Commodity Futures Modernization Act (CFMA)

Commodity Futures Modernization Act (CFMA),

Definition of Commodity Futures Modernization Act (CFMA):

  1. The Act also clarified the responsibilities of two separate regulatory agencies, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), to eliminate overlapping jurisdictions between the two agencies and establish specific enforcement activities for each.

  2. A U.S. law enacted in 2000, which deregulated over-the-counter (OTC) derivatives, specifically futures contracts. The law allows sophisticated parties to trade the contracts without scrutiny under the Commodity Exchange Act of 1936. Instead, trading activity in these contracts must follow general safety and soundness standards.

  3. The Commodity Futures Modernization Act, (CFMA) signed into law on December 21, 2000 updates commodity trading regulations. The most notable change was in addressing newer types of financial contracts such as over-the-counter derivatives.

Meaning of Commodity Futures Modernization Act (CFMA) & Commodity Futures Modernization Act (CFMA) Definition