Miscellaneous

What does the Commodity Exchange Act do?

What does the Commodity Exchange Act do?

The Commodity Exchange Act regulates commodities and futures trading in the U.S. The Act established the Commodity Futures Trading Commission (CFTC) to oversee commodity exchanges. It is mainly responsible for agriculture, global markets, energy and environmental markets, and technology.

What is an eligible contract participant under the Commodity Exchange Act?

Eligible Contract Participant: An entity, such as a financial institution, insurance company, or commodity pool, that is classified by the Commodity Exchange Act as an eligible contract participant based upon its regulated status or amount of assets.

Who qualifies as eligible contract participant?

An eligible contract participant (ECP) is an entity or individual allowed to engage in certain financial transactions that are not open to the average investor. ECPs are often corporations, partnerships, organizations, trusts, brokerage firms, or investors that have total assets in the millions.

What do you mean by commodity exchange?

A commodities exchange is a legal entity that determines and enforces rules and procedures for trading standardized commodity contracts and related investment products. A commodities exchange also refers to the physical center where trading takes place. The most traded commodity future contract is crude oil.

Is a swap dealer an ECP?

Commission Regulations §§ 1.3(m)(1)-(4) provide that the ECP definition now includes swap dealers, security-based swap dealers, major swap participants and major security-based swap participants, as those terms are defined in the Page 6 Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080 CEA …

Can a swap dealer trade with a non eligible contract participant?

Because section 2(e) of the CEA makes it unlawful for a person that is not an eligible contract participant to enter into a swap – even if for hedging purposes – unless that swap is entered into over a board of trade that has been designated by the Commodity Futures Trading Commission as a contract market (e.g., a …

Are FX Swaps regulated by CFTC?

Foreign Exchange Forwards and Swaps Exempt from CFTC Regulation; CFTC Also Grants Relief to Family Offices and Funds-of-Funds.

Does CFTC regulate commodity swaps?

Under the comprehensive framework for regulating swaps and security-based swaps established in Title VII, the CFTC is given regulatory authority over swaps, the SEC is given regulatory authority over security-based swaps, and the Commissions jointly are to prescribe such regulations regarding mixed swaps as may be …

What does Commodity Exchange Act (CEA) mean?

The Commodity Exchange Act (CEA) is a 1936 law that regulates commodities and futures trading activities. It was designed to prevent and remove obstructions on the interstate commerce in commodities by regulating transactions on commodity futures exchanges.

What commodities can you trade on U.S. exchanges?

Some common tradable commodities and their trading symbols are as follows: Gold (GC) Crude oil (WTI) Rough rice (ZR) Corn (EMA) Wool (ASX)

Can commodities affect currency rates?

Even commodities (gold, oil prices, wheat, etc.) may affect the exchange rates between countries. But commodity price shifts will not affect all nations, or their currencies, in the same manner. After all, nations with moderate supplies of a commodity will not have their currency affected as greatly by price shifts as nations who have little to no supply of their own.