CFMA Meaning and
Definition
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CFMA stands for the "Commodity Futures Modernization Act." It is a United States federal law that was enacted in 2000 with the primary purpose of modernizing and regulating the trading of commodity futures and derivatives. The act aimed to facilitate the growth and development of these financial markets by streamlining their regulation.
Under the CFMA, various provisions were introduced to enhance the efficiency and competitiveness of commodity futures markets, including the exemption of certain derivatives transactions from regulation by the Commodity Futures Trading Commission (CFTC). This exemption allowed both professional traders and financial institutions to engage in these markets more easily, leading to increased liquidity and market participation.
Additionally, the CFMA established legal certainty and clarity regarding the legal status of over-the-counter (OTC) derivative contracts, which are privately negotiated contracts between two parties that are not traded on a centralized exchange. It granted broad legal certainty for OTC derivatives, ensuring that these contracts would not be considered illegal gambling or unenforceable for violating the law against gambling.
The CFMA was a significant piece of legislation that aimed to promote innovation and growth in commodity futures and derivatives markets while maintaining appropriate oversight and regulation. It provided legal clarity and regulatory relief, facilitating the expansion of these financial markets and enhancing market efficiency.
Common Misspellings for CFMA
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