The Commodity Futures Modernization Act was passed by Congress and signed into law by President Bill Clinton in December 2000. It was an attempt to solve a dispute between the Securities Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) that arose in the early 1980s. At that time, Congress had enacted legislation to expand the scope of what was defined as a commodity. This resulted in some overlap between the regulatory scope of the SEC and the CFTC.
The Commodity Futures Modernization Act of 2000 (CFMA) is United States federal legislation that clarified that most 'over-the-counter derivatives' would not be subject to regulation by barring the Commodity Futures Trading Commission (CFTC), the U.S. Securities and Exchange Commission (SEC), and the states from regulating these products.
Gramm and the ‘Enron Loophole’
By ERIC LIPTON
In 2000, Senator Phil Gramm played a central role in writing the Commodity Futures Modernization Act, a law that would open the door to unregulated trading of credit default swaps, the financial instruments blamed, in part, for the current economic meltdown.
Credit Default Swaps
The Press and Phil Gramm
The alternative press leads on the policy roots of the credit crisis
By Elinore Longobardi