Regulated Futures Contract Law and Legal Definition

Regulated futures contract in tax law refers to a contract with respect to which the amount required to be deposited and the amount which may be withdrawn depends upon daily market conditions. A regulated futures contract is usually subjected to the rules of a qualified board of exchange. They are also subjected to the rules of a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission or of any board of trade or exchange. A regulated futures contract also includes a foreign currency contract.

The following is an example of a federal statue defining the term regulated futures contract. According to 26 USCS § 1256(g)(1), the term "regulated futures contract" means a contract:

(A) with respect to which the amount required to be deposited and the amount which may be withdrawn depends on a system of marking to market; and

(B) which is traded on or subject to the rules of a qualified board or exchange.