About the CFTC
The Commodity Futures Trading Commission (CFTC) was created by Congress in 1974 as an independent agency with the mandate to regulate commodity futures and option markets in the United States. The agency's mandate was renewed and expanded in 1978, 1982, 1986, 1992 and 1995.
CFTC Mission
The CFTC is responsible for ensuring the economic utility of futures markets by encouraging their competitiveness and efficiency, ensuring their integrity, and protecting market participants against manipulation, abusive trade practices and fraud. Through effective oversight regulation, the CFTC enables the commodity futures markets better to serve their important functions in the nation's economy -- providing a mechanism for price discovery and a means of offsetting price risk.
History
Futures contracts for agricultural commodities have been traded in the U.S. for more than 100 years and have been under Federal regulation since the 1920's. In recent years, futures trading has expanded rapidly into many new markets, beyond the domain of traditional physical and agricultural commodities. Futures and option contracts are now offered on a vast array of financial instruments, including foreign currencies, U.S. and foreign government securities and U.S. and foreign stock indices. During FY 1997, 522,483,555 futures and option contracts were traded on U.S. futures exchanges, an increase of 5.7 percent over FY 1996.
Regulation and Oversight
The Commission regulates the activities of 237 commodity brokerage firms, 44,351 salespeople, 9,207 floor brokers, 1,325 floor traders, 1,364 commodity pool operators, 2,630 commodity trading advisors, and 1,556 introducing brokers.
To ensure the financial and market integrity of the nation's futures markets, the CFTC reviews the terms and conditions of proposed futures and option contracts. The Commission conducts daily market surveillance and can, in an emergency, order an exchange to take specific action to restore an orderly market in any contract that is being traded. Companies and individuals who handle customer funds or give trading advice must apply for registration through the National Futures Association (NFA), a self-regulatory organization approved by the Commission. The CFTC seeks to protect customers by requiring registrants to disclose market risks and past performance information to prospective customers, by requiring that customer funds be kept in accounts separate from those maintained by the firm for its own use, and by requiring that customer accounts be adjusted to reflect the current market value at the close of trading each day. In addition, the CFTC monitors registrants' supervision systems, internal controls and sales practice compliance programs and mandates that all registrants fulfill an ethics training requirement.
Industry Self-Regulation
Commodity exchanges complement federal regulation with rules and regulations of their own for the conduct of their markets -- rules covering clearance of trades, trade orders and records, position limits, price limits, disciplinary actions, floor trading practices and standards of business conduct. A new or amended exchange rule may be implemented only upon approval by the CFTC, which may also direct an exchange to change its rules and practices. The CFTC regularly audits each exchange's compliance program.
Organization
Based in Washington, D.C., the CFTC maintains regional offices in Chicago and New York and has smaller offices in Kansas City, Los Angeles, and Minneapolis. The Commission consists of five Commissioners, appointed by the President to serve staggered five year terms. One of the Commissioners is designated by the President, with the consent of the Senate, to serve as Chairperson. No more than three commissioners at any one time may be from the same political party.
Additional information about the Commission and its activities can be obtained from the Commission's Office of Public Affairs or through the CFTC's Internet web site (http://www.cftc.gov).
Commission Members
Commission members have included:
| William T. Bagley (Chairman) | 1975-1978 |
| Gary L. Seevers | 1975-1979 |
| Read P. Dunn, Jr. | 1975-1980 |
| John V. Rainbolt (Vice Chairman) | 1975-1978 |
| Robert L. Martin | 1975-1981 |
| David G. Gartner | 1978-1982 |
| James M. Stone (Chairman) | 1979-1983 |
| Philip McBride Johnson (Chairman) | 1981-1983 |
| Susan M. Phillips (Chairman) | 1981-1987 |
| Kalo A. Hineman | 1982-1991 |
| Fowler C. West | 1982-1993 |
| William E. Seale | 1983-1988 |
| Robert R. Davis | 1984-1990 |
| Wendy L. Gramm (Chairman) | 1988-1993 |
| William P. Albrecht | 1988-1993 |
| Sheila C. Bair | 1991-1995 |
| Joseph B. Dial | 1991-1997 |
| John E. Tull, Jr. | 1993- |
| Barbara P. Holum | 1993- |
| Mary L. Schapiro (Chairman) | 1994-1996 |
| Brooksley Born (Chairperson) | 1996- |
| David D. Spears | 1996- |