Case 1:25-cv-01283-ABA Document 26 Filed 05/09/25 Page 13 of 36
Market Designations, 40 Fed. Reg. 25849, 25850 (June 19, 1975). In other words, the statute
required the CFTC to preapprove new event contracts before DCMs could offer them.
In 2000, Congress amended the CEA to remove the default rule that all event contracts be
subject to a “public interest” review and instead to allow DCMs to self -certify, with no prior review
required for many types of contracts. See 7 U.S.C. § 7a-2(c)(1) (2006); 17 C.F.R. § 40.2. This
process requires DCMs to certify that they have complied with the CEA and all applicable CFTC
regulations. On the tenth day following this certification, the new contract may be listed by the
registered entity unless notified by the CFTC that certification is stayed. 7 U.S.C. § 7a-2(c)(2).
However, the CFTC’s failure to act during t he initial 10-day period does not imply CFTC
approval of the contract or foreclose future CFTC review. DTCC Data Repository (U.S.) LLC v.
CFTC , 25 F. Supp. 3d 9, 18 (D.D.C. 2014). If DCMs want “ approval ” by the CTFC , they can
also request that the CFTC preapprove their contracts to confirm that they do not violate the CEA
or CFTC regulation. 7 U.S.C. § 7a-2(c)(4)(5); 17 C.F.R. § 40.3.
Not until the 2010 Dodd-Frank Act, on the heels of the 2008 Financial Crisis, did Congress
give the CFTC authority to regulate “swaps.” See Dodd-Frank Wall Street Reform and Consumer
Protection Act, Pub. L. No. 111-203, Title VII, Part II, § 722, 124 Stat. 1376, 1672; DTCC Data
Repository , 25 F. Supp. 3d at 11. The purpose of these swap amendments was to illuminate
“previously dark markets in the complex derivative instruments at the heart of the [2008 financial]
crisis.” Inv. Co. Inst. v. CFTC , 891 F. Supp. 2d 162, 174 (D.D.C. 2012), as amended (Jan. 2,
2013), aff’d , 720 F.3d 370 (D.C. Cir. 2013) (quotation omitted).
Congress was careful to make sure that these swap amendments did not legalize sports
gambling. See 156 Cong. Rec. S5906- 07, 2010 WL 2788026, at S5906-07 (daily ed. July 15,
2010) (statements of Sen. Blanche Lincoln and Sen. Dianne Feinstein). Dodd-Frank limited swaps
7
Made with FlippingBook - Online catalogs