What is the primary purpose of the Commodity Futures Trading Commission (CFTC)?

• A. To support agricultural development
• B. To regulate the U.S. derivatives markets
• C. To promote fair trade practices
• D. To enhance global trade agreements

Answer: (B)

The primary purpose of the Commodity Futures Trading Commission (CFTC) is to regulate the U.S. derivatives markets. This federal agency oversees the trading of futures and options contracts to maintain the integrity of these financial markets. Through its regulatory authority, the CFTC aims to protect market participants against fraud, manipulation, and abusive practices. By ensuring transparency and promoting efficient market operations, the CFTC helps to foster economic stability and confidence among investors.

The focus of the CFTC on regulating derivatives markets plays a crucial role in safeguarding the overall financial system, as these instruments are often used for hedging purposes and risk management. Therefore, the agency’s activities directly influence the functioning and safety of these trading environments.

Regarding the other options, while supporting agricultural development, promoting fair trade practices, and enhancing global trade agreements are important activities, they do not encapsulate the CFTC's central role. The agency’s foundational mission primarily revolves around the regulation of derivatives, making it essential for maintaining the robustness of the U.S. commodities markets.