About Commodity Futures Trading Commission

The CFTC (Commodity Futures Trading Commission) is an US based independent organization. The Commodity Exchange Act (CEA) before CFTC forbids deceitful behaviors in the dealings of futures contracts. In the year of 1974, Congress revised the Act to make a more ample regulatory agenda for the futures contracts trading and therefore the Commodity Futures Trading Commission (CFTC) was formed, completely substituting the Commodity Exchange Authority. The major goal of the Commodity Futures Trading Commission is to keep the market users secure and the communal from deceit, exploitation, and abusive practices connected to the sale of stocks and monetary futures and options, and to promote open, competitive, and economically settled futures and option markets.

The CFTC (Commodity Futures Trading Commission) has power over foreign currency exchange markets. The Commodity Exchange Act allocates the OTC forex futures selling and alternatives to retail customers if, and only if, the opposite party (the person on the other side of the transaction) is a regulated entity. Federal Reserve Bank monitors the banking systems in U.S. The government agency CFTC also scrutinizes the activities of National Futures association’s (NFA).

About the Commodity Futures Trading Commission it has delimited the regulatory right over trade over-the-counter (OTC). But not an individual in U.S. has direct authoritarian omission in the foreign currency exchange market; the CFTC has efficiently overtaken that role. The Commodity Exchange Act (CEA) has given CFTC the right to legalize the sale of OTC foreign currency exchange futures and options to retail clients only if the counterparty is a regulated entity. Regulated entities include banks, financial institutions, broker dealers, and FCMs. By limiting the parties regulated entities can interact with, the CFTC has exerted some level of control.

The power of terminating the unregulated foreign exchange entities (particularly, FCMs) is there with the CFTC. (Also, the CEA has a stipulation for any contravention regarding antifraud and anti manipulation linked with OTC transactions in Foreign exchange in the trade market.) In spite of the repute that markets loathe regulation, this has not been the issue with Foreign exchange. The majority of currency exchanges firms have gripped the new regulatory authority because it gives them authenticity and helps weed out fraudulent players in the Forex markets.