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The CFTC was created as an independent agency by Congress in 1974 under the authorization of the Commodity Exchange Act1 (CEA or the Act) with the mandate to regulate commodity futures and option markets in the United States. The Agency’s mandate was renewed and expanded under the Futures Trading Act of 1978, 1982, and 1986; the Futures Trading Practices Act of 1992; and the CFTC Reauthorization Act of 1995. The CFMA reauthorized the Commission through FY 2005.

Futures contracts for agricultural commodities have been traded in the United States for 150 years and have been under Federal regulation since the 1920s. 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.

Today, as the futures industry experiences unprecedented growth and as trading instruments and mechanisms increase in complexity, the CFTC is responsible for overseeing the economic utility of futures markets by encouraging their competitiveness, efficiency, and integrity and by protecting market participants against manipulation, abusive trade practices, and fraud. Through effective oversight regulation, the CFTC enables the commodity futures markets to serve their important function in the Nation’s economy by providing a mechanism for price discovery and a means of offsetting price risk.

1 Commodity Exchange Act, as amended (7 U.S.C., Section 1, et seq.) (back to text)