Congress Urged to Close Zelener Loophole

NFA President Daniel Roth and Executive Vice President Daniel Driscoll urged Congress to close the Zelener loophole for non-forex products. In the CFTC vs. Zelener case, the U.S. Court of Appeals for the Seventh Circuit concluded that the rolling spot contracts in question did not qualify as futures contracts and that the CFTC therefore lacked the jurisdiction to regulate them. While the loophole created by the decision was partially closed by congress in 2008, the fix only applies to forex. Similar practices in retail OTC commodities trading remain virtually unregulated.

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