The CommodityFuturesModernizationAct of 2000 (CFMA) is United States federal legislation that officially ensured modernized regulation[1] of financial products known as over-the-counter derivatives. It was signed into law on December 21, 2000 by President Bill Clinton. It clarified the law so that most over-the-counter (OTC) derivatives transactions between "sophisticated parties" would not be regulated as "futures" under the Commodity Exchange Act of 1936 (CEA) or as "securities" under the federal securities laws. Instead, the major dealers of those products (banks and securities firms) would continue to have their dealings in OTC derivatives supervised by their federal regulators under general "safety and soundness" standards. The Commodity Futures Trading Commission's (CFTC) desire to have "Functional regulation" of the market was also rejected. Instead, the CFTC would continue to do "entity-based supervision of OTC derivatives dealers."[2] These derivatives, including the Credit Default Swap, are a few of the many causes of the financial crisis of 2008 (Credit Crisis 2008) and the subsequent 2008–2012 global recession.

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