Leverage Contracts:
Commodity Futures Trading Commission's Regulation of Leverage Contracts
GGD-88-41: Published: Apr 14, 1988. Publicly Released: May 18, 1988.
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Pursuant to a congressional request, GAO examined the: (1) nature and components of leverage contracts; (2) extent to which the three leverage transaction merchants (LTM) complied with applicable laws and regulations; (3) various federal and state regulations governing LTM; (4) issues the Commodity Futures Trading Commission (CFTC) should explore in its mandated report on leverage contracts; (5) possibility of trading leverage contracts on a registered futures exchange; and (6) regulatory structure the Securities and Exchange Commission (SEC) might apply to leverage contracts if they are viewed as securities.
GAO found that CFTC: (1) generally conducted the necessary oversight and review to determine LTM compliance with applicable laws and regulations; (2) did not conduct sufficient tests to determine LTM compliance with sales practice regulations; (3) imposed moratoria restricting entry into leverage contracts; (4) as required by recent legislation, is studying leverage contract issues and planning to lift the restrictions; (5) will need more staff to accommodate the resulting increase of LTM; and (6) does not have jurisdiction over precious-metal purchasing arrangements which involve cash transactions. GAO also found that: (1) federal regulations contain certain provisions regarding LTM activities, including registration, sales, disclosures, and examinations; (2) state regulators have no direct jurisdiction over leverage contracts but may enforce certain fraud statutes; (3) proposed legislation requiring the trade of leverage contracts on organized futures exchanges would have banned the contracts; and (4) SEC would regulate leverage contracts as over-the-counter options if they were viewed as securities. GAO believes that CFTC should study the: (1) use of self-regulatory organizations for LTM regulation; (2) resource impact of the lifted restrictions on CFTC; and (3) extent to which it and other authorities should regulate third-party financing transactions.
Dec 16, 2020
Financial Stability:
Agencies Have Not Found Leveraged Lending to Significantly Threaten Stability but Remain Cautious Amid PandemicGAO-21-167: Published: Dec 16, 2020. Publicly Released: Dec 16, 2020.
Dec 10, 2020
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Federal Reserve Lending Programs:
Use of CARES Act-Supported Programs Has Been Limited and Flow of Credit Has Generally ImprovedGAO-21-180: Published: Dec 10, 2020. Publicly Released: Dec 10, 2020. -
Financial Assistance:
Lessons Learned from CARES Act Loan Program for Aviation and Other Eligible BusinessesGAO-21-198: Published: Dec 10, 2020. Publicly Released: Dec 10, 2020.
Sep 22, 2020
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Anti-Money Laundering:
Opportunities Exist to Increase Law Enforcement Use of Bank Secrecy Act Reports, and Banks' Costs to Comply with the Act VariedGAO-20-574: Published: Sep 22, 2020. Publicly Released: Sep 22, 2020.
Sep 4, 2020
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Bank Supervision:
FDIC Could Better Address Regulatory Capture RisksGAO-20-519: Published: Sep 4, 2020. Publicly Released: Sep 4, 2020.
Jul 21, 2020
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Financial Company Bankruptcies:
Congress and Regulators Have Updated Resolution Planning RequirementsGAO-20-608R: Published: Jul 21, 2020. Publicly Released: Jul 21, 2020.
Jul 6, 2020
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Public Companies:
Disclosure of Environmental, Social, and Governance Factors and Options to Enhance ThemGAO-20-530: Published: Jul 2, 2020. Publicly Released: Jul 6, 2020.
Apr 30, 2020
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Priority Open Recommendations:
Department of the TreasuryGAO-20-549PR: Published: Apr 23, 2020. Publicly Released: Apr 30, 2020.
Apr 27, 2020
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Priority Open Recommendations:
Board of Governors of the Federal Reserve SystemGAO-20-499PR: Published: Apr 20, 2020. Publicly Released: Apr 27, 2020. -
Priority Open Recommendations:
Federal Deposit Insurance CorporationGAO-20-498PR: Published: Apr 20, 2020. Publicly Released: Apr 27, 2020.
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