The Exclusive Jurisdiction of the Commodity Futures Trading Commission
![handle is hein.journals/hoflr6 and id is 75 raw text is: THE EXCLUSIVE JURISDICTION OF
THE COMMODITY FUTURES
TRADING COMMISSION
Thomas A. Russo* and Edwin L. Lyon**
In 1974, Congress substantially amended the Commodity Ex-
change Act' (the Act), and created a new, independent federal
regulatory agency, the Commodity Futures Trading Commission
(CFTC). The congressional purpose was to remove the regulation
of commodities from the Department of Agriculture and place it
under the auspices of the CFTC. Interestingly, however, the most
controversial and ambiguous provision in the 1974 amendments
concerns the jurisdiction of the CFTC, and more specifically, the
parameters of its exclusive jurisdiction. This exclusive jurisdiction
provision, section 2(a)(1) of the Act, states:
That the [Commodity Futures Trading] Commission shall have
exclusive jurisdiction with respect to accounts, agreements (in-
cluding any transaction which is the character of . . . an 'op-
tion' . . .), and transactions involving contracts of sale of a com-
modity for future delivery, traded or executed on a contract
market designated pursuant to Section 7 of this title or any other
board of trade, exchange, or market .... 2
Difficult questions have arisen as to the meaning of exclusive
jurisdiction as defined by the amendment. In addition, uncertainty
has arisen because Congress vested the CFTC with jurisdiction
over areas which had not been regulated by its predecessor, the
Commodity Exchange Authority (CEA). This jurisdictional expan-
* Member, District of Columbia and New York Bars. B.A., 1965, Fordham Uni-
versity; M.B.A., 1969; J.D., 1969, Cornell University. Mr. Russo was formerly as-
sociated with the Commodity Futures Trading Commission as Deputy General
Counsel and Director of the Division of Trading and Markets, and with the Securities
and Exchange Commission in the Division of Market Regulation.
** Member, District of Columbia and Missouri Bars. B.S., 1969, Southwest Mis-
souri State University; J.D., 1972, Washington University. Mr. Lyon was formerly as-
sociated with the Commodity Futures Trading Commission as Chief Counsel in the
Division of Trading and Markets, and with the Securities and Exchange Commission
in the Division of Market Regulation.
1. Commodity Futures Trading Commission Act of 1974, Pub. L. No. 93-463, 88
Stat. 1389 (codified at 7 U.S.C. §§ 2-22 (Supp. V 1975)).
2. 7 U.S.C. § 2 (Supp. V 1975).](ViewImageLocal?handle=hein.journals/hoflr6&div=14&collection=&method=preview&ext=.png&size=3)
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The Exclusive Jurisdiction of the Commodity Futures Trading Commission
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