What regulations govern the trading of derivatives?

In California, the trading of derivatives is regulated by the Alternative Investment Law, which was created by the state in 2011. This law addresses a wide range of topics related to securities, such as the registration of certain investments, the disclosure of certain information, and the prevention of fraud. Specifically, the Alternative Investment Law outlines rules around the trading of derivatives, which are financial instruments that derive their value from the value of an underlying asset. The Alternative Investment Law requires that all persons who engage in the buying and selling of derivatives must be licensed. Furthermore, the law outlines the requirements for derivative contracts, and also sets restrictions on the types of derivatives that can be traded. It also requires that derivative contracts include certain information, such as the terms and conditions of the contract, and the underlying assets that are involved in the transaction. Finally, the Alternative Investment Law outlines restrictions on the types of derivatives that can be traded, such as restrictions on the use of options or swaps. This law also specifies the minimum capital requirements that must be met before engaging in the trading of derivatives. In addition, all derivatives must be reported and disclosed to the California Department of Financial Services. Overall, the Alternative Investment Law provides comprehensive regulations on the trading of derivatives in California. These regulations ensure that all traders are held to a high standard of accountability and transparency in their investments.

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What regulations govern the trading of derivatives?

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