CFTC History in the 1990s
June 6, 1990—The CFTC and the Commission des Operation de Bourse (COB) of France sign two agreements that provide the most comprehensive structure of information sharing and cooperation yet achieved between financial regulatory authorities in different countries.
November 15, 1990—The CFTC, in a move toward closer worldwide cooperation among regulatory authorities, adopts ten general principles intended to assist regulators and developers of screen-based trading systems in addressing areas of common concern. The ten principles were drafted by a CFTC-chaired working group of the International Organization of Securities Commissions (IOSCO). IOSCO also adopts the ten principles.
January 17, 1991—Prior to and during the Persian Gulf War, the CFTC works closely with the U.S. Department of Energy to ensure that futures markets have ample access to cash market information about crude oil production and to ensure that the markets perform their price discovery and risk shifting functions in an orderly manner. The Commission reported to Congress that it found no evidence that the sharp rises in energy prices were caused by manipulation or excessive speculation.
September 4, 1991—The CFTC released a year-long staff study analyzing the performance of the corn, wheat, and soybean futures contracts traded at the CBOT, “An Analysis of the Delivery-Point Provisions of the CBOT's Corn, Wheat and Soybean Futures Contracts.”
November 1991—The CFTC and the Securities and Exchange Commission concurrently approve proposed rule changes by the Options Clearing Corporation (OCC) and the Chicago Mercantile Exchange intended to improve coordination in the clearance and settlement of futures and options. The rule changes expand the existing cross-margining programs between the OCC and CME to permit clearing members to include intermarket futures and option positions held in certain non-proprietary accounts.
July 1992—The CFTC approves final rules which exempt commodity pool operators and commodity trading advisors of pools sold exclusively to certain highly accredited investors from specific disclosure, reporting, and recordkeeping requirements.
Fiscal Year 1992—The CFTC implements initiatives to eliminate unnecessary paperwork. As a result of this initiative, market reports from exchanges are now sent electronically to the Commission.
October 28, 1992—President Bush signs the CFTC's reauthorization legislation, the Futures Trading Practices Act of 1992 (FTPA), expanding the CFTC's regulatory authority and reauthorizing the agency until October 1994. The Futures Trading Practices Act, among other things, granted the Commission the authority to exempt over-the-counter (OTC) derivative and other transactions from CFTC regulation and provided for registration of local traders.
January 22, 1993—Using new exemptive authority granted in the Futures Trading Practices Act, the CFTC exempts certain swap agreements and hybrid instruments from regulation under the Commodity Exchange Act.
February 26, 1993—A bomb placed by terrorists explodes in the basement of the World Trade Center, disrupting futures trading in New York and causing the temporary relocation of the CFTC's New York office.
April 9, 1993—The CFTC adopts rules requiring the registration of floor brokers and ethics training for all individual registrants, as mandated by the Futures Trading Practices Act. The Commission also adopts rules permitting the suspension of registrants charged with felonies under authority granted by the Futures Trading Practices Act.
April 20, 1993—Under Futures Trading Practices Act exemptive authority, the CFTC exempts from regulation certain contracts for the deferred purchase or sale of specified energy products.
July 22, 1993—The CFTC approves final rules prohibiting the practice of dual trading by floor brokers, unless an exemption is explicitly granted by the CFTC, in contract markets that trade in excess of a threshold level of 8,000 contracts a day.
Fiscal Year 1993—The CFTC approves 46 new futures and option contracts, breaking the previous record.
October 25, 1993—The CFTC releases a report entitled “OTC Derivative Markets and Their Regulation,” the first of several required by the Futures Trading Practices Act.
January 1994—In response to a recommendation in the CFTC's OTC Derivative Markets Report, the President's Working Group on Financial Markets expands its charter to encompass new developments in financial markets, including the growth of OTC derivatives.
January 10, 1994—The CFTC files an administrative complaint against two former Chicago Board of Trade members, Anthony Catalfo and Darrell Zimmerman, alleging that the respondents engaged in a scheme to manipulate Treasury bond futures and put options on the CBOT. On September 26, 1994, an administrative law judge issues a default order against both respondents finding that they committed the violations as alleged.
April 1994—The CFTC releases another report mandated by the Futures Trading Practices Act, “A Study of the Global Competitiveness of US Futures Markets.”
June 20, 1994—In response to concerns over cattle market volatility, the CFTC releases a report entitled, “The Live Cattle Futures Market, April to June 1994: Review of Market Fundamentals and Analysis of Large Trader Positions and Activity.” In September 1994, the CFTC releases a follow-up report entitled, “An Analysis of Intraday Trading of Beef Packers in Live Cattle Futures.”
June 28, 1994—The CFTC approves final rules permitting registrants to provide to customers a "generic" risk disclosure statement that will satisfy risk disclosure requirements applicable to both domestic and foreign commodity futures and options transactions.
November 29, 1994—The CFTC releases separate studies on audit trails, computerized trading, and penalties as required by the Futures Trading Practices Act of 1992.
December, 1994—The CFTC, in coordination with the Securities and Exchange Commission, files and simultaneously settles, for a fine of $10 million, an administrative complaint against BT Securities, a subsidiary of Bankers Trust. The Commission’s complaint alleges that BT Securities committed fraud in its over-the-counter (OTC) derivatives transactions with Gibson Greetings.
December 21, 1994—The CFTC approves Phase I of new risk assessment rules which require futures commission merchants to maintain and file organization charts showing major affiliated persons, policies and procedures governing risk management, and consolidated financial statements.
April 21, 1995—President Clinton signs a bill reauthorizing the CFTC through the year 2000, but otherwise making no amendments to the Commodity Exchange Act.
May 1, 1995—A new Commitments of Traders report is introduced that reflects, for each market, the combined futures and futures-equivalent option positions of traders identified through the CFTC's and the exchanges' large trader reporting systems.
May 17, 1995—Representatives of regulatory bodies from 16 countries, responsible for supervising the world's leading futures exchanges, issue a Declaration at a meeting in Windsor, England hosted by the U.K. Securities Investment Board (SIB) and the CFTC. The Windsor Declaration outlines the steps the representatives propose to take to strengthen the supervision of the international futures markets.
June 29, 1995—The CFTC adopts comprehensive revisions to rules governing disclosure by commodity pool operators and commodity trading advisors. The changes are designed to increase the clarity and comprehension of disclosure to investors.
February 29, 1996—The CFTC's Division of Trading and Markets issues a no-action letter to permit the Deutsche Terminborse (DTB) (predecessor to Eurex) to install and utilize DTB computer terminals in the U.S. in connection with the purchase and sale of certain futures and options contracts, the staff’s first consideration of a request to place computer terminals of an off-shore exchange in the U.S. (CFTC Press Release 3893-96, March 4, 1996)
March 12, 1996—The CFTC eliminates the requirement for case-by-case approval of the offer and sale of foreign option contracts in the U.S., subject to existing restrictions for options on foreign stock index futures and foreign sovereign debt futures. (CFTC Press Release 15-96, March 25, 1996)
March 15, 1996—The CFTC announces that it is one of 14 international futures regulators that are the founding signatories of a Declaration on Cooperation and Supervision of International Futures Exchanges and Clearing Organizations. (CFTC Press Release 3995-96, March 15, 1996)
July 10, 1996—A CFTC order imposes a $600,000 civil monetary penalty against Fenchurch Capital Management Inc. of Chicago, on charges of market manipulation and cornering of the cheapest-to-deliver note deliverable against the Chicago Board of Trade ten-year Treasury note futures contract. (CFTC Press Release 3922-96, July 10, 1996)
Fiscal Year 1996—The CFTC approves a record 92 new futures and option contracts.
December 19, 1996—The CFTC notifies the Chicago Board of Trade that the delivery terms of its corn and soybean futures contracts do not satisfy the statutory objectives of Section 5a(a)(10) of the Commodity Exchange Act of "permit[ting] the delivery of any commodity...at such point or points and at such quality and locational price differentials as will tend to prevent or diminish price manipulation, market congestion, or the abnormal movement of such commodity in interstate commerce” and gives the CBOT 75 days to respond. (CFTC Press Release 3983-96, December 19, 1996)
February 25, 1997—In Dunn v. CFTC, the U.S. Supreme Court rules that foreign currency options are ''transactions in foreign currency'' for purposes of the Treasury Amendment exclusion to the Commodity Exchange Act, and, thus, that the CFTC has no jurisdiction over such transactions. The Commodity Futures Modernization Act of 2000 will endeavor to clarify CFTC jurisdiction over retail transactions in foreign currency futures and options.
February 28, 1997—The CFTC approves final rules for fast-track approval of new contracts and contract amendments. These rules provide for approval of many new contracts within ten days and further provide that rule amendments and certain new contracts are to be approved within 45 days. At this time, under the Commodity Exchange Act, the Commission legally has 365 days to act on applications for new contracts and 180 days to act on proposed rule amendments. (CFTC Press Release 3994-97, February 27, 1997)
November 7, 1997—The CFTC orders the Chicago Board of Trade to change the delivery specifications for its corn and soybean futures contracts pursuant to Section 5a(a)(10) of the Commodity Exchange Act. The Commission notes that the CBOT can propose alternate specifications that meet the requirements of the Act. (CFTC Press Release 4077-97, November 7, 1997)
December 4, 1997—The Securities and Exchange Commission vetoes the Chicago Board of Trade’s proposed futures and futures options on the Dow Jones Transportation Average and the Dow Jones Utilities Average, stating that these contracts are too narrow-based to meet the requirements of the 1982 Shad-Johnson Accord. This is the only time the SEC exercised its veto power under the Accord. A court decision subsequently overturns the SEC veto and the CFTC approves the contracts on October 27, 1999.
February 13, 1998—The CFTC adopts amendments to its risk disclosure rules to eliminate requirements that futures commission merchants and introducing brokers provide institutional investors and certain other sophisticated market participants with standardized risk disclosure statements, while continuing to require such risk disclosure statements for retail customers. (CFTC Press Release 4106-98, February 13, 1998)
May 7, 1998—The CFTC issues a "concept release" seeking public comments to assist it in reexamining its approach to the over-the-counter (OTC) derivatives market. After an extended public comment period and much discussion among the members of the Working Group, Congress passes legislation (part of an October 1998 appropriations bill) temporarily preventing the CFTC from taking further action. Congress eventually creates legal certainty for OTC derivatives in the Commodity Futures Modernization Act of 2000. (CFTC Press Release 4142-98, May 7, 1998)
May 7, 1998—The CFTC approves the Chicago Board of Trade’s new corn and soybean futures contracts with delivery specifications that supersede those ordered by the CFTC on November 7, 1997. (CFTC Press Release 4143-98, May 7, 1998)
May 11, 1998— The CFTC enters into a settlement with Sumitomo Corporation to resolve allegations of manipulating the copper market in 1995 and 1996 that includes a civil monetary penalty of $150 million. (CFTC Press Release 4144-98, May 11, 1998)
June 11, 1998—The CFTC permits futures-style margining of commodity options traded on regulated futures exchanges. (CFTC Press Release 4155-98, June 11, 1998)
March 23, 1999—The CFTC approves for the first time an order exempting certain cleared swap agreements from most provisions of the Commodity Exchange Act and Commission regulations. The order applies to certain swap agreements submitted for clearing through SwapClear, a swaps clearing organization developed by the London Clearing House Limited. (CFTC Press Release 4247-99, March 23, 1999)
June 25, 1999—The Chicago Board of Trade, Chicago Mercantile Exchange, and New York Mercantile Exchange petition the CFTC pursuant to Section 4(c) of the Commodity Exchange Act for exemptive relief from certain statutory requirements in three areas: (1) the contract market designation procedures for new contract submissions; (2) the contract market rule review procedures; and (3) pertinent provisions of the Act that would otherwise prevent the immediate adoption and implementation of trading rules and procedures for a contract listed by a contract market that are comparable to those of a competing foreign exchange. The CFTC requests public comment on this petition. The concerns raised in this petition are eventually addressed by the Commodity Futures Modernization Act of 2000. (CFTC Press Release 4303-99, August 20, 1999)
November 4, 1999—The CFTC staff issues a report comparing the global competitiveness of U.S. futures and option markets to their counterparts abroad. The report, “The Global Competitiveness of U.S. Futures Markets Revisited,” updates a 1994 CFTC study, using the same methodology as the earlier study. (CFTC Press Release 4333-99, November 4, 1999)
November 9, 1999—The Working Group issues a report unanimously calling for legislation creating greater legal certainty for over-the-counter (OTC) derivatives.
November 17, 1999—The CFTC approves final rules that permit futures exchanges to list new contracts for trading pursuant to exchange certification—without prior Commission approval. This addresses one of the requests in the June 25, 1999 petition for exemptive relief of the Chicago Board of Trade, Chicago Mercantile Exchange, and New York Mercantile Exchange. (CFTC Press Release 4339-99, November 17, 1999)