a proposed standard for binary options in the commodities markets

The FICC Markets Standards Board (“FMSB”) was established in 2015 in response to the Fair and Effective Markets Review in the UK with a mandate to issue Standards designed to improve conduct and raise standards in the wholesale Fixed Income, Commodities, and Currencies (“FICC”) markets. On July 22, 2016, the UK’s FICC Markets Standards Board published a proposed standard for binary options in the commodities markets. Binary options are options that pay out either a fixed amount or nothing, depending on the performance of the underlying commodity over an agreed period of time. The draft standard sets out the characteristics of a type of transaction used by participants in the commodities markets and the expected behaviors of wholesale market participants that enter into them. Although not legally binding, it will apply to all FMSB member firms (currently just over 30 firms) on a global basis once in its final form