There are actually not many of these less-regulated markets. At the moment there are none of the first and six of the second. Entities typically qualify as ECPs based on the nature of their business and/or the amount of assets that they own or control, but ultimately a specific entity is an ECP only if that type of entity is on the list.
ECPs currently include financial institutions, insurance companies, investment companies, commodity pools with assets exceeding $5 million and operated by a regulated person, other entities with total assets exceeding $10 million or with assets exceeding $1 million and trading only for risk management purposes, employee benefit plans, government entities, supranationals (such as the World Bank), SEC-regulated brokers and dealers, associated persons of such brokers and dealers, futures commission merchants, floor brokers and floor traders, individuals with assets in excess of $10 million, and anybody else the CFTC may throw into the definition.
For example, floor brokers and traders who are guaranteed by a clearing member of their exchange were added to the list in about 2003 based on a petition from one of the markets.
Note that there is also an eligible commercial entity (ECE), whose name is unfortunately close to and confused with ECPs. The difference is that the ECE category is a subset of ECPs having a commercial connection and the ability to make or take delivery of the underlying commodity.
|Eligible Contract Participant|