The requirement that listed futures and option contracts meet specified criteria has been a fundamental tool of Federal regulation of commodity futures exchanges since the Futures Trading Act of 1921, Pub. L. No. 67-66, 42 Stat. 187 (1921).
Currently, the statutory requirements for listing futures and option contracts are found in Section 5 of the Commodity Exchange Act (CEA), 7 USC 7, for security futures, in Section 2(a)(1)(D) of the CEA, 7 USC 2(a)(1)(D) and for swaps in Section 5h of the CEA, 7 USC 7b-3
Designated contract markets (DCMs) must comply initially and on an ongoing basis with 23 core principles. Core Principle 3 and Core Principle 5 are specifically applicable to the terms and conditions of listed contracts. Core Principle 3 requires that contracts must not be readily susceptible to manipulation. Core Principle 5 specifies that speculative position limits or position accountability must be adopted where necessary and appropriate, to reduce the potential threat of market manipulation or congestion.
Appendix B and Appendix C to Part 38 of the CFTC’s regulations, 17 CFR Part 38 Appendix B, and Appendix C 38 of the CFTC’s regulations, 17 CFR Part 38 Appendix C, may be used as guidance for DCMs in ascertaining compliance with the statutory requirements for new product listings and existing listed contracts.
Swap Execution Facilities (SEFs) must comply initially and on and ongoing basis with 15 core principles. Core Principle 3 and Core Principle 6 are specifically applicable to the terms and conditions of swaps traded on or through a SEF. Core Principle 3 requires that swap contracts must not be readily susceptible to manipulation. Core Principle 6 specifies that speculative position limits or position accountability must be adopted where necessary and appropriate, to reduce the potential threat of market manipulation or congestion.
Economic Requirements Interpretative Statement
Policy Statement on Price Differentials