Security Futures: BD and FCM Regulation

Overview

Security futures, as that term is defined in the SEA and the CEA, are subject to regulation by both the SEC under the securities laws and the CFTC under the Commodity Exchange Act. Just as the product is dual-regulated, so are the firms that act as intermediaries in the products. However, fully-SEC-regulated broker-dealers and fully-CFTC-regulated FCMs that trade in security futures products are subject only to a "light" scheme of regulation under the other regime and may register under the other regime by "notice."

The principal FINRA rule regulating security futures, Rule 2370, is generally modeled after FINRA Rule 2360, the principal FINRA Rule governing the obligations of broker-dealers with respect to option transactions. See also the topic page on Securities Options.

A separate topic page on Security Futures Jurisdiction provides guidance on the jurisdictional issues as to security futures products and as to futures that relate to securities.

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Broker-Dealer Registration for FCMs

SEC Margin Rules

FINRA Rules

FCM Registration for Broker-Dealers

CFTC Regulation of Product

NFA Compliance and Registration Rules