CFTC

The CFTC is the federal agency that regulates US derivatives markets, covering futures, options on futures, and most swaps. It was created in the 1970s to oversee commodity futures trading and has since expanded its reach as derivatives markets grew far beyond agricultural and energy contracts into interest rates, currencies, and financial indexes.

The agency's job is to keep these markets fair and transparent by policing manipulation, fraud, and excessive speculation, and by setting rules for the exchanges and clearinghouses that operate them. Major US derivatives exchanges, including the CME Group and ICE Futures US, operate under CFTC oversight, and any firm that deals in futures or swaps must register with the agency.

The CFTC is often compared to the SEC, but the two have separate jurisdictions. The SEC regulates securities such as stocks, bonds, and options on individual stocks, while the CFTC regulates futures and most swaps contracts, including those tied to commodities, interest rates, and stock indexes. For most equity investors the CFTC works in the background, but its oversight becomes directly relevant to anyone trading futures contracts, commodity ETFs that use futures, or derivatives tied to interest rates and currencies.