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Goal Two Background and Context

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The focus of the second goal is protection of the firms and individuals—market users—who come to the marketplace to fulfill their business and trading needs. Market users must be protected from possible wrongdoing on the part of the firms and commodity professionals with whom they deal to access the marketplace, and they must be confident that the marketplace is free of fraud, manipulation, and abusive trading practices.

The Commission has promulgated regulations that mandate appropriate disclosure and customer account reporting, as well as fair sales and trading practices by registrants. The Commission has also sought to maintain appropriate sales practices by screening the fitness of industry professionals and by requiring proficiency testing, continuing education, and supervision of Commission registrants. Extensive record-keeping of all futures and commodity option transactions is also required. Likewise, the Commission monitors compliance with those requirements and supervises the work of the exchanges and NFA in enforcing the regulations. With the passage of the Dodd-Frank Act, the Commission began promulgating rules that, among other changes, will require: swap dealers and major swap participants to register and come under comprehensive regulation ─ including capital standards, margin requirements, business conduct standards and record-keeping and reporting requirements; and ensure that dealers and major swap participants bring their clearable swaps into central clearinghouses. The Commission will monitor compliance with these requirements.

The Commission plays an important role in deterring behavior that could affect market users’ confidence by investigating and taking action against unscrupulous traders, registrants, and others who engage in a wide variety of illegal activity, including, but not limited to, manipulation and fraudulent sales practices.


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