How to Become a Designated Contract Market
Application Process for Designation as a Contract Market
Applicants for designation–including applicants amending a pending application and existing DCMs applying for an amendment to their order of designation—must file Form DCM electronically with the Secretary of the Commission at [email protected], and with the Division of Market Oversight at [email protected], pursuant to the application procedures set forth in CFTC regulation 38.3. Form DCM is available in Appendix A to Part 38 of the CFTC’s regulations. The application must include information sufficient to demonstrate compliance with the core principles specified in section 5(d) of the Commodity Exchange Act (CEA). An application will not be considered to be materially complete unless the applicant has submitted, at a minimum, the exhibits required in Form DCM.
The commission will review new applications for designation as a contract market pursuant to the 180-day time frame and procedures specified in Section 6(a) of the CEA, 7 USC 8(a). The Commission will approve or deny the application or, if deemed appropriate, designate the applicant as a contract market subject to conditions.
Part 38 Application Procedures
An applicant must demonstrate compliance with the 23 core principles set forth in Section 5(b) of the CEA, 7 USC 7(d), and with the provisions of Part 38 of the CFTC's regulations, 17 CFR Part 38.
Appendix A to Part 38 includes Form DCM, which contains instructions and a list of necessary information and documentation required to initiate the designation process.
Appendix B to Part 38 provides guidance to applicants on how designated contract markets can remain in compliance with the core principles. For certain core principles, Appendix B also provides acceptable practices for meeting selected requirements.
Appendix C to Part 38 provides guidance to applicants on how designated contract markets can demonstrate that a contract is not readily susceptible to manipulation pursuant to Core Principle 3 (Contracts Not Readily Subject to Manipulation).
DCM Technology Questionnaire
The Form DCM includes Exhibit V, the DCM Operational Capability Technology Questionnaire. This questionnaire focuses on information pertaining to the Applicant's automated systems and its program of risk analysis and oversight. Main topic areas include: enterprise risk management; information security; business continuity-disaster recovery planning and resources; capacity and performance planning; systems operations; systems development and quality assurance; and physical security and environmental controls. The questionnaire is provided to Applicants on the Forms and Submissions page.