Which swaps are regulated by CFTC?
It includes, for example, interest rate swaps, commodity swaps, currency swaps, equity swaps and credit default swaps.
The Commodity Futures Trading Commission is an independent U.S. government agency that regulates the U.S. derivatives markets, including futures, options, and swaps.
Most foreign exchange and currency transac- tions (“Currency Transactions”) conducted in the U.S. market are subject to the CEA and the rules of the CFTC and the National Futures Associa- tion (“NFA”). Other financial regulators, such as the federal banking regulators and the SEC, also play a significant role.
— The term “security-based swap” includes any agreement, contract, or transaction that is as described in subparagraph (A) and also is based on the value of 1 or more interest or other rates, currencies, commodities, instruments of indebtedness, indices, quantitative measures, other financial or economic interest or ...
The CFTC regulates the U.S. derivatives markets. This includes the commodity futures, options, and swaps markets as well as over-the-counter (OTC) markets.
As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFTC has written rules to regulate the swaps marketplace.
While digital assets and cryptocurrencies are not explicitly defined as “commodities” under the CEA, the CFTC expressed in a 2015 settlement order that Bitcoin and other virtual currencies are commodities and fall under its enforcement authority. This position was upheld by a U.S. District Court decision in 2018.
Under the comprehensive framework for regulating swaps and security-based swaps established in Title VII, the CFTC is given regulatory authority over swaps, the SEC is given regulatory authority over security-based swaps, and the Commissions jointly are to prescribe such regulations regarding mixed swaps as may be ...
An other commodity swap is an agreement between two parties in which one party (the fixed rate payer) makes periodic payments (the fixed leg) to another party (the floating rate payer) based on a fixed quantity of a specified commodity in exchange for receipt of periodic payments (the floating leg) based on the actual ...
On November 2, 2023, the U.S. Securities and Exchange Commission (the SEC) adopted Regulation SE (Regulation SE) under the Securities Exchange Act of 1934 (the Exchange Act) to create a regime for the registration and regulation of security-based swap (SBS) execution facilities (SBSEFs).
Are swaps regulated as securities?
The SEC regulates Security-Based Swaps (SBS) and Security-Based Swap Dealers (SBSD). The CFTC regulates Swaps and Swap Dealers. Shortly after, the regulatory bodies adopted rules to provide further clarity for the characteristics of SBS, SBSD, Swaps and Swap Dealers.
Types of swaps. The generic types of swaps, in order of their quantitative importance, are: interest rate swaps, basis swaps, currency swaps, inflation swaps, credit default swaps, commodity swaps and equity swaps. There are also many other types of swaps.
A firm is added to the RED List when the CFTC determines, from investigative leads and questions from the public, that it is not registered with the CFTC and appears to be acting in a capacity that requires registration, such as trading binary options, foreign currency (forex), or other products.
A contract for difference (CFD) is similar to a total rate of return swap except that payment only occurs once on the contract expiration date. A CFD may have a single stock, a basket of stocks, or an index as its underlying reference asset.
As set forth in CFTC Regulation 30.4, any domestic or foreign person engaged in activities like those of a futures commission merchant (FCM), introducing broker (IB), commodity pool operator (CPO), or commodity trading advisor (CTA) must register in the appropriate capacity or seek an exemption from registration under ...
In a swap between a non-U.S. swap dealer or non-U.S. major swap participant and a U.S. person, the parties are required to comply with Category A Transaction-Level Requirements, and substituted compliance for Category A Transaction-Level Requirements generally is not available.
"Consumers" is not a category outlined by the Commodities Futures Trading Commission.
An excluded commodity is one that falls outside of the regulatory purview of the Commodities Exchange Act (CEA). Examples of excluded commodities include futures contracts and other commodities derivatives.
CFTC Oversight of Virtual Currencies
While its regulatory oversight authority over commodity cash markets is limited, the CFTC maintains general anti-fraud and manipulation enforcement authority over virtual currency cash markets as a commodity in interstate commerce.
In an industry desperate for U.S. regulation, Coinbase is now registered as a futures commission merchant, or FCM, with the Commodity Futures Trading Commission (CFTC), akin to an SEC-registered broker-dealer and a club that plays a key role at the core of U.S. derivatives trading.
What is the difference between CFTC and SEC?
The mission of the SEC is to protect investors, maintain fair, orderly, and efficient securities markets, and facilitate capital formation. The mission of the CFTC is to foster open, transparent, competitive and financially sound markets.
The CFTC is the Federal agency with the primary responsibility for overseeing the commodities markets, including foreign currency trading.
The broad definition of swap set forth in Title VII of the Dodd-Frank Act includes any agreement, contract or transaction (the “Subject Agreement”) that provides for payment “dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, ...
Swaps are customized contracts traded in the over-the-counter market privately, versus options and futures traded on a public exchange. The plain vanilla interest rate and currency swaps are the two most common and basic types of swaps.
Examples of mixed swaps provided by the Commissions include the following: Total return swaps with either embedded interest rate optionality or a non-securities component. A portfolio of securities and commodities. Broad-based index credit default swaps requiring mandatory physical settlement.
