COMMODITY FUTURES TRADING COMMISSION

FY 2010 President’s Budget 

and Performance Pla

P r e a r e d f o r t h e C o m m i t t e e o n pp o p r i at i 

Ap r i l 20
Summary & Highlight Statement 

May 7, 2009 

The Honorable Daniel K. Inouye 

Chairman 

Committee on Appropriations 

United States Senate 

S-128 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 Inouye and Chairman Obey: 

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

(CFTC) Budget and Performance Estimate for FY 2010. This budget requests an 

appropriation of $160,600,000 and 610 staff-years, an increase of approximately 

$14,600,000 and 38 staff-years over the recently enacted FY 2009 appropriation 

of $146,000,000 and 572 staff-years. With a current on-board staff of only 500, 

the funds appropriated for FY 2009, and requested for FY 2010, are critical incremental increases toward providing the CFTC with the resources required to 

ensure that the Nation’s futures markets operate without disruption. Compared 

to the FY 2009 appropriation, key changes in the FY 2010 President’s Budget are:

$7.4 million to provide for increased compensation and benefit costs for 

a staff of 572 FTEs; 

$0.2 million (net increase) to provide for increased operating costs for 

information technology modernization, lease of office space, and all other 

services; and 

$7.0 million to provide for salary and expenses of 38 additional full-time 

equivalent staff-years (FTEs). 

The CFTC was created in 1974 to ensure fair practice and honest dealings on the 

commodity exchanges of the Nation’s $500 billion futures industry. At that time, 

approximately 500 employees were tasked with this responsibility. Thirty-five 

years later, the Nation’s futures market is a $22 trillion industry that bears little 

resemblance to the early market with respect to volume, complexity, technology, 

products, platforms, instruments, strategies, and globalization. The increases 

provided for FY 2009 and requested for FY 2010 recognize that the Commission 

cannot continue to oversee properly an increasingly complex, opaque and global 

marketplace with resources deemed adequate four decades ago when the modern 

futures markets were in their nascence. The Commission requires additional resources to hire and retain highly trained professionals and equip them with information technologies that are as sophisticated as the markets they are charged 

with overseeing. 
Notwithstanding the important work of industry self-regulatory bodies, the 

Commission’s role is unique and if it is not properly performed, there is no adequate secondary safety net. It is important not to risk the moral hazard of assuming that adequate oversight is being performed by others when it is not. The 

Commission is the only entity with regulatory oversight across all jurisdictions 

and across all markets. If the Commission is unable to regulate effectively because of insufficient resources, other authorities will not be available to step in 

and fill the void. Self-regulatory organizations can take action only against their 

own members, and their sanctions cannot affect conduct outside their jurisdiction or markets, and other Federal regulators and state regulators have limited 

jurisdiction and expertise in handling futures-related matters and misconduct. 

And while criminal prosecutions by the Department of Justice are an important 

adjunct to effective oversight and enforcement, cooperative enforcement still requires the active use of Commission staff to assist criminal authorities in the 

prosecutions. 

Strong support of the CFTC, with its principle-based regulatory regime, will also 

serve to reassure concerned American taxpayers and investors. Most Americans 

have a direct stake in futures markets through personal investments in stocks, 

mutual funds, or pension funds tied to these markets─ and all Americans have an 

indirect stake, since these markets are critical in establishing prices from WalMart to Wall Street. 

I am available to discuss this budget request and to answer any questions you 

may have. 

 Sincerely yours, 

 Michael V. Dunn 

 Acting Chairman 
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 2010 PRESIDENT’S BUDGET & PERFORMANCE PLAN 

Table of Contents 

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

The Commission and the Industry We Regulate ................. 5

Indicators of Industry Growth Complexity ........................................5

Growth in Volume of Futures & Option Contracts Traded & FTEs .. 6

Actively Traded Futures & Option Contracts ..................................... 7

Number of Registrants ....................................................................... 8

Enforcement Actions to Preserve Market Integrity and Protection 

of Market Users................................................................................... 9

Contract Markets Designated by the CFTC, 2003 - 2008 ............... 11

Number of Derivatives Clearing Organizations Registered with 

the CFTC, 2003 - 2008 ......................................................................12

Exempt Commercial Markets, 2003 - 2008.....................................13

Exempt Boards of Trade, 2003 - 2008 .............................................14

Customer Funds in Futures Commission Merchants Accounts, 

1998 - 2008 ........................................................................................15

OVERVIEW OF PLANNED OUTCOMES BY STRATEGIC GOAL .... 16

Introduction .......................................................................................16

FY 2010 Outcomes by Goal ............................................................... 17

COMMISSION STRATEGIES TO INFLUENCE OUTCOMES .......... 23

Strategic Goal One - Ensure the Economic Vitality of the 

Commodity Futures and Option Markets. ........................ 23

Summary of Goal One Performance Indicators .............................. 29

Breakout of Goal One Request by Program Activity ....................... 30

Breakout of Goal One Request by Outcome Objective .....................31

Strategic Goal Two – Protecting Market Users and the 

Public. ............................................................................... 32

Summary of Goal Two Performance Indicators .............................. 36

Breakout of Goal Two Request by Program Activity ........................37

Breakout of Goal Two Request by Outcome Objective ................... 38

Strategic Goal Three – Ensuring Market Integrity in 

Order to Foster Open, Competitive, and Financially 

Sound Markets. ................................................................. 39

Summary of Goal Three Performance Indicators ........................... 43

Breakout of Goal Three Request by Program Activity .................... 44

Breakout of Goal Three Request by Outcome Objective ................. 45

Strategic Goal Four: To Facilitate Commission 

Performance through Organizational and Management 

Excellence, Efficient Use of Resources, and Effective 

Mission Support. ............................................................... 46

Summary of Goal Four Performance Indicators ............................. 53

Breakout of Goal Four Request by Program Activity .......................55

Breakout of Goal Four Request by Outcome Objective ................... 56

JUSTIFICATION OF THE FY 2010 BUDGET & PERFORMANCE 

ESTIMATE .......................................................................... 57

Breakout of $160.6 Million Budget Estimate by Program ...............57

Breakout of $160.6 Million Budget Estimate by Object Class ........ 58

Crosswalk from FY 2009 to FY 2010 ............................................... 59
Market Oversight .............................................................. 60

Total Budget: $33,831,000 133 FTEs ....................................60

Total Change: $ 3,038,000 8 FTEs ....................................60

Clearing & Intermediary Oversight .................................. 68

Total Budget: $23,876,000 91 FTEs ....................................68

Total Change: $ 2,263,00 6 FTEs ....................................68

Enforcement ......................................................................74

Total Budget: $46,313,000 171 FTEs .................................... 74

Total Change: $ 4,265,000 11 FTEs .................................... 74

Office of the Chief Economist ........................................... 80

Total Budget: $ 3,896,000 15 FTEs ................................... 80

Total Change: $ 372,000 1 FTE .................................... 80

Office of Proceedings ........................................................ 85

Total Budget: $ 2,723,000 11 FTEs ....................................85

Total Change: $ 75,000 0 FTE ......................................85

Office of the General Counsel ........................................... 89

Total Budget: $10,724,000 39 FTEs ....................................89

Total Change: $ 1,111,000 3 FTEs ....................................89

Executive Direction & Support ..........................................95

Total Budget: $39,237,000 150 FTEs ....................................95

Total Change: $ 3,476,000 9 FTEs.....................................95

APPENDIX 1 .................................................................. 104

The Commissioners ......................................................................... 104

APPENDIX 2 .................................................................. 107

Summary of Goals, Outcomes, and Business Processes ................ 107

APPENDIX 3 .................................................................. 110

Investment in Technology ...............................................................110

APPENDIX 4 ................................................................... 111

Summary of OMB and Congressional Action on Appropriations FY 

2001 – FY 2010 ................................................................................ 111

APPENDIX 5 .................................................................. 112

Privacy Policy for the CFTC Web Site .............................................112

APPENDIX 6 .................................................................. 113

Table of Acronyms............................................................................113
FY 2010 President’s Budget & Performance Plan—Figures and Tables 

Figure 1: Growth of Volume of Contracts Traded and FTEs ........................... 6

Figure 2: CFTC Actively Traded Contracts .......................................................7

Table 1: Number of Registrants ........................................................................ 8

Table 2: Energy Markets................................................................................... 9

Table 3: Pool/Hedge Funds .............................................................................. 9

Table 4: Foreign Currency Markets ................................................................10

Table 5: Designated Contract Markets............................................................ 11

Table 6: CFTC-Registered Derivatives Clearing Organizations .....................12

Table 7: Exempt Commercial Markets ............................................................13

Table 8: Exempt Boards of Trade ...................................................................14

Figure 3: Customer Funds in FCM Accounts .................................................15

Figure 4: Budget & Performance Estimate by Strategic Goal ........................16

Table 9: Breakout of Goal One by Outcome ................................................... 17

Table 10: Breakout of Goal Two by Outcome .................................................18

Table 11: Breakout of Goal Three by Outcome ...............................................19

Table 12: Breakout of Goal Four by Outcome .................................................21

Figure 6: Goal One Resource Strategy Mapping ........................................... 25

Table 13: Breakout of Goal One Request by Program Activity ...................... 30

Figure 7: Breakout of Goal One Request by Program Activity ....................... 30

Table 14: Breakout of Goal One by Outcome ...................................................31

Figure 8: Breakout of Goal One Request by Outcome Objective ....................31

Figure 9: Goal Two Resource Strategy Mapping ........................................... 33

Table 15: Breakout of Goal Two Request by Program Activity ......................37

Figure 10: Breakout of Goal Two Request by Program Activity .....................37

Table 16: Breakout of Goal Two by Outcome ................................................. 38

Figure 11: Breakout of Goal Two Request by Outcome Objective ................. 38

Figure 12: Goal Three Resource Strategy Mapping ....................................... 40

Table 17: Breakout of Goal Three by Program Activity .................................. 44

Figure 13: Breakout of Goal Three Request by Program Activity .................. 44

Table 18: Breakout of Goal Three Request by Outcome ................................ 45

Figure 14: Breakout of Goal Three Request by Outcome Objective .............. 45

Figure 15: Goal Four Resource Strategy Mapping ......................................... 49

Table 19: Breakout of Goal Four by Program Activity ....................................55

Table 20: Breakout of Goal Four by Outcome ................................................ 56

Figure 16: Breakout of Goal Four Request by Outcome Objective ............... 56

Table 21: Budget Estimate by Program...........................................................57

Figure 17: $195.1 Million Budget Estimate by Program ................................. 57

Table 22: Budget Estimate by Object Class ................................................... 58

Figure 18: $195.1 Million Budget Estimate by Object Class.......................... 58

Table 23: Crosswalk from FY 2009 to FY 2010 ............................................. 59

Figure 19: Market Oversight Percentage of Total Budget Dollars ................. 60

Figure 20: Market Oversight Percentage of Total Budget FTEs .................... 60

Table 24: Market Oversight Request by Subprogram ................................... 66

Figure 21: Market Oversight FY 2010 Budget by Subprogram ..................... 66

Table 25: Market Oversight Request by Goal .................................................67

Figure 22: Market Oversight FY 2010 Budget by Goal ..................................67

Figure 23: Clearing & Intermediary Oversight Percentage of 

Total Budget Dollars ........................................................................................ 68

Figure 24: Clearing & Intermediary Oversight Percentage of 

Total Budget FTEs ........................................................................................... 68

Table 26: Clearing & Intermediary Oversight Request by Subprogram........72

Figure 25: Clearing & Intermediary Oversight FY 2010 

Budget by Subprogram .....................................................................................72

Table 27: Clearing & Intermediary Oversight Request by Goal .....................73
Figure 26: Clearing & Intermediary Oversight FY 2010 Budget by Goal ..... 73

Figure 27: Enforcement Percentage of Total Budget Dollars ........................ 74

Figure 28: Enforcement Percentage of Total Budget FTEs ........................... 74

Table 28: Enforcement Request .....................................................................78

Table 29: Enforcement Request by Goal ........................................................ 79

Figure 29: Enforcement FY 2010 Budget by Goal ......................................... 79

Figure 30: Chief Economist Percentage of Total Budget Dollars .................. 80

Figure 31: Chief Economist Percentage of Total Budget FTEs ...................... 80

Table 30: Office of the Chief Economist Request ..........................................83

Table 31: Office of the Chief Economist Request by Goal..............................84

Figure 32: Proceedings Percentage of Total Budget Dollars .........................85

Figure 33: Proceedings Percentage of Total Budget FTEs ............................85

Table 32: Proceedings Request by Subprogram ............................................87

Figure 34: Proceedings FY 2010 Budget by Subprogram ..............................87

Table 33: Proceedings Request by Goal .........................................................88

Figure 35: Percentage of Total Budget Dollars ..............................................89

Figure 36: Percentage of Total Budget FTEs .................................................89

Table 34: General Counsel Request ................................................................93

Table 35: General Counsel Request by Goal ..................................................94

Figure 37: General Counsel FY 2010 Budget by Goal ....................................94

Figure 38: Percentage of Total Budget Dollars ..............................................95

Figure 39: Percentage of Total Budget FTEs .................................................95

Table 36: Executive Direction & Support Request by Subprogram .............101

Figure 40: Executive Direction & Support FY 2010 Budget by Subprogram101

Table 37: Executive Direction & Support Request by Goal ......................... 102

Figure 41: Executive Direction & Support FY 2010 Budget by Goal ........... 103
FY 2010 President’s Budget and Performance Plan

Indicators of Industry Growth Complexity 5 

The Commission and the Industry We Regulate 

Indicators of Industry Growth Complexity 

In a marketplace driven by change, it may be helpful to look back at industry and 

CFTC trends over the past few years. The charts that follow reflect many of those 

changes affecting the CFTC: 

 Industry growth versus staff growth; 

 Growth in actively traded futures and option contracts; 

 Enforcement actions to preserve market integrity and protection of market users; 

 Number of registrants; 

 Contract markets designated by the CFTC; 

 Number of derivatives clearing organizations (DCOs) registered with the 

CFTC; 

 Exempt commercial markets (ECMs); 

 Exempt boards of trade (XBOTs); and 

 Amount of customer funds held at futures commission merchants (FCMs). 
FY 2010 President’s Budget and Performance Plan

6 Growth in Contract Volume vs. CFTC FTEs 

Growth in Volume of Futures & Option Contracts Traded & 

FTEs 

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

levels at the Commission have trended downward. 

625 614 580

723

1004

1225

1518

1920

2421

3085

3446

560 567 546 514 521 497 517 491 493 437 448

0

500

1000

1500

2000

2500

3000

3500

4000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Contract Trading Volume (Millions)

FTEs (Staff Years)

Figure 1: Growth of Volume of Contracts Traded and FTEs 
FY 2010 President’s Budget & Performance Plan

Actively Traded Contracts 7 

Actively Traded Futures & Option Contracts 

The number of actively traded contracts on U.S. exchanges has more than quintupled in the last decade. 

286

251 266 250 278

538

662

906

1135

1365

1521

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Contracts

Fiscal Year

Figure 2: CFTC Actively Traded Contracts 
FY 2010 President’s Budget & Performance Plan

8 Registered Commodity Professionals 

Number of Registrants 

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

or give trained advice must apply for CFTC registration through the National Futures Association (NFA), an SRO with delegated oversight authority from the 

Commission. The Commission regulates the activities of nearly 68,000 registrants. 

Registration Category1 Number as of September 30, 2008

Associated Persons (APs) (Salespersons) 53,249

Commodity Pool Operators (CPOs) 1,353

Commodity Trading Advisors (CTAs) 2,534

Floor Brokers (FBs) 7,335

Floor Traders (FTs) 1,446

Futures Commission Merchants (FCMs) 1792

Introducing Brokers (IBs) 1,6473

TOTAL 67,743

Table 1: Number of Registrants 

 

1 A person who is registered in more than one registration category is counted in each category. 

2 Includes 16 notice-registered FCMs. 

3 Includes 44 notice-registered IBs. 
FY 2010 President’s Budget & Performance Plan

Energy, Pool/Hedge Funds, and Foreign Currency Markets 9 

Enforcement Actions to Preserve Market Integrity and Protection 

of Market Users 

Manipulation, Attempted Manipulation, and False Reporting 

The CFTC utilizes every tool at its disposal to detect and deter against illegitimate 

market forces. The Commission uses enforcement actions to preserve market integrity and protect market users, demonstrating that it’s authority is significant and 

that the Commission intends to use it. 

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

through September 2008 have resulted in 43 enforcement actions charging 73 

companies and individuals and the assessment of approximately $445 million in 

penalties. 

Actions Taken Since December 2001 in Energy Markets Energy Markets

Number of Cases Filed or Enforcement Actions 43

Number of Entities/Persons Charged 73

Number of Dollars in Penalties Assessed

 Civil Monetary Penalties $445,465,000

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 2008, the 

Commission filed a total of 73 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 73

 Case/Actions Charging Commission Registrants 24

Number of Dollars in Penalties Assessed $564,127,597

Table 3: Pool/Hedge Funds 
FY 2010 President’s Budget & Performance Plan

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

Forex Fraud 

The Commission vigorously uses its enforcement authority to combat the problem 

of foreign currency (forex) fraud. Since passage of the CFMA in December 2000 

through September 2008, the Commission, on behalf of more than 25,000 customers, has filed 98 cases. Those efforts have thus far resulted in the assessment of 

approximately $453 million in restitution and $562 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 $562,241,267

 Restitution $453,675,335

Table 4: Foreign Currency Markets 
FY 2010 President’s Budget & Performance Plan

Designated Contract Markets 11

Contract Markets Designated by the CFTC, 2003 - 2008 

The following designated contract markets (DCMs) are boards of trade or exchanges that meet the CFTC criteria and CFTC Core Principles for trading futures 

or options by both institutional and retail participants. Currently, 13 DCMs meet 

CFTC criteria and CFTC Core Principles for trading futures and options. 

Commodity 

Exchanges 2003 2004 2005 2006 2007 2008

BTEX  

CBOT      

CCFE  

  

CFE      

CME      

CSCE  

EPFE 

HedgeStreet     

ICE US     

KCBT      

MACE 

ME  

MGE      

NQLX   

NYCE  

NYFE  

NYMEX

(incl. COMEX)      

NYSE LIFFE 

OCX      

PBOT       

USFE     

TOTAL 15 18 13 12 12 13

Table 5: Designated Contract Markets 
FY 2010 President’s Budget & Performance Plan

12 CFTC-Registered Derivatives Clearing Organizations 

Number of Derivatives Clearing Organizations Registered with 

the CFTC, 2003 - 2008 

Clearinghouses that provide clearing services for CFTC-regulated exchanges must 

register as DCOs. Currently, 10 DCOs are registered with the Commission. 

DCOs 2003 2004 2005 2006 2007 2008

AE   

BTEX 

CBOT     

CCorp      

CME      

EnergyClear 

FCOM 

GCC 

HedgeStreet     

ICC 

KCBT      

LCH      

MGE      

NYCC/ICE Clear      

NYMEX      

OCC      

ONXCC 

TOTAL 14 10 11 11 11 10

Table 6: CFTC-Registered Derivatives Clearing Organizations
FY 2010 President’s Budget & Performance Plan

Exempt Commercial Markets 13

Exempt Commercial Markets, 2003 - 2008 

Electronic trading facilities that execute 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 

anti-fraud 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, record-keeping, 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 24 

ECMs have filed notices with the Commission and 19 were active in FY 2008. 

Exempt Commercial 

Markets 2003 2004 2005 2006 2007 2008

CCX      

CDXchange    

ChemConnect  

EOXLIVE 

Flett  

GFI (Energy Match)  

HSE      

ICAP   

ICAP ETC   

ICAP HYDE   

ICE      

IMAREX      

LiquidityPort (Options 

ATS)

 

NGX      

NEX  

NTP   

OPEX     

Parity 

SL     

TCX    

TFS      

TFSE      

TFSC 

TS    

TOTAL 11 11 12 17 19 19

Table 7: Exempt Commercial Markets 
FY 2010 President’s Budget & Performance Plan

14 Exempt Boards of Trade 

Exempt Boards of Trade, 2003 - 2008 

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, 14 XBOTs filed notices with the Commission and 10 were 

active in FY 2008. 

Exempt Boards of 

Trade7

2003 2004 2005 2006 2007 2008

AE    

CME AM    

Derivatives Bridge, 

LLC 

GFI ForexMatch  

Intrade    

IRESE 

LiquidityPort 

Longitude  

Matchboxx ATS 

Storm   

Swapstream   

WBOT    

WXL    

Yellow Jacket 

TOTAL 2 2 5 8 8 10

Table 8: Exempt Boards of Trade 
FY 2010 President’s Budget & Performance Plan

Customer Funds in Futures Commission Merchants Accounts 15

Customer Funds in Futures Commission Merchants Accounts, 

1998 - 2008 

The amount of customer funds held at FCMs has more than quadrupled in the last 

decade. 

$47.5

$54.1 $56.7 $59.7 $64.3

$75.6

$94.5

$116.7

$138.0

$155.4

$201.0 

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Amount in Billions

Figure 3: Customer Funds in FCM Accounts 
FY 2010 President’s Budget & Performance Plan

16 Overview of Planned Outcomes by Strategic Goal 

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 almost 3.5 billion contracts traded in 2008. 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 $160.6 million in FY 2010 to fund its efforts to reach its 

four strategic goals: 

$48.2 Million

Goal One: Ensure 

the economic 

vitality of the 

commodity 

futures and 

option markets.

30%

$42.9 Million

Goal Two: Protect 

market users and 

the public.

27%

$38.0 Million

Goal Three: 

Ensure market 

integrity in order 

to foster open, 

competitive, and 

financially sound 

markets.

24%

$31.5 Million

Goal Four: 

Organizational 

and Management 

Excellence.

19%

Figure 4: Budget & Performance Estimate by Strategic Goal 

To achieve the planned outcomes for FY 2010, the Commission will allocate the 

$160.6 million request among six programs: Enforcement; Clearing & Intermediary Oversight; Market Oversight; Chief Economist; Proceedings; and General 

Counsel. There is one support program: Executive Direction4 . 

Figure 5: $160.6 Million Budget Estimate by Program

 

4 Includes information technology staff in support of all programs. 
 FY 2010 President’s Budget & Performance Plan

Overview of Planned Outcomes by Strategic Goal 17

FY 2010 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 become increasingly diversified. 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, highly complex financial contracts based on interest rates, 

foreign currencies, Treasury bonds, and securities indexes, and other products 

have far outgrown agricultural contracts in trading volume. Latest statistics show 

that approximately eight percent of on-exchange commodity futures and option 

trading activity occurs in the agricultural sector, while financial commodity futures and option contracts make up approximately 79 percent, and other contracts, such as those on metals and energy products, make up about 13 percent. 

In FY 2010, the Commission requests $48.2 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 2010 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 2010 performance goal of improving effectiveness and efficiency of market surveillance. 

Breakout of Goal One Request by Outcome 

FY 2009 FY 2010 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.

$37,922 151 $41,181 158 $3,259 7

1.2 Markets that can be monitored to 

ensure early warning of potential problems or issues that could adversely 

affect their economic vitality.

5,890 23 6,971 27 1,081 4

Total Goal One $43,812 174 $48,152 185 $4,340 11

Table 9: Breakout of Goal One by Outcome 
FY 2010 President’s Budget & Performance Plan

18 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 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 150 investigations open at 

any particular time, however in FY 2008; an unprecedented 215 investigations 

were opened. If evidence of criminal activity is found, matters are referred to 

state or Federal authorities for criminal prosecution. 

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 manipulation. Since 2001, the Commission charged over 73 companies and individuals 

and assessed approximately $445 million in penalties 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 2010, the Commission requests $42.9 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 2010 performance goal of increasing the probability of violators being detected and sanctioned. 

 Commodity professionals meet high standardswith an FY 2010 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 2010 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 2009 FY 2010 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.$29,369 112 $32,132 119 $2,763 7

2.2 Commodities professionals meet 

high standards.

5,985 24 6,631 25 646 1

2.3 Customer complaints against 

persons or firms falling within the 

jurisdiction of the Commodity Exchange Act are handled effectively 

and expeditiously.

3,824 15 4,117 16 293 1

Total Goal Two $39,178 151 $42,880 160 $3,702 9

Table 10: Breakout of Goal Two by Outcome 
 FY 2010 President’s Budget & Performance Plan

Overview of Planned Outcomes by Strategic Goal 19

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

and Financially Sound Markets 

The Commission also focuses on issues of market integrity, which 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 2010, the Commission requests $38.0 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 2010 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 2010 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 2009 FY 2010 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.

$9,607 37 $10,490 39 $883 2

3.2 Commodity futures and option markets are effectively self-regulated.12,772 51 14,508 56 1,736 5

3.3 Markets are free of trade practice 

abuses.

5,499 21 5,904 22 405 1

3.4 Regulatory environment responsive 

to evolving market conditions.

6,462 25 7,138 27 676 2

Total Goal Three $34,340 134 $38,040 144 $3,700 10

Table 11: Breakout of Goal Three by Outcome 
FY 2010 President’s Budget & Performance Plan

20 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 2010, the Commission requests $31.5 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 2010 President’s Budget & Performance Plan

Overview of Planned Outcomes by Strategic Goal 21

Breakout of Goal Four Request by Outcome Objective 

FY 2009 FY 2010 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.

$3,778 15 $3,897 15 $119 0

4.2 A modern and secure information 

system that reflects the strategic priorities of the Commission. 5

7,570 30 8,456 33 886 3

4.3 An organizational infrastructure 

that efficiently and effectively responds 

to and anticipates both the routine and 

emergency business needs of the Commission.

3,778 15 3,897 15 119 0

4.4 Financial resources are allocated, 

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

Commission.

3,778 15 4,157 16 379 1

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

sound management and organizational 

excellence provided by executive leadership. 

9,766 38 11,121 42 1,355 4

Total Goal Four $28,670 113 $31,528 121 $2,858 8

Table 12: Breakout of Goal Four by Outcome 

 

5

 Represents Office of Information Technology Services dollars and staff resources not otherwise allocated to Goals 1, 2, or 3. 
FY 2010 President’s Budget & Performance Plan

22 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

Ensure the economic vitality 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 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 23

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, it may refer matters to state authorities or the U.S. 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 2010 President’s Budget & Performance Plan

24 Commission Strategies to Influence Outcomes 

energy companies and the market power manipulation of worldwide copper prices. 
FY 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 25

$0

$20

$40

$60

$80

$100

0 20 40 60 80 100 120 140 160 180 200 220

FULL-TIME EQUIVALENTS

MILLIONS

Outcome 1.1 - Markets Accurately Reflect Supply and Demand

Outcome 1.2 - Markets That Can be Monitored

CFTC Strategy Mapping 

FY 2010 Goal One Resource Investment by Outcome Objective 

Figure 6: Goal One Resource Strategy Mapping 

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. 

 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. 

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

Outcome 1.1

26% Investment

Outcome 1.2

4% Investment
FY 2010 President’s Budget & Performance Plan

26 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 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 27

 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 2010 President’s Budget & Performance Plan

28 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 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 29

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 2007

Actual

FY 2008

Actual

FY 2009

Plan

FY 2010

Plan

Percentage growth in market volume

Percentage of novel or innovative 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 organization applications completed 

within expedited review period

 a) new exchange applications

 b)new clearinghouse applications

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

27%

100%

20%

 

N/A6

N/A6

82%

82%

12.8%

100%

11.4%

100%

100%

82%

86%

24%

75%

10%

25%

100%

82%

86%

28%

75%

10%

25%

100%

82%

86%

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 derivatives clearing organization applications 

demonstrating compliance with CFTC Core Principles

Ratio of markets surveilled per economist

Percentage of contract expirations without manipulation

N/A7

13

99.9%

N/A7

14

99.9%

100%

12

99.9%

100%

12

99.9%

 

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

7 No applications for registration as a DCO were received in FY 2007 or FY 2008. 
FY 2010 President’s Budget & Performance Plan

30 Commission Strategies to Influence Outcomes 

Breakout of Goal One Request by Program Activity 

FY 2009 FY 2010 Change

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

Market Oversight $21,295 87 $23,515 93 $2,220 6

Clearing & Intermediary 

Oversight

1,524 6 1,574 6 50 0

Chief Economist 3,524 14 3,896 15 372 1

Enforcement 13,370 51 14,769 55 1,399 4

Proceedings 0 0 0 0 0 0

General Counsel 2,046 8 2,280 8 234 0

Executive Direction & 

Support

2,053 8 2,118 8 65 0

TOTAL: $43,812 174 $48,152 185 $4,340 11

Table 13: Breakout of Goal One Request by Program Activity 

Figure 7: Breakout of Goal One Request by Program Activity 
FY 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 31

Breakout of Goal One Request by Outcome Objective 

FY 2009 FY 2010 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.

$37,922 151 $41,181 158 $3,259 7

1.2 Markets that can be monitored to 

ensure early warning of potential problems or issues that could adversely 

affect their economic vitality.

5,890 23 6,971 27 1,081 4

Total Goal One $43,812 174 $48,152 185 $4,340 11

Table 14: Breakout of Goal One by Outcome 

Figure 8: Breakout of Goal One Request by Outcome Objective 
FY 2010 President’s Budget & Performance Plan

32 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 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 33

CFTC Strategy Mapping 

FY 2010 Goal Two Resource Investment by Outcome Objective 

Figure 9: Goal Two Resource Strategy Mapping 

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

$55

0 20 4 0 6 0 8 0 100 120 140 160 180 200 220

FULL- TIME EQUIVALENTS

MILLIONS

Outcome 2.1 - Violations Detected and Prevented

Outcome 2.2 - Commodity Professionals Meet High Standards

Outcome 2.3 - Complaints are Handled Effectively and Expeditiously 

Outcome Objectives and Annual Performance Goals 

Outcome 2.1 – Violations of Federal laws concerning futures and option 

contracts are detected and prevented. 

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

Outcome 2.2 – Commodity professionals meet high standards. 

 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. 

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

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

Outcome 2.1

20% Investment

Outcome 2.3

3% Investment

Outcome 2.2

4% Investment
FY 2010 President’s Budget & Performance Plan

34 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 50-60 

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 is transitioning to Practice Manager, a Project eLaw automated tool 

that will assist staff in managing the reparations complaints more efficiently 

and effectively. We anticipate that Practice Manager will replace Repcase for 

new cases filed after the implementation date. 

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. 

By the end of 2009, dispositions from 1997 through the present will be available through the Web site. In addition, in FY 2009, the Web Disciplinary 

History project streamlined and automated the process for updating and 

publishing the Administrative and Reparations Sanctions information to the 

Commission’s Web site and improved the user interface and usability of this 

information for our users. 

During FY 2009, the Commission amended its rules to allow a Presiding Officer, at his discretion, to allow filing by email or fax. In addition, published 

rules to implement new statutory requirements on post-judgment interest. 

 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 
FY 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 35

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 2010 President’s Budget & Performance Plan

36 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 2007

Actual

FY 2008

Actual

FY 2009

Plan

FY 2010

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

99

41

98%

24

215

40

97%

31

142

50

98%

24

176

55

98%

25

Outcome 2.2: Commodity professionals meet high standards.

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

Performance Measures 

FY 2007

Actual

FY 2008

Actual

FY 2009

Plan

FY 2010

Plan

Percentage of self-regulatory organizations that comply 

with CFTC Core Principles

Percentage of derivatives clearing organizations that comply with CFTC Core Principles

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

Percentage of self-regulatory organizations 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%

75%

100%

100%

100%

100%

90%

100%

100%

100%

100%

90%

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 2007

Actual

FY 2008

Actual

FY 2009

Plan

FY 2010

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

100%

50%

90%

66%

67%

57%

73%

56%

100%

60%

90%

10%

100%

60%

90%

50%
FY 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 37

Breakout of Goal Two Request by Program Activity 

FY 2009 FY 2010 Change

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

Market Oversight $0 0 $0 0 $0 0

Clearing & Intermediary 

Oversight

7,097 28 7,715 29 618 1

Chief Economist 0 0 0 0 0 0

Enforcement 22,120 84 24,339 90 2,219 6

Proceedings 2,648 11 2,723 11 75 0

General Counsel 5,122 19 5,714 21 592 2

Executive Direction & 

Support

2,191 9 2,389 9 198 0

TOTAL: $39,178 151 $42,880 160 $3,702 9

Table 15: Breakout of Goal Two Request by Program Activity 

 

Figure 10: Breakout of Goal Two Request by Program Activity 
FY 2010 President’s Budget & Performance Plan

38 Commission Strategies to Influence Outcomes 

Breakout of Goal Two Request by Outcome Objective 

FY 2009 FY 2010 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.$29,369 112 $32,132 119 $2,763 7

2.2 Commodities professionals meet 

high standards.

5,985 24 6,631 25 646 1

2.3 Customer complaints against 

persons or firms falling within the 

jurisdiction of the Commodity Exchange Act are handled effectively 

and expeditiously.

3,824 15 4,117 16 293 1

Total Goal Two $39,178 151 $42,880 160 $3,702 9

Table 16: Breakout of Goal Two by Outcome 

Figure 11: Breakout of Goal Two Request by Outcome Objective 
FY 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 39

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 practice violations. 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 2010 President’s Budget & Performance Plan

40 Commission Strategies to Influence Outcomes 

CFTC Strategy Mapping 

FY 2010 Goal Three Resource Investment by Outcome Objective 

Figure 12: Goal Three Resource Strategy Mapping 

$0

$5

$10

$15

$20

$25

$30

0 20 40 6 0 80 100

FULL- TIME EQ UIV ALENT S

MILLIONS

Outcome 3.1 - Sound Financial Practices for Clearing Organizations and Firms

Outcome 3.2 - Markets are Effectively Self-Regulated

Outcome 3.3 - Market are Free of Trade Practice Abuses

Outcome 3.4 - Regulatory Environment is Responsive to Market Conditions

Outcome Objectives and Annual Performance Goals 

Outcome 3.1 – Clearing organization 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. 

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

 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. 

 Annual Performance Goal: Minimize trade practice abuses. 

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. 

Outcome 3.2

9% Investment

Outcome 3.1

7% Investment

Outcome 3.4

4% Investment

Outcome 3.3

4% Investment
FY 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 41

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 2010 President’s Budget & Performance Plan

42 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 CFTC 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 has integrated the world’s commodity futures and option markets, resulting in 

increased cross-border trading volume, cross-border participation, and 

cross-border exchange linkages. In these circumstances no one regulator 

will have the information or geographic reach to address all regulatory 

and enforcement issues. The recent financial crises, which included the 

failure of a major investment bank with positions on multiple markets, 

and the concerns raised with respect to volatility in the energy and agricultural markets, illustrate that markets are global and require the Commission to coordinate with foreign regulators and within multilateral organization such as IOSCO. The calls for global regulatory reform will also necessitate even greater engagement within IOSCO and the foreign 

regulators. 
FY 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 43

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 2007

Actual

FY 2008

Actual

FY 2009

Plan

FY 2010

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 clearing organizations that comply with

requirement to enforce rules

0

$0

1

100%

0

$0

0

100%

0

$0

3

100%

0

$0

4

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 2007

Actual

FY 2008

Actual

FY 2009

Plan

FY 2010

Plan

Percentage of intermediaries who meet risk-based capital 

requirements

Percentage of self-regulatory 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 2007

Actual

FY 2008

Actual

FY 2009

Plan

FY 2010

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 2007

Actual

FY 2008

Actual

FY 2009

Plan

FY 2010

Plan

Percentage of CFMA Section 126(b) objectives addressed

Number of rulemakings, studies, interpretations, and 

guidances 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%

19

100%

95%

100%

41

100%

75%

100%

36

75%

83%

100%

38

75%

83%
FY 2010 President’s Budget & Performance Plan

44 Commission Strategies to Influence Outcomes 

Breakout of Goal Three Request by Program Activity 

FY 2009 FY 2010 Change

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

Market Oversight $9,498 38 $10,316 40 $818 2

Clearing & Intermediary 

Oversight

12,992 51 14,587 56 1,595 5

Chief Economist 0 0 0 0 0 0

Enforcement 6,558 25 7,205 26 647 1

Proceedings 0 0 0 0 0 0

General Counsel 2,445 9 2,730 10 285 1

Executive Direction & 

Support

2,847 11 3,202 12 355 1

TOTAL $34,340 134 $38,040 144 $3,700 10

Table 17: Breakout of Goal Three by Program Activity 

Figure 13: Breakout of Goal Three Request by Program Activity 
FY 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 45

Breakout of Goal Three Request by Outcome Objective 

FY 2009 FY 2010 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.

$9,607 37 $10,490 39 $883 2

3.2 Commodity futures and option markets are effectively self-regulated.12,772 51 14,508 56 1,736 5

3.3 Markets are free of trade practice 

abuses.

5,499 21 5,904 22 405 1

3.4 Regulatory environment responsive 

to evolving market conditions.

6,462 25 7,138 27 676 2

Total Goal Three $34,340 134 $38,040 144 $3,700 10

Table 18: Breakout of Goal Three Request by Outcome 

Figure 14: Breakout of Goal Three Request by Outcome Objective 
FY 2010 President’s Budget & Performance Plan

46 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.

This past year, Congress enacted the CFTC Reauthorization Act of 2008 (CRA) as 

part of the Food, Conservation, and Energy Act of 2008 (Farm Bill), making critical improvements to the CEA and the Commission’s authority. Specifically, the 

new legislation reauthorized the Commission through FY 2013, closed the socalled ―Enron Loophole‖ by allowing enhanced Commission oversight of ECMs 

that trade contracts linked to regulated U.S. futures contracts, increased CFTC 

penalties for manipulation, clarified CFTC anti-fraud authority for off-exchange 

principal-to-principal energy trades, and clarified CFTC retail foreign currency 

fraud authority. 

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 

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

(FSRIA) of 2002. 
FY 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 47

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 2010 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 3 for a more 

detailed summary of the information technology budget. 

With the growth of trade and order volumes, the amount of reported trade and 

order data has grown considerably. Alongside that data growth, the Commission 

is frequently engaged in more complex and time sensitive information analysis 

efforts. These developments have led to a key technology initiative ─ the development of an information management architecture that transforms a growing 

data stream and a growing data analysis requirement into a Commission data 

environment. The initiative will examine current capabilities, emerging data 

needs, data governance, data organization, data privileges, and software capabilities to provide an information architecture roadmap in support of current mission requirements. The resulting solution will provide the CFTC with more effective information analysis capability by modernizing the Commission existing data 

management environment. 

The Commission is also in the process of fully implementing the Trade Surveillance System (TSS), which is used for trade practice surveillance on new and 

emerging electronic exchanges. This new system uses 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 implementation of a Document Management 

System to modernize, centralize and automate the management of the Commission’s information resources. The Commission’s ability to fulfill its mission depends on the collection, analysis, communication and presentation of information in forms useful to Commission employees, the regulated industry, other Federal, state, and international agencies, the Congress, and the American public. 

When complete, the Document Management System will improve the Commission’s document management practices, technical solutions, and business 

process. 

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, including the development of a property management system for non-capitalized, sensitive items and better tools for planning and managing space requirements. 

Financial Management. Improved accountability for performance, together with 

unquestionable fiscal integrity, serves as key mission delivery cornerstones. Ef-
FY 2010 President’s Budget & Performance Plan

48 Commission Strategies to Influence Outcomes 

fective 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 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 49

CFTC Strategy Mapping 

FY 2010 Goal Four Resource Investment by Outcome Objective 

Figure 15: Goal Four Resource Strategy Mapping 

$0

$5

$10

$15

$20

0 1 0 2 0 30 4 0 5 0 60

FULL-TIME EQUIVALENTS

MILLIONS

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. 

 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. 

 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. 

Outcome 4.5

7% Investment

Outcome 4.3

2% Investment

Outcome 4.2

5% Investment

Outcome 4.1

2% Investment

Outcome 4.4

3% Investment
FY 2010 President’s Budget & Performance Plan

50 Commission Strategies to Influence Outcomes 

 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. 

 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. 

 Annual Performance Goal: Progress in completing the 18 priorities established in the Commission Strategic Plan8 for fiscal years 2007 through 2012. 

 

8 The Commission adopted the Strategic Plan for 2007 - 2012 on September 30, 2007. 
FY 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 51

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 2010 President’s Budget & Performance Plan

52 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. 

 Undertake physical security upgrades commensurate with Federal Protective Service Level III facility standards. 

 Integrate contingency planning efforts of the Commission according to 

risk management principles and methodologies. 
FY 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 53

Summary of Goal Four Performance Indicators 

Goal Four: 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 2007

Actual

FY 2008

Actual

FY 2009

Plan

FY 2010

Plan

4.1.1 Percentage of fiscal year program development objectives met under CFTC 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%

84

3.9%

45%

42.1%

100%

59

2.4%

78%

23.0%

100%

45

3.6%

55%

27%

100%

45

3.6%

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 2007

Actual

FY 2008

Actual

FY 2009

Plan

FY 2010

Plan

4.2.1 Percentage of CFTC information technology resources 

directly tied to Commission resource priorities as stated in 

the Strategic Plan 

4.2.2 Percentage of major information technology 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 National Institute of 

Standards and Technology guidance

4.2.7 Percentage of information technology 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

100%

100%

83%

100%

95%

75%

100%

98%

100%

100%

84%

100%

100%

100%

100%

99%

100%

100%

80%

100%

100%

100%

100%

98%

100%

100%

80%

100%

100%

100%

100%

98%
FY 2010 President’s Budget & Performance Plan

54 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 2007

Actual

FY 2008

Actual

FY 2009

Plan

FY 2010

Plan

4.3.1 Number of hours required to deploy staff and 

begin mission essential functions at the Continuity of 

Operations Plan site

24 24 12 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 2007

Actual

FY 2008

Actual

FY 2009

Plan

FY 2010

Plan

4.4.1 Audit opinion of the Commission’s annual financial statements as reported by the CFTC’s external 

auditors 

4.4.2 Number of material internal control weaknesses 

reported in the Performance and Accountability Report

4.4.3 Number of non-compliance disclosures in the 

audit report

Unqualified

0

0

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 2007

Actual

FY 2008

Actual

FY 2009

Plan

FY 2010

Plan

4.5.1 Percentage of 18 Strategic Plan priorities that 

are on track to completion by FY 20129

N/A14 100% 25% 50%

 

9 The Commission adopted the Strategic Plan for FY 2007–FY 2012 on September 30, 2007. 
FY 2010 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 55

Breakout of Goal Four Request by Program Activity 

FY 2009 FY 2010 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

28,670 113 31,528 121 2,858 8

TOTAL $28,670 113 $31,528 121 $2,858 8

Table 19: Breakout of Goal Four by Program Activity 
FY 2010 President’s Budget & Performance Plan

56 Commission Strategies to Influence Outcomes 

Breakout of Goal Four Request by Outcome Objective 

FY 2009 FY 2010 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.

$3,778 15 $3,897 15 $119 0

4.2 A modern and secure information 

system that reflects the strategic priorities of the Commission. 10

7,570 30 8,456 33 886 3

4.3 An organizational infrastructure 

that efficiently and effectively responds 

to and anticipates both the routine and 

emergency business needs of the Commission.

3,778 15 3,897 15 119 0

4.4 Financial resources are allocated, 

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

Commission.

3,778 15 4,157 16 379 1

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

sound management and organizational 

excellence provided by executive leadership. 

9,766 38 11,121 42 1,355 4

Total Goal Four $28,670 113 $31,528 121 $2,858 8

Table 20: Breakout of Goal Four by Outcome 

Figure 16: Breakout of Goal Four Request by Outcome Objective 

 

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

allocated to Goals 1, 2, or 3. 
FY 2010 President’s Budget & Performance Plan

Justification of the FY 2010 President’s Budget & Performance Plan 57

Justification of the FY 2010 Budget & Performance Estimate

Breakout of $160.6 Million Budget Estimate by Program 

FY 2010 FY 2010

FY 2008 FY 2009 Current Services Request

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

Market Oversight 101 $24,504 125 $30,793 125 $32,412 133 $33,831

Clearing & Intermediary Oversight 66 $16,090 85 $21,613 85 $22,576 91 $23,876

Chief Economist 7 $1,732 14 $3,524 14 $3,711 15 $3,896

Enforcement 113 $28,730 160 $42,048 160 $44,305 171 $46,313

Proceedings 9 $2,227 11 $2,648 11 $2,786 11 $2,723

General Counsel 27 $6,685 36 $9,613 36 $10,130 39 $10,724

Exec. Direction & Support 126 $31,198 141 $35,761 141 $37,637 150 $39,237

Total 449 $111,166 572 $146,000 572 $153,557 610 $160,600

Table 21: Budget Estimate by Program 

Figure 17: $160.6 Million Budget Estimate by Program 

 
FY 2010 President’s Budget & Performance Plan

58 Justification of the FY 2010 President’s Budget & Performance Plan 

Breakout of $160.6 Million Budget Estimate by Object Class 

FY 2008 FY 2009 FY 2010

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

11.1-11.5 Personnel Compensation $57,931 $75,843 $86,354

11.8 Special Pers. Serv. Payments 22 22 24

11.9 Subtotal, Personnel Comp. 57,953 75,865 86,378

12.1 Personnel Benefits: Civilian 14,396 20,410 24,329

13.0 Benefits for Former Personnel 0 0 51 

21.0 Travel & Transportation of Persons 1,418 1,568 2,068

22.0 Transportation of Things 37 100 104

23.2 Rental Payments to Others 11,610 12,400 14,462

23.3 Comm., Utilities & Miscellaneous 2,369 5,108 4,501

24.0 Printing and Reproduction 312 472 472

25.0 Other Services11 16,705 21,214 23,743

26.0 Supplies and Materials 749 1,004 1,017

31.0 Equipment 5,549 6,849 3,198

32.0 Building/Fixed Equipment 66 1,010 277

42.0 Claims/Indemnities 2 0 0 

99.0 Subtotal, Direct Obligations 111,166 146,000 160,600

99.0 Reimbursable 230 125 125

99.0 Total Obligations $111,396 $146,125 $160,725

Table 22: Budget Estimate by Object Class 

Figure 18: $160.6 Million Budget Estimate by Object Class 

 

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

maintenance, and advisory & assistance services. 
FY 2010 President’s Budget & Performance Plan 

Justification of the FY 2010 President’s Budget & Performance Plan 59

Crosswalk from FY 2009 to FY 2010 

FY 2009

Budget

FY 2010 

Request Change

Budget Authority ($000) $146,000 $160,600 $14,600

Full-Time Equivalents (FTEs) 572 610 38

Explanation of Change FTEs 

Dollars 

($000) 

Current Services Increases: (Adjustments to FY 2009 Base)

To provide for the following changes in personnel compensation:

 --Estimated July 2010 5.5% merit based pay adjustment 990

 --Estimated July 2009 5.5% merit based pay adjustment (annualization of)

3,174

 --To provide for increase in incentive awards 60

 --To provide pay parity with FIRREA agencies in accordance with 

FSRIA 2002

 Compensation (Classification Review) 791

 Benefits (Classification Review) 211

 Expanded Benefits (Health) 441

 --To provide for increased costs of personnel benefits 1,722

 --To provide for increased costs of unemployment benefits 51

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

117

 --Travel/Transportation ($504)

 --Space Rental/Communications/Utilities ($1,455)

 --Supplies/Printing ($13)

 --All Services ($2,529)

 --Equipment (-$3,651)

 --Building/Fixed Equipment (-$733)

Program Increase: (Adjustments to FY 2010 Current Services)

 --To provide for salaries and expenses for 38 additional FTEs +38 7,043

Total Increases +38 $14,600

Table 23: Crosswalk from FY 2009 to FY 2010 
FY 2010 President’s Budget & Performance Plan

60 FY 2010 President’s Budget & Performance PlanMarket Oversight 

Market Oversight 

Total Budget: $33,831,000 133 FTEs 

Total Change: $ 3,038,000 8 FTEs 

Figure 19: Market Oversight

Percentage of Total Budget Dollars

Figure 20: Market Oversight

Percentage of Total Budget FTEs

Justification of the FY 2010 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 fulfills the Commission’s surveillance and oversight responsibilities 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 2010, the Market Oversight program requests 133 FTEs, an increase of 8 

FTE over the FY 2009 level. The three major subprogramsMarket Surveillance, Market and Product Review, and Market Complianceare requesting 70

FTEs, 26 FTEs, and 37 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 operations of the FBOT and its regulator. 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 ex-
 FY 2010 President’s Budget & Performance Plan 

FY 2010 President’s Budget & Performance PlanMarket Oversight 61

changes; 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 detecting and preventing threats of price manipulation and other market disruptions caused by abusive 

trading practices, investigating instances of possible manipulation, analyzing routine reports of large trader activity, and implementing the ECM significant price 

discovery contract (SPDC) provisions of the CRA. 

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 monitor the markets 

and 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 contracts that are linked by cash-settlement to a contract traded at a designated contract market in order to better accomplish the Commission’s mission of detecting 

and preventing price manipulation in markets under its 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 with safe marketplaces that have appropriate protections in place and 

provisions for ensuring the fairness of the market and the integrity of their contracts. 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. Furthermore, exchanges must 

provide for fair, equitable and secure markets. Adherence to the approval criteria, CFTC Core Principles, and appropriate contract design minimizes market 

disruptions and the susceptibility of contracts to manipulation or price distortion 

and promote customer protection and market integrity. 

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 CFTC Core Principles and Commission regulations. The subprogram also reviews filings by exempt markets and, as 
FY 2010 President’s Budget & Performance Plan 

62 FY 2010 President’s Budget & Performance PlanMarket Oversight 

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 exchange rules and rule amendments for consistency with CFTC Core Principles and various regulatory standards, thus maintaining fairness and integrity, protecting customers, and accommodating and 

fostering innovation and efficiency in self-regulation. 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 reviews exempt commercial market and exempt board of trade 

filings to ensure compliance with the Act. The subprogram 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. Furthermore, the subprogram reviews exempt commercial markets and exempt board of 

trade on an ongoing basis to ascertain whether the operator 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. With additional staff, the subprogram will implement new provisions of the CRA regarding exempt commercial markets that trade significant price discovery contracts, including ongoing 

reviews of the new market rules or amendments as well as annual evaluations to 

determine whether any of the market’s serve a significant price discovery function and, to the extent that any contract does, subjecting that contract to an oversight regime comparable to that for designated contract market contracts. 

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 self-regulatory 

programs on an ongoing, routine basis to assess their continuing compliance with 

applicable CFTC 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, recordkeeping, and dispute resolution programs. These periodic reviews promote and 
 FY 2010 President’s Budget & Performance Plan 

FY 2010 President’s Budget & Performance PlanMarket Oversight 63

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. 

Electronic trading accounts for over 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 will be used 

to monitor inter-market trading, a blind spot in surveillance which only the 

Commission can address, and side-by-side trading, e.g., simultaneous trading of 

a contract on a DCM’s floor and the DCM’s electronic trading platform. 

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. 
FY 2010 President’s Budget & Performance Plan 

64 FY 2010 President’s Budget & Performance PlanMarket Oversight 

In FY 2010, the Market Oversight staff will be required to monitor a large and 

diverse array of markets and products to carry out the Commission’s oversight 

and surveillance program to deter and prevent price manipulation and investigate suspect activity. The Commission anticipates that a large number of new, 

novel 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 agricultural and 

energy futures contracts is also expected to continue to grow, as exchanges develop new types of contracts to meet commercial needs, such as new exchangetraded contracts that replicate OTC products. 

The increasing inter-relationship among exchange-traded contracts, OTC products, and cash markets, involving many commodity areas, increases the complexity of conducting surveillance to detect manipulative strategies and to understand 

the factors causing price movements. 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 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. 

Additional staffers are critical to enable the Market Oversight program to meet its 

regulatory and oversight responsibilities. These additional staff persons are 

needed for staff to focus on the complex issues and changing practices in the derivatives markets, especially in the energy and agricultural sectors. 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 cannot keep up 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. In addition, the Commission proposed acceptable practices for CFTC 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 these additional resources, surveillance staff will be stretched to a level 

that puts at significant 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 to cover each commodity area, the surveillance economists will be required to cover many markets, and the amount of expertise and attention that 

can be devoted to each market will suffer dramatically. Thus, some price manipulations and abusive trading practices will go undetected or will be detected too 

late to permit amelioration or intervention. Also, staff will not be able to assess 

trader participation in the markets to evaluate the extent of speculative and 

commercial activity. In particular, there is a substantial risk that abusive trading 

in agricultural and energy futures markets will go undetected, potentially costing 

American consumers hundreds of millions of dollars. This is of critical importance during recent periods of unprecedented prices and volatility in many commodity markets. 

Further, in the absence of sufficient resources, the efficacy of exchange selfregulatory programs will not be evaluated as effectively or on a timely basis. By 
 FY 2010 President’s Budget & Performance Plan 

FY 2010 President’s Budget & Performance PlanMarket Oversight 65

materially 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, affected industries and the general public will suffer direct economic harm from an 

increase in illegal trading activity. In addition, without sufficient human resources to further develop the Commission’s new Trade Surveillance System the 

system may not be developed to its full capabilities or could quickly become obsolete. TSS, which is in the early stages of development, will enhance the Commission’s trade practice surveillance program and allow staff to conduct surveillance 

across multiple markets and exchanges to detect trading violations and potentially violative activity. TSS also will provide staff with the necessary tools to recognize and monitor today’s often-novel and complex trading practices and strategies. TSS development and implementation is expected to be an ongoing process 

and is part-and-parcel of the Commission’s innovation to keep pace with rapid 

developments in today’s high-volume global electronic trading environment. 

In addition, staff would not be able to review all new contracts, new rules and 

rule change submissions for approval within statutory time frames, and will not 

be able to appropriately review all new contract, new rule and rule change certifications in a timely manner. In the absence of a timely new contract reviews, 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 new rule or 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 or because the contract 

may not be a useful risk management tool. 

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. 

Without adequate resources, the Market Oversight program cannot monitor exempt markets and carry out the requirements of recently enacted legislation related to significant price discovery contracts on exempt markets. This could significantly affect the public interest by permitting such contracts to trade without 

effective surveillance and exchange oversight, thereby creating the potential for 

undetected market abuses and manipulation. 

In addition, without adequate resources, staff cannot implement the various initiatives adopted by the Commission to improve transparency in the futures markets, especially the energy and agriculture markets. Many of these initiatives 

were adopted as a result of the staff’s special call to swap dealers. These initiatives focus on providing critical market information to traders and the public to 

address concerns about volatility and high prices. 

It is anticipated that some time in 2009, legislation will be adopted that will work 

fundamental changes to U.S. financial regulatory system, including new obligations with respect to the oversight of OTC derivatives markets. While the precise 

allocation of those new regulatory responsibilities is unclear, there is a very high 

probability that the CFTC will have some increased market monitoring responsibilities. Without additional resources, CFTC staff may not be adequate to effectively carry out the duties that would likely be attendant to those new responsibilities, including regulation drafting and market surveillance. 
FY 2010 President’s Budget & Performance Plan 

66 FY 2010 President’s Budget & Performance PlanMarket Oversight 

Table 24: Market Oversight Request by Subprogram 

FY 2009 FY 2010 Change

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

Market Compliance $8,989 36.00 $9,525 37.00 $536 1.00

Market & Product Review 6,098 14.00 6,817 26.00 719 2.00

Market Surveillance 15,706 65.00 17,489 70.00 1,783 5.00

TOTAL $30,793 125.00 $33,831 133.00 $3,038 8.00

Figure 21: Market Oversight FY 2010 Budget by Subprogram 
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanMarket Oversight 67

Table 25: Market Oversight Request by Goal 

FY 2009 FY 2010 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.

$19,292 79.00 $21,185 84.00 $1,893 5.00

1.2 Markets that can be monitored to ensure 

early warning of potential problems or issues 

that could adversely affect their economic 

vitality.

2,003 8.00 2,330 9.00 327 1.00

Subtotal Goal One $21,295 87.00 $23,515 93.00 $2,220 6.00

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.

$6,493 26.00 $7,217 28.00 $724 2.00

3.3 Markets are free of trade practice abuses. 2,497 10.00 2,575 10.00 78 0.00

3.4 Regulatory environment responsive to 

evolving market conditions.

508 2.00 524 2.00 16 0.00

Subtotal Goal Three $9,498 38.00 $10,316 40.00 $818 2.00

TOTAL $30,793 125.00 $33,831 133.00 $3,038 8.00

Figure 22: Market Oversight FY 2010 Budget by Goal 

 
FY 2010 President’s Budget & Performance Plan 

68 FY 2010 President’s Budget & Performance PlanClearing & Intermediary Oversight 

Clearing & Intermediary Oversight 

Total Budget: $23,876,000 91 FTEs 

Total Change: $ 2,263,000 6 FTEs 

Figure 23: Clearing & Intermediary Oversight

Percentage of Total Budget Dollars

Figure 24: Clearing & Intermediary Oversight 

Percentage of Total Budget FTEs

Justification of the FY 2010 President’s Budget & Performance Plan 

In FY 2010, the Clearing and Intermediary Oversight (DCIO) program requests 

91 FTEs, an increase of six FTEs over the FY 2009 level. The three subprograms 

of Compliance and Registration, Clearing Policy and Risk Surveillance (formerly 

Clearing Policy and Review), and Audit and Financial Review, are requesting 13, 

26, and 52 FTEs, respectively. 

Compliance and Registration - The Compliance and Registration subprogram 

level of 13 FTEs represents one additional FTE for FY 2010. The FTE will be allocated to fill an attorney position needed to meet the Compliance and Registration’s subprogram responsibilities with respect to Part 30. 

Compliance and Registration staff review petitions under Part 30 of the Commission’s regulations. Part 30 governs the offer and sale of foreign futures and options contracts to customers located in the United States, and it requires intermediaries seeking to engage in such activities to either register in the appropriate 

capacity with the Commission or seek exemption from registration requirements. The petition for exemption is typically filed by either a foreign governmental agency responsible for implementing and enforcing the foreign regulatory 

program, or by a foreign exchange on behalf of its members. In order to grant 

such petitions, the Commission must determine that compliance with the foreign 

jurisdiction’s regulatory program would offer protections comparable to those 

found under the U.S. regulatory scheme. In the past, most Part 30 petitions came 

from jurisdictions with which the Commission was familiar and had some working relationship. More recently, petitions have come from less familiar jurisdictions, and subprogram staff expects this trend to continue. Accordingly, additional staff is needed to review these incoming petitions, review the regulatory 

scheme of the home jurisdictions, meet with and evaluate the programs of foreign 

regulators and exchanges, and draft recommendations for Commission action. 

Additional staff also is needed to undertake a review of Part 30 program generally. The program has now existed for approximately 20 years during which time 

laws of the Part 30 jurisdictions have changed. Additional staff would be com-
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanClearing & Intermediary Oversight 69

mitted to reviewing the program to ensure that the past orders continue to reflect 

current realities. 

It should be noted that Compliance and Registration staff is the primary point of 

contact for the public and industry with regard to the meaning, interpretation, 

and effect of many of the Commission’s regulations. Consequently, the subprogram staff is responsible for handling numerous inquiries, ranging from daily 

calls and e-mail inquiries to formal requests for interpretation or no-action relief. 

The staff also is responsible for drafting and amending many of the rules involving the registration and regulation of intermediaries. Given current trends, staff 

anticipates significantly more work in this area. However, no additional staff will 

be available to handle any increase in the volume of work with regard to these 

issues. 

Clearing Policy and Risk Surveillance - The Clearing Policy and Risk Surveillance 

subprogram level of 26 FTEs represents two additional FTEs for FY 2010. The 

additional FTEs will be allocated to fill risk analyst positions to carry out Clearing 

Policy and Risk Surveillance subprogram responsibilities, particularly those related to the expanded and enhanced financial and risk surveillance functions. 

Additional risk analysts will enhance the ability of the risk surveillance group to 

analyze proactively and more comprehensively the risk profiles of traders, intermediaries, and clearinghouses in the continually growing markets. The FTEs also 

will be used to staff additional periodic reviews of DCOs to evaluate their compliance will the Act and Commission regulations, including CFTC Core Principles 

governing financial resources, risk management, default procedures, protection 

of customer funds, and system safeguards. 

Audit and Financial Review - The Audit and Financial Review subprogram level 

of 52 FTEs represents three FTEs for FY 2010. The additional FTEs are requested to carry out Audit and Financial Review’s program responsibilities.

The Audit and Financial Review subprogram is primarily responsible for conducting oversight of the financial surveillance programs of SROs for compliance 

with the Act, Commission regulations, and interpretations. Such oversight includes reviews and assessments of the effectiveness of the programs adopted by 

the SROs (i.e., CME Group, Kansas City Board of Trade, and NFA) to examine 

their member FCMs’ compliance with the Commission’s minimum financial and 

related reporting requirements, customer funds protection requirements, and 

sales practice requirements. The Audit and Financial Review subprogram also 

reviews and assesses the effectiveness of NFA’s program for monitoring CPOs’ 

and CTAs’ compliance with relevant provisions of the Act and Commission regulations. The subprogram further assesses the effectiveness of NFA’s execution of 

certain functions and responsibilities that the Commission has delegated to NFA, 

including the registration function. 

The Audit and Financial Review subprogram also conducts direct examinations 

of FCMs and CPOs. Such examinations may be conducted as part of the oversight 

of SROs, or they may be conducted on a ―for cause‖ basis to assess whether the 

target of the examination is in compliance with the Act and Commission regulations. Furthermore, the Audit and Financial Review subprogram is responsible 

for responding to public inquiries regarding the application of the Commission’s 

capital rule, financial reporting rules, segregation rule, and certain financial and 

reporting rules governing CPOs. 

Three additional FTEs will be allocated to the regional offices by assigning one 

FTE each to fill auditor positions in New York, Chicago, and Kansas City. The 

additional auditors will participate in the conduct of oversight examinations of 

the SROs which will allow the Audit and Financial Review subprogram to more 

effectively and more frequently monitor the financial surveillance programs of 
FY 2010 President’s Budget & Performance Plan

70 FY 2010 President’s Budget & Performance PlanClearing & Intermediary Oversight 

the SROs for compliance with the Act and Commission regulations. The FTE allocated to the New York Regional Office also will enable the subprogram staff to 

focus greater attention on the largest and most complex FCMs. 

The additional FTEs also will allow the Audit and Financial Review subprogram 

to engage in more frequent direct examination of FCMs and CPOs. Direct examinations provide an opportunity for the audit staff to conduct independent verification of the effectiveness and thoroughness of an SRO’s examinations. Direct 

examinations also provide opportunities for staff to become more proficient in 

the examination and review of the back-office operations and books and records 

of FCMs and CPOs. Such proficiency is critical in instances where immediate 

Commission action is necessary to assess the compliance of a FCM or CPO with 

the Commission’s financial requirements in order to protect customers and ensure orderly markets. 

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 further changes to the CEA resulting from the CRA, 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 increasing volume and the 

retail, non-intermediated nature of off-exchange trading in futures contracts 

based on forex has brought increased attention to this area. Additional resources 

will be needed as a result of reauthorization legislation that expands the Commission’s regulatory authority and jurisdiction over off-exchange retail foreign currency transactions. Specifically, DCIO will need additional resources to implement the Commission’s forex regulations, including developing oversight measures that will assure the effective monitoring of forex activity and the safeguarding of retail customers’ funds. Similarly, DCIO expects to devote significant resources to respond to futures industry and public inquiries regarding the effect of 

these regulations. 

DCIO also will require additional resources to maintain effective oversight programs of the operations and financial condition of the large FCMs, which also are 

registered with the Securities and Exchange Commission as securities brokersdealers. These large and diverse financial institutions are increasingly engaging 

in complex financial transactions that may have a significant potential impact on 

their financial condition and their ability to meet obligations to the futures clearing system and to the protection of customer funds. 

One consequence of not receiving the DCIO program’s requested level of resources is that the Clearing and Intermediary Oversight program will 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, including large and financially diverse FCMs, 

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. 
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanClearing & Intermediary Oversight 71

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 2010 President’s Budget & Performance Plan

72 FY 2010 President’s Budget & Performance PlanClearing & Intermediary Oversight 

Table 26: Clearing & Intermediary Oversight Request by Subprogram 

 FY 2009 FY 2010 Change

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

Clearing Policy & Review $6,073 24.00 $6,791 26.00 $718 2.00

Compliance & Registration 2,976 12.00 3,331 13.00 355 1.00

Audit & Financial Review 12,564 49.00 13,754 52.00 1,190 3.00

TOTAL $21,613 85.00 $23,876 91.00 $2,263 6.00

Figure 25: Clearing & Intermediary Oversight FY 2010 Budget by Subprogram 
 FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanClearing & Intermediary Oversight 73

Table 27: Clearing & Intermediary Oversight Request by Goal 

 FY 2009 FY 2010 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.

$762 3.00 $787 3.00 $25 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.

762 3.00 787 3.00 25 0.00

Subtotal Goal One $1,524 6.00 $1,574 6.00 $50 0.00

GOALTWO: Protect market users and the public.

Outcomes

2.1 Violations of Federal commodities laws are detected and prevented.$1,659 6.50 $1,712 6.50 $53 0.00

2.2 Commodities professionals meet 

high standards.

 5,182 20.50 5,738 22.00 556 1.50

2.3 Customer complaints against 

persons or firms falling within the 

jurisdiction of the Commodity Exchange Act are handled effectively.

 256 1.00 265 1.00 9 0.00

Subtotal Goal Two $7,097 28.00 $7,715 29.50 $618 1.50

GOAL THREE: Foster open, competitive, and financially sound markets.

Outcomes

3.1 Clearing organizations and firms 

holding customer funds have sound 

financial practices.

$4,960 19.50 $5,379 20.50 $419 1.00

3.2 Commodity futures and option 

markets are effectively selfregulated.

5,891 23.00 6,870 26.00 979 3.00

3.4 Regulatory environment responsive to evolving market conditions.2,141 8.50 2,338 9.00 197 0.50

Subtotal Goal Three $12,992 51.00 $14,587 55.50 $1,595 4.50

TOTAL $21,613 85.00 $23,876 91.00 $2,263 6.00

Figure 26: Clearing & Intermediary Oversight FY 2010 Budget by Goal 
FY 2010 President’s Budget & Performance Plan

74 FY 2010 President’s Budget & Performance Plan Enforcement 

Enforcement 

Total Budget: $46,313,000 171 FTEs 

Total Change: $ 4,265,000 11 FTEs 

Figure 27: Enforcement Percentage 

of Total Budget Dollars

Figure 28: Enforcement Percentage 

of Total Budget FTEs

Justification of the FY 2010 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 2010, the Enforcement program’s FTE allocation level is 171, an increase of 

11 FTEs over the FY 2009 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 manipulation, including 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 

markets and market participants. 

 The Enforcement program anticipates that it will be required to engage in a 

number of large, complex investigations and trials during FY 2009 and FY 

2010. To adequately address these complex matters will require the Enforcement program to commit expenditures, especially with respect to information processing 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.12 The Enforcement program anticipates that 

 

12 ―Quick-strike‖ enforcement actions are those that the Commission files within four months of opening an investigation. 
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanEnforcement 75

it will need to devote additional resources to investigate CPO and CTA activity. 

 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. The recent legislation reauthorizing the Commission, the CRA, also expanded the 

Commission’s oversight of electronic trading facilities. These challenges and 

developments will require additional resources not only for investigation and 

prosecution, but also for Enforcement staff training. 

 The Enforcement program continues to battle the pervasive fraud involving 

retail forex futures, forex options, and/or off-exchange retail forex transactions. The CRA bolstered the Enforcement Program’s efforts in this area by 

clarifying the Commission’s forex jurisdiction. The Enforcement program anticipates that it will need to devote additional resources to combating retail 

forex fraud. 

 The Enforcement program also focuses resources against other types of offexchange fraud. The Enforcement program anticipates additional activity in 

this program area, in part, due to the fact that the CRA clarifies the Commission’s anti-fraud jurisdiction with respect to certain principal-to-principal 

transactions. 

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 $1 million per manipulation violation or $140,000 per other 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 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; manipulative trading in the OTC markets that affect, or tend to affect, the futures or 

options markets; fraud involving certain off-exchange principal-to-principal 

transactions; or off-exchange retail forex transactions. 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 misconduct involving off-exchange retail 
FY 2010 President’s Budget & Performance Plan

76 FY 2010 President’s Budget & Performance PlanEnforcement 

forex transactions and charging illegal futures and options, often in 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 manipulation and abusive trading 

practices, including wash sales. 

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/or 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 

25 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 2010 in targeting 

certain program areas, for example: 1) allegations of manipulation, attempted 

manipulation, trade practice violations, and false reporting; 2) misconduct by 

commodity pools, hedge funds, CPOs, and CTAs; and 3) financial, supervision, 

recordkeeping and other violations committed by registered entities. Also, in 

response to recent legislation reauthorizing the CFTC, which provided the agency 

with clarified authority with respect to off-exchange retail foreign currency fraud 

and trading on exempt commercial markets, the Enforcement program will target: 1) off-exchange fraud involving illegal futures and options contracts, including those involving foreign currency; and 2) trade practice violations. The allocated FTEs also will enable the Enforcement program to continue its commitment 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 complex litigation draws resources away from inves-
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanEnforcement 77

tigations. 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 and State authority 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 2010 President’s Budget & Performance Plan

78 FY 2010 President’s Budget & Performance PlanEnforcement 

Table 28: Enforcement Request 

FY 2009 FY 2010 Change

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

Enforcement $42,048 160.00 $46,313 171.00 $4,265 11.00

TOTAL $42,048 160.00 46,313 171.00 $4,265 11.00
FY 2010 President’s Budget & Performance Plan

 

FY 2010 President’s Budget and Performance PlanEnforcement 79

Table 29: Enforcement Request by Goal 

FY 2009 FY 2010 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.

$12,766 48.58 $14,103 52.07 $1,337 3.49

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

potential problems or issues that could 

adversely affect their economic vitality.

604 2.30 666 2.46 62 0.16

Subtotal Goal One $13,370 50.88 $14,769 54.53 $1,399 3.65

GOAL TWO: Protect market users and the public.

Outcomes

2.1 Violations of Federal commodities 

laws are detected and prevented.

$21,918 83.40 $24,117 89.05 2,199 5.65

2.2 Commodities professionals meet 

high standards.

202 0.77 222 0.82 20 0.05

Subtotal Goal Two $22,120 84.17 $24,339 89.87 $2,219 5.70

GOAL THREE: Foster open, competitive, and financially sound markets.

Outcomes

3.1 Clearing organizations and firms 

holding customer funds have sound 

financial practices.

$3,620 13.77 $3,997 14.76 $377 0.99

3.3 Markets are free of trade practice 

abuses.

2,412 9.18 2,666 9.84 254 0.66

3.4 Regulatory environment responsive 

to evolving market conditions.

526 2.00 542 2.00 16 0.00

Subtotal Goal Three $6,558 24.95 $7,205 26.60 $647 1.65

TOTAL $42,048 160.00 $46,313 171.00 $4,265 11.00

Figure 29: Enforcement FY 2010 Budget by Goal 
FY 2010 President’s Budget & Performance Plan

80 FY 2010 President’s Budget and Performance PlanOffice of the Chief Economist 

Office of the Chief Economist 

Total Budget: $ 3,896,000 15 FTEs 

Total Change: $ 372,000 1 FTE 

Figure 30: Chief Economist

Percentage of Total Budget Dollars

Figure 31: Chief Economist

Percentage of Total Budget FTEs

Justification of the FY 2010 President’s Budget & Performance Plan 

Innovation in the futures and option markets continues to ramp up taxing the 

ability of OCE staff to conduct thorough market research in support of 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 2010, the Office of the Chief Economist (OCE) program requests 15 FTEs; 

this is one additional FTE over the 14 FTE in the FY 2009 base. 

The growth in the number of markets that trade and clear a widening array of 

complex derivative products requires analysis and research to determine the appropriate regulatory approach to these markets and products. In FY 2010, staff 

of the OCE will be required to monitor a larger and more 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 
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanOffice of the Chief Economist 81

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 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 monitoring developments in derivatives trading and 

market innovation will be less effective. 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. 

Such research is integral to OCE’s ability to provide timely and effective support 

to the Chairman’s office in its response to information and analysis requests from 

the Congress and from other regulatory organizations. Stresses brought on both 

by difficulties in the financial markets as well as questions raised by innovative 

institutional arrangements show no signs of abating. Problems with sub-prime 

debt have elevated credit risk problems which can be expected to be an ongoing 

source of challenges. Very significant questions are being raised with regard to 

the appropriate levels for speculative activity as well as the institutional arrangements through which speculative activities are channeled. 

The development of new technology brought about by electronic trading is 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 surveillance programs, 

and review the financial safeguard system. This may result in substantial time 
FY 2010 President’s Budget & Performance Plan

82 FY 2010 President’s Budget & Performance PlanOffice of the Chief Economist 

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 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanOffice of the Chief Economist 83

Table 30: Office of the Chief Economist Request 

FY 2009 FY 2010 Change

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

Chief Economist $3,524 14.00 $3,896 15.00 $372 1.00

TOTAL $3,524 14.00 $3,896 15.00 $372 1.00

 
FY 2010 President’s Budget & Performance Plan

84 FY 2010 President’s Budget & Performance Plan Office of the Chief Economist 

Table 31: Office of the Chief Economist Request by Goal 

FY 2009 FY 2010 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.

$2,406 9.56 $2,166 8.35 -$240 -1.21

1.2 Markets that can be monitored to 

ensure early warning of potential problems or issues that could adversely affect 

their economic vitality.

1,118 4.44 1,730 6.65 612 2.21

Subtotal Goal One $3,524 14.00 $3,896 15.00 $372 1.00

GOAL TWO: Protect market users and the public.

None.

GOAL THREE: Foster open, competitive, and financially sound markets.

None

TOTAL $3,524 14.00 $3,896 15.00 $372 1.00
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance Plan Office of Proceedings 85

Office of Proceedings 

Total Budget: $ 2,723,000 11 FTEs 

Total Change: $ 75,000 0 FTE 

Figure 32: Proceedings Percentage of 

Total Budget Dollars

Figure 33: Proceedings Percentage of 

Total Budget FTEs

Justification of the FY 2010 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 2010, the Office of Proceedings program 

requests 11 FTEs, the same number of FTEs as the FY 2009 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 between 50 and 60 cases per year and will respond to 5,000 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. 
FY 2010 President’s Budget & Performance Plan

86 FY 2010 President’s Budget & Performance PlanOffice of Proceedings 

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 as needed. The office also 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 also published as needed. 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 requests no increase of FTEs over the FY 2009 level of 

11. If the requested level of eleven FTEs is not approved, the Office of Proceedings 

will be unable to move forward in effectively supporting the Commission’s customer protection program. In particular, the Office will not be able to effectively 

coordinate with the other customer protection programs of the Commission and 

NFA, or to represent the Commission in working on customer protection issues 

with external groups, including other Federal financial regulators and organizations such as AARP. In addition, the Office will not be able to address serious paper record-keeping issues or plan for and implement electronic filing and recordkeeping. The Office will also have difficulty in the transition to eLaw, the electronic litigation support package that currently supports the Division of Enforcement. This will, in turn, minimize the long-range ability of the program to 

effectively serve the Commission and the public. Finally, if the requested level of 

eleven FTEs is not approved, 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 could be impacted. 
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanOffice of Proceedings 87

Table 32: Proceedings Request by Subprogram 

FY 2009 FY 2010 Change

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

Enforcement $963 4.00 $990 4.00 $27 0.00

Reparations 1,685 7.00 1,733 7.00 48 0.00

TOTAL $2,648 11.00 $2,723 11.00 $75 0.00

Figure 34: Proceedings FY 2010 Budget by Subprogram 
FY 2010 President’s Budget & Performance Plan

88 FY 2010 President’s Budget & Performance PlanOffice of Proceedings 

Table 33: Proceedings Request by Goal 

FY 2009 FY 2010 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.

$963 4.00 $990 4.00 $27 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.

1,685 7.00 1,733 7.00 48 0.00

Subtotal Goal Two $2,648 11.00 $2,723 11.00 $75 0.00

GOAL THREE: Foster open, competitive, and financially sound markets.

None

TOTAL $2,648 11.00 $2,723 11.00 $75 0.00

 
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance Plan Office of the General Counsel 89

Office of the General Counsel 

Total Budget: $10,724,000 39 FTEs 

Total Change: $ 1,111,000 3 FTEs 

Figure 35: Percentage of 

Total Budget Dollars

Figure 36: Percentage of 

Total Budget FTEs

Justification of the FY 2010 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 2010, the OGC program requests 

39 FTEs, an increase of three FTEs over the FY 2009 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 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 2010 President’s Budget & Performance Plan

90 FY 2010 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 and, where appropriate, provides exemptive, interpretive, and noaction 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 and its staff 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 handling all appeals from initial determinations regarding 

requests for 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, including 

unregistered pool operators perpetrating fraudulent Ponzi schemes) 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 Commission 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 

compliance, complex document review, and personnel-related matters) require 

added resources. The recently-enacted CRA clarified the Commission’s enforcement authority (and expanded its rulemaking authority) over off-exchange retail 

foreign currency trading, and gave the Commission regulatory authority over significant price discovery contracts traded on exempt commercial markets. The 

exercise of these authorities will require an expanded role for OGC in providing 

counsel to Commission staff and in handling litigation matters arising out of 

those efforts. 

Separately, increasing innovation in the futures and capital markets in recent 

years has yielded a growing number of novel derivative products that contain 

elements of both futures contracts and securities. Such products span the jurisdictional divide between the CFTC under the CEA and the SEC under the federal 

securities laws. Last year, the two agencies entered into a Memorandum of Understanding Regarding Coordination in Areas of Common Regulatory Interest to 

improve efficiency in the approval and regulation of such novel derivative products in order to speed their access to the marketplace. The continuing development of these hybrid instruments will create an increased need for legal analysis 

of products, statutory jurisdiction, and judicial precedents by OGC attorneys. 

The recent credit crisis has spurred calls for the creation of effective clearing solutions for over-the-counter credit default swaps, which some believe have contributed to the severity of the current circumstances. Such clearing may be done by 

derivatives clearing organizations registered with the Commission. This new 
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanOffice of the General Counsel 91

functional responsibility can be expected to necessitate additional legal support 

from OGC for Commission programs performing this clearing oversight function. 

Since the enactment of reauthorization legislation in mid-2008, a substantial 

amount of legislative attention has been devoted to three issues implicating the 

CEA and the Commission: 1) whether excessive speculation has been responsible, in whole or in part, for significant volatility in prices of crude oil and various 

agricultural commodities; 2) the possible role of credit default swaps in exacerbating the credit crisis, and potential regulation of the vast over-the-counter derivatives markets; and 3) suggested reform of the financial regulatory structure 

for all sectors of the financial industry, including the futures industry, in response 

to the severe economic stresses of recent times. This legislative activity has included several requests for testimony by Commission representatives, a myriad of 

statutory proposals to address these issues, and a multitude of Congressional requests for information to the Commission. Legislative activity in these areas is 

expected to continue, and thus the demand for OGC resources in this area will 

continue apace. 

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 Privacy 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 its likely impact on 

the Commission and the futures industry, and suggests needed legislative reforms. OGC also has responsibility for handling Freedom of Information Act requests and appeals filed with the Commission. 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. OGC’s activities, programs and support contribute to all the outcomes and functions of the Commission, and have a direct and 

significant impact on the ability of the Commission to perform its mission. 

The volume and complexity of the futures and derivatives markets have grown 

exponentially, while OGC has shrunk in recent years. A combination of staff attrition through retirements and resignations, and the lingering effects of prior 

hiring freezes, left OGC with only 18 staff attorneys in early 2008. The easing of 

restrictions on hiring, plus new positions previously authorized, have enabled 

OGC to begin rebuilding its ranks by hiring nine attorneys. These recent hires 

have restored OGC approximately to its strength prior to the recent wave of retirements and resignations (assuming no further attrition). In order to build its 

capability to handle the new responsibilities it is assuming as discussed above, 

OGC seeks authorization for three additional positions in FY 2010, including: 

one mid- to senior level litigator; and two entry- to mid-level general attorneys 

for regulatory affairs and legislation/inter-governmental affairs. OGC anticipates 

utilizing these positions to: 1) replenish its litigation program, which has been 

particularly hard hit by recent retirements and attrition; 2) respond to new regulatory and legislative demands, particularly with respect to energy and foreign 

currency, in light of a substantial increase in congressional activity affecting the 

Commission; 3) enhance staff expertise in growing areas such as international 

law, energy, clearing, over-the-counter derivatives, cross-margining, and novel 

derivative products, in recognition of today’s expanding, evolving, and global 

markets; and 4) establish a cadre of junior attorneys who will develop into experienced counsel providing sound legal advice to the Commission for years to 

come. 
FY 2010 President’s Budget & Performance Plan

92 FY 2010 President’s Budget & Performance PlanOffice of the General Counsel 

As the legal advisor to the Commission, a large portion of OGC’s workload is reactive in nature. In addition to serving the Commission, OGC must respond to outside ―stakeholders‖ whose requirements are not within the Commission’s control, 

such as Congress and the courts. An understaffed Office of General Counsel risks 

leaving the Commission’s legal interests less than fully protected.
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanOffice of the General Counsel 93

Table 34: General Counsel Request 

FY 2009 FY 2010 Change

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

General Counsel $9,613 36.00 $10,724 39.00 $1,111 3.00

TOTAL $9,613 36.00 $10,724 39.00 $1,111 3.00
FY 2010 President’s Budget & Performance Plan

94 FY 2010 President’s Budget & Performance PlanOffice of the General Counsel 

Table 35: General Counsel Request by Goal 

FY 2009 FY 2010 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.

$1,915 7.17 $2,134 7.76 $219 0.59

1.2 Markets that can be monitored to ensure early warning of potential problems or 

issues that could adversely affect their 

economic vitality.

131 0.49 146 0.53 15 0.04

Subtotal Goal One $2,046 7.66 $2,280 8.29 $234 0.63

GOAL TWO: Protect market users and the public.

Outcomes

2.1 Violations of Federal commodities laws 

are detected and prevented.

$3,028 11.34 $3,379 12.29 $351 0.95

2.2 Commodities professionals meet high 

standards.

601 2.25 671 2.44 70 0.19

2.3 Customer complaints against persons 

or firms falling within the jurisdiction of 

the Commodity Exchange Act are handled 

effectively and expeditiously.

1,493 5.59 1,664 6.05 171 0.46

Subtotal Goal Two $5,122 19.18 $5,714 20.78 $592 1.60

GOAL THREE: Foster open, competitive, and financially sound markets.

Outcomes 

3.1 Clearing organizations and firms holding customer funds have sound financial 

practices.

$624 2.34 $698 2.54 $74 0.20

3.2 Commodity futures and option markets 

are effectively self-regulated.

262 0.98 291 1.06 29 0.08

3.3 Markets are free of trade practice 

abuses.

590 2.21 663 2.41 73 0.20

3.4 Regulatory environment responsive to 

evolving market conditions.

969 3.63 1,078 3.92 109 0.29

Subtotal Goal Three $2,445 9.16 $2,730 9.93 285 0.77

TOTAL $9,613 36.00 $10,724 39.00 $1,111 3.00

Figure 37: General Counsel FY 2010 Budget by Goal 
FY 2010 President’s Budget & Performance Plan

 

FY 2010 President’s Budget & Performance PlanExecutive Direction & Support 95

Executive Direction & Support 

Total Budget: $39,237,000 150 FTEs 

Total Change: $ 3,476,000 9 FTEs 

Figure 38: Percentage of 

Total Budget Dollars

Figure 39: Percentage of 

Total Budget FTEs

Justification of the FY 2010 President’s Budget & Performance Plan 

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 

New York, Chicago, and Kansas City. 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 as-
FY 2010 President’s Budget & Performance Plan

96 FY 2010 President’s Budget & Performance PlanExecutive Direction & Support 

pects of the retail market in foreign currency trading; and 5) gave the Commission authority to regulate clearing organizations. 

This past year, Congress enacted the CFTC Reauthorization Act of 2008 (CRA) as 

part of the Food, Conservation, and Energy Act of 2008 (Farm Bill), making critical improvements to the CEA and the Commission’s authority. Specifically, the 

new legislation reauthorized the Commission through FY 2013, closed the socalled ―Enron Loophole‖ by allowing enhanced Commission oversight of ECMs 

that trade contracts linked to regulated U.S. futures contracts, increased CFTC 

penalties for manipulation, clarified CFTC anti-fraud authority for off-exchange 

principal-to-principal energy trades, and clarified CFTC retail foreign currency 

fraud authority. 

In FY 2010, the Agency Direction program requests a total of 46 FTEs, an increase of three over the FY 2009 level. One additional FTE is allocated to the 

Office of International Affairs in recognition of the burgeoning growth issues related to global market integration, the increased international coordination responsibilities contemplated by Congress with regard to trading in energy contracts through foreign boards of trade, the development of international standards and best practices, and the need for enhanced cooperation and coordination with foreign market authorities for supervisory and enforcement purposes. 

Two additional FTE are allocated to the Office of the Chairman to ensure that the 

Commission responds in a timely manner to Congress, the Administration, media, and the public. 

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; 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; 

 Manage the security, continuity and emergency preparedness programs of 

the Commission; 

 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 2010, the Administrative Management and Support subprogram requests a 

total of 104 FTEs, an increase of six FTE over the FY 2009 level. This includes an 

increase of three FTEs for the Office of Information Technology Services; an increase of one FTE for the Office of Management Operations; and increase of two 

FTEs for the Office Human Resources. 
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanExecutive Direction & Support 97

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. Department of Transportation systems and services used by CFTC ensure that the financial resources entrusted to the Commission are well managed 

and judiciously deployed. The Budget and the Performance and Accountability 

Report permit the public to see how well programs perform, and the cost incurred to achieve that performance.

Office of Information and Technology Services. 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 

and 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 

developing and maintaining its IT systems, applications and infrastructure, deploying a modern messaging, archiving and document management system. 

With the growth of trade and order volumes, the amount of reported trade and 

order data has grown considerably. Alongside that data growth, the Commission 

is frequently engaged in more complex and time sensitive information analysis 

efforts. These developments have led to a key technology initiative ─ the development of an information management architecture that transforms a growing 

data stream and a growing data analysis requirement into a Commission data 

environment. The initiative will examine current capabilities, emerging data 

needs, data governance, data organization, data privileges, and software capabilities to provide an information architecture roadmap in support of current mission requirements. The resulting solution will provide the CFTC with more effective information analysis capability by modernizing the Commission existing data 

management environment. 

The Commission is also in the process of fully implementing the TSS, which is 

used for trade practice surveillance on the new and emerging electronic exchanges. This new system uses 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 inter-exchange trading, are 

commonplace practices. 

 

Another significant project is the implementation of a Document Management 

System to modernize, centralize and automate the management of the Commission’s information resources. The Commission’s ability to fulfill its mission depends on the collection, analysis, communication and presentation of information in forms useful to Commission employees, the regulated industry, other Federal, state, and international agencies, the Congress, and the American public. 

When complete, the Document Management System will improve the Commission’s document management practices, technical solutions, and business 

process. 

A net increase of three FTEs is requested to address the need to design and implement information architecture and associated software tools. The three additional FTE would be deployed to this corporate need, developing an enterprise 

data repository, developing technical solutions to facilitate data analysis, ensuring data quality requirement, and providing data governance support. 
FY 2010 President’s Budget & Performance Plan

98 FY 2010 President’s Budget & Performance PlanExecutive Direction & Support 

Office of Management Operations. The Office of Management Operations 

(OMO) provides support to Commission staff by ensuring the timely delivery of 

products and services, 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, including the implementation of a property management system for all property, capitalized, noncapitalized, sensitive items, and development and maintaining the space matrix 

to track staff and available space for facilities planning. OMO will continue the 

furniture replacement project over the next three to four years, depending on 

funding availability. OMO will also lead the expansion and possible renovation 

of space at headquarters and in the regions to accommodate new staff. 

One additional Administrative position will be allocated for the regional office in 

Kansas City. The additional OMO staff member in Kansas City will free other 

staff to focus on programmatic and IT support functions. 

Office of Human Resources. The Commission 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 with the capacity to meet this evolving mission. 

The Commission continually refines its strategic human resource initiatives. A 

governance committee of senior managers draws on frequent employee input to 

develop programs that will support long-term mission goals with knowledgeable, 

diverse and productive human capital. The goal of this continual program review 

is an equally flexible workforce, one that reacts and adapts quickly in terms of 

size, skills and composition to meet changes in the industry, technology and/or 

statutory or regulatory developments. The process produced our new merit pay 

system, which supports our performance culture. This ongoing strategic management of human capital initiative commits the agency to improving its ability 

to: 1) plan for anticipated change in workforce composition; 2) target and recruit 

employees to fill critical skill deficiencies; 3) support employee development; 4) 

identify and justify staff resources needed to perform statutory mandates; and 5) 

implement the Title V-exempt CT pay plan as mandated by Section 10702 of Public Law 107-171, the FSRIA of 2002. 

Two FTEs will be allocated to continue rebuilding after retirement losses in the 

following critical functions: 1) classification and staffing; 2) employee relations; 

3) security; 4) suitability; and 5) training. These positions are essential to successful management of the new pay for performance system, continued implementation of eGov initiatives, and overall delivery of strategic human capital 

planning and accountability programs that serves agency goals. These positions 

also support delivery of data-driven workforce/succession planning, enabling 

continued good stewardship of the agency pay parity authority that provides 

access to needed talent through effective, efficient compensation programs. 

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. 
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanExecutive Direction & Support 99

U.S. futures markets and firms operate globally, which increasingly necessitates 

that the Commission coordinates with foreign market authorities for supervisory 

and enforcement purposes. The global financial crisis has resulted in intense 

regulatory development work by the G20 and the International Organization of 

Securities Commissions. Additional FTEs are needed in order to adequately staff 

the various work groups that have been called for by those organizations. Additional FTEs are also needed to address the accelerating pace of global market integration, the need to take forward recommendations for enhancing commodity 

market transparency, the increasing requests to the Commission to participate in 

U.S. government financial services initiatives and to provide technical assistance, 

and the need to coordinate closely with foreign regulatory counterparts in light of 

global market volatility and global regulatory changes affecting the U.S. futures 

industry. Finally,, recent Congressional action will require enhanced CFTC due 

diligence and international coordination with regard the trading of energy contracts through foreign boards of trade. Any diminution in resources will severely 

affect the ability of the Commission to continue its existing international cooperation and coordination program. Cutbacks would require the Commission to reduce its participation in working groups formed to respond to the financial crisis 

and 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, energy 

trading coordination, 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; 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 41 percent of managers on board at the start of FY 2008 to 

retire by the end of FY 2010; 4) increased regulatory and administrative responsibilities imposed by GAO, General Services Administration (GAO), 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 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. 

Office of Information and Technology Services. The consequence for the Office 

of Information and Technology Services not receiving additional resources will 

curtail the Commission’s ability to keep pace with the industry data growth and 

the need for more effective and complex information analysis. The three new IT 

positions requested will provide database analysis and a software engineering 

services in support of all the Commission’s mission areas. Work on trade practice 

surveillance, trader account identification, large trader reporting, economic analysis, and litigation support will all benefit from the work products expected of 

staff in these positions. At present, the Commission has a limited number of contractor staff engaged in these efforts, but there is not government staff engaged in 

the initiative beyond the inherently governmental project management functions, 

creating a high dependence on external resources for technical work. OITS would 
FY 2010 President’s Budget & Performance Plan

100 FY 2010 President’s Budget & Performance PlanExecutive Direction & Support 

ideally have a more blended workforce to reduce contractor dependence for business results and technical output, increase the Commission technical knowledge 

of highly-complex mission requirements, and increase the service delivery on 

efforts of mission importance. Without the staff level requested the Commission 

will be impaired to maximize the use of information to support important mission objectives. 
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanExecutive Direction & Support 101

Table 36: Executive Direction & Support Request by Subprogram 

FY 2009 FY 2010 Change

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

Agency Direction13 $11,075 43.00 $12,218 46.00 $1,143 3.00

Admin. Mgmt. & Supp. 24,686 98.00 27,019 104.00 2,333 6.00

TOTAL $35,761 141.00 $39,237 150.00 $3,476 9.00

13) Agency Direction includes the office of the Inspector General. 

 FY 2009 FY 2010 Change 

$000 FTE $000 FTE $000 FTE

$1,043 4.00 $1,076 4.00 $33 0.00 

Figure 40: Executive Direction & Support FY 2010 Budget by Subprogram
FY 2010 President’s Budget & Performance Plan

102 FY 2010 President’s Budget & Performance PlanExecutive Direction & Support 

Table 37: Executive Direction & Support Request by Goal 

FY 2009 FY 2010 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.

$781 3.10 $806 3.10 $25 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.

1,272 5.05 1,312 5.05 40 0.00

Subtotal Goal One $2,053 8.15 $2,118 8.15 $65 0.00

GOALTWO: Protect market users and the public.

Outcomes

2.1 Violations of Federal commodities 

laws are detected and prevented.

$1,801 7.15 $1,934 7.45 $133 0.30

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

Act are handled effectively and expeditiously.

390 1.55 455 1.75 65 0.20

Subtotal Goal Two $2,191 8.70 $2,389 9.20 $198 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.

$403 1.60 $416 1.60 $13 0.00

3.2 Commodity futures and option 

markets are effectively self-regulated.

126 0.50 130 0.50 4 0.00

3.4 Regulatory environment responsive 

to evolving market conditions.

2,318 9.00 2,656 10.00 338 1.00

Subtotal Goal Three $2,847 11.10 $3,202 12.10 $355 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.

$3,778 15.00 $3,897 15.00 $119 0.00

4.2 A modern and secure information 

system that reflect the strategic priorities of the Commission. 14

7,750 30.05 8,456 32.55 886 2.50

 

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

allocated to Goals 1, 2, or 3. 

4.3 An organizational infrastructure 

that efficiently and effectively responds 

to and anticipates both the routine and 

emergency business needs of the Commission.

3,778 15.00 3,897 15.00 119 0.00

4.4 Financial resources are allocated, 

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

Commission.

3,778 15.00 4,157 16.00 379 1.00

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

sound management and organizational 

excellence provided by executive leadership. 

9,766 38.00 11,121 42.00 1,355 4.00

Subtotal Goal Four 28,670 113.05 31,528 120.55 2,858 7.50

TOTAL $35,761 141.00 $39,237 150.00 $3,476 9.00
FY 2010 President’s Budget & Performance Plan

FY 2010 President’s Budget & Performance PlanExecutive Direction & Support 103

Figure 41: Executive Direction & Support FY 2010 Budget by Goal 
FY 2010 President’s Budget & Performance Plan

104 Appendix 1—The Commissioners 

APPENDIX 1 

The Commissioners 

Michael V. Dunn, Acting Chairman 

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. On January 20, 2009, Mr. Dunn was selected by his fellow Commissioners to be the Acting Chairman of the Commodity Futures Trading Commission. 

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 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. 

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. 

Walter L. Lukken, Commissioner 

Walter Lukken was first appointed Commissioner in 2002 and is now serving his 

second term due to expire in 2010. President Bush nominated him in September 

2007 to serve as Chairman of the CFTC. He served as Acting Chairman of the 

Commission from June 27, 2007 until January 20, 2009. Commissioner Lukken 

has testified numerous times before Congress and has represented the agency as 

part of the President’s Working Group on Financial Markets. He also has 

represented the Commission before international organizations and forums, including the International Organization of Securities Commissions (IOSCO) and 

the Committee of European Securities Regulators (CESR). 
FY 2010 President’s Budget & Performance Plan

Appendix 1—The Commissioners 105

Commissioner Lukken served as chairman of the CFTC’s Energy Markets Advisory Committee (EMAC) until March 2009. The EMAC was created by the 

Commission in February 2008 to address the timely and critical regulatory issues 

connected to the role of the futures markets for discovering prices and managing 

energy price risks. He also served as chairman of the CFTC’s Global Markets Advisory Committee (GMAC) from October 2003 through January 2008. The 

GMAC provides an industry forum in which it can discuss the many complex and 

novel issues raised by the ever-increasing globalization of futures markets. 

Prior to joining the CFTC, Commissioner 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 Commodity Futures Modernization Act of 2000 (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. Commissioner Lukken is a 

member of the Illinois Bar. 

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 OTC 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 CFMA. 

Commissioner Sommers started her career in Washington, DC 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 of Kansas. She and her husband, Mike, currently reside in the 

Washington D.C. area and have three children ages 5, 4, and 3. 
FY 2010 President’s Budget & Performance Plan

106 Appendix 1—The Commissioners 

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. 

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 2010 President’s Budget & Performance Plan

Appendix 2—Summary of Commission Goals, Outputs, and Business Processes 107

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 2010 President’s Budget & Performance Plan

108 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 2010 President’s Budget & Performance Plan

Appendix 2―Summary of Commission Goals, Outputs, and Business Processes 109 

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 2010 President’s Budget & Performance Plan

110 Appendix 3Investment in Technology 

 APPENDIX 3 

Investment in Technology 

The Commission plans an investment of approximately $23.3 million in FY 2010. 

 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 $3.0 million to provide for Capital Equipment and Software Purchases; 

o $4.3 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; and 

o $1.4 million to provide for IT supplies, operations, and maintenance including 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 2010 President’s Budget & Performance Plan

Appendix 4―OMB and Congressional Action 111 

APPENDIX 4 

Summary of OMB and Congressional Action on Appropriations FY 2001 – FY 2010 
FY 2010 President’s Budget & Performance Plan

112 Appendix 5─Privacy Policy for the CFTC Web Site 

APPENDIX 5 

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 questions@cftc.gov. 

The CFTC regularly publishes information in the Federal Register on its systems of records maintained under the Privacy Act of 1974. See CFTC Privacy 

Act Systems of Records Compilation.
FY 2010 President’s Budget & Performance Plan

Appendix 6─Table of Acronyms 113

APPENDIX 6 

Table of Acronyms 

AE The Actuarials Exchange, LLC 

AECTS Enforcement Case Tracking System 

ALJ Administrative Law Judge 

AP Associated Persons 

BTEX BrokerTec Futures Exchange 

CBOT Chicago Board of Trade 

CCORP The Clearing Corporation 

CCFE Chicago Climate Futures Exchange, LLC 

CCX Chicago Climate Exchange, Inc. 

CDXCHANGE Commodities Derivative Exchange, Inc. 

CEA Commodity Exchange Act 

CFE CBOE Futures Exchange 

CFTC Commodity Futures Trading Commission 

CFMA Commodity Futures Modernization 

Act of 2000 

CHEMCONNECT ChemConnect, Inc. 

CME Chicago Mercantile Exchange 

CME AM CME Alternative Marketplace, Inc. 

COMEX Commodity Exchange Division 

COOP Continuity of Operations Plan 

CPO Commodity Pool Operator 

CRA CFTC Reauthorization Act of 2008 

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 

DERIVATIVES BRIDGE Derivatives Bridge, LLC 

DOJ Department of Justice 

DTEF Derivatives Transaction Execution Facility 

ECM Exempt Commercial Markets 

EDBS Exchange Database System 

EOPF Electronic Office Personnel Folders 

EOXLIVE Energy Options Exchange, LLC 

EPFE Exchange Place 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 

FLETT Flett Exchange 

FSRIA Farm Security and Rural Investment Act 

FMHA Farmers Home Administration 
FY 2010 President’s Budget & Performance Plan

114 Appendix 6─Table of Acronyms 

FOREX Foreign Currency 

FT Floor Trader 

FTE Full-time Equivalent 

FY Fiscal Year 

GAO Government Accountability Office 

GCC Guaranty Clearing Corporation 

GFI (Energy Match) GFI Group Inc.- Energy Match 

GFI FOREXMATCH GFI Group Inc., ForexMatch 

GSA General Services Administration 

HEDGESTREET HedgeStreet, Inc. 

HSE HoustonStreet Exchange, Inc. 

IB Introducing Broker 

ICAP ICAP Commodity and Commodity Derivatives 

Trading System 

ICAP ETC ICAP Electronic Trading Community 

ICAP HYDE ICAP Hyde Limited Trading System 

ICC Intermarket Clearing Corporation 

ICE IntercontinentalExchange, Inc. 

ICE US ICE Futures U.S., Inc. 

IMAREX International Maritime Exchange 

INTRADE Intrade Board of Trade 

IRESE IRESE, Inc. 

ISS Integrated Surviellance System 

IT Information Technology 

JO Judgment Officer 

KCBT Kansas City Board of Trade 

LCH London Clearing House 

LIQUIDITYPORT (Option ATS) LiquidityPort, LLC 

LONGITUDE Longitude, LLC 

MACE MidAmerica Commodity Exchange 

MATCHBOXX ATS Matchboxx ATS 

ME Merchants Exchange 

MGE Minneapolis Grain Exchange 

MOU Memorandum of Understanding 

NFA National Futures Association 

NGX Natural Gas Exchange, Inc. 

NEX Nodal Exchange, LLC 

NQLX NQLX LLC Futures Exchange 

NTP NetThruPut 

NYCC New York Clearing Corporation 

NYCE New York Cotton Exchange 

NYFE New York Futures Exchange 

NYMEX New York Mercantile Exchange 

NYSE LIFFE NYSE Liffe Futures Exchange, LLC 

OCC The Options Clearing Corporation 

OCE Office of Chief Economist (OCE) 

OCX OneChicago LLC 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 
FY 2010 President’s Budget & Performance Plan

Appendix 6─Table of Acronyms 115

OMO Office of Management Operations (CFTC) 

ONXCC OnExchange Clearing Corporation 

OPEX Optionable, Inc. 

OTC Other-the-Counter 

PARITY Parity Energy Inc. 

PBOT Philadelphia Board of Trade 

PMA President’s Management Agenda

PPGC Pay Parity Governance Committee 

PWG President’s Working Group

REPCASE Reparations Case Tracking System 

RWG Registration Working Group 

SEC Securities and Exchange Commission 

SES Senior Executive Service 

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. 

TCX TradeCapture Exchange 

TFS TFS Energy -Pulp and Paper 

TFSE TFS Energy, LLC 

TFSC TraditionalCoal.com 

TS TradeSpark, LP 

TSS Trade Surveillance System 

US United States 

USDA United States Department of Agriculture 

USFE US Futures Exchange 

UK United Kingdom 

WBOT Weather Board of Trade 

WXL WeatherXchange Limited 

XBOT Exempt Boards of Trade 

YELLOW JACKET Yellow Jacket Software, Inc.