The Commodity Futures Trading Commission (CFTC) is an independent federal agency that regulates the U.S. derivatives markets. The CFTC was established by the Commodity Futures Trading Commission Act of 1974 and oversees the commodity futures, options, and swaps markets. The CFTC aims to foster open, transparent, competitive, and financially sound markets while also protecting market users and the public from fraud, manipulation, and abusive practices.

History and Background of the CFTC

Futures contracts for agricultural commodities have existed in the U.S. since the mid-19th century. However, it wasn’t until the 1920s that futures trading expanded to include other commodities. Regulatory oversight for commodity futures remained minimal until the Great Depression, when widespread speculation was blamed for accelerating price declines and contributing to the severity of the economic catastrophe.

In response, Congress passed the Commodity Exchange Act in 1936, which established federal regulation of all commodities and futures trading activities for the first time. The legislation aimed to deter and prevent price manipulation, corners, and fraudulent practices on commodity exchanges. It required all futures exchanges to register with the Secretary of Agriculture and created a Commodity Exchange Authority under the Department of Agriculture to provide oversight.

Despite federal regulation, issues with the commodity markets persisted over the following decades. By 1974, rising inflation and volatile commodity prices led to increased futures speculation and several major market scandals. As a result, Congress passed the Commodity Futures Trading Commission Act, which established the CFTC as an independent agency outside of the Agriculture Department. The CFTC was granted exclusive jurisdiction over futures trading in all previously unregulated commodities.

CFTC Mission and Responsibilities

The mission of the CFTC is to promote the integrity, resilience, and vibrancy of U.S. commodity futures, options, and swaps markets through effective regulation. The agency is tasked with fostering safe, transparent, competitive, and financially sound markets while also protecting market users and the public from fraud, manipulation, and other abuses.

The primary responsibilities of the CFTC include:

Industry Oversight

  • Reviewing new applications for exchanges, clearing houses, futures commission merchants, commodity pool operators, commodity trading advisors, and other registrants
  • Conducting regular surveillance and audits of registered entities for regulatory compliance
  • Taking enforcement actions when violations occur


  • Developing rules and regulations to implement the Commodity Exchange Act
  • Reviewing and approving new futures and option contracts and product terms
  • Setting position limits on speculative trading

Market Transparency

  • Collecting and publishing market data to promote transparency
  • Publishing weekly reports on futures market transactions and trader positions
  • Disseminating information on market fundamentals

Fraud Prevention

  • Prosecuting cases of fraud, price manipulation, and other violations
  • Overseeing bankruptcy and receivership proceedings
  • Providing consumer education on fraud risks

Analysis and Research

  • Monitoring emerging risks and changes in the derivatives markets
  • Studying the economic role and functions of the commodity futures and option markets
  • Analyzing the effects of CFTC actions on the markets

CFTC Organization and Leadership

The CFTC consists of five Commissioners, with one designated by the President to serve as Chairman. No more than three Commissioners may be from the same political party. Commissioners serve staggered five-year terms and oversee the operations of the CFTC.

The Chairman leads the Commission and is responsible for executing agency policies, promoting its interests domestically and abroad, and ensuring effective management and functioning. Current CFTC Chairman is Rostin Behnam, who was appointed in 2021.

Day-to-day operations are handled by the Offices, Divisions, and Committees of the CFTC. Key divisions include:

  • Division of Enforcement – Detects and prosecutes violations of commodity futures and option laws
  • Division of Market Oversight – Oversees derivatives platforms, swap execution facilities, data repositories, algorithmic trading
  • Division of Clearing and Risk – Regulates derivatives clearing organizations and risk management
  • Division of Swap Dealer and Intermediary Oversight – Regulates swap dealers, futures commission merchants, retail foreign exchange dealers, and other intermediaries
  • Office of the Chief Economist – Conducts research on derivative market functions and new financial products
  • Office of International Affairs – Negotiates international regulatory initiatives and cooperates with foreign authorities
  • Office of the Executive Director – Provides administrative services for the Commission

There are also several advisory committees that provide recommendations, information, and opinions to the Commission.

CFTC Registration and Compliance Requirements

Certain individuals and firms that deal in commodity futures, options, swaps, and retail foreign exchange must register with the CFTC. Required registrants include:

  • Futures Commission Merchants (FCMs) – Individuals or firms that solicit or accept orders, funds, or property to connect customers to a derivatives exchange
  • Commodity Pool Operators (CPOs) – Operate collective investment vehicles like commodity pools and hedge funds in derivatives
  • Commodity Trading Advisors (CTAs) – Provide advice on trading commodity futures and options
  • Introducing Brokers (IBs) – Solicit orders and introduce customers to FCMs on a commission basis
  • Retail Foreign Exchange Dealers (RFEDs) – Deal in off-exchange retail foreign currency futures and options
  • Swap Dealers – Deal in swaps markets above a de minimis threshold
  • Major Swap Participants – Maintain substantial swap positions that could impact U.S. financial stability

Registrants must meet minimum financial requirements, disclose operational information, keep records, submit reports, and follow business conduct standards. Failure to comply can result in NFA or CFTC enforcement actions.

CFTC Market Regulation and Reform

The CFTC regulates commodity futures, options, swaps, and certain retail foreign exchange contracts traded on regulated exchanges or swap execution facilities. It sets and enforces rules on trading conduct, market integrity, price transparency, position limits, transaction reporting, sales practices, recordkeeping, and other areas.

Key regulations include:

  • Position limits – Limits on speculative positions to reduce potential for corners, squeezes, and excessive speculation
  • Large trader reporting – Reporting requirements to detect concentrated positions and market power
  • Capital requirements – Ensures financial intermediaries hold adequate capital to meet obligations
  • Supervision requirements – Standards for internal supervision, risk management, and ethics training
  • Swap reforms – Regulates formerly unregulated swaps markets under the 2010 Dodd-Frank Act
  • Anti-manipulation and anti-disruptive trading practices – Prohibits manipulation, spoofing, wash trading, and other abuses

After the 2008 financial crisis, the CFTC adopted numerous reforms under the Dodd-Frank Act to improve transparency, reduce systemic risks, and prevent regulatory arbitrage. Ongoing priorities include promoting market integrity, adapting to fintech innovations, cross-border cooperation, and increasing competition.

CFTC Market Surveillance and Enforcement

The CFTC conducts regular surveillance of commodity derivatives markets to detect potential abuses and ensures registered firms comply with regulations. Suspected violations are referred to the Division of Enforcement for investigation.

The CFTC has broad enforcement authority over futures, options, swaps, and foreign currency misconduct. This includes pursuing cases of:

  • Fraud and misappropriation
  • Market manipulation
  • False reporting
  • Illegal solicitation
  • Trading advice fraud
  • Registration violations
  • Disruptive trading practices
  • Violating position limits
  • Money laundering

When violations are found, the Commission can impose civil monetary penalties, seek restitution for victims, require disgorgement of ill-gotten gains, and revoke registration. The CFTC may also refer criminal matters to the Department of Justice for prosecution.

Major historical CFTC enforcement cases include actions against Enron, BP, Citigroup, JPMorgan, Barclays, and many other high profile banks, traders, exchanges, and brokers. Since 2001, the agency has assessed over $10 billion in civil monetary penalties.

CFTC Resources for Consumers and Traders

The CFTC offers a number of resources to help educate investors, consumers, and traders on commodity futures markets and protect against fraud:

  • SmartCheck – Helps investors research background of financial professionals before investing
  • RED – Database of disciplinary actions taken against CFTC registrants
  • Consumer Protection – Outreach and education on common frauds and risks
  • CFTC Whistleblower Program – Rewards and protections for whistleblowers reporting violations
  • LabCFTC – Fintech initiative to facilitate market-enhancing innovation
  • Weekly Commitments of Traders Reports – Shows futures market positioning
  • Economic Research – Analysis on futures and options market trends
  • Financial Data for Futures Commission Merchants – Enables analyzing financial health of FCMs
  • Weekly Swaps Report – Data on interest rate and credit default swap transactions

The CFTC’s website, public advisories, and social media also provide ongoing updates, warnings, and educational materials for commodities traders and derivatives market participants.

Cooperation with Other Regulators

The CFTC coordinates with other financial regulators both domestically and internationally to harmonize regulations, enhance oversight, and minimize systemic risks. This includes close coordination with:

Securities and Exchange Commission (SEC) – Jointly regulate security futures products and certain firms like broker-dealers and investment advisors. Operate joint advisory committees.

Federal Reserve – Works with Federal Reserve on regulating swap dealers, setting capital and margin requirements, and monetary policy impacts.

Financial Stability Oversight Council (FSOC) – Member of the interagency FSOC that identifies and monitors risks to U.S. financial stability.

National Futures Association (NFA) – Delegates certain registration, compliance, and arbitration functions to the self-regulatory NFA.

Foreign Regulators – Cooperates with international regulators through bilateral and multilateral arrangements to coordinate oversight of cross-border derivatives activity.

State Regulators – Works with state regulators on certain retail foreign exchange and commodity trading advisor regulation and consumer protection enforcement.

This extensive inter-agency coordination aims to prevent regulatory gaps, build supervisory capacity, and develop policies that protect market integrity while fostering financial innovation.

Looking Forward: Evolving Priorities

Looking ahead, the CFTC will continue adapting its regulatory oversight and priorities to keep pace with the evolving derivatives markets. Top areas of focus include:

Crypto-assets – Developing an appropriate regulatory framework and oversight for cryptocurrencies, digital assets, and related derivatives.

Technology – Monitoring adoption of financial technology in trading and implementing appropriate safeguards and risk monitoring.

Convergence – Responding to blurring boundaries between futures, securities, swaps, and retail foreign exchange products.

Market fragmentation – Addressing potential impacts of trading shifts to foreign jurisdictions and non-intermediated platforms.

Climate-related risks – Identifying and managing emerging risks from climate change that could impact commodities markets.

Pandemic response – Adjusting regulations to maintain market function and integrity amid COVID-19 disruptions.

By evolving with the markets, focusing on risk monitoring, and providing sound regulation, the CFTC will continue working to uphold the vitality, resilience, and integrity of the commodity derivatives markets.


Since its establishment in 1974, the Commodity Futures Trading Commission has become a crucial regulator overseeing the growing U.S. derivatives markets. As an independent agency, the CFTC regulates key industry participants, sets important market protections, provides transparency, combats fraud and abuse, and aims to foster open, competitive markets. While adapting to emerging technologies and risks, the CFTC remains focused on safeguarding market integrity and protecting public interests for the benefits of the U.S. economy.