Info 1: Commodities Future Trading Commission definition
Info 2: how CFTC works
Info 3: CFTC vs other agency
Info 4: example of CFTC
Opening information:
Commodities future trading commission sentence breaks into four words commodities, future, trading, and commission. Commodities mean natural materials, future means forward coming time, trading means buying and selling with profits and loss, and commission means broker charges or committee.
Commodities Future Trading Commission is a committee for ruling and commanding the buying and selling activities of natural materials with a contract.
So now let’s have a look at what is a commodities futures trading commission, how CFTC works, and what is the difference between the commodities futures trading commission and other agencies, finally one clear example of the commodities futures trading commission.
Info 1: Commodities Future Trading Commission
Whenever there is a group, there must be one person as a leader to control the whole group. When there is a country there must be one government to rule the entire nation.
Like whenever there is a market, there must be one ruler to regulate the market, and rulers are authorized by the government to rule such a specific kind of market based on their national laws.
This same applies to the commodities market, the of the commodities market is the commodities future trading commission (CFTC) which is authorized by the government to regulate the whole market.
However, like the government authorized by the country people’s, these regulators are authorized by their country’s government to follow and protect the integrity of the market in the trading of commodities.
They had the power to penalize or punish anyone based on the rules of laws, and also they had the authority to create new laws and rules.
So let’s dive into how the Commodities Future Trading Commission works in the public market.
Info 2: how commodities futures trading commission works
Commodities Futures Trading Commission doesn’t represent any of the specific things or objects, instead, they are an agency that is created by the government to regulate the commodities market.
Therefore each of the countries would have separate agencies that are used to regulate the commodities future market with different kinds of names but with the core purpose of ruling a whole commodities market.
Supposedly if any of the agencies would regulate the stock exchange or public equity business they are not considered as commodities futures trading commission.
Each of the separated categories of security has a different kind of agency so the agency of the commodities market are commodities futures trading commission, which helps to protect the investors and traders of such market.
The reason not one commodity futures trading commission (CFTC) for the whole world is that every country has its own ruler and laws of government, So to know the current newly changed rules you must look at your own country’s CFTC website.
The person who got cheated and frauded by any public broker of commodities future market and Industries which failed to maintain the market integrity in the commodities using the futures contract, which that person or Investors had the authority to complain to their country CFTC.
Each person who participates in the commodities future market where must follow the all rules and regulations that are created by them, breaking the laws and rules would lead to paying heavy penalties or fainting in jail.
Any kind of contract such as options and futures which are traded using public securities called commodities would be regulated by the commodity’s futures trading commission.
Most people are confused about the Commodities Future Trading Commission and other agencies, so let’s jump into the key difference anyway.
Info 3: CFTC vs other agency
The difference between the CFTC and other agencies is, that CFTC is the ruler and regulator which only creates and maintains transparency and integrity of the commodity’s future market. This CFTC was first created in 1974 by the US government.
On the other side, other agencies refer the separate regulators of different kinds of markets such as the Securities and Exchange Commission, National Future Association, extra… And to make you more Clear about the CFTC, let’s look into one brief example below.
Info 4: example of CFTC
Say that you had held a position in the oil and crops, where such a position is executed by the commodities broker under the commodities exchange.
Next, you also purchased equity shares in the stock market under different brokers with separate and registered stock exchanges.
Here your commodities position is regulated and takes complaints to the Commodities Future Trading Commission and another second position from the equity shares which are not regulated by the CFTC although they are ruled by the Security and Exchange Commission (SEC).