What does Commodity Futures Modernization Act mean?
An Act enacted in 2000 which contains provisions defining the regulatory and supervisory roles of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Clarity was introduced in some overlapping functions of the CFTC and the SEC. Both futures exchanges and stock exchanges were allowed to trade common products under the joint regulatory jurisdiction of the CFTC and the SEC. The Act simplified and modernized the process for designating boards of trade that can offer futures contracts.
Futures Knowledge Explains Commodity Futures Modernization Act
Commodity Futures Modernization Act brought basic changes in the derivatives and commodities markets. Some OTCs derivatives transactions were kept outside of the jurisdiction of the CFTC. The Act removed the ban trading of futures contracts based on single stocks and narrowly based stock indices in the U.S.