The Commodity Futures Trading Commission (CFTC) is an independent government agency that regulates the futures market.

Futures are not considered securities, so the CFTC has jurisdiction over such exchanges while the SEC does not. The CFTC is the regulatory authority for the futures trade. This includes futures on currency, indexes, and stocks.

Futures are not technically considered securities, because a security is defined as a contract that depends on the performance of a third party, while futures contracts only depend on two people. Any options that stem from futures are considered securities, however.

The SEC regulates securities in general but the CTFC has some authority over options that relate to commodities. Among the CFTC’s duties is to set limits on the allowable speculative position in any one commodity.

It came under fire after the 2008 crash when it was revealed that many exceptions to the limits had been granted to large institutions who became overly leveraged. Besides futures and options, the CFTC regulates swaps as well, collectively referring to the three as “referenced contracts.”

The CFTC monitors large positions and operates a whistleblower program to encourage those who have learned of unethical behavior to come forward.

What is Commodity Paper?
What are Futures Markets?