![cover image](https://wikiwandv2-19431.kxcdn.com/_next/image?url=https://upload.wikimedia.org/wikipedia/commons/thumb/5/5c/Great_Seal_of_the_United_States_%2528obverse%2529.svg/640px-Great_Seal_of_the_United_States_%2528obverse%2529.svg.png&w=640&q=50)
Commodity Futures Modernization Act of 2000
United States federal legislation / From Wikipedia, the free encyclopedia
Dear Wikiwand AI, let's keep it short by simply answering these key questions:
Can you list the top facts and stats about Commodity Futures Modernization Act of 2000?
Summarize this article for a 10 year old
The Commodity Futures Modernization Act of 2000 (CFMA) is United States federal legislation that ensured financial products known as over-the-counter (OTC) derivatives remained unregulated. It was signed into law on December 21, 2000 by President Bill Clinton. It clarified the law so most OTC derivative transactions between "sophisticated parties" would not be regulated as "futures" under the Commodity Exchange Act of 1936 (CEA) or as "securities" under the federal securities laws. Instead, the major dealers of those products (banks and securities firms) would continue to have their dealings in OTC derivatives supervised by their federal regulators under general "safety and soundness" standards. The Commodity Futures Trading Commission's (CFTC) desire to have "functional regulation" of the market was also rejected. Instead, the CFTC would continue to do "entity-based supervision of OTC derivatives dealers".[1] The CFMA's treatment of OTC derivatives such as credit default swaps has become controversial, as those derivatives played a major role in the financial crisis of 2008 and the subsequent 2008–2012 global recession.[2][3]
![]() | This article possibly contains original research. (May 2013) |
![]() | |
Acronyms (colloquial) | CFMA |
---|---|
Effective | December 21, 2000 |
Legislative history | |
|