Case 2:25-cv-01541-JCM-DJA Document 1 Filed 08/19/25 Page 10 of 26
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by the Dodd-Frank Act of 2010, Pub. L. No. 111-203, 124 Stat. 1376, which brought swaps within the coverage of the CEA and added a special rule about event contracts. See 7 U.S.C. § 7a-2(c)(5)(C)(i). 34. The CEA provides that the CFTC has “exclusive jurisdiction” over transactions involving event contracts—which, as described below, are swaps or contracts of sale of a commodity for future delivery—traded on registered exchanges (known as “designated contract markets”): “The Commission shall have exclusive jurisdiction . . . with respect to accounts, agreements (including any transaction which is of the character of, or is commonly known to the trade as, an ‘option’, ‘privilege’, ‘indemnity’, ‘bid’, ‘offer’, ‘put’, ‘call’, ‘advance guaranty’, or ‘decline guaranty’), and transactions involving swaps or contracts of sale of a commodity for future delivery (including significant price discovery contracts), traded or executed on a contract market designated pursuant to section 7 of this title . . . .” 7 U.S.C. § 2(a)(1)(A) (emphasis added). The CEA expressly preserves state authority to regulate transactions “not conducted on or subject to the rules” of a CFTC-regulated exchange. Id. § 16(e)(1)(B)(i). 35. To receive the CFTC’s designation as a contract market, an exchange must apply and set forth its ability to comply with CFTC rules and regulations. Id. §§ 2(e), 7(a); 17 C.F.R. § 38.3(a). The CFTC’s comprehensive regulatory framework for contract markets, including a set of 23 “Core Principles,” 17 C.F.R. pt. 38, is designed to ensure and protect the integrity of those markets. Status as a CFTC-designated contract market “imposes upon [an exchange] a duty of self-regulation, subject to the Commission’s oversight,” requiring the exchange to “enact and enforce rules to ensure fair and orderly trading, including rules designed to prevent price manipulation, cornering and other market disturbances.” Am. Agric. Movement, Inc. , 977 F.2d at 1150-51. The CFTC is authorized to suspend or revoke an exchange’s designation if it fails to comply with any of the provisions of the CEA or the CFTC’s regulations. 7 U.S.C. § 8(b).
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