Economic Requirements

The requirement that listed futures and option contracts meet specified criteria has been a fundamental tool of Federal regulation of commodity futures exchanges since the Futures Trading Act of 1921, Pub. L. No. 67-66, 42 Stat. 187 (1921).

Currently, the statutory requirements for listing contracts are found in Section 5 of the Commodity Exchange Act (CEA), 7 USC 7, and for security futures, in Section 2(a)(1)(D) of the CEA, 7 USC 2(a)(1)(D).

Designated contract markets (DCMs) must comply initially and on an ongoing basis with eight specified designation criteria and 18 core principles. Core Principle 3 and Core Principle 5 are specifically applicable to the terms and conditions of listed contracts. Core Principle 3 requires that contracts must not be readily susceptible to manipulation. Core Principle 5 specifies that speculative position limits or position accountability must be adopted where necessary and appropriate, to reduce the potential threat of market manipulation or congestion.

Appendix A to Part 38 of the CFTC’s regulations, 17 CFR Part 38 Appendix A, and Appendix A to Part 40 of the CFTC’s regulations, 17 CFR Part 40 Appendix A, may be used as guidance for DCMs in ascertaining compliance with the statutory requirements for new product listings and existing listed contracts.

Economic Requirements Interpretative Statement
Policy Statement on Price Differentials