Who Is The Commodity Futures Trading Commission And What Do They Do?

Based in Washington, the Commodity Futures Trading Commission (CFTC) was created by Congress in 1974 to oversee and regulate the NYMEX, the Chicago Board of Trade, the Chicago Mercantile Exchange and other U.S. futures exchanges.

Presided over by five Senate-approved commissioners, the CFTC is an independent agency whose primary task is ensuring the open and efficient operation of the commodity futures and option markets. To assure the economic utility of both these markets, the CFTC actively encourages competitiveness and efficiency, oversees the financial integrity of the clearing process and protects market users and the public against manipulation, abusive trading practices, and fraud.

The Commodity Futures Modernization Act (CFMA) passed by Congress in December 2000 was designed to assist the U.S. financial markets remain global leaders, the Act reaffirming the mandate of the CFTC and giving the go ahead to the joint regulation of single-stock and narrow-based stock index futures by the CFTC and the Securities and Exchange Commission. This joint regulation ended the 18 year ban that had been imposed on this type of stock index futures.