CFTC History in the 1970s
October 23-24, 1974—Congress 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..
April 15, 1975—Four of the first five CFTC members, including the CFTC's first Chairman, are sworn in.
April 21, 1975—Authority for the regulation of futures trading is transferred from the Commodity Exchange Authority, an agency in the Department of Agriculture, to the CFTC.
July 18, 19751 — The CFTC 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.
November 26, 1975—The CFTC approves the first futures contract on U.S. government debt—the Chicago Mercantile Exchange 90-Day U.S. Treasury bill futures contract.
May 25, 1976—The New 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.
April 28, 1977—The CFTC 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.
August 2, 1977—The CFTC approves the first futures contract on long-term U.S. government debt—the Chicago Board of Trade U.S. Treasury bond futures contract.
November 23, 1977—The CFTC 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 ICE Futures U.S.), 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.
June 1, 1978—The CFTC suspends most commodity options transactions in the U.S. because of pervasive fraud in so-called "London options" and dealer options on physical commodities.
September 30, 1978—The Futures 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.
January 2, 1979—The CFTC 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.
January 4, 1979—The CFTC announces a temporary moratorium on entry into the leverage contract business in gold and silver bullion and bulk coins.
March 16, 1979—In an 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.
September 12, 1979—The U.S. Court of Appeals for the Seventh Circuit affirms the CFTC's authority to act during market emergencies, and concludes that judicial review of the Commission's determination of such an emergency would thwart the purpose for which Congress granted the CFTC emergency powers.
1 Previous histories have cited September 11, 1975 as a significant date in the CFTC’s history because of the Commission’s approval of the first futures contract on a financial instrument—the Chicago Board of Trade Government National Mortgage Association certificates futures contract. However, the first futures contract on a financial instrument approved by the Commission—relating to foreign currencies—was actually introduced by the Chicago Mercantile Exchange three years earlier in 1972. The Commission authorized this contract on July 18, 1975 when it authorized exchanges to continue trading futures contracts previously unregulated by the Commodity Exchange Act.