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Major Commodity Exchanges
The major commodity futures markets are described as
continuous auction markets and exchanges providing the
latest information about supply and demand with respect
to major commodities, financial instruments, and
currencies. Futures exchanges are where buyers and
sellers of an expanding list of commodities, financial
instruments, and currencies, come together to trade.
Commodity trading has also been initiated in options on
futures contracts. Thus, option buyers participate in
futures markets with different risk. The exact risk is
known to the option buyer. It is unknown to the futures
trader.
Major Commodity Futures Trading
Major commodity futures trading are subject to
regulation by the CFTC and the NFA oversees firms and
individuals that conduct futures trading business with
the public. All major futures exchanges are also
regulated by the CFTC. NFA is a congressionally
authorized self-regulatory organization subject to CFTC
oversight. It exercises regulatory Authority with the
CFTC over Futures Commission Merchants,.
Major Futures Exchanges
Violators of NFA rules of professional ethics or
conduct, or failure to comply with financial and record
keeping requirements can be fined, barred from the
industry, or referred to the Department of Justice for
criminal prosecution. Futures Commission Merchants which
are members of an exchange are subject to CFTC and NFA
regulation and also regulation by the major commodity
exchanges of which they are members. Exchange regulatory
staffs are responsible for the business conduct and
financial responsibility of their member firms.
Violations of exchange rules can result in substantial
fines, suspension or revocation of trading privileges,
and loss of exchange membership.
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