Regulations were put in place a long time ago to keep the operation of the futures market free of market abuses and price manipulation. Both the federal government and the exchanges play an active role in regulating market activity.

The Commodity Futures Trading Commission (CFTC) is regulates exchange-traded derivative products, but not the OTC markets. Historically, the CFTC has followed a more principles-based approach to regulation than the SEC, the government body regulating equities. Since the Commodity Futures Modernization Act of 2000 (CFMA), the CFTC has replaced its traditional "one-size fits all" regulatory framework with a risk based model in which regulation is tailored to the nature of the market and its participants. Under the CFTC's approach, exchanges and clearing houses must adhere to statutory "core principles" to the point that there are virtually no longer any prescriptive regulations to meet for compliance.

Exchanges also play an active role in regulating their own markets' activities. Each exchange serves as its own Self-Regulatory Organization (SRO), with its own market regulations units responsible for overview of all transactions traded in its markets.

Details: Regulation of Futures Markets