Business, Legal & Accounting Glossary
The Commodities Futures Trading Commission oversees various matters with commodities trading including disclosure, registration of trading firms and individual traders, fair trading practices, record keeping, and customer fund protection.
The Commodity Futures Trading Commission is an independent federal regulatory agency.
The Commodity Futures Trading Act of 1974 established the Commodity Futures Trading Commission to administer the Commodity Exchange Act.
The Commodity Futures Trading Commission regulates US commodity futures and option markets and protects market users and the public from fraud, manipulation, and abusive practices. Besides its Washington headquarters, the Commodity Futures Trading Commission has offices in New York, Chicago, Kansas City, and Minneapolis.
The Commodity Futures Trading Commission has five commissioners, appointed by the President for staggered five-year terms. The role of the commissioners of the Commodity Futures Trading Commission is to maintain fair and orderly markets, enforce market regulations, and protect customers from fraudulent or abusive trading practices.
Congress created the Commodity Futures Trading Commission (CFTC) in 1974 as an independent agency with the mandate to regulate commodity futures and options markets in the United States. The agency’s mandate has been renewed and expanded several times since then, most recently by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
In 1974 the majority of futures trading took place in the agricultural sector. The CFTC’s history demonstrates, among other things, how the futures industry has become increasingly varied over time and today encompasses a vast array of highly complex financial futures contracts.
Today, the CFTC assures the economic utility of the futures markets by encouraging their competitiveness and efficiency, protecting market participants against fraud, manipulation, and abusive trading practices, and by ensuring the financial integrity of the clearing process. Through effective oversight, the CFTC enables the futures markets to serve the important function of providing a means for price discovery and offsetting price risk.
The CFTC’s mission is to protect market users and the public from fraud, manipulation, abusive practices, and systemic risk related to derivatives that are subject to the Commodity Exchange Act, and to foster open, competitive, and financially sound markets.
The CFTC was formed in 1974 by the U.S. Congress.
The Commission consists of five commissioners appointed by the President, with the advice and consent of the Senate, to serve staggered five-year terms. The President, with the consent of the Senate, designates one of the commissioners to serve as Chairman. No more than three commissioners at any one time may be from the same political party.
The Office of Inspector General (OIG) conducts and supervises audits and investigations of programs and operations of the CFTC and recommends policies to promote economy, efficiency and effectiveness in CFTC programs and operations and to prevent and detect fraud and abuse.
The Office of the Chief Economist provides economic support and advice to the Commission, conducts research on policy issues facing the Commission, and educates and trains Commission staff. The OCE plays an integral role in the implementation of new financial market regulations by providing economic expertise and cost-benefit considerations underlying those regulations.
The Office of Data and Technology provides technology and data management support for Commission market and financial oversight, surveillance, enforcement, legal support, and public transparency activities. ODT also provides general network, communication, storage, computing, and information management infrastructure and services.
The Executive Director ensures the Commission’s adaptation to the ever-changing markets it is charged with regulating, directs the allocation of CFTC resources, develops and implements management and administrative policy, and ensures program performance is measured and tracked Commission-wide. The OED also oversees the Commission’s Whistleblower and Consumer Affairs programs, and the Office of Diversity and Inclusion.
The Office of General Counsel provides legal services and support to the Commission and all of its programs. These services include: representing the Commission in appellate, bankruptcy and other litigation; assisting in the performance of adjudicatory functions; providing legal advice and support for Commission programs; drafting and assisting in the preparation of Commission regulations; interpreting the CEA; and advising on legislative, regulatory, and operational issues.
The Office of the Inspector General is an independent organizational unit at the CFTC. Its mission is to detect waste, fraud, and abuse and to promote integrity, economy, efficiency, and effectiveness in the CFTC’s programs and operations. As such it has the ability to review all of the Commission’s programs, activities, and records. In accordance with the Inspector General Act of 1978, the OIG issues semiannual reports detailing its activities, findings, and recommendations.
The Office of International Affairs advises the Commission regarding international regulatory initiatives; provides guidance regarding international issues raised in Commission matters; represents the Commission in international organizations, such as the International Organization of Securities Commissions (IOSCO); coordinates Commission policy as it relates to international initiatives of the G20, Financial Stability Board and the US Treasury Department; and provides technical assistance to foreign market authorities.
The Office of Public Affairs is the Commission’s liaison with the general public and news media. OPA issues press releases and media alerts, and maintains the Commission’s website and social media presence.
The CFTC’s Advisory Committees were created to provide input and make recommendations to the Commission on a variety of regulatory and market issues that affect the integrity and competitiveness of U.S. markets. The committees facilitate communication between the Commission and U.S. futures markets, trading firms, market participants, and end-users. The committees, governed by the provisions of the Federal Advisory Committee Act, currently include:
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This glossary post was last updated: 4th August, 2021 | 1 Views.