Commodity Futures Trading Commission (CFTC)

Definition

The Commodity Futures Trading Commission (CFTC) is an independent regulatory agency of the United States government responsible for overseeing and regulating the derivatives markets.

What is the Commodity Futures Trading Commission?

The CFTC oversees the operation and integrity of the derivatives markets to ensure fair and orderly trading. It monitors trading activity, investigates market abuses and manipulative practices, and enforces compliance with regulatory requirements. Furthermore, the CFTC also reviews and approves new derivatives products and exchange rules.

The CFTC requires certain market participants to register with the agency and comply with regulatory standards aimed at protecting customers and maintaining market integrity. Registered entities must comply with capital requirements, disclosure obligations, record-keeping rules, and other regulatory requirements.

Additionally, the CFTC has enforcement authority to investigate and prosecute violations. It conducts enforcement actions against individuals and firms engaged in fraud, manipulative conduct, insider trading, false reporting, and other unlawful activities in the derivatives markets. Penalties for violations may include monetary penalties, trading bans, and other sanctions.

Lastly, the CFTC collaborates with domestic and international regulatory authorities to promote regulatory harmonization, share information, and coordinate oversight of global derivatives markets. It participates in international regulatory forums and initiatives to address cross-border regulatory issues, promote market stability, and improve investor protection on a global scale.