Encyclopedia > Commodity Futures Modernization Act of 2000
The Commodity Futures Modernization Act of 2000 or CFMA, was passed and signed by President William Jefferson Clinton in December 2000 in large part to allow for the creation of U.S. exchanges for the listing of a new sort of derivative security, the single-stock future. Order: 42nd President Term of Office: January 20, 1993–January 20, 2001 Preceded by: George H. W. Bush Succeeded by: George W. Bush Date of birth: August 19, 1946 Place of birth: Hope, Arkansas Date of death: Place of death: First Lady: Hillary Rodham Clinton Political party: Democratic Vice President... 2000 is a leap year starting on Saturday of the Gregorian calendar. ...
The prohibition on single-stock futures and narrow-based indexes that had been in effect until the passage of this act was known as the Shad-Johnson Accord because it was first announced in 1982, as part of a jurisdictional pact between John Shad, then chairman of the Securities and Exchange Commission and Phil Johnson, then chairman of the Commodity Futures Trading Commission. 1982 is a common year starting on Friday of the Gregorian calendar. ... The Securities and Exchange Commission, commonly referred to as the SEC, is the United States governing body which has primary responsibility for overseeing the regulation of the securities industry. ... The Commodity Futures Trading Commission (CFTC) is an independent agency of the United States Government, created by Congress in 1974. ...
At the same time, the CFMA modernized the regulation of U.S. futures exchanges, replacing a one-size-fits-all approach to regulation with an approach that recognizes that the regulatory regime necessary and appropriate to achieve the objectives of the CEA depends on the nature of the underlying assets traded and the capabilities of market participants.
In the case of security futures, the lenders are broker-dealers and FCMs, and the commissions are responsible for all other aspects of prudential regulation of those firms.
Some futures exchanges argue that the definition of a narrow-based index in the CFMA was drafted with reference to the U.S. equities markets and that, in any event, the definition unnecessarily restricts the trading of futures on indexes of U.S. debt obligations and foreign securities.
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