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History of the CFTC

History of the CFTC hicago Board of Trade (CBOT) is founded as a cash market for grain. Forward or to-arrive contracts begin trading at the CBOT almost immediately. ansas City Board of Trade is established by local Kansas City merchants as a means of trading grain. ardized terms are created for forward or to-arrive contracts. overnor of Illinois signs an act of the Illinois legislature that grants a corporate charter to the CBOT. This charter, among other things, grants the CBOT self-regulatory authority over its members, standardizes grades and provides for CBOT-appointed inspectors of grain whose decisions are binding on members. This is one of several steps in the evolution of forward contracts to modern standardized futures contracts. CFTC Annual reports published before 2004 considered 1859 to be the beginning of futures trading in CBOT wheat, corn, and oats. al trading rules are instituted at the CBOT, particularly concerning margin and delivery procedures, another step in the evolution of futures contracts. BOT adopts a rule banning corners (defined as making contracts for the purchase of a commodity, and then taking measures to render it impossible for the seller to fill his contract, for the purpose of extorting money from him). This is the first known regulatory attempt to deter manipulation. ew York Cotton Exchange is founded. The NYCE cotton futures contract is traded today on ICE Futures US. utter and Cheese Exchange of New York, predecessor to the New York Mercantile Exchange, is founded. es trading begins at the Kansas City Board of Trade. BOT begins publishing futures prices on a regular basis.  Future CBOT documents considered this to be the beginning of true futures trading at the CBOT. inneapolis Chamber of Commerce establishes an exchange designed to promote trade in grains and to prevent abuses. In 1947, it became the Minneapolis Grain Exchange. utter and Cheese Exchange of New York is renamed the New York Mercantile Exchange. irst clearing organization is established to clear CBOT contracts, initially on a voluntary basis. irst bills are introduced in Congress to regulate, ban, or tax futures trading in the U.S. Over the next 40 years, approximately 200 such bills will be introduced. hicago Butter and Egg Board, predecessor to the Chicago Mercantile Exchange, is founded. otton Futures Act, which imposes a prohibitive tax on cotton futures contracts that do not meet certain regulatory requirements, is enacted. upreme Court declares the Cotton Futures Act unconstitutional on the grounds that it was a revenue bill that originated in the Senate rather than the House of Representatives. version of the Cotton Futures Act is enacted that addresses the constitutional concerns, but is otherwise similar to the 1914 act. hicago Butter and Egg Board is renamed the Chicago Mercantile Exchange. ederal Trade Commission releases the first of seven volumes of its Report on the Grain Trade. Several volumes discuss the grain futures markets (referred to at that time as future markets) and make recommendations regarding the regulation of grain futures contracts (including the establishment of speculative position limits). The final volume is released in 1926. uture Trading Act which provides for the regulation of futures trading in grain (corn, wheat, oats, rye, etc.) is enacted. Under the Future Trading Act, the Secretary of Agriculture is empowered to designate exchanges that meet certain requirements enumerated in the Act as contract markets in grain futures. The Future Trading Act also imposes a prohibitive tax of 20 cents per bushel on all options trades and on grain futures trades that are not executed on a designated contract market. .S. Supreme Court declares the Future Trading Act unconstitutional in Hill v. Wallace. The Future Trading Act imposed a prohibitive tax whose primary purpose was to force boards of trade to submit to Federal regulation rather than citing the interstate commerce clause of the Constitution to establish Federal jurisdiction. The Supreme Court ruled that this use of Congress's taxing power was unconstitutional. rain Futures Act, predecessor to the Commodity Exchange Act, is enacted. The provisions of the Grain Futures Act, including the requirements for designation as a contract market, are similar to those of the Future Trading Act. Unlike the Future Trading Act, the Grain Futures Act is based on the interstate commerce clause and bans off-contract-market futures trading rather than taxing it. The Grain Futures Administration is formed as an agency of the U.S. Department of Agriculture (USDA) to administer the Grain Futures Act. The Grain Futures Act also creates the Grain Futures Commission, which consists of the Secretary of Agriculture, the Secretary of Commerce, and the Attorney General. The authority to suspend or revoke a contract market designation is vested in the Grain Futures Commission. upreme Court rules in Chicago Board of Trade v. Olsen that the Grain Futures Act unlike its predecessor, the Future Trading Act, is constitutional. rain Futures Administration implements a large trader reporting system, under which each clearing member is required to report on a daily basis the market positions of each trader exceeding a specified size. This large trader reporting system remains an integral part of the CFTC?s oversight scheme to this day. Using this data, the Grain Futures Administration begins publishing in its annual reports information similar to that contained in today?s Commitments of Traders reports. ecretary of Agriculture temporarily suspends large trader reporting requirements, effective until November 1, 1927, in response to complaints that the requirements were preventing large bullish speculators from entering the market, thus allegedly depressing grain prices. Following the suspension, the Grain Futures Administration determines that large trader reporting requirements did not discourage bullish speculators. ecretary of Agriculture again temporarily suspends large trader reporting requirements, in response to complaints that the requirements are depressing grain prices (which at this point in the Great Depression are at historically low levels, but are not yet at record lows). Wheat, corn, and oat futures prices decline to all-time record lows during the period in which the suspension is in effect. The reporting requirements are reinstated on July 20, 1933. ommodity Exchange (COMEX) is founded from the merger of the National Metal Exchange, the Rubber Exchange of New York, the National Raw Silk Exchange, and the New York Hide Exchange (the oldest of these exchanges was founded in 1882). By the 1970s, COMEX becomes an exchange that primarily trades gold, silver, and copper futres. Since 1994, COMEX has operated as a subsidiary of the New York Mercantile Exchange (NYMEX), which in turn became a subsidiary of the CME Group in 2008. ommodity Exchange Act is enacted. The Commodity Exchange Act replaces the Grain Futures Act and extends Federal regulation to a list of enumerated commodities that includes cotton, rice, mill feeds, butter, eggs, and Irish potatoes, as well as the grains. All references to grains in the Grain Futures Act are changed to commodities. The Grain Futures Commission becomes the Commodity Exchange Commission and continues to consist of the Secretary of Agriculture, the Secretary of Commerce, and the Attorney General. The Commodity Exchange Act grants the Commodity Exchange Commission the authority to establish Federal speculative position limits, but not the authority to require exchanges to set their own speculative position limits. The Commodity Exchange Act, among other things, also requires futures commission merchants to segregate customer funds that are deposited for purposes of margin, prohibits fictitious and fraudulent transactions such as wash sales and accommodation trades, and bans all commodity option trading. The option ban remains in effect until 1981. ommodity Exchange Administration is formed within the USDA to succeed the Grain Futures Administration and administer the Commodity Exchange Act. ommodity Exchange Act is amended to add wool tops (a type of processed wool that is ready to be manufactured into textiles) to the list of regulated commodities. ommodity Exchange Commission promulgates the first Federal speculative position limits for futures contracts in grains (then defined as wheat, corn, oats, barley, flaxseed, grain sorghums, and rye), following an extended public comment period and hearings on the record. ommodity Exchange Commission establishes a Federal speculative position limit for cotton futures contracts. ommodity Exchange Act is amended to add fats and oils (including lard, tallow, cottonseed oil, peanut oil, soybean oil, and all other fats and oils), cottonseed meal, cottonseed, peanuts, soybeans, and soybean meal to the list of regulated commodities. ommodity Exchange Administration is merged with other agencies to form the Agricultural Marketing Administration. The organization is now known as the Commodity Exchange Branch of the Agricultural Marketing Administration. gricultural Marketing Administration is merged into the Food Distribution Administration, with the Commodity Exchange Branch renamed the Compliance Branch. ood Distribution Administration is consolidated with three other agencies to form the Administration of Food Production, which is renamed the War Food Administration on April 19, 1943. Several more reorganizations in USDA affect the regulatory organization for commodity futures trading over the next few years. inneapolis Chamber of Commerce is renamed the Minneapolis Grain Exchange. nsibility for administering the Commodity Exchange Act is transferred to the Commodity Exchange Authority, an agency of USDA. ommodity Exchange Act is amended to enable the Secretary of Agriculture to submit to Congress (pursuant to a congressional subpoena issued two days earlier) and make public the names, addresses, and market positions of large traders (which the Commodity Exchange Act normally requires be kept confidential). Shortly thereafter, the Secretary submits and publishes 35,000 large trader reports. ommodity Exchange Act is amended to add wool (as opposed to wool tops) to the list of regulated commodities. ommodity Exchange Act is amended to grant the Commodity Exchange Authority the authority to issue investigative subpoenas prior to filing a formal administrative proceeding. ommodity Exchange Act is amended to add onions to the list of regulated commodities. ommodity Exchange Act is amended to allow the Commodity Exchange Authority to set the level of registration and renewal fees for futures commission merchants and other registrants. Prior to this, these fees were fixed legislatively at $10. ommodity Exchange Authority issues a complaint charging Vincent W. Kosuga, Sam S. Siegel, and National Produce Distributors with manipulating and/or attempting to manipulate three onion futures contract months. The complaint charges the respondents with one attempted upward manipulation (of the November 1955 contract), one attempted price stabilization manipulation (of the November and December 1955 contracts), and one successful downward manipulation. The March 1956 futures contract, the subject of the alleged downward manipulation, fell from near $2 per 50-lb. bag in late 1955 to 15 cents on the last trading day in March 1956. On June 3, 1960, a USDA Judicial Officer found that the respondents performed the attempted stabilization and successful downward manipulation, but did not find sufficient evidence for the upward manipulation. Following the issuance of the complaint, Congress held hearings to consider banning onion futures trading. ommodity Exchange Act is amended to allow for the exemption from speculative position limits of anticipatory hedges (i.e., long hedges of anticipated needs for a commodity by processors or manufacturers). On the same day, the Bank Holding Company Act of 1956 makes some technical amendments to the Commodity Exchange Act. nion Futures Act bans futures trading in onions, but does not amend the Commodity Exchange Act. Onions remain on the list of regulated commodities until 1974 and the Onion Futures Act remains in effect to this day. ommodity Exchange Authority publishes the first monthly Commitments of Traders report, replacing the annual reports that had been published in previous years. at is known as the Great Salad Oil Swindle, Anthony (Tino) DeAngelis, owner of the Allied Crude Vegetable Oil Refining Corp., is indicted for, among other things, creating phony warehouse receipts for non-existent soybean oil (through a variety of methods including filling storage tanks with water and covering the water with a thin layer of soybean oil on top) and using those receipts as loan collateral to finance heavy trading of soybean, soybean oil, and cottonseed oil futures (including a 1962 attempt to corner the soybean market). The scandal causes 16 firms (including two Wall Street brokerage houses and a subsidiary of American Express) to go bankrupt and leads to calls for increased regulation of the commodity futures markets. DeAngelis is convicted in 1965 and sentenced to ten years in prison. enate passes a bill (introduced by Senator Edmund Muskie) to ban futures trading in potatoes, but it does not become law. e first major commodities legislation since 1936, the Commodity Exchange Act is amended to, among other things, add livestock and livestock products (e.g., live cattle, pork bellies) to the list of regulated commodities and institute minimum net financial requirements for futures commission merchants. The 1968 amendments also enhanced the enforcement provisions of the Act in various ways, including enhanced reporting requirements, increases in criminal penalties for manipulation and other violations of the Act, and a provision allowing for the suspension of contract market designation of any board of trade that fails to enforce its own rules. ommodity Exchange Act is amended to add orange juice to the list of regulated commodities. and soybean futures prices reach record highs. This is blamed in part on excessive speculation and there are allegations of manipulation. Congress begins to consider revising the Federal regulatory scheme for commodities. ess passes the Commodity Futures Trading Commission Act of 1974, and it is signed by President Gerald Ford. The bill overhauls the Commodity Exchange Act and creates the Commodity Futures Trading Commission (CFTC or Commission), an independent agency with powers greater than those of its predecessor agency, the Commodity Exchange Authority. For example, while the Commodity Exchange Authority only regulated agricultural commodities enumerated in the Commodity Exchange Act, the 1974 act granted the CFTC exclusive jurisdiction over futures trading in all commodities. of the first five CFTC members, including the CFTC's first Chairman, are sworn in. rity for the regulation of futures trading is transferred from the Commodity Exchange Authority, an agency in the Department of Agriculture, to the CFTC. FTC authorizes exchanges to continue trading futures contracts on a number of commodities previously unregulated under the Commodity Exchange Act. Effectively, this action brings under Federal regulation all commodities for which a futures contract is actively traded. FTC approves the first futures contract on a financial instrument - the Chicago Board of Trade Government National Mortgage Association (Ginnie Mae) certificates futures contract. FTC approves the first futures contract on U.S. government debt - the Chicago Mercantile Exchange 90-Day U.S. Treasury bill futures contract. ew York Mercantile Exchange declares a default in its May Maine potato contract. After an extensive investigation, the CFTC brings manipulation charges against both the long and short position holders. FTC asks the U.S. District Court in Chicago to order seven members of the Hunt family of Dallas, and a related company, to liquidate positions that exceed the three million bushel speculative position limit for soybean futures on the Chicago Board of Trade. FTC approves the first futures contract on long-term U.S. government debt - the Chicago Board of Trade U.S. Treasury bond futures contract. FTC declares a market emergency in the December coffee C futures contract on the New York Coffee and Sugar Exchange (which merged with the New York Cocoa Exchange to form the Coffee Sugar and Cocoa Exchange in 1979 and has now become part of the New York Board of Trade), resulting in an orderly reduction of the open interest in that contract. This is one of several emergencies in coffee futures during the late 1970s. FTC suspends most commodity options transactions in the U.S. because of pervasive fraud in so-called London options and dealer options on physical commodities. utures Trading Act of 1978 is signed into law by President Carter. The act renews the CFTC's regulatory authority for four years, requires the CFTC to maintain communication with the Securities and Exchange Commission, the Department of the Treasury, and the Federal Reserve Board, and makes some technical changes to the Commodity Exchange Act. FTC adopts the first rules to govern the operations of commodity pool operators (CPO) and commodity trading advisors (CTA) in a new Part 4 of its rules. FTC announces a temporary moratorium on entry into the leverage contract business in gold and silver bullion and bulk coins. emergency action, the CFTC votes to prohibit further trading in the Chicago Board of Trade March wheat futures contract, the first time the Commission orders a market closed in the interest of preventing a price manipulation. emergency action, the CFTC orders the suspension of futures trading for two days for wheat, corn, oats, soybean meal, and soybean oil on four exchanges after President Carter announces an embargo on the sale of certain agricultural goods to the Soviet Union that includes substantial amounts of grain. careful consideration of a host of market factors, the CFTC votes not to use its emergency powers to order a suspension of trading in silver futures as prices plummet. quired by Public Law 96-276, the CFTC transmits to Congress a report on events in the silver market during late 1979 and early 1980, and on issues involving futures contracts on financial instruments. FTC adopts a comprehensive set of regulations to govern exchange-trading of options on futures contracts under a controlled and monitored three-year pilot program. FTC grants registration to the National Futures Association as a self-regulatory futures association and approves its articles, bylaws, and rules. NFA begins to hire staff and commences operations on October 1, 1982. FTC adopts Regulation 1.61 (now part of CFTC Regulation 150, 17 CFR 150) requiring exchanges to establish speculative position limits in all futures contracts. FTC and the Securities and Exchange Commission jointly announce a basic jurisdictional agreement on the regulatory responsibility of each agency for a variety of financial instruments, in particular stock index futures. This agreement was known as the Shad-Johnson Accord and later became part of the Commodity Exchange Act. FTC approves the first futures contract settled in cash at expiration, the Eurodollar contract on the Chicago Mercantile Exchange. FTC approves the first futures contract based on a stock index, the Value Line Index Average traded on the Kansas City Board of Trade. FTC approves the first options on futures contracts since its announcement of the exchange-traded options pilot program. The contracts include options on sugar futures on the Coffee Sugar and Cocoa Exchange; options on gold futures on the MidAmerica Commodity Exchange (later acquired and eventually closed by the Chicago Board of Trade) and Commodity Exchange, Inc. (now a part of the New York Mercantile Exchange); and options on Treasury bond futures on the Chicago Board of Trade. FTC approves the first options based on stock index futures contracts: an option for the New York Stock Exchange Composite Index futures contract on the New York Futures Exchange, Inc. and an option on the Standard & Poor's 500 (S & P 500) Index futures contract on the Chicago Mercantile Exchange. dent Reagan signs the Futures Trading Act of 1982, renewing the CFTC's mandate to regulate futures trading for four more years and clarifying Commission jurisdiction in a number of areas. Among other things, this act codified the Shad-Johnson Accord (which gave the CFTC jurisdiction over broad-based stock index futures and banned single-stock and narrow-based stock index futures), and required the CFTC to act on new contract proposals and rule amendments within specified time periods (365 days for new contracts and 180 days for rule amendments). FTC adopts final rules governing introducing brokers (IB) and associated persons (AP) of introducing brokers, commodity pool operators, and commodity trading advisors - new registrant categories created by the Futures Trading Act of 1982. Concurrently, the Commission authorizes the National Futures Association to perform registration processing functions for introducing brokers and their associated persons, the first time NFA is authorized to perform registration functions. FTC adopts final rules to govern temporary licenses for associated persons and a new system of statutory disqualifications for all registrants. Concurrently, the National Futures Association is authorized to grant temporary licenses in appropriate cases. Effective September 30, 1985, following NFA?s adoption of rules in this area, the CFTC authorizes NFA to take adverse action against registrants, subject to appeal to the CFTC. FTC's Office of the General Counsel issues a letter to the Toronto Futures Exchange stating that the Commission will not take any enforcement action if the TFE?s stock index futures contract on the Toronto Stock Exchange Composite 300 Stock Index is offered and sold in the U.S. Since then, Commission staff has issued many similar letters regarding other foreign stock index futures contracts. FTC approves amendments to Chicago Mercantile Exchange rules that allow it to establish a trading link with the Singapore International Monetary Exchange, the first trading and clearing link between a domestic and a foreign exchange. FTC submits A Study of the Nature, Extent and Effects of Futures Trading by Persons Possessing Material, Nonpublic Information to its Congressional oversight committees. FTC approves the first options on domestic agricultural commodity futures contracts on six exchanges. FTC authorizes the National Futures Association to perform registration processing functions for futures commission merchants, commodity pool operators, commodity trading advisors, and their respective associated persons. ederal Reserve Board, the Securities and Exchange Commission, and the CFTC submit to Congress A Study of the Effects on the Economy of Trading in Futures and Options. FTC approves the first option on a physical commodity - Amex Commodity Corporation's physical gold bullion option contract. FTC ends its silver investigation, alleging that Nelson Bunker Hunt, William Herbert Hunt, and other individuals and firms manipulated and attempted to manipulate silver prices in 1979 and 1980. e Investors, Inc., a clearing member at COMEX, defaults on a margin call on options on gold futures. The default affects the funds of 100 customers, mostly local traders, and causes the Commission to consider numerous changes to its rules. Ultimately, improved surveillance, early warning, and margining procedures are developed. FTC adopts Regulation 4.5, 17 CFR 4.5, which excludes certain otherwise regulated persons from the commodity pool operator definition upon the filing of a notice of eligibility, subject to certain limits on trading. Effective August 8, 2003, trading limits have been removed. Most of the notices filed under the regulation are filed by registered investment companies. FTC terminates the pilot program started in 1981 for exchange-traded commodity option contracts not based on domestic agricultural commodities. With the successful completion of the pilot program, non-agricultural options continue to trade according to CFTC regulations. FTC, the Securities and Exchange Commission, and the United Kingdom Department of Trade and Industry announce the signing of a Memorandum of Understanding (MOU), which will enhance cooperation and mutual assistance in securing compliance with and enforcement of securities and commodities laws in both countries. Since then, the Commission has entered into information-sharing and enforcement MOUs with many other foreign regulators. dent Reagan signs the Futures Trading Act of 1986, reauthorizing the CFTC for three years. FTC votes to end the pilot program in options on agricultural futures contracts and physical commodities, and to continue to allow trading of options on futures in those commodities. FTC adopts final rules to permit the offer and sale of foreign futures and options in the U.S. and to apply the same customer protection rules to the offer and sale of foreign futures and options as to the offer and sale of domestic futures and options. These rules include a requirement (repealed on March 12, 1996) that foreign options trading must be approved on a case-by-case basis. e biggest one-day price plunge in stock market history, no CFTC-regulated systems fail and no firms default on obligations. FTC releases an interim report on stock index futures and related stock market activity during October 1987; a follow-up report was released on January 8, 1988, and a final staff report on February 1, 1988. resident's Working Group on Financial Markets (Working Group), composed of the CFTC, the Securities and Exchange Commission, the Treasury Department, and the Federal Reserve Board, presents its report on the October 1987 stock market break to President Reagan. FTC approves the offer and sale of the first foreign option contracts in the U.S. - options to be traded on the SIMEX, the SFE, and the Montreal Exchange. FTC approves the ACC gold bullion warrants - options on physical gold bullion, the first warrants contract approved by the CFTC. FTC approves proposals to amend daily price limits and trading halt provisions for stock index futures and option contracts traded on the Chicago Mercantile Exchange, the Chicago Board of Trade, the Kansas City Board of Trade, and the New York Futures Exchange. These proposals were based on recommendations by the Working Group. FTC approves the Chicago Board of Trade futures contracts in long-term U.K. gilts, the Japanese Stock Index (TOPIX), and long-term Japanese government bonds, and the Chicago Mercantile Exchange Nikkei Stock Average futures contract. These are the first domestic futures contracts based on foreign stock indices and foreign government debt instruments. ews media report the disclosure of a two-year undercover investigation of the Chicago trading pits conducted by the Federal Bureau of investigation in cooperation with the CFTC and the Department of Justice. The CFTC takes a number of market integrity actions in the following months. FTC unanimously approves rules proposed by the Chicago Mercantile Exchange for the basic Globex system, the first international electronic trading system. Trading begins in June 1992. hicago Board of Trade institutes an emergency action concerning the July 1989 CBOT soybean futures contract. CBOT requires all large traders to reduce their positions prior to the expiration of the July contract. The contract expires in an orderly manner. FTC approves final rules addressing the regulation of hybrid instruments that combine characteristics of commodity options with debt, preferred equity, or depository interests and, at the same time, approves a policy statement concerning swap transactions and rules establishing an exemptive framework for certain hybrid instruments with limited commodity option components. FTC releases a major economic analysis of dual trading prepared by its Division of Economic Analysis. FTC and the Commission des Operation de Bourse (COB) of France sign two agreements that provide the most comprehensive structure of information sharing and cooperation yet achieved between financial regulatory authorities in different countries. FTC, in a move toward closer worldwide cooperation among regulatory authorities, adopts ten general principles intended to assist regulators and developers of screen-based trading systems in addressing areas of common concern. The ten principles were drafted by a CFTC-chaired working group of the International Organization of Securities Commissions (IOSCO). IOSCO also adopts the ten principles. to and during the Persian Gulf War, the CFTC works closely with the U.S. Department of Energy to ensure that futures markets have ample access to cash market information about crude oil production and to ensure that the markets perform their price discovery and risk shifting functions in an orderly manner. The Commission reported to Congress that it found no evidence that the sharp rises in energy prices were caused by manipulation or excessive speculation. FTC released a year-long staff study analyzing the performance of the corn, wheat, and soybean futures contracts traded at the CBOT, An Analysis of the Delivery-Point Provisions of the CBOT's Corn, Wheat and Soybean Futures Contracts. FTC and the Securities and Exchange Commission concurrently approve proposed rule changes by the Options Clearing Corporation (OCC) and the Chicago Mercantile Exchange intended to improve coordination in the clearance and settlement of futures and options. The rule changes expand the existing cross-margining programs between the OCC and CME to permit clearing members to include intermarket futures and option positions held in certain non-proprietary accounts. FTC approves final rules which exempt commodity pool operators and commodity trading advisors of pools sold exclusively to certain highly accredited investors from specific disclosure, reporting, and recordkeeping requirements. FTC implements initiatives to eliminate unnecessary paperwork. As a result of this initiative, market reports from exchanges are now sent electronically to the Commission. dent Bush signs the CFTC's reauthorization legislation, the Futures Trading Practices Act of 1992 (FTPA), expanding the CFTC's regulatory authority and reauthorizing the agency until October 1994. The Futures Trading Practices Act, among other things, granted the Commission the authority to exempt over-the-counter (OTC) derivative and other transactions from CFTC regulation and provided for registration of local traders. new exemptive authority granted in the Futures Trading Practices Act, the CFTC exempts certain swap agreements and hybrid instruments from regulation under the Commodity Exchange Act. b placed by terrorists explodes in the basement of the World Trade Center, disrupting futures trading in New York and causing the temporary relocation of the CFTC's New York office. FTC adopts rules requiring the registration of floor brokers and ethics ucm for all individual registrants, as mandated by the Futures Trading Practices Act. The Commission also adopts rules permitting the suspension of registrants charged with felonies under authority granted by the Futures Trading Practices Act. Futures Trading Practices Act exemptive authority, the CFTC exempts from regulation certain contracts for the deferred purchase or sale of specified energy products. FTC approves final rules prohibiting the practice of dual trading by floor brokers, unless an exemption is explicitly granted by the CFTC, in contract markets that trade in excess of a threshold level of 8,000 contracts a day. FTC approves 46 new futures and option contracts, breaking the previous record. FTC releases a report entitled OTC Derivative Markets and Their Regulation, the first of several required by the Futures Trading Practices Act. sponse to a recommendation in the CFTC's OTC Derivative Markets Report, the President's Working Group on Financial Markets expands its charter to encompass new developments in financial markets, including the growth of OTC derivatives. FTC files an administrative complaint against two former Chicago Board of Trade members, Anthony Catalfo and Darrell Zimmerman, alleging that the respondents engaged in a scheme to manipulate Treasury bond futures and put options on the CBOT. On September 26, 1994, an administrative law judge issues a default order against both respondents finding that they committed the violations as alleged. FTC releases another report mandated by the Futures Trading Practices Act, A Study of the Global Competitiveness of US Futures Markets.? sponse to concerns over cattle market volatility, the CFTC releases a report entitled, The Live Cattle Futures Market, April to June 1994: Review of Market Fundamentals and Analysis of Large Trader Positions and Activity. In September 1994, the CFTC releases a follow-up report entitled, An Analysis of Intraday Trading of Beef Packers in Live Cattle Futures. FTC approves final rules permitting registrants to provide to customers a generic risk disclosure statement that will satisfy risk disclosure requirements applicable to both domestic and foreign commodity futures and options transactions. FTC releases separate studies on audit trails, computerized trading, and penalties as required by the Futures Trading Practices Act of 1992. FTC, in coordination with the Securities and Exchange Commission, files and simultaneously settles, for a fine of $10 million, an administrative complaint against BT Securities, a subsidiary of Bankers Trust. The Commission's complaint alleges that BT Securities committed fraud in its over-the-counter (OTC) derivatives transactions with Gibson Greetings. FTC approves Phase I of new risk assessment rules which require futures commission merchants to maintain and file organization charts showing major affiliated persons, policies and procedures governing risk management, and consolidated financial statements. dent Clinton signs a bill reauthorizing the CFTC through the year 2000, but otherwise making no amendments to the Commodity Exchange Act. Commitments of Traders report is introduced that reflects, for each market, the combined futures and futures-equivalent option positions of traders identified through the CFTC's and the exchanges' large trader reporting systems. sentatives of regulatory bodies from 16 countries, responsible for supervising the world's leading futures exchanges, issue a Declaration at a meeting in Windsor, England hosted by the U.K. Securities Investment Board (SIB) and the CFTC. The Windsor Declaration outlines the steps the representatives propose to take to strengthen the supervision of the international futures markets. FTC adopts comprehensive revisions to rules governing disclosure by commodity pool operators and commodity trading advisors. The changes are designed to increase the clarity and comprehension of disclosure to investors. FTC launches its Internet website, (CFTC Press Release 3867-95, October 10, 1995) FTC's Division of Trading and Markets issues a no-action letter to permit the Deutsche Terminborse (DTB) (predecessor to Eurex) to install and utilize DTB computer terminals in the U.S. in connection with the purchase and sale of certain futures and options contracts, the staff's first consideration of a request to place computer terminals of an off-shore exchange in the U.S. (CFTC Press Release 3893-96, March 4, 1996) FTC eliminates the requirement for case-by-case approval of the offer and sale of foreign option contracts in the U.S., subject to existing restrictions for options on foreign stock index futures and foreign sovereign debt futures. (CFTC Press Release 15-96, March 25, 1996) FTC announces that it is one of 14 international futures regulators that are the founding signatories of a Declaration on Cooperation and Supervision of International Futures Exchanges and Clearing Organizations. (CFTC Press Release 3995-96, March 15, 1996) C order imposes a $600,000 civil monetary penalty against Fenchurch Capital Management Inc. of Chicago, on charges of market manipulation and cornering of the cheapest-to-deliver note deliverable against the Chicago Board of Trade ten-year Treasury note futures contract. (CFTC Press Release 3922-96, July 10, 1996) FTC approves a record 92 new futures and option contracts. FTC notifies the Chicago Board of Trade that the delivery terms of its corn and soybean futures contracts do not satisfy the statutory objectives of Section 5a(a)(10) of the Commodity Exchange Act of permitting the delivery of any such point or points and at such quality and locational price differentials as will tend to prevent or diminish price manipulation, market congestion, or the abnormal movement of such commodity in interstate commerce” and gives the CBOT 75 days to respond. (CFTC Press Release 3983-96, December 19, 1996) nn v. CFTC, the U.S. Supreme Court rules that foreign currency options are ''transactions in foreign currency'' for purposes of the Treasury Amendment exclusion to the Commodity Exchange Act, and, thus, that the CFTC has no jurisdiction over such transactions. The Commodity Futures Modernization Act of 2000 will endeavor to clarify CFTC jurisdiction over retail transactions in foreign currency futures and options. FTC approves final rules for fast-track approval of new contracts and contract amendments. These rules provide for approval of many new contracts within ten days and further provide that rule amendments and certain new contracts are to be approved within 45 days. At this time, under the Commodity Exchange Act, the Commission legally has 365 days to act on applications for new contracts and 180 days to act on proposed rule amendments. (CFTC Press Release 3994-97, February 27, 1997) FTC orders the Chicago Board of Trade to change the delivery specifications for its corn and soybean futures contracts pursuant to Section 5a(a)(10) of the Commodity Exchange Act. The Commission notes that the CBOT can propose alternate specifications that meet the requirements of the Act. (CFTC Press Release 4077-97, November 7, 1997) ecurities and Exchange Commission vetoes the Chicago Board of Trade's proposed futures and futures options on the Dow Jones Transportation Average and the Dow Jones Utilities Average, stating that these contracts are too narrow-based to meet the requirements of the 1982 Shad-Johnson Accord. This is the only time the SEC exercised its veto power under the Accord. A court decision subsequently overturns the SEC veto and the CFTC approves the contracts on October 27, 1999. FTC adopts amendments to its risk disclosure rules to eliminate requirements that futures commission merchants and introducing brokers provide institutional investors and certain other sophisticated market participants with standardized risk disclosure statements, while continuing to require such risk disclosure statements for retail customers. (CFTC Press Release 4106-98, February 13, 1998) FTC issues a concept release seeking public comments to assist it in reexamining its approach to the over-the-counter (OTC) derivatives market. After an extended public comment period and much discussion among the members of the Working Group, Congress passes legislation (part of an October 1998 appropriations bill) temporarily preventing the CFTC from taking further action. Congress eventually creates legal certainty for OTC derivatives in the Commodity Futures Modernization Act of 2000. (CFTC Press Release 4142-98, May 7, 1998) FTC approves the Chicago Board of Trade's new corn and soybean futures contracts with delivery specifications that supersede those ordered by the CFTC on November 7, 1997. (CFTC Press Release 4143-98, May 7, 1998) FTC enters into a settlement with Sumitomo Corporation to resolve allegations of manipulating the copper market in 1995 and 1996 that includes a civil monetary penalty of $150 million. (CFTC Press Release 4144-98, May 11, 1998) FTC permits futures-style margining of commodity options traded on regulated futures exchanges. (CFTC Press Release 4155-98, June 11, 1998) FTC approves for the first time an order exempting certain cleared swap agreements from most provisions of the Commodity Exchange Act and Commission regulations. The order applies to certain swap agreements submitted for clearing through SwapClear, a swaps clearing organization developed by the London Clearing House Limited. (CFTC Press Release 4247-99, March 23, 1999) hicago Board of Trade, Chicago Mercantile Exchange, and New York Mercantile Exchange petition the CFTC pursuant to Section 4(c) of the Commodity Exchange Act for exemptive relief from certain statutory requirements in three areas: (1) the contract market designation procedures for new contract submissions; (2) the contract market rule review procedures; and (3) pertinent provisions of the Act that would otherwise prevent the immediate adoption and implementation of trading rules and procedures for a contract listed by a contract market that are comparable to those of a competing foreign exchange. The CFTC requests public comment on this petition. The concerns raised in this petition are eventually addressed by the Commodity Futures Modernization Act of 2000. (CFTC Press Release 4303-99, August 20, 1999) FTC staff issues a report comparing the global competitiveness of U.S. futures and option markets to their counterparts abroad. The report, The Global Competitiveness of US Futures Markets Revisited, ?updates a 1994 CFTC study, using the same methodology as the earlier study. (CFTC Press Release 4333-99, November 4, 1999) orking Group issues a report unanimously calling for legislation creating greater legal certainty for over-the-counter (OTC) derivatives. FTC approves final rules that permit futures exchanges to list new contracts for trading pursuant to exchange certification - without prior Commission approval. This addresses one of the requests in the June 25, 1999 petition for exemptive relief of the Chicago Board of Trade, Chicago Mercantile Exchange, and New York Mercantile Exchange. (CFTC Press Release 4339-99, November 17, 1999) FTC transmits to Congress a staff report, A New Regulatory Framework, which recommends changes to the CFTC's regulatory structure.  The report details changes that will lessen the regulatory burdens on U.S. futures markets by creating a more flexible regulatory framework.  At the same time, the framework provides the over-the-counter (OTC) markets with greater legal certainty.  Much of this framework will be incorporated into the Commodity Futures Modernization Act of 2000. (CFTC Press Release 4367-00, February 22, 2000) FTC permits use of electronic signatures in lieu of handwritten signatures by customers of futures commission merchants, clients of commodity trading advisors, and commodity pool participants. (CFTC Press Release 4372-00, March 6, 2000) ommission participates in the first annual international Internet Surf Day, organized by the International Organization of Securities Commissions (IOSCO), which targets futures and securities fraud and abuse on the Internet. This Surf Day includes the participation of approximately 220 individuals from 21 regulators in 18 countries.  The second Surf Day takes place on April 23, 2001. (CFTC Press Release 4399-00, May 15, 2000) FTC and Securities and Exchange Commission announce an agreement providing for joint jurisdiction over security futures products, that is, single stock futures and futures on narrow-based stock indices.  Under the agreement, which will be incorporated into the Commodity Futures Modernization Act of 2000, the CFTC retains exclusive jurisdiction over futures contracts on broad-based stock indices. (CFTC Press Release 4447-00, September 14, 2000) FTC approves rules implementing the New Regulatory Framework.  These rules are later superseded by passage of the Commodity Futures Modernization Act of 2000 and most new rules were subsequently withdrawn. (CFTC Press Release, 4475-00, November 22, 2000) dent Clinton signs into law the Commodity Futures Modernization Act of 2000, which, among other things, reauthorizes the Commission for five years, overhauls the Commodity Exchange Act to create a flexible structure for the regulation of futures and options trading, clarifies Commission jurisdiction over certain retail foreign currency transactions, and repeals the 18-year-old ban on the trading of single stock futures.  On the same day, the CFTC withdraws most of the New Regulatory Framework; however, the amendments to Regulation 1.25 concerning investment of customer funds by futures commission merchants and derivatives clearing organizations are made effective immediately with some technical corrections.  The amendments permit investment of customer funds in new types of instruments, such as money market mutual funds. (CFTC Press Release 4479-00, December 15, 2000; CFTC Press Release 4481-00, December 21, 2000) ght of the Commodity Futures Modernization Act's clarification of the CFTC's jurisdiction over retail foreign currency trading, the CFTC issues an advisory and a revised consumer alert addressing the offering of foreign currency trading opportunities to the retail public.  The advisory explains how firms may lawfully offer foreign currency trading opportunities and the consumer alert warns the public of the risks of foreign currency trading and of foreign currency scams. (Advisory on Foreign Currency; CFTC Press Release 4489-01, February 8, 2001) he first time since the passage of the Commodity Futures Modernization Act, the CFTC uses its newly-clarified authority to file a complaint charging fraud and the offering of illegal futures contracts against a firm soliciting retail investors to trade foreign currency contracts.  Over the next several years, the CFTC filed similar complaints against dozens of firms that solicit retail investors to trade foreign currency. (CFTC Press Release 4508-01, April 19, 2001) FTC approves the application of EnergyClear Corporation for registration as a derivatives clearing organization under the Commodity Exchange Act. This is the first new derivatives clearing organization that is not affiliated with a trading facility to be granted registration by the Commission since the passage of the Commodity Futures Modernization Act.  Derivatives clearing organizations for the existing futures exchanges were grandfathered in under the Commodity Futures Modernization Act. (CFTC Press Release 4540-01, July 11, 2001) FTC kicks off implementation of the Commodity Futures Modernization Act by adopting new rules for the various types of exchanges (with different levels of regulatory oversight) created by the Act.  These types of exchanges include designated contract markets, derivatives transaction execution facilities, exempt boards of trade, and exempt commercial markets. (CFTC Press Release 4547-01, August 1, 2001) FTC and the Securities and Exchange Commission adopt the first sets of rules to enable the trading of single stock futures and futures on narrow-based stock indexes. Additional rules are adopted in subsequent months. (CFTC Press Release 4550-01, August 13, 2001; CFTC Press Release 4554-01, August 21, 2001) FTC orders Avista Energy, Inc. to pay $2.1 million to settle CFTC charges of manipulating electricity futures; several former Avista employees (who each subsequently settle with the CFTC) and a NYMEX floor broker (who is found liable in September 2004) are also charged with participating in the manipulative scheme. (CFTC Press Release 4555-01, August 21, 2001) FTC adopts new rules for derivatives clearing organizations, further implementing the Commodity Futures Modernization Act. (CFTC Press Release 4560-01, August 22, 2001) FTC's New York office in the World Trade Center is destroyed in a terrorist attack; fortunately all Commission employees escape without serious injury. The trading floor of the New York Board of Trade (NYBOT) is also destroyed and trading is disrupted on other exchanges. NYBOT soon resumes trading on a back-up trading floor it has maintained since the 1993 World Trade Center bombing and eventually moves into permanent space in the NYMEX building. FTC issues an Order pursuant to Section 409 of the Federal Deposit Insurance Corporation Improvement Act, added by the Commodity Futures Modernization Act, concerning the multilateral clearing activities of NOS Clearing ASA, a Norwegian clearing house, in connection with transactions entered into on the International Maritime Exchange.  This is the first time the CFTC uses its authority under that section to determine that supervision by a foreign financial regulator, in this case the Norwegian Banking, Insurance and Securities Commission, of a multilateral clearing organization for over-the-counter (OTC) derivative instruments satisfies appropriate standards.  Accordingly, NOS Clearing ASA may act as a multilateral clearing organization for OTC derivative instruments in the same manner as a derivatives clearing organization or a registered securities clearing agency. (CFTC Press Release 4595-02, January 14, 2002 FTC releases a report on its own responses and those by industry participants to the terrorist attacks on September 11, 2001. (CFTC Press Release 4617-02, March 11, 2002) several months in temporary quarters following the September 11, 2001 attacks, the CFTC New York office moves into its new permanent space at 140 Broadway. FTC issues Report on the Study of the Commodity Exchange Act and the Commission's Rules and Orders Governing the Conduct of Registrants Under the Act, also known as the Intermediaries Study, pursuant to Section 125 of the Commodity Futures Modernization Act. (CFTC Press Release 4659-02, June 21, 2002) FTC restructures its staff organization to facilitate the implementation of the Commodity Futures Modernization Act.  Under the restructuring, the functions previously performed by the Division of Trading and Markets and the Division of Economic Analysis are performed by two new divisions and one new office: the Division of Market Oversight, the Division of Clearing and Intermediary Oversight, and the Office of the Chief Economist.  (CFTC Press Release 4600-02, February 1, 2002) dent Bush issues an executive order creating the Corporate Fraud Task Force; the chairman of the CFTC is a member. FTC and Securities and Exchange Commission adopt the final rules necessary to permit domestic trading in single stock futures, concerning margin and the treatment of customer funds, respectively. (CFTC Press Release 4685-02, August 2, 2002) ng in single stock futures is launched on two new exchanges - OneChicago and NQLX. y Marketing and Trade and West Coast Power LLC pay $5 million to settle CFTC charges of attempted manipulation and false reporting of prices. During 2003 and early 2004, many energy companies settle similar claims under the Commodity Exchange Act that they intentionally reported false natural gas price and volume information to energy reporting firms in an attempt to affect prices of natural gas contracts.  Some of the subsequent settlements are for $20 million or more. (CFTC Press Release 4728-02, December 19, 2002 FTC and the Federal Energy Regulatory Commission hold a joint conference on Credit Issues in the Energy Market: Clearing & Other Solutions. (CFTC Press Release 4752-03, February 11, 2003) FTC charges the bankrupt Enron Corporation and a former Enron vice president with manipulating prices in the natural gas market.  Enron also is charged with operating an illegal, undesignated futures exchange and offering illegal lumber futures contracts through Enron Online, its Internet trading platform.  Enron settles in May 2004 and the trader settles in July 2004. (CFTC Press Release 4762-03, March 12, 2003) FTC approves exchange rules implementing a common clearing link between the Chicago Board of Trade and Chicago Mercantile Exchange. (CFTC Press Release 4821-03, July 15, 2003) FTC and the National Futures Association announce new rules to combat fraud in the retail off-exchange foreign currency market. (CFTC Press Release 4833-03, August 26, 2003) FTC approves or (in most cases) accepts the exchange self-certification of a record 348 new futures and option contracts during fiscal year 2003.  While about 200 of these new contracts are single stock futures, the number of new non-single stock futures contracts easily exceeds the old record of 92 new contracts set in fiscal year 1996. FTC joins other members of the President's Corporate Fraud Task Force in undercover Operation Wooden Nickel to prosecute individuals and companies allegedly stealing millions of dollars through sales of illegal foreign currency futures contracts. (CFTC Press Release 4867-03, November 19, 2003) FTC designates the US Futures Exchange, LLC, also known as Eurex US, as a contract market for the automated trading of futures and options on futures contracts.  This is the first designated contract market to be owned by a foreign futures exchange. (CFTC Press Release 4886-04, February 4, 2004) FTC releases a Spanish-language consumer protection advisory on commodity scams. (CFTC Press Release 4913-04, April 14, 2004) Corporation receives the bankruptcy court's permission to enter into a settlement with the CFTC that provides for a $35 million civil monetary penalty.  Collection is considered unlikely in light of the bankruptcy. (CFTC Press Release 4920-04, April 28, 2004) TC v. Zelener, the U.S. Court of Appeals for the Seventh Circuit  finds that certain foreign currency transactions were spot transactions rather than futures contracts, and, thus, outside of CFTC jurisdiction. FTC announces that it has completed its seven-month investigation of the sharp upward movement in prices in the natural gas market that occurred in late 2003. The CFTC states that its investigation did not uncover evidence that any entity or individual engaged in activity with an intent to cause an artificial price in natural gas in late 2003. (CFTC Press Release 4982-04, August 30, 2004) FTC announces its participation, through a partnership with 19 other Federal agencies, in the launching of a new financial education website and toll-free hotline number. The website and the 1-888-mymoney toll-free hotline were established to provide Americans easy access to information that can help them better understand their money:  how to save it, invest it, and manage it wisely to meet important personal goals. (CFTC Press Release 5007-04, October 12, 2004) FTC and the Committee of European Securities Regulators (CESR) hold a two-day roundtable on cross-border derivatives issues which is attended by 60 market participants and senior regulators. The purpose of the roundtable is to hear the issues affecting those actively involved in transatlantic business in exchange-traded derivatives and related transactions, and to establish key areas where improvements can be made.  On March 31, 2005, the CFTC and CESR release a Communiqué requesting comment on a proposed work program to facilitate the conduct and supervision of a trans-Atlantic derivatives business.  The final communiqué is issued on June 28, 2005. (CFTC Press Release 5049-05, February 14, 2005) FTC holds a roundtable on commodity pool operators and the commodity pool industry that focuses on the growth, innovation, and regulation of the commodity pool industry and the challenges and issues faced by the industry. (CFTC Press Release 5061-05, March 24, 2005) FTC's Office of the Chief Economist releases a staff research report, Price Dynamics, Price Discovery and Large Futures Trader Interactions in the Energy Complex, ?which finds that managed money traders (MMTs or hedge funds) do not change their positions as frequently as other participants, particularly including hedgers. The staff found that there is a significant negative correlation between MMT positions and other participants' positions (including the largest hedgers). Results suggest that MMT traders provide liquidity to large hedgers and not the other way around. (CFTC Press Release 5074-05, April 29, 2005) FTC and the Federal Energy Regulatory Commission enter into a memorandum of understanding regarding the sharing of information and the confidential treatment of proprietary energy trading data, pursuant to the Energy Policy Act of 2005. (CFTC Press Release 5127-05, October 12, 2005) , Inc., the parent company of Refco LLC, a large futures commission merchant, files for Chapter 11 bankruptcy, eight days after the company announced that its chairman, Philip R. Bennett, has hidden $430 million in bad debts from the company's auditors and investors, and only two months after the company's initial public offering.  The futures commission merchant is not included in the bankruptcy filing and is subsequently sold to Man Financial.  During this time, CFTC auditors and attorneys are actively engaged in re-confirming that Refco LLC's customer funds on deposit remain uncompromised and that the capital requirements of Refco LLC continue to be met. FTC announces the filing and simultaneous settlement of charges against Shell Trading US Company (STUSCO) and Shell International Trading and Shipping Co. (STASCO), two companies whose ultimate parent is Royal Dutch Shell, and Nigel Catterall, who was the chief trader on behalf of STUSCO, for engaging in prearranged trades on the New York Mercantile Exchange (NYMEX) on five occasions between November 2003 and March 2004.  The settlement also directs STASCO to pay a $200,000 civil penalty and Catterall to pay a $100,000 civil penalty. (CFTC Press Release 5150-06, January 4, 2006) FTC holds a public hearing to discuss issues related to self-regulation and self-regulatory organizations in the U.S. futures industry. (CFTC Press Release 5159-06, February 13, 2006) FTC publishes in the Federal Register a request for comment as part of a comprehensive review of its commitments of traders (COT) reports. The COT reports are weekly reports, published by the CFTC, showing aggregate trader positions in certain futures and option markets. The CFTC receives a record 4,659 comment letters in response to this notice. (CFTC Press Release 5190-06, June 21, 2006) FTC holds a public hearing on the issue of what constitutes a board of trade, exchange, or market located outside the United States, as that phrase is used in Section 4(a) of the Commodity Exchange Act. (CFTC Press Release 5184-06, May 26, 2006) FTC announces the filing of a civil enforcement action in the U.S. District Court for the Northern District of Illinois against BP Products North America, Inc. (BP), a subsidiary of BP plc (formerly British Petroleum), alleging that BP manipulated the price of February 2004 TET physical propane by, among other things, cornering the market for February 2004 TET physical propane. The CFTC also charges BP with attempting to manipulate the price of April 2003 TET physical propane by attempting to corner the April 2003 TET physical propane market. (CFTC Press Release 5193-06, June 28, 2006) nth Advisors, LLC, a large hedge fund, reports that it has lost $6 billion of its capital, primarily due to losses on seasonal inter-month spread positions in futures and other derivatives on natural gas. Amaranth sells its natural gas and some other positions to JPMorgan Chase and Co. and Citadel Investment Group, LLC the next day.  Amaranth subsequently announces that it will close. wing a public hearing on June 27, 2006, the CFTC issues a Statement of Policy that, among other things, affirms the use of the staff no-action process for foreign boards of trade that seek to provide direct access for U.S. persons to their electronic trading systems. (CFTC Press Release 5252-06, October 31, 2006) FTC and the U.K. Financial Services Authority (FSA) sign a memorandum of understanding concerning consultation, cooperation, and the exchange of information related to market oversight.  The MOU establishes a framework for the CFTC and FSA to share information that the respective authorities need to detect potential abusive or manipulative trading practices that involve trading in related contracts on U.K. and U.S. derivatives exchanges in order to provide the regulators with a more complete view of these markets for oversight purposes. (CFTC Press Release 5259-06, November 20, 2006) FTC begins publishing a new weekly commitments of traders report, entitled COT - Supplemental. The new report shows aggregate futures and options positions of index traders, as well as noncommercial and commercial traders in 12 selected agricultural commodities. (CFTC Press Release 5262-06, December 5, 2006) FTC moves to strengthen futures exchange governance by issuing a guidance calling for increased public representation at key levels of decision making, including boards of directors. This guidance is issued in light of a recent trend in which U.S. futures exchanges have become publicly held for-profit corporations rather than mutually-owned non-profit organizations. (CFTC Press Release 5282-07, February 1, 2007) FTC and the North American Securities Administrators Association (NASAA) issue a joint investor alert to warn of the dangers facing retail investors who are lured into foreign currency (forex) trading frauds. In the alert, the regulators caution investors that off-exchange forex trading by retail investors is at best extremely risky, and at worst, plagued by outright fraud. (CFTC Press Release 5332-07, May 7, 2007). FTC approves an exchange traded credit derivative contract based on the Chicago Mercantile Exchange's North American Investment Grade High Volatility Credit Index.  This product is based on an index or bundle of reference entities.  On the same day, the CFTC also issues an exemptive order to allow the Options Clearing Corporation to clear similar products to be traded on the Chicago Board Options Exchange. (CFTC Press Release 5345-07, June 5, 2007) hicago Mercantile Exchange and the Chicago Board of Trade announce the completion of their merger forming the world's largest futures exchange, the CME Group. FTC charges the hedge fund Amaranth and its former head energy trader, Brian Hunter, with attempting to manipulate the price of natural gas futures on February 24, 2006 and April 26, 2006. The CFTC also alleges that Amaranth tried to cover up the conduct by making false statements to the New York Mercantile Exchange. The following day, the Federal Energy Regulatory Commission issues an order to show cause in the same matter. (CFTC Press Release 5359-07, July 25, 2007). FTC charges Energy Transfer Partners, L.P. and three of its subsidiaries with attempting to manipulate the price of physical natural gas at the Houston Ship Channel (HSC) delivery hub during September and November 2005 and with attempting to manipulate the October 2005 and December 2005 HSC monthly index prices of natural gas published by Platts in its Inside FERC's Gas Market Report (Inside FERC). The CFTC alleges that the conduct was designed to benefit basis swap positions established on the IntercontinentalExchange (ICE). The prices of the basis swaps were based in part on the Inside FERC index prices.  On the same day, the Federal Energy Regulatory Commission issues an order to show cause in the same matter. (CFTC Press Release 5360-07, July 26, 2007).  On March 17, 2008, ETP and its subsidiaries agree to pay $10 million in civil monetary penalties to settle these charges. (CFTC Press Release 5471-08, March 17, 2008). FTC holds a hearing to examine trading on regulated exchanges and Exempt Contract Markets (ECMs) as part of an ongoing review of energy futures trading. (CFTC Press Release 5382-07, September 13, 2007). FTC delivers to Congress a report that includes recommendations to increase the oversight of some trading activity on ECMs. (CFTC Press Release 5403-07, October 24, 2007). oducts North America, Inc. (BP) agrees to pay a total of $303 million in sanctions to settle charges of manipulation and attempted manipulation in the propane market. (CFTC Press Release 5405-07, October 25, 2007). FTC announces the establishment of a new Energy Markets Advisory Committee to provide a public forum to examine emerging issues related to the energy markets and the CFTC's role in these markets under the Commodity Exchange Act. (CFTC Press Release 5455-08, February 13, 2008). FTC and the SEC enter into a mutual cooperation agreement to enhance coordination and facilitate review of new derivative products. (CFTC Press Release 5468-08, March 11, 2008). FTC holds a roundtable discussion on the agricultural markets. The roundtable is designed to gather information about whether the futures markets are properly performing their risk management and price discovery roles. (CFTC Press Release 5484-08, April 10, 2008). ess enacts the Food, Conservation, and Energy Act of 2008. The Act reauthorizes the CFTC until 2013 and gives the agency additional regulatory and enforcement tools necessary to continue to effectively oversee the futures industry, particularly transactions in energy products and foreign currency. (CFTC Press Release 5501-08, May 23, 2008). FTC announces a number of initiatives to increase transparency of the energy futures markets including (1) expanded international surveillance information for crude oil trading; (2) several steps to gather additional information from and improve transparency in the energy futures markets; and (3) the continuation of a nationwide investigation of the crude oil markets. (CFTC Press Release 5503-08, May 29, 2008). FTC announces several policy initiatives aimed at addressing concerns in the agricultural futures markets raised at its April 22nd roundtable in Washington, DC.  These include, among other things: (1) measures to obtain more information from index traders and swap dealers; (2) the development of a new monthly publication on trader data for agricultural and other markets, beginning in July 2008; and (3) the disclosure of an investigation into cotton futures trading. (CFTC Press Release 5504-08, June 3, 2008). ght of the recent rise in crude oil and other commodity prices and the influx of new investors into commodity futures markets, the CFTC announces the formation of an interagency task force to evaluate developments in commodity markets. The task force includes staff representatives from the CFTC, the Federal Reserve, the Department of the Treasury, the Securities and Exchange Commission, the Department of Energy, and the Department of Agriculture. (CFTC Press Release 5508-08, June 10, 2008). FTC hosts an international manipulation enforcement conference that is focused on global trading in the energy markets.  Participants include senior enforcement officials from 10 countries.  (CFTC Press Release 5509-08, June 13, 2008). FTC announces that Commission staff has amended the no-action relief letter under which ICE Futures Europe is permitted direct access to U.S. customers. The amended letter conditions direct access on ICE Futures Europe's adoption of equivalent U.S. position limits and accountability levels on its West Texas Intermediate (WTI) crude oil contract, which is linked to the NYMEX crude oil contract. (CFTC Press Release 5511-08, June 17, 2008). nteragency Task Force on Commodity Markets releases a staff report offering a preliminary assessment of fundamental and market factors affecting the crude oil market. The ITF's Interim Report on Crude Oil studied fundamental supply and demand factors and the roles of various market participants, and it found that fundamental supply and demand factors provide the best explanation for the recent crude oil price increases. (CFTC Press Release 5520-08, July 22, 2008). FTC charges Optiver Holding BV, two of its subsidiaries, and three employees, charging them with manipulation and attempted manipulation of New York Mercantile Exchange (NYMEX) Light Sweet Crude Oil, New York Harbor Heating Oil, and New York Harbor Gasoline futures contracts during March 2007.  (CFTC Press Release 5521-08, July 24, 2008). FTC forms the Retail Foreign Currency Fraud Enforcement Task Force which is charged with investigating and litigating fraud in the off-exchange retail foreign currency market. (CFTC Press Release 5530-08, August 11, 2008). FTC releases a staff report with Commission recommendations on activities of swap dealers and commodity index traders. The report's findings and recommendations are based on information obtained from the June 2008 special call that Commission staff issued to quantify key components of the over-the-counter (OTC) swap and commodity index markets. (CFTC Press Release 5542-08, September 11, 2008). FTC, the Board of Governors of the Federal Reserve, and the Securities and Exchange Commission (SEC) enter into a Memorandum of Understanding (MOU) to establish a framework for consultation and information sharing on regulatory issues related to central counterparties for credit default swaps. FTC announces that the CME Group has certified a proposal to clear certain OTC credit default swaps through the CME clearing organization. (CFTC Press Release 5592-08, December 23, 2008). FTC announces the launch, on a six-month trial basis, of a new monthly report: This Month in Futures Markets. (CFTC Press Release 5607-09, February 4, 2009). FTC announces the formation of the Subcommittee on Convergence in Agricultural Commodity Markets, a new Subcommittee of the CFTC's Agricultural Advisory Committee. The Subcommittee on Convergence will identify the causes of poor cash-futures convergence in select agricultural commodity markets and advise the CFTC on actions to remedy the situation. (CFTC Press Release 5629-09, March 9, 2009). FTC approves final rules and rule amendments that increase the Commission's oversight of exempt commercial markets (ECMs). The rules implement provisions of the CFTC Reauthorization Act of 2008, which created a new regulatory category - ECMs with significant price discovery contracts (SPDCs) - and subjected these electronic trading facilities to additional regulatory and reporting requirements. (CFTC Press Release 5636-09, March 23, 2009). FTC issues an order finding that the Henry Financial LD1 Fixed Price contract - a natural gas contract traded on the IntercontinentalExchange, Inc. (ICE), an ECM - performs a significant price discovery function. This Order represents the Commission's first use of its new regulatory authority over ECMs with respect to their SPDCs. (CFTC Press Release 5683-09, July 27, 2009). FTC holds three public hearings to discuss speculative position limits and exemptions in energy markets. (CFTC Press Release 5681-09, July 21, 2009). FTC withdraws two no-action letters that provided relief for two commodity pool operators/commodity trading advisors from federal agricultural speculative positions limits. (CFTC Press Release 5695-09, August 19, 2009). FTC begins disaggregating the data in its weekly Commitments of Traders (COT) reports and begins releasing, on a quarterly basis, data collected from an ongoing special call on swap dealers and index traders in the futures markets. Rather than breaking traders into two broad categories: commercial and noncommercial, the new COT reports break the data into four categories of traders: Producer/Merchant/Processor/User; Swap Dealers; Managed Money; and Other Reportables. (CFTC Press Release 5710-09, September 2, 2009) FTC and SEC issue a joint report identifying areas where the agencies' regulatory schemes differ and recommending actions to address those differences. The report includes 20 recommendations to enhance enforcement powers, strengthen market and intermediary oversight and improve operational coordination. (CFTC Press Release 5735-09, October 16, 2009). FTC votes at an open meeting to publish in the Federal Register a proposal to set position limits for futures and option Contracts in the major energy markets.  (CFTC Press Release 5771-10, January 7, 2010) FTC holds an open meeting to examine the trading of futures and options in the precious and base metals markets. (CFTC Press Release 5782-10, February 23, 2010) FTC Launches a new web site along with supporting web 2.0 components FTC issues an order filing and simultaneously settling (for a civil monetary penalty of $25 million among other things) charges that Moore Capital Management, LP, and various affiliated companies attempted to manipulate the settlement prices of platinum and palladium futures contracts on the New York Mercantile Exchange. (CFTC Press Release 5815-10, April 29, 2010) stock indexes and stock index futures experience a brief but severe drop in prices, falling more than 5% in a matter of minutes, only to recover a short time later. Some individual securities experience more volatility than the stock indexes. (Statement by SEC and CFTC, May 6, 2010) taffs of the CFTC and the SEC release preliminary findings related to the unusual market events on May 6, 2010. (CFTC Press Release 5825-10, May 17, 2010) ewly formed Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues holds its first meeting. (CFTC Press Release 5823-10, May 17, 2010) FTC approves the first futures contracts based on motion picture box office receipts after finding that the terms and conditions of Media Derivatives, Inc.'s proposed Weekend Motion Picture Revenue futures and options contracts do not violate the Commodity Exchange Act or CFTC regulations. (CFTC Press Release 5834-10, June 14, 2010) dent Obama signs the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Title VII of the Dodd-Frank Act amends the Commodity Exchange Act to establish a comprehensive new regulatory framework for swaps and security-based swaps. The legislation is enacted to reduce risk, increase transparency, and promote market integrity within the financial system by, among other things: 1) providing for the registration and comprehensive regulation of swap dealers and major swap participants; 2) imposing clearing and trade execution requirements on standardized derivative products; 3) creating robust recordkeeping and real-time reporting regimes; and 4) enhancing the Commission’s rulemaking and enforcement authorities with respect to, among others, all registered entities and intermediaries subject to the Commission’s oversight. On the same day, the CFTC releases a list of 30 areas of rulemaking to implement the Dodd-Frank Act. (CFTC Press Releases 5855-10 and 5856-10, July 21, 2010). FTC sanctions ConAgra Trade Group, Inc. (CTG) $12 Million for causing a non-bona fide price to be reported in the NYMEX Crude Oil futures contract. On January 2, 2008, CTG was the first to purchase NYMEX crude oil futures contracts at the then-historic price of $100. As a result of CTG’s effort to be the first to trade at the $100 level, CTG caused a non-bona fide price to be reported, according to the CFTC order. (CFTC Press Release 5873-10, August 16, 2010). FTC holds the first of many open meetings to consider the issuance of proposed rules to implement the Dodd-Frank Act. (CFTC Press Release 5901-10, September 21, 2010) taffs of the CFTC and SEC release a joint report presenting their findings regarding the market events of May 6, 2010.  (CFTC Press Release 5912-10, October 1, 2010) FTC charges Parnon Energy Inc., Arcadia Petroleum Ltd. and Arcadia Energy (Suisse) SA, along with two traders, with price manipulation in the crude oil market.
The complaint alleges cross-market trading scheme in 2008 involving accumulation and sell-off of a substantial position in physical crude oil to manipulate futures prices, yielding in excess of $50 million in unlawful profits for defendants. (CFTC Press Release 6041-11, May 24, 2011) FTC holds the first of many open meetings to finalize rules to implement the Dodd-Frank Act, including new rules regarding the prohibition on manipulative trading and the 	definition of agricultural commodity. (CFTC Press Release 6064-11, June 30, 2011) FTC files and simultaneously settles charges that Ecoval Dairy Trade, Inc. attempted to manipulate the daily settlement prices of non-fat dry milk cash-settled futures contracts on the Chicago Mercantile Exchange. The CFTC order requires Ecoval to pay a $1,425,000 civil monetary penalty. (CFTC Press Release 6075-11, July 19, 2011) FTC holds an open meeting to, among other things, issue final rules regarding registration and core principles for swap data repositories, a new type of registered entity 	created by the Dodd-Frank Act. (CFTC Press Release 6085-11, July 28, 2011) FTC holds an open meeting where it issues a final rule implementing position limits for futures and swaps in a variety of agricultural, metal, and energy commodities. (CFTC Press Release 6124-11, October 11, 2011) obal, a futures commission merchant and broker-dealer, declares bankruptcy and reports deficiencies in customer futures segregated accounts held at the firm. The bankruptcy trustee later reports that up to $1.6 billion in customer funds were missing. (CFTC-SEC Statement on MF Global, October 31, 2011). FTC holds an open meeting to, among other things, issue final rules on real-time reporting of swap transaction data and swap data recordkeeping and reporting requirements as part of the implementation of the Dodd-Frank Act. (CFTC Press Release 6157-11, December 13, 2011) FTC charges Joseph F. Welsh III in federal court with attempted manipulation of the prices of palladium and platinum futures contracts, including the settlement prices. According to the complaint, while working as a broker at MF Global Inc., Welsh employed a manipulative scheme commonly known as banging the close. Welsh is also charged with aiding and abetting Christopher L. Pia, who had settled similar charges with the CFTC on July 25, 2011. (CFTC Press Release 6210-12, March 14, 2012) FTC holds an open meeting to, among other things, issue a final rule (joint with the SEC) to further define the terms Swap Dealer, Security-Based Swap Dealer, Major Swap Participant, Major Security-Based Swap Participant, and Eligible Contract Participant. as part of the implementation of the Dodd-Frank Act. (CFTC Press Release 6228-12, April 11, 2012). FTC orders Barclays Bank to pay a $200 million penalty for attempting to manipulate the LIBOR and Euribor benchmark interest rates and making related false reports to benefit its derivatives trading positions. The CFTC order also finds that Barclays made false LIBOR reports at the direction of members of senior management to protect its reputation during the global financial crisis of 2008. (CFTC Press Release 6289-12, June 27, 2012) FTC holds an open meeting to, among other things, issue a final rule (joint with the SEC) to further define the terms swap and security based swap as part of the implementation of the Dodd-Frank Act. (CFTC Press Release 6295-12, July 3, 2012) .S. district court for the District of Columbia vacates the CFTC’s rule implementing position limits for futures and swaps.  On November 15, 2012, the CFTC appeals that ruling. CFTC Press Release 6413-12, November 15, 2012) FTC issues new rules to require certain credit default swaps and interest rate swaps to be cleared by derivatives clearing organizations (DCOs). The rules establish the first clearing determination by the Commission under the Dodd-Frank Act. Under the rules, market participants are required to submit a swap that is identified in the rule for clearing by a DCO as soon as technologically practicable and no later than the end of the day of execution. (CFTC Press Release 6429-12, November 28, 2012) FTC files a complaint in federal court that Eric Moncada, BES Capital LLC, and Serdika LLC attempted to manipulate wheat futures prices, and engaged in fictitious sales and non-competitive transactions. According to the complaint, Moncada’s scheme was to electronically enter and immediately cancel numerous large-lot orders for wheat futures that he did not intend to fill, but that he intended to use to create a misleading impression of increasing liquidity in the marketplace.  Moncada would then allegedly seek to take advantage of any price movements that may have resulted from this manipulative scheme by placing smaller orders, which he hoped to fill at prices beneficial to him, on the opposite side of market from his large-lot cancelled orders.  (CFTC Press Release 6441-12, December 4, 2012) FTC orders UBS, a Swiss bank, to pay a $700 million penalty to settle charges of manipulation, attempted manipulation and false reporting of LIBOR and other benchmark interest rates. In summary, the CFTC's Order finds that for at least six years UBS regularly tried to manipulate (and at times successfully manipulated) multiple benchmark interest rates for profit, and that there were more than 2,000 instances of unlawful conduct involving dozens of UBS employees, including colluding with other panel banks, inducing interdealer brokers to spread false information and influence other banks; and the making of false LIBOR submissions to protect its reputation during the global financial crisis. (CFTC Press Release 6472-12, December 19, 2012) dealer registration and real-time reporting of swaps transactions begin, pursuant to reforms enacted in the Dodd-Frank Act. (CFTC Press Release 6489-13, January 2, 2013) FTC hosts a public roundtable to discuss the Futurization of Swaps. (CFTC Press Release 6500-13, January 18, 2013) s third LIBOR-related action, the CFTC orders The Royal Bank of Scotland and RBS Securities Japan to pay a $325 million civil monetary penalty to settle charges of manipulation, attempted manipulation, and false reporting of yen and Swiss franc LIBOR. (CFTC Press Release 6510-13, February 6, 2013) ant to the Dodd-Frank Act, mandatory clearing of certain index credit default swaps and interest rate swaps begins for swap dealers, major swap participants and private funds active in the swaps market.  Mandatory clearing subsequently begins for additional entities on June 10, 2013. (CFTC Press Release 6529-13, March 11, 2013) and (CFTC Press Release 6607-13, June 10, 2013) FTC holds an open meeting where it finalizes rules to implement the pre-trade transparency module including: (1) Procedures to Establish Appropriate Minimum Block Sizes for Large Notional Off-Facility Swaps and Block Trades (Swaps Block Rule), (2) Process for a Designated Contract Market or Swap Execution Facility to Make a Swap Available to Trade under the trade execution requirement of the Commodity Exchange Act; (Made Available to Trade Rule); and (3) Core Principles and Other Requirements for Swap Execution Facilities (SEFs). (CFTC Press Release 6585-13, May 9, 2013) .S. Court of Appeals for the District of Columbia upholds a CFTC rulemaking (CFTC Press Release 6176-12, February 9, 2012) revising CFTC rule 4.5 to require certain SEC-registered investment companies that fall under the definition of commodity pool operator to register with the CFTC as well as the SEC.  See Investment Company Institute and U.S. Chamber Of Commerce v. Commodity Futures Trading Commission. FTC files and simultaneously settles charges in U.S. District Court against MF Global and its former CEO Jon S. Corzine and former employee Edith O'Brien of, among other violations, MF Global's unlawful use of customer funds that harmed thousands of customers and violated fundamental customer protection laws on an unprecedented scale. The settlement, subject to court approval, directs payment of all funds still owed to commodity customers and imposes a $100 million penalty against the company. (CFTC Press Release 6626-13, June 27, 2013) FTC holds an open meeting where it finalizes cross-border interpretive guidance, a policy statement, and a cross-border phase-in exemptive order regarding compliance with certain swap regulations. (CFTC Press Release 6638-13, July 5, 2013) FTC fines Panther Energy Trading LLC and its principal Michael J. Coscia $1.4 million for engaging in the disruptive practice of spoofing, that is, utilizing a computer algorithm that was designed to illegally place and quickly cancel bids and offers in futures contracts across a broad spectrum of commodities from August 8, 2011 through October 18, 2011 on CME Group's Globex trading platform. (CFTC Press Release 6649-13, July 22, 2013) FTC approves for publication in the Federal Register a Concept Release on Risk Controls and System Safeguards for Automated Trading Environments. The Concept Release provides an overview of the automated trading environment and discusses and requests public comment on a series of (1) pre-trade risk controls; (2) post trade reports and other measures; (3) system safeguards related to the design, testing and supervision of automated trading systems; and (4) additional protections designed to promote safe and orderly markets. (CFTC Press Release 6683-13, September 9, 2013) ng begins on temporarily registered swap execution facilities as the SEF core principle rulemaking goes into effect. FTC re-proposes position limits in various physical commodities. (CFTC Press Release 6763-13, November 5, 2013). federal agencies, including the CFTC, issue final rules developed jointly to implement section 619 of the Dodd-Frank Act (the “Volcker Rule”).  The final rules prohibit insured depository institutions and their affiliates from engaging in short-term proprietary trading of certain securities, derivatives, commodity futures and options on these instruments, for their own account. The final rules also impose limits on these entities’ investments in, and other relationships with, hedge funds or private equity funds. (CFTC Press Release 6790-13, December 10, 2013). available-to-trade (MAT) determinations for certain interest rate swap and credit default swap contracts go into effect. Those swaps therefore become subject to the trade execution mandate and must, with certain exceptions, be traded on a SEF or DCM. (CFTC Press Release 6831-14, January 16, 2014, CFTC Press Release 6838-14, January 23, 2014, CFTC Press Release 6841-14, January 28, 2014, and CFTC Press Release 6843-14, January 30, 2014) FTC issues its first whistleblower reward under the whistleblower program created by the Dodd-Frank Act. The reward is approximately $240,000 for providing valuable information about violations of the Commodity Exchange Act. (CFTC Press Release 6933-14, May 20, 2014) FTC files and simultaneously settles charges against Lloyds Banking Group plc and Lloyds Bank plc (formerly Lloyds TSB), for acts of false reporting and attempted manipulation of the London Interbank Offered Rate (LIBOR) for sterling, U.S. dollar, and yen. The order finds that, in a few instances, Lloyds TSB was successful in its manipulation of sterling and yen LIBOR. The order imposes a civil monetary penalty of $105 million.  (CFTC Press Release 6966-14, July 28, 2014) FTC enters into a consent order settling charges brought against Brian Hunter, resident of Calgary, Alberta, for attempting to manipulate the price of natural gas futures contracts traded on the New York Mercantile Exchange (NYMEX) during the expiry on February 24 and April 26, 2006.  The consent order arises from a The consent Order arises from a CFTC complaint filed on July 25, 2007. (CFTC Press Release 7000-14, September 15, 2014) ge for the U.S. District Court for the District of Columbia dismisses a lawsuit by three Wall Street trade groups claiming that the CFTC overstepped its authority in issuing new rules and guidance related to overseas swaps transactions. The judge also directs the CFTC to reconsider the costs and benefits of certain previously implemented rules in a cross-border context, but those remain in effect while the CFTC does so. FTC orders five banks, Citibank, HSBC, JPMorgan, Royal Bank of Scotland, and UBS, to pay over $1.4 billion in penalties for attempted manipulation of, and for aiding and abetting other banks’ attempts to manipulate, global foreign exchange benchmark rates to benefit the positions of certain traders. (CFTC Press Release 7056-14, November 12, 2014)