The Commodity Markets Council (CMC) is the leading trade association for commodity futures exchanges like Nasdaq Futures and their customers on the hedging side that trade agriculture, energy, finance, infrastructure, and transportation derivatives. It provides the access, forum and action for exchanges and exchange users to lead our industry in addressingglobal marketand risk management issues.
“Our members use the futures markets for hedging purposes rather than speculation,” Gregg Doud, President of the Commodity Markets Council, said. “We deal specifically with the Commodity Futures Trading Commission (CFTC) and Dodd-Frank regulation in Washington D.C., as well as a division that deals with MiFID and MiFID II issues called CMC Europe.”
CMC spends a great deal of time working with the regulators to help them understand how derivatives are used to hedge products as well as the cost implications of regulation on the underlying industry.. “We work with regulators to show them how derivatives are used in the real world to hedge our products, and if you add costs to doing that, it means that farmers and producers of commodities and consumers of food have to pay more and the farmer gets less if you add regulatory costs in the middle,” Doud said.
Doud also points out there is sentiment that a speculator is a “bad person,” but members of the CMC rely on that kind of activity to keep markets liquid and active because, if you don’t do that, it drives the costs up for those hedging. “The person that takes the other side of the position and what we do to manage our risk is critical to our business,” Doud said.
To learn more about the Commodity Markets Council, check out this video as Doud join Jill Malandrino at the MarketSite.
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