The US-based Commodity Futures Trading Commission (CFTC) is in charge of policing the derivatives markets, including those for options, swaps, and futures contracts. It was officiated in 1974 as a separate entity to assume the duties of its outgoing regulatory body, the Commodity Exchange Authority (CEA).
Futures contracts were frequently traded in the past while discussing agricultural commodities. One of the reasons the CEA was a part of the US Department of Agriculture (USDA) is because of this. However, the futures market has grown more complicated and now offers a wide range of contracts.
The CFTC’s stated goals and duties include ensuring the smooth operation of the US derivatives markets:
“The mission of the Commodity Futures Trading Commission (CFTC) is to foster open, transparent, competitive, and financially sound markets. By working to avoid systemic risk, the Commission aims to protect market users and their funds, consumers, and the public from fraud, manipulation, and abusive practices related to derivatives and other products that are subject to the Commodity Exchange Act (CEA).”
