The Commodity Futures Trading Commission (CFTC) is the federal agency that regulates futures and swaps markets in the United States. The agency began overseeing futures trading in 1975 after being formed by the Commodity Futures Trading Commission Act of 1974. The CFTC is charged with ensuring that commodity futures markets operate by the legal requirements set forth by the Commodity Exchange Act. Following the financial crisis of 2008, Congress also put the swaps market under the CFTC’s legal authority with the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The CFTC aims to preserve the essential functions of futures and swaps markets while minimizing their risks. The agency works to ensure transparency in the markets, block abuse of the trading systems, protect consumer investments and prevent the deleterious economic impacts of fraudulent trading practices. To this end, the CFTC polices and regulates trading intermediaries including commodity trading advisors, derivatives clearing organizations, swap dealers and futures commission merchants.
The respective domains of futures and swaps markets are regulated on the advice of the CFTC’s five advisory committees: the Agricultural Advisory Committee, the Energy and Environmental Markets Advisory Committee, the Global Markets Advisory Committee, the Market Risk Advisory Committee and the Technology Advisory Committee. Each entity is overseen by a commissioner who serves a staggered five-year term. No more than three current commissioners may be aligned with a single political party.
The CFTC is organized into four departments: the Division of Clearing and Risk monitors derivatives clearing organizations, the Division of Enforcement is responsible for the investigation and prosecution of legal violations, the Division of Market Oversight supervises trading practices and the Division of Swap Dealer and Intermediary Oversight regulates trading intermediaries and self-regulatory organizations. The agency’s operations are further supported by the Offices of the Chief Economist, Data and Technology, the Executive Director, General Counsel, the Inspector General, International Affairs, Legislative Affairs and Public Affairs.