CFTC financial regulator

Judy Rubio

CFTC is a US Commodity Futures Trading Commission. Its activity began in 1974. The regulator acted as a guarantor in ensuring normal relations between brokers and their consumers. Thanks to it, competitiveness is maintained and fraudulent activity on the market is eliminated. According to its authority, the regulator corresponds to FCA and NFA. On the page “Regulator SEC” you can get acquainted with the work of the Commission on exchanges and securities.

CFTC authority

  • Registration of market participants whose activities are related to the futures exchange.
  • Collection of reports of organizations registered in CFTC, every week.
  • Imposition of sanctions against unscrupulous market participants.
  • Monitoring accountable organizations for the fulfillment of their obligations: obtaining the status of a “futures merchant”, storing customers 'money in segregated accounts, reporting clients' trading risks.
  • Conducting exams to verify staff and managers of accountable companies.
  • Liquidation of the license and closure of the brokerage organization in case of its violation of the provisions of CFTC. 

CFTC Structure

The US President appoints 5 people who are members of the CFTC. They should get senate recommendations. Members of the commission hold their posts for a period of 5 years. It has 4 departments:

  • Execution control
  • Supervision of intermediaries and swap dealers
  • Clearing and Risk Supervision
  • Market surveillance

The CFTC includes a legal adviser, an economist, an inspector general, an executive director, a department of public relations, a department of international relations, a technology and data management department, and a legal affairs department.

CFTC Tasks 

  • US Futures Market Protection
  • Taking measures aimed at increasing the confidence of market participants
  • Promoting the efficiency and transparency of clearing operations
  • Development of measures to increase the effectiveness of relationships between market participants
  • Money Laundering Prevention 

CFTC requirement for companies to get licence

To work on American futures exchanges, the company must obtain a license.

To obtain a license, you must register with the NFA. Brokers in the United States are tested by several regulators.

The license applicant is required to have segregated accounts drawn up at banks accredited by the commission.

  • The company must recount the client’s cash daily.
  • Licensing is carried out exclusively by FCM brokers who have the right to accumulate funds of customers.
  • Net capital should be at least 4% of the funds placed by customers on a segregated account. The value is reviewed annually. If its value reaches 7% and higher, this provides the CFTC with grounds for monitoring the broker every day.

The CFTC Commission regulates the activities of brokers on US exchanges. It has broad powers and protects the market from unscrupulous companies. If you plan to open your brokerage organization, be sure to find out what CFTC requirements it should meet. This will allow to avoid many troubles in the future.