Summary of the digital commodity exchange act of 2020 house. The digital commodity exchange act dcea is legislation to fill in the regulatory gaps that exist between the u. Compliance with the rules by members of the commodity exchange. Government replacing the grain futures act of 1922.
The cea establishes the statutory framework under which the cftc operates. Bitcoin and virtual currencies harvard business law. These products, which have not previously been regulated in the united. That this act may be cited as the commodity exchange act sec. Section 4c3a j of the commodity exchange act states.
Act or cea the term act or cea shall mean the commodity exchange act, as amended from time to time. The status of environmental commodities under the commodity. Jan 10, 2015 ultimately, transactions in environmental commodities may qualify for the forward exclusion from the definition of swap under the commodity exchange act 1 ceaand thus not be subject to cftc regulationif the transactions satisfy certain requirements, the most important of which is the parties intent to physically settle. Commodity exchange act, also known as an act to amend the grain futures act to prevent and remove obstructions and burdens upon interstate commerce in grains and other commodities by regulating transactions therein on commodity futures exchanges, to limit or abolish short selling, to curb manipulation, and for other purposes. The rule broadly prohibits fraud and fraudbased manipulations, including any such attempts. The doddfrank wall street reform and consumer protection act brings comprehensive reform to the regulation of swaps. Public law 90258 an act to amend the commodity exchange act, as amended. Passed in 1936, it has been amended several times since. In 1936, the commodity exchange act cea amended the grain futures act. The agency administers the commodity exchange act cea,3 which was passed in 1936. Definitions act or cea the term act or cea shall mean. It creates a framework to regulate trading venues which list emerging digital commodities, such as bitcoin.
The whistleblower office of the commodity futures trading commission cftc is issuing this alert to inform members of the public about how they may make themselves eligible for both financial awards and certain protections while helping stop those who violate the commodity exchange act by failing to comply with the bank secrecy act bsa or related regulations. The term alternative trading system means an organization, association, or group of persons that. Prior to the cftcs creation, trading in agricultural commodities regulated by the cea was overseen by the commodity exchange administration, an office within the u. Passed in 1936, it has been amended several times since then. Commission shall jointly adopt a rule further defining the terms swap, security. Commodity futures trading commission cftc and the u. A person who actively participates in the generation. Feb 11, 2021 85 fr 59470, 9222020 pdf version 17 cfr part 23 margin requirements for uncleared swaps for swap dealers and major swap participants 1142021. Prohibition of operating a commodity exchange without a licence.
Definitions act or cea the term act or cea shall mean the. Reserve system, the secretary of the treasury, the commodity. The following is a revised version of the commodity. Federal register annual adjustment of civil monetary. Iiii, and engaged in anticompetitive behavior in violation of the sherman act, 15 u. Summary of the digital commodity exchange act of 2020. Federal deposit insurance corporation 12 cfr part 351 rin 3064ae67. The term commodity pool is defined broadly under the commodity exchange act cea to include any investment trust, syndicate or similar form of enterprise operated for the purpose of trading in commodity interests, including any commodity for future delivery, securities futures product or swap, agreement in foreign currency. The commodity futures trading commission act of 1974 exten sively amended the commodity exchange act.
The digital commodity exchange act of 2020 summary this proposed legislation has several main objectives. Futures trading commission, and the securities and exchange. The working group has concluded that under many circumstances, the trading of. Department of agriculture which was also formed in 1936. B performs the functions commonly performed by an exchange as defined in section 3a1 of the securities exchange act of 1934 15 u. These products, which have not previously been regulated in the united states, were at the center of the 2008 financial crisis.
Commodity exchange act and related regulatory issues. The following is a revised version of the commodity exchange. Exchange commission commission, pursuant to section 19b1 of the securities exchange act of 1934 exchange act 1 and rule 19b4 thereunder,2 a proposed rule change to amend nyse arca rule 8. Over the past three years, federal and state agencies, as well as courts that have considered the issue, have determined that virtual currencies qualify as commodities, or securities, under the law. The commodity exchange act cea should be modernized to provide legal and regulatory certainty for financial contracts, to encourage financial innovation, and to facilitate competition in the united states and abroad. Securities and exchange commission sec in digital asset markets. Government that provides federal regulation of all futures trading activities. The following is a revised version of the commodity exchange act marked to indicate the changes proposed by the overthecounter derivatives markets act of 2009. The commodity futures trading commission cftc is an independent agency of the us government created in 1974, that regulates the u.
An act to amend the grain futures act to prevent and remove obstructions and burdens upon interstate commerce in grains and other commodities by regulating transactions therein on commodity futures exchanges, to limit or abolish short selling, to curb manipulation, and for other purposes. Criminal portions of the commodity exchange act federal. Under this act, the cftc has authority to establish regulations. Department of treasury office of the comptroller of the currency 12 cfr part 44 docket no. Government replacing the grain futures act of 1922 the act provides federal regulation of all commodities and futures trading activities and requires all futures and commodity options to be traded on organized exchanges. This proposed legislation has several main objectives. The grain futures act of 1922 set the basic authority and was changed by the commodity exchange act of 1936 7 u. Commodity exchange act issuesrelatedtothe regulation of. Act,and that the martin act s definition of a commodity was broader than the federal definition under the commodity exchange act. Exchange act cea to include any investment trust, syndicate or. Overthecounter derivatives markets and the commodity. How is technology being used in the exchange traded futures market, and what concerns does this use raise under the commodity exchange act cea. Squeezes, corpses, the antimanipulation provisions of.
Liability under the commodities exchange act on september 23, 20, the united states court of appeals for the second circuit issued a decision clarifying the standard for aiding and abetting liability under the commodities exchange act cea. Keep in mind though, just because something isnt covered here, it may still be a violation of some other part of the federal criminal law. Administered by the cftc, the program the cftc wp is similar to the provisions creating the new sec wp, providing the same lucrative monetary incentives and allowing commodity whistleblowers who believe they have been retaliated against to file a private right of action. Act, 1952, all the contracts for delivery of goods, which are settled by payment of money difference or.
Key decisions from 2018 and enforcement trends to monitor in 2019 2018 was an interesting year for market participants subject to the commodity exchange act the cea, with federal appellate courts issuing three noteworthy decisions involving claims under the cea. Be it enacted hy the senate and house of representatwes of the united states of america in congress assembled, that section 2a of the commodity exchange act 42 stat. Commodity exchange act cea,2 as amended by title vii of the dodd frank. The act provides federal regulation of all commodities and futures trading activities and requires all futures and commodity options to be traded on organized. Commodity futures trading commission division of enforcement. Exchange act, as amended by the commodity futures modernization act of 2000 the commodity exchange act. It creates a framework to regulate trading venues which list emerging digital commodities, such as bitcoin, ether, their forks, and. The commodity futures trading commission and the securities and exchange. Second circuit clarifies the standard for aiding and abetting. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the firm, to be given or withheld at. The significance of commodity exchanges for trade in agricultural.
This chapter shall apply to and the commission shall have jurisdiction with respect to accounts, agreements, and transactions involving, and may permit the listing for trading pursuant to section 7a2c of this title of, a put, call, or other option on 1 or more securities as defined in section 77ba1 of title 15 or section 3a10 of the securities exchange act of 1934 15 u. Securities and exchange commission november 16, 2006 and rule. To amend the commodity exchange act to strengthen the regulation of futures trading, to bring all agricultural and. Commodity exchange act issuesrelatedtothe regulation.
Commodity futures trading commission 17 cfr part 75 rin 3038ae72. Db multisector commodity trust pursuant to section 19b1 of the securities exchange act of 1934 act 1 and rule 19b4 thereunder,2 notice is hereby given that on august 16, 2006, the american stock exchange llc amex or exchange filed with the securities and exchange commission. In 1974, the commodity futures trading commission cftc. C does not i set rules governing the conduct of subscribers other than the conduct of such. The following is a revised version of the commodity exchange act. Exchange nymex and the intercontinental exchange ice futures europe, in violation of sections 6c1 and 9a of the commodity exchange act, 7 u. The act provides federal regulation of all commodities and futures trading activities and requires all futures and commodity options to be traded on organized exchanges. Eligible contract participantslike financial institutions, insurance companies, and. Cftc antifraud and manipulation enforcement authority.
The doddfrank act amended the commodity exchange act and adopted an explicit prohibition regarding activity commonly known as spoofing in commodities markets. This note argues that the spoofing prohibition is a necessary step towards improved market discipline and price integrity in the relevant commodities markets. Neither commodity exchange act cea nor its legislative history specifically authorizes extraterritorial application of statute. Jan 28, 2021 the commodity exchange act outlines the qualifications for ecp eligibility in section 1a18 of the cea. A journey through the history of commodity derivatives. Commodity exchange act cea definition investopedia. Commodity futures trading commission cftc and the national futures. Aggregate base available funds the sum of any remaining base collateral, any remaining base customer collateral if applicable as described in rule 802.
Consumer protection act to implement amended sections 6c1 and 6c3 of the commodity exchange act, respectively. The words the commission shall mean the commodity exchange commission, con. Doddfrank wall street reform and consumer protection act. Under the cea, the cftc has exclusive jurisdiction over futures, commodity. Requirements of secretary of the treasury regarding exemption of foreign exchange swaps and foreign exchange forwards from definition of the term swap 2. However, there are regional commodity exchanges functioning all over the country. As the commodity exchange act of 1936 indicates, these regulations are predicated on a belief that futures markets are susceptible to manipulation and control by large traders.
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