82,891
edits
CFTC Representations: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) (Created page with "==Introduction== The U.S. Commodity Futures Trading Commission (“'''{{tag|CFTC}}'''”) has jurisdiction over ALL products traded on any US exchange (this captures virtu...") |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 2: | Line 2: | ||
The U.S. [[Commodity Futures Trading Commission]] (“'''{{tag|CFTC}}'''”) has jurisdiction over ALL products traded on any US exchange (this captures virtually all financial products, except for foreign jurisdiction specific products that are not traded in the US). | The U.S. [[Commodity Futures Trading Commission]] (“'''{{tag|CFTC}}'''”) has jurisdiction over ALL products traded on any US exchange (this captures virtually all financial products, except for foreign jurisdiction specific products that are not traded in the US). | ||
All {{tag|ISDA}}s must include certain representations in the {{TAG|ISDA}} Schedule to ensure that the {{isdama}} and the underlying Transactions fall into a safe harbor exempting the {{isdama}} / Transactions from regulation by the [[Commodity Futures Trading Commission]] (“'''{{tag|CFTC}}'''”) and are not deemed illegal off-exchange transactions. | All {{tag|ISDA}}s must include certain representations in the {{TAG|ISDA}} Schedule to ensure that the {{isdama}} and the underlying Transactions fall into a safe harbor exempting the {{isdama}} / Transactions from regulation by the [[Commodity Futures Trading Commission]] (“'''{{tag|CFTC}}'''”) and are not deemed illegal off-exchange transactions. | ||
==Background== | ==Background== | ||
In order to comply with U.S. Commodity Futures Trading Commission (“{{tag|CFTC}}”) regulations, we include two market standard representations, “{{ISDArep3|eligible|contract|participant}}” (“ECP”) and “{{ISDArep3|Eligible|Commercial|Entity}}” (“ECE”), in our {{tag|ISDA}} Schedule and other [[Master Agreements]]. The United States [[Commodity Exchange Act]] (“CEA”) was passed in 1936 and provides for federal regulation of all commodities and futures trading activities and requires that all futures and commodity options be traded on organized exchanges, and its primary enforcer, the {{tag|CFTC}}, regulates all futures markets in the United States in which commodities are traded. The CEA defines “commodity” very broadly (see definition below, emphasis added). | In order to comply with U.S. Commodity Futures Trading Commission (“{{tag|CFTC}}”) regulations, we include two market standard representations, “{{ISDArep3|eligible|contract|participant}}” (“ECP”) and “{{ISDArep3|Eligible|Commercial|Entity}}” (“ECE”), in our {{tag|ISDA}} Schedule and other [[Master Agreements]]. The United States [[Commodity Exchange Act]] (“CEA”) was passed in 1936 and provides for federal regulation of all commodities and futures trading activities and requires that all futures and commodity options be traded on organized exchanges, and its primary enforcer, the {{tag|CFTC}}, regulates all futures markets in the United States in which commodities are traded. The CEA defines “commodity” very broadly (see definition below, emphasis added). | ||
{{ | {{quote|7USC.1a.Definitions. (4) '''Commodity'''. The term "commodity" means wheat, cotton, rice, corn, oats, barley, rye, <br> flaxseed, grain sorghums, mill feeds, butter, eggs, Solanum tuberosum (Irish potatoes), wool, wool tops, fats and <br>oils (including lard, tallow, cottonseed oil, peanut oil, soybean oil, and all other fats and oils), cottonseed meal, <br>cottonseed, peanuts, soybeans, soybean meal, livestock, livestock products, and frozen concentrated orange juice, and <br>all other goods and articles, except onions as provided in section 13-1 of this title, and all services, rights, and <br>interests in which contracts for future delivery are presently or in the future dealt in.}} | ||
This could include a variety of financial products that we do not typically think of as “commodities” such as [[interest rates]] and [[currencies]], potentially pulling in USD swaps and / or USD [[foreign exchange]] transactions. | This could include a variety of financial products that we do not typically think of as “commodities” such as [[interest rates]] and [[currencies]], potentially pulling in USD swaps and / or USD [[foreign exchange]] transactions. | ||