USCA4 Appeal: 25-1892
Doc: 16
Filed: 10/15/2025
Pg: 26 of 97
the 2000 amendments then exempted transactions between qualified parties
“in a commodity other than an agricultural commodity” from the exchange-
trading requirement. 114 Stat. 2763A-365, 2763A – 379.
Because exempted transactions would not take place on DCMs, they
were not under the CFTC’s exclusive jurisdiction. To avoid state regulation
of these transactions, Congress in 2000 further amended the CEA in what is
now Section 16(e)(2) to “s upersede and preempt the application of any State
or local law that prohibits or regulates gaming or the operation of bucket
shops (other than antifraud provisions of general applicability) ” as to
“exempted” transactions. 7 U.S.C. § 16(e)(2). The Committee Report
reaffirmed that “the current ” CEA already “ supersedes and preempts ” state laws “ in the case of transactions conducted on a registered entity , ” a category
that includes DCMs. H.R. Rep. No. 106-711, pt. 2, at 71 (2000) (emphasis
added). The new preemption provision clarified that “ the CEA supersedes
and preempts State gaming and bucket shop laws ” as to exempted transactions as well. Id. ; see 7 U.S.C. § 1a(40) (defining “registered entity” to include DCMs). Second , Congress in 2000 expanded the definition of “commodit y ” to
include events. A qualifying event is an “occurrence” or “contingency” that
is “beyond the control of the parties” to a “transaction” and “associated with
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