Rothera wins CFTC approval for Tesla KPI swap

Rothera has received approval from the US Commodity Futures Trading Commission (CFTC) for a swap tied to Tesla’s reported earnings, as it prepares to introduce more markets on company performance.

The exchange announced the decision on 28 October. The CFTC’s product register records approval on 27 October and classifies the contract as a swap. Rothera describes it as the first contract of its kind approved by the regulator.

The revised terms attached to the filing describe a yes-or-no market on whether Tesla reports adjusted earnings per share above $0.65. A winning contract pays $1. Settlement depends on the reported earnings figure, giving traders exposure to that specific business result rather than movements in Tesla’s share price.

The terms prohibit trading by Tesla directors and officers, employees involved in preparing or releasing its financial results, and other people with material non-public information. Subsequent revisions to the reported result do not change settlement once the outcome has been determined.

A CFTC route alongside Cboe’s KPI options

In a 27 October statement, CFTC Chairman Michael Selig said the Commission approved the cash-settled binary swap under Regulation 40.3. The approval covers trading on a designated contract market and clearing through a registered derivatives clearing organisation, subject to the Commodity Exchange Act and the CFTC’s rules.

The decision follows the SEC’s 13 October approval of Cboe’s proposal to list binary options on company KPIs. Cboe had named Robinhood as its first retail broker at launch, subject to regulatory approval.

Selig said the CFTC’s decision does not foreclose SEC jurisdiction over products linked to the same KPIs when they are structured differently. The two approvals recognise separate regulatory routes for contracts tied to company performance, depending on how those contracts are structured.

Rothera’s amended filing says it intends to self-certify additional corporate-metric contracts under Regulation 40.2. That differs from the explicit Commission approval it requested for the initial contract under Regulation 40.3.

Financial results, usage and production

Rothera’s planned range covers financial measures such as earnings, sales and margins; platform activity such as active users, customers and trips; and production figures such as units made or delivered.

Chief executive Tom Chippas said the products would help participants “manage risk and exposure to specific business outcomes and performance”.

PF recently covered Rothera’s executive appointments across risk, compliance and operations.

Rothera says the phased rollout begins this autumn, targeting initial listings ahead of relevant companies’ quarterly reporting dates. The announcement does not give a firm launch date or confirm when a particular retail broker will offer the contracts.