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Topic: Commodity Futures Modernization Act of 2000

	FRB: Testimony, Parkinson--Commodity Futures Modernization Act of 2000 --September 8, 2005
		At the same time, the CFMA modernized the regulation of U.S. futures exchanges, replacing a one-size-fits-all approach to regulation with an approach that recognizes that the regulatory regime necessary and appropriate to achieve the objectives of the CEA depends on the nature of the underlying assets traded and the capabilities of market participants.
		In the case of security futures, the lenders are broker-dealers and FCMs, and the commissions are responsible for all other aspects of prudential regulation of those firms.
		Some futures exchanges argue that the definition of a narrow-based index in the CFMA was drafted with reference to the U.S. equities markets and that, in any event, the definition unnecessarily restricts the trading of futures on indexes of U.S. debt obligations and foreign securities.
	www.federalreserve.gov /BoardDocs/Testimony/2005/20050908/default.htm (1503 words)

	Commodity Futures Trading Commission - Wikipedia, the free encyclopedia
		The Commodity Futures Trading Commission (CFTC) is an independent agency of the United States Government, created by Congress in 1974.
		For this reason futures contracts on single stocks were not allowed in the United States, as both regulators claimed jurisdiction.
		In December 2000 the Commodity Futures Modernization Act of 2000 was passed.
	en.wikipedia.org /wiki/Commodity_Futures_Trading_Commission (229 words)

	FRB: Testimony, Greenspan -- S. 2697, the Commodity Futures Modernization Act of 2000 -- June 21, 2000
		To be sure, the Commodity Futures Trading Commission (CFTC) has recently proposed issuing regulatory exemptions that would reduce legal uncertainty about the enforceability of over-the-counter (OTC) derivatives transactions and would conform the regulation of futures exchanges to the realities of today's marketplace.
		In its November 1999 report, Over-the-Counter Derivatives and the Commodity Exchange Act, the President's Working Group on Financial Markets (PWG) concluded that OTC derivatives transactions should be subject to the CEA only if necessary to achieve the public policy objectives of the act--deterring market manipulation and protecting investors against fraud and other unfair practices.
		For some time the Board has been arguing that the regulatory framework for futures trading, which was designed for the trading of grain futures by the general public, is not appropriate for the trading of financial futures by large institutions.
	www.federalreserve.gov /boarddocs/testimony/2000/20000621.htm (1332 words)

	ICI Statement on Commodity Futures Modernization Act, July 2000
		Pools of security futures would likely come to be seen by the market as a proxy for, or as an alternative to, investment in mutual funds, and very likely would be marketed to investors as such.
		For example, under the Bill as currently drafted, investors could unwittingly be drawn into investing in a security futures pool without understanding that it may engage in activities, such as leveraging, that could significantly increase the risk associated with the investment and that would be restricted or prohibited for mutual funds.
		We recognize that many of these entities may already be registered as commodity trading advisors under the Commodity Exchange Act, and therefore propose an exclusion from registration under the Advisers Act for registered commodity trading advisors whose business does not consist primarily of acting as an investment adviser.
	www.ici.org /statements/tmny/00_house_commodities_tmny.html (1534 words)

	Commodity Futures Modernization Act (CFMA)
		An act passed in 2000 by the U.S Government that reaffirmed the authority of the Commodity Futures Trading Commission for five years as the regulatory body of the American futures markets.
		The most significant outcome from this act was the allowance for the trading of single stock futures.
		Futures Fundamentals - For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them.
	www.investopedia.com /terms/c/cfma.asp (193 words)

	17 CFR PART 166 (Site not responding. Last check: )
		No futures commission merchant, introducing broker or any of their associated persons may directly or indirectly effect a transaction in a commodity interest for the account of any customer unless before the transaction the customer, or person designated by the customer to control the account:
		The act, omission or failure of any person acting for the branch office, within the scope of his employment or office, shall be deemed the act, omission or failure of the Commission registrant as well as of such person.
		A procedure established by a designated contract market under the Act for the settlement of customers' claims or grievances against a member or employee thereof may permit the submission of a counterclaim in the procedure by a person against whom a claim or grievance is brought.
	www.washingtonwatchdog.org /documents/cfr/title17/part166.html (1485 words)

	McDermott - Newsletters - Congress Makes Changes to the Regulation of Futures and Derivatives Transactions
		In general, "excluded commodities" are commodities that are not susceptible to manipulation.
		Excluded commodities include rates, currencies, securities, macroeconomic indexes, economic or commercial measures that are broad-based or based on commodities lacking cash markets, economic or commercial measures based on an underlying commodity not within the control of a party to the relevant contract and an occurrence not within the control of such a party.
		Transactions in exempt commodities that are entered into on a principal-to-principal basis solely between "eligible commercial entities" (ECEs) and executed or traded on an ETF are also excluded from all provisions of the CEA other than the clearing and antifraud and anti-manipulation provisions.
	www.mwe.com /index.cfm/fuseaction/publications.nldetail/object_id/EAB1D60E-C2CE-47DC-BEB4-2D6B54759878.cfm (2307 words)

	Electronic Code of Federal Regulations:
		Authority: 7 U.S.C. 2, 5, 6, 6c, and 12a, as amended by the Commodity Futures Modernization Act of 2000, Appendix E of Pub.
		Commodities eligible under section 5d(b)(1) of the Act to be traded by an exempt board of trade are:
		A board of trade notifying the Commission that it meets the criteria of Section 5d of the Act and elects to operate as an exempt board of trade shall not represent to any person that it is registered with, designated, recognized, licensed or approved by the Commission.
	ecfr.gpoaccess.gov /cgi/t/text/text-idx?c=ecfr&sid=b2caf10d1e4f390ced2ecf2064155592&rgn=div5&view=text&node=17:1.0.1.1.27&idno=17 (2034 words)

	GTT RESOURCES
		The Commodity Futures Modernization Act of 2000 (CFMA) created an entire new batch of financial products to trade, and the new indices created from the act are taxed as commodities, which have lower tax rates then securities.
		Shrewd commodities traders were setting up complex straddles (offsetting positions) to avoid taxes by accelerating realized losses in the current tax year and deferring the offsetting unrealized gains positions to the next tax year.
		Commodities are marked-to-market at the end of each day (which is the way a trader thinks), and the tax rates are lower.
	www.greencompany.com /EducationCenter/GTTRecCFMA.shtml (2227 words)

	National Futures Association \| NFA Newsletter
		The legislation is the culmination of years of work by congressional leaders, their staff, government regulators and representatives of the various constituencies in the futures, securities and banking industries.
		There are several requirements we must meet, including adopting a suitability rule for security futures comparable to that in the securities industry and adopting a rule requiring all Members and Associates to comply with the securities laws in connection with security futures transactions.
		As I stated earlier, the Commodity Futures Modernization Act of 2000 ushers in a new era for the futures industry.
	www.nfa.futures.org /member/newsLetterArticle.asp?ArticleID=526 (455 words)

	National Futures Association \| News Center
		The basic thrust of the CFMA in this area was that foreign currency futures with retail customers were covered by the Commodity Exchange Act ("Act") unless the counterparty was an "otherwise regulated entity," such as a bank, a broker-dealer or an FCM.
		Congress intended to allow FCMs, along with banks, broker-dealers and insurance companies, to act as counterparties to retail forex transactions because they are all "otherwise regulated entities." The wording of the statute, though, opened the door for firms that are not really FCMs to take advantage of the FCM exemption.
		Congress should fix this problem by limiting the FCMs that can act as counterparties to those that are primarily and substantially engaged in the activities described in Section 1(a)(20) of the Act.
	www.nfa.futures.org /news/newsTestimony.asp?ArticleID=1968 (1763 words)

	Commodity Futures Modernization Act
		Futures Trading Commission, and the futures industry should be looking at different ways that we can accommodate farm producers to better manage their own risks by utilizing futures contracts to hedge their commodities.
		Security futures are treated as both futures and securities under the CFMA and, accordingly, both the CFTC and the SEC share oversight responsibility for their trading under a primary regulator and notice regulator regime intended to avoid duplicative or overly burdensome requirements on market participants.
		Modernizing futures regulation, providing legal certainty for OTC derivatives, and opening the door to single stock futures trading were sound policy goals we were pleased to endorse.
	commdocs.house.gov /committees/ag/hag1088.000/hag1088_0.htm (17110 words)

	Senate Banking Committee - Chairman's Testimony
		On the Introduction of the Commodity Futures Modernization Act
		The formal purpose of this legislation is to reauthorize the Commodity Exchange Act, the legal authority for the Commodity Futures Trading Commission.
		While the Commodity Exchange Act is clearly within the jurisdiction of the Agriculture Committee, stocks, options, and swaps are within the jurisdiction of the Banking Committee.
	banking.senate.gov /corresp/0608cfma.htm (391 words)

	futuresmag.com: Press Releases
		Washington, D.C. -- In a public meeting, held on February 4, 2004, the Commodity Futures Trading Commission (CFTC) voted unanimously to designate the U.S. Futures Exchange, L.L.C. (USFE) as a contract market for the automated trading of futures and options on futures contracts.
		This is the CFTC's seventh exchange designation since implementation of the Commodity Futures Modernization Act of 2000 (CFMA).
		The USFE has contracted with the National Futures Association (NFA) to assist it in carrying out various self-regulatory responsibilities, including, among other things: market, trade practice, and financial surveillance; and investigative and disciplinary functions.
	www.futuresmag.com /press_releases/releases/re020404a.html (308 words)

	[No title] (Site not responding. Last check: )
		Chairman, members of the Subcommittee, on behalf of the Futures Industry Association (FIA), I appreciate the opportunity to appear before you today to discuss the impact of the Commodity Futures Modernization Act of 2000 (CFMA) on the derivatives industry, generally, and more specifically, on the Commodity Futures Trading Commission (Commission or CFTC).
		The amendments strike an appropriate balance—modifying terms and conditions of the existing rule that have proved in practice to be unnecessarily cumbersome for futures industry participants, while maintaining procedural requirements that will permit the Commission and the several self-regulatory organizations to meet their responsibilities of assuring continued customer protection.
		The futures markets are prospering in the United States, and we are committed to their continued success.
	www.fiafii.org /downloads/regulatory/jd6-19-03.doc (3316 words)

	17 CFR PART 36 (Site not responding. Last check: )
		7 U.S.C., 5, 6, 6c, and 12a, as amended by the Commodity Futures Modernization Act of 2000, Appendix E of Pub.
		Commodities eligible under section 5d(b)(1) of the Act to be traded by an exempt board of trade are:
		(i) All information required upon special call of the Commission under section 2(h)(5)(B)(iii) of the Act shall be prepared in the form and manner and in accordance with the instructions, and shall be transmitted at the time and to the office of the Commission, as may be specified in the call.
	www.washingtonwatchdog.org /documents/cfr/title17/part36.html (574 words)

	SIA-Single Stock Futures (Site not responding. Last check: )
		Because single stock futures don't easily fit into either of the pre-existing categories, the CFMA directed that these products be treated as both "securities" and "futures" and, accordingly, subject to regulation by both the Securities and Exchange Commission ("SEC") and the Commodity Futures Trading Commission ("CFTC").
		Very generally, under existing law "securities" are financial instruments that are regulated by the SEC and the various securities exchanges (e.g., the New York Stock Exchange; NASDAQ; etc.) while "futures" are regulated by the CFTC and the futures exchanges (e.g., the Chicago Board of Trade; the New York Mercantile Exchange, etc.).
		On June 12, SIA submitted a memorandum to the SEC and CFTC highlighting the regulatory issues that will have to be addressed in light of the legislation.
	www.sia.com /ssf (335 words)

	Commodity Futures Trading Commission
		The Commodity Futures Trading Commission (CFTC), the federal regulatory agency for futures trading, was established by the Commodity Futures Trading Commission Act of 1974 (88 Stat.
		To comply with the requirements of the Modernization Act, the commission underwent a restructuring in 2002.
		Futures contracts for agricultural commodities were traded in the United States for more than one hundred years before futures trading was diversified to include trading in contracts for precious metals, raw materials, foreign currencies, commercial interest rates, and U.S. government and mortgage
	law.jrank.org /pages/5436/Commodity-Futures-Trading-Commission.html (620 words)

	LS-765: TREASURY ASSISTANT SECRETARY LEWIS A. SACHS HOUSE COMMERCE SUBCOMMITTEE ON FINANCE AND HAZARDOUS MATERIALS
		In this report, the Working Group, which is chaired by Secretary Summers and includes the Chairmen of the Federal Reserve, the Commodity Futures Trading Commission and the Securities and Exchange Commission, set forth a series of unanimous recommendations designed to reform the legal and regulatory framework affecting the OTC derivatives market.
		And fourth, to maintain US competitiveness by providing a modernized framework that will lead those engaged in the financial services industry to continue the operations of their businesses in the United States, and thereby promote the continued leadership of American capital markets.
		While we have no objection to the introduction of single-stock or narrow-based stock index futures, it is vitally important that the integrity of the underlying markets be preserved, and that these instruments not be used as a means to avoid the regulations of the cash markets.
	www.treas.gov /press/releases/ls765.htm (2583 words)

	[No title]
		The court reviewing the action of the Board or the Commission shall not enter a stay or order of mandamus unless the court determines, after notice and a hearing before a panel of the court, that the agency action complained of was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.
		The Commodity Exchange Act is amended-- (1) by redesignating section 5b (7 U.S.C. 7b) as section 5e; and (2) by striking sections 5 and 5a (7 U.S.C. 7, 7a) and inserting the following: ``SEC.
		Section 12(d) of the Commodity Exchange Act (7 U.S.C. 16(d)) is amended by striking ``2000'' and inserting ``2005''.
	www.agriculturelaw.com /legis/reports/106-711.txt (4783 words)

	SEC Testimony: S. 2697, The Commodity Futures Modernization Act of 2000(A. Levitt)
		Disparities between futures and securities regulation, as well as the ease with which single stock futures were expected to substitute for securities, made this a difficult task.
		The legislation also should require coordinated clearing of single stock futures so that a future purchased on one exchange could be offset on another exchange that trades the same type of future.
		A bill should not introduce single stock futures into the mix of investment opportunities that an investment adviser may recommend to his or her clients or that a portfolio manager may purchase for the mutual fund he or she manages without regulation by the SEC.
	www.sec.gov /news/testimony/ts112000.htm (4613 words)

	Capital Markets Compliance, LLC provides regulatory guidance for Broker Dealers, Banks,and Investment Advisers
		A CPO is an individual or organization which operates or solicits funds for a commodity pool; that is, an enterprise in which funds contributed by a number of persons are combined for the purpose of trading futures contracts or commodity options, or to invest in another pool.
		The Commodity Futures Modernization Act of 2000 ("CFMA") authorizes the trading of futures on individual stocks and narrow-based stock indices.
		The Commodity Futures Modernization Act of 2000 amended the definition of "security" in the Securities Act of 1933 and the definitions of "security"and "equity security" in the Securities Exchange Act of 1934 to include a security future.
	www.cmcompliance.com /nfa.htm (615 words)

	HR 4541 - - 10/19/2000
		The Administration strongly supports the version of H.R. 4541, the Commodity Futures Modernization Act of 2000, that the Administration understands will be considered on the House floor.
		It is important that this legislation be enacted this year because of the meaningful steps it would take in helping to: promote innovation; enhance the transparency and efficiency of derivative markets; maintain the competitiveness of U.S. businesses and markets; and, potentially, reduce systemic risk.
		A failure to modernize the Nation's framework for OTC derivatives during this legislative session would deprive American markets and businesses of these important benefits and could result in the movement of these markets to overseas locations with more updated regulatory regimes.
	www.whitehouse.gov /omb/legislative/sap/106-2/HR4541-h.html (195 words)

	[No title]
		Second, it would codify the regulatory relief proposal of the Commodity Futures Trading Commission (CFTC) to ensure that futures exchanges are appropriately regulated and remain competitive.
		When Congress enacted the CEA and the Commodity Futures Trading Commission (CFTC) to enforce it, this was not a concern.
		The first, the electronic trading facility exclusion, would exclude transactions in financial and energy commodities from the Act if conducted: (1) on a principal to principal basis; (2) between institutions or sophisticated persons with high net worth; and (3) on an electronic trading facility.
	agriculture.senate.gov /Legislation/106_Leg/ceaflste.htm (1719 words)

	Georgetown Law - Courses (Online Curriculum Guide)
		Futures markets are an important component of today's financial markets, involving more than a billion contracts annually and a trillion dollars in daily cash flows.
		The Commodity Futures Trading Commission moved from front line to oversight regulation, and "core principles" replaced prescriptive rules for regulation of futures and option markets.
		The course examines the regulation of futures and related markets in financial and tangible commodities, the structure and requirements of the Commodity Exchange Act, the roles of the CFTC, futures exchanges, traders and brokers, clearinghouses, pool operators and trading advisers, brokerage firms and the growing links with securities, banking, and other sectors.
	www.law.georgetown.edu /curriculum/tab_courses.cfm?Status=Course&CourseNumber=704 (181 words)

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