Chairman’s Transmittal Letter

February 1, 2010

The Honorable Daniel K. Inouye

Chairman

Committee on Appropriations

United States Senate

S-128 Capitol Building

Washington, D. C. 20510

The Honorable Thad Cochran

Vice 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

The Honorable Jerry Lewis

Ranking Republican Member

Committee on Appropriations

United States House of Representatives

H-218 Capitol Building

Washington, D. C. 20515

Dear Senators Inouye and Obey and Representatives Cochran and Lewis:

In the fall of 2008, the financial system and the financial regulatory system failed. While more than a 

year has passed and the system appears to have stabilized, we cannot relent in our mission to 

vigorously implement our mandate to protect the public from fraud, manipulation and other abuses 

in the commodity markets. The Commodity Futures Trading Commission (CFTC) needs additional 

resources to promote transparency and market integrity. Only through strong, intelligent regulation 

can we fully protect the American people and keep our economy strong.

As we began FY 2010, the Commission had on-board more than 580 staff. While this gets us back to 

our staffing levels ten years ago, it is just a start. I believe that merely raising our staffing levels to the 

same as a decade ago will not be enough to adequately fulfill the agency‘s statutory mandate. In the 

last ten years, trading volume went up almost five-fold. The number of actively traded futures and 

options contracts went up seven-fold, and many of these have become considerably more complex in 

nature. We also moved from an environment with open-outcry pit trading to highly sophisticated 

electronic markets. What was once a group of regional domestic markets is now a global marketplace. 

What was once just a $500 billion business has grown to a $33 trillion industry.

Therefore, I am pleased to transmit to you the CFTC‘s Budget and Performance Estimate for FY 2011. 

This budget requests, for currently existing statutory authorities, an appropriation of $216,000,000 

and 745 staff-years. For proposed new authorities related to financial regulatory reform, the budget 

requests an appropriation of $45,000,000 and 119 FTE, for a total request of $261,000,000 and 864 

FTE. 

The $216,000,000 requested for current authorities is an increase of $47,200,000 and 95 staff years 

over the estimated FY 2010 appropriation of $168,800,000 and 650 staff years. The increases 

requested are critical to providing the CFTC with the resources required to ensure that the Nation‘s 

futures markets operate without disruption.

The requested funding increase includes resources for the following:

 Updating the Commission‘s Surveillance and Technology Programs. The Commission requires 

additional resources to replace legacy surveillance equipment with 21st Century computers. 

Significant changes in the markets demand new systems capable of efficiently receiving and 

managing massive amounts of raw data and converting it to useful market information for 

analysis by skilled market experts, economists and technologists. Upgraded systems and 

analytical tools, such as detection alert software, will increase the staff‘s ability to monitor the 

markets and provide better information about futures and options trading to the American public. 

This transparency and new level of oversight will foster market integrity.
 Boosting the Commission‘s Clearing and Intermediary Oversight Program. Additional resources 

would allow the Commission to perform regular and direct reviews of registrants and more 

frequently assess compliance with Commission regulations. In the case of intermediaries, the 

Commission requires additional resources to directly assess compliance instead of relying on 

designated self-regulatory organizations (DSROs). The frequency of the reviews will increase 

from once every three years to annually. New staff will permit the review annually of all 

derivatives clearing organizations (DCOs), designated contract markets (DCMs) and the audit and 

financial surveillance programs of each DSRO ensuring ongoing rather than intermittent 

oversight.

 Strengthening the Commission‘s Enforcement Program. The CFTC should be adequately 

resourced to vigorously investigate and litigate complex market manipulation and trade-practice 

violations. Properly functioning markets must be free from fraud, manipulation and other abuses 

to ensure their integrity in setting price and offsetting risk. This budget provides funding to grow 

the Enforcement staff to 200 in FY 2011, from a staff of 121 in FY 2009. A robust Enforcement 

program will foster regulatory compliance in the marketplace, protecting the American public and 

the marketplace. Adequate legal staff is necessary to act swiftly to investigate and prosecute 

fraudulent schemes, such as the rash of Ponzi schemes experienced after the recent market 

downturn.

 Rigorously Exercising Existing Authorities to Ensure Market Integrity. Additional economic and 

legal staff will allow the annual review of all contracts listed on exempt commercial markets 

(ECMs) to determine if they are significant price discovery contracts (SPDCs). Such contracts 

must be reviewed to determine compliance with a stringent set of CFTC Core Principles under the 

Commission‘s regulations. These and other new and increasingly diverse products add to the 

scope and complexity of products staff must review and monitor to ensure the integrity of the 

marketplace.

 Establishing Enterprise Risk Management. This program would identify plausible risks that may 

affect the CFTC‘s ability to respond effectively and assess risks and determine an appropriate 

response strategy. The objective is to proactively address enterprise-wide risks so that the CFTC 

may discharge its responsibilities without any obstacles.

 Initiating Major Reviews of Existing Programs. The Commission seeks additional resources to 

initiate major programmatic reviews of existing programs; expand development of the 

Commission‘s continuity of operations program (COOP); increase public and consumer education 

and outreach; implement the strategic plan; and improve performance metrics.

 Continuing Current Service Level. The CFTC requires additional resources to provide a 

continuation of the FY 2010 current service level into FY 2011. This includes annual merit based 

compensation adjustments for staff, lease of office space, utilities and communications, printing, 

supplies, capital equipment and fixed equipment.

We are currently working with the Congress to bring comprehensive regulation to the over-thecounter derivatives marketplace and appropriate oversight to any trading markets that may be 

developed on carbon equivalent allowances as a result of cap-and-trade legislation. In addition to 

increases relating to existing regulatory responsibilities, this budget requests an additional 

$45,000,000 and 119 FTE for FY 2011 to begin implementation of the Administration‘s 

comprehensive proposal for financial regulatory reform. The Commission‘s FY 2012 total (current 

and proposed new authorities related to financial regulatory reform) staff requirement is estimated to 

be approximately 1,000 FTE. The requested funds will permit Commission implementation of new 

responsibilities, such as:

 Requiring swap dealers and major swap participants to register and come under comprehensive 

regulation, including capital standards, margin requirements, business conduct standards and 

recordkeeping and reporting requirements;

 Requiring dealers and major swap participants to use transparent trading venues for their 

standardized swaps;
 Ensuring that dealers and major swap participants bring their clearable swaps into central 

clearinghouses; and

 Providing the CFTC with authority to impose aggregate position limits in the OTC derivatives 

markets.

Appendix 3 of this document provides additional supporting detail of the $45,000,000 and 119 FTE 

requested for the Administration‘s financial regulatory reform proposal. 

The staff of the CFTC is a talented and dedicated group of public servants. The financial crisis and the 

significant increase in trade volume, market complexity and globalization command additional 

resources to effectively protect American taxpayers. For all of these reasons, I feel it is necessary and 

appropriate for our staffing levels and our technology to be bolstered to more closely match the new 

financial realities of the day.

In short, despite a recent increase in funding, the Commission remains an underfunded agency. With 

additional resources, we will be better able to police the market, promote market integrity and protect 

the public from fraud, manipulation and other abuses.

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

Sincerely yours,

Gary Gensler

Chairman
cc:

The Honorable Blanche Lincoln

Chairman

Committee on Agriculture, 

Nutrition, and Forestry

U.S. Senate

SR-328A Russell Senate Office Building

Washington, D. C. 20510-6000

The Honorable Saxby Chambliss

Ranking Republican Member 

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

The Honorable Frank Lucas

Ranking Republican Member 

Committee on Agriculture

U.S. House of Representatives

1301 Longworth House Office Building

Washington, D. C. 20515-6001
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The FY 2011 President’s Budget & Performance Plan

Table of Contents

CHAIRMAN‘S TRANSMITTAL LETTER ........................................................ 1

EXECUTIVE SUMMARY .............................................................................4

THE COMMISSION AND THE INDUSTRY WE REGULATE.............................9

Indicators of Industry Growth Complexity .............................................................. 9

Growth in Volume of Futures & Option Contracts Traded & FTEs .......................10

Actively Traded Futures & Option Contracts.......................................................... 11

Customer Funds in Futures Commission Merchants Accounts, 2000 - 2009......12

Number of Registrants.............................................................................................13

Enforcement Actions to Preserve Market Integrity and Protection of 

Market Users.................................................................................................14

Contract Markets Designated by the CFTC, 2004 - 2009......................................16

Number of Derivatives Clearing Organizations Registered with the CFTC, 

2004 - 2009 .................................................................................................. 17

Exempt Commercial Markets, 2004 - 2009 ...........................................................18

Exempt Boards of Trade, 2004 - 2009....................................................................19

OVERVIEW OF PLANNED OUTCOMES BY STRATEGIC GOAL......................20

Introduction ............................................................................................................ 20

FY 2011 Outcomes by Goal ......................................................................................21

COMMISSION STRATEGIES TO INFLUENCE OUTCOMES ...........................27

Strategic Goal One - Ensure the Economic Vitality of the 

Commodity Futures and Option Markets. ..................................... 27

Summary of Goal One Performance Indicators......................................................31

Breakout of Goal One Request by Program Activity.............................................. 32

Breakout of Goal One Request by Outcome Objective .......................................... 33

Strategic Goal Two – Protecting Market Users and the Public........... 34

Summary of Goal Two Performance Indicators......................................................37

Breakout of Goal Two Request by Program Activity ............................................. 38

Breakout of Goal Two Request by Outcome Objective.......................................... 39

Strategic Goal Three – Ensuring Market Integrity in Order to 

Foster Open, Competitive, and Financially Sound Markets. ........40

Summary of Goal Three Performance Indicators.................................................. 44

Breakout of Goal Three Request by Program Activity........................................... 45

Breakout of Goal Three Request by Outcome Objective ....................................... 46

Strategic Goal Four: To Facilitate Commission Performance 

through Organizational and Management Excellence, 

Efficient Use of Resources, and Effective Mission Support. ......... 47

Summary of Goal Four Performance Indicators.................................................... 54

Breakout of Goal Four Request by Program Activity............................................. 56

Breakout of Goal Four Request by Outcome Objective ..........................................57

JUSTIFICATION OF THE FY 2011 BUDGET & PERFORMANCE 

ESTIMATE.........................................................................................58

Breakout of $216.0 Million Budget Estimate by Program .................................... 58

Breakout of $216.0 Million Budget Estimate by Object Class............................... 59
Crosswalk from FY 2010 to FY 2011 .......................................................................60

Market Oversight ....................................................................................61

Total Budget: $47,736,000 168 FTEs ................................................................. 61

Total Change: $12,615,000 29 FTEs ................................................................. 61

Clearing & Intermediary Oversight........................................................70

Total Budget: $34,474,000 120 FTEs .................................................................70

Total Change: $ 5,369,000 7 FTEs .................................................................70

Enforcement............................................................................................77

Total Budget: $59,620,000 200 FTEs ............................................................. 77

Total Change: $16,372,000 39 FTEs ............................................................ 77

Office of the Chief Economist................................................................ 84

Total Budget: $ 5,115,000 17 FTEs ..................................................................84

Total Change: $ 1,577,000 4 FTE...................................................................84

Office of Proceedings ............................................................................. 88

Total Budget: $ 2,860,000 11 FTEs..................................................................88

Total Change: $ 571,000 1 FTE....................................................................88

Office of the General Counsel................................................................ 92

Total Budget: $14,242,000 47 FTEs..............................................................92

Total Change: $ 1,413,000 0 FTE................................................................92

Office of the International Affairs..........................................................97

Total Budget: $ 2,946,000 10 FTEs..............................................................97

Total Change: $ 566,000 1 FTE................................................................97

Agency Direction................................................................................... 101

Total Budget: $13,846,000 47 FTEs.............................................................101

Total Change: $ 4,591,000 12 FTEs............................................................101

Administrative Management & Support .............................................105

Total Budget: $35,161,000 125 FTEs.............................................................. 105

Total Change: $4,126,000 2 FTEs............................................................. 105

APPENDIX 1 ...................................................................................... 112

The Commissioners ................................................................................................112

APPENDIX 2...................................................................................... 116

Summary of Goals, Outcomes, and Business Processes .......................................116

APPENDIX 3...................................................................................... 119

Federal Financial Regulatory Reform....................................................................119

APPENDIX 4...................................................................................... 125

Investment in Technology (for Current Statutory Authorities)........................... 125

APPENDIX 5...................................................................................... 127

Inspector General .................................................................................................. 127

APPENDIX 6......................................................................................128

Summary of OMB and Congressional Action on Appropriations FY 2001 – FY 2011

................................................................................................................................ 128

APPENDIX 7 ......................................................................................129

Privacy Policy for the CFTC Web Site................................................................... 129

APPENDIX 8......................................................................................130

Table of Acronyms................................................................................................. 130
FY 2011 President’s Budget & Performance Plan—Figures and Tables

Figure 1: Growth of Volume of Contracts Traded and FTEs ................................................10

Figure 2: CFTC Actively Traded Contracts............................................................................ 11

Figure 3: Customer Funds in FCM Accounts .......................................................................12

Table 1: Number of Registrants .............................................................................................13

Table 2: Energy Markets ........................................................................................................14

Table 3: Pool/Hedge Funds ...................................................................................................14

Table 4: Foreign Currency Markets.......................................................................................15

Table 5: Designated Contract Markets ..................................................................................16

Table 6: CFTC-Registered Derivatives Clearing Organizations ........................................... 17

Table 7: Exempt Commercial Markets ..................................................................................19

Table 8: Exempt Boards of Trade..........................................................................................19

Figure 4: Budget & Performance Estimate by Strategic Goal.............................................. 20

Table 9: Breakout of Goal One by Outcome..........................................................................21

Table 10: Breakout of Goal Two by Outcome....................................................................... 22

Table 11: Breakout of Goal Three by Outcome..................................................................... 23

Table 12: Breakout of Goal Four by Outcome....................................................................... 25

Figure 6: Goal One Resource Strategy Mapping.................................................................. 28

Table 13: Breakout of Goal One Request by Program Activity............................................. 32

Figure 7: Breakout of Goal One Request by Program Activity ............................................. 32

Table 14: Breakout of Goal One by Outcome ........................................................................ 33

Figure 8: Breakout of Goal One Request by Outcome Objective ......................................... 33

Figure 9: Goal Two Resource Strategy Mapping...................................................................35

Table 15: Breakout of Goal Two Request by Program Activity............................................ 38

Figure 10: Breakout of Goal Two Request by Program Activity........................................... 38

Table 16: Breakout of Goal Two by Outcome........................................................................ 39

Figure 11: Breakout of Goal Two Request by Outcome Objective........................................ 39

Figure 12: Goal Three Resource Strategy Mapping ..............................................................41

Table 17: Breakout of Goal Three by Program Activity......................................................... 45

Figure 13: Breakout of Goal Three Request by Program Activity......................................... 45

Table 18: Breakout of Goal Three Request by Outcome....................................................... 46

Figure 14: Breakout of Goal Three Request by Outcome Objective..................................... 46

Figure 15: Goal Four Resource Strategy Mapping ............................................................... 50

Table 19: Breakout of Goal Four by Program Activity .......................................................... 56

Figure 16: Breakout of Goal Four Request by Program Activity .......................................... 56

Table 20: Breakout of Goal Four by Outcome .......................................................................57

Figure 17: Breakout of Goal Four Request by Outcome Objective.......................................57

Table 21: Budget Estimate by Program................................................................................ 58

Figure 18: $216.0 Million Budget Estimate by Program..................................................... 58

Table 22: Budget Estimate by Object Class.......................................................................... 59

Figure 19: $216.0 Million Budget Estimate by Object Class ............................................... 59

Table 23: Crosswalk from FY 2010 to FY 2011..................................................................... 60

Figure 20: Market Oversight Percentage of Total Budget Dollars ........................................61

Figure 21: Market Oversight Percentage of Total Budget FTEs ............................................61

Table 24: Market Oversight Request by Subprogram ......................................................... 68

Figure 22: Market Oversight FY 2011 Budget by Subprogram............................................ 68

Table 25: Market Oversight Request by Goal....................................................................... 69

Figure 23: Market Oversight FY 2011 Budget by Goal......................................................... 69

Figure 24: Clearing & Intermediary Oversight Percentage of Total Budget Dollars........... 70

Figure 25: Clearing & Intermediary Oversight Percentage of Total Budget FTEs............. 70

Table 26: Clearing & Intermediary Oversight Request by Subprogram ..............................75

Figure 26: Clearing & Intermediary Oversight FY 2011 Budget by Subprogram ................75

Table 27: Clearing & Intermediary Oversight Request by Goal ...........................................76
Figure 27: Clearing & Intermediary Oversight FY 2011 Budget by Goal............................. 76

Figure 28: Enforcement Percentage of Total Budget Dollars .............................................. 77

Figure 29: Enforcement Percentage of Total Budget FTEs.................................................. 77

Table 28: Enforcement Request............................................................................................82

Table 29: Enforcement Request by Goal ..............................................................................83

Figure 30: Enforcement FY 2011 Budget by Goal ................................................................83

Figure 31: Chief Economist Percentage of Total Budget Dollars..........................................84

Figure 32: Chief Economist Percentage of Total Budget FTEs.............................................84

Table 30: Office of the Chief Economist Request.................................................................86

Table 31: Office of the Chief Economist Request by Goal....................................................87

Figure 33: Proceedings Percentage of Total Budget Dollars................................................88

Figure 34: Proceedings Percentage of Total Budget FTEs ...................................................88

Table 32: Proceedings Request by Subprogram...................................................................90

Figure 35: Proceedings FY 2011 Budget by Subprogram.....................................................90

Table 33: Proceedings Request by Goal................................................................................ 91

Figure 36: Percentage of Total Budget Dollars.....................................................................92

Figure 37: Percentage of Total Budget FTEs .......................................................................92

Table 34: General Counsel Request......................................................................................95

Table 35: General Counsel Request by Goal.........................................................................96

Figure 38: General Counsel FY 2011 Budget by Goal...........................................................96

Figure 39: Percentage of Total Budget Dollars.....................................................................97

Figure 40: Percentage of Total Budget FTEs.......................................................................97

Table 36: International Affairs Request by Subprogram.....................................................99

Table 37: International Affairs Request by Goal ................................................................100

Figure 41: Percentage of Total Budget Dollars ....................................................................101

Figure 42: Percentage of Total Budget FTEs ......................................................................101

Table 38: Agency Direction Request by Subprogram ........................................................ 103

Table 39: Agency Direction Request by Goal...................................................................... 104

Figure 43: Percentage of Total Budget Dollars................................................................... 105

Figure 44: Percentage of Total Budget FTEs ..................................................................... 105

Table 40: Administrative Management & Support Request by Subprogram ................... 109

Table 41: Administrative Management & Support Request by Goal..................................110

Figure 45: Administrative Management & Support FY 2011 Budget by Goal.................... 111
FY 2011 President’s Budget and Performance Plan

4 Executive Summary

Executive Summary

The CFTC is charged with a significant responsibility to ensure the fair, open and efficient functioning 

of futures markets. The CFTC has exclusive jurisdiction over the regulatory oversight of all 

exchanges, clearing organizations, and intermediaries in the U.S. futures industry. The Commission‘s 

duty is to protect market participants and the American public from fraud, manipulation and other 

abuses and to promote open, competitive and financially sound futures markets. 

The Commission faces growing and significant challenges. We must be adequately prepared to meet 

them. This requires additional resources to fulfill staffing and technology needs. 

FY 2011 BUDGET PRIORITIES

Market Transparency and Technology Modernization. Existing Commission surveillance systems 

annually process more than one billion transactions to capture mission-critical data. Recent 

Commission initiatives to promote transparency of market data reveal the need for a substantial 

investment in systems development. The timely reporting of quality and meaningful market 

information is not possible with current legacy systems. Integration of two legacy systems, one with 

position data and one with trade data, is vital to building necessary functionality to capture more 

detailed data by trader, account ownership, inter-day transactions and intra-day transactions across 

all markets. New staff competencies and skill sets are also critical. Market transparency is crucial to 

public trust and confidence in the vital price discovery and risk management functions of the futures 

and option markets. The 21st century marketplace, now largely electronic, demands 21st century 

systems, applications and analytics.

For many years, the CFTC has been limited to only minimum maintenance on existing technology 

infrastructure. The FY 2010 and 2011 investments will target the building of mission-essential 

systems responsive to the need to oversee an increasingly large, diverse and complex industry. This 

budget reflects a $34 million technology program.

Ensure Robust Enforcement of the Law. The recent financial downturn revealed, and continues to 

reveal, Ponzi-type schemes that could only stay afloat during periods of rising asset values. The types 

of investigations being handled by the Enforcement Division have become increasingly more complex. 

The Division must devote significantly more resources to the activities of multiple markets and 

market participants. This is true for fraud and Ponzi schemes, as well as staff-intensive manipulation 

and trade practice investigations. Enforcement staff is operating at full capacity and is forced to 

balance resources from important investigations to ongoing and future litigation demands, which 

limits the Division‘s ability to pursue new investigations. 

Review of New Products and Rule Changes/Significant Price Discovery Contracts. The 2008 Farm Bill 

requires staff to annually review all contracts listed on ECMs to determine if they are SPDCs. 

Approximately 50 contracts have been identified as possible SPDCs to date. If they are determined to 

be SPDCs, then any ECM listing such a contract must be reviewed to determine compliance with a 

stringent set of CFTC Core Principles. Commission staff must also conduct day-to-day surveillance 

and general market oversight of all the contracts deemed to be SPDCs, a significant undertaking that 

cannot be fully accomplished without additional staff and technology investments. Conducting timely 

reviews of all new products and rule change filings has lagged due to staffing shortfalls in the face of 

the growth of products listed by the exchanges and the increasing complexity of many of the new 

markets. This delay in monitoring the marketplace and its products jeopardizes the oversight of 

products listed on the regulated futures exchanges.

Review and Audit of Registrants. More frequent, regular direct audits of CFTC registrants are 

essential to enhance effective self-regulation and ensure that exchanges rigorously enforce compliance 

with their rules. Currently, the CFTC is limited to conducting reviews, on average, every three years, 

thereby diluting their intended effect. The Commission needs additional staff to perform regular and 

direct reviews of all exchanges and intermediaries and to assess their compliance with the Commodity 

Exchange Act (CEA). The CFTC should no longer rely on the DSROs for these reviews. The 

Commission especially requires staff with expertise in trading. Commission staff should have the 
FY 2011 President’s Budget & Performance Plan

Executive Summary 5

resources to build knowledge of how exchanges‘ various electronic trading platforms operate and how 

violations may occur on and across electronically traded markets. In the absence of expert oversight, 

there is a risk that an ineffective self-regulatory program may go undetected or a systemic risk may 

not be identified. Adequate resources must exist to fully discharge the Commission‘s statutory 

responsibility to ensure financial integrity in the marketplace through annual reviews of every DSRO 

and derivatives clearing organization (DCO), as well as annual examinations of commodity pool 

operators (CPOs), commodity trading advisors (CTAs) and Futures Commission Merchants (FCMs). 

Position Limits. The Commission has begun to consider carefully whether to adopt Federal 

speculative limits on energy commodities, including crude oil, heating oil, natural gas, gasoline and 

other energy products. Additional staff and expertise are critical to analyze whether position limits, 

consistently applied across all physically delivered commodities, would enhance market integrity and 

efficiency. If limits are adopted, the Commission will require additional investments in staff and 

technology to establish the limits, oversee traders‘ compliance with the limits and consider 

appropriate exemptions from the limits. 

FY 2011 BUDGET REQUEST

Current Authorities. The FY 2011 President‘s Budget of $216,000,000 and 745 FTE proposes an 

increase of $47.2 million. Just over half of the increase is needed to maintain the FY 2010 level of 

operations, including funding increases for 650 FTE and on-going IT modernization into FY 2011. The 

balance would fund an additional 95 FTE for a total of 745 FTE in FY 2011. These funds are required 

to hire and equip additional staff in areas of critical need throughout the Commission. 

The Commission faces a serious staffing shortfall. When the Commission received its FY 2009 

appropriation in March, 2009, staff levels were below 500. That is the same level as the 

Commission‘s first year of operation 34 years ago. Six months after the Commission received its FY 

2009 appropriation, the Commission hired more than 90 permanent staff. For FY 2010 and for FY 

2011, staffing areas of critical need will remain a top priority.

The Commission requests an additional 95 FTEs, over estimated FY 2010 levels, allocated as follows:

• 39 for Enforcement; 

• 29 for Market Oversight; 

• 9 for Agency Direction 

• 7 for Clearing and Intermediary Oversight and Risk Management; 

• 4 for Chief Economist

• 3 for Enterprise Risk Management

• 2 for Commission Planning

• 1 for International Affairs

• 1 for Proceedings;

Enforcement. Earlier this fiscal year, the Commission‘s Enforcement program reached its lowest 

level since 1984. Enforcement staff is anticipated to reach nearly 145 by the beginning of FY 

2010. This is still below the agency‘s peak of 167 and well below what is needed to address the 

current challenges brought by the recent financial turmoil. The goal of the Commission for FY 

2011 is to have an Enforcement staff of 200, including strategic plans to double the Enforcement 

staff in the Kansas City office. Additionally, more professional staff comprised of attorneys, 

investigators, economists and paralegals are required to pursue resource-intensive investigations 

and litigation involving manipulation.

Market Oversight. The Division of Market Oversight requires more highly skilled economists, 

investigators, attorneys and statisticians so that: 1) position data may be analyzed quickly and 

thoroughly; 2) exchange applications and rule changes may be reviewed efficiently and 

comprehensively to ensure compliance with all CFTC Core Principles and CFTC policies; and 3) 

exchange self-regulatory programs may be examined on an on-going and routine basis with 

regard to trade practices, market surveillance and compliance with disciplinary, audit trail and 

record-keeping regulations. 
FY 2011 President’s Budget and Performance Plan

6 Executive Summary

Agency Direction. The Offices of the Chairman and the Commissioners require professional, legal, 

and economic expertise as they undertake a number of high priority programmatic initiatives, 

including: 1) regulation of derivatives markets and regulatory changes to protect the U.S. public 

from systemic financial risks; 2) regulatory coordination with other agencies such as the SEC and 

FERC; 3) market transparency; 4) transparency of the Commission‘s Web site; 5) regulation of 

energy markets -- especially with regard to position limits and SPDCs; 6) frequency of reviews 

and audits of Commission registrants; and 7) technology modernization, resource justification 

and program performance. 

Clearing and Intermediary Oversight. The Division of Clearing and Intermediary Oversight

requires auditors and attorneys to ensure effective clearing systems to protect against the 

financial problems of a single market becoming a systemic risk. Adequate staff will protect 

investors‘ funds from misuse or exposure to inappropriate risks of loss and protect customers 

from abusive sales practices that undermine market integrity.

Chief Economist. The Office of the Chief Economist (OCE) needs additional economists to review 

and analyze new market structures and off-exchange derivative instruments. OCE also needs 

additional resources to review and analyze risk management models supportive of the 

Commission‘s enforcement and surveillance programs.

International Affairs. The Office of International Affairs needs additional professional staff to 

address the increasing global reach of the futures markets. The Commission has a growing 

responsibility to coordinate with international markets authorities for supervisory and 

enforcement purposes. Additional resources are required to address the intense regulatory 

development work by the G20 and the International Organization of Securities Commissions

(stemming from the global financial crisis) and to keep pace with global market integration and 

the deed to take forward recommendations for enhance commodity market transparency

Enterprise Risk Management. A new Enterprise Risk Management subprogram is proposed to 

focus on proactively developing and employing methods and processes to manage risks that may 

be obstacles to the discharge of the Commission‘s responsibilities and goal achievement. The staff 

will identify plausible risks posed by current and future events or circumstances that may affect 

the Commission‘s ability to respond effectively. Risks will be assessed in terms of the likelihood 

and magnitude of impact, determining an appropriate response strategy, and monitoring 

outcomes

Commission Planning. The Office of the Executive Director requires staff to establish a small 

Commission strategic and operational planning and evaluation function, the first such permanent 

resource. It is imperative that program measurement and evaluation methodologies are 

developed and implemented. Additional staff will assist the Commission‘s programs in 

establishing metrics to track, monitor and evaluate program results, outcomes, and goal 

achievement to ensure the effective and efficient allocation of resources. Staff is required for a 

comprehensive records management program being designed to leverage technology to protect 

these assets. Expertise is needed to ensure a sufficient level of human capital expertise focusing 

on employee development, leadership, management training and employee relations.

Proceedings. The Office of Proceeding requires one additional position to cover the current staff 

requirement for this office, which is responsible for providing an inexpensive, impartial, and 

expeditious forum for handling customer complaints against persons or firms registered under 

the CEA. The one position will cover the recently filled, long-vacant, office director position. 
FY 2011 President’s Budget & Performance Plan

Executive Summary 7

Proposed New Authorities Related to Financial Regulatory Reform.

The FY 2011 President‘s Budget proposes an additional $45,000,000 and 119 FTE to support FY 2011 

implementation of the Administration‘s comprehensive proposal for financial regulatory reform. The 

FY 2011 budget estimate of $45,000,000 includes a substantial investment of $18,000,000 in 

information technology and $27,000,000 for an additional 119 FTE and related operating expenses. 

Information Technology. Approximately $18,000,000 is needed to provide for additional critical 

Information Technology capacity, principally for new systems development, capital equipment and 

mission support. For example, substantial additional IT resources will be critical for implementing 

the automated surveillance and comprehensive analysis solutions that are essential to meet the 

transparency objectives of the new authorities. The CFTC anticipates major systems development to 

address voluminous transaction processing, data storage, and data analysis requirements, and new IT 

systems development projects will require extensive business and industry analysis. The complexity, 

diversity, and volume of instruments proposed for regulation will also demand extensive data 

analysis. Newly developed systems will be more complex than current systems and will require 

thorough integration with current systems, leading to an increase in solutions development not only 

for new systems but also for existing systems. New sources of commercially-developed information 

will be assessed and may be acquired as part of the strategy to support CFTC resources in rule 

adoption and implementation. Supporting new program requirements will require substantial 

increases in all facets of CFTC infrastructure, including communications circuits, circuit capacity, 

cabling and connection, switches, routers, the server processer farm, and data storage and backup. 

Given the increased volume and frequency of data submitted, CFTC may have to supplement current 

data storage area network (SAN) infrastructure with large scale data warehousing and analytical 

appliances.

Human Capital. The balance of $27,000,000 would fund an additional 119 FTE in FY 2011. These 

funds are required to hire and equip additional staff in areas affected by the proposed new authorities. 

The Commission‘s requests an additional 119 FTE are allocated as follows:

• 41 for Market Oversight and Analysis; 

• 30 for Clearing and Intermediary Oversight and Risk Management; 

• 18 for Enforcement; 

• 15 for Information Technology;

• 8 for General Counsel.

• 5 for Human Resources and Management Operations

• 1 for Chief Economist 

• 1 for International Affairs

The 119 FTE requested will permit the Commission to implement reforms that, among others

changes, require: 1) swap dealers and major swap participants to register and come under 

comprehensive regulation ─ including capital standards, margin requirements, business conduct 

standards and recordkeeping and reporting requirements; 2) ensure that dealers and major swap 

participants bring their clearable swaps into central clearinghouses; 3) require dealers and major 

swap participants to use transparent trading venues for their clearable swaps; and 4) provide the 

CFTC with authority to impose position limits in the OTC derivatives markets.

SUMMARY

Financial markets are complex, global and interconnected. The Commission needs the resources to 

ensure the integrity of the U.S. futures and option markets, which is a critical component of this 

broader marketplace. The future of the American and global economy depends on effective oversight 

by the Commission. The agency needs to grow ─ by the end of FY 2011 ─ to a staffing level of nearly

1,000 to perform its present duties. This need has not diminished. 

The Commission looks forward to working with the Congress and the Administration to address the 

challenges outlined here and to secure the necessary funding to strengthen market integrity, lower 

risks, protect investors, promote transparency and continue to restore health to the economy. 
FY 2011 President’s Budget and Performance Plan

8 Executive Summary

SUMMARY ON CHANGE FROM FY 2010 TO FY 2011

Current Statutory Authority

FY 2010 President’s Budget (BASE) $168.8 M 650 FTE

Requested for FY 2011: 

To provide for current services increases:

o Personnel Compensations (Pay Adjustment) 5.2

o Personnel Benefits (Pay Adjustment) 1.6

o Pay Parity with FIRREA Agencies 0.3

o Leases, Communications and Utilities 

 (Including -$0.3 for IT))

4.8

o Other Services 

 (Including $6.8 M for IT)

7.5

o

o Equipment

 (Including $2.8 M for IT)

3.5

o Building and Fixed Equipment 1.4

 To provide for program increases:

o New Staff Compensation and Benefits 20.1 95 FTE

o New Staff Operating Expenses 1.1

o Program Initiatives 1.7

 Information Technology (included above) (9.3) ( 0 FTE)

FY 2011 President Budget $216.0 M 745 FTE

Proposed Statutory Authority

FY 2010 President’s Budget (Current Authority Base) $216.0 M 745 FTE

Requested for FY 2011: 

o Personnel Compensation and Benefits 21.8 119 FTE

o Operating Expenses

 (Office Space, Equipment, Communications, Travel) 5.2

o Information Technology Expenses

 (Systems Development and Analysis,

 Technology Mission Support, and Capital Equipment) 

18.0

FY 2012 President Budget (Current and Proposed Authority) $261.0 M 864 FTE
FY 2011 President’s Budget & Performance Plan

Indicators of Industry Growth Complexity 9

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; 

 Amount of customer funds held at futures commission merchants (FCMs);

 Number of registrants; 

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

 Contract markets designated by the CFTC; 

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

 Exempt commercial markets (ECMs); and

 Exempt boards of trade (EBOTs).
FY 2011 President’s Budget and Performance Plan

10 Growth in Contract Volume vs. CFTC FTEs

Growth in Volume of Futures & Option Contracts Traded & FTEs

Trading volume has increased almost five-fold in the last decade (2000-2009) while staffing levels at 

the Commission have trended downward.1

Figure 1: Growth of Volume of Contracts Traded and FTEs

 

1 Volume started decreasing at the end of FY 2008 and has continued at about a 20 percent decline for FY 2009. 
FY 2011 President’s Budget & Performance Plan

Actively Traded Contracts 11

Actively Traded Futures & Option Contracts

The number of actively traded contracts on U.S. exchanges has increased seven-fold in the last decade

(2000-2009).

Figure 2: CFTC Actively Traded Contracts
FY 2011 President’s Budget & Performance Plan

12 Customer Funds in Futures Commission Merchants Accounts

Customer Funds in Futures Commission Merchants Accounts, 2000 - 2009

The amount of customer funds held at FCMs decreased in the past year after having nearly 

quadrupled since 2000.

Figure 3: Customer Funds in FCM Accounts
FY 2011 President’s Budget & Performance Plan

Registered Commodities Professionals 13

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 over 66,000 registrants.

Registration Category2 Number as of Sept. 30, 2009

Associated Persons (APs) (Salespersons) 51,921

Commodity Pool Operators (CPOs) 1,277

Commodity Trading Advisors (CTAs) 2,568

Floor Brokers (FBs) 7,114

Floor Traders (FTs) 1,447

Futures Commission Merchants (FCMs) 1663

Introducing Brokers (IBs) 1,6944

TOTAL 66,187

Table 1: Number of Registrants

 

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

3 Includes 15 notice-registered FCMs.

4 Includes 44 notice-registered IBs.
FY 2011 President’s Budget & Performance Plan

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

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 illegitimate market forces. Through

enforcement action, the Commission preserves market integrity and protects market users, 

demonstrating that the Commission has significant authority and intends to use it.

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

2009 have resulted in 47 enforcement actions, charging 80 companies and individuals and assessing

approximately $458 million in penalties.

Actions Taken Since December 2001 in Energy Markets Energy Markets

Number of Cases Filed or Enforcement Actions 47

Number of Entities/Persons Charged 80

Number of Dollars in Civil Monetary Penalties Assessed $458,525,000

Table 2: Energy Markets

Commodity Pools, Hedge Funds, Commodity Pool Operators, and Commodity 

Trading Advisors 

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, rather than legitimate hedge fund operations. From October 2000 through 

September 2009, the Commission filed a total of 95 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 95

Case/Actions Charging Commission Registrants 33

Number of Dollars in Penalties Assessed $618,666,128

Table 3: Pool/Hedge Funds
FY 2011 President’s Budget & Performance Plan

Energy, Pool/Hedge Funds, and Foreign Currency Markets 15

Forex Fraud

The Commission vigorously uses its enforcement authority to combat the problem of foreign currency 

(forex) fraud. Since passage of the Commodities Futures Modernization Act of 2000 (CFMA) in 

December 2000 through September 2009, the Commission, on behalf of more than 26,000 

customers, has filed 114 cases. Those efforts have thus far resulted in the award of approximately 

$476 million in restitution and $576 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 114

Number of Entities/Persons Charged 437

Number of Customers Affected 26,865

Number of Dollars in Civil Monetary Penalties Assessed $576,119,521

Number of Dollars in Restitution Assessed $476,599,896

Table 4: Foreign Currency Markets
FY 2011 President’s Budget & Performance Plan

16 Contract Markets Designated by the CFTC

Contract Markets Designated by the CFTC, 2004 - 2009

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, 14 DCMs meet CFTC criteria and CFTC Core Principles for trading futures 

and options.

DCMs 5 2004 2005 2006 2007 2008 2009 

CBOT

CCFE

CFE

CME

CSCE

EPFE

ELX

ICE US (NYBOT)

KCBT

ME

MGE

Nadex 

(HedgeStreet)

NFX (PBOT)

NQLX

NYCE

NYFE

NYMEX

(incl. COMEX)

NYSE LIFFE

OCX

USFE

TOTAL 18 13 12 12 13 14

Table 5: Designated Contract Markets

 

5 Refer to Appendix 8 for full names of organizations.
FY 2011 President’s Budget & Performance Plan

CFTC-Registered Derivatives Clearing Organizations 17

Number of Derivatives Clearing Organizations Registered with the CFTC, 

2004 - 2009

Clearinghouses that provide clearing services for CFTC-regulated exchanges must register as DCOs. 

Currently, 12 DCOs are registered with the Commission.

DCOs 6 2004 2005 2006 2007 2008 2009 

AE Clearinghouse

CBOT

CCorp

CME

ICE Clear US

IDC

KCBT

LCH

MGE

NADEX

NGX

NYMEX

OCC

TOTAL 10 11 11 11 10 12

Table 6: CFTC-Registered Derivatives Clearing Organizations

 

6 Refer to Appendix 8 for full names of organizations.
FY 2011 President’s Budget & Performance Plan

18 Exempt Commercial Markets

Exempt Commercial Markets, 2004 - 2009

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

eligible commercial entities in exempt commodities may operate as ECMs, as set forth under the CEA 

and the Commission‘s regulations. An ECM is subject to anti-fraud and anti-manipulation provisions 

and a requirement that, if performing an SPDF, 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 31 ECMs have filed notices with the Commission. In FY 2009, 27 ECMs were in business for at 

least part of the year; four however, withdrew their ECM notifications during the fiscal year.

ECMs7 2004 2005 2006 2007 2008 2009 

Agora-X

CCX

CDXchange

ChemConnect

DFOX 8

EnergyCross.com

EOXLIVE

FCRM

Flett 8

GFI

HSE

ICAP

ICAPture

ICAP Shipping

ICE

IMAREX

LiquidityPort

NGX

Nodal

NTP

OILX

OPEX 8

Parity

SL

TCX

TFSWeather

tpENERGYTRADE 8

Tradition Coal.com

 

7 Refer to Appendix 8 for full names of organizations.

8 These ECMs withdrew their ECM notifications during FY 2009.
FY 2011 President’s Budget & Performance Plan

Exempt Commercial Markets 19

Trading Optx

TS

WORLDPULP

TOTAL 11 12 17 19 20 27

Table 7: Exempt Commercial Markets

Exempt Boards of Trade, 2004 - 2009

Transactions by eligible contract participants in selected commodities may be conducted on an EBOT 

as set forth under the CEA and the Commission‘s regulations. EBOTs are subject only to the CEA‘s

anti-fraud and anti-manipulation provisions. An EBOT 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 EBOT must provide certain pricing information to the 

public. To date, 15 EBOTs filed notices with the Commission. In FY 2009, 10 EBOTs were in business 

for at least part of the year; one however, withdrew its EBOT notification during the fiscal year.

EBOTs.

9

 2004 2005 2006 2007 2008 2009 

AE 10

CME AM

Derivatives Bridge

GFI ForexMatch

Intrade

IRESE

LiquidityPort

Longitude

MATCHBOXX

ATS

Storm

Swapstream

TACE

WBOT

WXL

Yellow Jacket

TOTAL 3 5 8 9 9 10

Table 8: Exempt Boards of Trade

 

9 Refer to Appendix 8 for full names of organizations.

10 This EBOT withdrew its EBOT notification during FY 2009.
FY 2011 President’s Budget & Performance Plan

20 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 almost 

five-fold in the last decade and reached a record level of almost 2.8 billion contracts traded in 2009. 

The Commission‘s mission in the futures industry is 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 $216.0 million in FY 2011 to fund its efforts to reach its four strategic goals:

Figure 4: Budget & Performance Estimate by Strategic Goal

To achieve the planned outcomes for FY 2011, the Commission will allocate the $216.0 million request 

among seven programs: Enforcement; Clearing & Intermediary Oversight; Market Oversight; Chief 

Economist; Proceedings; General Counsel and International Affairs. There are two support programs: 

Agency Direction and Administrative Management and Support11.

Figure 5: $216.0 Million Budget Estimate by Program

 

11 Includes information technology staff in support of all programs.
FY 2011 President’s Budget & Performance Plan

Overview of Planned Outcomes by Strategic Goal 21

FY 2011 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 2011, the Commission requests $74.3 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 2011 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 2011

performance goal of improving effectiveness and efficiency of market surveillance.

Breakout of Goal One Request by Outcome

FY 2010 FY 2011 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.

$48,302 186 $65,400 226 $17,098 40

1.2 Markets that can be monitored to 

ensure early warning of potential 

problems or issues that could adversely 

affect their economic vitality.

6,661 26 8,875 31 2,214 5

Total Goal One $54,963 212 $74,275 257 $19,312 45

Table 9: Breakout of Goal One by Outcome
FY 2011 President’s Budget & Performance Plan

22 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 2009; an unprecedented 251 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 80

companies and individuals and assessed approximately $458 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 illgotten gains. 

In FY 2011, the Commission requests $50.2 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 2011

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

 Commodity professionals meet high standardswith an FY 2011 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 2011 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 2010 FY 2011 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.

$27,540 103 $36,166 122 $8,626 19

2.2 Commodities professionals meet 

high standards.

7,633 29 9,002 31 1,369 2

2.3 Customer complaints against 

persons or firms falling within the 

jurisdiction of the Commodity 

Exchange Act are handled effectively 

and expeditiously.

4,502 18 5,045 18 543 0

Total Goal Two $39,675 150 $50,213 171 $10,538 21

Table 10: Breakout of Goal Two by Outcome
FY 2011 President’s Budget & Performance Plan

Overview of Planned Outcomes by Strategic Goal 23

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 2011, the Commission requests $52.6 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

2011 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 2011

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 2010 FY 2011 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.

$12,824 49 $15,609 54 $2,785 5

3.2 Commodity futures and option 

markets are effectively self-regulated.

16,097 64 19,905 69 3,808 5

3.3 Markets are free of trade practice 

abuses.

5,162 20 6,223 21 1,061 1

3.4 Regulatory environment responsive 

to evolving market conditions.

8,885 33 10,908 37 2,023 4

Total Goal Three $42,968 166 $52,645 181 $9,677 15

Table 11: Breakout of Goal Three by Outcome
FY 2011 President’s Budget & Performance Plan

24 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 depend on 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 and sustaining this foundation will 

continually require significant investment in people, management initiatives systems, and facilities.

In FY 2011, the Commission requests $38.9 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 2011 President’s Budget & Performance Plan

Overview of Planned Outcomes by Strategic Goal 25

Breakout of Goal Four Request by Outcome Objective

FY 2010 FY 2011 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.

$4,542 18 $5,063 18 $521 0

4.2 A modern and secure information 

system that reflects the strategic 

priorities of the Commission. 12

7,052 28 7,862 28 810 0

4.3 An organizational infrastructure 

that efficiently and effectively responds 

to and anticipates both the routine and 

emergency business needs of the 

Commission.

4,289 17 4,782 17 493 0

4.4 Financial resources are allocated, 

managed, and accounted for in 

accordance with the strategic priorities 

of the Commission.

4,037 16 4,501 16 464 0

4.5 The Commission‘s mission is 

fulfilled and goals are achieved through 

sound management and organizational 

excellence provided by executive 

leadership. 

11,274 43 16,659 57 5,385 14

Total Goal Four $31,194 122 $38,867 136 $7,673 14

Table 12: Breakout of Goal Four by Outcome

 

12 Represents Office of Information Technology Services dollars and staff resources not otherwise allocated to Goals 1, 2, or 3.
FY 2011 President’s Budget & Performance Plan

26 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 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 27

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 energy companies and the market power manipulation of 

worldwide copper prices.
FY 2011 President’s Budget & Performance Plan

28 Commission Strategies to Influence Outcomes

CFTC Strategy Mapping

FY 2011 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.
FY 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 29

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, foreign currencies and emission allowances. 

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.

 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.
FY 2011 President’s Budget & Performance Plan

30 Commission Strategies to Influence Outcomes

 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 have 

entered into a Memorandum of Understanding (MOU) establishing a permanent regulatory 

liaison between the agencies to address areas of mutual interest, and providing 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. The agencies‘ cooperative efforts seek to avoid barriers to entry and reduce legal 

uncertainty. 

 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. The Commission‘s Web site plays a 

significant role in providing information to the public.

 Investigate and prosecute wrongdoing. The 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 continue 

to hear and decide administrative enforcement cases brought by the Commission against persons 

or firms charged with violating the Act or Commission regulations.

 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 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 31

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 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

Plan

1.1.1 Percentage growth in market volume

1.1.2 Percentage of novel or innovative market proposals or 

requests for CFTC action addressed within six months to 

accommodate new approaches to, or the expansion in, 

derivatives trading, enhance the price discovery process, or 

increase available risk management tools

1.1.3 Percentage increase in number of products traded

1.1.4 Percentage of new exchange and clearinghouse 

organization applications completed within expedited 

review period:

a) new exchange applications

b) new clearinghouse applications

1.1.5 Percentage of new contract certification reviews 

completed within three months to identify and correct 

deficiencies in contract terms that make contracts 

susceptible to manipulation

1.1.6 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

12.8%

100%

11.4%

100%

100%

82%

86%

-19.5%

75%

22.7%

N/A13

N/A14

71%

73%

28%

75%

10%

25%

100%

70%

75%

10%

90%

10%

50%

100%

85%

85%

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 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

Plan

1.2.1 Percentage of DCO applications demonstrating 

compliance with Core Principles

1.2.2 Ratio of markets surveilled per economist

1.2.3 Percentage of contract expirations without 

manipulation

N/A15

14

99.9%

100%

14

99.9%

100%

13

99.9%

100%

10

99.9%

 

13 The applicants of two fast track submissions were taken off the fast track review.

14 The applicants of two fast track submissions voluntarily requested to be taken off the fast track review. A third application 

did not qualify for fast track review.

15 No applications for registration as a DCO were received in FY 2008.
FY 2011 President’s Budget & Performance Plan

32 Commission Strategies to Influence Outcomes

Breakout of Goal One Request by Program Activity

FY 2010 FY 2011 Change

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

Market Oversight $24,346 97 $33,691 120 $9,345 23

Clearing & Intermediary 

Oversight

1,547 6 2,015 7 468 1

Chief Economist 3,538 13 5,115 17 1,577 4

Enforcement 18,717 70 25,870 87 7,153 17

Proceedings 0 0 0 0 0 0

General Counsel 2,626 10 2,915 10 289 0

International Affairs 0 0 0 0 0 0

Agency Direction 0 0 0 0 0 0

Administrative Mgmt. & 

Support

4,189 16 4,669 16 480 0

TOTAL: $54,963 212 $74,275 257 $19,312 45

Table 13: Breakout of Goal One Request by Program Activity

Figure 7: Breakout of Goal One Request by Program Activity

Market 

Oversight

45%

Clearing & 

Intermediary 

Oversight

3 % Chief 

Economist

7 %

Enforcement

35%

General 

Counsel

4 %

Administrative 

Management & 

Support

6 %
FY 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 33

Breakout of Goal One Request by Outcome Objective

FY 2010 FY 2011 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.

$48,302 186 $65,400 226 $17,098 40

1.2 Markets that can be monitored to 

ensure early warning of potential 

problems or issues that could adversely 

affect their economic vitality.

6,661 26 8,875 31 2,214 5

Total Goal One $54,963 212 $74,275 257 $19,312 45

Table 14: Breakout of Goal One by Outcome

Figure 8: Breakout of Goal One Request by Outcome Objective
FY 2011 President’s Budget & Performance Plan

34 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 regulations 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 regulations. 

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 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 35

CFTC Strategy Mapping

FY 2011 Goal Two Resource Investment by Outcome Objective

Figure 9: Goal Two Resource Strategy Mapping

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 involving the voluntary proceedings are 

resolved within one year from the date filed, and summary and formal proceedings are resolved 

within one year and six months from the date filed.
FY 2011 President’s Budget & Performance Plan

36 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, investigates, and brings 

enforcement actions regarding possible fraudulent and other illegal activities relating to retail 

forex transactions and the commodity futures and option markets. 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. In FY 2010, 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 2010, 

dispositions from 1997 through the present will be available through the Web site. 

 Oversee the NFA’s registration program. The Commission oversees the NFA‘s registration 

program, requiring testing, licensing, and ethics training for commodity futures and option 

professionals. CFTC maintains a strong working relationship with the NFA, including joint 

representation on the Registration Working Group (RWG).

 Review regulations and amend or abolish as appropriate. In order to ensure that the 

regulations enforced by the Commission are reflective of the needs of the industry and the public, 

the Commission reviews and adapts its regulations with the evolving conditions and changes in 

the industry.

 Monitor media. The Internet and other media venues are monitored for fraudulent activities and 

other possible violations of the Act.

 Maintain cooperative relationships. Strong working relationships with the exchanges, the NFA, 

other Federal agencies, state governments and law enforcement entities, and foreign authorities 

maintain the Commission‘s ability to gain information for regulatory and law enforcement 

purposes and to provide enforcement assistance as necessary and appropriate.
FY 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 37

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 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

Plan

2.1.1 Number of enforcement investigations opened during 

the fiscal year

2.1.2 Number of enforcement cases filed during the fiscal 

year

2.1.3 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)

2.1.4 Cases filed by other criminal and civil law 

enforcement authorities during the fiscal year that included 

cooperative assistance from the Commission

215

40

97%

31

251

50

98%

44

195

51

98%

25

226

55

98%

30

Outcome 2.2: Commodity professionals meet high standards.

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

Performance Measures 

FY 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

Plan

2.2.1 Percentage of SROs that comply with CFTC Core 

Principles

2.2.2 Percentage of DCOs that comply with CFTC Core 

Principles

2.2.3 Percentage of professionals compliant with standards 

regarding testing, licensing, and ethics training 

2.2.4 Percentage of SROs that comply with requirement to 

enforce their rules

2.2.5 Percentage of total requests receiving CFTC responses 

for guidance and advice

100%

100%

100%

100%

75%

100%

100%

100%

100%

90%

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 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

Plan

2.3.1(a) Percentage of filed complaints resolved within one 

year of the filing date for Voluntary Proceedings 

2.3.1(b) Percentage of filed complaints resolved within one 

year and six months of the filing date for Summary 

Proceedings

2.3.1 (c)Percentage of filed complaints resolved within one 

year and six months of the filing date for Formal 

Proceedings

67%

57%

73%

83%

80%

93%

90%

90%

95%

100%

100%

95%
FY 2011 President’s Budget & Performance Plan

38 Commission Strategies to Influence Outcomes

Breakout of Goal Two Request by Program Activity

FY 2010 FY 2011 Change

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

Market Oversight $0 0 $0 0 $0 0

Clearing & Intermediary 

Oversight

8,833 34 10,568 37 1,735 3

Chief Economist 0 0 0 0 0 0

Enforcement 19,445 72 26,661 89 7,216 17

Proceedings 2,289 10 2,860 11 571 1

General Counsel 6,509 24 7,227 24 718 0

International Affairs 0 0 0 0 0 0

Agency Direction 0 0 0 0 0 0

Administrative Mgmt. & 

Support

2,599 10 2,897 10 298 0

TOTAL: $39,675 150 $50,213 171 $10,538 21

Table 15: Breakout of Goal Two Request by Program Activity

Figure 10: Breakout of Goal Two Request by Program Activity
FY 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 39

Breakout of Goal Two Request by Outcome Objective

FY 2010 FY 2011 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.

$27,540 103 $36,166 122 $8,626 19

2.2 Commodities professionals meet 

high standards.

7,633 29 9,002 31 1,369 2

2.3 Customer complaints against 

persons or firms falling within the 

jurisdiction of the Commodity 

Exchange Act are handled effectively 

and expeditiously.

4,502 18 5,045 18 543 0

Total Goal Two $39,675 150 $50,213 171 $10,538 21

Table 16: Breakout of Goal Two by Outcome

Figure 11: Breakout of Goal Two Request by Outcome Objective
FY 2011 President’s Budget & Performance Plan

40 Commission Strategies to Influence Outcomes

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 noncompetitive trading.

The financial crisis has led to heightened global concerns with regard to systemic risk, OTC 

derivatives, cross-border transactions and volatility and possible abusive practices in energy and 

agricultural commodity markets. There is general recognition that because markets are global as the

result of electronic access, linkages, mergers, and cooperative business arrangements, an

internationally harmonized approach is necessary to avoid regulatory gaps or arbitrage. This 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 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 41

CFTC Strategy Mapping

FY 2011 Goal Three Resource Investment by Outcome Objective

Figure 12: Goal Three Resource Strategy Mapping 

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 self-regulated.

 Annual Performance Goal: No loss of funds resulting from failure of self-regulatory 

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. 
FY 2011 President’s Budget & Performance Plan

42 Commission Strategies to Influence Outcomes

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. 

 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 information 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, both on a bilateral basis and multilaterally within 

international organizations and thereby enhance the effectiveness of financial safeguards 
FY 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 43

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

internationally. The Commission has responded to growing concerns about energy and 

agricultural market volatility through its co-chairing of an International Organization of 

Securities Commissions (IOSCO) Commodity Task Force on Commodity Futures Markets and 

continuing efforts to promote greater transparency of futures, cash and OTC commodity 

market transactions.

 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 2011 President’s Budget & Performance Plan

44 Commission Strategies to Influence Outcomes

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 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

Plan

3.1.1 Lost funds: 

a) Number of customers who lost funds 

b) Amount of funds lost

3.1.2 Number of rulemakings to ensure market integrity and

financially sound markets

3.1.3 Percentage of clearing organizations that comply with

requirement to enforce their rules

0

$0

0

100%

0

$0

4

100%

0

$0

4

100%

0

$0

7

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 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

Plan

3.2.1 Percentage of intermediaries who meet risk-based 

capital requirements

3.2.2 Percentage of SROs 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 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

Plan

3.3.1 Percentage of exchanges deemed to have adequate 

systems for detecting trade practice abuses

3.3.2 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 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

Plan

3.4.1 Percentage of CFMA Section 126(b) objectives 

addressed

3.4.2 Number of rulemakings, studies, interpretations, and 

guidances to ensure market integrity and exchanges‘ 

compliance with regulatory requirements

3.4.3 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

3.4.4 Percentage of total requests receiving CFTC responses 

for guidance and advice

100%

41

100%

75%

100%

63

100%

93%

100%

59

75%

87%

100%

69

90%

90%
FY 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 45

Breakout of Goal Three Request by Program Activity

FY 2010 FY 2011 Change

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

Market Oversight $10,775 42 $14,045 48 $3,270 6

Clearing & Intermediary 

Oversight

18,725 73 21,891 76 3,166 3

Chief Economist 0 0 0 0 0 0

Enforcement 5,086 19 7,089 24 2,003 5

Proceedings 0 0 0 0 0 0

General Counsel 3,694 14 4,100 14 406 0

International Affairs 1,771 9 2,074 10 303 1

Agency Direction 0 0 0 0 0 0

Administrative Mgmt. & 

Support

2,917 9 3,446 9 529 0

TOTAL $42,968 166 $52,645 181 $9,677 15

Table 17: Breakout of Goal Three by Program Activity

Figure 13: Breakout of Goal Three Request by Program Activity
FY 2011 President’s Budget & Performance Plan

46 Commission Strategies to Influence Outcomes

Breakout of Goal Three Request by Outcome Objective

Table 18: Breakout of Goal Three Request by Outcome

FY 2010 FY 2011 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.

$12,824 49 $15,609 54 $2,785 5

3.2 Commodity futures and option 

markets are effectively self-regulated.

16,097 64 19,905 69 3,808 5

3.3 Markets are free of trade practice 

abuses.

5,162 20 6,223 21 1,061 1

3.4 Regulatory environment responsive 

to evolving market conditions.

8,885 33 10,908 37 2,023 4

Total Goal Three $42,968 166 $52,645 181 $9,677 15

Figure 14: Breakout of Goal Three Request by Outcome Objective
FY 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 47

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 depend on 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 wellqualified workforce supported by a modern support infrastructure that enables the Commission to 

achieve its programmatic goals. Building and sustaining this foundation requires continuous 

investments 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; 

and the Office of Equal Employment Opportunity.

The Commission continues to implement the CRA, (part of the 2008 Farm Bill), making critical 

improvements to the CEA and the Commission‘s authority. Specifically, the new legislation 

reauthorized the Commission through FY 2013, provided enhanced Commission oversight of ECMs 

that trade contracts performing a significant price discovery function, increased CFTC penalty 

authority for manipulation, clarified CFTC anti-fraud authority for off-exchange principal-toprincipal energy trades, and clarified CFTC off-exchange retail foreign currency fraud authority. 

Human Resources Management. The Commission employees play 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 continually refines and enhances 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 of knowledgeable, diverse and productive human capital.

The goal is a workforce 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 governance 

process has contributed to annual successes in the development and implementation of a 

comprehensive pay and benefits program mandated by Section 10702 of Public Law 107-171, the 

FSRIA of 2002. CFTC is in its second full year of measuring performance under a merit pay system to 

foster a performance culture. The Commission system for classifying its mission-critical positions is 

under review by the governance committee. Next steps include consideration of differentiating 

compensation for supervisory responsibilities and a review of the executive management 

classification system. This ongoing strategic management of human capital initiatives 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 Vexempt CT pay plan envisioned by FISRA. 

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: Federal, 
FY 2011 President’s Budget & Performance Plan

48 Commission Strategies to Influence Outcomes

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 data analysis, reporting, messaging, archiving, and document 

management solution. The Commission‘s FY 2011 Budget includes approximately $32 million for 

information technology. The resources will allow the Commission to make improvements in 

information technology by upgrading hardware and software, improving existing systems and 

developing new systems critical to maintaining adequate market oversight and innovating new ways 

to assure transparency. 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 

multifold. Alongside that data growth, the Commission is frequently engaged in more complex and 

time sensitive information analysis efforts. The Commission is actively engaged in modernizing the 

technology base of core, mission-critical market surveillance systems – automating detection methods 

to identify and analyze market manipulation and trade practice violations in a global environment. 

Previously, such detection relied on the manual detection by Commission staff members. With the 

market growth experienced in the industry over recent years, manual detection methods are 

inadequate and extremely burdensome on staff. The Commission is making a significant investment 

to bring these systems in line with the requirements of 21st century surveillance.

The Commission is in the process of fully implementing the Trade Surveillance System (TSS), which 

will allow the Division of Market Oversight to better detect and assess a range of possible trade 

practice violations and market manipulation scenarios. TSS information is also being used by the 

Office of the Chief Economist for economic analyses and by the Division of Enforcement for 

investigatory purposes. The TSS implementation is an essential component of the technology 

modernization being undertaken at the Commission. This system takes advantage of state-of-the-art 

commercially available software to enhance market surveillance capability over the expanding and 

diverse electronic trading platforms. TSS will ultimately replace outdated legacy surveillance systems, 

which have limited capability to assess new trading techniques, such as inter-exchange trading. 

Several new custom trade practice surveillance models, reports, and alerting mechanisms are being 

developed. The implementation of TSS will facilitate the utilization of the essential trading-related 

data, around which considerable Commission industry analysis is based.

CFTC uses the Integrated Surveillance System (ISS) to receive end of day positions from large traders 

active in commodity markets. The Commission is planning a significant modernization of this 

mission critical system, which was originally developed when manual detection methods were 

sufficient to monitor market conditions. This system will be modernized to focus on greater market 

manipulation detection and reporting, increased internal and external data transparency enhanced 

reports, improved case management to track market surveillance activities, integration of large trader 

data with intraday trading activity, improving the automated collection of data from industry 

participants, and enhancing capabilities to manage position limits. The modernization of ISS, along 

with TSS, is an essential initiative that will be part of the technological foundation of the 

Commission‘s 21st century surveillance program in the global economy.

The Commission continues to upgrade its information technology management capabilities in the 

areas of analytics, statistical processing and market research. This ongoing initiative involves 

acquiring and implementing new and emerging software technologies that enhance and leverage our 

current information assets. The Commission is concentrating on leading edge technology that can be 

applied throughout the organization, using this new capability to assist staff in conducting market 

research that impacts policy decisions and provides the interpretive analysis necessary for 

Congressional inquiries and inter-agency programs.

The eLaw Program provides law office automation and modernization by seamlessly integrating 

technology and work processes to support managers and staff across the Commission in their 

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

management, litigation, and document management. The eLaw program has been an essential 

component of the Commission‘s successful execution of its enforcement objectives. With the eLaw 
FY 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 49

program, the Commission has a state-of-the-art technology base to conduct investigations and bring 

enforcement actions through the analysis of massive quantities of data. We will be expanding this 

system into the Office of Proceedings and planning further expansion into the Office of General 

Counsel. Additional technical enhancements will also be introduced as the existing eLaw suite of 

products are upgraded or expanded. One such expansion of the eLaw suite is the addition of audio 

analytics capability. Audio analytics software is being phased-in to complement the investigative 

process. Electronic trial support capability is also being added to provide onsite trial support for our 

litigation teams interfacing with electronic courtrooms. 

CFTC.gov and the Commission‘s intranet Web site, Open Interest, are being enhanced as part of an 

initiative to enhance both internal and external transparency of information. The objective for both 

sites is to provide a more dynamic, accessible and informative Web site with rich multi-media content 

and web 2.0 services. An evaluation and functional assessment of both CFTC.gov and Open Interest 

will be performed. Completion of these initiatives will ensure that the Commission‘s Web sites comply 

with government best practices, legal requirements, and industry guidelines, while leveraging 

emerging internet technologies. 

The Commission‘s ability to fulfill its mission depends on the collection, analysis, communication, 

and presentation of information in forms that are easily retrieved and useful to Commission 

employees, the regulated industry, Federal, state, and international agencies, the Congress, and the 

American public. The Commission is planning the implementation of a new Records and Document 

Management System to modernize, centralize and automate the management of the Commission‘s 

information resources. When complete, the new system will transform the Commission‘s document 

management practices, technical solutions, and business process. 

To effectively implement and sustain the modernization of the mission critical surveillance systems, 

the improved internet and intranet Web sites, and implementation of a document management 

system, the Commission will use enterprise architecture and data architecture best practice 

frameworks, tools, and processes. This approach will ensure that the development of an information 

management strategy that will transform a growing data stream and growing data analysis 

requirements into the Commission-wide information management environment. This strategic 

initiative will examine current capabilities, emerging data needs, data governance, data organization, 

data privileges, and software capabilities to provide an information architecture framework that 

supports current mission requirements. The resulting solution will provide the CFTC with more 

effective information analysis capability by modernizing the Commission existing data management 

environment.

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 and construction requirements to meet the 

requirements of additional personnel.

Financial Management. Improved accountability for performance, together with unquestionable 

fiscal integrity, serves as key mission delivery cornerstones. Effective financial management systems 

and services facilitate Commission performance, and earning unqualified audit opinions 

demonstrates financial accountability. Reliance on Department of Transportation systems and 

accounting 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 2011 President’s Budget & Performance Plan

50 Commission Strategies to Influence Outcomes

CFTC Strategy Mapping

FY 2011 Goal Four Resource Investment by Outcome Objective

Figure 15: Goal Four Resource Strategy Mapping

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.
FY 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 51

 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 Plan16 for fiscal years 2007 through 2012.

 

16 The Commission adopted the Strategic Plan for 2007 - 2012 on September 30, 2007. 
FY 2011 President’s Budget & Performance Plan

52 Commission Strategies to Influence Outcomes

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 both management expertise and staff technical competencies in mission-critical areas.

 Implement an on-boarding system to provide enhanced online support for new employees as 

they are oriented, acclimated, trained, and mentored during their first year at CFTC. 

 Link business decisions on IT resources to CFTC strategic goals and establish a decisionmaking 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 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 53

 Standardize furniture assets and implement life cycle management; improving financial 

planning, management, and maintenance.

 Manage the space expansion project at Headquarters and two of the three regional offices to 

create additional space to house new priority hires.

 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 2011 President’s Budget & Performance Plan

54 Commission Strategies to Influence Outcomes

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 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

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%

59

2.4%

78%

23%

100%

57

1.9%

43%

24%

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 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

Plan

4.2.1 Percentage of CFTC IT resources directly tied to 

Commission resource priorities as stated in the Strategic 

Plan 

4.2.2 Percentage of major IT investments having undergone 

an investment review within the last three years

4.2.3 Percentage of Customer Support Center inquires 

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 the National Institute 

Standards and Technology guidance

4.2.7 Percentage of IT E-Government initiatives on target 

for compliance with implementation schedule

4.2.8 Percentage of network users who have completed 

annual security and privacy training

100%

100%

84%

100%

100%

100%

100%

99%

100%

100%

100%

100%

100%

100%

100%

99%

100%

100%

100%

100%

100%

100%

100%

99%

100%

100%

100%

100%

100%

100%

100%

99%
FY 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 55

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 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

Plan

4.3.1 Number of hours required to deploy staff and 

begin mission essential functions at the Continuity Of 

Operations Plan site

24 12 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 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

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 & Accountability Report

4.4.3 Number of non-compliance disclosures in 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 2008

Actual 

FY 2009

Actual 

FY 2010

Plan

FY 2011

Plan

4.5.1 Percentage of 18 Strategic Plan priorities that 

are on track to completion by FY 2012

100% 25% 50% 50%
FY 2011 President’s Budget & Performance Plan

56 Commission Strategies to Influence Outcomes

Breakout of Goal Four Request by Program Activity

FY 2010 FY 2011 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

International Affairs 0 0 0 0 0 0

Agency Direction 9,864 35 14,718 47 4,854 12

Administrative Mgmt. & 

Support

21,330 87 24,149 89 2,819 2

TOTAL $31,194 122 $38,867 136 $7,673 14

Table 19: Breakout of Goal Four by Program Activity

Figure 16: Breakout of Goal Four Request by Program Activity
FY 2011 President’s Budget & Performance Plan

Commission Strategies to Influence Outcomes 57

Breakout of Goal Four Request by Outcome Objective

FY 2010 FY 2011 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.

$4,542 18 $5,063 18 $521 0

4.2 A modern and secure information 

system that reflects the strategic 

priorities of the Commission. 17

7,052 28 7,862 28 810 0

4.3 An organizational infrastructure 

that efficiently and effectively responds 

to and anticipates both the routine and 

emergency business needs of the 

Commission.

4,289 17 4,782 17 493 0

4.4 Financial resources are allocated, 

managed, and accounted for in 

accordance with the strategic priorities 

of the Commission.

4,037 16 4,501 16 464 0

4.5 The Commission‘s mission is 

fulfilled and goals are achieved through 

sound management and organizational 

excellence provided by executive 

leadership. 

11,274 43 16,659 57 5,385 14

Total Goal Four $31,194 122 $38,867 136 $7,673 14

Table 20: Breakout of Goal Four by Outcome

Figure 17: Breakout of Goal Four Request by Outcome Objective

 

17 Represents Office of Information Technology Services dollars and staff resources not otherwise allocated to Goals 1, 2, or 3.
FY 2011 President’s Budget & Performance Plan

58 Justification of the 2011 President’s Budget & Performance Plan

Justification of the FY 2011 Budget & Performance 

Estimate

Breakout of $216.0 Million Budget Estimate by Program

FY 2009 FY 2011 FY 2011

Actual FY 2010 Current Services Request

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

Market Oversight 107 $30,823 139 $35,121 139 $40,258 168 $47,736

Clearing & Intermediary Oversight 77 $22,290 113 $29,105 113 $33,315 120 $34,474

Chief Economist 10 $2,927 13 $3,538 13 $4,034 17 $5,115

Enforcement 121 $36,168 161 $43,248 161 $49,357 200 $59,620

Proceedings 11 $3,220 10 $2,289 10 $2,644 11 $2,860

General Counsel 36 $10,539 47 $12,829 47 $14,624 47 $14,242

International Affairs 7 $2,049 9 $2,380 9 $2,878 10 $2,946

Agency Direction 32 $9,369 35 $9,255 35 $10,414 47 $13,846

Administrative. Management & 

Support

97 $28,398 123 $31,035 123 $35,557 125 $35,161

Total 498 $145,783 650 $168,800 650 $193,081 745 $216,000

Table 21: Budget Estimate by Program

Figure 18: $216.0 Million Budget Estimate by Program
FY 2011 President’s Budget & Performance Plan

Justification of the FY 2011 President’s Budget & Performance Plan 59

Breakout of $216.0 Million Budget Estimate by Object Class 

FY 2009 FY 2011

Actual FY 2010 President’s 

Budget18

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

11.1-11.5 Personnel Compensation $66,601 $92,438 $113,642

11.8 Special Pers. Serv. Payments 0 25 25

11.9 Subtotal, Personnel Comp. 66,601 92,463 113,667

12.1 Personnel Benefits: Civilian 17,093 24,625 30,563

13.0 Benefits for Former Personnel 9 9 52

21.0 Travel & Transportation of Persons 2,029 2,344 2,899

22.0 Transportation of Things 81 100 100

23.2 Rental Payments to Others 13,077 13,149 18,257

23.3 Comm., Utilities & Miscellaneous 3,676 4,103 3,768

24.0 Printing and Reproduction 340 464 457 

25.0 Other Services19 23,153 26,892 36,702

26.0 Supplies and Materials 1,023 1,137 1,196

31.0 Equipment 12,916 3,131 6,584

32.0 Building/Fixed Equipment 5,785 383 1,755

42.0 Claims/Indemnities 0 0 0 

99.0 Subtotal, Direct Obligations 145,783 168,800 216,000 

99.0 Reimbursable 126 175 175 

99.0 Total Obligations $145,909 $168,975 $216,175

Table 22: Budget Estimate by Object Class

Figure 19: $216.0 Million Budget Estimate by Object Class

 

18 Current Authorization.

19 Includes costs for Enforcement investigations, information technology modernizations, operations & maintenance, and 

advisory & assistance services.
FY 2011 President’s Budget & Performance Plan

60 Justification of the FY 2011 President’s Budget and Performance Plan

Crosswalk from FY 2010 to FY 2011

FY 2010

Budget

FY 2011

Request Change

Budget Authority ($000) $168,800 $216,000 $47,200

Full-Time Equivalents (FTEs) 650 745 95

Explanation of Change FTEs 

Dollars 

($000) 

Current Services Increases: (Adjustments to FY 2010 Base)

To provide for the following changes in personnel compensation:

 --Estimated July 2011 5.5% merit based pay adjustment 1,206

 --Estimated July 2010 5.5% merit based pay adjustment 

(annualization of) 3,868

 --To provide for increase in incentive awards 47

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

FSRIA 2002

 Compensation (Classification Review) 241

 Benefits (Classification Review) 64

 --To provide for increased costs of personnel benefits 1,654

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

17,198

 --Travel/Transportation ($43)

 --Space Rental/Communications/Utilities ($4,771)

 --Supplies/Printing ($14)

 --All Services ($7,545)

 --Equipment ($3,453)

 --Building/Fixed Equipment ($1,372)

Program Increase: (Adjustments to FY 2011 Current Services)

 --To provide for salaries and expenses for 95 additional FTEs +95 21,172

 --To provide for program increases 1, 750

Total Increases +95 $47,200

Table 23: Crosswalk from FY 2010 to FY 2011
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanMarket Oversight 61

Market Oversight 

Total Budget: $47,736,000 168 FTEs

Total Change: $12,615,000 29 FTEs

Figure 20: Market Oversight

Percentage of Total Budget Dollars

Figure 21: Market Oversight

Percentage of Total Budget FTEs

Justification of the FY 2011 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 ensure the 

integrity of the futures markets. Of increasing importance is Market Oversight‘s effort to enhance 

market transparency by publication of a number of more meaningful market reports providing 

information on the types of trading and trading activity in the marketplace.

In FY 2011, the Market Oversight program requests 168 FTEs, an increase of 29 FTE over the FY 2010 

level. The four major subprogramsMarket Surveillance, Market and Product Review, Market 

Compliance and Office of Data Management are requesting 59 FTEs, 29 FTEs, 50 FTEs and 30 

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, 
FY 2011 President’s Budget & Performance Plan

62 FY 2011 President’s Budget & Performance PlanMarket Oversight

policies, and current agenda regarding foreign regulatory authorities and foreign exchanges; 2) 

coordinate with other divisions and offices of the Commission in a comprehensive knowledge of the 

laws, regulations, and policies applicable to FBOTs; and 3) negotiate with FBOTs and foreign 

regulators, market authorities, and experts in the derivatives industry and academia. 

Market Surveillance. Futures prices are generally quoted and disseminated throughout the U.S. and 

abroad. Business, agricultural, and financial enterprises use the futures markets for pricing 

information and for hedging against price risk. The participants in commercial transactions rely 

extensively on prices established by the futures markets, which affect trillions of dollars in 

commercial activity. Moreover, the prices established by the futures markets directly or indirectly 

affect all Americans. They affect what Americans pay for food, clothing, and shelter, what we pay to 

heat our homes and fuel our cars, as well as other necessities. Because futures and option prices are 

susceptible to manipulation and excessive volatility, and producers and users of the underlying 

commodities can be harmed by manipulated prices, preventive measures are necessary to ensure that 

market prices accurately reflect supply and demand conditions. 

The detection and prevention of price manipulation are the responsibility of economists who monitor 

all active futures and option contracts for potential problems. The staff requested for the Market 

Oversight program will work to detect and prevent threats of price manipulation and other market 

disruptions caused by abusive trading practices in listed futures and option contracts. They will 

investigate instances of possible manipulation, and analyze routine reports of large-trader activity. To 

maintain an effective Market Surveillance program, the Commission must expand its commitment to 

information technology resources. The innovation in and diversity of contracts listed for trading as 

well as the volume of contracts traded on a daily basis has increased enormously in recent years. 

Price linkages between contracts traded, in different venues, has increased the complexity of the 

surveillance mission to understand manipulative strategies that may occur across markets.

Without additional resources, new surveillance burdens will need to be allocated among existing staff, 

reducing the effectiveness and timeliness of their analyses and constraining the ability of staff to react 

to new potential sources of manipulation or disruptive behavior. Computerized trading has 

transformed futures trading from a floor-based marketplace into an electronic one; a trading 

environment with potentially greater price impacts and market developments that can only be 

analyzed with the aid of new technology resources. For example, the special call survey of swaps 

dealers and index traders required a significant commitment of staff resources. Routine surveillance 

of markets had to be temporarily reallocated to other staff in the surveillance program, reducing the 

amount of time focused on each surveilled market. Technology must be engaged to continue to fully 

process and analyze special call data to complement its surveillance mission. 

Market and Product Review. The Market and Product Review subprogram oversees the regulatory 

and oversight activities of all DCMs to ensure customer protection and market integrity. 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. To accomplish this, the 

subprogram evaluates all exchange applications for approval as a contract market or as a Derivatives 

Transaction Execution Facility (DTEF) to ensure that the exchange is in compliance with Designation 

Criteria and Core Principles and Commission regulations, and that the public is appropriately protected. 

The reviews, which are required by the CEA, ensure that exchanges provide for fair, equitable and 

secure markets and that have appropriate self regulatory programs in place to police their markets. 

The foundation of the Market and Product Review program are the reviews carried out prior to, or 

shortly after, implementation of new rules, programs and products. The regulated exchanges file with 

the Commission a very large number of new contracts and rule amendments. Unfortunately, reviews 

of exchange rule and product submissions are taking longer to complete, and regularly new rules and 

rule changes are implemented and new products trade for some time before the staff is able to review 

and address any concerns that may exist. This increases the risk that problematic new product terms 

and conditions, inappropriate new incentive or market maker programs, new market trading 

methods, changes to disciplinary rules or governance, and other troublesome changes to contract 

terms may go undetected posing a risk to the general public resulting in possible undermining the 

price discovery process for industry participants. 
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanMarket Oversight 63

The staff reviews new exchange rules and rule amendments for consistency with Core Principles and 

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. 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. With 

additional resources, the subprogram would be able to provide more guidance to the exchanges, thus 

increasing the likelihood that when exchanges adopt new trading programs, incentive plans, 

governance models, etc., that such changes will be better designed to address and prevent regulatory 

concerns, thus enhancing the markets‘ integrity, fairness and security.

The Market and Product Review staff also review exempt commercial market and exempt board of 

trade filings to ensure compliance with the Act and the significant price discovery provisions adopted 

by the Farm Bill in 2008. The subprogram oversees an annual requirement to file a notice with the 

Commission regarding the markets‘ operating status under the exemption and whether any of the 

contracts listed on these markets serve a significant price discovery function. ECMs list a very large 

number of contracts in the energy area, many of which require extensive analysis by staff to ascertain 

whether they meet the requirements for SPDCs. Initially, there are as many as 50 contracts that 

potentially meet the SPDC criteria and ECMs continue to develop new products. Staff must evaluate 

all potential SPDCs to ascertain whether they meet the SPDC criteria; for those that do, staff must 

conduct surveillance of activity on those markets to protect the public interest, as directed by 

Congress in the Farm Bill, more staff are needed to implement the new provisions regarding ECMs 

that trade SPDCs, including ongoing reviews of the new market rules or amendments and annual 

evaluations to determine whether any of the markets serve a significant price discovery function. Any 

and all SPDCs must be subjected 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 to ensure customer protection and market integrity. The 

cornerstone of the Market Compliance program is the Rule Enforcement Review (RER) program that 

consists of examinations of DCM self-regulatory programs on an ongoing routine basis to assess their 

compliance with applicable core principles under the Act and Commission regulations. Different 

aspects of DCMs‘ compliance and surveillance programs are reviewed: audit trails, trade practice 

surveillance, disciplinary, and dispute resolution programs. Results are documented in 

comprehensive reports and if issues are identified, specific recommendations for improvement are 

made. Unfortunately, due to limited resources, RERs of a given exchange are periodic in nature 

rather than annual evaluations, which is necessary to ensure comprehensive oversight. As a result, 

the subprogram is planning to establish a program for annual review of exchange programs. The less 

frequent timing of these reviews dilutes their ability to promote and enhance effective self-regulation 

and ensure that exchanges rigorously enforce compliance with their rules. There is a risk that an 

ineffective DCM self-regulatory program may go undetected or a systemic risk may not be identified 

posing a risk to the general public. The SEC maintains an ―inspection‖ program similar to the 

Commission‘s RER program. Under this program, the SEC reviews its major exchanges annually and 

its smaller exchanges very two to three years for compliance with various securities laws and 

regulations.

Limited resources have severely impacted Market Compliance‘s ability to conduct ―horizontal RERs‖ 

across exchanges. The last horizontal RER completed by Market Compliance was in 1997. These 

reviews assess how several DCMs address a particular issue and allow staff to recommend ―best 

practices‖ and make recommendations for all exchanges. The 1997 RER assessed broker association 

programs in place at numerous exchanges and made six recommendations applicable to all of the 

exchanges reviewed. Many significant changes in the futures industry over the past 10 years are wellsuited to examination in the form of a horizontal RER yet they remained unexamined. Some that 

merit in-depth review across DCMs include how changing business structures have impacted selfregulation, comparison of compliance staff size for DCMs with similar trading volume, electronic 
FY 2011 President’s Budget & Performance Plan

64 FY 2011 President’s Budget & Performance PlanMarket Oversight

trading audit trail reviews, and size and type of disciplinary sanctions across all DCMs for violations of 

a similar type. 

Current Commission oversight of U.S. futures markets does not include an established program for 

conducting regular reviews of the automated systems and business continuity and disaster recovery 

(BC-DR) plans required by exchanges to maintain appropriate plans, oversight, and testing to ensure 

that their automated systems and related operations are secure and resilient, and have adequate 

functionality and capacity. In today‘s world, where electronic trading predominates, automated 

trading systems play a critical role in the financial markets. Sophisticated computer systems are also 

crucial to a DCM‘s ability to maintain a comprehensive audit trail, publish timely market data, 

conduct adequate market and trade practice surveillance, provide large trader reporting, and monitor 

and enforce compliance with exchange rules and Commission regulations.

The importance of regular Commission review of automated system resilience and BC-DR capability 

of DCMs was heightened significantly in the wake the September 11, 2001 terrorist attacks, the 2003 

Northeast power blackout, and the cyber attacks on NYMEX from 2005-2007. The resilience of 

DCM‘s automated systems is vital to the continued operation of the U.S. financial sector in the event 

of a severe pandemic. Recent market events have only emphasized the interconnectedness of 

economies, markets, and market participants, and the serious economic consequences that can flow 

from the unavailability of organizations that play key roles in the financial system. Effective 

Commission oversight of DCM BC-DR programs and automated systems is thus essential to 

mitigation of systemic risk in the financial sector. 

To enable the Commission to conduct regular reviews of the automated systems and BC-DR programs 

of major DCMs on an annual basis, and to conduct similar reviews of smaller DCMs on at least a 

triennial basis, the Commission must establish a dedicated Market Continuity Unit similar to the 

SEC‘s program. This unit, which would reside within Market Compliance, would require at least five 

to seven technical staff with certification and/or degrees in information technology and cyber 

security. One person with such technical qualifications has already been hired.

Other U.S. financial regulators, including the SEC and the Federal Reserve, maintain comprehensive 

programs for regular review of the automated systems and the BC-DR plans and resources of the 

exchanges that fall within their purview. For example, the SEC has a dedicated program with a 

technical staff of 15. SEC‘s staff receives training and software from the National Security Agency and 

has its own computer systems and network separate from the main SEC network. The SEC conducts 

annual reviews of the automated systems and BC-DR programs of its major (13) exchanges and 

clearing houses and conducts such reviews at smaller exchanges at least triennially. 

The Market Compliance program 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. 

This same individual also represents 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. 

The Market Compliance subprogram monitors trading activity on all DCMs in order to detect and 

prevent possible trading violations. This type of oversight is conducted through the use of automated 

surveillance and floor surveillance, to foster markets that are free of trading abuses. The 

identification of potential trading violations results in referrals to relevant DCMs and to the 

Commission‘s Division of Enforcement. In addition, the Market Compliance subprogram reviews and 

analyzes trading platforms, rule enforcement programs, and disciplinary procedures in connection 

with new DCM applications. 

A key and under resourced function in Market Compliance is the conduct of investigations to detect 

possible trading abuses. This work protects market users and the integrity of the marketplace, but 
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanMarket Oversight 65

increasingly cannot be performed without a concerted focus on an investment in technology. Two 

years ago, staff began shifting resources away from the legacy system, EDBS, which relied heavily on 

manual analysis, to the development of an automated trade practice alert system, known as the Trade 

Surveillance System (TSS). TSS, when fully developed and implemented, will provide staff with 

automated alerts on possible trade practice abuses, exponentially improving their detection 

capabilities in the electronic trading environment. Trade violation detection software performs 

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.

Office of Data Management. Detecting and preventing price manipulation in the markets under its 

jurisdiction rests on the ability to efficiently and effectively capture data and ensure its quality, 

accessibility, and storage management. The staff currently processes data records from between 250-

270 firms daily and collects approximately 110 million records every year through a business process 

that is not fully automated. The application of technology and business process reengineering are 

essential to ensuring the integrity of the data and its timely accessibility. 

The data is used in reports that 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. These data are also used to 

publish reports that improve market transparency. Several transparency initiatives, begun in FY 

2009, need additional resources in order to improve upon the timeliness and frequency of the reports, 

as well as the efficiency of the data collection. Separately, staff has issued ―special calls‖ to about 40 

trading entities, including swap dealers, to supplement what we already know about their onexchange trading and, more importantly, to obtain critical information about their OTC trading and 

their clients.

The effectiveness gained through automation will allow Commission staff to periodically conduct 

audits of the firms to assure that information is being properly and accurately submitted. Limited 

funding severely curtailed the number of audits conducted, potentially affecting the accuracy of data 

collected and the ability of surveillance analysts to properly oversee activity in the market. For 

example, if accounts are not aggregated properly, it is impossible to track speculative limit violations, 

which can be a risk to the market. 

Consequence of Not Receiving Requested Level of Resources

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 exchange-traded contracts that replicate OTC products. 

The current marketplace demands a sophisticated level of surveillance to adequately protect the 

public. The growth in the number and different types of facilities that trade a wide array of 

derivatives products, including futures on OTC instruments, contracts based on events or 

occurrences, and nontraditional contracts listed by ECMs, as well as, novel approaches to derivatives 

trading that must be overseen by experienced staff to monitor these products and examine the 

benefits and risks to the public arising from these developments. To adequately protect the public, 

effective surveillance and oversight of exchanges and product design requires adequate staff to 

monitor the 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 and to deter and prevent price manipulation and 

investigate suspect activity.

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. Exchanges have 
FY 2011 President’s Budget & Performance Plan

66 FY 2011 President’s Budget & Performance PlanMarket Oversight

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 staff are critical to enable the Market Oversight program to focus on the complex issues 

and changing practices in the derivatives markets, especially in the energy and agricultural sectors. 

Without adequate staff and technology resources, the Market Oversight program 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 resources are required to conduct necessary 

reviews to ensure that exchanges adequately address potential conflicts of interest between their selfregulatory functions and responsibilities and their commercial interests. Furthermore, changes to the 

CEA now require reviews of ECMs that list for trading any contracts which have been determined to 

perform a significant price discovery function. This requires extensive additional staff hours focused 

on markets previously only lightly reviewed. Without adequate resources, staff will not be able to 

complete reviews in a timely manner, allowing traders to continue to use these markets to carry out 

manipulations or abusive trading strategies in that regulatory oversight.

Surveillance staff will be stretched to a level that puts at significant risk the Commission‘s strategic 

goal to detect and deter price manipulation without new expert staff. Proper surveillance coverage of 

markets requires highly specialized and comprehensive knowledge of assigned markets. Surveillance 

economists currently are required to cover many markets, limiting the amount of expertise and 

attention that can be devoted to each market. It is likely that this situation will only deteriorate. 

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. 

The efficacy of exchange self-regulatory programs is not being evaluated on a timely basis. The length 

of the time between reviews significantly grew over past several years. Staff must be able to ensure on 

an annual basis that exchanges are effectively fulfilling their self-regulatory responsibilities with 

respect to customer protection and market integrity and, if not, traders, affected industries and the 

general public may suffer direct economic harm from an increase in illegal trading activity. In 

addition, without sufficient resources to sufficiently advance the development of the TSS system staff 

will be constrained in its ability to conduct surveillance across multiple markets and exchanges to 

detect trading violations and potentially volatile 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 partand-parcel of the Commission‘s innovation to keep pace with rapid developments in today‘s highvolume global electronic trading environment.

Staff will 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.
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanMarket Oversight 67

Without adequate resources, staff may not be able to maintain its ability to process requests from 

foreign boards of trade to permit direct trading access to U.S. market users and ensure that the public 

is adequately protected. 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. Also, without adequate staff, the Market oversight Program 

cannot monitor activity on the foreign boards of trade granted direct access privileges to ensure that 

the conditions imposed by staff are met and that trading on these markets do not adversely affect 

trading on markets in the United States.

Without adequate resources, the Market Oversight program cannot monitor exempt markets and 

carry out the requirements of recently enacted legislation related to SPDCs on exempt markets. A 

shortfall of resources could significantly affect the public interest by undermining the intent of 

Congress to bring SPDCs under Commission oversight 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. These initiatives focus on providing critical market information to traders and the public to 

address concerns about volatility and high prices. At very critical junctures of the streams of data 

processing, development, and maintenance of these current systems the staff has literally a person or 

two, who if unavailable for any reason, would delay those efforts. Additional hires are essential to 

remedy this situation. 

Some of the transparency initiatives were the result of the staff‘s special call to swap dealers. Much of 

the data collected from that endeavor, however, is currently not processed for lack of resources. As a 

result, the Commission and the public do not benefit from what is otherwise the only resource for 

further insight into OTC derivatives markets. Without additional resources, the number of trading 

entities subject to the call is severely constrained. The call currently focuses on entities with ―index 

investment‖ activity. Ideally, we need to expand the call to additional, major swap dealers who are 

not necessarily involved in index investment. In order to expand the list of recipients, we need 

additional resources to develop a list of targeted entities, prepare and issue the additional call letters, 

deal with follow-up discussion with the recipients to ensure proper interpretation and consistent 

results, process the incoming information, and then incorporate the new information into appropriate 

reports—for both internal use and potentially for public dissemination in aggregate form.

It is anticipated that some time in 2009, legislation will be adopted that will make 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 over markets that have heretofore never been subject to regulation. 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, market surveillance, 

and evaluations of exchange compliance with regulatory requirements.
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68 FY 2011 President’s Budget & Performance PlanMarket Oversight

Table 24: Market Oversight Request by Subprogram

FY 2010 FY 2011 Change

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

Market Compliance $10,871 43.00 $14,189 50.00 $3,318 7.00

Market & Product Review 6,618 26.00 8,261 29.00 1,643 3.00

Market Surveillance 11,839 47.00 16,763 59.00 4,924 12.00

Data Management 5,793 23.00 8,523 30.00 2,730 7.00

TOTAL $35,121 139.00 $47,736 168.00 $12,615 29.00

Figure 22: Market Oversight FY 2011 Budget by Subprogram
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanMarket Oversight 69

Table 25: Market Oversight Request by Goal

FY 2010 FY 2011 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.

$22,481 90.00 $30,479 109.00 $7,998 19.00

1.2 Markets that can be monitored to ensure 

early warning of potential problems or issues 

that could adversely affect their economic 

vitality.

1,865 7.00 3,212 11.00 1,347 4.00

Subtotal Goal One $24,346 97.00 $33,691 120.00 $9,345 23.00

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.

$7,681 30.00 $10,230 35.00 $2,549 5.00

3.3 Markets are free of trade practice abuses. 2,529 10.00 3,190 11.00 661 1.00

3.4 Regulatory environment responsive to 

evolving market conditions.

565 2.00 625 2.00 60 0.00

Subtotal Goal Three $10,775 42.00 $14,045 48.00 $3,270 6.00

TOTAL $35,121 139.00 $47,736 168.00 $12,615 29.00

Figure 23: Market Oversight FY 2011 Budget by Goal
FY 2011 President’s Budget & Performance Plan

70 FY 2011 President’s Budget & Performance PlanClearing & Intermediary Oversight

Clearing & Intermediary Oversight

Total Budget: $34,474,000 120 FTEs

Total Change: $ 5,369,000 7 FTEs

Figure 24: Clearing & Intermediary Oversight

Percentage of Total Budget Dollars

Figure 25: Clearing & Intermediary Oversight 

Percentage of Total Budget FTEs

Justification of the FY 2011 President’s Budget & Performance Plan

In FY 2011, the Clearing and Intermediary Oversight (DCIO) program requests 120 FTEs, an increase

of seven FTEs over the FY 2010 level. The three subprograms of Compliance and Registration, 

Clearing Policy and Risk Surveillance, and Audit and Financial Review, are requesting 16, 38, and 66 

FTEs, respectively. 

Compliance and Registration. The Compliance and Registration subprogram level of 16 FTEs 

represents one additional FTE for FY 2011. The FTE will be allocated to fill an attorney-advisor 

position needed to meet the Compliance and Registration‘s subprogram responsibilities. 

Compliance and Registration staff attorneys 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. 

Compliance and Registration staff attorneys are 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, 
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanClearing & Intermediary Oversight 71

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. In this regard, staff is currently engaged in drafting rules that will, 

for the first time, impose registration requirements and Commission oversight upon intermediaries 

engaged in the offer and sale of over-the-counter foreign currency contracts (forex) to retail 

customers. Given current trends, staff anticipate significantly more work in this area, including the 

drafting of final and follow up regulations and the provision of guidance to the public and industry 

regarding the effect of the rules. 

Compliance and Registration staff have engaged in efforts to identify areas where CFTC and SEC 

regulations can be harmonized. There are significant differences between CFTC and SEC 

requirements concerning, for example, the registration and oversight of investment advisers and the 

recognition of foreign intermediaries. 

The additional FTE requested would contribute in each of these areas. Finally, the Compliance and 

Registration subprogram request of additional staff does not take into consideration prospective 

responsibilities in its allocation of staff. In this regard, attorneys will be needed to implement 

legislative reforms currently being considered by Congress. These proposals will require Commission 

staff to prepare numerous rulemakings as more market participants are required to be registered. 

Clearing Policy and Risk Surveillance. The Clearing Policy and Risk Surveillance subprogram level 

of 38 FTEs represents three additional FTEs for FY 2010. The three additional FTEs will be allocated 

to fill risk analyst positions.

The Clearing Policy and Risk Surveillance subprogram‘s primary objective is to ensure that DCOs and 

market intermediaries avoid creating systemic risk. The Clearing Policy and Risk Surveillance 

subprogram‘s major functional responsibilities in support of this objective are to: review DCO 

applications and rule submissions and make recommendations to the Commission; assess DCO 

compliance with the Act and Commission regulations, including core principles relating to financial 

resources, risk management, default procedures, customer funds protection, and automatic system 

safeguards; prepare proposed regulations, orders, guidelines, and other regulatory approaches on 

issues pertaining to DCOs; provide support to Commission staff in the review of DCM applications 

and rules submissions relating to clearing and customer funds protection; conduct risk assessment 

and financial surveillance through the use automated systems to gather and analyze financial 

information from clearing FCMs to ascertain, on a continuous basis, whether any such FCM shows a 

material financial weakness; provide advice and guidance regarding clearing to the Commission, 

other Commission staff, futures professionals, and general public; and review DCO and FCM requests 

for no-action, exemptive, or interpretive letters relating to the Act or Commission regulations.

The additional FTEs are needed to carry out Clearing Policy and Risk Surveillance subprogram 

responsibilities of an increasing workload, 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 Core Principles governing financial resources, risk management, default 

procedures, protection of customer funds, and system safeguards. 

Daily risk surveillance is a central element of the Clearing Policy and Risk Surveillance subprogram. 

Staff receives and reviews reports that detail positions in all futures markets. Staff calculates margin 

requirements, conducts stress tests and compares potential losses to available resources such as FCM 

capital and the DCO guarantee fund. Staff contacts DCOs, FCMs, and large market participants 

regularly, on a proactive basis, to discuss risk posed by large positions and the measures in place to 

mitigate those risks. Increasing the number of risk analysts will enable individual staff members to 

focus more on particular markets and market participants and conduct more frequent and more indepth analyses. For example, there are two risk analysts assigned to the energy complex which has 

over 200 separate contracts. Additional staff resources would allow the energy complex to be divided 

among more analysts. 
FY 2011 President’s Budget & Performance Plan

72 FY 2011 President’s Budget & Performance PlanClearing & Intermediary Oversight

Staff conducts periodic reviews of DCOs to evaluate their compliance with the Act and Commission 

regulations, including core principles governing financial resources, risk management, default 

procedures, protection of customer funds, and system safeguards. Currently, the scope and frequency 

of these reviews are determined based on staff‘s assessment of risk. A formal review is not conducted 

of each DCO each year. The number of DCOs, the volume of positions cleared by DCOs, and the 

complexity of positions are all growing. Increasing the number of risk analysts will enable the 

program to conduct an on-site risk review of each DCO every year.

Clearing Policy and Risk Surveillance staff are currently engaged in efforts to identify areas where 

CFTC and SEC regulations can be harmonized. There are significant differences between CFTC and 

SEC requirements concerning, for example, clearing organization rule approvals and margining 

methodologies for exchange listed derivative products. Additional staff would be committed to 

working on the harmonization efforts.

Finally, the Clearing Policy and Risk Surveillance subprogram request of additional staff does not take 

into consideration prospective responsibilities into its allocation of staff discussed previously. In this 

regard, attorneys will be needed to implement legislative reforms currently being considered by 

Congress. These proposals will require that Commission staff prepare numerous rulemakings as 

more over-the-counter products are required to be cleared. Likewise, additional resources will be 

needed to process new applications to become a DCO, and to carry out ongoing oversight of DCOs and 

to carry out daily risk surveillance. 

Audit and Financial Review. The Audit and Financial Review subprogram level of 66 FTEs 

represents three additional FTEs for FY 2011. The additional FTEs will provide the Audit and 

Financial Review subprogram with additional resources to better ensure the financial integrity of the 

futures markets and the protection of customer funds. One staff auditor will be allocated to each of 

the three regional offices.

The Audit and Financial Review subprogram is primarily responsible for ensuring that market 

intermediaries comply with applicable financial and customer protection requirements set forth in the 

Act and Commission regulation. The Audit and Financial Review subprogram addresses its 

responsibilities by conducting oversight of the financial surveillance programs of the 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., the CME 

Group, Kansas City Board of Trade, Minneapolis Grain Exchange, 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 to perform on behalf of the Commission, 

including the registration function and the review of CPO and CTA disclosure documents. 

The Audit and Financial Review subprogram also performs routine, daily financial surveillance of 

FCMs. Audit and Financial Review subprogram staff reviews monthly financial statements submitted 

by FCMs to assess compliance with financial and customer funds protection requirements and to 

identify possible adverse financial trends. Audit and Financial Review subprogram staff also reviews 

and performs any necessary follow up on all regulatory notices filed by FCMs, SROs, and DCOs 

pursuant to Commission regulations (e.g., FCMs that are under-capitalized, under-segregated, or 

have triggered early warning reporting requirements, etc.). 

The Audit and Financial Review subprogram also conducts direct examinations of FCMs and CPOs. 

Such examinations may be conducted as an integral part of the oversight of the SROs‘ financial 

surveillance program, 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. The Audit and Financial 

Review subprogram also may assist with financial reviews of DCOs and periodically provides 

assistance/expertise on Division of Enforcement investigations/cases. Furthermore, the Audit and 

Financial Review subprogram is responsible for responding to public inquiries regarding the 
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanClearing & Intermediary Oversight 73

application of the Commission‘s capital rules, financial reporting rules, segregation rules, and certain 

financial and reporting rules governing CPOs. 

Direct examination of market intermediaries is a key component of the Audit and Financial Review 

subprogram. The expertise and proficiency obtained by audit staff during direct examinations are 

vital tools when assessing the effectiveness and thoroughness of an SRO‘s financial surveillance 

program. Direct examinations also provide independent verification of audit work completed by 

SROs‘ staffs. The expertise and proficiency obtain by audit staff during direct examinations also are 

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.

The additional FTEs will provide added resources to the Audit and Financial Review subprogram, 

which will enhance the subprogram‘s efforts to conduct frequent and comprehensive assessments of 

the effectiveness of the SROs‘ financial surveillance programs. Historically, SRO oversight reviews 

have not been conducted pursuant to established schedules, or on a routine basis. Recently, the Audit 

and Financial Review subprogram has conducted an average of approximately two major SRO reviews 

each fiscal year. These reviews required significant staff resources (i.e., approximately 11,000 staff 

hours per year). The addition of three audit staff members will provide the Audit and Financial 

Review subprogram with added resources to conduct ongoing comprehensive assessments of the two 

major SROs (i.e., CME Group and NFA currently have DSRO responsibility for the overwhelming 

majority of FCMs) on a routine basis (i.e., yearly), and the remaining SROs on a more limited basis, 

while allowing Audit and Financial Review staff to continue to conduct its regulatory responsibilities 

detailed above at current levels. 

Finally, the Audit and Financial Review subprogram request of additional staff does not take into 

consideration prospective responsibilities into its allocation of staff discussed previously. In this 

regard, attorneys will be needed to implement legislative reforms currently being considered by 

Congress. These proposals will require that Commission staff prepare numerous rulemakings as 

more over-the-counter products are required to be cleared and more market participants are required 

to be registered. Likewise, additional resources will be needed to directly examine more market 

intermediaries and to prepared minimum regulatory capital requirements for new categories of 

registrants.

Consequences of Not Receiving Requested Level of Resources

The DCIO program must at all times maintain an effective and robust 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 of retail, non-intermediated, off-exchange trading in 

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. Moreover, DCIO expects that 

efforts to harmonize CFTC and SEC regulations will require increased staff levels. Without additional 

resources, Clearing and Intermediary Oversight program will be severely hampered in its ability to 

implement expanded Congressional mandates in a timely fashion. Finally, various pending legislative

proposals would bring numerous products and market participants within Commission jurisdiction 

and could impose significant new responsibilities on DCIO. Given the uncertain nature of the final 
FY 2011 President’s Budget & Performance Plan

74 FY 2011 President’s Budget & Performance PlanClearing & Intermediary Oversight

legislation, DCIO has not factored prospective responsibilities into the allocation of staff discussed 

above. Nevertheless, it is likely that in order to effectuate the provisions of any legislation that does 

pass, DCIO staff will be required to engage in extensive rule writing, further stretching the Division‘s 

resources.

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 brokers-dealers. 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. 

Another 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.

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 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanClearing & Intermediary Oversight 75

Table 26: Clearing & Intermediary Oversight Request by Subprogram

 FY 2010 FY 2011 Change

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

Clearing Policy & Review $9,130 35.00 $11,047 38.00 $1,917 3.00

Compliance & Registration 4,119 15.00 4,881 16.00 762 1.00

Audit & Financial Review 15,856 63.00 18,546 66.00 2,690 3.00

TOTAL $29,105 113.00 $34,474 120.00 $5,369 7.00

Figure 26: Clearing & Intermediary Oversight FY 2011 Budget by Subprogram
FY 2011 President’s Budget & Performance Plan

76 FY 2011 President’s Budget & Performance PlanClearing & Intermediary Oversight

Table 27: Clearing & Intermediary Oversight Request by Goal

 FY 2010 FY 2011 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.

$773 3.00 $1,007 3.50 $234 0.50

1.2 Markets that can be monitored 

to ensure early warning of potential 

problems or issues that could 

adversely affect their economic 

vitality.

774 3.00 1,008 3.50 234 0.50

Subtotal Goal One $1,547 6.00 $2,015 7.00 $468 1.00

GOALTWO: Protect market users and the public.

Outcomes

2.1 Violations of Federal 

commodities laws are detected and 

prevented.

 $1,908 7.50 $2,410 8.50 $502 1.00

2.2 Commodities professionals meet 

high standards.

 6,673 25.50 7,877 27.00 1,204 1.50

2.3 Customer complaints against 

persons or firms falling within the 

jurisdiction of the Commodity 

Exchange Act are handled 

effectively.

 252 1.00 281 1.00 29 0.00

Subtotal Goal Two $8,833 34.00 $10,568 36.50 $1,735 2.50

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

Outcomes

3.1 Clearing organizations and firms 

holding customer funds have sound 

financial practices.

 $7,356 28.50 $8,493 29.50 $1,137 1.00

3.2 Commodity futures and option 

markets are effectively selfregulated.

 8,072 32.00 9,293 33.00 1,221 1.00

3.4 Regulatory environment 

responsive to evolving market 

conditions.

3,297 12.50 4,105 14.00 808 1.50

Subtotal Goal Three $18,725 73.00 $21,891 76.50 $3,166 3.50

TOTAL $29,105 113.00 $34,474 120.00 $5,369 7.00

Figure 27: Clearing & Intermediary Oversight FY 2011 Budget by Goal
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanEnforcement 77

Enforcement

Total Budget: $59,620,000 200 FTEs

Total Change: $16,372,000 39 FTEs

Figure 28: Enforcement Percentage 

of Total Budget Dollars

Figure 29: Enforcement Percentage 

of Total Budget FTEs

Justification of the FY 2011 President’s Budget & Performance Plan

The primary responsibility of the Enforcement program is to deter and prevent price manipulation or 

any other disruptions to market integrity and to protect all market participants from fraudulent or

other abusive sales practices and misuses of customer assets. Such conduct undermines the integrity 

and functioning of the market as well as the confidence of market participants. In the enforcement 

role, each year the Commission performs investigations and conducts litigations for non-compliance 

with the laws and regulations under the jurisdiction of the CEA.

In FY 2011, the Enforcement program‘s FTE allocation level is 200, an increase of 39 FTEs over the 

FY 2010 appropriation level. In FY 2009, despite operating significantly below its FTE allocation 

level of 160 for the entire year, the Enforcement program brought 25 percent more actions to protect 

customers and market participants than it had in FY 2007 and 2008. Many of these were quick-strike 

actions to freeze customer funds, resulting from tips regarding Ponzi-type and other fraudulent 

schemes. For example, in FY 2009, the Enforcement program filed over 24 of these Ponzi-type fraud 

cases, which represented a 100 percent increase in comparison to FY 2008 filings of this nature. In 

FY 2009, the Enforcement program also brought a large-scale case involving manipulative activity in 

milk futures.

The Ponzi-type fraud cases primarily arose from the unprecedented financial crisis which caused 

these schemes to collapse. Additionally, the use of increased authority provided by the Congress 

involving retail foreign currency fraud contributed to the increase in these cases. The Enforcement 

program was forced to shift significant resources from larger-scale market manipulation cases –

primarily involving crude oil and other energy markets– to prosecute the Ponzi-type fraud cases, thus 

delaying the conclusion of these larger manipulation investigations. For example, in FY 2009, the 

Enforcement program anticipated using only five FTE‘s to investigate and ultimately prosecute all 

retail foreign currency fraud leads, which is just a small subset of the Ponzi-type frauds handled by 

the Enforcement program. Within a month of the financial crisis, the Enforcement program devoted 

more than double the number of FTE‘s anticipated to investigate and ultimately prosecute retail 

foreign currency fraud. 
FY 2011 President’s Budget & Performance Plan

78 FY 2011 President’s Budget & Performance PlanEnforcement

The additional 39 FTE‘s requested in the FY 2011 budget are vital for the Enforcement program to 

continue to prosecute large-scale manipulations and other market abuses. The types of investigations 

being handled by the Enforcement program have become increasingly more complex. For instance, in 

the last decade, trading volume has increased almost six-fold and the amount of customer funds held 

at futures commission merchants has more than quadrupled alone. Also, the amount of information 

that the Enforcement program must analyze in its investigations is staggering. For instance, in the 

ongoing National Crude Oil Investigation commenced in May of 2008, the Enforcement program is 

reviewing millions of emails, instant messages, and other documents and analyzing incredibly 

complex trading strategies. As part of that investigation alone, the Enforcement program is reviewing 

over 8,000 hours of audio recordings. To handle the vast amount of information that must be 

analyzed, the Commission has made significant technology investments in its e-law program which 

has enabled the Enforcement program to keep up, in part, with the demands and complexities of 

manipulation investigations. 

The additional FTEs requested for FY 2011 are vitally needed by the Enforcement program to address 

the following:

 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. One 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 2010 and FY 2011. Market-based conduct 

investigations tend to be more involved and expensive relative to other types of investigations. 

Beyond the Commission‘s resources, they frequently involve the need to retain special outside 

expertise for these cases. 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. The Commission anticipates that it will need to spend 

twice the amount that was spent in FY 2009 for consultant and expert fees.

 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.20 The Enforcement 

program anticipates that it will need to devote additional resources to investigate CPO and CTA 

activity, including potential ―Ponzi‖ schemes.

 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 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 at least an additional four FTE resources to 

combating retail forex fraud.

 The Enforcement program also expends resources against other types of off-exchange 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 principalto-principal transactions.

 

20 ―Quick-strike‖ enforcement actions are those that the Commission files within four months of opening an investigation.
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanEnforcement 79

 In FY 2009, the Commission entered into an MOU with the Financial Crimes Enforcement 

Network (FinCEN) at the U.S. Treasury, which increases information sharing between CFTC and 

FinCEN and, in the context of investigations of suspected violations of the CEA and/or 

Commission Regulations, gives the Enforcement program access to suspicious activity reports 

and other financial information. The Enforcement program will dedicate a minimum of two 

FTE‘s with respect to activities related to this FinCEN MOU.

 The Enforcement Program will utilize additional FTE‘s to enhance its cooperative enforcement 

program in three vital aspects. First, the Enforcement program will establish a Customer 

Outreach and Protection initiative to educate consumers about the warning signs of commodity 

fraud. Second, the Enforcement program will utilize additional FTE‘s to enhance our cooperative 

efforts with the FERC, Federal Trade Commission (FTC), and SEC. Notably, in FY 2009, the 

number of cooperative enforcement filings with criminal authorities has increased by 15 percent 

and with the SEC by over 500 percent. Third, the Enforcement program will use 5-10 FTE‘s to 

establish a staff detail program, lending the futures market expertise of CFTC staff to the 

Department of Justice, SEC, FERC, and other agencies. With regard to the Department of 

Justice, the staff details will provide training, expertise, and advice to help further criminal 

prosecutions of violations of the CEA. As to the other agencies, the staff details will provide 

training and expertise to ensure that detection and prosecution of manipulations and abuses 

involving areas of overlapping jurisdiction are fully coordinated.

Responsibilities of the Division of Enforcement

Responding to Violative Conduct. When an enforcement investigation indicates that violative 

conduct may have occurred, the Commission files either 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. In FY 2009, the Commission‘s efforts have thus far resulted in the award of 

approximately $147 million in restitution and disgorgement and $77 million in civil monetary 

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. The Enforcement 

program addresses various types of violative conduct including conduct that threatens the economic 

functions of the markets. 

Protecting Market Users. The Enforcement program works to protect market users and the public by 

promoting compliance with and deterring violations of the CEA and Commission regulations. The 

bulk of the work in this area involves investigating and prosecuting enforcement actions in matters 

involving fraud and imposing sanctions against wrongdoers. These actions send a message to industry 

professionals about the kinds of conduct that will not be tolerated. 

The Commission also pursues actions involving false or misleading advertising. Over the past several 

years, there has been substantial false and deceptive advertising of commodity-related investment 

products, often by unregistered persons and entities through various forms of mass media, such as 

cable television, radio, and the Internet. The Enforcement program has worked aggressively to detect 

and stop such advertising by filing enforcement actions. Similarly, the Enforcement program pursues 

cases charging misconduct involving off-exchange retail 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.
FY 2011 President’s Budget & Performance Plan

80 FY 2011 President’s Budget & Performance PlanEnforcement

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 (FBI), 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 2011 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 ECMs, the 

Enforcement program will target off-exchange fraud involving illegal futures and options contracts, 

including those involving foreign currency; and 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 

investigations, resulting in less efficient and potentially less successful actions. 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 are forced to shift resources from important 

investigations to ongoing and future litigation demands, which limits our 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. Self Regulatory 

Organizations 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, 
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanEnforcement 81

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 2011 President’s Budget & Performance Plan

82 FY 2011 President’s Budget & Performance PlanEnforcement

Table 28: Enforcement Request

FY 2010 FY 2011 Change

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

Enforcement $43,248 161.00 $59,620 200.00 $16,372 39.00

TOTAL $43,248 161.00 $59,620 200.00 $16,372 39.00
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget and Performance PlanEnforcement 83

Table 29: Enforcement Request by Goal

FY 2010 FY 2011 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.

$18,097 67.38 $25,006 83.88 $6,909 16.50

1.2 Markets are effectively and 

efficiently monitored to ensure early 

warning of potential problems or issues 

that could adversely affect their 

economic vitality.

620 2.31 864 2.90 244 0.59

Subtotal Goal One $18,717 69.69 $25,870 86.78 $7,153 17.09

GOAL TWO: Protect market users and the public.

Outcomes

2.1 Violations of Federal commodities 

laws are detected and prevented.

$19,238 71.61 $26,372 88.47 7,134 16.86

2.2 Commodities professionals meet 

high standards.

207 0.77 289 0.97 82 0.20

Subtotal Goal Two $19,445 72.38 $26,661 89.44 $7,216 17.06

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

Outcomes

3.1 Clearing organizations and firms 

holding customer funds have sound 

financial practices.

$3,726 13.87 $5,178 17.37 $1,452 3.50

3.3 Markets are free of trade practice 

abuses.

554 2.06 718 2.41 164 0.35

3.4 Regulatory environment responsive 

to evolving market conditions.

806 3.00 1,193 4.00 387 1.00

Subtotal Goal Three $5,086 18.93 $7,089 23.78 $2,003 4.85

TOTAL $43,248 161.00 $59,620 200.00 $16,372 39.00

Figure 30: Enforcement FY 2011 Budget by Goal
FY 2011 President’s Budget & Performance Plan

84 FY 2011 President’s Budget and Performance PlanOffice of the Chief Economist

Office of the Chief Economist

Total Budget: $ 5,115,000 17 FTEs

Total Change: $ 1,577,000 4 FTE

Figure 31: Chief Economist

Percentage of Total Budget Dollars

Figure 32: Chief Economist

Percentage of Total Budget FTEs

Justification of the FY 2011 President’s Budget & Performance Plan

Innovation in the futures and option markets continues to ramp up the demands on 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 2011, the Office of the Chief Economist (OCE) program requests 17 FTEs; this is four additional 

FTE over the 13 FTE in the FY 2010 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 an ever widening and 

more diverse array of markets, including new energy products, new types of ―event-related‖ markets, 
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanOffice of the Chief Economist 85

such as corporate actions, derivatives on economic statistics, derivatives on credit events, derivatives 

on weather, environmental contracts 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 and anticipate 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 continue. 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 in existing markets and in 

new markets generate huge amounts of trading data. This requires additional data management 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 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 2011 President’s Budget & Performance Plan

86 FY 2011 President’s Budget and Performance PlanOffice of the Chief Economist

Table 30: Office of the Chief Economist Request

FY 2010 FY 2011 Change

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

Chief Economist $3,528 13.00 $5,115 17.00 $1,577 4.00

TOTAL $3,538 13.00 $5,115 17.00 $1,577 4.00
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanOffice of the Chief Economist 87

Table 31: Office of the Chief Economist Request by Goal

FY 2010 FY 2011 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.

$3,538 13.00 $5,115 17.00 $1,577 4.00

1.2 Markets that can be monitored to 

ensure early warning of potential 

problems or issues that could adversely 

affect their economic vitality.

0 0 0 0 0 0

Subtotal Goal One $3,538 13.00 $5,115 17.00 $1,577 4.00

GOAL TWO: Protect market users and the public.

None.

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

None

TOTAL $3,538 13.00 $5,115 17.00 $1,577 4.00
FY 2011 President’s Budget & Performance Plan

88 FY 2011 President’s Budget & Performance PlanOffice of Proceedings

Office of Proceedings

Total Budget: $ 2,860,000 11 FTEs

Total Change: $ 571,000 1 FTE

Figure 33: Proceedings Percentage of 

Total Budget Dollars

Figure 34: Proceedings Percentage of 

Total Budget FTEs

Justification of the FY 2011 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 

2011, the Office of Proceedings requests 11 FTEs, which is an increase of one FTE over FY 2010.

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 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanOffice of Proceedings 89

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 an increase of one FTE over the FY 2010 level. 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 record-keeping. 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 11 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 2011 President’s Budget & Performance Plan

90 FY 2011 President’s Budget & Performance PlanOffice of Proceedings

Table 32: Proceedings Request by Subprogram

FY 2010 FY 2011 Change

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

Enforcement $687 3.00 $1,040 4.00 $353 1.00

Reparations 1,602 7.00 1,820 7.00 218 0.00

TOTAL $2,289 10.00 $2,860 11.00 $571 1.00

Figure 35: Proceedings FY 2011 Budget by Subprogram
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanOffice of Proceedings 91

Table 33: Proceedings Request by Goal 

FY 2010 FY 2011 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.

$687 3.00 $1,040 4.00 $353 1.00

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.

1,602 7.00 1,820 7.00 218 0.00

Subtotal Goal Two $2,289 10.00 $2,860 11.00 $571 1.00

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

None

TOTAL $2,289 10.00 $2,860 11.00 $571 1.00
FY 2011 President’s Budget & Performance Plan

92 FY 2011 President’s Budget and Performance PlanOffice of the General Counsel

Office of the General Counsel

Total Budget: $14,242,000 47 FTEs 

Total Change: $ 1,413,000 0 FTE

Figure 36: Percentage of 

Total Budget Dollars

Figure 37: Percentage of 

Total Budget FTEs

Justification of the FY 2011 President’s Budget & Performance Plan

The Office of General Counsel (OGC) provides legal services and support to the Commission and all of 

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; and 6) providing advice on legislative 

and regulatory issues. In FY 2011, OGC requests 47 FTEs, which is a continuation of its current 

staffing at the FY 2010 level.

As Legal Advisor to the Commission, OGC: 

 Reviews for legal sufficiency all substantive regulatory, enforcement, legislative, and 

administrative matters presented to the Commission;

 Advises the Commission on the application and interpretation of the CEA, all other statutes to 

which the Commission is subject or that have relevance to the Commission's regulatory mission, 

and other pertinent administrative and legislative issues; 

 Assists the Commission in performing its adjudicatory functions through its Opinions and Review 

Program;

 Represents the Commission in appellate litigation, including participation as amicus curiae; 

certain trial-level cases, including bankruptcy cases involving futures industry professionals; and 

certain kinds of administrative litigation;

 Provides legal support to the Commission to assure compliance with laws of government-wide 

applicability such as the Privacy, Government in the Sunshine, Regulatory Flexibility, Paperwork 

Reduction, and Federal Advisory Committee Acts; 

 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 appeals from 

initial determinations regarding requests for records;
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance Plan Office of the General Counsel 93

 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; 

 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 Systems Protection Board cases arising under the Civil Service Reform Act of 1978; 

 Monitors, reviews, and comments on proposed legislation affecting the Commission or the 

futures industry, prepares technical assistance regarding 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;

 Provides written interpretations of Commission statutory and regulatory authority and, where 

appropriate, provides exemptive, interpretive, and no-action letters to regulatees and potential 

regulatees of the Commission; and 

 Counsels other Commission staff on legal aspects of various issues arising during the course of 

Commission business.

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. 

The demand for OGC‘s services and expertise on the legislative front is expected to remain high 

through the upcoming year as Congress focuses its attention on issues arising out of the recent 

financial crisis, including proposals to regulate the vast over-the-counter derivatives markets. In 

addition to advising and assisting the Commission on these matters, OGC expects to continue to be 

called upon to provide technical assistance to members of Congress and their staff, as well as the U.S. 

Treasury, on numerous pending pieces of legislation affecting futures and derivatives markets. Other 

issues relevant to the Commission on which Congress is expected to focus its attention include a 

proposed carbon cap-and-trade regime, speculative trading in energy and agricultural futures 

markets, hedge fund registration and the supervision of systemically important entities including 

clearinghouses. The call for OGC resources in this area is expected to remain at a high level as this 

legislative activity generates frequent 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. 

In addition, OGC is heavily involved in advising the Commission on ensuring the fair and orderly 

trading of futures contracts. In particular, OGC is assisting the Commission regarding the 

implementation of its new authority, granted as part of the CRA in 2008, to set position limits for 

SPDC contracts traded on ECMs. Other complex matters before OGC include legal counsel regarding 

efforts to harmonize the CFTC's and SEC's respective regulatory structures. Further, 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. Pursuant to the 

MOU between the CFTC and SEC, the agencies cooperate 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 creates increased need for legal analysis of 

products, statutory jurisdiction, and judicial precedents by OGC attorneys. Finally, ongoing 

initiatives by the U.S. Treasury‘s FinCEN, coupled with the MOU that the CFTC has entered into with 

FinCEN, are expected to increase the need for OGC resources addressing anti-money laundering and 

counter-terrorism financing issues.

Further, OGC's responsibility to review for legal sufficiency all substantive regulatory, legislative, 

enforcement and administrative matters presented to the Commission has increased as a 

consequence of heightened activity by other Divisions within the Commission. The Commission 

continues to vigorously prosecute manipulative and fraudulent activities in, among other areas, 

energy commodities and collective investment vehicles (such as commodity pools and hedge funds, 

including unregistered pool operators perpetrating Ponzi schemes) that now play an expanding role in 
FY 2011 President’s Budget & Performance Plan

94 FY 2011 President’s Budget and Performance PlanOffice of the General Counsel

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 increased activity 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 in OGC. The recently-enacted 

CRA clarification of the Commission‘s enforcement authority (and expansion of rulemaking 

authority) over off-exchange retail foreign currency trading is one of the most visible instances in this 

regard.

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 order to continue to effectively and efficiently 

perform that statutory role, OGC must maintain its current staffing level in FY 2011. As described 

above, the volume and complexity of OGC's workload has grown exponentially, while OGC has only 

recently recovered from a dramatic depletion of staff. 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 rebuild its ranks since that low. Given the substantial regulatory 

activity underway by the Commission, and the stakes that attach to OGC‘s analysis of such initiatives, 

maintenance of the current staffing level for OGC‘s legal program is an imperative. 

All proposed new rules and rule amendments, enforcement actions, exchange and clearinghouse 

application approvals, and international undertakings, among other initiatives, that are 

recommended to the Commission are reviewed by OGC both to ensure their legal sufficiency and to 

make certain that the Commission is appropriately apprised of all facts and potential risks relevant to 

its decision whether to approve the recommended action. Failure in this regard could expose the 

Commission to a finding of having acted in an arbitrary and capricious manner in violation of the 

Administrative Procedure Act in the regulatory context, and to liability for a litigation opponent‘s 

attorney fees pursuant to the Equal Access to Justice Act in the enforcement context. 

The consequences of not maintaining OGC‘s current staffing level with properly equipped persons will 

leave OGC unable to fulfill its statutory role effectively and may result in the Commission's receiving 

and acting on legal advice that is either not timely or that lacks the requisite depth and rigor. Absent 

sufficient OGC staff to fulfill its advise-and-review function, OGC may be unable to provide the 

Commission with timely legal advice on pending matters. Separately, 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 in these critical forums less than fully protected.
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance Plan Office of the General Counsel 95

Table 34: General Counsel Request

FY 2010 FY 2011 Change

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

General Counsel $12,829 47.00 $14,242 47.00 $1,413 0.00

TOTAL $12,829 47.00 $14,242 47.00 $1,413 0.00
FY 2011 President’s Budget & Performance Plan

96 FY 2011 President’s Budget and Performance PlanOffice of the General Counsel

Table 35: General Counsel Request by Goal

FY 2010 FY 2011 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.

$2,454 8.99 $2,724 8.99 $270 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.

172 0.63 191 0.63 19 0.00

Subtotal Goal One $2,626 9.62 $2,915 9.62 $289 0.00

GOAL TWO: Protect market users and the public.

Outcomes

2.1 Violations of Federal commodities laws 

are detected and prevented.

$3,865 14.16 $4,291 14.16 $426 0.00

2.2 Commodities professionals meet high 

standards.

753 2.76 836 2.76 83 0.00

2.3 Customer complaints against persons 

or firms falling within the jurisdiction of 

the Commodity Exchange Act are handled 

effectively and expeditiously.

1,891 6.93 2,100 6.93 209 0.00

Subtotal Goal Two $6,509 23.85 $7,227 23.85 $718 0.00

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

Outcomes 

3.1 Clearing organizations and firms 

holding customer funds have sound 

financial practices.

$771 2.82 $855 2.82 $84 0.00

3.2 Commodity futures and option markets 

are effectively self-regulated.

344 1.26 382 1.26 38 0.00

3.3 Markets are free of trade practice 

abuses.

742 2.72 824 2.72 82 0.00

3.4 Regulatory environment responsive to 

evolving market conditions.

1,837 6.73 2,039 6.73 202 0.00

Subtotal Goal Three $3,694 13.53 $4,100 13.53 406 0.00

TOTAL $12,829 47.00 $14,242 47.00 $1,413 0.00

Figure 38: General Counsel FY 2011 Budget by Goal
FY 2011 President’s Budget & Performance Plan

 

FY 2011 President’s Budget & Performance PlanInternational Affairs 97

Office of the International Affairs

Total Budget: $ 2,946,000 10 FTEs 

Total Change: $ 566,000 1 FTE

Figure 39: Percentage of 

Total Budget Dollars

Figure 40: Percentage of 

Total Budget FTEs

Justification of the FY 2011 President’s Budget & Performance Plan

The Office of International Affairs (OIA) coordinates the Commission‘s non-enforcement related 

international activities, represents the Commission in international organizations, such as IOSCO, 

coordinates Commission policy as it relates to U.S. Treasury global initiatives and provides technical 

assistance to foreign market authorities. These activities have as a common goal the promotion of

internationally accepted standards of best practice, the development of supervisory cooperation 

arrangements in order to strengthen customer and market protections and the improvement of the 

quality and timeliness of international information sharing. 

OIA‘s work increasingly has focused on international initiatives that respond to the financial crisis 

and to volatility in energy and agricultural commodity markets. OIA represents the Commission in 

its capacity as co-chair of IOSCO‘s Task Force on Commodity Futures Markets, which recently has 

been re-tasked by IOSCO to carry work forward on promoting practical ways to enhance the 

transparency of futures, cash and OTC physical commodity markets in energy and agricultural 

markets. Achieving greater transparency across all commodity markets will provide regulators with 

the data needed to understand better the composition and pricing mechanisms in these strategically 

important markets. OIA also has focused on strengthening the Commission‘s ability to detect abusive 

trading practices, such as working closely with the U.K. regulatory authorities to enhance their 

supervision of linked oil contracts. 

In FY 2011, the Office of International Affairs requests a total of 10 FTEs, an increase of one FTE over 

FY 2010. 

Consequence of Not Receiving Requested Level of Resources

The financial crisis and volatility in global energy and agricultural commodity markets make clear 

that no one regulator alone can address successfully the impact of global activities on its national 

markets. As a result, the Commission must continue to participate fully in a variety of international 

forums to seek cooperative and coordinated solutions to these global market concerns. 
FY 2011 President’s Budget & Performance Plan

98 FY 2011 President’s Budget & Performance PlanInternational Affairs

For example, cooperative discussions with the U.K‘s Financial Services Authority resulted in an 

agreement on steps to strengthen cross border supervision of energy markets. However, 

implementation of this agreement will require ongoing involvement by staff. The Commission 

intends to continue to work for greater commodity market transparency and global cooperation in 

surveillance and enforcement by co-chairing the IOSCO Task Force on Commodity Futures Markets, 

participating in a newly created IOSCO Task Force on Surveillance and in four IOSCO Technical 

Committee working groups that develop international standards of best practice. 

Similarly, resources are needed to allow the Commission to participate in a broad range of regulatory 

development activities within IOSCO and the G20 structure that respond to issues revealed by the 

financial crisis, such as: cooperation and coordination in the areas of OTC regulation, central 

counterparty clearing standards, the monitoring and control of systemic risk, the protection of 

customer funds, and mechanisms to share systemically important information internationally. It is 

critical for the Commission to participate in this work, which effectively is creating international 

standards of best practice. 

The Commission‘s international agenda also includes responding to requests by the U.S. Treasury to 

participate in international dialogues (e.g., U.S.─ China dialogue), providing technical assistance to 

developing market jurisdictions, and engaging in bilateral negotiations with foreign regulators to 

resolve cross-border issues. The need to participate in U.S. Treasury initiatives, many of which 

address critical issues addressing the financial crisis, has resulted in additional staffing needs. We 

expect these demands to increase. Finally, the Commission also is focusing on strengthening its 

supervision of registered entities such as clearing organizations and markets that are registered by 

both the Commission and a foreign regulator, and on ensuring that the recipients of regulatory 

exemptions remain in compliance with applicable requirements. Achieving this goal of greater due 

diligence and ongoing compliance monitoring will require the Commission to coordinate closely with 

foreign regulators.

Any diminution in resources would require the Commission to reduce its international program, 

thereby making it less able to advocate for international regulatory policies that help to ensure that 

commodity markets remain free from fraud, manipulation and other market abuses and reduce the 

possibility for regulatory arbitrage among jurisdictions. Cutbacks in resources would also greatly 

inhibit the Commission‘s ability to address the need for enhanced supervision of cross-border 

activities.
FY 2011 President’s Budget & Performance Plan

 

FY 2011 President’s Budget & Performance PlanInternational Affairs 99

Table 36: International Affairs Request by Subprogram

FY 2010 FY 2011 Change

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

International Affairs $2,380 9.00 $2,946 10.00 $566 1.00

TOTAL $2,380 9.00 $2,946 10.00 $566 1.00
FY 2011 President’s Budget & Performance Plan

100 FY 2011 President’s Budget & Performance PlanInternational Affairs

Table 37: International Affairs Request by Goal 

FY 2010 FY 2011 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

None

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

Outcomes

3.1 Clearing organizations and firms 

holding customer funds have sound 

financial practices.

$0 0 $0 0 $0 0.00

3.2 Commodity futures and option 

markets are effectively self-regulated.

 0 0 0 0 0 0.00

3.3 Markets are free of trade practice abuses. 0 0 0 0 0 0.00

3.4 Regulatory environment responsive 

to evolving market conditions.

2,380 9.00 2,946 10.00 566 1.00

Subtotal Goal Three $2,380 9.00 $2,946 10.00 $566 1.00

TOTAL $2,380 9.00 $2,946 10.00 $566 1.00
FY 2011 President’s Budget & Performance Plan

 

FY 2011 President’s Budget & Performance PlanAgency Direction 101

Agency Direction

Total Budget: $13,846,000 47 FTEs

Total Change: $ 4,591,000 12 FTEs

Figure 41: Percentage of 

Total Budget Dollars

Figure 42: Percentage of 

Total Budget FTEs

Justification of the FY 2011 President’s Budget & Performance Plan

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; and the Office of Equal 

Employment Opportunity. 

The Commission continues to implement the CRA, (part of the 2008 Farm Bill), making critical 

improvements to the CEA and the Commission‘s authority. Specifically, the new legislation 

reauthorized the Commission through FY 2013, provided enhanced Commission oversight of ECMs 

that trade contracts performing a significant price discovery function, increased CFTC penalty 

authority for manipulation, clarified CFTC anti-fraud authority for off-exchange principal-toprincipal energy trades, and clarified CFTC off-exchange retail foreign currency fraud authority. 

The Commission has undertaken a number of high priority programmatic initiative beginning in FY 

2009 with resource implications for FY 2010 and FY 2011, these include: 1) reviewing regulation of 

derivatives markets and recommending changes to protect the U.S. public from systemic financial 

risks and improve regulatory coordination with other agencies such as the SEC and FERC; 2) 

increasing market transparency through initiatives such as, enhancing the Commitment of Traders

(COT) Reporting; publishing quarterly and eventually monthly reports on commodity index trading; 

rapid expansion of mission critical information systems that can integrate large trader data with 

intraday trades and account ownership data to improve CFTC oversight of trading and better deter 

fraud and manipulation, and; implementing improvements to the Commission‘s Web site─ CFTC.gov; 

3) improving regulation of energy markets – especially with regard to position limits and SPDCs 4) 

increasing the frequency of reviews and audits of Commission registrants, and; 5) improving resource 
FY 2011 President’s Budget & Performance Plan

102 FY 2011 President’s Budget & Performance PlanAgency Direction

utilization through technology modernization, improved resource justification and improve program 

performance. 

In FY 2010, the Agency Direction program requests a total of 47 FTEs, an increase of 12 over the 

estimated FY 2010 usage. Three additional staff are allocated to the Immediate Office of the 

Chairman: two senior counselors and one administrative assistant to assist the Chairman in 

implementing the financial regulatory reform (including regulation of the derivatives markets and

SEC harmonization); improving market transparency (enhanced reporting on market data; 

integration of large trader data with intraday trades and account ownership; enhanced access to 

information through an improved CFTC Web site); and better use of current regulatory and statutory 

authorities (particularly with regard to energy markets and registrant oversight); and, better use of 

human and technological resources (with focus of technology modernizations, better resource 

justification and improve program performance and outcomes). 

One additional information technologist (Web site content manager) is required to ensure the 

Commission has a robust Web site that is useful to market participants, the industry we regulate, and 

the public. Five additional staff-years are requested to provide each of the four Commissioners with a

staff of three (professional and administrative) to assist in the adequate review and analysis of the 

increasing number of complex issues presented to the Commission for review and action. . 

Three new risk management analysts are requested to establish a new enterprise risk management 

staff. The risk management staff will focus on developing and employing methods and processes to 

manage risks related to the achievement the Commission goals. Specifically, identifying particular 

events or circumstances they may affect the integrity of Nation‘s futures markets, and assessing them 

in terms of likelihood and magnitude of impact, determining a response strategy, and monitoring 

progress. In short, the object is to proactively address risks and opportunities and thereby protect the 

integrity of the futures markets, market participants, consumers, the public, and the Nations‘ 

financial stability.

Consequence of Not Receiving Requested Level of Resources

Without the requested level of resources, the Offices of the Chairman and the Commissioners will not 

be adequately staffed to respond appropriately and timely to the many new expectations, 

requirements, requests, and new responsibilities thrust upon the agency in the wake of the financial 

crisis of 2008. For example, public outreach, and responsiveness to Congress and other government 

agencies, the futures industry, and public inquiries would be unacceptably slowed. Likewise, the 

administrative and technical review of Administration proposals, proposed legislation from Congress, 

Commission memoranda, correspondence from stakeholders, or official actions may take longer. 

These delays will certainly impede the Commission goals of ensuring the economic vitality of the 

markets, ensuring that market users and public are protected, and fostering open, competitive and 

financial sound markets. Specially, the additional resources requested are critical to ensuring there 

are no avoidable delays in advancing Administrative and Congressional initiatives aimed at restoring 

the economy and ensuring a sustained recovery of the Nation‘s economy. 
FY 2011 President’s Budget & Performance Plan

 

FY 2011 President’s Budget & Performance PlanAgency Direction 103

Table 38: Agency Direction Request by Subprogram

FY 2010 FY 2011 Change

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

Agency Direction13 $9,255 35.00 $13,846 47.00 $4,591 12.00

TOTAL $9,255 35.00 $13,846 47.00 $4,591 12.00

13) Agency Direction includes the Office of the Inspector General. See Appendix 5 for more detail. 

 FY 2010 FY 2011 Change

$000 FTE $000 FTE $000 FTE

$1,095 4.00 $1,215 4.00 $120 0.00
FY 2011 President’s Budget & Performance Plan

104 FY 2011 President’s Budget & Performance PlanAgency Direction

Table 39: Agency Direction Request by Goal

FY 2010 FY 2011 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

None

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

Outcomes

None

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.

$0 0.00 $0 0.00 $0 0.00

4.2 A modern and secure information 

system that reflect the strategic 

priorities of the Commission. 

0 0.00 0 0.00 0 0.00

4.3 An organizational infrastructure 

that efficiently and effectively responds 

to and anticipates both the routine and 

emergency business needs of the 

Commission.

0 0.00 0 0.00 0 0.00

4.4 Financial resources are allocated, 

managed and accounted for in 

accordance with the strategic priorities 

of the Commission.

0 0.00 0 0.00 0 0.00

4.5 The Commission‘s mission is 

fulfilled and goals are achieved through 

sound management and organizational 

excellence provided by executive 

leadership. 

9,255 35.00 13,846 47.00 4,591 12.00

Subtotal Goal Four 9,255 35.00 13,846 47.00 4,591 12.00

TOTAL $9,255 35.00 $13,846 47.00 $4,591 12.00
FY 2011 President’s Budget & Performance Plan

 

FY 2011 President’s Budget & Performance PlanAdministrative Management & Support 105

Administrative Management & Support

Total Budget: $35,161,000 125 FTEs

Total Change: $4,126,000 2 FTEs

Figure 43: Percentage of 

Total Budget Dollars

Figure 44: Percentage of 

Total Budget FTEs

Justification of the FY 2011 President’s Budget & Performance Plan

The fulfillment of the Commission‘s mission and the achievement of its goals depend on 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, skilled and 

diverse workforce supported by a modern infrastructure and support services that enable staff to 

achieve programmatic goals. Building and sustaining this foundation requires continuous review and 

investment in people, technology, management initiatives and facilities. 

The Office of Executive Director (OED) staff ensures Commission compliance with Federal laws, 

regulations and 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. The Executive Director serves as the Chief Operating Officer (COO) 

responsible for the effective and efficient allocation and use of resources. The COO also develops and 

implements management and administrative policy and programs, functions and services of the 

Commission. The program‘s broad ranging mandate is centrally managed and administered through 

the offices of the Executive Director: Human Resources (OHR); Financial Management (OFM); 

Information and Technology Services (OITS); Management Operations; and the Library. 

OED staff:

 Formulate budget and resource authorization strategies;

 Deliver best practices in human capital resource strategies and management;

 Supervise the allocation and utilization of agency resources;

 Promote and foster best business practices for resource utilization;

 Develop and implement annual resource management plans;

 Promote management controls and financial integrity;

 Manage space leases and Commission assets;
FY 2011 President’s Budget & Performance Plan

106 FY 2011 President’s Budget & Performance PlanAdministrative Management Direction & Support

 Manage the Commission‘s technical and information infrastructure;

 Develop and implement the Commission‘s automated information systems; 

 Ensure the acquisition, quality, accessibility, storage and retention of mission critical trading 

data; 

 Manage security, continuity and emergency preparedness programs;

 Deliver administrative support services;

 Ensure development of agency records management and retention program; and

 Deliver the library services of the Commission. 

In FY 2011, the Administrative Management and Support subprogram requests a total of 125 FTEs, an 

increase of two FTE over the FY 2010 level. The two FTE, together with a current staff of one 

professional focused on strategic and operational planning, will establish a planning and evaluation 

function. This new team represents the first permanent resources fully dedicated to establishing, 

executing and monitoring strategic and annual operating plans. With the significant increase in 

funding and resources, it is imperative that the Commission develop program measurement and 

evaluation methodologies. These FTE will assist the Commission‘s programs in establishing metrics 

to track, monitor and evaluate program results, outcomes, and goal achievement to ensure the 

effective and efficient allocation and application of resources.

Office of Financial Management. The Commission‘s focus on financial integrity and its expectation 

of financial accountability are key cornerstones in the Commission‘s ability to achieve unqualified 

audit opinions and comply with Federal financial laws and regulations. Effective financial 

management systems and services facilitate Commission executives in successfully monitoring and 

achieving program performance. The Office of Financial Management staff interfaces with the 

Department of Transportation systems and services to ensure that the financial resources entrusted to 

the Commission are well managed and judiciously deployed. Effective stewardship over agency 

resources enhances program management and mission performance. 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. In 2008, the Commission was recognized by the 

Association of Government Accountants for the fourth consecutive year for excellence in financial 

reporting. The one FTE requested will provide direct support to the CFO in bringing consistency to 

managing the three separate organizational units of OFM and to providing the opportunity to 

integrate program functions for efficiency and effectiveness. This position will work closely with the 

newly established planning and evaluation team to fully integrate performance budgeting and 

evaluation into the Commission financial management program.

Office of Information and Technology Services. The Commission‘s ability to fulfill its mission 

continues to depend heavily on the collection, storage, accessibility and analysis of voluminous 

amounts of data from futures market participants. The continuing increase in the volume and 

complexity of the data collected requires continuing investments in and sustained support of IT 

systems and resources to enable staff to fully monitor the markets, promote greater market 

transparency and efficiency, and support market integrity. Resources allocated to the Office of 

Information and Technology Services will ensure the agency continues to have the competencies and 

skill sets needed to sustain technology that is as modern and dynamic as the technology-driven 

markets the CFTC is charged with overseeing. The Commission must continue to leverage highly 

competent skilled IT resources to employ 21st century technology in protecting the American people. 

Expecting continued growth of trade and order volumes, and more complex and time sensitive 

information analysis efforts, the Commission will sustain and continue to invest in critical programs 

that are aligned with the agency mission: 

 Market Surveillance. The Integrated Surveillance System (ISS) is the Commission's market 

surveillance system under which clearing members of exchanges, Futures Commission Merchants 

(FCMs), and foreign brokers (collectively called "reporting firms") electronically file daily end-ofday position 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 
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanAdministrative Management & Support 107

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 surveillance staff to 

aggregate information across FCMs for related accounts. ISS allows CFTC economists, 

investigators, and attorneys to analyze positions across FCMs and exchanges. Using ISS reports, 

the Commission's surveillance staff closely monitor the futures and option market activity of all 

traders to determine potential impact on 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, surveillance 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. Using ISS data, Commissioners and senior staff are kept 

apprised of market events and potential problems. Recent investments in ISS enhancements for

automated alerting, case management, and workflow have enabled staff to be automatically 

notified of market events requiring further analysis. Automated surveillance is essential to 

fulfilling our mission responsibilities given the continuing growth in market volume and 

complexity. Tracking will be sustained and supplemented to meet new requirements surfaced by 

evolving markets. 

 Trade Practice Surveillance. As part of the Commission's overall mission to ensure market 

integrity and customer protection, the Trade Surveillance System (TSS) collects futures and 

options trade register data from U.S. futures exchanges in order to detect possible trading abuses. 

TSS uses state-of-the-art commercially available software (ActimizeTM) to enhance CFTC's trade 

surveillance of ever-evolving and innovative electronic trading. Automated trade violation 

detection software provides staff with greater efficiency and flexibility by performing 

sophisticated pattern recognition and data mining, helping detect novel and complex abusive 

practices. TSS development and implementation is expected to be ongoing to help the 

Commission keep pace with the rapid developments in today's high-speed, high-volume global 

electronic trading environment. On a nightly basis, the Commission receives trade registers from 

US futures exchanges. Once the data is loaded, automated processes generate alerts that list 

potential trade violations and include a range of key data points needed to determine if the 

potential violations warrant action by the Commission. TSS users run ad hoc queries using the 

Detection and Research Tool (DART) in order to investigate violation alerts, research ongoing 

legal cases, and perform general market oversight and analysis. DART helps staff create complex 

queries without the need for programming skills. Trade practice violations pattern detection and 

inter-exchange pattern detection models will be sustained and refined and new models will be 

implemented as needed to keep pace with evolving markets.

 Information Management - Internet, Intranet, Data Standardization, and Document 

Management. The Commission will build on recently-implemented usability and transparency 

improvements to the public facing Web site, www.CFTC.gov, based on the President‘s initiative 

for ―Transparency and Open Government,‖ and visitor feedback. The Commission will complete 

an overhaul of its intranet in order to enhance communication and improve staff productivity 

through more efficient access to information resources, tools, and content. The Commission will 

also continue working with industry on data standardization to improve the data quality and 

consistency of regular data submissions. The CFTC will continue the implementation of the 

Commodity Data Warehouse (CDW), which provides a single source for CFTC enterprise business 

data used by applications to conduct analysis. A Records and Document Management system will 

also be deployed to enable staff to effectively find and use information in Commission documents 

and comply with Federal and CFTC records management and information security policies. 

The Commission will also sustain and supplement recent investments in eLaw and forensic 

technologies, futures commission merchants reporting and analysis systems, general IT 

infrastructure, and information security controls as needed to meet Commission requirements 

and adapt to emerging security threats. 

These initiatives are the top information technology priorities of the Commission and are critical 

mission support activities essential to market surveillance, financial risk management, economic 

analysis, data transparency, and regulatory enforcement. These initiatives will be sustained, 

improved, and enhanced as driven by evolving market conditions.
FY 2011 President’s Budget & Performance Plan

108 FY 2011 President’s Budget & Performance PlanAdministrative Management Direction & Support

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 be able to attract, train, promote and 

retain a professional workforce with the capacity to meet this evolving mission.

The Commission continually refines and enhances 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 of knowledgeable, diverse and productive human capital.

The goal is a workforce 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 governance 

process has contributed to annual successes in the development and implementation of a 

comprehensive pay and benefits program mandated by Section 10702 of Public Law 107-171, the 

FSRIA of 2002. The Commission is in its second full year of measuring performance under a merit 

pay system to foster a performance culture. The Commission system for classifying its missioncritical positions is under review by the governance committee. Next steps include consideration of 

differentiating compensation for supervisory responsibilities and a review of the executive 

management classification system. 

This ongoing strategic management of human capital initiatives 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 envisioned 

by FISRA. No additional positions are requested for this program.

Office of Management Operations. The Office of Management Operations (OMO) provides support 

to Commission by ensuring the leasing, operation and maintenance of appropriate office facilities in 

Washington, DC and three regional locations. OMO is accountable for the timely delivery of quality 

products and services to provide staff with the tools needed to accomplish their work. The 

Commission‘s physical assets are managed, secured and accounted for by the OMO staff. Current 

program priorities are around the acquisition, build out and occupation of additional office space in 

the Washington, DC headquarters and the Chicago regional office. The ongoing project to complete a 

cyclical update and standardization of furniture assets continues as funding is available. No 

additional positions are requested for this program.

Consequence of Not Receiving Requested Level of Resources

Administrative Management and Support. Without the two FTE requested to establish a planning 

and evaluation function, the Commission will continue to have insufficient resources devoted to 

planning and program performance. With growing FTE and financial resources and an increasingly 

complex mission, the Commission must ensure sound stewardship over the taxpayers‘ investment in

its mission. Effective program and resources stewardship can only be achieved through establishing 

and sustaining best business practices. Such practices include planning, strategically and 

operationally, and measuring program achievements and outcomes. Effective program evaluation 

and measurement must build off of appropriate metrics and well planned outcomes. Without a 

planning and evaluation team, accurately assessing and reporting on the effect of the increased 

investment in the Commission‘s program will be challenging. Equally challenging will be sustaining 

compliance with the Government Performance and Results Act and other regulatory and legislative 

mandates around effective program governance.

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

Technology Services not receiving requested resources will be a curtailment of the Commission‘s 

ability to keep pace with the industry data growth and the need for more effective and complex 

information analysis. The Commission will not be able to sustain and continue improvements 

supporting trade practice surveillance, trader account identification, large trader reporting, economic 

analysis, and litigation support. Without the ability to leverage these resources, the Commission will 

not be able to continue current levels of surveillance and analysis, resulting in less transparent futures 

markets and a greater risk of market fraud, manipulation and excessive speculation.
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanAdministrative Management & Support 109

Table 40: Administrative Management & Support Request by Subprogram

FY 2010 FY 2011 Change

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

Admin. Mgmt. & Supp. $31,035 123.00 $35,161 125.00 $4,126 2.00

TOTAL $31,035 123.00 $35,161 125.00 $4,126 2.00
FY 2011 President’s Budget & Performance Plan

110 FY 2011 President’s Budget & Performance PlanAdministrative Management Direction & Support

Table 41: Administrative Management & Support Request by Goal

FY 2010 FY 2011 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.

$959 3.80 $1,069 3.80 $110 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.

3,230 12.8 3,600 12.8 370 0.00

Subtotal Goal One $4,189 16.60 $4,669 16.60 $480 0.00

GOALTWO: Protect market users and the public.

Outcomes

2.1 Violations of Federal commodities 

laws are detected and prevented.

$1,842 7.30 $2,053 7.30 $211 0.00

2.3 Customer complaints against 

persons or firms falling within the 

jurisdiction of the Commodity 

Exchange Act are handled effectively 

and expeditiously.

757 3.00 844 3.00 87 0.00

Subtotal Goal Two $2,599 10.30 $2,897 10.30 $298 0.00

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

Outcomes

3.1 Clearing organizations and firms 

holding customer funds have sound 

financial practices.

$971 3.85 $1,083 3.85 $112 0.00

3.3 Markets are free of trade practice 

abuses.

1,337 5.30 1,491 5.30 154 0.00

Subtotal Goal Three $2,308 9.15 $2,574 9.15 $266 0.00

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.

$4,542 18.00 $5,063 18.00 $521 0.00

4.2 A modern and secure information 

system that reflect the strategic 

priorities of the Commission. 21

7,052 27.95 7,862 27.95 810 0.00

4.3 An organizational infrastructure 

that efficiently and effectively responds 

to and anticipates both the routine and 

emergency business needs of the 

Commission.

4,289 17.00 4,782 17.00 493 0.00

4.4 Financial resources are allocated, 

managed and accounted for in 

accordance with the strategic priorities 

of the Commission.

4,037 16.00 4,501 16.00 464 0.00

4.5 The Commission‘s mission is 

fulfilled and goals are achieved through 

sound management and organizational 

excellence provided by executive 

leadership. 

2,019 8.00 2,813 10.00 794 2.00

Subtotal Goal Four 21,939 86.95 25,021 88.95 3,082 2.00

TOTAL $31,035 123.00 $35,161 125.00 $4,126 2.00

 

21 Represents Office of Information Technology Services dollars and staff resources not otherwise allocated to Goals 1, 2, or 3.
FY 2011 President’s Budget & Performance Plan

FY 2011 President’s Budget & Performance PlanAdministrative Management & Support 111

Figure 45: Administrative Management & Support FY 2011 Budget by Goal
FY 2011 President’s Budget & Performance Plan

112 Appendix 1—The Commissioners

APPENDIX 1

The Commissioners

Gary Gensler, Chairman

Gary Gensler was sworn in as the Chairman of the Commodity Futures Trading Commission on May 

26, 2009.

Chairman Gensler previously served at the U.S. Department of Treasury as Under Secretary of 

Domestic Finance (1999-2001) and as Assistant Secretary of Financial Markets (1997-1999). He 

subsequently served as a Senior Advisor to the Chairman of the U.S. Senate Banking Committee, 

Senator Paul Sarbanes, on the Sarbanes-Oxley Act, reforming corporate responsibility, accounting 

and securities laws.

As Under Secretary of the Treasury, Chairman Gensler was the principal advisor to Treasury Secretary 

Robert Rubin and later to Secretary Lawrence Summers on all aspects of domestic finance. The office 

was responsible for formulating policy and legislation in the areas of U.S. financial markets, public 

debt management, the banking system, financial services, fiscal affairs, federal lending, Government 

Sponsored enterprises, and community development. In recognition of this service, he was awarded 

Treasury‘s highest honor, the Alexander Hamilton Award.

Prior to joining Treasury, Chairman Gensler worked for 18 years at Goldman Sachs, where he was 

selected as a partner; in his last role he was Co-head of Finance.

Chairman Gensler is the co-author of a book, The Great Mutual Fund Trap, which presents common 

sense investment advice for middle income Americans.

He is a summa cum laude graduate from the University of Pennsylvania‘s Wharton School in 1978, 

with a Bachelor of Science in Economics and received a Master of Business Administration from the 

Wharton School‘s graduate division in 1979. He lives with his three children outside of Baltimore, 

Maryland.

Michael V. Dunn, Commissioner

Michael V. Dunn was confirmed by the U.S. Senate on November 21, 2004, as a Commissioner of the 

Commodity Futures Trading Commission. He was sworn in December 6, 2004, to a term expiring

June 19, 2006. On June 16, 2006 Commissioner Dunn was nominated by President Bush to a second 

term as Commissioner of the CFTC and confirmed by the Senate on August 3, 2006. In a ceremony 

on August 23, 2006 at the Federal Court House in Des Moines, Iowa, attended by Senator Tom 

Harkin (D-IA), Commissioner Dunn was sworn in. U.S. District Judge Robert Pratt administered the 

oath of office. 

From January 20, 2009 – May 25, 2009, Commissioner Dunn served as Acting Chairman for the 

agency.
FY 2011 President’s Budget & Performance Plan

Appendix 1—The Commissioners 113

Commissioner Dunn additionally serves as Chairman and Designated Federal Official of the 

Commission‘s Agricultural Advisory Committee (AAC). The AAC was created to advise the 

Commission on agricultural issues surrounding the trading of commodity futures and options and to 

serve as a communications link with the agricultural community. Commissioner Dunn is also the 

Chairman of the Commission‘s Forex Task Force. The task force objective is to raise the public‘s 

awareness of fraudulent activity in the retail foreign currency (forex) futures and option markets and 

to highlight the Commission‘s enforcement activities in this area.

Prior to joining the CFTC, Mr. Dunn served as Director, Office of Policy and Analysis at the Farm 

Credit Administration (FCA) where he managed the two FCA divisions responsible for developing 

regulations and public policy positions for applicable statutes as well as promoted the safety and 

soundness of the Farm Credit System (FCS). Prior to this position, Mr. Dunn served briefly as a 

member of the FCA Board. 

Mr. Dunn has also served as Under Secretary of Agriculture for Marketing and Regulatory Programs, 

Acting Under Secretary for Rural Economic Community Development, and as Administrator of the 

Farmers Home Administration (FmHA) at U.S. Department of Agriculture (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.

Jill E. Sommers, Commissioner

Jill E. Sommers was sworn in as a Commissioner of the Commodity Futures Trading Commission on 

August 8, 2007 to a term that expired April 13, 2009. She was nominated on July 20, 2009 by 

President Barack Obama to serve a five-year second term. 

On February 4, 2008 the Commission appointed Commissioner Sommers to serve as Chairman and 

Designated Federal Official of the Global Markets Advisory Committee, which meets periodically to 

discuss issues of concern to exchanges, firms, market users and the Commission regarding the 

regulatory challenges of a global marketplace. She also serves as the Commission designee to the 

Financial Literacy and Education Commission, which is chaired by the Secretary of Treasury and was 

established to improve the financial literacy and education of U.S. citizens.

Commissioner Sommers has worked in the commodity futures and options industry in a variety of 

capacities throughout her career. In 2005 she was the Policy Director and Head of Government 

Affairs for the International Swaps and Derivatives Association, where she worked on a number of 

over-the-counter derivatives issues. 
FY 2011 President’s Budget & Performance Plan

114 Appendix 1—The Commissioners

Prior to that, Ms. Sommers worked in the Government Affairs Office of the Chicago Mercantile 

Exchange (CME), where she was instrumental in overseeing regulatory and legislative affairs for the 

exchange. During her tenure with the CME, she had the opportunity to work closely with 

congressional staff drafting the Commodity Futures Modernization Act of 2000. 

Commissioner Sommers started her career in Washington in 1991 as an intern for Senator Robert J. 

Dole (R-KS), working 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, DC area and have three 

children ages 7, 6, and 5. 

Bart Chilton, Commissioner

Bart Chilton was sworn in as CFTC Commissioner in August of 2007. He currently serves as the 

Chairman of the CFTC‘s Energy and Environmental Markets Advisory Committee (EEMAC). His 

career spans 25 years in government service—working on Capitol Hill in the House of Representatives 

and in the Senate, and serving the Executive Branch during the Clinton, Bush and Obama 

Administrations. 

Prior to joining the CFTC, Mr. Chilton was the Chief of Staff and Vice President for Government 

Relations at the National Farmers Union where he represented average family farmers. 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 a Senior Advisor to Senator Tom Daschle, the Democrat Leader of the United States 

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, Mr. 

Chilton became a member of the Senior Executive Service (SES)—government executives selected for 

their leadership qualifications to serve in the key positions just below the most senior Presidential 

appointees. As an SES member, Mr. Chilton served as a liaison between Secretary Glickman and the 

Federal work force at USDA.

From 1985 to 1995, Mr. Chilton worked in the U.S. House of Representatives where he served as 

Legislative Director for three different Members of Congress on Capitol Hill and as the Executive 

Director of the bipartisan Congressional Rural Caucus.

Mr. Chilton previously served on the Boards of Directors of Bion Environmental Technologies and the 

Association of Family Farms.

Mr. Chilton was born in Delaware and spent his youth in Indiana, where he attended Purdue 

University (1979—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 2011 President’s Budget & Performance Plan

Appendix 1—The Commissioners 115

Scott O’Malia, Commissioner

Scott O‘Malia was confirmed by the U.S. Senate on October 8, 2009 as Commissioner of the 

Commodity Futures Trading Commission. He was sworn in on October 16, 2009 to complete a vacant 

term, which expires April 2010, and received a full five-year term that expires April 2015.

Commissioner O‘Malia previously served as the Staff Director to the Senate Subcommittee on Energy 

and Water Development, Committee on Appropriations, where he focused on expanding U.S. 

investment in clean energy technologies, including access to low cost financing and driving technical 

innovation into the domestic energy sector. 

From 2003 to 2004, Commissioner O‘Malia served on the Senate Energy and National Resources 

Committee under Chairman Pete Domenici (R.-NM) as senior policy advisor on oil, coal, and gas 

issues. From 1992 to 2001, the Commissioner served as senior legislative assistant to Senator Mitch 

McConnell (R.-KY), now the Senate Minority Leader.

During his career, O‘Malia also established the Washington office of Mirant Corporation, where he 

worked on rules and standards for corporate risk management and energy trading among wholesale 

power producers. 

Commissioner O‘Malia has a Bachelor‘s Degree from the University of Michigan.
FY 2011 President’s Budget & Performance Plan

116 Appendix 2Summary of Commission Goals, Outputs, and Business Processes

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

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
FY 2011 President’s Budget & Performance Plan

Appendix 2—Summary of Commission Goals, Outputs, and Business Processes 117

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

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
FY 2011 President’s Budget & Performance Plan

118 Appendix 2Summary of Commission Goals, Outputs, and Business Processes

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 2011 President’s Budget & Performance Plan

 

Appendix 3Federal Financial Regulatory Reform 119

APPENDIX 3

Federal Financial Regulatory Reform

Summary of Resources Requested

Funds: $45,000,000:

 $21,800,000 119 FTEs

 $5,200,000 Operating Expenses

 Office Space,

 Equipment, 

 Communications

 Travel

 $18,000,000 Information Technology 

 Systems Development and Analysis

 Technology Mission Support

 Capital Equipment

FTE: 119 (238 annualized in FY 2012) 

Program allocation and justification summarized below:

Market Oversight: 41 FTE 

The Administration‘s legislative proposal:

 Establishes significant new requirements on market participants and significant new 

authorities that the Commission would be responsible for administering. A substantial 

number of these requirements and authorities fall within the primary responsibility of the 

Market Oversight program. 

 Requires the Commission to publicly report aggregated swap position data (without 

disclosing the positions of individual market participants) that it derives from transaction 

data provided by (i) clearing organizations, (ii) swaps repositories and (iii) parties otherwise 

required to report directly to the Commission; this data must be collected, assembled, 

analyzed and reported. The volume of transaction data is expected exponentially to exceed 

the current volume of data the Commission collects, assembles, analyzes and reports.

 Requires the Commission oversight of an entirely new category of regulatee – Swap 

Repositories. Swap Repositories would responsible for (i) collecting data as to all executed 

swaps, (ii) make that data available to the Commission, and (iii) publish the data in some 

aggregated form to the general public, without revealing the positions of any particular 

market participant. Market and Product Review subprogram (with consultation with the 

Surveillance subprogram), will have substantial responsibility for formulating the rules 

applicable to, and the regulatory framework within which Swap Repositories will be required 

to operate. Once the rules and regulatory framework are established, the Market and Product 

Review subprogram will have responsibility for the oversight activities, along with the 

Compliance subprogram that will initiate RERs to evaluate ongoing compliance.
FY 2011 President’s Budget & Performance Plan

120 Appendix 3─Federal Financial Regulatory Reform

 Establishes a ―mandatory‖ trading requirement for standardized swaps either on a 

Designated Contract Market (DCM) or an Alternative Swap Execution Facility (ASEF) –

another entirely new category of regulatee. The Market and Product Review subprogram 

(with consultation with the Surveillance program) will have substantial responsibility for 

formulating the rules applicable to, and the regulatory framework within which ASEFs will be 

required to operate. Once the rules and regulatory framework are established, the Market 

and Product Review subprogram will have responsibility for the oversight activities, along 

with the Compliance subprogram that will initiate RERs to evaluate ongoing compliance with 

extensive self-regulatory obligations.

 Expands significantly the self-regulatory obligations of DCMs with three new or significantly 

modified Core Principles in the areas of competitive trading, exchange finances, and 

operational security. The Compliance subprogram will have substantial responsibility to 

initiate RERs to evaluate ongoing compliance with the new Core Principles.

 Expands the Commission‘s position limit-setting authority beyond DCMs, to reach ASEFs 

that list contracts that perform a significant price discovery function. In addition, the 

proposal directs the Commission to, for the first time, establish cross-exchange aggregate 

position limits. The Surveillance subprogram would have substantial responsibility for 

establishing the regulatory frame work for expanded position limits on DCMs, for position 

limits on ASEFs, and for aggregating those position limits across markets. 

 Alters significantly the Commission‘s contract and rule review process for exchanges and 

clearing organizations alike by establishing a ten-day review process (rather than the 

immediate effectiveness feature of the current rule submission process) and would give the 

Commission discretion to stay the effectiveness of contracts and rules that raise novel or 

complex issues or that are inadequately explained. The Market and Product Review 

subprogram would have substantial authority to administer this new contract and rule review 

process, which would require immediate attention to all submission to evaluate the product 

and rule submissions within 10 days.

 Establishes a new registration category for foreign boards of trade and sets forth various 

substantive requirements to be imposed on such entities when they choose to list contracts 

that link to contracts listed on designated contract markets. The Chief Counsel‘s Office would 

have primary responsibility for administering this registration category.

Clearing and Intermediary Oversight: 30 FTE 

The Administration‘s legislative proposal:

 Requires, for the first time Commission regulation of the OTC derivative markets. Generally, 

the legislation requires the clearing of many OTC swaps, the registration of clearing entities 

and participants engaged in transacting over-the-counter swaps, and the imposition of 

various prudential and conduct standards upon these entities. Additionally, to the extent 

swaps would not be cleared, the legislative proposal would require that information regarding 

the transactions be reported to repositories that would be Commission registrants subject to 

Commission oversight. 

 Requires the Commission to undertake extensive rulemaking (and/or joint rulemaking with 

SEC and others) in the following areas:

o Definitions of relevant terms, including ―swaps,‖ ―standardized,‖ ―swap dealer,‖ and 

―major swap participant‖;

o Rules governing persons to be registered as DCOs for swaps;

o Rules governing persons that are to be registered as swap repositories;
FY 2011 President’s Budget & Performance Plan

 

Appendix 3Federal Financial Regulatory Reform 121

o Rules providing for the registration of swap dealers and major swap participants;

o Rules imposing capital and margin requirements on swap dealers and major swap 

participants;

o Rules governing reporting and recordkeeping for swap dealers and major swap 

participants;

o Rules governing daily trading records for swap dealers and major swap participants;

o Rules governing business conduct standards for swap dealers and major swap 

participants (i.e., fraud, supervision, position limits, etc.);

o Rules governing back office standards for swap dealers and major swap participants; and

o Rules requiring that futures commission merchants and introducing brokers implement 

conflict-of-interest systems and procedures

 Establishes multiple new on-going responsibilities following the drafting, publication, and 

finalizing of rules:

o For example, the imposition of financial requirements would require the development 

and implementation of a routine financial surveillance function, which would include the 

periodic audit of swap dealers and major swap participants, and the review of interim and 

annual financial reports submitted by swap dealers and swap participants. 

o The registration of new DCOs engaged in the clearing of swaps would require the 

examination of new entrants for compliance with core principles as well as the routine 

auditing of such DCOs once registered. DCIO staff will need to review a wide range of 

OTC swaps and other derivatives instruments to determine their suitability for clearing.

Enforcement: 18 FTE 

The Administration‘s legislative proposal:

 Establishes Commission fraud and manipulation authority over OTC trading More 

specifically, the proposed legislation amends several provisions of the Commodity Exchange 

Act (CEA) to include  ̳swaps‘ where the CFTC has enforcement authority under the CEA and 

further amends the CEA to grant the CFTC exclusive authority to enforce the provisions of 

title I of the OTCDMA against any person. 

 Addresses, directly, ―Retail Commodity Transactions‖ and supports the extension of the forex 

fraud authority, which was granted under the Farm Bill, to all other commodities. 

Office of General Counsel: 8 FTE 

The Administration‘s legislative proposal, in effect:

 Requires OGC to perform new and substantial services on behalf of the Commission and to 

provide legal counsel and support to all other programs within the Commission as they 

address novel and complex legal issues arising in the implementation of this broad statutory 

scheme. (The legislation would establish a comprehensive regulatory regime for virtually all 

over-the-counter swaps – reducing systemic risk in the financial system by bringing most 

swaps into centralized clearing, enhancing transparency by bringing most swaps onto trading 

venues, and assuring accountability by establishing a new registration program for swap 

dealers and major swap participants. Although some swaps are voluntarily cleared under 

existing law, the Administration‘s proposed legislation would require a substantial expansion 

of the Commission‘s regulatory program for derivatives clearing organizations since all 

standardized swaps would have to be centrally cleared. Legal services required of OGC would 

grow markedly, both in terms of assuring the legal sufficiency of both new regulatory actions 
FY 2011 President’s Budget & Performance Plan

122 Appendix 3─Federal Financial Regulatory Reform

proposed to carry out the clearing mandate of the legislation, as well as financial integrity and 

rule enforcement reviews on an ongoing basis to evaluate the stability of the clearing system.)

 Includes provisions for new categories of registered entities and market participants that do 

not exist under current law. These include alternative swap execution facilities, swap 

repositories, swap dealers, and major swap participants – all of which would be registered 

and supervised by the Commission. Legal services will be required of OGC in developing new 

regulatory programs to govern these new categories of registrants, and addressing novel legal 

issues that inevitably would arise as the Commission applies these programs on a going 

forward basis. While there are some parallels under the existing regulatory structures for 

exempt commercial markets and market intermediaries trading futures and commodity 

options, legal support from OGC would be necessary to evaluate compliance with the intent of 

Congress as to the extent to which current models are to be carried over to swaps regulation, 

and how best to adapt those models to inherent differences in the nature of these instruments 

and the platforms and traders that trade them.

 Clarifies the Commission‘s ability to adopt rules in administering the Core Principles 

applicable to contract markets and clearinghouses, and also would provide for advance 

Commission review of new and amended rules and products proposed by these entities that 

does not occur under existing law. Legal support is critical to the successful exercise of both 

of these authorities. 

 Requires the Commission to set aggregate position limits covering contracts traded on 

designated contract markets, foreign boards of trade, and new trading platforms for swaps 

where there is a significant price discovery function. The imposition of these intricate 

position limits will require extensive legal review to assess compliance with congressional 

intent. 

 Requires extending the current Commitments of Traders reporting to include public 

reporting of swap data will require additional legal services to assure compliance with CEA 

provisions mandating confidentiality of certain trade information.

 Expanding substantially the Commission‘s enforcement authority—both with respect to 

manipulation and fraud involving swaps, and also pursuant to a provision that would extend 

the fraud enforcement authority that Congress granted to the Commission in 2008 for retail 

foreign currency transactions to all other retail commodity contracts as well. OGC reviews all 

enforcement recommendations concerning filing and settling charges for legal sufficiency and 

consistency with the CEA and Commission rules, policies, and precedents. It also handles 

appeals of enforcement cases to the U.S. Courts of Appeals. Expanded enforcement authority 

would yield increased numbers of case filings, settlements, and appeals, all requiring 

additional legal resources in OGC to fully protect the Commission‘s interests.

Office of Chief Economist 1 FTE

The Administration‘s legislative proposal, in effect:

 Requires Office of the Chief Economist to provide assistance to the Commission staff 

responsible for developing regulations mandated by legislation. These regulations will entail 

development of new measures for activity and positions as well as integration of these 

measures into current measurement scales. In addition, the proposed regulation alters 

incentives which, in turn, necessitate analyses to obtain expectations for the effects stemming 

from various regulatory alternatives. 

 Conduct analyses of the impact stemming from new regulation to ensure that legislative goals 

are being met. 
FY 2011 President’s Budget & Performance Plan

 

Appendix 3Federal Financial Regulatory Reform 123

Office of International Affairs 1 FTE

The Administration‘s legislative proposal, in effect:

 Creates a greater demand to communicate with major jurisdictions such as the European 

Union, Canada and Japan to explain the details of that legislation and to provide assistance to 

other jurisdictions interested in developing their own OTC policies. In order to avoid gaps in 

OTC regulation and ―regulatory arbitrage‖ additional international engagement will be 

needed in order to coordinate policies and rule development with those of major jurisdictions 

such as the European Union. 

 Creates additional demands for cross-border coordination to result from any new legislation 

granting the Commission authority over over-the-counter (OTC) derivatives. For example, the 

registration and regulation of major swap dealers and major swap participants will involve 

entities and persons who are globally active. It is likely that dealers required to register with 

the Commission will be required to register in other jurisdictions that are contemplating 

similar enhanced OTC regulation, such as the European Union and Japan. We anticipate the 

need to develop cooperative arrangements to share relevant regulatory information not only 

with regard to the safety and soundness of dealers but also with regard to the fitness and 

financial exposures of large internationally active clients. 

 Contemplates the development of trade repositories which will require close coordination 

with foreign regulators, particularly with those in the European Union, to ensure a consistent 

approach that minimizes duplicative efforts, ensures a comparable level of regulation and, 

most importantly, the sharing of information needed for market and financial integrity 

purposes. 

 Favors an increase in the standardization, electronic facility/exchange trading and clearing of 

OTC contracts. Given the cross-border nature of OTC trading, each of those three objectives 

will require the CFTC to coordinate the development of global policies to avoid gaps and to 

coordinate the development of effective cooperative arrangements to ensure access to 

information, access to relevant regulated entities and on-going general cooperation. Many of 

these objectives have begun to be addressed within the international community, such as 

IOSCO, G20 initiatives, the European Commission and, bilaterally, with the UK FSA, which 

necessitates increased staff representation. 

 Establishes enhanced requirements that will apply to position limits on U.S. exchanges and 

will also extend to foreign boards of trade that trade contracts that are linked to U.S. futures 

contracts. These new requirements will likely necessitate the development of enhanced 

information sharing and cooperative surveillance arrangements with relevant foreign boards 

of trade.

 Will attract the attention of international regulators, some of whom have already indicated 

that they would appreciate technical assistance in developing OTC policies. Providing such 

assistance is appropriate as it promotes a harmonized, high level of regulation. 

Office of the Executive Director: 5 FTE

The Administration‘s legislative proposal, in effect:

 Requires an appropriate level of overhead support to manage a substantially enlarged 

workforce. For example, the Office of Human Resources and the offices of Management 

Operations will be directly affected by the substantial growth in staff required to carry—out 
FY 2011 President’s Budget & Performance Plan

124 Appendix 3─Federal Financial Regulatory Reform

resulting for the new regulatory authorities. OHR is providing services at a ratio of about one

HR Specialist to every 60 employees. While this ratio might improve slightly - through, 

economies of scale, and /or better use of automation – the more desirable ratio would not be 

less than 1 to 100. Therefore, for the projected additional employees would require an 

additional two Human Resources Specialists. Likewise, the Office of Management Operations 

will require three additional support staff to meet the space management, asset management, 

security and physical infrastructure needs of the Commission. This need will become more 

critical as the Commission expands the size of the already underserved regional offices in

Chicago, Kansas City and New York City. 

Office of the Information Technology Services: 15 FTE

The Administration‘s legislative proposal, in effect:

 Requires collaborating with program staff in developing robust mission-oriented systems for 

the new regulatory framework. IT support will be mandatory for implementing the automated 

surveillance and comprehensive analysis solutions that are essential to meet the transparency 

objectives of the new authorities.

 Partnering with program staff as they draft and implement rules, researching and assessing 

industry data and systems. With a focus on efficient deployment of IT systems to support rule 

adoption and implementation, IT staff will analyze evolving business requirements, plan 

integration with and expansion of existing systems, and develop new systems. 

 Assisting program staff in the identification and adoption of industry data standards to 

increase the reliability, accuracy, and transparency of collected information. The CFTC 

anticipates major systems development to address voluminous transaction processing, data 

storage, and data analysis requirements. New IT systems development projects will be 

managed effectively and will require extensive business and industry analysis. The 

complexity, diversity, and volume of instruments to be newly regulated will also demand 

extensive data analysis. Newly developed systems will be more complex than current systems 

and will require thorough integration with current systems, leading to an increase in solutions 

development not only for new systems but also for existing systems. 

 Responding to the substantial staff increase by providing additional personal computers and 

communications devices as well as increases in supporting infrastructure like secure mobile 

storage devices, software licenses, and service usage fees. The CFTC also anticipates a 

substantial increase in teleconferencing and webcasting to support the collaboration required 

to implement the new authorities.

 Assessing and possibly acquiring new sources of commercially-developed information as part 

of the strategy to support CFTC resources in rule adoption and implementation. Additional 

IT resources will be required to support an increase in desktop and mobile computing 

equipment, communication capacity and bandwidth increases, data storage, server 

computing capacity, and staff to support additional general IT services. Estimates for 

increases in data to be submitted to the CFTC range as high as forty times over current levels. 

This will require substantial increases in all facets of CFTC infrastructure, including 

communications circuits, circuit capacity, cabling and connection, switches, routers, the 

server processer farm, and data storage and backup. Given the increased volume and 

frequency of data submitted, CFTC may have to supplement current data storage area 

network (SAN) infrastructure with large scale data warehousing and analytical appliances.
FY 2011 President’s Budget & Performance Plan

Appendix 4Investment in Technology 125

APPENDIX 4

Investment in Technology (for Current Statutory Authorities)

The Commission plans an investment of approximately $34 million FY 2011. Broadly summarized, an 

investment in Information Technology at the CFTC is an investment in: 

 Operations and Maintenance of mission supporting systems:

o Integrated Surveillance System (ISS) 

o Trade Surveillance System (TSS) 

o eLaw 

o CFTC.gov

o Open Interest

o RSR, SPARK, FILAC, and others

 Infrastructure:

o Network Operations

o Desktop Configuration

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

o Project Management

 New Technology Initiatives:

o Improved Market Data Transparency

o TSS and ISS Modernization

o Trade Pattern Modeling/Detection Support for TSS 

o CFTC.gov Enhancements

o Open Interest Reengineering

o ISS to TSS Integration

o New Data Analysis Software

o Data Standardization for Trade Data Submission

o Account Ownership and Control Analysis

o Improved Document Management and Records Management Program

o Improved Communications with SharePoint Services

o Expanded Network Administration for a Growing Commission Workforce

o Collocation Services

More specifically this investment is:

o $5.8 million to provide for Capital Equipment and Software Purchases;

o $3.5 million to provide for Telecommunication Services;

o $22.8 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 $1.9 million to provide for IT supplies, operations, and maintenance including intragovernmental payments or cross-services agreements with other government 
FY 2011 President’s Budget & Performance Plan

126 Appendix 4Investment in Technology

agencies for Internet access and Web site maintenance, personnel payroll system, 

GSA telephone services, and COOP facilities.
FY 2011 President’s Budget & Performance Plan

 

Appendix 5Inspector General Budget Request 127

APPENDIX 5

Inspector General

In accordance with the Inspector General Act, as amended:

The following amounts were included in the FY 2011 OMB Budget Estimate:

FY 2010

Total Budget22 Training Budget Estimate FTE

$1,098,000 $4,900 4

FY 2011

Total Budget Training Budget Estimate FTE

$1,205,000 $5,000 4

The following amounts are included in the FY 2011 President‘s Budget

FY 2010

Total Budget Training Budget Estimate FTE

$1,095,000 $4,900 4

FY 2011

Total Budget Training Budget Estimate FTE

$1,215,000 $5,000 4

 

22 Total Budget includes estimated direct salary and benefit costs of four (4) FTE and a proportional share of all estimated 

indirect costs, such as, travel, training, lease of space, utilities, communications, printing, supplies, equipment and all other 

services; including an estimated contribution of $2,628 and $2,916 in FY 2010 and FY 2011 respectively to support the Council

of the Inspectors General on Integrity and Efficiency.
FY 2011 President’s Budget & Performance Plan

128 Appendix 6History of Appropriations

APPENDIX 6

Summary of OMB and Congressional Action on Appropriations FY 2001 – FY 2011
FY 2011 President’s Budget & Performance Plan

 

Appendix 7Privacy Policy for CFTC Web Site 129

APPENDIX 7

Privacy Policy for the CFTC Web Site

Our privacy policy is intended 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); 

 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 our visitors.

We do not enable "cookies." A "cookie" is a text file placed on your hard drive by a Web site that is 

used to monitor your use of the site.

If you complete a form, send a comment, or email the CFTC, you may be choosing to send us 

information which personally identifies you. In general, such information is used to respond to your 

request; it may have other uses that are identified on each form. For example, if you send us a 

comment letter on a proposed rule, that letter becomes part of the CFTC‘s comment file and is 

available to the public. The comments help the CFTC and other members of the public evaluate 

proposed Commission actions.

You may submit other forms to us, such as Freedom of Information Act requests or requests for 

correction of information. Such forms may contain information that CFTC staff uses to track and 

respond to your request. Information you provide to the CFTC Division of Enforcement on our Report 

Suspicious Activities or Information form may be shared with other law enforcement agencies when 

appropriate.

If you have questions about CFTC‘s privacy policy and information practices, you can email us at 

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 2011 President’s Budget & Performance Plan

130 Appendix 8Table of Acronyms

APPENDIX 8

Table of Acronyms

AE Clearinghouse The Actuarials Exchange, LLC

Agora-X Agora-X, LLC

ALJ Administrative Law Judge

AP Associated Persons

BC-DR Business Continuity and Disaster Recovery

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

DFOX DFOX

Derivatives Bridge Derivatives Bridge, LLC

DSRO Designated Self-Regulatory Organization

DOJ Department of Justice

DTEF Derivatives Transaction Execution Facility

EBOT Exempt Boards of Trade

ECM Exempt Commercial Markets

EDBS Exchange Database System

ELX ELX Futures, L.P.

EnergyCross.com EnergyCross.com

EOXLIVE Energy Options Exchange, LLC

EPFE Exchange Place Futures Exchange, LLC

FB Floor Broker

FBI Federal Bureau of Investigation

FBIIC Financial and Banking Information Infrastructure Committee

FBOT Foreign Boards of Trade

FCA Farm Credit Administration

FCM Futures Commission Merchant

FCRM FCRM Electronics Markets, LLC

FERC Federal Energy Regulatory Commission

FTC Federal Trade Commission

FinCEN Financial Crimes Enforcement Network
FY 2011 President’s Budget & Performance Plan

Appendix 8Table of Acronyms 131

FIRREA Financial Institutions Reform, Recovery, and Enforcement Act

Flett Flett Exchange

FSRIA Farm Security and Rural Investment Act

FMHA Farmers Home Administration

FOCUS Financial and Operational Combined Uniform Single

FOREX Foreign Currency

FT Floor Trader

FTE Full-time Equivalent

FY Fiscal Year

GAO Government Accountability Office

GFI 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 Shipping ICAP Shipping Trading System

ICAPture ICAP Electronic Trading Community

ICE IntercontinentalExchange, Inc.

ICE Clear US ICE Clear US 

ICE US ICE Futures U.S., Inc.

IDC International Derivatives Clearinghouse, LLC

IMAREX International Maritime Exchange

Intrade Intrade Board of Trade

IOSCO International Organization of Securities Commissions

IRESE IRESE, Inc.

ISS Integrated Surviellance System

IT Information Technology

JO Judgment Officer

KCBT Kansas City Board of Trade Clearing Corporation

LCH London Clearing House Clearnet Ltd

LiquidityPort LiquidityPort, LLC

Longitude Longitude, LLC

MATCHBOXX ATS MATCHBOXX ATS

ME Merchants Exchange

MGE Minneapolis Grain Exchange Clearing House

MOU Memorandum of Understanding

Nadex North American Derivatives Exchange, Inc.

NFA National Futures Association

NFX NASDAQ OMX Futures Exchange, Inc.

NGX Natural Gas Exchange, Inc.

Nodal Nodal Exchange, LLC

NQLX NQLX LLC Futures Exchange

NTP NetThruPut

NYCE New York Cotton Exchange

NYFE New York Futures Exchange

NYMEX New York Mercantile Exchange Clearing House

NYSE LIFFE NYSE Liffe Futures Exchange, LLC

OCC The Options Clearing Corporation

OCE Office of Chief Economist (OCE)

OCX OneChicago LLC Futures Exchange
FY 2011 President’s Budget & Performance Plan

132 Appendix 8Table of Acronyms

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)

OIA Office of International Affairs (CFTC)

OILX OILX

OITS Office of Information and Technology Services (CFTC)

OMB Office of Management and Budget

OMO Office of Management Operations (CFTC)

OPEX Optionable, Inc.

OTC Other-the-Counter

Parity Parity Energy Inc.

PBOT Philadelphia Board of Trade

PMA President‘s Management Agenda

PWG President‘s Working Group

REPCASE Reparations Case Tracking System

RER Rule Enforcement Review

RWG Registration Working Group

SEC Securities and Exchange Commission

SES Senior Executive Service

SFP Security Futures Products

SL Spectron Live.com Limited

SPDC Significant Price Discovery Contract

SRO Self-Regulatory Organization

Storm Storm Exchange, Inc.

Swapstream Swapstream Operating Services, Ltd.

TACE The American Civics Exchange

TCX TradeCapture Exchange

TFSWeather TFSWeather.com

tpENERGYTRADE tpENERGYTRADE

TraditionalCoal.Com TraditionalCoal.com

Trading Optx Trading OptX, LLC

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

WORLDPULP WorldPulp.com

WXL WeatherXchange Limited

Yellow Jacket Yellow Jacket Software, Inc.