The CFTC, or Commodity Futures Trading Commission, is an independent agency of the United States government that regulates the derivatives markets, including futures contracts, options, and swaps. The CFTC was established in 1974 with the mandate to protect market participants from fraud, manipulation, and abusive practices in the commodities and futures trading industry.
The CFTC’s responsibilities include:
1. Registering and regulating commodity trading advisors, commodity pool operators, and other intermediaries in the derivatives markets.
2. Enforcing rules and regulations related to trading in the derivatives markets.
3. Investigating and prosecuting individuals and firms suspected of engaging in fraudulent or manipulative activities in the derivatives markets.
4. Reviewing and approving new futures contracts and other derivatives products before they can be offered to the public.
5. Promoting transparency and market integrity in the derivatives markets.
The CFTC also works closely with other regulatory agencies, such as the Securities and Exchange Commission (SEC), to ensure that financial markets are fair, transparent, and efficient.