The CFTC’s jurisdiction over derivative transactions is broader than spot transactions involving manipulation or fraud.  Generally speaking, a derivative is a type of contract the value of which is based on an underlying asset.  Derivatives include futures (contracts for future delivery); swaps (contracts to exchange income streams based on the occurrence of an event or the value of a reference); and options (a contract that provides the right, but not the obligation, to buy or sell a specified asset at a specified price).  In addition to fraud and manipulation, the CFTC has initiated the following categories of enforcement actions involving derivative trading:

• Reporting, risk management, adequate compliance programs, and business practices.  For example, failure to report swap data to the CFTC, make required disclosures about the pricing of swaps, or implement adequate compliance and know-your-customer measures.
• Off-exchange trading.  Violations of CFTC regulations requiring that certain derivatives be traded on registered exchanges.
• Failure to register.  Offering or dealing in derivatives without registering with the CFTC.  Registration categories include Futures Commission Merchants, Swap Dealers, Introducing Brokers, Commodity Pool Operators, among other categories.
• Anti-Money Laundering.  The failure of a firm registered with the CFTC as a Futures Commission Merchant to maintain and implement a written Anti-Money Laundering program.
• Violation of position limits.  Buying or selling commodity futures for the purpose of speculating (i.e., trying to make a profit) in amounts that are larger than the limits imposed by the CFTC or applicable exchange.
• Recordkeeping violations.  Failure of swap dealers and CFTC registrants to maintain required records and prevent the use of unapproved communications methods (including text messages and WhatsApp chats) to discuss business.