Summary & Highlight Statement 

February 5, 2008 

The Honorable Robert C. Byrd 

Chairman 

Committee on Appropriations 

United States Senate 

S-131 Capitol Building 

Washington, D.C. 20510 

The Honorable David R. Obey 

Chairman 

Committee on Appropriations 

United States House of Representatives 

H-218 Capitol Building 

Washington, D.C. 20515 

Dear Chairman Byrd and Chairman Obey: 

I am pleased to transmit to you the Commodity Futures Trading Commission’s 

(CFTC) Budget and Performance Estimate for FY 2009. This budget requests an appropriation of $130,000,000 and 475 staff-years, an increase of approximately 

$18,734,000 and 10 staff-years over the estimated FY 2008 appropriation of 

$111,266,000 and 465 staff-years. 

Congress created the CFTC in 1974 as an independent agency with the mandate to 

regulate commodity futures and option markets in the United States. In December 

2000, the Commission was last reauthorized by Congress and the President through 

FY 2005 with passage of the Commodity Futures Modernization Act of 2000 

(CFMA). Although the CFMA changed the Commission’s approach to regulation, the 

mission remains the same. The CFTC continues to be responsible for fostering the 

economic utility of futures markets by encouraging their competitiveness and efficiency, ensuring their integrity, and protecting market participants against manipulation, abusive trading practices, and fraud. Through effective oversight regulation, the 

CFTC enables the commodity futures markets to better serve their vital function in 

the Nation’s economy—providing a mechanism for price discovery and a means of 

offsetting price risks. 

These trillion dollar futures markets are expanding steadily in both volume and new 

users and their complexity is rapidly evolving with new technologies, globalization, 

product innovation, and greater competition. In the past 10 years, trading volume has 

increased six-fold while Commission staffing levels have fallen 21 percent. The funds 

requested will allow the Commission to hire critically needed staff and maintain the 

technological infrastructure to keep pace with the volume and complexity of the burgeoning and dynamic futures markets. The Commission needs these funds simply to 

keep up with the industry we regulate. 

Compared to the FY 2008 appropriation, key changes in the FY 2009 Budget are: 

$3.2 million to provide for increased compensation and benefit costs for a 

staff of 465 FTEs; 

$13.6 million to provide for increased operating costs for information technology modernization, lease of office space, and all other services; and 
$1.9 milion to provide for salary and expenses of 10 additional full-time

equivalent staff-years (FfEs).

The Administration will propose authorizing legislation to collect a fee on the settlement of contracts on commodity futures, options on futures, and other transactions

cleared by derivatives clearing organizations. The fees would be set at a level to equal

the costs to the taxpayer of funding CFfC's Market Oversight and Clearing & Intermediary Oversight, or non-Enforcement functions. The proceeds of these fees would

be deposited in a special fund at the Treasury and would be authorized to be appropriated to cover some of the CFfC costs. The proposed fee would not impact the discretionary spending allocations for the relevant Appropriations subcommittees. The

Administration proposal is in Appendix 5 of this document.

I am pleased to report that as part of the ongoing Farm bil debate, the Senate Committee on Agriculture, Nutrition, and Forestry, and the House Committee on Agriculture are considering CFfC reauthorization legislation that includes an increased

oversight proposal to ensure continued market integrity and customer protections for

exeript energy markets.

In accordance with the Commodity Exchange Act (CEA or the Act), copies of this

submission are also transmitted to the Senate and House Appropriations Committees, the Senate Committee on Agriculture, Nutrition, and Forestry, and the House

Committee on Agriculture.

I would be happy to meet with you to discuss this budget request and to answer any

questions you may have.
cc: 

The Honorable Tom Harkin 

Chairman 

Committee on Agriculture, 

Nutrition, and Forestry 

U.S. Senate 

SR - 328A Russell Senate Office Building 

Washington, D.C. 20510-6000 

The Honorable Collin C. Peterson 

Chairman 

Committee on Agriculture 

U.S. House of Representatives 

1301 Longworth House Office Building 

Washington, D.C. 20515-6001 
This page intentionally left blank. 
THE FY 2009 PRESIDENT’S BUDGET & PERFORMANCE PLAN 

Table of Contents 

SUMMARY & HIGHLIGHT STATEMENT ................................... 1

The Commission and the Industry We Regulate ................. 1

Indicators of Industry Growth Complexity ........................................1

Growth in Volume of Futures & Option Contracts Traded & FTEs...1

Actively Traded Futures & Option Contracts .................................... 2

Growth of Foreign Commodity Trading ............................................ 3

Number of Registrants ....................................................................... 4

Preservation of Market Integrity and Protection of Market Users....5

Contract Markets Designated by the CFTC, 2002 – 2007.................7

Number of CFTC-Registered Derivatives Clearing Organizations, 

2002 – 2007 ....................................................................................... 8

Exempt Commercial Markets, 2002 – 2007 ..................................... 9

Exempt Boards of Trade, 2002 – 2007 ............................................10

Customer Funds in Futures Commission Merchants Accounts ...... 11

OVERVIEW OF PLANNED OUTCOMES BY STRATEGIC GOAL.... 12

Introduction.......................................................................................12

FY 2009 Outcomes by Goal...............................................................13

COMMISSION STRATEGIES TO INFLUENCE OUTCOMES.......... 19

Strategic Goal One - Ensure the Economic Vitality of the 

Commodity Futures and Option Markets. .........................19

Summary of Goal One Performance Indicators .............................. 25

Breakout of Goal One Request by Program Activity ....................... 26

Breakout of Goal One Request by Outcome Objective.....................27

Strategic Goal Two – Protecting Market Users and the 

Public.................................................................................. 28

Summary of Goal Two Performance Indicators .............................. 32

Breakout of Goal Two Request by Program Activity....................... 33

Breakout of Goal Two Request by Outcome Objective ................... 34

Strategic Goal Three – Ensuring Market Integrity in Order 

to Foster Open, Competitive, and Financially Sound 

Markets................................................................................35

Summary of Goal Three Performance Indicators ........................... 39

Breakout of Goal Three Request by Program Activity .................... 40

Breakout of Goal Three Request by Outcome Objective..................41

Strategic Goal Four: To Facilitate Commission 

Performance through Organizational and Management 

Excellence, Efficient Use of Resources, and Effective 

Mission Support..................................................................42

Summary of Goal Four Performance Indicators ............................. 49

Breakout of Goal Four Request by Program Activity .......................51

Breakout of Goal Four Request by Outcome Objective................... 52

JUSTIFICATION OF THE FY 2009 BUDGET & PERFORMANCE 

ESTIMATE ..........................................................................53

Breakout of $130.0 Million Budget Estimate by Program.............. 53

Breakout of $130.0 Million Budget Estimate by Object Class........ 54

Crosswalk from FY 2008 to FY 2009 ...............................................55
Market Oversight ............................................................... 56

Total Budget: $26,454,000 101 FTEs ...................................56

Total Change: $ 3,679,000 1 FTE......................................56

Clearing & Intermediary Oversight ................................... 64

Total Budget: $19,278,000 70 FTEs ....................................64

Total Change: $ 2,890,000 2 FTEs ....................................64

Enforcement....................................................................... 70

Total Budget: $34,708,000 121 FTEs ....................................70

Total Change: $ 4,717,000 2 FTEs ....................................70

Office of the Chief Economist.............................................75

Total Budget: $ 2,851,000 10 FTEs..................................... 75

Total Change: $ 579,000 1 FTE ...................................... 75

Office of Proceedings ..........................................................79

Total Budget: $ 2,543,000 10 FTEs ..................................... 79

Total Change: $ 566,000 1 FTE....................................... 79

Office of the General Counsel ............................................ 83

Total Budget: $ 9,108,000 32 FTEs .....................................83

Total Change: $ 1,353,000 1 FTE ......................................83

Executive Direction & Support.......................................... 88

Total Budget: $35,058,000 131 FTEs ....................................88

Total Change: $ 4,950,000 2 FTEs ....................................88

APPENDIX 1.................................................................... 94

The Commissioners...........................................................................94

APPENDIX 2 ................................................................... 97

Summary of Goals, Outcomes, and Business Processes.................. 97

APPENDIX 3 ................................................................. 100

Management Initiatives Supporting the President’s Management 

Agenda .............................................................................................100

APPENDIX 4 ..................................................................105

Investment in Technology .............................................................. 105

APPENDIX 5 ................................................................. 106

Administration’s Mandatory Proposal for CFTC: Fee on Settlement 

of Contracts ..................................................................................... 106

APPENDIX 6 ..................................................................107

Privacy Policy for the CFTC Web Site............................................. 107

APPENDIX 7 ................................................................. 108

Table of Acronyms...........................................................................108
FY 2009 President’s Budget & Performance Plan—Figures and Tables 

Figure 1: Growth of Volume of Contracts Traded and FTEs............................................1

Figure 2: CFTC Actively Traded Contracts ...................................................................... 2

Figure 3: Foreign Commodity Trading ........................................................................... 3

Table 1: Number of Registrants........................................................................................ 4

Table 2: Energy Markets .................................................................................................. 5

Table 3: Pool/Hedge Funds............................................................................................. 5

Table 4: Foreign Currency Markets................................................................................. 6

Table 5: Designated Contract Markets............................................................................ 7

Table 6: CFTC-Registered Derivatives Clearing Organizations ..................................... 8

Table 7: Exempt Commercial Markets............................................................................ 9

Table 8: Exempt Boards of Trade.................................................................................. 10

Figure 4: Customer Funds in FCM Accounts................................................................ 11

Figure 5: Budget & Performance Estimate by Strategic Goal........................................12

Table 9: Breakout of Goal One by Outcome...................................................................13

Table 10: Breakout of Goal Two by Outcome.................................................................14

Table 11: Breakout of Goal Three by Outcome...............................................................15

Table 12: Breakout of Goal Four by Outcome.................................................................17

Figure 7: Goal One Resource Strategy Mapping ............................................................21

Table 13: Breakout of Goal One Request by Program Activity ...................................... 26

Figure 8: Breakout of Goal One Request by Program Activity...................................... 26

Table 14: Breakout of Goal One by Outcome ................................................................. 27

Figure 9: Breakout of Goal One Request by Outcome Objective................................... 27

Figure 10: Goal Two Resource Strategy Mapping......................................................... 29

Table 15: Breakout of Goal Two Request by Program Activity..................................... 33

Figure 11: Breakout of Goal Two Request by Program Activity..................................... 33

Table 16: Breakout of Goal Two by Outcome................................................................. 34

Figure 12: Breakout of Goal Two Request by Outcome Objective................................. 34

Figure 13: Goal Three Resource Strategy Mapping ...................................................... 36

Table 17: Breakout of Goal Three by Program Activity..................................................40

Figure 14: Breakout of Goal Three Request by Program Activity..................................40

Table 18: Breakout of Goal Three Request by Outcome .................................................41

Figure 15: Breakout of Goal Three Request by Outcome Objective ...............................41

Figure 16: Goal Four Resource Strategy Mapping ........................................................ 45

Table 19: Breakout of Goal Four by Program Activity ....................................................51

Table 20: Breakout of Goal Four by Outcome ............................................................... 52

Figure 17: Breakout of Goal Four Request by Outcome Objective ............................... 52

Table 21: Budget Estimate by Program......................................................................... 53

Figure 18: $130.0 Million Budget Estimate by Program .............................................. 53

Table 22: Budget Estimate by Object Class................................................................... 54

Figure 19: $130.0 Million Budget Estimate by Object Class ........................................ 54

Table 23: Crosswalk from FY 2008 to FY 2009............................................................ 55

Figure 20: Market Oversight Percentage of Total Budget Dollars ................................ 56

Figure 21: Market Oversight Percentage of Total Budget FTEs .................................... 56

Table 24: Market Oversight Request by Subprogram................................................... 62

Figure 22: Market Oversight FY 2009 Budget by Subprogram.................................... 62

Table 25: Market Oversight Request by Goal ............................................................... 63

Figure 23: Market Oversight FY 2009 Budget by Goal ................................................ 63

Figure 24: Clearing & Intermediary Oversight Percentage of Total Budget Dollars .... 64

Figure 25: Clearing & Intermediary Oversight Percentage of Total Budget FTEs ...... 64

Table 26: Clearing & Intermediary Oversight Request by Subprogram ......................68

Figure 26: Clearing & Intermediary Oversight FY 2009 Budget by Subprogram........68

Table 27: Clearing & Intermediary Oversight Request by Goal.................................... 69

Figure 27: Clearing & Intermediary Oversight FY 2009 Budget by Goal..................... 69

Figure 28: Enforcement Percentage of Total Budget Dollars....................................... 70

Figure 29: Enforcement Percentage of Total Budget FTEs .......................................... 70

Table 28: Enforcement Request.................................................................................... 73

Table 29: Enforcement Request by Goal....................................................................... 74

Figure 30: Enforcement FY 2009 Budget by Goal........................................................ 74

Figure 31: Chief Economist Percentage of Total Budget Dollars................................... 75
Figure 32: Chief Economist Percentage of Total Budget FTEs...................................... 75

Table 30: Office of the Chief Economist Request.......................................................... 77

Table 31: Office of the Chief Economist Request by Goal .............................................78

Figure 33: Proceedings Percentage of Total Budget Dollars.........................................79

Figure 34: Proceedings Percentage of Total Budget FTEs ............................................79

Table 32: Proceedings Request by Subprogram............................................................ 81

Figure 35: Proceedings FY 2009 Budget by Subprogram............................................. 81

Table 33: Proceedings Request by Goal ........................................................................82

Figure 36: Percentage of Total Budget Dollars .............................................................83

Figure 37: Percentage of Total Budget FTEs ................................................................83

Table 34: General Counsel Request...............................................................................86

Table 35: General Counsel Request by Goal..................................................................87

Figure 38: General Counsel FY 2009 Budget by Goal ..................................................87

Figure 39: Percentage of Total Budget Dollars ............................................................ 88

Figure 40: Percentage of Total Budget FTEs............................................................... 88

Table 36: Executive Direction & Support Request by Subprogram.............................. 91

Figure 41: Executive Direction & Support FY 2009 Budget by Subprogram ............... 91

Table 37: Executive Direction & Support Request by Goal...........................................92

Figure 42: Executive Direction & Support FY 2009 Budget by Goal............................93
FY 2009 President's Budget & Performance Plan

The Commission and the Industry We Regulate

Indicators of Industry Growth Complexity

The charts that follow reflect many of the changes affecting the CFfC: 1) industry

growth versus staff growth; 2) growth in actively traded futures and option contracts; 3) growth in foreign commodity trading; 4) number of registrants; 5) enforcement actions in energy and foreign currency (forex) markets; 6) contract

markets designated by the CFlC; 7) number of CFlC-registered derivatives clearing organizations (DCOs); 8) exempt commercial markets (ECMs); 9) exempt

boards of trade (XBOTs); and 10) amount of customer funds held at futures

commission merchants (FCMs).

Growth in Volume of Futures & Optiòn Contracts Traded &

FTEs

Trading volume has increased six-fold in the last decade while staffing levels at

the Commission have trended downward.

4500

4000

1000

~

3500

3000

enc

~

~ 2500

Q)

E

:J

;g

oi .~ 2000 i:

~

1:

~

~ 1500

Figure 1: Growth of Volume of Contracts Traded and FTEs

Growth in Contract Volume vs. CFTC FTEs
FY 2009 President’s Budget & Performance Plan

Actively Traded Futures & Option Contracts 

The number of actively traded contracts traded on U.S. exchanges has more than 

quintupled in the last decade. The number is expected to grow to over 1,700 contracts by FY 2009. 

258 286

251 266 250 278

538

662

906

1135

1365

1540

1730

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Est.

2009

Est.

Fiscal Year

Contracts

Figure 2: CFTC Actively Traded Contracts 

2 Actively Traded Contracts 
FY 2009 President’s Budget & Performance Plan

Growth of Foreign Commodity Trading 

Since 2000, the number of foreign customers trading on U.S. exchanges has 

more than tripled and the number of U.S. customers trading on foreign exchanges has more than quintupled. 

54.0

138.3

27.0

127.8

2000 2007

Amount in Thousands

Foreign Customers Trading on U.S. Commodity Exchanges

U.S. Customers Trading on Foreign Commodity Exchanges

Figure 3: Foreign Commodity Trading 

Foreign Commodity Trading 3 
FY 2009 President’s Budget & Performance Plan 

4 Registered Commodity Professionals 

Number of Registrants 

Companies and individuals who handle customer funds, solicit or accept orders, 

or give trading advice must apply for CFTC registration through the National Futures Association (NFA), a self-regulatory organization with delegated oversight 

authority from the Commission. 

The Commission regulates the activities of nearly 70,000 registrants: 

Type of Registered Professional Number as of September 30, 2007

Associated Persons (AP) (Sales People) 53,844 

Commodity Pool Operators (CPOs) 1,416 

Commodity Trading Advisors (CTAs) 2,601 

Floor Brokers (FBs) 8,038 

Floor Traders (FTs) 1,506 

Futures Commission Merchants (FCMs) 1971

Introducing Brokers (IBs) 1,6992

TOTAL 69,301

Table 1: Number of Registrants 

 

1 Includes 16 notice-registered FCMs. 

2 Includes 42 notice-registered IBs. 
FY 2009 President’s Budget & Performance Plan

Energy, Pool/Hedge Funds, and Foreign Currency Markets 5 

Preservation of Market Integrity and Protection of Market Users 

Manipulation, Attempted Manipulation, and False Reporting 

The CFTC has taken strong action utilizing every tool at its disposal to detect and 

deter illegitimate market forces. The Commission uses enforcement action to preserve market integrity and protect market users, demonstrating that our authority 

is significant and that we intend to use it. 

For example, CFTC enforcement efforts in the energy arena from December 2001 

through September 2007 have resulted in 38 enforcement actions charging 63 

companies and individuals and the assessment of approximately $308 million in 

penalties. 

Actions Taken Since December 2001 in Energy Markets Energy Markets

Number of Cases Filed or Enforcement Actions 38 

Number of Entities/Persons Charged 63 

Number of Dollars in Penalties Assessed 

• Civil Monetary Penalties $308,198,500 

Table 2: Energy Markets 

Commodity Pools, Hedge Funds, Commodity Pool Operators (CPOs), 

and Commodity Trading Advisors (CTAs) 

Investors continue to fall prey to unscrupulous CPOs and CTAs, including CPOs 

and CTAs operating hedge funds. The majority of the Commission’s pool/hedge 

fund fraud cases are brought against unregistered CPOs and /or CTAs. These cases 

tend to involve Ponzi schemes or outright misappropriation, as opposed to legitimate hedge fund operations. From October 2000 through September 2007, the 

Commission filed a total of 61 enforcement actions alleging misconduct in connection with commodity pools and hedge funds. 

Actions Taken Since October 2000 Pool/Hedge Funds

Number of Cases Filed or Enforcement Actions 61 

• Case/Actions Charging Commission Registrants 23 

Number of Dollars in Penalties Assessed $231,027,883 

Table 3: Pool/Hedge Funds 
FY 2009 President’s Budget & Performance Plan 

6 Energy, Pool/Hedge Funds, and Foreign Currency Markets 

Forex Fraud 

The Commission vigorously uses its enforcement authority to combat the problem 

of forex fraud. Since passage of the CFMA in December 2000 through September 

2007, the Commission, on behalf of more than 25,000 customers, has filed 98 

cases. Those efforts have thus far resulted in approximately $453 million in restitution and $551 million in civil monetary penalties. 

Actions Taken Since Passage of the CFMA in December 2000 Foreign Currency 

Markets

Number of Cases Filed or Enforcement Actions 98 

• Number of Entities/Persons Charged 374 

• Number of Customers Affected 25,859 

Number of Dollars in Penalties Assessed 

• Civil Monetary Penalties $551,301,267 

• Restitution $453,173,819 

Table 4: Foreign Currency Markets 
FY 2009 President’s Budget & Performance Plan

Designated Contract Markets 7 

Contract Markets Designated by the CFTC, 2002 – 2007 

Designated contract markets (DCMs) are boards of trade or exchanges that meet 

CFTC criteria and Core Principles for trading futures or options by both institutional and retail participants. 

Commodity 

Exchanges 3 2002 2003 2004 2005 2006 2007 

BTEX 9 9 

CBOT 9 9 9 9 9 9

CCFE 9

9 9 9

CFFE 9

CFE 9 9 9 9 9

CME 9 9 9 9 9 9

CSCE 9 9 9

EPFE 9

Eurex USFE 9 9 9 9

HedgeStreet 9 9 9 9

INET 9

KCBT 9 9 9 9 9 9

MACE 9 9

ME 9 9 9

MGE 9 9 9 9 9 9

NQLX 9 9 9 9

NYBOT 9 9 9 9

NYCE 9 9 9

NYFE 9 9 9

NYMEX 

(incl. COMEX) 

9 9 9 9 9 9

OCX 9 9 9 9 9 9

PBOT 9 9 9 9 9 9

TOTAL 16 15 18 13 12 12 

Table 5: Designated Contract Markets 

 

3 Refer to the CFTC Glossary in Appendix for full names of organizations 
FY 2009 President’s Budget & Performance Plan 

8 CFTC-Registered Derivatives Clearing Organizations 

Number of CFTC-Registered Derivatives Clearing Organizations, 

2002 – 2007 

Clearinghouses that provide clearing services for CFTC-regulated exchanges must 

register as DCOs. Currently, 11 DCOs are registered with the Commission. 

DCOs 4 2002 2003 2004 2005 2006 2007 

AE 

Clearinghouse 9 9 9

BTEX 9 9

CCorp 9 9 9 9 9 9

CBOT 9 9 9 9

CME 9 9 9 9 9 9

EnergyClear 9 9

FCOM 9 9

GCC 9 9

HedgeStreet 9 9 9 9

ICC 9 9

KCBT 9 9 9 9 9 9

LCH 9 9 9 9 9 9

MGE 9 9 9 9 9 9

NYCC/ICE Clear 9 9 9 9 9 9

NYMEX 9 9 9 9 9 9

OCC 9 9 9 9 9 9

ONXCC 9 9

TOTAL 14 14 10 11 11 11 

Table 6: CFTC-Registered Derivatives Clearing Organizations

 

4 Refer to the CFTC Glossary in Appendix for full names of organizations. 
FY 2009 President’s Budget & Performance Plan

Exempt Commercial Markets 9 

Exempt Commercial Markets, 2002 – 2007 

Electronic trading facilities providing for the execution of principal-to-principal 

transactions between eligible commercial entities in exempt commodities may operate as ECMs as set forth under the CEA and the Commission’s regulations. An 

ECM is subject to antifraud and anti-manipulation provisions and a requirement 

that, if performing a significant price discovery function, the ECM must provide 

pricing information to the public. A facility that elects to operate as an ECM must 

give notice to the Commission and comply with certain information, recordkeeping, and other requirements. An ECM is prohibited from claiming that the facility is registered with, or recognized, designated, licensed or approved by, the 

Commission. A total of 22 ECMs have filed notices with the Commission and 20 

were active in FY 2007. 

Exempt Commercial 

Markets 5 2002 2003 2004 2005 2006 2007 

CCX 9 9 9 9 9

CDXchange 9 9 9 9 9

ChemConnect 9 9

Flett 9

GFI 9

HSE 9 9 9 9 9 9

ICAP 9 9

ICAP ETC 9 9

ICAP HYDE 9 9

ICE 9 9 9 9 9 9

IMAREX 9 9 9 9 9 9

NGX 9 9 9 9 9 9

Nodel 9

NTP 9 9

OPEX 9 9 9 9 9 9

LiquidityPort 9

PARITY 9

SL 9 9 9 9 9

TCX 9 9 9

TFS 9 9 9 9 9

TFSE 9 9 9 9 9

TS 9 9 9 9 9

TOTAL 7 11 11 12 17 20 

Table 7: Exempt Commercial Markets 

 

5 Refer to the CFTC Glossary in Appendix for full names of organizations. 
FY 2009 President’s Budget & Performance Plan 

10 Exempt Boards of Trade 

Exempt Boards of Trade, 2002 – 2007 

Transactions by eligible contract participants in selected commodities may be conducted on an XBOT as set forth under the CEA and the Commission’s regulations. 

XBOTs are subject only to the CEA's anti-fraud and anti-manipulation provisions. 

An XBOT is prohibited from claiming that the facility is registered with, or recognized, designated, licensed, or approved, by the Commission. Also, if it is performing a price discovery function, the XBOT must provide certain pricing information 

to the public. To date, 12 XBOTs have filed notices with the Commission. 

Exempt Boards of 

Trade 6 2002 2003 2004 2005 2006 2007 

AE 9 9 9 9

CME AM 

9 9 9

GFI ForexMatch 9

Intrade 9 9 9

LiquidityPort 9

Longitude 9

MATCHBOXX 

ATS 

9

Storm 9 9

Swapstream 9 9

WBOT 9 9 9 9

WXL 9 9 9 9 9

Yellow Jacket 9

TOTAL 1 2 3 5 8 9 

Table 8: Exempt Boards of Trade 

 

6 Refer to the CFTC Glossary in Appendix for full names of organizations. 
FY 2009 President’s Budget & Performance Plan

Customer Funds in Futures Commission Merchants Accounts 

The amount of customer funds held at futures commission merchants has quadrupled in the last decade. 

$38.7

$47.5

$54.1 $56.7 $59.7

$64.3

$75.6

$94.5

$116.7

$138.0

$155.4

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Amount in Billions

Figure 4: Customer Funds in FCM Accounts 

Customer Funds in Futures Commission Merchants Accounts 11 
FY 2009 President’s Budget & Performance Plan

Overview of Planned Outcomes by Strategic 

Goal

Introduction 

The futures industry is experiencing a period of tremendous growth. Volume has 

increased six-fold in the last decade and reached a record level of 3 billion contracts traded in 2007. The Commission’s mission in the futures industry is to foster competitive and financially sound markets, to protect market users and the 

public from fraud, manipulation and abusive trading practices, and to foster open, 

competitive, and financially sound markets. 

The Commission requests $130 million in FY 2009 to fund its efforts to reach its 

four strategic goals: 

$28.4 Million

Goal Four: 

Organizational 

and Management

Excellence

22%

$40.8 Million

Goal One: Ensure 

the economic 

vitality of the 

commodity futures

and option 

markets.

32%

$31.8 Million

Goal Two: Protect

market users and

the public.

24%

$29.0 Million

Goal Three: 

Ensure market 

integrity in order

to foster open, 

competitive, and 

financially sound

markets.

22%

Figure 5: Budget & Performance Estimate by Strategic Goal 

To achieve the planned outcomes for FY 2009, the Commission will allocate the 

$130 million request among six programs: Enforcement; Clearing & Intermediary Oversight; Market Oversight; Chief Economist; Proceedings; and General 

Counsel. There is one support program: Executive Direction . 7

Enforcement

27%

Proceedings

2%

General Counsel

7%

Executive 

Direction &

Support

27%

Clearing & 

Intermediary

Oversight

15%

Market Oversight

20%

Chief Economist

2%

Figure 6: $130 Million Budget Estimate by Program

 

 Includes information technology staff in support of all programs. 7

12 Overview of Planned Outcomes by Strategic Goal 
 FY 2009 President’s Budget & Performance Plan

Overview of Planned Outcomes by Strategic Goal 13 

FY 2009 Outcomes by Goal 

Goal One: Ensuring Economic Vitality of Commodity Futures & Option Markets 

In seeking to fulfill its mission, a substantial portion of the Commission’s resources are devoted to daily oversight of registered exchanges, intermediaries, 

and DCOs. In 1974, when the Commission was founded, the vast majority of futures trading took place in the agricultural sector. These contracts gave farmers, 

ranchers, distributors, and end-users of everything from corn to cattle an efficient 

and effective set of tools to hedge against price volatility. 

Over the years, however, the futures industry has experienced increased complexity. While farmers and ranchers continue to use the futures markets as actively as 

ever to effectively lock in prices for their crops and livestock months before they 

come to market, new and highly complex financial contracts, based on such 

things as interest rates, foreign currencies, Treasury bonds, and stock market indices, have now far outgrown agricultural contracts in trading volume. Latest statistics show that approximately eight percent of on-exchange derivatives activity 

is in the agricultural sector, while financial derivatives make up approximately 82 

percent. Other contracts, such as those on metals and energy products, make up 

about 10 percent. 

In FY 2009, the Commission requests $40.8 million to fund its efforts to reach 

the following outcomes of Strategic Goal One: 

• Markets that accurately reflect the forces of supply and demand for the underlying commodity and are free of disruptive activity⎯with an FY 2009 performance goal of zero price manipulations that would cause loss of confidence or negatively affect price discovery or risk shifting. 

• Markets that are effectively and efficiently monitored to ensure early warning 

of potential problems or issues that could adversely affect their economic vitality⎯with an FY 2009 performance goal of improving effectiveness and efficiency of market surveillance. 

Breakout of Goal One Request by Outcome 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE 

GOAL ONE: Ensure economic vitality of commodity futures and option markets. 

Outcomes 

1.1 Futures and option markets that 

accurately reflect the forces of supply 

and demand for the underlying commodity and are free of disruptive activity. 

$30,260 126 $35,327 129 $5,067 3

1.2 Markets that can be monitored to 

ensure early warning of potential problems or issues that could adversely 

affect their economic vitality. 

4,711 20 5,537 20 826 0

Total Goal One $34,971 146 $40,864 149 $5,893 3

Table 9: Breakout of Goal One by Outcome 
FY 2009 President’s Budget & Performance Plan

14 Overview of Planned Outcomes by Strategic Goal 

Goal Two: Protecting Market Users and the Public 

While our country reaps the rewards of an explosive futures industry, there is an 

accompanying increased risk of fraud and manipulation for market users and the 

public. The trend toward electronic trading platforms as well as the expanding 

complexity of trading instruments has challenged the Commission to reconfigure 

its ability to identify, investigate, and prosecute all parties involved in violating 

applicable laws and regulations. Typically, the Commission has over 100 investigations open at any particular time. If evidence of criminal activity is found, matters can and will be referred to state or Federal authorities for prosecution under 

criminal statutes. 

Over the years, the Commission has prosecuted a number of cases involving manipulations or attempted manipulations of commodity prices. The Sumitomo 

copper case and the Hunt brothers silver case are well-known examples. Furthermore, during the last three years, the Commission charged over 30 individuals and companies for attempting to manipulate, or for manipulating energy 

markets. A variety of administrative sanctions are available to the Commission, 

such as bans on futures trading, civil monetary penalties, and restitution orders. 

The Commission may also seek Federal court injunctions, asset freezes, and orders to disgorge ill-gotten gains. 

In FY 2009, the Commission requests $31.8 million to fund its efforts to reach 

the following outcomes of Strategic Goal Two: 

• Violations of Federal commodities laws are detected and prevented⎯with an 

FY 2009 performance goal of increasing the probability of violators being detected and sanctioned. 

• Commodity professionals meet high standards⎯with an FY 2009 performance goal of zero unregistered, untested, or unlicensed commodity professionals, unless they qualify for exemption from registration. 

• Customer complaints against persons or firms registered under the Act are 

handled effectively and expeditiously⎯with an FY 2009 performance goal of 

resolving: voluntary proceedings customer complaints within one year from 

the date filed; summary and formal proceedings customer complaints within 

one year and six months from the date filed; and resolving appeals within six 

months from the date filed. 

Breakout of Goal Two Request by Outcome 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

GOAL TWO: Protect markets users and the public.

Outcomes 

2.1 Violations of Federal commodities laws are detected and prevented. $19,583 79 $22,540 80 $2,957 1

2.2 Commodities professionals meet 

high standards. 

4,702 19 5,348 19 646 0

2.3 Customer complaints against 

persons or firms falling within the 

jurisdiction of the Commodity Exchange Act are handled effectively 

and expeditiously. 

3,132 14 3,891 14 759 0

Total Goal Two $27,417 112 $31,779 113 $4,362 1

Table 10: Breakout of Goal Two by Outcome 
 FY 2009 President’s Budget & Performance Plan

Overview of Planned Outcomes by Strategic Goal 15 

Goal Three: Ensuring Market Integrity in Order to Foster Open, Competitive, 

and Financially Sound Markets 

The Commission also focuses on issues of market integrity, seeks to protect: the 

economic integrity of the markets so that they may operate free from manipulation; the financial integrity of the markets so that the insolvency of a single participant does not become a systemic problem affecting other market participants; 

and the operational integrity of the markets so that transactions are executed 

fairly and that proper disclosures are made to existing and prospective customers.

In FY 2009, the Commission requests $29.0 million to fund its efforts to reach 

the following outcomes of Strategic Goal Three: 

• Clearing organizations and firms holding customer funds have sound financial practices⎯with FY 2009 performance goals of zero loss of customer 

funds as a result of firms’ failure to adhere to regulations and zero customers 

prevented from transferring funds from failing firms to sound firms. 

• Commodity futures and option markets are effectively self-regulated⎯with 

an FY 2009 performance goal of zero loss of funds resulting from failure of 

self-regulatory organizations (SROs) to ensure compliance with their rules. 

• Markets are free of trade practice abuses. 

• Regulatory environment is flexible and responsive to evolving market conditions. 

Breakout of Goal Three Request by Outcome 

 FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

GOAL THREE: Ensure market integrity in order to foster open, competitive, and financially sound 

markets.

Outcomes 

3.1 Clearing organizations and firms 

holding customer funds have sound financial practices. 

$5,864 24 $7,550 27 $1,686 3

3.2 Commodity futures and option markets are effectively self-regulated. 10,867 46 12,503 46 1,636 0

3.3 Markets are free of trade practice 

abuses. 

2,896 12 3,347 13 451 1

3.4 Regulatory environment responsive 

to evolving market conditions. 

4,734 20 5,578 21 844 1

Total Goal Three $24,361 102 $28,978 107 $4,617 5

Table 11: Breakout of Goal Three by Outcome 
FY 2009 President’s Budget & Performance Plan

16 Overview of Planned Outcomes by Strategic Goal 

Goal Four: Facilitate Commission performance through organizational and 

management excellence, efficient use of resources, and effective mission 

support. 

The fulfillment of the Commission’s mission and the achievement of our goals are 

tied to a foundation of sound management and organizational excellence. The 

Commission is committed to maintaining a well-qualified workforce supported 

by a modern support infrastructure that enables the Commission to achieve its 

programmatic goals. Building this foundation will require significant investment 

in people, management initiatives systems, and facilities. 

In FY 2009, the Commission requests $28.4 million to fund its efforts to reach 

the following outcomes of Strategic Goal Four: 

• A productive, technically competent, competitively compensated, and diverse 

workforce that takes into account current and future technical and professional needs of the Commission. 

• A modern and secure information system that reflects the strategic priorities 

of the Commission. 

• An organizational infrastructure that efficiently and effectively responds to 

and anticipates both the routine and emergency business needs of the Commission. 

• Financial resources are allocated, managed, and accounted for in accordance 

with the strategic priorities of the Commission. 

• The Commission’s mission is fulfilled and goals are achieved through sound 

management and organizational excellence provided by executive leadership. 
 FY 2009 President’s Budget & Performance Plan

Overview of Planned Outcomes by Strategic Goal 17 

Breakout of Goal Four Request by Outcome Objective 

 FY 2008 FY 2009 Change 

 $ (000) FTE $ (000) FTE $ (000) FTE

GOAL FOUR: To facilitate Commission performance through management excellence, efficient 

use of resources, and effective mission support. 

Outcomes 

4.1 A productive, technically competent, competitively compensated, and 

diverse workforce that takes into account current and future technical and 

professional needs of the Commission. 

$3,281 14 $3,760 14 $479 0

4.2 A modern and secure information 

system that reflects the strategic priorities of the Commission. 8

5,872 25 6,996 26 1,124 1

4.3 An organizational infrastructure 

that efficiently and effectively responds 

to and anticipates both the routine and 

emergency business needs of the Commission. 

3,282 14 3,760 14 478 0

4.4 Financial resources are allocated, 

managed, and accounted for in accordance with the strategic priorities of the 

Commission. 

3,516 15 4,028 15 512 0

4.5 The Commission’s mission is fulfilled and goals are achieved through 

sound management and organizational 

excellence provided by executive leadership. 

8,566 37 9,835 37 1,269 0

Total Goal Four $24,517 105 $28,379 106 $3,862 1

Table 12: Breakout of Goal Four by Outcome 

 

8 Represents Office of Information Technology Services dollars and staff resources not otherwise allocated to Goals 1, 2, or 3. 
FY 2009 President’s Budget & Performance Plan

18 Overview of Planned Outcomes by Strategic Goal 

Summary of CFTC Mission Statement, Strategic Goals & Outcomes 

Mission Statement 

The mission of the CFTC is to protect market users and the public from fraud, manipulation, and abusive 

practices related to the sale of commodity futures and options, and to foster open, competitive, and financially sound commodity futures and option markets.

Goal One

Protect the economic functions of the commodity futures and option markets.

Outcomes 

1. Markets that accurately reflect the forces of supply and demand for the underlying commodity and are 

free of disruptive activity. 

2. Markets that are effectively and efficiently monitored to ensure early warning of potential problems or 

issues that could adversely affect their economic vitality. 

Goal Two

Protect market users and the public.

Outcomes 

1. Violations of Federal commodities laws are detected and prevented. 

2. Commodities professionals meet high standards. 

3. Customer complaints against persons or firms falling within the jurisdiction of the Commodity Exchange 

Act are handled effectively and expeditiously. 

Goal Three

Ensure market integrity in order to foster open, competitive, and financially sound markets.

Outcomes 

1. Clearing organizations and firms holding customer funds have sound financial practices. 

2. Commodity futures and option markets are effectively self-regulated. 

3. Markets are free of trade practice abuses. 

4. Regulatory environment is responsive to evolving market conditions. 

Goal Four

Facilitate Commission performance through organizational and management excellence, efficient use of 

resources, and effective mission support.

Outcomes 

1. Productive, technically competent, competitively compensated, and diverse workforce that takes into 

account current and future technical and professional needs of the Commission. 

2. Modern and secure information system that reflects the strategic priorities of the Commission. 

3. Organizational infrastructure that efficiently and effectively responds to and anticipates both the routine 

and emergency business needs of the Commission. 

4. Financial resources are allocated, managed, and accounted for in accordance with the strategic priorities 

of the Commission. 

5. Commission’s mission is fulfilled and goals are achieved through sound management and organizational 

excellence provided by executive leadership. 
FY 2009 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 19 

Commission Strategies to Influence Outcomes 

Strategic Goal One - Ensure the Economic Vitality of the Commodity Futures and Option Markets. 

Background and Context 

In order for commodity futures and option markets to fulfill their vital role in the 

national and global economy, they must operate efficiently, accurately reflect the 

forces of supply and demand, and serve market users by fulfilling an economic 

need, typically price discovery or risk management. Through direct market and 

trade practice surveillance, and through oversight of the surveillance efforts of 

the exchanges themselves, the Commission works to ensure that markets operate 

free of manipulation or congestion. 

The heart of the Commission’s direct market surveillance is a large-trader reporting system, under which clearing members of exchanges, FCMs, and foreign brokers electronically file daily reports with the Commission. These reports show all 

trader positions at or above specific reporting levels set by CFTC regulations. Because a trader may carry futures positions through more than one FCM, and due 

to the possibility that a customer may control more than one account, the Commission routinely collects information that enables its surveillance staff to aggregate information across FCMs for related accounts. 

Using these reports, the Commission’s surveillance staff closely monitors the futures and option market activity of all traders whose positions are large enough to 

potentially impact the orderly operation of a market. For contracts that may be 

settled through physical delivery—such as contracts in the energy complex—staff 

carefully analyze the adequacy of potential deliverable supply. In addition, staff 

monitor futures and cash markets for unusual movements in price relationships, 

such as cash/futures basis relationships and inter-temporal futures spread relationships, which often provide early indications of a potential problem. 

The Commissioners and senior staff are kept apprised of market events and potential problems at weekly surveillance meetings, and more frequently when necessary. At these meetings, surveillance staff briefs the Commission on broad economic and financial developments and on specific market developments in futures and option markets of particular concern. 

If indications of attempted manipulation are found, the Commission investigates 

and prosecutes alleged violations of the CEA or regulations. Subject to such actions are all individuals who are or should be registered with the Commission, 

those who engage in trading on any domestic exchange, those who engage in illegal cash market activities that affect or could affect the futures markets, and 

those who improperly market commodity futures or option contracts. The Commission has available to it a variety of administrative sanctions against wrongdoers, including revocation or suspension of registration, prohibitions on futures 

trading, and cease and desist orders. The Commission may seek Federal court 

injunctions, restraining orders, asset freezes, receiver appointments, and disgorgement orders. In both administrative and Federal court actions, the Commission can seek civil monetary penalties and restitution if evidence of criminal 

activity is found, and may refer matters to state authorities or the Department of 

Justice (DOJ) for prosecution of violations not only of the Act, but also of state or 

Federal criminal statutes, such as mail fraud, wire fraud, and conspiracy. Over 

the years, the Commission has brought numerous enforcement actions and imposed sanctions against firms and individual traders for attempting to manipulate prices, including the well-publicized attempted manipulation cases by several 
FY 2009 President’s Budget & Performance Plan

20 Commission Strategies to Influence Outcomes 

energy companies and the market power manipulation of worldwide copper 

prices. 
FY 2009 President’s Budget & Performance Plan

CFTC Strategy Mapping 

FY 2009 Goal One Resource Investment by Outcome Objective 

Figure 7: Goal One Resource Strategy Mapping 

Commission Strategies to Influence Outcomes 21 

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

0 20 40 60 80 100 120 140 160

FULL-TIME EQUIVALENTS

MILLIONS 

Outcome 1.1 - Markets Accurately Reflect Supply and Demand

Outcome 1.2 - Markets That Can be Monitored

 27% Investment 

4% Investment 

Outcome Objectives and Annual Performance Goals 

Outcome 1.1 – Markets that accurately reflect the forces of supply and demand for underlying commodity and are free of disruptive activity. 

F Annual Performance Goal: No price manipulation or other disruptive activities that would cause loss of confidence or negatively affect price discovery or 

risk shifting. 

Outcome 1.2 – Markets that are effectively and efficiently monitored so that 

the Commission receives early warning of potential problems or issues that 

could adversely affect their economic vitality. 

F Annual Performance Goal: To have an effective and efficient market surveillance program. 
FY 2009 President’s Budget & Performance Plan

22 Commission Strategies to Influence Outcomes 

Means and Strategies for Achieving Objectives 

Means: 

• Directly monitor the markets to detect and protect against price manipulation and abusive trading practices to ensure that the markets are performing the vital economic function of price discovery and risk transfer 

or hedging. 

• Perform market surveillance and trade practice oversight by conducting 

examinations of exchange programs to ensure that the exchange is appropriately monitoring daily trading activity, positions of large traders, 

and the supply and demand factors affecting prices. 

• Review products listed by exchanges and rules and rule amendments 

submitted by exchanges to ensure compliance with the Act and to develop, implement, and interpret regulations that are designed to protect 

the economic functions of the market, protect market participants, prevent trading abuses, and facilitate innovation. 

Strategies: 

• Collect and analyze trading data. On a daily basis, CFTC collects and analyzes U.S. futures and option data for all actively traded contracts to detect 

congestion and/or price distortion. Economists analyze the activities of traders, key price relationships, and relevant supply and demand conditions for 

nearly 1,400 contracts representing major agricultural commodities, metals, 

energy, financial instruments, equity indices, and foreign currencies. CFTC 

staff also analyze markets to determine how conditions and factors observed 

may impact individual registrants or the markets in general to deter potentially negative situations and to take appropriate action, responding quickly 

to potentially disruptive situations. 

• Review products and rules. Properly designed futures and option markets 

serve vital price discovery and hedging functions, which are essential to a 

healthy, capital-based economy. Business, agricultural, and financial enterprises use the futures markets for pricing information and to hedge against 

price risk. The participants in commercial transactions rely extensively on 

the prices established by futures markets that affect trillions of dollars in 

commercial activity. Moreover, the prices established by the futures markets 

directly or indirectly affect all Americans. They affect what Americans pay 

for food, clothing, and shelter, what we pay to heat our homes and fuel our 

cars, as well as other necessities. Deficiencies in the terms and conditions of 

futures and option contracts increase the likelihood of cash, futures, or option market disruptions, and also decrease the economic usefulness and efficiency of a contract. Furthermore, deficiencies in market rules can increase 

the likelihood that the market will operate in an unfair manner or will not 

have appropriate safeguards in place for the protection of customers. To 

meet its statutory mission of ensuring market integrity and customer protection, the Commission places greater reliance on its existing oversight authorities in permitting exchanges to list contracts for trading without prior Commission approval and to amend contracts when necessary. Commission staff 

conducts a due diligence review of each contract and contract amendment to 

ensure compliance with the CEA and the Commission’s regulations, while the 

Commission relies on its authority to then alter, or supplement, exchange 

rules or to take emergency action, as appropriate, if a violation is discovered. 
FY 2009 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 23 

• Analyze markets and provide expert analysis. Each week, reports are prepared on special market situations and on market conditions for all contracts 

approaching their critical expiration periods. Potential problems detected in 

preparing these reports are shared with the Commissioners and senior staff. 

The Commission shares pertinent information with other regulatory agencies 

and works with the affected exchange to develop and administer responsive 

measures as necessary. Economists and futures trading specialists keep 

abreast of innovation in the marketplace in technology, trading strategies, 

trading instruments, and methods to ensure an understanding of how the 

markets are functioning and to develop a flexible, effective regulatory response to market conditions as they evolve. 

• Coordinate with other financial regulators. The Chairman participates in 

the President’s Working Group on Financial Markets to ensure coordination 

of information and efforts among U.S. financial regulators. The Working 

Group brings together the leaders of the Federal financial regulatory agencies, including the Secretary of the Treasury, who chairs the group, and the 

chairs of the Board of Governors of the Federal Reserve System, the CFTC, 

and the Securities and Exchange Commission (SEC). In addition to the four 

primary financial regulators, the Working Group also includes the heads of 

the National Economic Council, the Council of Economic Advisors, the Office 

of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Reserve Bank of New York, and the Office of Thrift Supervision. Issues considered by the Working Group and its staff have included: 1) 

individual and coordinated agency initiatives concerning risk assessment; 2) 

capital requirements; 3) internal controls; 4) disclosure; 5) accounting; 6) 

private pools of capital, including hedge funds; 7) market practices relating to 

trading in derivative instruments; 8) bankruptcy law revisions; 9) security futures product (SFP) portfolio margining; 10) futures on security indexes; and 

11) contingency planning for market emergencies. Every two weeks, Commission staff participates in the President’s Working Group to discuss ongoing issues. 

• Address specific CFTC-SEC cross-jurisdictional products and issues. The 

CFTC and SEC are working on a Memorandum of Understanding (MOU) to 

establish a standing interagency committee to address areas of mutual interest, and provide a forum to discuss and address these issues on a timely basis. The agencies continue to address cross-jurisdictional issues as they arise, 

such as those presented by credit event products and commodity exchangetraded funds. For example, the agencies have discussed how to avoid barriers to entry and reduce legal uncertainty. In addition, the agencies worked 

together to jointly define broad-based debt security indexes, allowing futures 

on these products to trade on U.S. futures exchanges under the exclusive jurisdiction of the CFTC. Agency staffs exchanged access letters in order to 

share information regarding review of dually registered pools. 

• Cooperate with FERC. The CFTC and the Federal Energy Regulatory Commission (FERC) cooperate under the terms of an MOU mandated by the Energy Policy Act of 2005 and entered into in October 2005, regarding the sharing of information and the confidential treatment of proprietary energy trading data. 

• Provide information on the functions of the marketplace. Commission staff 

prepare and provide materials and information on the functions and utility of 

the markets to the public through public Commission meetings, public 

roundtables, advisory committee meetings, symposia, publications, press releases, advisories, and publication of the Commitments of Traders reports. 

Staff also participates as appropriate in seminars sponsored by other Federal 

and state government organizations and industry-sponsored conferences. 
FY 2009 President’s Budget & Performance Plan

24 Commission Strategies to Influence Outcomes 

The Commission’s Web site plays a significant role in providing information 

to the public. 

• Investigate and prosecute wrongdoing. Commission attorneys and investigators conduct investigations and institute enforcement actions against potential violators. Violators are sanctioned. The sanctions are publicized and 

enforced. The administrative law judges hear and decide administrative enforcement cases brought by the Commission. 

• Review regulations and amend or abolish as appropriate. In order to ensure that the regulations enforced by the CFTC are reflective of the needs of 

the industry and the public, the Commission reviews and adapts its regulations with evolving conditions and changes in the industry. 
FY 2009 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 25 

Summary of Goal One Performance Indicators 

Goal One: Ensure the economic vitality of the commodity futures and option markets.

Outcome 1.1: Futures and option markets that accurately reflect the forces of supply and demand for 

the underlying commodity and are free of disruptive activity.

Annual Performance Goal: No price manipulation or other disruptive activities that would cause loss of confidence 

or negatively affect price discovery or risk shifting. 

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

Percentage growth in market volume 

Percentage of novel or innovative market proposals or requests for CFTC action addressed within six months to 

accommodate new approaches to, or the expansion in, 

derivatives trading, enhance the price discovery process, or 

increase available risk management tools

Percentage increase in number of products traded

Percentage of new exchange and clearinghouse applications 

completed within expedited review period 

Percentage of new contract certification reviews completed 

within three months to identify and correct deficiencies in 

contract terms that make contracts susceptible to manipulation 

Percentage of rule change certification reviews completed 

within three months, to identify and correct deficiencies in 

exchange rules that make contracts susceptible to manipulation or trading abuses or result in violations of law 

26% 

 100% 

25% 

100% 

81% 

86%

27% 

 100% 

20% 

N/A9

82% 

82%

27% 

 90% 

20% 

100% 

75% 

75% 

27% 

 70% 

20% 

100% 

65% 

65% 

Outcome 1.2: Markets are effectively and efficiently monitored to ensure early warning of potential 

problems or issues that could adversely affect their economic vitality.

Annual Performance Goal: To have an effective and efficient market surveillance program. 

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

Percentage of DCO applications demonstrating compliance 

with core principles 

Ratio of markets surveilled per economist 

Percentage of contract expirations without manipulation 

N/A10

12 

99.9% 

N/A10

13 

99.9% 

100% 

12 

99.7% 

100% 

15 

99.7% 

 

9 No applications for registration as a DCO or exchange were received in FY 2007. 

10 No applications for registration as a DCO were received in FY 2006 or FY 2007. 
FY 2009 President’s Budget & Performance Plan

Breakout of Goal One Request by Program Activity 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

26 Commission Strategies to Influence Outcomes 

Market Oversight $15,254 67 $17,804 68 $2,550 1

Clearing & Intermediary 

Oversight 

899 4 1,049 4 150 0

Chief Economist 2,272 9 2,851 10 579 1

Enforcement 12,982 52 15,035 52 2,053 0

Proceedings 0 0 0 0 0 0

General Counsel 1,654 6 1,936 7 282 1

Executive Direction & 

Support 

1,910 8 2,189 8 279 0

TOTAL: $34,971 146 $40,864 149 $5,893 3

Table 13: Breakout of Goal One Request by Program Activity 

Enforcement

37%

General Counsel

5%

Executive Direction & 

Support

5%

M arket Oversight

43%

Chief Economist

7%

Clearing & 

Intermediary 

Oversight

3%

Figure 8: Breakout of Goal One Request by Program Activity 
FY 2009 President’s Budget & Performance Plan

Breakout of Goal One Request by Outcome Objective 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE 

GOAL ONE: Ensure economic vitality of commodity futures and option markets. 

Outcomes 

1.1 Futures and option markets that 

accurately reflect the forces of supply 

and demand for the underlying commodity and are free of disruptive activity. 

$30,260 126 $35,327 129 $5,067 3

1.2 Markets that can be monitored to 

ensure early warning of potential 

problems or issues that could adversely affect their economic vitality. 

4,711 20 5,537 20 826 0

Total Goal One $34,971 146 $40,864 149 $5,893 3

Table 14: Breakout of Goal One by Outcome 

Outcome Objective

1.2 

14%

Outcome Objective

1.1

86%

Figure 9: Breakout of Goal One Request by Outcome Objective 

Commission Strategies to Influence Outcomes 27 
FY 2009 President’s Budget & Performance Plan

28 Commission Strategies to Influence Outcomes 

Strategic Goal Two – Protecting Market Users and the Public. 

Background and Context 

The focus of the second goal is protection of the firms and individuals—market 

users—who come to the marketplace to fulfill their business and trading needs. 

Market users must be protected from possible wrongdoing on the part of the 

firms and commodity professionals with whom they deal to access the marketplace, and they must be confident that the marketplace is free of fraud, manipulation, and abusive trading practices. 

The Commission has promulgated requirements that mandate appropriate disclosure and customer account reporting, as well as fair sales and trading practices 

by registrants. The Commission has also sought to maintain appropriate sales 

practices by screening the fitness of industry professionals and by requiring proficiency testing, continuing education, and supervision of these persons. Extensive record-keeping of all futures transactions is also required. Likewise, the 

Commission monitors compliance with those requirements and supervises the 

work of the exchanges and NFA in enforcing the requirements. 

The Commission plays an important role in deterring behavior that could affect 

market users’ confidence by investigating and taking action against unscrupulous 

traders, entities, and others who engage in a wide variety of illegal activity, including, but not limited to, manipulation and fraudulent sales practices. 
FY 2009 President’s Budget & Performance Plan

CFTC Strategy Mapping 

FY 2009 Goal Two Resource Investment by Outcome Objective 

Figure 10: Goal Two Resource Strategy Mapping 

Commission Strategies to Influence Outcomes 29 

Outcome Objectives and Annual Performance Goals 

Outcome 2.1 – Violations of Federal laws concerning futures and option 

contracts are detected and prevented. 

F Annual Performance Goal: Violators have a strong probability of being detected and sanctioned. 

Outcome 2.2 – Commodity professionals meet high standards. 

F Annual Performance Goal: No unregistered, untested, or unlicensed commodity professionals. 

Outcome 2.3 – Customer complaints against persons or firms registered under the Act are handled effectively and expeditiously. 

F Annual Performance Goal: Customer complaints are resolved within one year 

from the date filed and appeals are resolved within six months. 

17% Investment 

 3% Investment 

4% Investment 

$0

$5

$35

$30

$25

$20

$15

$10

0 20 40 60 80 100 120

FULL-TIM E EQUIV ALENTS

Outcome 2.1 - Violations Detected and Prevented

Outcome 2.2 - Commodity Professionals Meet High Standards

Outcome 2.3 - Complaints Handled Effectively and Expeditiously
FY 2009 President’s Budget & Performance Plan

30 Commission Strategies to Influence Outcomes 

Means and Strategies for Achieving Objectives 

Means: 

• Detect and prevent violations of Federal commodity laws. 

• Require commodity professionals to meet high standards. 

• Provide a forum for customer complaints against firms and persons registered under the Act. 

Strategies: 

• Investigate and prosecute wrongdoing. The Commission identifies and investigates possible fraudulent and other illegal activities relating to the commodity futures and option markets and their registrants and brings enforcement actions as necessary. The Administrative Law Judges will continue to 

hear and decide administrative enforcement cases brought by the Commission against persons or firms charged with violating the Act or Commission 

rules and regulations. 

• Inform the public concerning violators. Allegations of wrongdoing and associated legal actions are publicized and communicated to the industry and the 

public in order to ensure informed market users. 

• Provide a forum to bring complaints. The Commission provides a reparations program for commodity futures and option market users to resolve 

complaints concerning possible violations of the Act. Approximately 60 

reparations cases are filed per year. Presently, the cases are maintained in 

the Reparations Case Tracking System (Repcase), which houses all filings relating to the complaints, as well as reparations sanctions information. The 

Office will be transitioning to Project eLaw, which consists of automated tools 

that will assist staff in managing the reparations complaints more efficiently 

and effectively. We anticipate that Project eLaw will replace Repcase. 

• Information regarding the Reparations program is available on the Commission’s Web site and information regarding the various reparations documents 

that have been filed or issued by a Presiding Officer or the Commission is 

available internally to Commission staff. In FY 2007, the Commission’s Web 

site was redesigned and includes a variety of detailed information about the 

Office of Proceedings, the reparations program, the reparations and administrative sanctions lists, and the Presiding Officers’ dispositions. In FY 2008, 

the Web Disciplinary History project will streamline and automate the process for updating and publishing the Administrative and Reparations Sanctions information to the Commission’s Web site and improve the user interface and usability of this information for our users. Currently, data on the 

Administrative and Reparations Sanctions is entered and tracked internally 

in the Administrative Enforcement Case Tracking System (AeCTS) and RepCase system. 

• Currently, the Office of Proceedings scans various documents in CFTC DocsII 

that are made available only to Commission staff. The Presiding Officers’ dispositions are available to the public on the Commission’s Web site. Staff 

members are implementing a new business process and will begin eCopying 

the various documents instead of scanning them. The process of eCopying 

will assist the Office in updating and expediting dispositions and pertinent 

documents to the Commission’s Web site, and that are made available to the 
FY 2009 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 31 

contract markets and internally to Commission staff and externally to the 

public. 

• Oversee the NFA’s registration program. The Commission oversees the 

NFA’s registration program, requiring testing, licensing, and ethics training 

for commodity futures and option professionals. CFTC maintains a strong 

working relationship with the NFA, including joint representation on the 

Registration Working Group (RWG). 

• Review regulations and amend or abolish as appropriate. In order to ensure that the regulations enforced by the Commission are reflective of the 

needs of the industry and the public, the Commission reviews and adapts its 

regulations with the evolving conditions and changes in the industry. 

• Monitor media. The Internet and other media venues are monitored for 

fraudulent activities and other possible violations of the Act. 

• Maintain cooperative relationships. Strong working relationships with the 

exchanges, the NFA, other Federal agencies, state governments and law enforcement entities, and foreign authorities maintain the Commission’s ability 

to gain information for regulatory and law enforcement purposes and to provide enforcement assistance as necessary and appropriate. 
FY 2009 President’s Budget & Performance Plan

32 Commission Strategies to Influence Outcomes 

 Summary of Goal Two Performance Indicators

Goal Two: Protect market users and the public.

Outcome 2.1: Violations of Federal commodities laws are detected and prevented.

Annual Performance Goal: Violators have a strong probability of being detected and sanctioned. 

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

Number of enforcement investigations opened during the 

fiscal year 

Number of enforcement cases filed during the fiscal year 

Percentage of enforcement cases closed during the fiscal 

year in which the Commission obtained sanctions (e.g., 

civil monetary penalties, restitution and disgorgement, 

cease and desist orders, permanent injunctions, trading 

bans, and registration restrictions)

Cases filed by other criminal and civil law enforcement 

authorities during the fiscal year that included cooperative 

assistance from the Commission 

123 

38 

100% 

23 

99 

41 

100% 

24 

135 

40 

98% 

24 

110 

40 

98% 

24 

Outcome 2.2: Commodity professionals meet high standards. 

Annual Performance Goal: No unregistered, untested, or unlicensed commodity professionals. 

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

Percentage of SROs that comply with core principles

Percentage of DCOs that comply with core principles 

Percentage of professionals compliant with standards regarding testing, licensing, and ethics training 

Percentage of SROs that comply with requirement to enforce their rules 

Percentage of total requests receiving CFTC responses for 

guidance and advice 

100% 

100% 

100% 

100% 

95% 

100% 

100% 

100% 

100% 

95% 

100% 

100% 

100% 

100% 

75% 

100% 

100% 

100% 

100% 

75% 

Outcome 2.3: Customer complaints against persons or firms registered under the Act are handled effectively and expeditiously.

Annual Performance Goal: Voluntary Proceedings customer complaints are resolved within one year from the date 

filed, Summary and Formal Proceedings are resolved within one year and six months from the date filed, and appeals are 

resolved within six months. 

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

Percentage of filed complaints resolved within one year of 

the filing date for Voluntary Proceedings 

Percentage of filed complaints resolved within one year and 

six months of the filing date for Summary Proceedings 

Percentage of filed complaints resolved within one year and 

six months of the filing date for Formal Proceedings

Percentage of appeals resolved within six months 

71% 

66% 

78% 

46% 

100% 

50% 

90% 

66% 

100% 

60% 

90% 

50% 

100% 

60% 

90% 

60% 
FY 2009 President’s Budget & Performance Plan

Breakout of Goal Two Request by Program Activity 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

Commission Strategies to Influence Outcomes 33 

Market Oversight $0 0 $0 0 $0 0

Clearing & Intermediary Oversight 5,891 24 6,572 23 681 -1

Chief Economist 0 0 0 0 0 0

Enforcement 13,611 54 15,743 55 2,132 1

Proceedings 1,977 9 2,543 10 566 1

General Counsel 4,145 17 4,867 17 722 0

Executive Direction & 

Support 

1,793 8 2,054 8 261 0

TOTAL: $27,417 112 $31,779 113 $4,362 1

Table 15: Breakout of Goal Two Request by Program Activity 

Enforcement

50%

Proceedings

8%

General Counsel

15%

Clearing & 

Intermediary Oversight

21%

Executive Direction & 

Support

6%

 

Figure 11: Breakout of Goal Two Request by Program Activity 
FY 2009 President’s Budget & Performance Plan

Breakout of Goal Two Request by Outcome Objective 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

34 Commission Strategies to Influence Outcomes 

GOAL TWO: Protect markets users and the public.

Outcomes 

2.1 Violations of Federal commodities laws are detected and 

prevented. 

$19,583 79 $22,540 80 $2,957 1

2.2 Commodities professionals 

meet high standards. 

4,702 19 5,348 19 646 0

2.3 Customer complaints against 

persons or firms falling within the 

jurisdiction of the Commodity 

Exchange Act are handled effectively and expeditiously. 

3,132 14 3,891 14 759 0

Total Goal Two $27,417 112 $31,779 113 $4,362 1

Table 16: Breakout of Goal Two by Outcome 

Outcome Objective

2.1

71%

Outcome Objective

2.2

17%

Outcome Objective

2.3

12%

Figure 12: Breakout of Goal Two Request by Outcome Objective 
FY 2009 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 35 

Strategic Goal Three – Ensuring Market Integrity in Order to 

Foster Open, Competitive, and Financially Sound Markets. 

Background and Context 

In fostering open, competitive, and financially sound markets, the Commission’s 

priorities are to protect the markets from abusive trading practices, to avoid disruptions to the systems for trading, clearing, and settling contract obligations, 

and to protect the funds that customers entrust to FCMs. Clearing organizations 

and FCMs are the backbone of the exchange system⎯together, they work to protect against the financial difficulties of one trader becoming a systemic problem 

for other traders. Several aspects of the oversight framework help the Commission achieve this goal with respect to traders: 1) periodically reviewing exchanges’ 

compliance with statutory and regulatory requirements; 2) directly overseeing 

activity on exchanges to detect and prosecute abusive trading; 3) requiring that 

market participants post margin to secure their ability to fulfill obligations; 4) 

requiring participants on the losing side of trades to meet their obligations, in 

cash, through daily (sometimes intraday) margin calls; and 5) requiring FCMs to 

segregate customer funds from their own funds. 

The Commission devotes substantial resources to meet its oversight responsibility over futures industry SROs, including the NFA, and DCOs, to ensure their fulfillment of responsibilities for monitoring and ensuring the financial integrity of 

market intermediaries and the protection of customer funds. An important component of this effort is conducting risk-based reviews of SROs and DCOs to 

evaluate their compliance programs with applicable provisions of the Act and 

Commission regulations. In addition, financial and risk surveillance of market 

intermediaries is conducted by the Commission to monitor actual and potential 

implications of market events and conditions for the financial integrity of the 

clearing system and to follow up on indications of financial difficulty. The Commission also undertakes examinations of registrants, such as FCMs, to assess the 

adequacy of the SROs’ and DCOs’ compliance programs, to address compliance 

with specific Commission regulations, or on an as needed basis. 

With respect to intermediary oversight, the Commission can investigate and 

prosecute FCMs alleged to have violated financial and capitalization requirements or to have committed supervisory or other compliance failures in connection with the handling of customer business. Such cases may result in substantial 

remedial changes in the supervisory structures and systems of FCMs, and can 

influence the way particular firms conduct business. This is an important part of 

fulfilling the Commission’s responsibility for ensuring that sound practices are 

followed by FCMs, and to ensure that markets remain financially sound. The 

Commission also seeks to ensure market integrity by investigating a variety of 

trade and sales practice abuses. For example, the Commission brings actions alleging unlawful trade allocations, trading ahead of customer orders, misappropriating customer trades, and non-competitive trading. 

Finally, the ongoing globalization of derivatives markets through electronic access, linkages, mergers, and cooperative business arrangements means that the 

Commission must continue to enhance its international coordination efforts with 

foreign market authorities in order to ensure that it can successfully supervise 

U.S. markets and protect U.S. customers. The Commission also is increasingly 

requested to provide technical assistance to developing markets, which helps foster global market integrity. 
FY 2009 President’s Budget & Performance Plan

CFTC Strategy Mapping 

FY 2009 Goal Three Resource Investment by Outcome Objective 

Figure 13: Goal Three Resource Strategy Mapping 

36 Commission Strategies to Influence Outcomes 

Outcome Objectives and Annual Performance Goals 

Outcome 3.1 – Clearing organization and firms holding customer funds 

have sound financial practices. 

F Annual Performance Goal: No loss of customer funds as a result of firms’ failure to adhere to regulations; no customers prevented from transferring funds 

from failing firms to sound firms. 

Outcome 3.2 – Commodity futures and option markets are effectively selfregulated. 

F Annual Performance Goal: No loss of funds resulting from failure of selfregulatory organizations to ensure compliance with their rules. 

Outcome 3.3 – Markets are free of trade practice abuses. 

F Annual Performance Goal: Minimize trade practice abuses. 

Outcome 3.4 – Regulatory environment is flexible and responsive to evolving market conditions. 

F Annual Performance Goal: Rulemakings issued and requests responded to reflect the evolution of the markets and protect the interests of the public. 

9% Investment 

6% Investment 

3% Investment 

4% Investment 

$0

$5

$10

5

0 20 40 60 80 100

FULL-TIM E EQUIV ALENTS

$1

Outcome 3.1 - Sound Financial Practices for Clearing Orgs & Firms

Outcome 3.2 - Markets are Effectively Self-Regulated

Outcome 3.3 - Markets are Free of Trade Practice Abuses

Outcome 3.4 - Regulatory Environment is Responsive to Market Conditions
FY 2009 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 37 

Means and Strategies for Achieving Objectives 

Means: 

• Oversee market intermediaries and the self-regulatory programs and 

compliance activities of the futures industry SROs, which include the 

U.S. commodity exchanges, the NFA, and DCOs. 

• Protect market users and financial intermediaries by developing regulations including requirements related to registration, record-keeping and 

reporting, financial adequacy, sales practices, protection of customer 

funds, and clearance and settlement activities. 

• Address cross-border transactions, the coordination of policy with foreign market authorities, systemic risk, anti-money laundering programs, 

and procedures to address extraordinary events such as firm defaults. 

• Monitor market movements for potential financial impact on clearing 

firms and DCOs. 

• Monitor trading activity to detect abusive trading practices through examinations of audit trail data. 

Strategies: 

• Maintain a flexible regulatory environment responsive to evolving 

market conditions. In an effort to ensure that the regulatory framework 

under which futures and option contracts are traded remains current, 

Commission staff will continue to review the Commission’s regulations 

with the intention of: eliminating obsolete regulations; streamlining and 

coordinating regulations across markets; and fostering efficiency and 

competitiveness while assuring customer protection, sound financial 

practices, and market integrity. The Commission will also respond to requests for exemptions and other relief from regulatory requirements to 

address situations in which additional flexibility is warranted. The Commission also will issue advisories and other guidance concerning the application of Commission regulations. 

• Oversight of SROs and DCOs. A key aspect of effective self-regulation is 

oversight by the Commission of SROs, NFA, and DCOs to ensure their 

fulfillment of responsibilities for monitoring and ensuring the financial 

integrity of market intermediaries and the protection of customer funds. 

This oversight program involves conducting risk-based reviews and examinations of SROs (including NFA) and DCOs to evaluate their compliance programs with applicable provisions of the Act and Commission 

regulations. 

• Conduct financial surveillance. An important component of oversight of 

DCOs and SROs is the conduct of financial surveillance of market intermediaries by using automated tools for collecting, analyzing, and reporting upon the financial condition and risk exposures of FCMs and clearing 

organizations. Monitoring of broad-based stock-index futures and security futures margins was added to the financial surveillance functions 

now performed. 

• Enhance risk assessment. To address changes in the operations and 

structures of multinational, multi-product financial firms, the Commission has implemented a risk assessment program by obtaining better in-
FY 2009 President’s Budget & Performance Plan

38 Commission Strategies to Influence Outcomes 

formation on such firms in the form of required organizational charts 

and internal control filings, consolidated and consolidating financial 

statements, identification of other regulators to whom such firms report, 

and descriptions of procedures in place to control risks associated with 

clearing of trades for affiliates of the regulated firm. 

• Develop global cooperation to enhance financial safeguards. Internationally, recent market issues with global market impact have underscored the importance of developing international standards of best practice. The Commission has increased its efforts to achieve greater international coordination, and thereby enhance the effectiveness of financial 

safeguards applicable to U.S. markets and market participants, as well as 

those applicable internationally. 

• Review SRO rule submissions. New rules and rule changes submitted by 

the exchanges, DCOs, and NFA to the Commission are reviewed with a 

view towards ensuring compliance with core principles and regulatory 

standards in order to maintain the fairness and integrity of the markets, 

protect customers, and accommodate and foster innovation and efficiency in self-regulation consonant with the Commission’s statutory 

mandates. Many of the rule submissions present complex new trading 

and clearing procedures, market structures, and financial arrangements 

that present novel issues and, in some cases, require amendments to or 

interpretations of Commission regulations to facilitate implementation of 

the SRO’s rule changes. The Commission has adapted its requirements 

to ensure, when approval is requested, quicker implementation of rule 

changes, and attempts, when carrying out due diligence reviews of new 

rules and rule changes submitted by exchange certification and immediately implemented, to complete the review as soon as possible to ensure 

that the implemented rules comply with the CEA and the Commission’s 

regulations. This due diligence review, when carried out in a timely fashion, allows the Commission to meet its statutory responsibility to ensure 

avoidance of systemic risks, protection of market participants, and the 

promotion of responsible innovation and fair competition. 

• Respond to globalization of the markets. Electronic technology is rapidly integrating the world’s commodity futures and option markets. 

These technology-driven changes will increase cross-border trading volume, cross-border participation, and cross-border exchange linkages. 

Markets, intermediaries, and customers demand efficient access to these 

global markets with a minimum of regulatory borders. Because no one 

regulator will have the information or geographic reach to address regulatory and practical issues related to cross-border access, the Commission will increase its cooperative efforts with global regulators. 
FY 2009 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 39 

Summary of Goal Three Performance Indicators

Goal Three: Ensure market integrity in order to foster open, competitive, 

and financial sound markets.

Outcome 3.1: Clearing organizations and firms holding customer funds have sound financial practices.

Annual Performance Goal: No loss of customer funds as a result of firms’ failure to adhere to regulations. No customers prevented from transferring funds from failing firms to sound firms. 

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

Lost funds: 

a) Number of customers who lost funds 

b) Amount of funds lost 

Number of rulemakings to ensure market integrity and

financially sound markets

Percentage of self-regulatory organizations that comply

with requirement to enforce rules

0 

$0 

3 

100% 

0 

$0 

1 

100% 

0 

$0 

5 

100% 

 0 

$0 

3 

100% 

Outcome 3.2: Commodity futures and option markets are effectively self-regulated.

Annual Performance Goal: No loss of funds resulting from failure of self-regulated organizations to ensure compliance with their rules. 

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

Percentage of intermediaries who meet risk-based capital 

requirements 

Percentage of clearing organizations that comply with 

requirement to enforce their rules 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100% 

Outcome 3.3: Markets are free of trade practice abuses. 

Annual Performance Goal: Minimize trade practice abuses. 

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

Percentage of exchanges deemed to have adequate systems for detecting trade practice abuses 

Percentage of exchanges that comply with requirement to 

enforce their rules

100% 

100% 

100% 

100% 

100% 

100% 

100% 

100%

Outcome 3.4: Regulatory environment is flexible and responsive to evolving market conditions. 

Annual Performance Goal: Rulemakings issued and requests responded to reflect the evolution of the markets and 

protect the interests of the public. 

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

Percentage of CFMA Section 126(b) objectives implemented 

Number of rulemakings, studies, interpretations, and 

guidance to ensure market integrity and exchanges’ compliance with regulatory requirements 

Percentage of requests for no-action or other relief completed within six months related to novel market or trading practices and issues to facilitate innovation 

Percentage of total requests receiving CFTC responses for 

guidance and advice 

100% 

20 

100% 

95% 

100% 

19 

100% 

95% 

100% 

17 

100% 

75% 

100% 

12 

80% 

76% 
FY 2009 President’s Budget & Performance Plan

Breakout of Goal Three Request by Program Activity 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

40 Commission Strategies to Influence Outcomes 

Market Oversight $7,521 33 $8,650 33 $1,129 0

Clearing & Intermediary Oversight 9,598 40 11,657 43 2,059 3

Chief Economist 0 0 0 0 0 0

Enforcement 3,398 13 3,930 14 532 1

Proceedings 0 0 0 0 0 0

General Counsel 1,956 8 2,305 8 349 0

Executive Direction & 

Support 

1,888 8 2,436 9 548 1

TOTAL $24,361 102 $28,978 107 $4,617 5

Table 17: Breakout of Goal Three by Program Activity 

M arket Oversight

30%

Executive Direction & 

Support

8%

Enforcement

14%

General Counsel

8%

Clearing & Intermediary 

Oversight

40%

Figure 14: Breakout of Goal Three Request by Program Activity 
FY 2009 President’s Budget & Performance Plan

Breakout of Goal Three Request by Outcome Objective 

 FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

Commission Strategies to Influence Outcomes 41 

GOAL THREE: Ensure market integrity in order to foster open, competitive, and financially sound markets.

Outcomes 

3.1 Clearing organizations and firms 

holding customer funds have sound 

financial practices. 

$5,864 24 $7,550 27 $1,686 3

3.2 Commodity futures and option 

markets are effectively self-regulated. 

10,867 46 12,503 46 1,636 0

3.3 Markets are free of trade practice 

abuses. 

2,896 12 3,347 13 451 1

3.4 Regulatory environment responsive 

to evolving market conditions. 

4,734 20 5,578 21 844 1

Total Goal Three $24,361 102 $28,978 107 $4,617 5

Table 18: Breakout of Goal Three Request by Outcome 

Outcome 

Objective 3.3

12%

Outcome 

Objective 3.4

19%

Outcome 

Objective 3.1

26%

Outcome 

Objective 3.2

43%

Figure 15: Breakout of Goal Three Request by Outcome Objective 
FY 2009 President’s Budget & Performance Plan

42 Commission Strategies to Influence Outcomes 

Strategic Goal Four: To Facilitate Commission Performance 

through Organizational and Management Excellence, Efficient 

Use of Resources, and Effective Mission Support. 

Background and Context 

The fulfillment of the Commission’s mission and the achievement of our goals are 

tied to a foundation of sound management and organizational excellence. This 

foundation is essential to support the work of the Commission in the Washington 

D.C. headquarters and three regional offices in Chicago, Kansas City, and New 

York. The Commission is committed to maintaining a well-qualified workforce 

supported by a modern support infrastructure that enables the Commission to 

achieve its programmatic goals. Building this foundation will require significant 

investment in people, management initiatives systems, and facilities. 

Agency Direction. The Office of the Chairman and the Commissioners provide 

executive direction and leadership to the Commission—specifically, as it develops 

and adopts agency policy that implements and enforces the CEA and amendments to that Act, including the CFMA. This policy is designed to foster the financial integrity and economic utility of commodity futures and option markets 

for hedging and price discovery, to conduct market and financial surveillance, 

and to protect the public and market participants against manipulation, fraud, 

and other abuses. Executive leadership, in this regard, is the responsibility of the 

Chairman and Commissioners and includes the offices of the Chairman: the Office of External Affairs; the Secretariat; the Office of Inspector General; the Office 

of International Affairs; and the Office of Equal Employment Opportunity.

The Commission continues to implement the CFMA passed by Congress and 

signed by the President in December 2000. Specifically, the CFMA: 1) repealed 

the ban on single-stock futures and implemented a regulatory framework for 

these instruments based on the agreement between the Commission and SEC; 2) 

enacted the principal provisions of the Commission’s new regulatory framework; 

3) brought legal certainty to bilateral and multilateral trading in over-the-counter 

financial markets; 4) confirmed the Commission’s jurisdiction over certain aspects of the retail market in foreign currency trading; and 5) gave the Commission authority to regulate clearing organizations. The CFMA reauthorized the 

Commission through FY 2005. The Commission continues to work with the Administration and the Congress on issues relating to the reauthorization of the 

Commission. 

Human Resources Management. The Commission, with less than 500 employees, performs a vital role in protecting the integrity of the futures and option 

markets—one of America’s most innovative and competitive financial services 

industries. To maintain the U.S. role as the world leader in setting the standard 

for ensuring market integrity and protection for market users, the Commission 

must have sufficient resources to attract, train, promote, and retain a professional workforce. 

The Commission continues to pursue human resource initiatives aimed at building, developing, and sustaining a knowledgeable, diverse, and productive workforce. The Commission aims to have a workforce whose size, skills, and composition react and adapt quickly to changes in the industry and technology and/or 

statutory or regulatory developments. The Commission has embarked on a comprehensive Strategic Management of Human Capital Initiative with the goals of 

improving the ability to: 1) plan for anticipated change in workforce composition; 

2) target and recruit employees to fill critical skill deficiencies; 3) target developmental resources; 4) identify and justify staff resources needed to perform statutory mandates; and 5) implement the Title V-exempt CT pay plan as mandated by 
FY 2009 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 43 

Section 10702 of Public Law 107-171, the Farm Security and Rural Investment Act

(FSRIA) of 2002. 

Information Technology Management. The Commission’s ability to fulfill its 

mission successfully depends on the collection, analysis, communication and 

presentation of information in forms useful to Commission employees and other 

interested parties, such as the industry it regulates, as well as other Federal, state, 

and international agencies with which we cooperate, the Congress, and the 

American public. A secure modern information technology infrastructure is a 

vital tool that enables the Commission to serve these stakeholders effectively. 

The Commission is making a concerted effort to use commercial best practices 

when developing and maintaining its information technology (IT) systems, applications and infrastructure, deploying a modern messaging, archiving, and document management system. The Commission’s FY 2009 Budget includes approximately $26 million for information technology. The resources will allow the 

Commission to make improvements in information technology by upgrading 

hardware and software, and by improving existing systems and developing new 

systems critical to maintaining adequate market oversight. See Appendix 4 for a 

more detailed summary of the information technology budget. 

The Commission is also in the process of developing the Trade Surveillance System (TSS), which will be used for trade practice surveillance on new and emerging electronic exchanges. This new system will use state-of-the-art commercially 

available software to enhance trade surveillance capability over the innovative 

and ever-expanding electronic trading platforms. The new TSS will ultimately 

replace the current legacy surveillance systems that have limited capability in the 

newer dynamic marketplace where new trading techniques, such as interexchange trading, are commonplace practices. 

 

Another significant project is the CFTC.gov redesign. This initiative improves the 

Commission’s ability to communicate effectively with the public by providing 

mission-critical information in an easily accessible and usable manner. The redesign includes an assessment and review of the current content and structure of 

CFTC.gov to gain insight into the depth and breadth of the Web site, its navigation, and architecture. Based upon the needs of CFTC’s customers, a new information architecture design and high-level user-interface structure was developed 

and implemented. This initiative also included an assessment and evaluation of 

the current Web technology environment and identified solutions to manage 

CFTC’s Internet presence. 

Other new systems are under development. The Filings and Actions System allows the Division of Market Oversight and the Division of Clearing and Intermediary Oversight to manage the processing of submissions from regulated entities. 

Users can enter, modify and query data associated with Organizations, Products, 

Rules, and Foreign Filings and Actions. Project eLaw provides law office automation and modernization by seamlessly integrating technology and work processes 

to support managers and staff across the Commission in their investigative, trial, 

and appellate work. Project eLaw provides support in the areas of case planning, 

case management, litigation, and document management. 

Management Operations. The Office of Management Operations provides support to Commission staff by ensuring the timely delivery of products and services, 

the safety and security of all employees, and operations and maintenance of the 

facilities at Headquarters and in the regional offices. Many improvements in 

critical administrative service areas have occurred during the last few years. Current goals include developing a property management system for non-capitalized, 

sensitive items; and conducting testing, training, and evaluation on all emergency 

preparedness programs, e.g., Occupant Emergency Plan, Shelter in Place, and 

Continuity of Operations. 
FY 2009 President’s Budget & Performance Plan

44 Commission Strategies to Influence Outcomes 

Financial Management. Improved accountability for performance, together with 

unquestionable fiscal integrity, serve as key mission delivery cornerstones. Effective financial management systems and services facilitate Commission performance, and earning unqualified audit opinions demonstrates financial accountability. Migration to Department of Transportation systems and services 

ensures that the financial resources entrusted to the Commission are well managed and judiciously deployed. The Budget and Performance and Accountability 

Report permit the public to see how well programs perform, and the cost incurred to achieve that performance. 
FY 2009 President’s Budget & Performance Plan

CFTC Strategy Mapping 

FY 2009 Goal Four Resource Investment by Outcome Objective 

Figure 16: Goal Four Resource Strategy Mapping 

$0

$5

$10

$15

0 20 40

FULL-TIME EQUIVALENTS

MILLIONS

7% Investment 

3% Investment 

3% Investment 

3% Investment 

3% Investment 

60

Outcome 4.1 - Productive, Technically Competent, Diverse Workforce

Outcome 4.2 - Modern and Secure Information System

Outcome 4.3 - Responsive Organizational Infrastructure

Outcome 4.4 - Allocated, Managed and Accounted Financial Resources 

Outcome 4.5 - Commission's Mission and Goals Fulfilled

Outcome Objectives and Annual Performance Goals 

Outcome 4.1 -- A productive, technically competent, and diverse workforce 

that takes into account current and future technical and professional needs 

of the Commission. 

F Annual Performance Goal: Recruit, retain, and develop a skilled and diversified staff to keep pace with attrition and anticipated losses due to retirement. 

Outcome 4.2 -- A modern and secure information portfolio that reflects the 

strategic priorities of the Commission. 

F Annual Performance Goal: Link business decisions on IT resources to CFTC 

strategic goals by establishing a decision making and review process for allocation of IT resources. 

Outcome 4.3 -- An organizational infrastructure that efficiently and effectively responds to and anticipates both the routine and emergency business 

needs of the Commission. 

Commission Strategies to Influence Outcomes 45 
FY 2009 President’s Budget & Performance Plan

46 Commission Strategies to Influence Outcomes 

F Annual Performance Goal: A fully operational Contingency Planning Program to ensure the CFTC is prepared for emergencies and is fully capable of 

recovery and reconstitution. 

Outcome 4.4 -- Financial resources are allocated, managed, and accounted 

for in accordance with the strategic priorities of the Commission. 

F Annual Performance Goal: A clean financial audit opinion for the CFTC. 

Outcome 4.5 -- The Commission’s mission is fulfilled and goals are achieved 

through sound management and organizational excellence provided by 

executive leadership. 

F Annual Performance Goal: Progress in completing the 18 priorities established in the Commission Strategic Plan11 for fiscal years 2007 through 2012. 

 

11 The Commission is on schedule to finalize and adopt the Strategic Plan for 2007 - 2012 before the 

end of the fiscal year, 2007. 
FY 2009 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 47 

Means and Strategies for Achieving Objectives 

Means: 

• Assess continually the external and internal issues and trends that may 

affect the mission and the way in which we must respond to meet it successfully. 

• Evaluate and adjust management and strategic plans to ensure that potential problems or weaknesses are managed before they develop into 

crises. 

• Develop and employ strategies that will focus on achieving results—

strategies that will: define the basis for developing policies, making decisions, taking actions, allocating resources, and defining program definition; and clarify why the organization exists, what it does, and why it 

does it—providing a bridge to understanding how the Commission connects to its environment. 

Strategies: 

• Refine existing workforce planning tools and hiring strategies to better 

target mission-critical staff competencies needed in future years. 

• Continue adjusting agency ability to compete as an employer with total 

compensation programs under the FSRIA mandates. 

• Continue to develop and enhance e-learning and other training and development initiatives to build staff’s competencies in mission-critical areas. 

• Link business decisions on IT resources to CFTC strategic goals and establish a decision-making process for allocation of IT resources. 

• Build roadmap for all IT systems requirements to improve planning, resource allocation, systems development and capital planning. 

• Build/ensure robust information security program. 

• Improve access to information with user-centric Web sites that provide 

current, consistent, and accurate information. 

• Secure agency assets by ensuring appropriate internal controls on assets 

and providing a basis for life cycle management of assets. 

• Build/ensure archives management program that supports electronic records and improves handling, management, and storage of records. 

• Improve IT customer service by improving linkage between program areas and short and long-term technology goals. 

• Build a Contingency Planning Program to ensure that the CFTC is prepared for emergencies and is fully capable of recovery and reconstitution. 

• Comply with U.S. Homeland Security directives and improve Federal 

identification procedures in the event of a disaster. 
FY 2009 President’s Budget & Performance Plan

48 Commission Strategies to Influence Outcomes 

• Standardize furniture assets and implement life cycle management; improving financial planning, management, and maintenance. 

• Manage events proactively to ensure effective application of scarce resources and to improve customer service. 

• Ensure a clean independent audit opinion of the agency’s financial 

statements by improving internal controls and improving financial reporting. 

• Execute an audit remediation plan to correct any deficiencies and/or implement recommendations. 

• Integrate budget and performance information to improve management 

and performance of the Commission. 

• Undertake IT investments reviews to ensure the prudence of ongoing IT 

investments. 
FY 2009 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 49 

Summary of Goal Four Performance Indicators 

Goal Four: To facilitate Commission performance through organizational and management excellence, efficient use of resources, and effective mission support.

Outcome 4.1: A productive, technically competent, competitively compensated, and diverse workforce 

that takes into account current and future technical and professional needs of the Commission.

Annual Performance Goal: Recruit and retain a skilled and diversified staff to replace aging and retiring workforce.

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

4.1.1 Percentage of fiscal year program development objectives met under agency pay for performance authority 

4.1.2 Average number of days between close of vacancy announcement and job offer, per Federal standards of 45 days 

or less 

4.1.3 Rate of employee turnover, exclusive of retirements 

4.1.4 Percentage of employees in mission-critical positions 

rating themselves at “extensive” or higher level of expertise 

on Strategic Workforce Planning Survey 

4.1.5 Percentage of underrepresented groups among new 

hires 

100% 

76 

3.6% 

37% 

12.5% 

100% 

84 

3.9% 

45% 

42.1% 

100% 

55 

3.5% 

50% 

27% 

100% 

45 

3.4% 

55% 

27% 

Outcome 4.2: A modern and secure information system that reflect the strategic priorities of the 

Commission. 

Annual Performance Goal: Link business decisions on IT resources to CFTC strategic goals by establishing a decision- making and review process for allocation of IT resources. 

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

4.2.1 Percentage of Agency IT resources directly tied to 

Agency resource priorities as stated in the Strategic Plan 

4.2.2 Percentage of major IT investments having undergone 

an investment review within the last three years 

4.2.3 Percentage of Customer Support Center inquiries resolved within established performance metrics 

4.2.4 Percentage of employees with network availability 

4.2.5 Percentage of employees who require remote network 

availability that have it 

 

4.2.6 Percentage of major systems and networks certified 

and accredited in accordance with NIST guidance 

4.2.7 Percentage of IT e-government initiatives on target for 

compliance with implementation schedule 

4.2.8 Percentage of network users who have completed annual security and privacy training 

TBD12

100% 

TBD 13

100% 

TBD 13

28% 

TBD 13

90% 

TBD 13

100% 

83% 

100% 

95% 

75% 

100% 

98% 

100% 

100% 

80% 

100% 

100% 

100% 

100% 

98% 

100% 

100% 

80% 

100% 

100% 

100% 

100% 

98% 

 

12 To be determined. 
FY 2009 President’s Budget & Performance Plan

50 Commission Strategies to Influence Outcomes 

Outcome 4.3: An organizational infrastructure that efficiently and effectively responds to and anticipates both the routine and emergency business needs of the Commission.

Annual Performance Goal: A fully operational Contingency Planning Program to ensure the CFTC is prepared for 

emergencies and is fully capable of recovery and reconstitution. 

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

4.3.1 Number of hours required to deploy staff and 

begin mission essential functions at the COOP site

TBD13 24 18 12

Outcome 4.4: Financial resources are allocated, managed, and accounted for in accordance with the 

strategic priorities of the Commission.

Annual Performance Goal: A clean audit opinion for CFTC. 

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

4.4.1 Audit opinion of the Agency’s annual financial 

statements as reported by the Agency’s external auditors 

4.4.2 Number of material internal control weaknesses 

reported in the Performance & Accountability Report 

4.4.3 Number of non-compliance disclosures in audit 

report 

Unqualified 

1 

1 

Unqualified 

0 

0 

Unqualified 

0 

0 

Unqualified 

0 

0 

Outcome 4.5: The Commission’s mission is fulfilled and goals are achieved through sound management and organizational excellence provided by executive leadership.

Annual Performance Goal: Progress in achieving priorities for fiscal years 2007 through 2012 as established by 

the Strategic Plan. 

Performance Measures 

FY 2006 

Actual 

FY 2007 

Actual 

FY 2008 

Plan 

FY 2009 

Plan 

4.5.1 Percentage of 18 Strategic Plan priorities that 

are on track to completion by FY 201214

N/A14 N/A14 100% 100% 

 

13 To be determined. 

14 The Commission adopted the Strategic Plan for FY 2007–FY 2012 on September 30, 2007. 
FY 2009 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 51 

Breakout of Goal Four Request by Program Activity 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

Market Oversight $0 0 $0 0 $0 0

Clearing & Intermediary Oversight 0 0 0 0 0 0

Chief Economist 0 0 0 0 0 0

Enforcement 0 0 0 0 0 0

Proceedings 0 0 0 0 0 0

General Counsel 0 0 0 0 0 0

Executive Direction & 

Support 

24,517 105 28,379 106 3,862 1

TOTAL $24,517 105 $28,379 106 $3,862 1

Table 19: Breakout of Goal Four by Program Activity 
FY 2009 President’s Budget & Performance Plan

Breakout of Goal Four Request by Outcome Objective 

 FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

52 Commission Strategies to Influence Outcomes 

GOAL FOUR: To facilitate Commission performance through management excellence, efficient use of resources, and effective mission support.

Outcomes 

4.1 A productive, technically competent, competitively compensated, and 

diverse workforce that takes into account current and future technical and 

professional needs of the Commission. 

$3,281 14 $3,760 14 $479 0

4.2 A modern and secure information 

system that reflect the strategic priorities of the Commission. 

5,872 25 6,996 26 1,124 1

15

4.3 An organizational infrastructure 

that efficiently and effectively responds 

to and anticipates both the routine and 

emergency business needs of the Commission. 

3,282 14 3,760 14 478 0

4.4 Financial resources are allocated, 

managed, and accounted for in accordance with the strategic priorities of the 

Commission. 

3,516 15 4,028 15 512 0

4.5 The Commission’s mission is fulfilled and goals are achieved through 

sound management and organizational 

excellence provided by executive leadership. 

8,566 37 9,835 37 1,269 0

Total Goal Four $24,517 105 $28,379 106 $3,862 1

Table 20: Breakout of Goal Four by Outcome 

Outcome Objective 4.5

35%

Outcome Objective 4.3

13%

Outcome Objective 4.4

14%

Outcome Objective 4.1

13%

Outcome Objective 4.2

25%

Figure 17: Breakout of Goal Four Request by Outcome Objective 

 

15 Represents Office of Information Technology Services dollars and staff resources not otherwise 

allocated to Goals 1, 2, or 3. 
FY 2009 President’s Budget & Performance Plan

Justification of the FY 2009 President’s Budget & Performance Plan 53 

Justification of the FY 2009 Budget & Performance Estimate 

Breakout of $130.0 Million Budget Estimate by Program 

 FY 2009 FY 2009 

FY 2007 FY 2008 Current Services Request 

FTE $ (000) FTE $ (000) FTE $ (000) FTE $ (000)

Market Oversight 100 $21,853 100 $22,775 100 $26,368 101 $26,454

Clearing & Intermediary Oversight 61 $13,388 68 $16,388 68 $18,765 70 $19,278

Chief Economist 7 $1,564 9 $2,272 9 $2,605 10 $2,851

Enforcement 112 $25,791 119 $29,991 119 $34,406 121 $34,708

Proceedings 10 $2,234 9 $1,977 9 $2,297 10 $2,543

General Counsel 26 $5,812 31 $7,755 31 $8,901 32 $9,108

Exec. Direction & Support 121 $27,044 129 $30,108 129 $34,754 131 $35,058

Total 437 $97,686 465 $111,266 465 $128,096 475 $130,000

Table 21: Budget Estimate by Program 

M arket Oversight

20%

Enforcement

27%

Chief Economist

2%

Clearing & Intermediary 

Oversight

15%

General Counsel

7% Proceedings

2%

Executive Direction & 

Support

27%

Figure 18: $130.0 Million Budget Estimate by Program 

 
FY 2009 President’s Budget & Performance Plan

Breakout of $130.0 Million Budget Estimate by Object Class 

FY 2007 FY 2008 FY 2009

($000) ($000) ($000)

11.1-11.5 Personnel Compensation $55,534 $60,485 $64,091

11.8 Special Pers. Serv. Payments 2 22 30 

11.9 Subtotal, Personnel Comp. 55, 536 60,507 64,121

12.1 Personnel Benefits: Civilian 13,841 15,884 17,381

13.0 Benefits for Former Personnel 9 9 21

21.0 Travel & Transportation of Persons 1,145 1,391 1,570

22.0 Transportation of Things 48 88 149

23.2 Rental Payments to Others 11,942 12,481 12,691

23.3 Comm., Utilities & Miscellaneous 2,362 3,016 4,651

24.0 Printing and Reproduction 316 400 577

25.0 Other Services16 11,086 11,144 20,395

26.0 Supplies and Materials 731 830 854

31.0 Equipment 541 5,390 7,499

32.0 Building/Fixed Equipment 10 51 91

42.0 Claims/Indemnities 0 75 0 

99.0 Subtotal, Direct Obligations 97,567 111,266 130,000

99.0 Reimbursable 119 125 125 

99.0 Total Obligations $97,686 $111,391 $130,125

Table 22: Budget Estimate by Object Class 

Compensation &

Benefits

62%

Space Rental

10%

All Other

16%

Equipment

6%

Communications &

Utilities

4%

Supplies &

Printing

1%

Travel & 

Transportation

1%

Figure 19: $130.0 Million Budget Estimate by Object Class 

 

16 Includes costs for Enforcement investigations, information technology modernizations, operations & 

maintenance, and advisory & assistance services. 

54 Justification of the FY 2009 President’s Budget & Performance Plan 
FY 2009 President’s Budget & Performance Plan 

Justification of the FY 2009 President’s Budget & Performance Plan 55 

Crosswalk from FY 2008 to FY 2009 

FY 2008 

Budget 

 FY 2009

Request Change

 

Budget Authority ($000) $111,266 $130,000 $18,734

Full-Time Equivalents (FTEs) 465 475 10

 

Explanation of Change FTEs

Dollars

($000)

Current Services Increases: (Adjustments to FY 2008 Base)

To provide for the following changes in personnel compensation: 

 --Estimated July 2009 4.5% merit based pay adjustment 643

 --Estimated July 2008 4.5% merit based pay increase (annualization of) 1,848

 --To provide for increased costs of personnel benefits 733

To provide for the following changes in non-personnel costs: 13,610

 --Travel/Transportation ($240) 

 --Space Rental/Communications/Utilities ($1,845) 

 --Supplies/Printing ($200) 

 --All Services ($9,251) 

 --Equipment ($2,109) 

 --Building/Fixed Equipment ($40) 

 --Claims (-$75) 

Program Increase: (Adjustments to FY 2009 Current Services)

 --To provide for salaries and expenses for 10 additional FTEs +10 1,900

Total Increases +10 $18,734

Table 23: Crosswalk from FY 2008 to FY 2009 
FY 2009 President’s Budget & Performance Plan

Market Oversight 

Total Budget: $26,454,000 101 FTEs 

Total Change: $ 3,679,000 1 FTE 

All Other 

Programs

80%

Market 

Oversight

20%

Market 

Oversight

21%

All Other 

Programs

79%

Figure 20: Market Oversight 

Percentage of Total Budget Dollars 

Figure 21: Market Oversight 

Percentage of Total Budget FTEs 

Justification of the FY 2009 President’s Budget & Performance Plan 

The primary responsibility of the Market Oversight program is to foster markets 

that accurately reflect the forces of supply and demand for the underlying commodity and are free of disruptive activity. By detecting and protecting against 

price manipulation and abusive trading practices, this program assists the markets in performing the vital economic functions of price discovery and risk transfer (hedging). The Market Oversight program will initiate and carry out the 

Commission’s surveillance and oversight programs for these markets. The program also will conduct trade practice surveillance and reviews of exchange rule 

amendments and submissions. In addition, the program will develop, implement, 

and interpret regulations that protect customers, prevent trading abuses, and 

assure the integrity of the futures markets. 

In FY 2009, the Division of Market Oversight (DMO) staff issued seven no-action 

relief letters to foreign boards of trade with direct access privileges in the United 

States DMO issued relief letters to three exchanges seeking initial placement of 

trading terminals here in the U.S.—the Dubai Mercantile Exchange, the Tokyo 

Financial Exchange, and the Mercado Mexicano de Derivados S.A. de C.V., or 

MexDer. In addition, DMO issued amended letters to four exchanges with already existing relief—Euronext Paris, Euronext LIFFE, SGX-DT (formerly known 

as the Singapore International Monetary Exchange), and Eurex. The amended 

no-action letters to the two Euronext exchanges expanded their relief to include 

order placement by CTAs and CPOs. The letter to SGX-DT recognized that SGX 

QUEST had replaced SIMEX ETS as the trading engine for financial futures and 

options and extended the relief to the Joint Asian Derivatives Exchange (JADE), 

a joint venture of SGX and CBOT Holdings, Inc., that operates as a division of 

SGX, and trades futures and options on physical commodities based in Asia. Finally, the letter to Eurex permitted that exchange to allow its non-U.S. members 

to outsource the performance of certain administrative functions relating to 

maintenance of orders in the Eurex trading system to specified employees located 

in the offices of the members’ U.S. affiliates. 

56 FY 2009 President’s Budget & Performance Plan⎯Market Oversight 
 FY 2009 President’s Budget & Performance Plan 

FY 2009 President’s Budget and Performance Plan⎯Market Oversight 57 

In FY 2009, the Market Oversight program requests 101 full-time equivalents 

(FTEs), an increase of one FTE over the FY 2008 level. The three subprograms⎯Market Surveillance, Market and Product Review, and Market Compliance⎯are requesting 50 FTEs, 17 FTEs, and 34 FTEs, respectively. 

Chief Counsel’s Office. The Chief Counsel is responsible for the issuance of rules 

and regulations related to oversight of regulated futures markets; the issuance of 

interpretations, policy statements, and no-action letters in connection with issues 

related to markets; the review of division matters generally to ensure their consistency with the CEA and the Commission’s regulations; and the review of matters 

originated by other divisions of the Commission to determine whether they implicate the division’s interests in any manner. A key duty of Chief Counsel’s Office is the design and implementation of a program to address the operations of 

foreign boards of trade (FBOTs) that permit their members or participants in the 

United States to directly access their electronic trading systems. The Chief Counsel’s Office designs and implements procedures regarding the handling of initial 

and subsequent FBOT requests to permit direct access from the United States, 

including the form and extensive content of those requests sufficient to undertake 

a meaningful evaluation of the FBOT’s operations. This area of responsibility 

requires the Chief Counsel to: 1) maintain a comprehensive knowledge of, and 

sensitivity to, the Commission's regulatory approach, policies, and current 

agenda regarding foreign regulatory authorities and foreign exchanges; 2) coordinate with other divisions and offices of the Commission in a comprehensive 

knowledge of the laws, regulations, and policies applicable to FBOTs; and 3) negotiate with FBOTs and foreign regulators, market authorities, and experts in the 

derivatives industry and academia. 

Market Surveillance. Futures prices are generally quoted and disseminated 

throughout the U.S. and abroad. Business, agricultural, and financial enterprises 

use the futures markets for pricing information and for hedging against price 

risk. The participants in commercial transactions rely extensively on prices established by the futures markets, which affect trillions of dollars in commercial activity. Moreover, the prices established by the futures markets directly or indirectly affect all Americans. They affect what Americans pay for food, clothing, and 

shelter, what we pay to heat our homes and fuel our cars, as well as other necessities. Because futures and option prices are susceptible to manipulation and excessive volatility, and producers and users of the underlying commodities can be 

harmed by manipulated prices, preventive measures are necessary to ensure that 

market prices accurately reflect supply and demand conditions. 

Actions to detect and prevent price manipulation are taken by economists who 

monitor all active futures and option contracts for potential problems. The FTEs 

requested for the Market Oversight program will work on investigating possible 

manipulation and other trading abuses, analyze routine reports of large trader 

activity, conduct rule enforcement reviews, and work to detect and prevent 

threats of price manipulation or other major market disruptions caused by abusive trading practices. 

Price manipulation prevention activities of Market Surveillance economists are 

enhanced by support personnel, such as futures trading specialists, futures trading assistants, and statisticians. Their activities include operating an extensive 

daily data-gathering and verification system and collecting reports from exchanges, futures industry firms, and traders. The reports provide current market 

information on the size of futures and option positions held by large traders as 

well as other background information that is necessary to enforce Commission 

and exchange speculative limits. 

Market Surveillance staff also collects and integrates information on large positions held on exempt commercial markets and foreign boards of trade in con-
FY 2009 President’s Budget & Performance Plan

58 FY 2009 President’s Budget & Performance Plan ⎯Market Oversight 

tracts that are linked by cash-settlement to a contract traded at a designated contract market in order to better accomplish its mission of detecting and preventing 

price manipulation in markets under the Commission’s jurisdiction. 

Market and Product Review. In order to serve the vital price-discovery and 

hedging functions of futures and option markets, exchanges must provide consumers safe marketplaces that have appropriate protections in place and provisions for ensuring the fairness of the market and the integrity of contracts traded. 

Exchanges must list products for trading that are not readily susceptible to manipulation and do not lead to price distortions or disruptions in the futures or 

option markets, or in the underlying cash markets. Adherence to the approval 

criteria, core principles, and appropriate contract design minimizes market disruptions and the susceptibility of the contracts to manipulation or price distortion. 

The Market and Product Review subprogram, in cooperation with other offices of 

the Commission, reviews exchanges’ applications for approval as a contract market 

or as a Derivatives Transaction Execution Facility (DTEF) to ensure that the exchange is in compliance with approval criteria and core principles and Commission 

regulations. The subprogram also reviews filings by exempt markets and, as required, analyzes these entities to ascertain whether they comply with statutory requirements. 

The subprogram reviews requests from exchanges for approval of new contracts and 

rule amendments to existing contracts to ensure that contracts are in compliance 

with statutory and regulatory anti-manipulation requirements. It also conducts reviews of new products and rule changes of economic significance submitted under 

certification procedures to provide information about the markets and product design features; and to ensure that contracts and rules comply with statutory requirements as well as the Commission’s rules and policies. The reviews foster markets 

free of disruptions, or price manipulation, provide essential information to conduct 

effective market surveillance, and address regulatory and public interest issues. In 

this regard, deficiencies in the terms and conditions of futures and option contracts 

increase the likelihood of cash, futures, or option market disruptions and decrease 

the economic usefulness and efficiency of contracts. 

The subprogram also reviews new rules and rule amendments for current markets ensuring compliance with core principles and regulatory standards maintains fairness and integrity, protects customers, and accommodates and fosters 

innovation and efficiency in self-regulation consonant with the Commission’s 

statutory mandates. The reviews consider complex new trading procedures and 

market structures that present novel issues and, in some cases, require amendments or interpretations by the Commission to facilitate implementation of the 

SRO’s rule changes. In this regard, deficiencies in the new programs or changes 

to existing programs increase the likelihood of trading abuses, inconsistent market oversight, or implementation of market or governance changes that create 

conflicts of interest or raise other regulatory concerns. 

The subprogram currently oversees an annual requirement to file a notice with 

the Commission regarding the market’s operating status under the exemption, as 

well as any information that should be updated, including information on 

whether the market performs a price-discovery function, whether trades are 

cleared, the exempt markets’ basis for believing participants are appropriate and 

whether complaints have been received. 

The subprogram reviews exempt market filings regarding whether their contract’s price-discovery function are being performed. If so, the subprogram 

would verify that appropriate market data is being disseminated. Furthermore, 

the subprogram reviews exempt markets on an ongoing basis to ascertain 
 FY 2009 President’s Budget & Performance Plan 

FY 2009 President’s Budget and Performance Plan⎯Market Oversight 59 

whether the market has an appropriate belief in the status of its traders, that 

complaints are being provided to the Commission, and that the market’s public 

representations do not imply that the market is regulated or overseen by the 

Commission. 

Market Compliance. The Market Compliance subprogram oversees the regulatory and oversight activities of all designated contract markets in furtherance of 

the Commission’s primary goals of ensuring customer protection and market integrity. The oversight program consists of examinations of exchange selfregulatory programs on an ongoing, routine basis to assess their continuing compliance with applicable core principles under the Act and the Commission’s regulations. The examinations result in rule enforcement review reports that evaluate 

an exchange’s compliance and surveillance capabilities. The reports set forth recommendations for improvement, where appropriate, with respect to an exchange’s trade practice surveillance, market surveillance, disciplinary, audit trail, 

record-keeping, and dispute resolution programs. These periodic reviews promote and enhance continuing effective self-regulation and ensure that exchanges 

rigorously enforce compliance with their rules. 

The Market Compliance subprogram also monitors trading activity on all exchanges in order to detect and prevent possible trading violations. This type of 

oversight is conducted through the use of automated surveillance and floor surveillance, and it fosters markets that are free of trading abuses. The identification 

of potential trading violations results in referrals to relevant exchanges and to the 

Commission’s Division of Enforcement. In addition, the Market Compliance subprogram reviews and analyzes proposed exchange trading platforms, rule enforcement programs, and disciplinary procedures in conjunction with new designated contract market applications. The subprogram also conducts special studies of exchange rules, procedures, and trading practices as issues arise affecting a 

particular exchange. This serves to promote orderly trading and facilitates open 

and competitive markets. 

The growth of electronic trading and increased competition has expanded the 

scope of trade-monitoring beyond the initial review of trading platforms. Reviews of front-end data entry systems and back-end account processing systems 

are being developed. Analysis of side-by-side trading in electronic and open outcry markets, as well as trading in related contracts on multiple exchanges, is becoming increasingly important. 

Electronic trading in the U.S. futures markets continues to grow. Electronic trading accounts for approximately 80 percent of total exchange volume. As part of 

the Commission’s overall mission to ensure market integrity and customer protection, it collects trade data from all U.S. futures exchanges and conducts investigations to detect possible trading abuses through the Exchange Database System (EDBS), which was developed in the mid-1980s. Presently, the Commission 

is developing a new trade surveillance system, TSS, to replace EDBS because it 

has not been upgraded since its inception. New technology will enhance staff’s 

ability to effectively detect and deter trade practice violations in a rapidly changing environment, especially with respect to electronic trading data, and will provide staff with greater efficiency and flexibility. Trade violation detection software will perform sophisticated pattern recognition and data mining to automate 

basic trade practice surveillance, and detect novel and complex abusive practices 

in today’s high-speed, high-volume global trading environment. TSS also will fill 

a vacuum in inter-market surveillance which only the Commission can address, 

e.g., New York Mercantile Exchange (NYMEX) and Chicago Board of Trade 

(CBOT) metals contracts, and side-by-side trading, e.g., simultaneous trading of 

a contract on a DCM’s floor and the DCM’s electronic trading platform. 
FY 2009 President’s Budget & Performance Plan

60 FY 2009 President’s Budget & Performance Plan ⎯Market Oversight 

The Market Compliance subprogram also is directly involved with emergency 

planning for the markets and Commission and business continuity in the event of 

an emergency. In this capacity, a Market Compliance staff member represents 

the Commission as a President’s Working Group (PWG) Duty Officer, serving as 

one of the Commission’s point persons for information flow and coordination 

between the Treasury, Federal Reserve, SEC, and CFTC in the event of market 

moves or physical events (terrorism, hurricanes, etc.) that could disrupt the 

normal functioning of the financial sector. Market Compliance staff also 

represent the Commission on the Financial and Banking Information 

Infrastructure Committee (FBIIC), a standing committee of the PWG that is 

charged with enhancing financial sector resiliency and improving coordination 

and communication among financial regulators and between regulators and private sector financial institutions. 

Consequence of Not Receiving Requested Level of Resources 

The growth in the number and different types of facilities that trade a wide array 

of derivatives products, including single-stock futures, futures on over-thecounter (OTC) instruments, contracts based on events or occurrences, as well as 

novel approaches to derivatives trading, requires an increased and more sophisticated level of surveillance, data collection, analysis, reporting, and research to 

conduct effective oversight and develop the necessary expertise to monitor these 

developments. Surveillance and oversight of exchanges and product design involves monitoring an increasing number of innovative and often complex futures 

and option contracts to detect or prevent potential problems, price manipulation, 

and other major market disruptions caused by abusive trading practices or contract design flaws. 

In FY 2009, the Market Oversight staff will be required to monitor a large and 

diverse array of markets to carry out the Commission’s oversight and surveillance 

program to deter and prevent price manipulation. The Commission anticipates 

that a large number of new contracts, including contracts based on complex financial derivatives, broad-based debt indexes and SFPs based on debt instruments, will be listed for trading on futures exchanges. The number and diversity 

of energy futures contracts is also expected to continue to grow, as is the complexity of conducting surveillance to detect manipulative strategies involving interrelated trading in energy futures, and over-the-counter and cash markets. 

Also, exchanges have indicated an interest in listing a large number of contracts, 

including new kinds of contracts, based on events that raise core issues regarding 

the extent of the Commission’s jurisdiction. Furthermore, the Commission anticipates that new technology and a number of new market plans and new trade 

execution methods will be adopted by exchanges. In large part, the growth in the 

number of exchanges, products, and product types results from the more flexible 

regulatory environment created by the CFMA. In addition, the development of 

new technology, side-by-side trading, and directly competitive markets creates 

the potential for new types of abuses across markets as well as abuses that utilize 

these newly available capabilities. 

One additional person will help the Market Oversight program meet its surveillance responsibilities with respect to the rapidly growing energy derivatives sector. This staff person will be able to focus on the complex issues and changing 

practices in the energy cash and derivatives markets. However, even with this 

additional resource, surveillance staff will be stretched to a level that puts at risk 

the Commission’s strategic goal to detect and deter price manipulation. Proper 

surveillance coverage of markets requires highly specialized and comprehensive 

knowledge of assigned markets. Without adequate staffing, each surveillance 

economist will be required to cover many markets, and the amount of expertise 

and attention that can be devoted to each market will suffer. 
 FY 2009 President’s Budget & Performance Plan 

FY 2009 President’s Budget and Performance Plan⎯Market Oversight 61 

Further, without adequate resources, the Market Oversight program of surveillance, exchange oversight, new exchange reviews, and studies to enhance understanding of the markets and new technology will not be commensurate with the 

growth in new types of exchanges, new trading execution methods in futures 

markets, and the initiation of trading in new, innovative complex products that 

require detailed analysis and raise substantive legal and policy questions. Thus, 

some price manipulations and abusive trading practices will go undetected or 

will be detected too late to permit amelioration or intervention. In particular, 

there is a substantial risk that abusive trading in energy futures markets will go 

undetected, potentially costing American consumers hundreds of millions of dollars in additional energy costs. Further, the efficacy of exchange self-regulatory 

programs will not be evaluated as effectively or on a timely basis. By lengthening 

the time between reviews, staff will not be able to ensure that exchanges are effectively fulfilling their self-regulatory responsibilities with respect to customer protection and market integrity and, as a result, traders will suffer direct economic 

harm from an increase in illegal trading activity. In addition, the Commission 

recently proposed acceptable practices for Core Principle 15 relating to exchange 

governance and conflicts of interest. Without adequate resources, staff will not 

be able to conduct necessary reviews to ensure that exchanges adequately address 

potential conflicts of interest between their self-regulatory functions and responsibilities and their commercial interests. 

Without adequate resources, staff may not be able to maintain its ability to 

promptly process requests from foreign boards of trade to permit direct trading 

access to U.S. market users. Any such delays would have a detrimental impact on 

the ability of U.S. market users to avail themselves of foreign liquidity pools and 

would generally impede the accelerating rate of globalization in the futures industry. 

In addition, staff may not be able to review all new contracts and rule change 

submissions for approval within statutory time frames, and will not be able to 

appropriately review all new contract and rule change certifications in a timely 

manner. In the absence of a timely new contract review, it is possible that a contract market might inadvertently list for trading a flawed contract that does not 

meet statutory or regulatory requirements. In the absence of a timely rule 

amendment review, a contract market might lead to a violation of the CEA or the 

Commission’s regulations. This could result in direct economic harm to producers, consumers, and other users of the underlying commodities and indirect harm 

to the economy as a whole because market prices may not accurately reflect supply and demand conditions. 

Without adequate resources, staff may not be able to maintain its ability to 

promptly process requests from foreign boards of trade to permit direct trading 

access to U.S. market users. Any such delays would have a detrimental impact on 

the ability of U.S. market users to avail themselves of foreign liquidity pools and 

would generally impede the accelerating rate of globalization in the futures industry. 

Finally, without adequate resources, the Market Oversight program cannot fully 

monitor exempt markets to determine proactively whether a price-discovery 

function is being performed. Absent such reviews, exempt markets would be operating in opaque environments where appropriate market data could be hidden 

from public view. This could lead to mispricing of certain commodities and an 

inefficient allocation of resources.
FY 2009 President’s Budget & Performance Plan

Table 24: Market Oversight Request by Subprogram 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

Market Compliance $7,822 34.00 $8,989 34.00 $1,167 0.00

Market & Product Review 3,605 17.00 4,173 17.00 568 0.00

Market Surveillance 11,348 49.00 13,292 50.00 1,944 1.00

TOTAL $22,775 100.00 $26,454 101.00 $3,679 1.00

Market & Product

Review

19%

Market 

Compliance

35%

Market 

Surveillance

46%

Figure 22: Market Oversight FY 2009 Budget by Subprogram 

62 FY 2009 President’s Budget & Performance Plan ⎯Market Oversight 
FY 2009 President’s Budget & Performance Plan

Table 25: Market Oversight Request by Goal 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

FY 2009 President’s Budget and Performance Plan⎯Market Oversight 63 

GOAL ONE: Protect the economic functions of the commodity futures and 

option markets. 

Outcomes 

1.1 Futures and option markets that accurately 

reflect the forces of supply and demand for the 

underlying commodity and are free of disruptive activity. 

$13,712 60.00 $16,026 61.00 $2,314 1.00

1.2 Markets that can be monitored to ensure 

early warning of potential problems or issues 

that could adversely affect their economic 

vitality. 

1,542 7.00 1,778 7.00 236 0.00

Subtotal Goal One $15,254 67.00 $17,804 68.00 $2,550 1.00

GOAL TWO: Protect market users and the public. 

None 

GOAL THREE: Foster open, competitive, and financially sound markets. 

Outcomes 

3.2 Commodity futures and option markets 

are effectively self-regulated. 

$5,239 23.00 $6,025 23.00 $786 0.00

3.3 Markets are free of trade practice abuses. 2,070 9.00 2,380 9.00 310 0.00

3.4 Regulatory environment responsive to 

evolving market conditions. 

212 1.00 245 1.00 33 0.00

Subtotal Goal Three $7,521 33.00 $8,650 33.00 $1,129 0.00

TOTAL $22,775 100.00 $26,454 101.00 $3,679 1.00

Goal Three

33%

Goal One

67%

Figure 23: Market Oversight FY 2009 Budget by Goal 

 
FY 2009 President’s Budget & Performance Plan 

64 FY 2009 President’s Budget & Performance Plan ⎯Clearing & Intermediary Oversight 

Clearing & Intermediary Oversight 

Total Budget: $19,278,000 70 FTEs 

Total Change: $ 2,890,000 2 FTEs 

All Other 

Programs

85%

Clearing & 

Intermediary

Oversight

15%

Clearing & 

Intermediary

Oversight

15%

All Other 

Programs

85%

Figure 24: Clearing & Intermediary Oversight 

Percentage of Total Budget Dollars 

Figure 25: Clearing & Intermediary Oversight 

Percentage of Total Budget FTEs 

Justification of the FY 2009 President’s Budget & Performance Plan 

In FY 2009, the Clearing and Intermediary Oversight (DCIO) program requests 

70 FTEs, an increase of two FTEs over the FY 2008 level. The requested level is 

necessary for the Clearing and Intermediary Oversight program to meet its regulatory oversight responsibilities. The two FTEs will be allocated to the Clearing 

Policy and Review subprogram. 

The Act, as amended in December 2000 by the CFMA, sets forth several purposes 

for which the Clearing and Intermediary Oversight program has direct responsibility: 

• To ensure the financial integrity of all transactions subject to the Act 

and the avoidance of systemic risk; and 

• To protect all market participants from fraudulent or other abusive 

sales practices and misuses of customer assets. 

The futures markets have grown rapidly since passage of the CFMA, with customer funds increasing by a factor of almost three between 2000 and 2007 to 

approximately $165 billion. In addition, Congress gave the Commission direct 

oversight responsibility over DCOs. DCOs, as the central counterparties in the 

futures markets, are key to the financial integrity of the futures markets by centralizing counterparty credit risk exposures. Their proper supervision requires 

the Commission to devote substantial resources to developing new competencies 

and implementing and executing new oversight programs. DCIO currently has 

direct supervisory responsibility for 11 DCOs. 

The DCIO program also requires substantial Commission resources to meet its 

oversight responsibility over SROs to ensure their fulfillment of responsibilities 

for monitoring and ensuring the financial integrity of market intermediaries, enforcing appropriate sales practice standards for the protection of customers and 

the public, and protecting customer funds. This is accomplished by conducting 

risk-based examinations of SROs, including the NFA, to evaluate their compliance programs over registrants with respect to applicable provisions of the Act 

and Commission regulations concerning requirements such as fitness, net capital, 
FY 2009 President’s Budget & Performance Plan

FY 2009 President’s Budget & Performance Plan ⎯Clearing & Intermediary Oversight 65 

segregation of customer funds, disclosure, reporting, sales practices, and related 

record-keeping. In addition, financial and risk surveillance of market intermediaries is conducted as part of the DCIO program of oversight of SROs and DCOs. 

The DCIO program responsibilities further include oversight of DCOs, intermediaries holding customer funds, and other market participants in their efforts to 

compete in dynamically evolving markets without sacrificing customer protections. Rapid market and product evolution will require that existing regulations 

be reviewed, refined, and applied in a manner that facilitates competitiveness 

while preserving core safeguards. The globalization of the markets, the blurring 

of distinctions among financial institutions, and the explosive growth of technology have made it essential that the Commission adapt its regulations and oversight approaches continually and appropriately to changing market conditions. 

Clearing Policy and Review. A Clearing Policy and Review subprogram level of 

17 FTEs in FY 2009 would represent an increase of two FTEs over the FY 2008 

level. The higher level is needed to enable the Clearing Policy and Review subprogram to address its current and additional responsibilities in a satisfactory 

manner, particularly with respect to the expansion and enhancement of financial 

and risk surveillance functions of the DCIO program, the execution of risk-based 

oversight and examination of DCOs, and assessment of new DCOs seeking to 

clear for domestic markets. 

The Clearing Policy and Review subprogram is responsible for reviewing applications for registration as DCOs and rule submissions submitted by DCOs; conducting risk-based oversight and examinations of DCOs to evaluate their compliance 

with applicable provisions of the Act and Commission regulations, including Core 

Principles with regard to financial resources, risk management, default procedures, protection of customer funds, and system safeguards. In addition, financial and risk surveillance of market intermediaries is conducted as part of the 

DCIO program of oversight of DCOs. 

Effective oversight must help to ensure financial integrity and adequate risk 

management within the FCMs and DCOs that are the backbone of the futures 

clearing system. This requires examination of the clearinghouses themselves and 

assessments of how well they, in turn, monitor the activities of their clearing 

members. The Clearing Policy and Review subprogram has the responsibility for 

monitoring, through both traditional supervisory methods and evolving financial 

surveillance efforts using automated quantitative analysis tools, the adequacy, 

reliability, and resilience of the clearing system (consisting of both DCOs and 

FCMs) to protect against: 1) the financial problems of a single market participant 

becoming systemic problems that could affect other market participants or other 

markets; 2) customer funds being misused or exposed to inappropriate risks of 

loss; and 3) abusive practices that harm customers and undermine market integrity. The Financial Surveillance unit was formed to focus, enhance, and expand 

the subprogram’s use of automated tools and systems to gather, combine, and 

analyze information from monthly financial reports filed by FCMs, large trader 

position information, and other relevant market and financial information so as 

to provide ongoing surveillance of actual or potential financial risks facing firms 

and clearinghouses and to anticipate emerging problems that may pose systemic 

risks. The unit acquired the responsibility of monitoring broad-based stockindex futures and security futures margins. The two FTEs allocated to the Clearing Policy and Review subprogram will be used to staff additional positions in the 

Financial Surveillance unit, and will enhance the unit’s capabilities to review and 

to assess risk management systems and address issues of risk associated with 

clearing organizations and their members. 

Audit and Financial Review. An Audit and Financial Review subprogram level of 

45 FTEs in FY 2009 would represent the same staffing as FY 2008 level. At this 
FY 2009 President’s Budget & Performance Plan

66 FY 2009 President’s Budget & Performance Plan ⎯Clearing & Intermediary Oversight 

staffing level, the Audit and Financial Review subprogram will be able to continue 

to accomplish its current core regulatory responsibilities. However, as markets 

continue to grow and market intermediaries continue to expand their futures related businesses, the Audit and Financial Review subprogram will be challenged 

to maintain oversight of market intermediaries at current staff levels, and the 

service provided by the Audit and Financial Review subprogram will not be as 

thorough as the service provided in the past. 

The Audit and Financial Review subprogram encompasses the activities of the 

chief accountant, who is responsible for, among other things, overseeing the financial surveillance programs of SROs; developing and interpreting Commission 

regulations related to minimum net capital and segregation requirements for 

FCMs; and overseeing the self-regulatory programs of NFA related to the regulation of market intermediaries in the managed funds area. 

Futures markets have experienced significant growth in recent years. One indication of the growth of the futures markets is the increasing amount of customer 

funds held by market intermediaries for trading on domestic and foreign futures 

markets. FCMs held approximately $61 billion of customer funds, on December 

31, 2000. Customer funds held by FCMs increased to approximately $165 billion, 

on November 30, 2007. In addition, with the passage of the CFMA of 2000, 

FCMs began to accept and hold customer funds for trading of retail off-exchange 

foreign currency futures contracts. On November 30, 2007, FCMs held approximately $1 billion of customer funds for retail off-exchange foreign currency 

transactions. With no increase in the staffing level for FY 2009, the Audit and 

Financial Review subprogram may have to reassess its regulatory oversight program and make appropriate adjustments to identify and focus available resources 

on areas of greatest risk to the financial integrity of market intermediaries and 

the protection of customer funds. 

Compliance and Registration. A Compliance and Registration subprogram level 

of eight FTEs in FY 2009 would represent the same staffing as the FY 2008 level. 

While this level would enable the Compliance and Registration subprogram to 

address its current responsibilities, in light of the increasing number, novelty, 

and uniqueness of those responsibilities, service will not be as thorough as the 

subprogram provided in the past. 

The Compliance and Registration subprogram is responsible for providing policy 

advice and recommendations to the Commission, other staff units, the public, 

and the industry concerning the activities of futures industry intermediaries with 

respect to, among other things, registration, disclosure, reporting, sales practices, 

and record-keeping. The subprogram is engaged in an ongoing regulatory modernization effort to keep the Commission’s regulatory framework abreast of market developments. This requires the subprogram to develop or modernize regulations and interpretations that are flexible, effective, and efficient, and that respond to further industry innovation and enhancements. Subprogram staff work 

closely with the staff of NFA and other industry groups to effectively address issues that arise in connection with the business practices of intermediaries. 

More specifically, in FY 2009, the ongoing responsibilities of the Compliance and 

Registration subprogram will include: 1) addressing regulatory issues and implementing a regulatory modernization program for intermediaries; 2) examining 

the regulations relating to, and working with the Enforcement program concerning firms engaged in, retail off-exchange forex transactions; 3) assisting in the 

Commission’s participation with the U.S. Treasury Department, the Financial 

Crimes Enforcement Network, and other financial regulators to develop and 

promulgate regulations to implement the anti-money laundering (AML) requirements of the USA PATRIOT Act; 4) continuing to effectively oversee the 

NFA and its fulfillment of CFTC-delegated responsibilities; 5) continuing to 
FY 2009 President’s Budget & Performance Plan

FY 2009 President’s Budget & Performance Plan ⎯Clearing & Intermediary Oversight 67 

evaluate the regulations covering registration of, and reporting and disclosure by, 

CPOs and CTAs, some of which may operate or advise “hedge funds;” 6) addressing any additional matters presented as a result of the current reauthorization 

process; 7) continuing to coordinate with the SEC with respect to the trading of 

SFPs, including addressing issues related to trading of foreign SFPs and foreign 

index products by U.S. customers; and 8) managing the Commission’s Part 30 

program, which helps to protect U.S. customers who trade on foreign boards of 

trade and through foreign intermediaries, and to preserve appropriate oversight 

capabilities for the Commission. 

Consequences of Not Receiving Requested Level of Resources 

The DCIO program must at all times maintain an effective supervisory system 

that is responsive to technological development, business changes, increasing 

globalization, increasing trading volume, and other evolutionary changes in the 

markets and the clearing process. 

Without the requested resources, the DCIO program will not meet its established 

and evolving responsibilities. The increased level of resources requested is necessary for the DCIO program to meet the responsibilities assigned to it by Congress 

through the CFMA and any further changes to the CEA resulting from the Commission’s current reauthorization process, and to help keep pace with the rapid 

growth in futures and option trading volume and the profound changes resulting 

from global competition, innovations in derivative contracts, innovations in 

clearing practices, new clearing organizations, advances in technology, and new 

market practices. The DCIO program also is responsible for overseeing that 

Commission registrants comply with the requirements of the USA PATRIOT Act, 

and the program staff expects that additional resources will be needed to address 

AML concerns. The volume and nature of retail off-exchange foreign currency 

transactions also will require increased resources. 

The consequence of not receiving the DCIO program’s requested level of resources is that the Clearing and Intermediary Oversight program would not be 

able to timely and adequately fulfill its oversight and review functions over DCOs, 

SROs, FCMs, IBs, CPOs, and CTAs. Without the requested resources, the DCIO 

program staff will not be able to conduct as many oversight examinations of 

SROs, DCOs, and other registrants or to review compliance and proper operation 

of SRO and DCO regulatory programs, thereby increasing the possibility of misappropriation or insolvency that could harm customers and consumers, compromise the integrity of the futures markets, and create systemic instability. 

Moreover, even at the requested level of resources, program areas such as foreign 

futures and options, as well as other compliance and investigative support activities performed by staff to maintain the integrity of the marketplace, may be subject to delay or postponement from time to time because a lack of available staff 

will make timely completion of work impossible. In addition, this constraint may 

affect the DCIO program’s ability to provide necessary and complete guidance as 

promptly and effectively as possible to industry professionals, customers, and 

other market users regarding compliance with an increasingly changing business 

and regulatory environment. 

 
FY 2009 President’s Budget & Performance Plan

Table 26: Clearing & Intermediary Oversight Request by Subprogram 

 FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

 Clearing Policy & Review $3,071 15.00 $4,021 16.50 $950 1.50

 Compliance & Registration 2,312 8.00 2,631 8.50 319 0.50

Audit & Financial Review 11,005 45.00 12,626 45.00 1,621 0.00

TOTAL $16,388 68.00 $19,278 70.00 $2,890 2.00

Compliance &

Registration

14%

Audit & Financial

Review

65%

Clearing Policy &

Review

21%

Figure 26: Clearing & Intermediary Oversight FY 2009 Budget by Subprogram 

68 FY 2009 President’s Budget & Performance Plan ⎯Clearing & Intermediary Oversight 
 FY 2009 President’s Budget & Performance Plan

Table 27: Clearing & Intermediary Oversight Request by Goal 

 FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

FY 2009 President’s Budget & Performance Plan ⎯Clearing & Intermediary Oversight 69 

GOAL ONE: Protect the economic functions of the commodity futures and option 

markets. 

Outcomes 

1.1 Futures and option markets that 

accurately reflect the forces of supply and demand for the underlying 

commodity and are free of disruptive activity. 

$449 2.00 $525 2.00 $76 0.00

1.2 Markets that can be monitored 

to ensure early warning of potential 

problems or issues that could adversely affect their economic vitality. 

450 2.00 524 2.00 74 0.00

Subtotal Goal One $899 4.00 $1,049 4.00 $150 0.00

GOALTWO: Protect market users and the public.

Outcomes 

2.1 Violations of Federal commodities laws are detected and prevented. $1,571 6.50 $1,680 6.00 $109 -0.50

2.2 Commodities professionals meet 

high standards. 

 4,075 16.50 4,612 16.50 537 0.00

2.3 Customer complaints against 

persons or firms falling within the 

jurisdiction of the Commodity Exchange Act are handled effectively. 

 245 1.00 280 1.00 35 0.00

Subtotal Goal Two $5,891 24.00 $6,572 23.50 $681 -0.50

GOAL THREE: Foster open, competitive, and financially sound markets. 

Outcomes 

3.1 Clearing organizations and firms 

holding customer funds have sound 

financial practices. 

$2,678 11.50 $3,577 13.50 $899 2.00

3.2 Commodity futures and option 

markets are effectively selfregulated. 

5,301 22.00 6,099 22.00 798 0.00

3.4 Regulatory environment responsive to evolving market conditions. 1,619 6.50 1,981 7.00 362 0.50

Subtotal Goal Three $9,598 40.00 $11,657 42.50 $2,059 2.50

TOTAL $16,388 68.00 $19,278 70.00 $2,890 2.00

Goal Three

61%

Goal Two

34%

Goal One

5%

Figure 27: Clearing & Intermediary Oversight FY 2009 Budget by Goal 
FY 2009 President’s Budget & Performance Plan

Enforcement 

Total Budget: $34,708,000 121 FTEs 

Total Change: $ 4,717,000 2 FTEs 

All Other 

Programs

73%

Enforcement

27%

All Other 

Programs

75%

Enforcement

25%

Figure 28: Enforcement Percentage 

of Total Budget Dollars 

Figure 29: Enforcement Percentage 

of Total Budget FTEs 

Justification of the FY 2009 President’s Budget & Performance Plan 

The primary responsibility of the Enforcement program is to police for conduct 

that violates the CEA and Commission regulations. Such conduct undermines the 

integrity of the market and the confidence of market participants. 

In FY 2009, the Enforcement program’s FTE allocation level is 121, an increase of 

FTEs over the FY 2008 appropriation level. These FTEs are vitally needed by the 

Enforcement program to address the following developments: 

• Trading strategies have become more complex, crossing product lines and 

markets, which has required the Enforcement program to expand the scope 

of its investigations concerning fraud, market manipulation, and other abusive trading practices. A striking example is the program’s intensive investigations and litigations involving energy-related market abuses. Due to their 

complexity, the Enforcement program must devote significantly more resources to these investigations in order to analyze voluminous trading data, 

hire experts, and examine the activities of multiple energy market participants. 

• The Enforcement program anticipates an increase in the number of large, 

complex investigations and trials during FY 2008 and FY 2009. To adequately address these complex matters will require the Enforcement program 

to commit expenditures, especially with respect to transcripts and experts 

that exceed its historical usage. 

• Matters involving fraud by registered and unregistered pool operators and 

trading advisors typically require immediate action using the Enforcement 

program’s “quick strike” capability to freeze assets belonging to customers 

and preserve books and records.17 The Enforcement program anticipates 

that it will need to devote additional resources to investigate CPO and CTA 

activity. 

 

17 “Quick-strike” enforcement actions are those that the Commission files within four months of opening an investigation. 

70 FY 2009 President’s Budget & Performance Plan ⎯Enforcement 
FY 2009 President’s Budget & Performance Plan

FY 2009 President’s Budget & Performance Plan ⎯Enforcement 71 

• The dramatic increase in electronic trading poses additional challenges to the 

Enforcement program in terms of potential novel violations (or adaptations 

of traditional trade practice violations) and potential audit trail gaps. These 

challenges will require additional resources not only for investigation and 

prosecution, but also for Enforcement staff training. 

• The Enforcement program continues to battle the pervasive fraudulent sale 

of illegal, off-exchange futures and option foreign currency contracts to retail 

customers. The Enforcement program also focuses resources against other 

types of off-exchange fraud. 

Responding to Violative Conduct. When an enforcement investigation indicates 

that violative conduct may have occurred, the Commission either files an administrative or civil injunctive enforcement action against the alleged wrongdoers. In 

administrative actions, wrongdoers found to have violated the CEA or Commission regulations or orders can be prohibited from trading and, if registered, have 

their registrations suspended or revoked. Violators also can be ordered to: cease 

and desist from further violations; pay civil monetary penalties of up to $130,000 

per violation, or triple their monetary gain, and pay restitution to those persons 

harmed by the misconduct. In civil injunctive actions, defendants can be enjoined 

from further violations, their assets can be frozen, and their books and records 

can be impounded. Defendants also can be ordered to disgorge all illegally obtained funds, make full restitution to customers, and pay civil penalties. 

As detailed above, alleged violations prosecuted by the Enforcement program 

may arise from commodity futures or option trading on U.S. exchanges, from 

manipulative trading in the OTC markets that affect, or tend to affect, the futures 

or options markets, or from the sale of illegal futures or option contracts not 

traded on trading facilities designated or registered by the Commission. The Enforcement program addresses various types of violative conduct including conduct that threatens the economic functions of the markets. 

Protecting Market Users. The Enforcement program works to protect market 

users and the public by promoting compliance with and deterring violations of 

the CEA and Commission regulations. The bulk of the work in this area involves 

investigating and prosecuting enforcement actions in matters involving fraud and 

imposing sanctions against wrongdoers. These actions send a message to industry professionals about the kinds of conduct that will not be tolerated. 

The Commission also pursues actions involving false or misleading advertising. 

Over the past several years, there has been substantial false and deceptive advertising of commodity-related investment products, often by unregistered persons 

and entities through various forms of mass media, such as cable television, radio, 

and the Internet. The Enforcement program has worked aggressively to detect 

and stop such advertising by filing enforcement actions. Similarly, the Enforcement program pursues cases charging illegal futures and options, often in forex 

and precious metals. Such cases typically involve unregistered “boiler rooms” 

selling illegal futures contracts and options to the general public. Again, the most 

likely victims are individual retail investors. 

Supervision and Compliance Failures. The Enforcement program investigates 

and prosecutes cases involving supervision and compliance failures by registrants 

handling customer business. Such violations can threaten the financial integrity 

of registered firms holding customer funds and can, in certain circumstances, 

threaten the financial integrity of clearing organizations. Diligent supervision by 

registered firms also protects markets from abusive trading practices, including 

manipulation and wash sales. 
FY 2009 President’s Budget & Performance Plan

72 FY 2009 President’s Budget & Performance Plan ⎯Enforcement 

Cooperative Enforcement Efforts. The Enforcement program works cooperatively with both domestic and foreign authorities to maximize its ability to detect, 

deter, and bring sanctions against wrongdoers involving U.S. markets, registrants, and customers. 

On the domestic level, this includes sharing information with, and on occasion 

providing testimony or other assistance to, state regulators and other Federal 

agencies, such as the DOJ, the Federal Bureau of Investigation, the SEC, the 

FERC, and Federal banking regulators. The Commission may also file injunctive 

actions jointly with state authorities with concurrent jurisdiction. These cooperative efforts bolster the effectiveness of the Enforcement program by allowing it to 

investigate and litigate more efficiently. 

Similarly, in the international realm, the Commission has entered into more than 

a dozen formal information-sharing arrangements and numerous other informal 

arrangements with foreign authorities. These arrangements permit information 

sharing and cooperative assistance among regulators. Such arrangements benefit 

all nations involved and greatly enhance the ability of the Enforcement program 

to investigate matters that involve foreign entities and/or individuals, or transfers 

of tainted funds to foreign jurisdictions. 

Consequences of Not Receiving Requested Level of Resources 

The markets continue to grow in volume and complexity as increasingly sophisticated instruments are employed across markets. An ever-larger segment of the 

population has money at risk in the futures markets, either directly or indirectly 

through pension funds or ownership of shares in publicly held companies that 

participate in the markets. 

The Enforcement program will utilize the FTEs allocated for FY 2009 in targeting 

certain program areas, for example: 1) allegations of manipulation, trade practice 

violations, and false reporting; 2) fraud and other illegal conduct committed by 

registered entities; 3) off-exchange fraud, involving illegal futures and options 

contracts by, among others, unregulated boiler rooms and bucket shops targeting 

the general public; and 4) unregistered and registered CTA/CPO fraud. The allocated FTEs also will enable the Enforcement program to continue its commitment both to cooperative enforcement activities. 

Without these FTE resources, the Enforcement program will not meet established 

responsibilities. Without adequate staffing, the Enforcement program must be 

more selective in the matters it investigates, potentially leaving serious wrongdoing unaddressed. Furthermore, investigations will take longer to complete, particularly when increasing litigation draws resources away from investigations. 

Likewise, domestic and international cooperative enforcement activities will be 

undermined, adversely affecting not only the mission of the Commission, but also 

that of its domestic and international counterparts. 

Enforcement staff are operating at full capacity and shifting resources from important investigations to ongoing and future litigation demands, which limit the 

ability to pursue new investigations. If the Enforcement program is unable to 

bring actions because of insufficient resources, other authorities will not be available to step in and fill the void. SROs can take action only against their own 

members, and their sanctions cannot affect conduct outside their jurisdiction or 

markets. In addition, other Federal regulators and state regulators have limited 

jurisdiction and expertise in handling futures-related misconduct. Finally, while 

criminal prosecutions by the DOJ are an important adjunct to effective enforcement of the CEA, cooperative enforcement still requires the active use of Commission FTEs to assist criminal authorities in their prosecutions. 
FY 2009 President’s Budget & Performance Plan

FY 2009 President’s Budget & Performance Plan ⎯Enforcement 73 

Table 28: Enforcement Request 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

Enforcement $29,991 119.00 $34,708 121.00 $4,717 2.00

TOTAL $29,991 119.00 $34,708 121.00 $4,717 2.00
FY 2009 President’s Budget & Performance Plan

Table 29: Enforcement Request by Goal 

FY 2008 FY 2009 Change 

 $ (000) FTE $ (000) FTE $ (000) FTE

74 FY 2009 President’s Budget & Performance Plan ⎯Enforcement 

GOAL ONE: Protect the economic functions of the commodity futures and option markets. 

Outcomes 

1.1 Futures and option markets that 

accurately reflect the forces of supply 

and demand for the underlying commodity and are free of disruptive activity. 

$12,560 49.84 $14,544 50.71 $1,984 0.87

1.2 Markets are effectively and efficiently monitored to ensure early warning of potential problems or issues that 

could adversely affect their economic 

vitality. 

422 1.68 491 1.71 69 0.03

Subtotal Goal One $12,982 51.52 $15,035 52.42 $2,053 0.90

GOAL TWO: Protect market users and the public. 

Outcomes 

2.1 Violations of Federal commodities 

laws are detected and prevented. 

$13,470 53.44 $15,579 54.31 2,109 0.87

2.2 Commodities professionals meet 

high standards. 

141 0.56 164 0.57 23 0.01

Subtotal Goal Two $13,611 54.00 $15,743 54.88 $2,132 0.88

GOAL THREE: Foster open, competitive, and financially sound markets. 

Outcomes 

3.1 Clearing organizations and firms 

holding customer funds have sound 

financial practices. 

$2,541 10.08 $2,945 10.27 $404 0.19

3.3 Markets are free of trade practice 

abuses. 

353 1.40 411 1.43 58 0.03

3.4 Regulatory environment responsive 

to evolving market conditions. 

504 2.00 574 2.00 70 0.00

Subtotal Goal Three $3,398 13.48 $3,930 13.70 $532 0.22

TOTAL $29,991 119.00 $34,708 121.00 $4,717 2.00

Goal Three

11%

Goal Two

46%

Goal One

43%

Figure 30: Enforcement FY 2009 Budget by Goal 
FY 2009 President’s Budget & Performance Plan

Office of the Chief Economist 

Total Budget: $ 2,851,000 10 FTEs 

Total Change: $ 579,000 1 FTE 

Chief 

Economist

2%

All Other 

Programs

98%

Chief 

Economist

2%

All Other 

Programs

98%

Figure 31: Chief Economist 

Percentage of Total Budget Dollars 

Figure 32: Chief Economist 

Percentage of Total Budget FTEs 

Justification of the FY 2009 President’s Budget & Performance Plan 

As innovation in the futures and option markets continues, the ability of staff to 

conduct thorough market research is vital to achieving Commission goals. Innovations in trading technology and trading instruments create significant regulatory challenges that require economic research and analysis in the form of: 

• Participation in the development of flexible and effective regulatory responses to evolving market conditions; 

• Review and analysis of new market trading structures and new trading products; 

• Continuous support to the Commission’s Enforcement program in the form 

of economic and statistical analysis or expert testimony to promote compliance with and deter violations of commodity laws; 

• Development of educational materials on futures and option trading for dissemination to producers, market users, and the general public; and 

• Review and analysis of the futures industry’s financial safeguard system, including evaluation of risk management processes employed by DCOs and intermediaries and evaluation of new clearing processes. 

In FY 2009, the Office of the Chief Economist (OCE) program requests 10 FTEs, 

one additional FTE over that requested in the FY 2008 budget. 

The growth in the number of markets that trade and clear a wider array of complex derivative products requires analysis and research to determine the appropriate regulatory approach to these markets and products. In FY 2009, staff of 

the OCE will be required to monitor a large and diverse array of markets, including new energy products, new types of “event-related” markets, such as corporate 

actions, derivatives on economic statistics, derivatives on credit events, derivatives on weather and derivatives on exchange-traded commodity funds. The 

Commission anticipates that a large number of these contracts will be listed for 

trading, both on futures and securities exchanges. In addition, management and 

parsing of the huge amounts of trading data, both transaction data and order 

FY 2009 President’s Budget & Performance Plan ⎯Office of the Chief Economist 75 
FY 2009 President’s Budget & Performance Plan

76 FY 2009 President’s Budget & Performance Plan ⎯Office of the Chief Economist 

book data, as a result of the continued expansion of electronic trading and the 

noted increase in products traded requires involvement of OCE staff as principal 

users of such data. 

With the requested level of resources, analysis to enhance understanding of the 

markets will keep pace with, but will, in very few cases, anticipate the growth in 

new types of exchanges and the initiation of trading in new products. Moreover, 

at the requested level, the staff will be able to monitor most but not all developments in derivatives trading and market innovations. In this regard, innovations 

in technology and derivative instruments and trading methods in futures markets 

create many challenging economic and regulatory issues. The performance of 

derivative markets has a potentially large impact on the stability of international 

and domestic financial markets. Market research and effective monitoring of 

these developments help ensure that the Commission has in place sound regulatory policies to reduce systemic risk in financial markets and protect the economic function of the markets without undermining innovation and the development of new approaches to risk management. 

Consequence of Not Receiving Requested Level of Resources 

If the OCE does not receive the requested level of resources, it will not be able to 

conduct market research and analysis commensurate with the growth in new 

types of exchanges, new trading execution methods in futures markets, and the 

initiation of trading in the array of new products noted above. Moreover at a 

lower level of resources, staff efforts to monitor developments in derivatives trading and market innovation will be delayed. This will undermine the ability of the 

Commission to keep its regulatory policies in line with new developments in the 

industry, which could impede innovation, lead to systemic risk in financial markets, and adversely affect the economic function of the markets. 

The development of new technology brought about by electronic trading in existing yet growing markets and in new markets generate huge amounts of trading 

data. This requires additional management of the data and, importantly, the 

ability to effectively analyze the data. Without the additional resources, the OCE 

will be unable to keep pace with this growth, meet its established and developing 

responsibilities, stay abreast of market developments, and would be unable to 

adequately provide effective and timely support to the other divisions within the 

Commission. Also, the lack of additional resources will undermine the ability of 

OCE to monitor and analyze the large and diverse array of markets, including 

new energy products, new types of “event-related” markets, such as corporate 

actions, derivatives on economic statistics, and derivatives on exchange-traded 

commodity funds. 

Without the requested level of resources OCE will be unable to provide effective 

economic and statistical analysis to the Enforcement and Market Surveillance 

programs and review the financial safeguard system. This may result in substantial time delays in critical market research, which may adversely affect the economic function of the markets and may lead to systemic risk across the broader 

financial market system. 
FY 2009 President’s Budget & Performance Plan

FY 2009 President’s Budget & Performance Plan ⎯Office of the Chief Economist 77 

Table 30: Office of the Chief Economist Request 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

Chief Economist $2,272 9.00 $2,851 10.00 $579 1.00

TOTAL $2,272 9.00 $2,851 10.00 $579 1.00

 
FY 2009 President’s Budget & Performance Plan

78 FY 2009 President’s Budget & Performance Plan ⎯Office of the Chief Economist 

Table 31: Office of the Chief Economist Request by Goal 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

GOAL ONE: Protect the economic functions of the commodity futures and 

option markets. 

Outcomes 

1.1 Futures and option markets that 

accurately reflect the forces of supply 

and demand for the underlying commodity and are free of disruptive activity. 

$1,262 5.00 $1,585 5.56 $323 0.56

1.2 Markets that can be monitored to 

ensure early warning of potential problems or issues that could adversely affect 

their economic vitality. 

1,010 4.00 1,266 4.44 256 0.44

Subtotal Goal One $2,272 9.00 $2,851 10.00 $579 1.00

GOAL TWO: Protect market users and the public. 

None. 

GOAL THREE: Foster open, competitive, and financially sound markets. 

None 

TOTAL $2,272 9.00 $2,851 10.00 $579 1.00
FY 2009 President’s Budget & Performance Plan

Office of Proceedings 

Total Budget: $ 2,543,000 10 FTEs 

Total Change: $ 566,000 1 FTE 

Proceedings

2%

All Other 

Programs

98%

All Other 

Programs

98%

Proceedings

2%

Figure 33: Proceedings Percentage of 

Total Budget Dollars 

Figure 34: Proceedings Percentage of 

Total Budget FTEs 

Justification of the FY 2009 President’s Budget & Performance Plan 

The Office of Proceedings is responsible for providing an inexpensive, impartial, 

and expeditious forum for handling customer complaints against persons or 

firms registered under the CEA. In FY 2009, the Office of Proceedings program 

requests 10 FTEs, an increase of one FTE over the FY 2008 level. 

The Complaints section of the Office of Proceedings receives and prepares customer claims for action by appropriate officials, dismissing those that are outside 

the jurisdiction of the Commission or are pending in another forum. The Hearings section includes judgment officers (JOs), who decide reparations complaints 

in voluntary and summary proceedings and administrative law judges (ALJs), 

who conduct formal proceedings. 

The ALJs also decide administrative enforcement cases brought by the Commission against persons or firms responsible for violating the CEA or Commission 

regulations. 

The Office of Proceedings receives 60 cases per year and will respond to 5,500 

telephone inquiries and requests. Inquiries from members of the public include 

questions from those considering investing in commodity futures and options, 

and questions about specific firms and whether or not they have had customer 

complaints filed against them. Information is also provided about how to utilize 

the CFTC complaints process. 

The Office of Proceedings maintains a case-tracking system that tracks the progress of each case from receipt of complaint through disposition, including any 

appeal to the Commission or Federal court. The case-tracking system not only 

assists with case management within the Commission, but it also enables the Office of Proceedings to provide current information on the status of cases in response to public inquiries. 

The Office of Proceedings maintains the Reparations Sanctions in Effect List

publication, a record of individuals and firms that have not paid reparations 

awards. This document is published annually and as needed. The office also 

FY 2009 President’s Budget & Performance Plan ⎯Office of Proceedings 79 
FY 2009 President’s Budget & Performance Plan

80 FY 2009 President’s Budget & Performance Plan ⎯Office of Proceedings 

maintains the Administrative Sanctions in Effect List publication, a record of 

individuals and firms that have outstanding against them enforcement sanctions, 

such as trading prohibitions. This document is published annually and updated 

quarterly. These lists are made available to the public on the Commission’s Web 

site and are distributed to the exchanges via e-mail, the NFA, the Futures Industry Association, the National Association of Securities Dealers, and the SEC for 

use in their compliance efforts. 

Consequence of Not Receiving Requested Level of Resources 

The Office of Proceedings’ ability to perform its activities in a timely fashion depends on the requested level. The Office has been without a Director since February 2007. If the requested level is not received, the Office of Proceedings will 

continue to operate without the strategic direction and oversight that a Director 

would bring to the Office. This, in turn, would result in a continuing lack of coordination with the other customer protection programs of the Commission and 

NFA and an inability to address serious paper record-keeping issues, as well as an 

inability to effectively plan for and manage electronic filing and record-keeping. 

In addition, the Office will not be able to effectively plan for and manage the transition to eLaw, the electronic litigation support package that currently supports 

the Division of Enforcement. This will, in turn, hurt the long-range ability of the 

program to effectively serve the Commission and the public. Finally, the lack of a 

Director impacts the ability of the Office to provide more and better information 

to the public through the agency’s Web site and through other public information 

forums. 
FY 2009 President’s Budget & Performance Plan

Table 32: Proceedings Request by Subprogram 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

Enforcement $439 2.00 $509 2.00 $70 0.00

Reparations 1,538 7.00 2,034 8.00 496 1.00

TOTAL $1,977 9.00 $2,543 10.00 $566 1.00

Enforcement

20%

Reparations

80%

Figure 35: Proceedings FY 2009 Budget by Subprogram 

FY 2009 President’s Budget & Performance Plan ⎯Office of Proceedings 81 
FY 2009 President’s Budget & Performance Plan

82 FY 2009 President’s Budget & Performance Plan ⎯Office of Proceedings 

Table 33: Proceedings Request by Goal 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

GOAL ONE: Protect the economic functions of the commodity futures and 

option markets. 

None 

GOAL TWO: Protect market users and the public.

Outcomes 

2.1 Violations of Federal commodities laws 

are detected and prevented. 

$659 3.00 $763 3.00 $104 0.00

2.2 Require commodities professionals to 

meet high standards. 

0 0.00 0 0.00 0 0.00

2.3 Customer complaints against persons or 

firms falling within the jurisdiction of the 

Commodity Exchange Act are handled effectively and expeditiously. 

1,318 6.00 1,780 7.00 462 1.00

Subtotal Goal Two $1,977 9.00 $2,543 10.00 $566 1.00

GOAL THREE: Foster open, competitive, and financially sound markets. 

None 

TOTAL $1,977 9.00 $2,543 10.00 $566 1.00

 
FY 2009 President’s Budget & Performance Plan

Office of the General Counsel 

Total Budget: $ 9,108,000 32 FTEs 

Total Change: $ 1,353,000 1 FTE 

General

Counsel

7%

All Other 

Programs

93%

General

Counsel

7%

All Other 

Programs

93%

Figure 36: Percentage of 

Total Budget Dollars 

Figure 37: Percentage of 

Total Budget FTEs 

Justification of the FY 2009 President’s Budget & Performance Plan 

The Office of General Counsel (OGC) provides legal services and support to the 

Commission and its programs. These services include: 1) engaging in defensive, 

appellate, and amicus curiae litigation; 2) assisting the Commission in the performance of its adjudicatory functions; 3) providing legal advice and support for 

Commission programs; 4) drafting and assisting other program areas in preparing Commission regulations; 5) interpreting the CEA; 6) providing advice on legislative and regulatory issues; and 7) providing exemptive, interpretive, and noaction letters and opinions to the public. In FY 2009, the OGC program requests 

32 FTEs, an increase of one FTE over the FY 2008 level. 

OGC is the legal advisor to the Commission, and a large portion of its workload is 

reactive in nature. The Office: 

• Reviews all substantive regulatory, legislative, and administrative matters 

presented to the Commission, and advises the Commission on the application 

and interpretation of the CEA and other pertinent administrative and legislative issues; 

• Assists the Commission in performing its adjudicatory functions through its 

Opinions Program; 

• Represents the Commission in appellate litigation and certain trial-level 

cases, including bankruptcy cases involving futures industry professionals; 

• Provides legal support to Commission administrative programs, such as 

compliance with the Freedom of Information, Privacy, Government in the 

Sunshine, Regulatory Flexibility, Paperwork Reduction, and Federal Advisory 

Committee Acts; 

• Monitors, reviews, and comments on proposed legislation affecting the 

Commission or the futures industry, prepares draft legislation as requested 

by members of Congress or their staff, and provides liaison with other Federal regulators as necessary on specific legislative projects; 

• Provides staff support to the PWG on Financial Markets; 

FY 2009 President’s Budget & Performance Plan ⎯Office of the General Counsel 83 
FY 2009 President’s Budget & Performance Plan

84 FY 2009 President’s Budget & Performance Plan ⎯Office of the General Counsel 

• Counsels other Commission staff on legal aspects of various issues arising 

during the course of Commission business; 

• Provides written interpretations of Commission statutory and regulatory authority to members of the public and, where appropriate, provides exemptive, 

interpretive, and no-action letters to regulatees and potential regulatees of 

the Commission; 

• Advises the Commission on personnel, labor, contract, and employment law 

matters, including cases arising under Title VII of the Civil Rights Act of 1964 

and other antidiscrimination statutes, and Merit Protection Board cases arising under the Civil Service Reform Act of 1978; 

• Advises the Commission with respect to all matters related to the Commission’s ethics standards and compliance with its Code of Conduct, as well as 

with government-wide ethics regulations promulgated by the Office of Government Ethics; and 

• Advises the Commission with respect to all matters related to the Freedom of 

Information Act, and responds to requests for non-public Commission records, as well as continuing to handle all appeals from initial determinations 

regarding requests for such records. 

OGC’s activities, programs, and support contribute to all of the outcomes and 

functions of the Commission and have a direct and significant impact on the ability of the Commission to perform its mission. In particular, OGC’s services and 

expertise are increasingly in demand as a consequence of added enforcement and 

other litigation activities in, among other areas, energy commodities and collective investment vehicles (such as commodity pools and hedge funds) that now 

play an expanding role in nearly every market that impacts the Commission’s 

mission. Moreover, exchange-traded contracts and other newer derivatives platforms continue to experience explosive growth and, as a consequence of the flowthrough from increased activities in these markets, the Commission's surveillance 

and enforcement resources are increasingly stressed. This heightened deployment of enforcement resources, in turn, spurs demand for readily available legal 

services from experienced legal talent within OGC. As a direct consequence, 

OGC's appellate practice and its other litigation dockets (including subpoena enforcement, complex document review, and personnel-related matters) require 

added resources. 

Commission Reauthorization 

The authorization for the Commission’s appropriations expired at the end of 

FY 2005. The Commission’s seventh reauthorization remains pending before 

Congress, and is raising some particularly complex issues, as Congress wrestles 

with energy and retail foreign currency oversight. Also, this is the first reauthorization since the enactment of the CFMA, which is further complicating congressional deliberations. OGC will continue to assist the Commission in analyzing, 

and taking the necessary actions to implement, the legislative proposals that are 

enacted in reauthorization. 

Consequence of Not Receiving Requested Level of Resources 

The CEA provides that the Commission “shall have a General Counsel [who] shall 

report directly to the Commission and serve as its legal advisor.” In that role, 

OGC reviews all proposed Commission actions to assure their legal sufficiency 

under the CEA and any other applicable statues, e.g., the Administrative Procedure Act, the Freedom of Information Act, and others. OGC is the Commission’s 

appellate advocate and also acts as the Commission’s trial lawyer in a range of 

administrative proceedings and Federal district court matters. It assists the 

Commission in resolving adjudicatory matters, reviews proposed legislation for 
FY 2009 President’s Budget & Performance Plan

FY 2009 President’s Budget & Performance Plan ⎯Office of the General Counsel 85 

its likely impact on the futures industry, and suggests needed legislative reforms. 

In addition, the General Counsel serves as the Commission’s Designated Agency 

Ethics Officer and in that capacity assures that the agency, the Commission, and 

its employees comply with Federal ethics rules and regulations. 

The volume and complexity of the futures and derivatives markets have grown 

exponentially, while OGC has shrunk. A combination of staff attrition through 

retirements and resignations, and the lingering effects of prior hiring freezes, left 

OGC with only 14 staff attorneys during part of 2007. The easing of restrictions 

on hiring, plus new positions previously authorized, have enabled OGC to begin 

rebuilding its ranks. OGC seeks authorization for one additional position in FY 

2009. OGC anticipates utilizing that position to enhance staff expertise in the 

areas of antitrust and/or bankruptcy, having recently lost both its senior bankruptcy expert and its principal antitrust attorney. 
FY 2009 President’s Budget & Performance Plan

86 FY 2009 President’s Budget & Performance Plan ⎯Office of the General Counsel 

Table 34: General Counsel Request 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

General Counsel $7,755 31.00 $9,108 32.00 $1,353 1.00

TOTAL $7,755 31.00 $9,108 32.00 $1,353 1.00
FY 2009 President’s Budget & Performance Plan

Table 35: General Counsel Request by Goal 

FY 2008 FY 2009 Change 

 $ (000) FTE $ (000) FTE $ (000) FTE

GOAL ONE: Protect the economic functions of the commodity futures and option markets. 

Outcomes 

1.1 Futures and option markets that accurately reflect the forces of supply and demand for the underlying commodity and 

are free of disruptive activity. 

$1,548 6.19 $1,813 6.37 $265 0.18

1.2 Markets that can be monitored to ensure early warning of potential problems or 

issues that could adversely affect their 

economic vitality. 

106 0.42 123 0.43 17 0.01

FY 2009 President’s Budget & Performance Plan ⎯Office of the General Counsel 87 

Subtotal Goal One $1,654 6.61 $1,936 6.80 $282 0.19

GOAL TWO: Protect market users and the 

public. 

Outcomes 

2.1 Violations of Federal commodities laws 

are detected and prevented. 

$2,454 9.81 $2,880 10.12 $426 0.31

2.2 Commodities professionals meet high 

standards. 

485 1.94 572 2.01 87 0.07

2.3 Customer complaints against persons 

or firms falling within the jurisdiction of 

the Commodity Exchange Act are handled 

effectively and expeditiously. 

1,206 4.82 1,415 4.97 209 0.15

Subtotal Goal Two $4,145 16.57 $4,867 17.10 $722 0.53

GOAL THREE: Foster open, competitive, and financially sound 

markets. 

Outcomes 

3.1 Clearing organizations and firms holding customer funds have sound financial 

practices. 

$494 1.97 $583 2.05 $89 0.08

3.2 Commodity futures and option markets 

are effectively self-regulated. 

210 0.84 245 0.86 35 0.02

3.3 Markets are free of trade practice 

abuses. 

472 1.89 558 1.96 86 0.07

3.4 Regulatory environment responsive to 

evolving market conditions. 

780 3.12 919 3.23 139 0.11

Subtotal Goal Three $1,956 7.82 $2,305 8.10 349 0.28

TOTAL $7,755 31.00 $9,108 32.00 $1,353 1.00

Goal Three

25%

Goal Two

54%

Goal One

21%

Figure 38: General Counsel FY 2009 Budget by Goal 
FY 2009 President’s Budget & Performance Plan

Executive Direction & Support 

Total Budget: $35,058,000 131 FTEs 

Total Change: $ 4,950,000 2 FTEs 

All Other 

Programs

73%

Executive

Direction

27%

All Other 

Programs

72%

Executive

Direction 

28%

Figure 39: Percentage of 

Total Budget Dollars 

Figure 40: Percentage of 

Total Budget FTEs 

Justification of the FY 2009 President’s Budget & Performance Plan 

Agency Direction. The Commission develops and implements agency policy in 

furtherance of the purposes of the CEA. This policy is designed to foster the financial integrity and economic utility of commodity futures and option markets 

for hedging and price discovery, to conduct market and financial surveillance, 

and to protect the public and market participants against manipulation, fraud, 

and other abuses. Agency Direction is administered by the Chairman and Commissioners and includes the following offices of the Chairman: 1) External Affairs; 2) the Secretariat; 3) the Inspector General; and 4) International Affairs.

The Commission continues to implement the CFMA. The legislation, enacted in 

December 2000: 1) repealed the ban on single-stock futures and implemented a 

regulatory framework for these instruments based on the agreement between the 

Commission and SEC; 2) enacted the principal provisions of the Commission’s 

new regulatory framework; 3) brought legal certainty to bilateral and multilateral 

trading in OTC financial markets; 4) confirmed the Commission’s jurisdiction 

over certain aspects of the retail market in foreign currency trading; and 5) gave 

the Commission authority to regulate clearing organizations. 

In FY 2009, the Agency Direction program requests a total of 40 FTEs, resulting 

in no increase over the FY 2008 level. 

 

Administrative Management and Support. Administrative Management and 

Support is provided by the Office of the Executive Director (OED), which is responsible for policy development and implementation of the management and 

administrative functions of the Commission. Administrative Management and 

Support is administered by the Chief of Staff and Executive Director and includes 

the following offices of the Executive Director: 1) Human Resources (OHR); 2) 

Financial Management (OFM); 3) Information and Technology Services (OITS); 

4) Management Operations (OMO); and 5) the Library. OED staff: 

• Formulate budget and resource authorization strategies; 

• Supervise the allocation and utilization of agency resources; 

• Promote management controls and financial integrity; 

• Manage administrative support offices; 

88 FY 2009 President’s Budget & Performance Plan ⎯Executive Direction & Support 
FY 2009 President’s Budget & Performance Plan

FY 2009 President’s Budget & Performance Plan ⎯Executive Direction & Support 89 

• Manage the Commission’s technical and information infrastructure; 

• Manage human capital resource strategies; 

• Oversee the development and implementation of the Commission’s automated information systems; and 

• Oversee the library services of the Commission. 

In addition, the staffs of OED and subordinate offices oversee Commission-wide 

compliance with Federal requirements enacted by Congress and imposed by the 

Office of Management and Budget (OMB), the U.S. Treasury, the Government 

Accountability Office (GAO), and the Office of Personnel Management. 

In FY 2009, the Administrative Management and Support subprogram requests 

two additional FTE for a total of 91 FTEs. The requested level is taking into account the likely retirement of current employees. The additional two FTEs would 

provide in-house expertise needed to improve network infrastructure, telecommunications, and assist program offices in the monitoring, audit, and investigation of the futures markets. 

Consequence of Not Receiving Requested Level of Resources 

Agency Direction. Without the requested level of resources, the Offices of the 

Commissioners and Chairman will suffer a diminution in the administrative and 

regulatory responsiveness of the Commission. For example, public outreach and 

responsiveness to Congress, other government agencies, the futures industry, and 

other public inquiries may be slower, or administrative and technical review of 

Commission memoranda, correspondence, or official actions, such as responding 

to Freedom of Information Act requests, may take longer. 

U.S. futures markets and firms operate globally, which increasingly necessitates 

that the Commission coordinate with foreign market authorities for supervisory 

and enforcement purposes. The accelerating pace of global market integration, 

as well as increasing requests to the Commission to participate in U.S. government financial services initiatives and to provide technical assistance. Additional 

FTEs are needed to meet these increasing demands. Any diminution in resources will severely affect the ability of the Commission to continue its existing 

international cooperation and coordination program. Cutbacks in the Commission require the Commission to reduce its participation in standard-setting international organizations, restrict its ability to engage in bilateral meetings with 

foreign regulatory authorities that are increasingly necessary to address important cross-border issues (e.g., electronic markets, cross-border mergers and cooperative surveillance arrangements), and restrict our ability to respond positively to requests by the U.S. Treasury to participate in international dialogues 

where Commission contributions are requested (e.g., U.S.-China dialogue). Limits on staff capacity will also restrict the Commission’s ability to respond to increasing requests for technical assistance from developing market jurisdictions. 

Administrative Management and Support. Without the requested level of resources, the Administrative Management and Support subprogram will impair its 

ability to manage the: 1) new pay for performance system and other strategic initiatives so they deliver increased accountability for agency goals as envisioned by 

the PMA; 2) continued stewardship of agency pay parity authority to assure access to needed talent with effective and efficient compensation programs; 3) support of data-driven workforce/succession planning that prepares the agency to 

act in advance on issues such as the ability of 42 percent of managers on board at 

the start of FY 2007 to retire by the end of FY 2009; 4) increased regulatory and 

administrative responsibilities imposed by GAO, GSA, OMB, the U.S. Treasury 

and legislative mandates such as the Government Performance and Results Act, 

Information Security Act, Federal Managers’ Financial Integrity Act, and the Tax 
FY 2009 President’s Budget & Performance Plan

90 FY 2009 President’s Budget & Performance Plan ⎯Executive Direction & Support 

Accountability Act; 5) in-house expertise needed to assist major programs in the 

monitoring, audit, and investigation of increasingly sophisticated and technologically driven markets; 6) coordination and implementation of the agency asset 

management initiative as identified in the financial audit statement as an internal 

control weakness; and 7) preparedness and readiness of the Commission and 

staff in the event of an emergency. 
FY 2009 President’s Budget & Performance Plan

Table 36: Executive Direction & Support Request by Subprogram 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

FY 2009 President’s Budget & Performance Plan ⎯Executive Direction & Support 91 

Agency Direction $9,247 40.00 $10,619 40.00 $1,372 0.00

Admin. Mgmt. & Supp. 20,861 89.00 24,439 91.00 3,578 2.00

TOTAL $30,108 129.00 $35,058 131.00 $4,950 2.00

Admin. Mgmt.

& Support

70%

Agency 

Direction

30%

Figure 41: Executive Direction & Support FY 2009 Budget by Subprogram
FY 2009 President’s Budget & Performance Plan

92 FY 2009 President’s Budget & Performance Plan ⎯Executive Direction & Support 

Table 37: Executive Direction & Support Request by Goal 

FY 2008 FY 2009 Change 

$ (000) FTE $ (000) FTE $ (000) FTE

GOAL ONE: Protect the economic functions of the commodity futures and option markets. 

Outcomes 

1.1 Futures and option markets that 

accurately reflect the forces of supply 

and demand for the underlying commodity and are free of disruptive activity. 

$727 3.10 $834 3.10 $107 0.00

1.2 Oversee markets which can be used 

effectively by producers, processors, 

financial institutions, and other firms 

for the purposes of price discovery and 

risk shifting. 

1,183 5.05 1,355 5.05 172 0.00

Subtotal Goal One $1,910 8.15 $2,189 8.15 $279 0.00

GOALTWO: Protect market users and the public. 

Outcome 

2.1 Violations of Federal commodities 

laws are detected and prevented. 

$1,430 6.10 $1,638 6.10 $208 0.00

2.3 Customer complaints against persons or firms falling within the jurisdiction of the Commodity Exchange 

Act are handled effectively and expeditiously. 

363 1.55 416 1.55 $53 0.00

Subtotal Goal Two $1,793 7.65 $2,054 7.65 $261 0.00

GOAL THREE: Foster open, competitive, and financially sound markets. 

Outcomes 

3.1 Clearing organizations and firms 

holding customer funds have sound 

financial practices. 

$152 0.65 $444 1.65 $292 1.00

3.2 Commodity futures and option 

markets are effectively self-regulated. 

116 0.50 134 0.50 18 0.00

3.4 Regulatory environment responsive

to evolving market conditions. 

1,620 7.00 1,858 7.00 238 0.00

Subtotal Goal Three $1,888 8.15 $2,436 9.15 $548 1.00

GOAL FOUR: Organizational and Management Excellence. 

Outcomes 

4.1 A productive, technically competent, 

competitively compensated, and diverse 

workforce that takes into account current and future technical and professional needs of the Commission. 

$3,282 14.00 $3,760 14.00 $478 0.00

4.2 A modern and secure information 

system that reflect the strategic priorities of the Commission. 18

5,872 25.05 6,996 26.05 1,124 1.00

4.3 An organizational infrastructure 

that efficiently and effectively responds 

to and anticipates both the routine and 

emergency business needs of the Commission. 

3,282 14.00 3,760 14.00 478 0.00

4.4 Financial resources are allocated, 

managed and accounted for in accordance with the strategic priorities of the 

Commission. 

3,516 15.00 4,028 15.00 512 0.00

4.5 The Commission’s mission is fulfilled and goals are achieved through 

sound management and organizational 

excellence provided by executive leadership. 

8,565 37.00 9,835 37.00 $1,270 0.00

Subtotal Goal Four 24,517 105.05 28,379 106.05 3,862 1.00

TOTAL $30,108 129.00 $35,058 131.00 $4,950 2.00

 

18 Represents Office of Information Technology Services dollars and staff resources not otherwise 

allocated to Goals 1, 2, or 3. 
FY 2009 President’s Budget & Performance Plan

Goal Four

81%

Goal Two

6%

Goal Three

7%

Goal One

6%

Figure 42: Executive Direction & Support FY 2009 Budget by Goal 

FY 2009 President’s Budget & Performance Plan ⎯Executive Direction & Support 93 
FY 2009 President’s Budget & Performance Plan

94 Appendix 1⎯The Commissioners 

APPENDIX 1 

The Commissioners 

Walter L. Lukken, Acting Chairman 

Walter Lukken was appointed Acting Chairman by the Commission on June 27, 

2007. In September 2007, President Bush nominated Mr. Lukken to be Chairman of the Commission. He was first appointed Commissioner in 2002 and is 

now serving his second term due to expire in 2010. 

Acting Chairman Lukken has testified several times before Congress and represents the agency as part of the President’s Working Group on Financial Markets. 

He works frequently with other domestic and foreign financial regulators. 

Acting Chairman Lukken serves as chairman of the CFTC’s Global Markets Advisory Committee (GMAC). The GMAC was created by the Commission to provide 

an industry forum in which it can discuss the many complex and novel issues 

raised by the ever-increasing globalization of futures markets. In this role, he 

frequently represents the Commission before international organizations and 

forums, including the International Organization of Securities Commissions (IOSCO) and the Committee of European Securities Regulators (CESR). He spoke 

before the U.S.-China Joint Economic Committee hosted by the U.S. Department 

of Treasury on the developing role of derivatives markets in China. 

Prior to joining the CFTC, Acting Chairman Lukken served for five years as counsel on the professional staff of the U.S. Senate Agriculture Committee under 

Chairman Richard Lugar (R-IN), specializing in futures and derivatives markets. 

In this capacity, he was prominently involved in the development, drafting, and 

passage of the CFMA (H.R. 5660). 

A native of Richmond, Indiana, he received his B.S. degree with honors from the 

Kelley School of Business at Indiana University, and his Juris Doctor degree from 

Lewis and Clark Law School in Portland, Oregon. Acting Chairman Lukken is a 

member of the Illinois Bar. 

Michael V. Dunn, Commissioner 

Michael V. Dunn was nominated to a second term as a Commissioner of the 

Commodity Futures Trading Commission by President Bush on June 16, 2006, 

and confirmed by the Senate on August 3, 2006. Mr. Dunn has served as a 

Commissioner since December 6, 2004. On January 9, 2006, he was chosen by 

his colleagues to chair the Commission’s Agriculture Advisory Committee and on 

March 13, 2006, he was appointed chairman of the Commission’s Forex Task 

Force. 

Prior to joining the CFTC, Mr. Dunn served as Director, Office of Policy and 

Analysis at the Farm Credit Administration (FCA). Prior to this position, in 

January 2001 he served briefly as a member of the FCA Board. 

Prior to joining FCA, Mr. Dunn was the Under Secretary of Agriculture for Marketing and Regulatory Programs at the U.S. Department of Agriculture (USDA). 

He also served as the Acting Under Secretary for Rural Economic Community 

Development and as Administrator of the Farmers Home Administration 

(FmHA) at USDA. 
FY 2009 President’s Budget & Performance Plan

Appendix 1—The Commissioners 95 

Mr. Dunn has had a long involvement in agricultural credit dating back to the late 

1970s, when he was the Midwest Area Director for the FmHA. He has been a 

loan officer and vice president of the Farm Credit Banks of Omaha and has served 

as a member of the professional staff of the Senate Agricultural Committee, specializing in agricultural credit. At the USDA, Mr. Dunn also served as a member 

of the Commodity Credit Corporation and Rural Telephone Bank Board. He is a 

past member of the Iowa Development Commission and has served as the 

Chairman of the State of Iowa’s City Development Board. 

A native of Keokuk, Iowa, and a current resident of Harpers Ferry, West Virginia, 

Mr. Dunn received his B.A. and M.A. degrees from the University of New Mexico. 

Jill E. Sommers, Commissioner 

Jill E. Sommers was sworn in as a CFTC Commissioner on August 8, 2007 to a 

term that expires April 13, 2009. Commissioner Sommers had worked in the 

commodity futures and options industry in a variety of capacities throughout her 

career. In 2005, she was the Policy Director and Head of Government Affairs for 

the International Swaps and Derivatives Association, where she worked on a 

number of over-the-counter derivatives issues. 

Prior to that, Ms. Sommers worked for Chicago Mercantile Exchange, including 

overseeing regulatory and legislative affairs for the exchange. During her tenure 

with the exchange, she had the opportunity to work closely with congressional 

staff drafting the Commodity Futures Modernization Act of 2000. 

Commissioner Sommers started her career in Washington in 1991 as an intern for 

Senator Robert J. Dole (R-KS), where she worked in various capacities until 1995. 

She later worked as a legislative aide for two consulting firms specializing in agricultural issues, Clark & Muldoon, P.C. and Taggart and Associates. 

A native of Fort Scott, Kansas, Ms. Sommers holds a Bachelor of Arts degree from 

the University Kansas. She and her husband, Mike, currently reside in the Washington D.C. area and have three children ages 5, 4, and 3. 

Bart Chilton, Commissioner 

Bart Chilton was sworn in as a CFTC Commissioner on August 8, 2007. He was 

formerly the Chief of Staff and Vice President for Government Relations at the 

National Farmers Union—one of the oldest and largest trade associations. 

In 2005, Mr. Chilton was a Schedule C political appointee of President Bush at 

the U.S. Farm Credit Administration where he served as an Executive Assistant to 

the Board. From 2001 to 2005, Mr. Chilton was Senior Advisor to Senator Tom 

Daschle, the Democrat leader of the U.S. Senate where he worked on myriad issues including, but not limited to, agriculture and transportation policy. 

From 1995 to 2001, Mr. Chilton was a Schedule C political appointee of President 

Clinton where he rose to Deputy Chief of Staff to the U.S. Secretary of Agriculture, Dan Glickman. In this role, Chilton became a member of the Senior Executive Services (SES)—government executives selected for their leadership qualifications to serve in the key positions just below the top Presidential appointees. 

As an SES member, Chilton served as a major link between Secretary Glickman 

and the rest of the Federal work force at USDA. 

From 1985 to 1995, Mr. Chilton worked in the U.S. House of Representatives as 

Legislative Director for three different Members of Congress on Capitol Hill. He 

also worked in the U.S. House as the Executive Director of the bipartisan Congressional Rural Caucus. 
FY 2009 President’s Budget & Performance Plan

96 Appendix 1—The Commissioners 

Mr. Chilton previously served on the Board of Directors of Bion Environmental 

Technologies, and the Association of Family Farms—where he also served on the 

Executive Committee and as Treasurer. 

Mr. Chilton was born in Delaware and spent his youth in Indiana where he attended Purdue University from 1979 to 1982. He studied political science and 

communications and was a collegiate leader of several organizations. Mr. Chilton 

and his wife, Sherry Daggett Chilton, reside on the Western Shore of the Chesapeake Bay. 
FY 2009 President’s Budget & Performance Plan

Appendix 2—Summary of Commission Goals, Outputs, and Business Processes 97 

APPENDIX 2 

Summary of Goals, Outcomes, and Business Processes 

Goal One: Ensure the economic vitality of the commodity futures and option 

markets.

Outcome Business Process 

1.1 Markets that accurately reflect the 

forces of supply 

and demand for 

the underlying 

commodity and 

are free of disruptive activity. 

1. Conduct financial surveillance 

2. Conduct market surveillance 

3. Conduct trade practice surveillance 

4. Conduct economic research 

5. Review trading facility filings and clearing organization

contracts and rules 

6. Conduct cooperative enforcement 

7. Investigate violations 

8. File and prosecute cases 

9. Take appropriate remedial or punitive action 

1.2 Markets are effectively and efficiently monitored 

to ensure early 

warning of potential problems or 

issues that could 

adversely affect 

their economic vitality. 

1. Conduct financial surveillance 

2. Conduct market surveillance 

3. Conduct trade practice surveillance 

4. Conduct economic research 

5. Review trading facility filings and clearing organization

contracts, and rules 

6. Investigate violations 

7. File and prosecute cases 

8. Share information externally 

9. Coordinate with domestic regulators 

Goal Two: Protect market users and the public.

Outcome Business Process 

2.1 Violations of Federal commodities 

laws are detected 

and prevented. 

1. Conduct financial surveillance 

2. Conduct cooperative enforcement 

3. Investigate violations 

4. File and prosecute cases 

5. Resolve administrative enforcement cases 

6. Resolve appeals 

7. Share information externally 

8. Take appropriate remedial or punitive action 

9. Represent Commission in litigation or other disputes 

10. Collect monetary penalties from violators. 

2.2 Commodity professionals meet 

high standards. 

1. Provide guidance, advice, and regulate business, financial,

and sales practices 

2. Review self-regulatory organizations and clearing organizations 

3. Investigate, file, and prosecute cases 
FY 2009 President’s Budget & Performance Plan

98 Appendix 2⎯Summary of Commission Goals, Outputs, and Business Processes 

Goal Two: Protect market users and the public. (Continued)

Outcome Business Process 

2.3 Customer complaints against persons or firms registered under the Act 

are handled effectively and expeditiously. 

1. Manage reparations program 

2. Resolve appeals 

3. Represent Commission in litigation or other disputes 

Goal Three: Ensure market integrity in order to foster open, competitive, 

and financial sound markets.

3.1 Clearing organizations and firms 

holding customer 

funds have sound 

financial practices. 

1. Conduct financial surveillance 

2. Provide guidance, advice, and regulate business, financial, and

sales practices 

3. Review self-regulatory organization enforcement 

4. Investigate violations 

5. File and prosecute cases 

6. Take appropriate remedial or punitive action 

3.2 Commodity futures 

and option markets 

are effectively selfregulated. 

1. Conduct financial surveillance 

2. Provide guidance, advice, and regulate business, financial, and

sales practices 

3. Review exchange applications, contracts, and rules 

4. Review self-regulatory organization enforcement 

3.3 Markets are free of 

trade practice 

abuses. 

1. Investigate violations 

2. File and prosecute cases 

3.4 Regulatory environment is flexible 

and responsive to 

evolving market 

conditions. 

1. Coordinate with domestic regulators 

2. Coordinate with foreign and international regulators 

3. Draft, review, and comment on legislation 

4. Provide guidance, advice, and regulate business, financial, and

sales practices 

Goal Four: Facilitate Commission performance through organizational and management excellence, efficient use of resources, and effective mission support.

4.1 Productive, technically competent, 

competitively compensated, and diverse workforce 

that takes into account current and 

future technical and 

professional needs 

of the Commission. 

1. Plan for and manage the human needs and resources of the

Commission 

4.2 Modern and secure 

information system 

that reflect the strategic priorities of 

the Commission. 

1. Plan for and manage the information and technological needs

and resource of the Commission 
FY 2009 President’s Budget & Performance Plan

 

Appendix 2⎯Summary of Commission Goals, Outputs, and Business Processes 99 

4.3 Organizational infrastructure that efficiently and effectively responds to 

and anticipates both 

the routine and 

emergency business 

needs of the Commission. 

1. Plan for and manage the security and infrastructure needs and

resources of the Commission 

4.4 Financial resources 

are allocated, managed, and accounted

for in accordance 

with the strategic 

priorities of the 

Commission. 

1. Plan for and manage the financial needs and resources of the

Commission 

4.5 Commission’s mission is fulfilled and 

goals are achieved 

through sound 

management and 

organizational excellence provided by

executive leadership. 

1. Provide executive leadership 
FY 2009 President’s Budget & Performance Plan

100 Appendix 3⎯Management Initiatives Supporting the President’s Management Agenda 

 APPENDIX 3 

Management Initiatives Supporting the President’s Management Agenda 

Strategic Management of Human Capital 

The Commission reached major milestones during FY 2007 in its plan to more 

fully realize the PMA principle of accountability for results in its strategic management of human capital. Specifically, through the efforts of the permanent Pay 

Parity Governance Committee (PPGC), the Commission developed and implemented a revised performance management program and a new pay for performance system. Based upon input from all employees and staff, the features of these 

programs explicitly address expressed staff needs for improved communication 

about individual and agency performance goals and outcomes. On this foundation, the Commission will proceed with added confidence to enhance its performance culture to better attract, reward, and retrain the highly skilled staff necessary to meet its strategic goals. To assure that the Commission can continue to 

anticipate and act in advance to build that crucial human capital, OHR also 

worked to refine delivery of supporting services through enhanced online systems. During FY 2007, these efforts included supporting the development of current staff through delivery for the first time of training at the desk tops of all 

Commission employees, with curricula that respond to identified strategic skill 

needs. Identification of those needs continued to rely in part on the annual quantitative inventory of current and projected employee skills, provided by enhanced 

reporting from the agency Strategic Human Capital Survey. These incremental 

contributions to the agency’s ability to manage its human capital allow a continued self rating of green on the standards for success under this goal on the Executive Branch Management Scorecard. This estimate is based on these specific actions to strengthen our response to each standard and retain an overall green 

light rating: 

• Strategy aligned with mission, goals, and organizational objectives. The 

Commission continues to seek input from the PPGC and other management 

and employee groups to develop options for human capital programs that 

support agency strategic objectives. During FY 2007, these representatives 

from each agency office and division successfully implemented the performance and pay revisions essential to competing for talent with the other Federal financial regulators. By encouraging enhanced communication of goals 

and basing all pay decisions on performance outcomes, these programs will 

support the most efficient and effective use of CFTC authority, under the 

FSRIA, to direct its human capital resources. 

• Citizen-centered organizational structure. As management considers how its 

organizational structure can best reflect Commission strategy in the face of 

global changes to the financial markets, a key input is the enhanced reporting 

of quantified data on current and projected employee skills inventories provided by the Strategic Workforce Planning Survey. Users build on the strategic management processes developed to support the structural shift from 

front-line regulation to the oversight role assigned to the Commission by the 

CFMA. With detailed skills inventories completed yearly by all staff, management can readily access the objective data needed to maintain the responsive organizational alignment of resources with stakeholder needs. 

• Sustains performance, utilizes flexibilities, and plans succession. Armed 

with specific projections of the type and level of qualifications that will be lost 

to separations over the life of its strategic plan, the Commission supports its 

managers in developing responsive action plans for each organizational unit. 
FY 2009 President’s Budget & Performance Plan

Appendix 3⎯Management Initiatives Supporting the President’s Management Agenda 101 

Tactics to maintain mission readiness are contained in talent management 

action plan templates, which support supervisors in selecting from a range of 

flexible responses to pending skills gaps. To realize those action goals, the 

Commission this year gave all employees access to online training tools, including a custom suite of managerial training from Harvard Business School 

Publishing and the online Skillsoft training for all staff. These actions will 

help sustain performance despite the projected loss of 70 percent of all staff 

and 40 percent of all managers over the life of the current strategic plan. 

• Meet mission-critical skill needs. By developing and publishing a library of 

mission-critical job competencies, ranked in terms of current and projected 

relative importance, the Commission has provided all employees a tool to assess their skills against agency needs. To support continual selfdevelopment, the Commission conducts an annual survey of training needs 

and provides responsive in-house seminars and online course offerings. This 

emphasis on maintaining and demonstrating expert job knowledge is reflected in the performance management system launched in FY 2007. Developed with input from all employees, including an online survey soliciting input on any suggested adjustments after its first performance cycle, the performance elements and standards support self-development of our professional workforce in the service of agency objectives. 

• Reward performance. During FY 2007, the Commission implemented a pay 

for performance system. It is designed to assure that the total rewards of 

employment are based on achieving agency results. To assure the system will 

truly help manage human capital resources immediately and into the future, 

its development focused on obtaining extensive, specific feedback from employees on both the design and implementing details of the program. The result is a system that employees recognized as responsive to their needs for 

enhanced communication about agency goals and performance outcomes. To 

reinforce the important role of each employee in making the system work, 

once they had helped design it, all employees and managers receive continuing classroom training on the pay system and on communicating about performance goals and results. 

• Workforce emphasizes E-government and competition. At each stage of the 

development of e-government tools, OHR has installed them as they became 

available. This includes completing the assessment phase of the conversion 

to electronic official personnel folders (eOPF) under the OPM Enterprise 

Human Resources Integration program. To support enhanced knowledge 

management for an aging workforce, OHR advises the CFTC Training Advisory Group in its yearly development of popular in-house seminars and other 

training events, based on online surveys of staff training needs. This etraining approach achieved fuller realization in FY 2007 with the delivery of 

online courseware to each employee’s desk top. Full use of e-government capabilities also continues in the area of employee security and suitability determinations, including electronic fingerprinting capability. Competitive 

bidding secured needed support for several of these initiatives. 

Continuing the OED emphasis on realizing the strategic approach to resource 

management laid out in the PMA, OHR acts to provide programs and services 

that deliver information useful to managers as they analyze their strategic options. By relying on the participation of all our employees during program development, we draw on the great strength of our human capital as our primary resource in meeting the standard for an overall green light rating. 

Expanding Electronic Government 

The Commission continues to look at ways to implement E-Government initiatives and specifically to review, assess, and improve its overall Web presence in 

support of E-Government initiatives. In FY 2006, the Commission began to re-
FY 2009 President’s Budget & Performance Plan

102 Appendix 3⎯Management Initiatives Supporting the President’s Management Agenda 

design and restructure its Internet Web site based on Federal standards and best 

practices. The redesigned Web site will improve the Commission’s overall Web 

presence by meeting more fully the identified needs of its customers, improving 

usability of its Web site, and providing a consistent customer experience. The 

Commission plans to introduce fillable, saveable Adobe PDF forms on the new 

CFTC.gov Web site so that users of all CFTC forms will now be able to go to our 

Web site, fill out a form electronically, and save the form for their records or for 

re-use. 

We are also currently working on an online application that will allow transmitters of large trader data to enter and submit their data online. We have targeted 

release of that application for the end of 2008. 

Competitive Sourcing 

The Commission continues incorporating the elements of performance-based 

service contracting in its service contracts, as appropriate. 

Budget and Performance Integration 

The Commission continues to make steady progress toward achieving the accelerated financial reporting requirements of the PMA. During the FY 2007 reporting cycle, the Commission will issue its fourth Performance and Accountability 

Report by the mid-November due date. In FY 2007, we are conforming to the 

accelerated reporting requirement. 

In addition we continue to make progress with respect to each of the standards 

for success associated with the President’s goal of budget and performance integration as outlined below: 

• Creation, implementation, and monitoring of an integrated performance 

plan/budget. The FY 2009 OMB budget request and the Annual Performance Plan are integrated—with the budget showing the request broken out by 

object class, by program, and by strategic goal and planned outcome. 

To further demonstrate the Commission’s progress, the Office of Financial 

Management continues working to restructure the financial management 

system to align the monitoring of spending with that of budgeting or planning for spending. On October 1, 2006, the Commission migrated towards a 

new financial management system, Delphi. OFM took full advantage of the 

new capabilities Delphi offered and migrated its work measurement system, 

formally known as the Management Accounting Structure Code system, to 

Delphi’s Budget Program Activity Code system. 

This meant a complete overhaul of the agency’s work measurement system to 

better align it with the goals, outcomes, and business processes of the new 

strategic performance planning and measurement structure. A new coding 

structure was developed from six digits to 10 alpha-numeric characters and 

realigned from program activities to the agency’s strategic planning structure, as set forth in the CFTC’s 2004-2009 Strategic Plan. 

This restructuring of the financial management system and work measurement system enables a better understanding by program staff of how their activities help the Commission reach its goals, outcomes, and performance targets. As a result, monitoring of resource expenditures⎯monetary and human⎯will become more successfully aligned as originally envisioned. 

• Full cost of outputs and programs is integrated with performance. The 

Commission’s fully integrated budget and performance estimate contain a 

cross-cutting analysis that demonstrates how the full cost of each budget request is fully integrated with planned performance. That is, the programbased and object class-based analyses of the request are augmented by a pro-
FY 2009 President’s Budget & Performance Plan

Appendix 3⎯Management Initiatives Supporting the President’s Management Agenda 103 

grammatic distribution of resources by each of the Commission’s strategic 

goals. Conversely, the goal-based analysis of request also disaggregates resources by program. This analysis was developed both to demonstrate that 

full costs were integrated with performance and to engender greater understanding among the public, the Congress, the Administration, market users, 

and the many other interested persons and entities regarding how resources 

contribute to the accomplishment of the Commission’s mission. 

• Agency documents program effectiveness, analyzes policies’ impact on outcomes, and demonstrates how results inform budget decisions. In September 2007, the Commission adopted the Strategic Plan for 2007 – 2012. With 

the work of the senior staff who revamped the strategic performance planning and measurement system, as well as the efforts of the Budget & Planning and Accounting teams of OFM who aligned planning and monitoring of 

resource expenditure, the Commission now has a foundation in place to begin documenting program effectiveness, analyzing the impact of policy decisions on outcomes, and demonstrating how performance results affect 

budget decisions. 

Improved Financial Performance 

OFM continues to work toward improving its financial performance through increasing the efficiency of financial reporting, enhancing financial systems to improve functionality and strengthen regulatory compliance. Initiatives for improving the Commission’s financial performance to meet the core criteria for successful financial management standards include the following: 

• Financial management systems meet Federal financial management systems requirements and applicable Federal accounting and transaction 

standards. As a result of the passage of the Accountability of Tax Dollars Act 

of 2002 and the E-Government Act of 2002, the CFTC is even more strongly 

committed to delivering its mission in an effective and efficient manner. The 

agency is eager to adapt current business processes to leverage efficiencies 

that new technology brings. Moreover, the evolving nature of the commodity 

futures trading industry drive greater reliance on more sophisticated regulatory techniques, which in turn drive expectations within the CFTC for better 

technological systems to support its key activities. Meaningful data is needed 

now more then ever to evaluate program plans, budgets, and performance, as 

well as to support a broad array of management decisions. Meeting these 

expectations will require a transformation in the systems and processes the 

CFTC currently uses to record, collect, assemble, and analyze data. 

 In FY 2007, the agency migrated its core financial management system to the 

Department of Transportation’s Enterprise Services Center; an OMBapproved Center of Excellence. It will continue its efforts to integrate additional systems and business lines, such as acquisitions, asset management, 

and eTravel as part of an enterprise-wide financial management system in FY 

2008. 

• Integrated financial and performance management systems supporting 

day-to-day operations. In FY 2006, OFM completed an assessment of its 

current methods for producing financial and performance data from its systems. As a result, enhancements to the core financial system were made to 

provide better integration of cost and performance data. In future fiscal 

years, OFM will continue its effort to refine and improve the integration of financial and performance data to support better performance measurement 

and decision-making regarding the Commission’s resources. 

• Unqualified and timely audit opinions. The Accountability of Tax Dollars Act 

of 2002 required the Commission to comply with reporting requirements of 

the Chief Financial Officers Act of 1990 for FY 2004. Reporting requirements 

include submitting audited financial statements for fiscal year-end. In FY 
FY 2009 President’s Budget & Performance Plan

104 Appendix 3⎯Management Initiatives Supporting the President’s Management Agenda 

2006, the Commission received an unqualified, or clean, opinion on its audited financial statements. As a result, continued efforts and resources were 

committed to making improvements in the timeliness and integrity of financial reporting. These improvements included: 

• Producing financial reporting that was more timely, complete, and accurate by performing timely analysis, including monthly reconciliation, 

trial balance and financial statement relationship tests, fluctuation analysis, and computation; 

• Meeting accelerated reporting deadlines of OMB and U.S. Treasury; 

• Documenting agency accounting events and business processes to include asset management, civil monetary sanctions, human resources, 

funds management, and financial reporting; 

• Conducting a series of management control reviews and validation of its 

financial activities; and 

• Improving integration of accountability reporting to reflect agency’s internal control framework and revised requirements of OMB Circular A123, Management’s Responsibility for Internal Control. 

OFM will continue to support the OED emphasis on improving financial performance as envisioned in the PMA, specifically by maintaining and sustaining 

controls to ensure an unqualified audit opinion and effective stewardship of the 

agency’s assets; ongoing implementation and integration of an enterprise-wide 

financial management system solution that provides valuable financial management tools to enhance and drive sound decision-making; and refining and expanding efficiency indicators to measure program results against performance. 
FY 2009 President’s Budget & Performance Plan

 

Appendix 4⎯Investment in Technology 105 

APPENDIX 4 

Investment in Technology 

The Commission plans an investment of approximately $26.3 million in FY 

2009. This long overdue investment will sustain current services levels while 

procuring new equipment, software and services. 

Broadly summarized, an investment in Information Technology at the CFTC 

is an investment in: 

• Operations and Maintenance of Mission-Critical systems:

o Integrated Surveillance System (ISS) 

o Trade Surveillance System (TSS) 

o eLaw 

o RSR/SPARK, FILAC, Repcase, and others

• Infrastructure:

o Network Operations

o Security 

o Business Continuity

o Telecommunications 

o Customer Support

o Enterprise Architecture

o Policy and Planning

• Technology Management and Quality Control:

o Database Administration 

o Configuration Management

o Testing and Performance Monitoring

• New Technology Initiatives:

o TSS 

o Microsoft Vista and Office 2007 

o Document Management and Records Management Program

More specifically this investment is: 

o $8.8 million to provide for Capital Equipment and Software 

Purchases; 

o $1.6 million to provide for Telecommunication Services; 

o $14.6 million to provide for support services such as financial and legal information services, operations and maintenance, systems analysis for ISS, TSS, and eLaw as well as 

other smaller mission supporting systems; 

o $0.1 million to provide for IT supplies; and 

o $1.2 million to provide for Intra-governmental payments or 

cross-services agreements with other government agencies 

for Internet access and Web-site maintenance, personnel 

payroll system, GSA telephone services, and continuity of 

operations (COOP) facilities. 
FY 2009 President’s Budget & Performance Plan

106 Appendix 5─Mandatory Fee Proposal 

APPENDIX 5 

Administration’s Mandatory Proposal for CFTC: Fee on Settlement of Contracts 

Funding Summary 

(In millions of dollars) 

2009 2010 2011 2012 2013 2009-

2013 

2009-

2018 

Proposed 

change from 

current 

law.......... 

-96 -100 -103 -107 -111 -517 -1,131 

Administration Proposal and Impact

The Administration will propose authorizing legislation to collect a fee on the 

settlement of contracts on commodity futures, options on futures, and other 

transactions cleared by derivatives clearing organizations. The fees would be 

set at a level to equal the costs to the taxpayer of funding CFTC's Market 

Oversight and Clearing & Intermediary Oversight, or non-Enforcement functions. Similar fees are already imposed on futures exchanges to fund the programs of the futures industry's self-regulatory organization, and would help 

to offset the deficit impact of general taxpayer funding of the CFTC's activities. The proposed fee would not impact the discretionary spending allocations for the relevant Appropriations subcommittees. 

 

Administration Background

The CFTC ensures the integrity and effectiveness of the U.S. futures and options markets through administration of the Commodity Exchange Act of 

1936 (CEA), as amended. The CFTC is the only Federal financial regulator 

that does not derive its funding from the specialized entities it regulates, and 

since the CFTC's programs provide clear benefits to market participants it is 

appropriate for those participants to at least partially offset or contribute toward the cost of providing those programs. The resources would also allow 

the CFTC to build upon its knowledge of the increasingly complex futures 

markets and improve its ability to undertake enforcement actions against 

wrongdoers. The CFTC must remain vigilant in its supervision of critical areas such as energy and foreign currency fraud, and maintain expertise on the 

changing nature of traded products and evolving platforms on which they are 

traded. 
FY 2009 President’s Budget & Performance Plan

 

Appendix 6⎯Privacy Policy for the CFTC Web Site 107 

APPENDIX 6 

Privacy Policy for the CFTC Web Site 

The purpose of this policy statement is to describe how the CFTC handles 

information that we learn about you when you visit our Web site. The information we receive depends on how you use the Web site. You are not required to give us personal information to visit our Web site. 

If you visit the CFTC Web site to read or download information, such as press 

releases or publications, we will collect and store the following information: 

• the name of the domain (the machine or Web site) from which you 

access the Internet (for example, aol.com if you are connecting from 

an America Online account) and/or the name and Internet protocol 

(IP) address of the server you are using to access the CFTC Web site; 

• the name and IP address of the CFTC server that received and logged 

the request; 

• the date and time the request was received; 

• the information which you are accessing (for example, which page or 

image you choose to read or download); and 

• the name and version of the Web browser used to access the Web 

page. 

We use the information collected to measure the number of visitors to the 

different sections of our Web site and to help us make the Web site more useful to visitors. 

We do not enable “cookies.” A “cookie” is a text file placed on your hard drive 

by a Web site that can be used to monitor your use of the site. 

If you complete a form or send a comment or e-mail, you may be choosing to 

send us information that personally identifies you. This information is used 

generally to respond to your request but may have other uses that are identified on each form. For example, if you send us a comment letter on a 

proposed regulation, that letter becomes part of the comment file and is 

available to the public. The comments are used to help CFTC and other 

members of the public evaluate proposed Commission actions. Other forms 

that you may choose to submit, such as Freedom of Information Act requests 

or requests for correction of information, contain information that is used by 

CFTC employees to track and respond to your request. Information provided 

on the enforcement questionnaire may be shared with other law enforcement 

agencies, if appropriate. 

If you have questions about CFTC’s privacy policy and information practices 

you can e-mail webmaster@cftc.gov. 

Information on the Commission's systems of records maintained under the 

Privacy Act can be found under Section D of the CFTC Federal Register Notices.
FY 2009 President’s Budget & Performance Plan

108 Appendix 7─Table of Acronyms 

APPENDIX 7 

Table of Acronyms 

AE The Actuarials Exchange, LLC 

ALJ Administrative Law Judge 

AML Anti-Money Laundering 

AP Associated Persons 

BTEX BrokerTex Futures Exchange 

BPAC Budget Program Activity Code 

CBT Chicago Board of Trade 

CCORP The Clearing Corporation 

CCFE Chicago Climate Futures Exchange 

CCX Chicago Climate Exchange, Inc. 

CDXCHANGE Commodities Derivative Exchange, Inc. 

CEA Commodity Exchange Act 

CESR Committee of European Securities Regulators 

CFE CBOE Futures Exchange 

CFFE Cantor Financial Futures Exchange 

CFTC Commodity Futures Trading Commission 

CFMA Commodity Futures Modernization Act of 2000 

CME Chicago Mercantile Exchange 

CME AM CME Alternative Marketplace, Inc. 

COMEX Commodity Exchange Division 

COOP Continuity of Operations Plan 

CPO Commodity Pool Operator 

CSCE Coffee Sugar and Cocoa Exchange 

CTA Commodity Trading Advisor 

DCIO Division of Clearing and Intermediary Oversight (CFTC) 

DCM Designated Contract Market 

DCO Derivatives Clearing Organization 

DMO Division of Market Oversight (CFTC) 

DOJ Department of Justice 

DTEF Derivatives Transaction Execution Facility 

ECM Exempt Commercial Markets 

EDBS Exchange Database System 

EOPF Electronic Office Personnel Folders 

EPFE Exchange Place Futures, LLC 

EUREX USFE U.S. Futures Exchange, LLC 

FB Floor Broker 

FBIIC Financial and Banking Information Infrastructure 

 Committee 

FBOT Foreign Boards of Trade 

FCA Farm Credit Administration 

FCM Futures Commission Merchant 

FCOM FutureCom 

FERC Federal Energy Regulatory Commission 

FIRREA Financial Institutions Reform, Recovery, and 

 Enforcement Act 

FSRIA Farm Security and Rural Investment Act 

FMHA Farmers Home Administration 

FOREX Foreign Currency 

FT Floor Trader 
FY 2009 President’s Budget & Performance Plan

Appendix 7─Table of Acronyms 109 

FTE Full-time Equivalent 

FY Fiscal Year 

GAO Government Accountability Office 

GCC Guaranty Clearing Corporation 

GFI FOREXMATCH GFI Group Inc., ForexMatch 

GMAC Global Markets Advisory Committee 

GSA General Services Administration 

HSE HoustonStreet Exchange, Inc. 

IB Introducing Broker 

ICAP ICAP Commodity Derivatives Trading System 

ICAP ETC ICAP Electronic Trading Community 

ICAP HYDE ICAP HYDE, Ltd. 

ICC Intermarket Clearing Corporation 

ICE IntercontinentalExchange, Inc. 

IMAREX International Maritime Exchange 

INET INET Futures Exchange 

INTRADE Intrade Board of Trade 

IOSCO International Organization of Securities Commissions 

ISDA International Swaps and Derivatives Association 

ISS Integrated Surviellance System 

IT Information Technology 

JADE Joint Asian Derivatives Exchange 

JO Judgment Officer 

KCBT Kansas City Board of Trade 

LCH London Clearing House 

LIQUIDITYPORT LiquidityPort, LLC 

LONGITUDE Longitude, LLC 

MACE MidAmerica Commodity Exchange 

MASC Management Accounting Structure Code 

MATCHBOXX ATS Matchboxx Alternate Trading System 

ME Merchants Exchange 

MGE Minneapolis Grain Exchange 

MOU Memorandum of Understanding 

NFA National Futures Association 

NFU National Farmers Union 

NGX Natural Gas Exchange 

NQLX NQLX LLC 

NTP NetThruPut 

NYBOT New York Board of Trade 

NYCC New York Clearing Corporation 

NYCE New York Cotton Exchange 

NYFE New York Futures Exchange 

NYMEX New York Mercantile Exchange 

OCC The Options Clearing Corporation 

OCE Office of Chief Economist (OCE) 

OCX OneChicago Futures Exchange 

OED Office of the Executive Director (CFTC) 

OFM Office of Financial Management (CFTC) 

OGC Office of the General Counsel (CFTC) 

OHR Office of Human Resources (CFTC) 

OITS Office of Information and Technology Services (CFTC) 

OMB Office of Management and Budget 

OMO Office of Management Operations (CFTC) 
FY 2009 President’s Budget & Performance Plan

110 Appendix 7─Table of Acronyms 

ONXCC OnExchange Clearing Corporation 

OPEX Optionable, Inc. 

OPM Office of Personnel Management 

OTC Other-the-Counter 

PARITY Parity Energy Inc. 

PBOT Philadelphia Board of Trade 

PMA President’s Management Agenda 

PPGC Pay Parity Governance Committee 

REPCASE Reparations Case Tracking System 

RSR Regulatory Statement Review 

RWG Registration Working Group 

SEC Securities and Exchange Commission 

SFP Security Futures Products 

SL Spectron Live.com Limited 

SPARK Stress Positions at Risk 

SRO Self-Regulatory Organization 

STORM Storm Exchange, Inc. 

SWAPSTREAM Swapstream Operating Services, Ltd. 

SWG Strategic Workforce Planning 

TCX TradeCapture Exchange 

TFS Traditional Financial Services Pulp and Paper Division 

TFSE TFS Energy, LLC 

TS TradeSpark, LP 

TSS Trade Surveillance System 

US United States 

USA PATRIOT Uniting and Strengthening America by Providing 

 Appropriate Tools Required to Intercept 

 and Obstruct Terrorism 

USDA United States Department of Agriculture 

UK United Kingdom 

WBOT Weather Board of Trade 

WXL WeatherXchange Limited 

XBOT Exempt Boards of Trade 

YELLOW JACKET Yellow Jacket Software, Inc.