The Commodity Futures Trading Commission (CFTC) was created by Congress in 1974 as an independent agency with the mandate to regulate commodity futures and option markets in the United States. Regulations: The CFTC reviews the terms and conditions of futures and option contracts. To prevent market abuse and to enhance market operations, the CFTC overseas the enforcement of exchange rules and conducts its own surveillance of trading in the markets. It also has the power to order an exchange to take specific action to restore an orderly market in any contract that is being traded. The CFTC provides a mechanism for “price discovery” and “hedging risks” through oversight regulations. The CFTC also seeks to protect customers by a series of regulations like requiring registrants to disclose market risk and past performance information to prospective customers, providing financially secure trading places etc. The National Futures Association (NFA) oversees the futures trading. Companies and individuals who handle customer funds or give trading advice must apply for registration through the National Futures Association (NFA), a self-regulatory organization approved by the Commission. It registers all categories of persons and firms dealing with customers. It conducts a thorough background check of the applicant to determine whether they should be precluded from conducting commodity business.
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