Have you ever heard about Commodity future trading? If not, this article is for you. Today we will talk about what is commodity future trading and what Is the Difference Between the SEC and CFTC. Let’s find out by reading the article below.
What is commodity future trading?
The Commodity Future Trading Commission (CFTC) protects the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and promotes open, competitive, and financially sound futures and options markets. They investigate and prosecute commodity fraud, including foreign exchange schemes, energy manipulation, and hedge fund fraud, and cooperate with other federal and state agencies in criminal and other prosecutions.
What Is the Difference Between the SEC and CFTC?
The SEC and CFTC were created by different laws, have different responsibilities, and use different methods to carry out those responsibilities. The most basic difference between these two entities is that the SEC regulates the securities market, while the CFTC regulates the derivatives market.
What does the CFTC regulate?
The CFTC regulates the U.S. derivatives market. This includes commodity futures, options and swaps markets as well as over-the-counter (OTC) markets. To adequately oversee these markets, the CFTC regulates trading organizations, such as designated contract markets for managed futures trading, and swap execution facilities, which are platforms that allow participants to buy and sell swaps.
The CFTC's Division of Clearing and Risk is solely responsible for monitoring derivatives clearing organizations (DCOs), such as the Options Clearing Corporation. The OCC is the largest DCO in the world and operates under the jurisdiction of the CFTC.
The Swap Data Repository, created by the Dodd-Frank Act, provides a central facility for swap data reporting and record keeping and is also regulated by the CFTC.
I hope this article will help you to learn what is commodity future trading and what Is the Difference Between the SEC and CFTC. CFTC is funded by the federal government. However, many critics argue that the CFTC is underfunded compared with other regulators.
