ASA Applauds SEC for Bringing Key Performance Binary Options Under Securities Law Protections

WASHINGTON – The American Securities Association (ASA) today applauded Securities and Exchange Commission (SEC) Chairman Paul Atkins and the Commission for approving an exchange rule change that permits the listing of binary options tied to key performance indicators (KPIs) reported by public companies.

“The SEC’s approval of KPIs gives investors a new way to manage company-specific risk, and listing them on a regulated securities exchange means every investor who trades them is protected by the securities laws,” said ASA President and CEO Chris Iacovella.

The SEC’s action reflects the position ASA laid out in its September comment letter to the SEC and the Commodity Futures Trading Commission (CFTC). In that letter, ASA expressly supported KPI products as a way to improve issuer-performance information and help investors hedge company-specific risk. ASA also urged both Commissions to confirm that derivatives tied to American public companies belong under securities law, and to proceed carefully with other new products, such as perpetual futures on individual stocks, that would allow around-the-clock trading outside regulated market hours, leverage of 20 to 100 times, and references to privately held companies with no public disclosure obligations.

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The American Securities Association (ASA) represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.