What is a Commodity Intermediary? A Comprehensive Legal Overview
Definition & Meaning
A commodity intermediary is an individual or entity that operates within the realm of commodities trading. Specifically, it refers to a person or organization that is registered as a futures commission merchant under federal commodities law. These intermediaries typically provide essential services such as clearance and settlement for trades conducted on designated contract markets, which are regulated under federal law. This role is crucial in ensuring that transactions in the commodities market are executed smoothly and in compliance with legal standards.
Legal Use & context
The term "commodity intermediary" is primarily used in the context of futures trading and commodities law. Legal professionals may encounter this term when dealing with contracts, trading regulations, and compliance matters. It is relevant in areas such as:
- Commodity trading
- Futures contracts
- Financial regulations
Individuals or businesses engaging in commodity trading may need to utilize forms or templates to ensure compliance with applicable laws. US Legal Forms provides legal templates that can assist users in navigating these requirements.
Real-world examples
Here are a couple of examples of abatement:
Here are a couple of examples of how a commodity intermediary operates:
- A registered firm that facilitates the buying and selling of futures contracts for agricultural products, ensuring that all transactions are settled according to market regulations.
- A brokerage that acts as an intermediary for investors looking to trade in commodities, providing necessary services to ensure compliance with federal laws. (hypothetical example)
Relevant laws & statutes
The primary legal framework governing commodity intermediaries includes:
- Commodity Exchange Act (CEA)
- Regulations set forth by the Commodity Futures Trading Commission (CFTC)