* ** * * * * * I 

COMMODITY FUTURES TRADING COMMISSION 

Congressional Budget Review 

Committees on Appropriations FY 2024 
FY 2024 President's Budget 

In order for the CFTC to fulfill its duty to oversee the Nation's vital 

derivatives markets in FY 2024, CFTC is requesting $411 .0 million (M) 

to operate the Commission effectively and advance priority initiatives 

and reflects the level of resources needed for the CFTC to maintain 

and enhance its role as the primary regulator of the U.S. futures, 

swaps, and options markets. 

► $411.0M Total Budget Request 

► 764 full-time equivalents (FTE) 

► $46.0M increase above the FY 2023 Enacted Budget 

2 llaillCFTC 
FY 2024 Budget Request by Program1,2,3,4,s 

Program 

FY 2022 

Actual 

$ (000) 

FY 2023 

Spend Plan 

$ (000) 

FY 2024 

Request 

$ (000) Change 

Salaries and Expenses $314,384 $360,782 $404,755 $43,973 

Office of the Inspector General $3,678 $4,218 $6,245 $2,027 

Annual Total $318,063 $365,000 $411 ,000 $46,000 

Facilities Replacement and Relocation $62,000 $0 $0 $0 

Grand Total $380,063 $365,000 $411 ,000 $46,000 

1 FY 2023 amounts provided in the "Consolidated Appropriations Act, 2023," Public Law 117-328, Division E. 2 Salaries and Expenses: The Salaries and Expenses program provides funding for all CEA-related activities. This includes funding for Federal staff 

salaries and benefits, leasing of facilities, information technology, travel, training, and general operations of the Commission. 3 The Office of the Inspector General program provides audits, investigations, reviews, inspections, and other activities to evaluate the operations and 

programs of the Commission. 4 The Commission considers the Salaries and Expenses and Office of the Inspector General programs to be its sole PPAs. All other budget displays by 

division or any other depictions are for informational purposes only. 5 Facilities Relocation and Replication resources are a separate no-year account from the Commission's other PPAs included in the FY 2022 

appropriations. 

3 llaillCFTC 
FY 2024 Budget Request 

Process Summary 

► FY 2024 budget request was built using the FY 2023 

President's Budget as the base plus + 

► Negotiated compensation increases 

► Assumed contract inflation rates 

► Focus on Data, IT and Cyber related initiatives and funding alignment 

► Funding Alignment Purpose 

► Focused effort to make the Data, IT and Cyber budgets whole 

► Historical Commission budget restraints required incremental funding procurement actions on 

our larger contracts. 

► New contracts for existing services require full funding procurement actions with higher than 

anticipated inflation costs that current budget is unable to absorb. 

Privileged and Confidential 4 llaillCFTC 
Request Increases by Division 

► Enforcement, $1 ,400K 

► Supports subject matter engagement; Digital asset tools 

► Data, $4,750K 

► Replace legacy data loading framework; Application 

Modernization - Cloud-enable legacy applications; Implement 

an enterprise metadata repository 

► Administration - Cyber, $1,500K 

► Supports additional security integration, certification and 

monitoring in all architecture 

► Alignment - $17,000K 

► Administration - IT($9,500K) 

► Administration - Cyber ($2,000K) 

► Data ($5,S00K) 

► OIG, +5 FTE 

Privileged and Confidential s llaillCFTC 
FY 2024 Budget Request by Division 

FY 2022 FY 2023 FY 2024 

Actual Spend Plan Request Change 

FTE $ 000 FTE $ 000 FTE $ 000 FTE $ 000 

Enforcement 161 $61,273 172 $67,866 172 $70,559 0 $2,692 

Market Oversight 75 $26,697 93 $34,143 93 $36,060 0 $1,918 

Clearing and Risk 79 $27,948 91 $33,838 91 $34,994 0 $1,155 

Market Participants 64 $22,797 73 $27,318 73 $28,395 0 $1,077 

Office of the Chief Economist 19 $6,460 20 $7,052 20 $7,387 0 $334 

Office of the General Counsel 57 $25,379 59 $25,993 59 $28,255 0 $2,232 

Office of International Affairs 15 $5,576 20 $7,859 20 $8,661 0 $802 

Division of Data 38 $33,815 43 $40,128 43 $53,269 0 $13,141 

Division of Administration 126 $92,395 136 $101,217 136 $120,242 0 $19,025 

Office of the Chairman & Commissioners 32 $1 2,044 41 $15,367 41 $16,963 0 $1,596 

Office of the Inspector General 9 $3,678 11 $4,218 16 $6,245 5 $2,027 

Total 676 $318,063 759 $365,000 764 $411 ,000 5 $46,000 

6 llaillCFTC 
FY 2024 Administration Proposal on User Fees 

FY 2024 

Program Request 

Salaries and Ex enses $404,755 

Office of the Ins ector General $6,245 

Total A $411 ,000 

Offsettin Collections $116,000 

Net A $295,000 

• Same proposal as FY 2023 

• Offsetting collections remained 

constant, $116M, same in FY 2023 

President's Budget 

• Increased base to $295M from 

$249M in FY 2023 President's 

Budget 

• This budget reflects the Administration's intention to propose authorizing legislation to collect user fees of $116 million to 

fund a portion of the Commission's activities. 

• The CFTC is the only Federal financial regulator that does not derive its funding from the specialized entities it regulates. It 

may be appropriate for those participants to at least partially offset or contribute toward the cost of providing those 

programs. The Administration has proposed a user fee for the CFTC for most of the past ten+ years. 

• Any such fee would be contingent upon enactment of authorizing legislation permitting the CFTC to collect fees. 

• Any such market participation fees would be designed in a way that supports market access, liquidity, and the efficiency of 

the Nation's derivatives markets. The Commission oversees the most complex markets of any U.S. regulator, and supports 

whatever funding mechanism Congress deems appropriate that secures the CFTC the resources it needs. 

1 llaillCFTC 
FY 2024 President's Budget 

COMMODITY FUTURES TRADING COMMISSION 

For necessary expenses to carry out the provisions ofthe Commodity 

Exchange Act (7 U.S. C. 1 et seq.), including the purchase and hire of 

passengermotor vehicles, and the rental ofspace (to include multiple year 

leases), in the District of Columbia and elsewhere, $411,000,000, including 

not to exceed $3,000 for official reception and representation expenses, and 

not to exceed $25,000 for the expenses for consultations and meetings hosted 

by the Commission with foreign governmental and other regulatory officials, of 

which not less than $20,000,000 shall remain available 

until September 30, 2025, and of which not less than $6,245,000 

shall be for expenses ofthe Office ofthe Inspector General: Provided, That 

notwithstanding the limitations in 31 U.S.C. 1553, 

amounts provided under this heading are available for the liquidation of 

obligations equal to current year payments on leases entered into prior to the 

date ofenactment ofthis Act: Provided further, That for the purpose of 

recording and liquidating any lease obligations that should have been 

recorded and liquidated against accounts closed pursuant to 31 U.S.C. 1552, 

and consistent with the preceding proviso, such amounts shall be transferred 

to and recorded in a no-year account in the Treasury, which has been 

established for the sole purpose ofrecording adjustments for and 

liquidating such unpaid obligations. 

FY 2024 Request 

Salaries and Expenses $404.BM 

Office of the Inspector General $6.2M 

Total $ 411.0M 

Legislative Language Summary 

• Administrations request sets distribution of $295M 

(non-fee) for operations 

• Includes a provision to conform language with 

authorities of other regulators for international 

meetings and consultations 

• Includes a provision to continue with the transfer 

and use of the no-year fund to record and liquidate 

lease payments each year. 

• CFTC needs this leasing language until at 

least 2025. 

a llaillCFTC 
Appropriations Committee Questions: 

User Fees 

QUESTION: How would the CFTC anticipate implementing the administration's userfee proposal? What 

is the vision for OMB's proposal for user fees? 

RESPONSE: The Commission has not proposed any method for collecting user fees and has not received 

any materials or guidance on how the Administration envisions the user fee implementation. 

Cloud Providers 

QUESTION: Provide additional information about available cloud service providers. 

RESPONSE: The CFTC procurement group provided the following resources on cloud service providers. 

GSA has aggregated the acquisition information for Cloud Support here: 

https://cic.gsa.gov/acq u isitions/acquisition-resources 

As you can see, there are multiple federal acquisition vehicles and service providers available for 

agencies to use. 

In addition, the Cloud Information Center's main page provides details on how GSA can help with 

obtaining support: 

https://cic.gsa.gov / 

Procurement Model 

QUESTION: Explain why the contract model is now FFP vs. T&M and how the change took place. 

RESPONSE: The change in procurement model is one of the factors associated with the Commission's 

funding realignment strategy. This change does not apply to all contracts at the Commission, however it 

is a shift for some of our larger value contracts, such as IT support services. The shift from the costreimbursement or time and materials(T&M) contracts to firm fixed price (FFP) supports the 

Administration's expectations that agencies maximize FFP contracts and minimize t he use of T&M 

contracts as shared in 0MB Memo, M-21-ll - Jncreasing Attention on Federal Contract Type Decisions 

(attached). An FFP contract provides for a price that is not subject to any adjustment on the basis of the 

contractor's cost experience in performing the contract. This model for more operational and 

maintenance type contracts follows the Federal Acquisitions Regulations (FAR) guidance because it 

provides maximum incentive for the contractor to control costs and perform effectively and imposes a 

minimum administrative burden upon the contracting parties. The timing of the shift has been a more 

recent occurrence due to the timing of contract recompete timelines. 
U.S. COMMODITY FUTURES TRADING COMMISSION 

Three Lafayette Centre 

1155 21st Street, NW, Washington, DC 20581 

www.cftc.gov 

Rostin Behnam (202) 418-5575 

Chairman CFTCChairman@CFTC.gov 

September 29, 2023 

The Honorable Shalanda Young 

Director 

Office ofManagement and Budget 

725 17th Street, N.W. 

Washington, DC 20503 

Dear Director Young, 

On behalf ofthe Commodity Futures Trading Commission (Commission or CFTC), I am pleased 

to transmit the Commission's budget estimate for fiscal year (FY) 2025. The CFTC is requesting 

a budget of $399.0 million and 725 full-time equivalents (FTE) to operate the agency effectively 

and support our mission in FY 2025. This request was developed with the "Fiscal Responsibility 

Act of2023" in mind. The FY 2025 request is a decrease of $12 million, or 2.9%, below the FY 

2024 President's Budget and includes a decrease of 39 FTE, or 5.1 %, below the FY 2024 

President's Budget. 

This proposed budget reflects the CFTC's resource needs to maintain and enhance its role as the 

primary regulator ofthe U.S. futures, swaps, and options markets and supports the 

Administration's priorities and executive orders. The Commission's investments in FY 2025 

will continue to prioritize efforts to deliver results for all Americans through enforcement 

program support, and strengthening cybersecurity capabilities and protection efforts. 

It may be helpful to provide examples ofpriority initiatives that would be funded through this 

proposed budget. The proposed budget focuses on our continuous efforts to ensure optimal 

preparation and protections to keep our consumed markets data and Commission systems 

protected from emerging risks and cyber threats. The budget supports the need to ensure that our 

enforcement program sustains its growth trajectory and continues its proactive approach in 

identifying and addressing misconduct within our ever expanding and transforming markets. 

This is especially critical in light ofgrowing retail participation and the need for greater 

protections in the digital asset space. The planned prioritization in these areas will help the 

CFTC fulfill its mission to promote the integrity, resilience, and vibrancy ofthe U.S. derivatives 

markets through sound regulation. 

These initiatives are vital to our oversight ofmarket utilities and participants, such as swap 

execution facilities, market intermediaries, and commodity pool operators. The focus also 
facilitates our enforcement efforts, including investigating and prosecuting fraud and 

manipulation in digital assets. 

In conclusion, the proposed budget would help the CFTC continue to build capacity to fulfill its 

mission as the derivatives markets evolve. Thank you for your consideration. 

Sincerely, 

Rostin Behnam 

Attachments: 

A FY 2025 0MB Budget Estimate Request by Program 

B. FY 2025 0MB Budget Estimate Request by Division 

C. FY 2025 0MB Budget Estimate Request by Object Class 

D. FY 2025 0MB Budget Estimate Justification by Division 

E. FY 2025 0MB Budget Estimate Request for the Office ofthe Inspector General 

F. FY 2025 0MB Budget Estimate CFTC Facility Lease, Replacement, and Relocation Cost 

Exhibits 

2 
Attachment A 

FY 2025 0MB Budget Estimate Request by Program 1

• 

2

• 

3 

FY 2023 FY 2024 FY 2025 

Spend President's Budget 

Plan Budget Request Change 

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

Salaries and Expenses $360,782 $404,755 $392,419 ($12,335) 

Office of the Inspector General $4,218 $6,245 $6,581 $335 

Annual Total $365,000 $411 ,000 $399,000 ($12,000) 

Columns may not add due to rounding 

1 The Commission considers the Salaries and Expenses and the Office ofthe Inspector General programs to be its sole programs, 

projects, and activities (PPAs). All other budget displays by Division or any other depiction are for informational purposes only. 2 Salaries and Expenses: The Salaries and Expenses program provides funding for all CEA-related activities. This includes 

funding for Federal staffsalaries and benefits, leasing offacilities, travel, training, and general operations ofthe Commission. 3 The Office ofthe Inspector General program provides audits, investigations, reviews, inspections, and other activities to 

evaluate the operations of the Commission. 
Attachment B 

FY 2025 0MB Budget Estimate Request by Division1

• 2• 

3 

FY 2023 FY 2024 FY 2025 

Spend Plan President's Budget Budget Request Change 

FTE $ {000) FTE $ {000) FTE $ {000) FTE $ {000) 

Enforcement 172 $67,866 172 $70,559 163 $73,997 (9) $3,438 

Market Oversight 93 $34,143 93 $36,060 88 $35,987 (5) ($74) 

Clearing and Risk 91 $33,838 91 $34,994 86 $35,553 (5) $559 

Market Participants 73 $27,318 73 $28,395 69 $28,488 (4) $93 

Office of the Chief Economist 20 $7,052 20 $7,387 19 $7,993 (1) $606 

Office of the General Counsel 59 $25,993 59 $28,225 56 $28,630 (3) $405 

Office of International Affairs 20 $7,859 20 $8,661 19 $8,547 (1) ($114) 

Division of Data 43 $40,128 43 $53,269 41 $42,106 (2) ($11,164) 

Division of Administration 136 $101,21 7 136 $120,242 129 $113,449 (7) ($6,793) 

Office of the Chairman & Commissioners 41 $15,367 41 $16,963 39 $1 7,670 (2) $708 

Office of the Inspector General 11 $4,218 16 $6,245 16 $6,581 0 $335 

Total 759 $365,000 764 $411,000 725 $399,000 !39) {$12,000) 

Columns may not add due to rounding 

1 The Commission considers the Salaries and Expenses and the Office of the Inspector General programs to be its sole programs, 

projects, and activities (PP As). All other budget displays by Division or any other depiction are for informational purposes only. 2 Estimates include costs for all PPAs 3 The Office of the Inspector General estimate includes an amount for overhead. 

2 
Attachment C 

FY 2025 0MB Budget Estimate Request by Object Class 1

, 

2 

FY 2023 FY 2024 FY 2025 

Spend President's Budget 

Plan Budget Request Change 

$ {000} $ {000) $ {000} $ {000) 

11.0 Personnel Compensation $169,601 $180,130 $184,840 $4,710 

12.0 Personnel Benefits $61,135 $63,302 $65,360 $2,058 

21 .0 Travel and Transportation of Persons $2,149 $2,293 $1,240 ($1,053) 

22.0 Transportation of Things $52 $55 $56 $1 

23.1 Rental Payments to GSA $3,336 $3,503 $5,575 $2,072 

23.2 Rental Payments to Others $25,241 $26,541 $23,060 ($3,481) 

23.3 Communications, Utilities, & Misc. $3,168 $3,388 $3,497 $109 

24.0 Printing and Reproduction $657 $690 $691 $1 

25.0 Other Services $91,272 $122,150 $105,698 ($16,452) 

26.0 Supplies and Materials $2,609 $2,765 $2,657 ($107) 

31.0 Equipment $5,763 $6,165 $6,323 $158 

32.0 Building and Fixed Equipment $16 $17 $2 ($15) 

Total $365,000 $411 ,000 $399,000 !$12,000} 

Columns may not add due to rounding 

1 The Commission considers the Salaries and Expenses and the Office ofthe Inspector General programs to be its sole programs, 

projects, and activities (PP As). All other budget displays by Division or any other depiction are for infonnational purposes only. 2 Estimates include costs for all PPAs. 

3 
Attachment D 

FY 2025 Budget Estimate Justification 

The Commission is requesting $399.0 million and 725 FTE for FY 2025. In addition to maintaining and 

enhancing the CFTC's role as the primary regulator ofderivatives markets, the Commission's request for FY 

2025 will allow it to continue to invest in mission-critical functions and priorities outlined in the request. 

Summary justifications are provided below by division: 

Division o(E11forceme11t 

The Commission requests $74.0 million and 163 FTE for its enforcement program. The Commission remains 

committed to protecting the public and seeing that America's derivatives markets operate free from fraud, 

manipulation, and other trading abuses by being tough on those who break the rules. The Commission is on track 

for another robust enforcement year with many significant accomplishments. 

Based on the continued growth ofinnovative products and practices such as digital assets and algorithmic trading, 

the ongoing fraud and illegal operations in these new spaces, as well as the continued occurrence ofmanipulative 

and trade practice violations, the Commission anticipates more time-intensive and inherently complex 

investigations to continue in coming years. 

The CFTC has risen to the challenges brought by the burgeoning digital asset market by ensuring that the markets 

and market participants acting within its jurisdiction comply with their statutory and regulatory requirements. The 

CFTC uses its anti-fraud, false reporting, and anti-manipulation enforcement authority over commodity cash 

markets in interstate commerce to investigate and address misconduct in the digital asset space. Thus far during 

2023 1

, the Commission has brought 28 actions involving conduct related to digital assets, representing more than 

49% ofall actions filed during that period. 

The novel and complex investigations undertaken by the enforcement program continues to require the use of 

subject matter experts in specialized areas. In addition, manipulative and trade practice schemes continue to 

evolve, as evidenced by recent cross market misconduct. The enforcement program will use additional resources 

to engage with subject matter experts, to enable the Commission to keep pace with this rapidly growing industry, 

including the digital asset space. 

A tough enforcement program is vital to maintaining public confidence in the financial markets. The Commission 

uses its enforcement authorities to deter fraudulent and manipulative conduct and to ensure that markets, firms, 

and participants subject to the Commission's oversight meet their obligations. The Commission also maintains a 

robust market surveillance program and applies analytical tools and techniques including artificial intelligence 

and machine learning (AI/ML) to vast quantities oftrade data to identify trading patterns or positions that warrant 

further investigative inquiry. 

The Commission engages in cooperative enforcement work with domestic, state, federal, and international 

regulatory and criminal authorities. The information-sharing through these cooperative agreements assists in 

enforcing the Commodity Exchange Act (CEA), which state securities regulators and state attorney generals are 

statutorily authorized to do alongside the Commission. Information shared could generate enforcement actions 

under federal or state securities laws, commodities and derivatives laws, or other areas of law, further extending 

1 Through July 31, 2023 

4 
protections to market participants. The Commission also supports the criminal prosecution ofprovable, willful 

violations of the CEA. 

Division ofMarket Oversight 

The Commission requests $36.0 million and 88 FTE to continue its commitment to maintaining the integrity of 

the derivative markets, to improve market intelligence capabilities and to continue to foster open, transparent, fair, 

competitive and secure markets that are free offraud and manipulation. 

The Commission remains focused on fostering market integrity, fairness, and security through robust oversight 

and reviews ofDesignated Contract Markets (DCMs), Swap Execution Facilities (SEFs) and Swap Data 

Repositories (SDRs). Commission staff conduct examinations ofthese derivatives platforms' self-regulatory 

programs to evaluate their compliance with the core principles and Commission regulations. Effective 

cybersecurity and system safeguards oversight is increasingly crucial to the stability ofthe economy and a critical 

element ofthe examinations and requires an increase in the number and frequency of examinations conducted 

annually. In conducting such oversight, the Commission works to reduce the burden on entities by coordinating 

system safeguards examinations between Derivatives Clearing Organizations (DCOs) and one or more DCMs, 

SEFs or SDRs that share a common program of system safeguards analysis and oversight. The Commission also 

oversees foreign boards of trade in connection with trading by direct access from the U.S., and will work to 

automate the process that foreign boards oftrade use to submit products to the Commission in order to make the 

products available for trading to U.S. persons. 

The Commission continues to work diligently with existing and prospective DCMs and SEFs to promote 

responsible financial innovation and compliance with the CEA and Commission regulations. DCMs and SEFs 

made over 600 rule filings in FY 2023 to date. The Commission is currently analyzing several applications from 

new entities seeking to become designated as contract markets or to become registered as a SEF so that they may 

list derivatives products for trading. 

The Commission will closely monitor developments concerning new and novel products such as, for example, 

digital assets and environmental risk products, including the substantial growth in spot markets, derivatives 

markets. The Commission reviews product filings received from DCMs and SEFs to evaluate compliance with the 

core principles and Commission regulations, including more than 630 products received in FY 2023 to date. The 

Commission will continue advising the Commission on any emerging risks relating to digital assets and how 

legislation or regulations could benefit innovation in the industry and enhance Commission oversight. In addition, 

the Commission will monitor developments and continue its oversight relating to event contracts as they continue 

to evolve to ensure that the regulation ofsuch contracts is aligned with the CEA and designed to benefit 

innovation in the markets. The Commission will continue to review the evolution of environmental risk products 

and their listing on derivatives markets. 

The Commission completes extensive analysis and provides information regarding U.S. and global derivatives 

markets, including with respect to commodity and financial markets, international events impacting commodity 

markets, and volatility and inflation in markets. The Commission is also executing an ambitious rulemaking 

agenda, including with respect to event markets, governance and conflicts of interest, data and reporting, and 

other areas. Several ofthese will have notices ofproposed rulemaking published, with work on final rules 

anticipated in 2024 and 2025. 

Division ofClearing and Risk 

The Commission requests $35.6 million and 86 FTE for its Division that oversees DCOs. DCOs are the buyer to 

every seller, and the seller to every buyer, in derivatives contracts. DCOs are critical infrastructures in the global 

5 
financial system; the failure ofa DCO, or disruption to the functioning ofa DCO, could create significant 

liquidity or credit problems for other financial institutions. 

The Commission's goal in overseeing DCOs is to identify and address issues that may affect a DCO's ability to 

manage, control, and monitor risk. OCR carries out the Commission's oversight ofDCOs through daily 

surveillance ofDCO risk data, review ofDCO rule changes, regular examinations ofDCOs, and the development 

ofregulations applicable to DCOs. 

In FY 2023, the Commission approved several rule proposals and final rules put forth by DCR concerning DCO 

governance, reporting, and recovery and resolution. The Commission also began or continued reviewing six 

applications for DCO registration, which, if ultimately approved, would increase the number ofregistered DCOs 

subject to Commission oversight from 15 to 21. The Commission continued to examine DCOs, including its 

annual examinations ofthe two DCOs designated as systemically important by the Financial Stability Oversight 

Council. 

Market Participants Division 

The Commission requests $28.5 million and 69 FTE to maintain effective oversight ofthe registration and 

compliance ofswap and futures market participants and swap and futures industry self-regulatory organizations, 

including the Chicago Mercantile Exchange and the National Futures Association (NF A). 

The Commission oversees thousands of market participants, including retail foreign exchange dealers and futures 

commission merchants, who collectively hold hundreds ofbillions in customer funds; major swap participants and 

swap dealers, who form the core ofthe U.S. regulated swaps markets and who collectively transact in hundreds of 

trillions in notional value swap contracts annually; introducing brokers; and commodity pool operators and 

commodity trading advisors. The Commission directs its registration and compliance resources to provide these 

entities with critical policy and regulatory guidance and to design rules, standards, and reporting requirements that 

keep pace with the needs ofthe evolving marketplace. The Commission further directs its resources to oversee 

NF A as it implements its delegated registration and compliance authority over market participants. Taken as a 

whole, the Commission's use ofits registration and compliance resources serves to foster the development and 

integrity ofthe commodity derivatives markets that are so vital to the efficient hedging ofrisk. 

Office ofthe Chie[Economist 

The Commission requests $8.0 million and 19 FTE to maintain its core economic expertise in order to conduct indepth studies ofeconomic issues affecting all areas ofCommission and regulatory interest. 

The Commission's work requires top-quality researchers with a strong understanding ofmarket participants and 

the markets as a whole. The mission ofthe Office ofthe ChiefEconomist is to conduct rigorous economic and 

econometric analysis ofderivatives markets; to foster market transparency by disseminating its research to market 

participants and the general public, and to partner with other CFTC divisions and offices to integrate economic 

reasoning and data analysis into Commission policy and cost-benefit considerations. The Office will continue its 

program of partnerships with academics in relevant fields and encourage academics to work on areas of interest to 

the Commission. The Commission's economic capabilities continue to expand, along with improvements in data 

quality and computing capacity, allowing the CFTC to measure and monitor risk and conduct robust quantitative 

analysis of liquidity, volatility, market quality, transaction costs, and other aspects ofderivatives market activity. 

Office ofthe General Counsel 

The Commission requests $28.6 million and 56 FTE for the Office ofthe General Counsel (OGC). OGC provides 

legal representation for the Commission in federal courts and before administrative bodies in litigation, including 

6 
appeals of enforcement actions, challenges to CFTC actions, derivatives industry bankruptcies, employment 

lawsuits, and other administrative matters. The Commission's OGC also provides reviews ofall rulemakings and 

staff interpretive and no-action letters to ensure consistency and compliance with the requirements ofthe CEA. 

OGC houses the Freedom oflnformation Act program, the CFTC's Ethics program, the Secretariat, Privacy, 

Records, Library, and the CFTC's £-discovery program. 

Office of International A ffairs 

The Commission requests $8.5 million and 19 FTE to continue and enhance critical work with our international 

counterparts, shape international policy to advance or protect U.S. and CFTC interests, and participate in 

regulatory bodies to ensure that the rules and regulations of foreign regulators and international standard setters 

are consistent with the Commission's oversight ofderivatives markets. 

The Commission's regulated markets are by nature global. As our international counterparts advance their 

equities in international settings, this office is critical to ensuring that international policies remain appropriate for 

the priorities ofthe U.S. and Commission. Through this office, the Commission engages in the leadership of 

international bodies such as the International Organization of Securities Commissions (IOSCO). IOSCO's joint 

work with the Committee on Payments and Market Infrastructures (CPMI-IOSCO), the work ofIOSCO's 

Sustainable Finance Task Force on carbon markets, the Financial Stability Board (FSB), and the CFTC-pioneered 

Financial Stability Engagement Group to interface between IOSCO and the FSB. This office's active participation 

in an array ofpolicy committees and task forces in these forums continues to advance key CFTC priorities and 

equities as the international regulatory landscape continues to evolve. The Commission continues to expand its 

international portfolio giving CFTC an even stronger voice building on its vast global footprint. 

As the CFTC's foreign regulatory counterparts seek to shape international standards and policy, while 

concurrently implementing swaps reforms in their markets, it is essential that the Commission ensures that these 

developments are appropriate for the U.S. derivatives markets and our rules do not conflict with, or fragment, the 

global marketplace. Through this office, the CFTC maintains a sophisticated understanding offoreign regulatory 

developments and processes to carry out successful outcomes-based regulatory coordination. In 2023, this office 

successfully engaged with the Bank ofEngland as the UK develops its framework on non-UK clearinghouses 

operating in the UK, fostering regulatory cooperation that results in deferential supervision of U.S. 

clearinghouses. This office additionally negotiated successful outcomes in IOSCO's development of baseline 

standards for crypto-asset markets, international policy concerning clearinghouse margin procyclicality and 

transparency, and operational resilience. International policy development in these areas continues to expand at a 

rapid and active pace. Furthermore, this office leads the Commission's negotiation of cross-border supervisory 

cooperation agreements and robust technical assistance to emerging market authorities. Moreover, with the 

facilitation provided by this office, the Commission will continue to coordinate with counterparts in enforcement 

cooperation, supervisory cooperation, and policy development. 

Division ofAdministration 

The Commission requests $1 13.4 million and 129 FTE for its administrative operations. The Division of 

Administration directs the internal management ofthe Commission's business, including personnel, financial, 

technological, security, and strategic, operational resources. 

The Division is a key partner in the Commission's efforts to promote excellence through executive direction and 

leadership, organizational and individual performance management, and effective management ofresources. 

Efforts to achieve these objectives will result in better-informed decision-making regarding the management and 

investment ofthe Commission's resources. 

7 
The FY 2025 budget request focuses on strengthening the Commission's fiduciary posture by executing and 

evaluating opportunities for program and process improvements. In addition, the request recognizes the need to 

keep overhead costs as low as possible while making careful investments to continue efficiency, innovation, and 

effectiveness in its operations and management. 

The Commission aims to further reduce its reliance on physical data centers and increase the utilization ofcloud 

technologies to improve availability and reliance ofthe Commission's technology infrastructure. In FY 2023, the 

Commission completed the lift and shift phase of the cloud migration project. Currently over 90% ofthe 

commission's infrastructure resides and operates from cloud environments. In FY 2024 and FY 2025, the 

Commission will analyze and implement improvements on functionality and reliability so that IT applications and 

systems function optimally in a cloud environment. In addition to the actions to be taken in the cloud to optimize 

migrated systems, some legacy applications may not be migrated to the cloud due to the obsolescence oftheir 

base technologies. The Commission continues to modernize these applications and their associated hardware to 

migrate all our systems to the cloud. 

In accordance with Executive Order 14028, Improving the Nation's Cyber Security, the CFTC's Division of 

Administration is continuing to modernize and address security vulnerabilities in the Commission's IT 

infrastructure. CFTC is planning and implementing multiple programs to support the cybersecurity focus areas 

outlined in Executive Orders, 0MB mandates and CISA Directives: 

1. Continue to achieve progress in zero trust deployments as outlined in 0MB Memorandum M-22-09, 

Moving the U.S. Government Toward Zero Trust Cybersecurity Principles. 

2. Establishing a Data Protection Program, including data loss prevention technologies and processes to 

manage access to sensitive data and ensure it is tightly controlled and monitored. 

3. Advance the Insider Risk Program implementation to ensure compliance with E.O. 13587 and applicable 

standards and guidelines relating to National Insider Threat Policy and Minimum Standards. 

4. Extend the Enterprise Security Operations Center (eSOC) coverage. This will enhance CFTC's network 

detection and monitoring capabilities. 

5. Leverage advanced AI/ML for eSOC to enhance CFTC's ability to automate and augment threat detection 

and response. 

6. Enhance the Cybersecurity Awareness and Cyber Workforce Continuous Education. 

The Commission will continue to improve compliance with the Federal Information Security Management Act by 

maintaining a comprehensive control inheritance model to enhance security while reducing the effort required to 

secure CFTC systems. The Commission will also continue to adhere to DHS CISA's Cybersecurity Binding 

Operational and Emergency Directives and any related 0MB security mandates supporting the protection of 

sensitive market participants and Commission's data. 

Division ofData 

The Commission requests $42.1 million and 41 FTE for the Division ofData, headed by the ChiefData Officer 

and responsible for the Commission's data strategy, enterprise data catalog, analytics systems, and Al efforts. 

The CFTC has begun leveraging its digital transformation to use the new tools available in cloud services 

offerings. Migration to the cloud allows the Commission to build out AI efforts that take in market data and 

analyze it more quickly, allowing for faster turnaround ofcases and preventing further market manipulation. 

However, j ust moving systems to the cloud through "lift and shift" is not enough; applications and architecture to 

fully utilize the new service offerings need to continue to be modernized. The Commission's regulatory and 

enforcement programs are predicated on gathering, maintaining, understanding, and analyzing data in the most 

effective and efficient manner. Modernization must continue in order to operate in the new cloud services 

paradigm as well as to use new functionality such as AL 

8 
AI techniques like machine learning and pattern recognition helps find bad actors in our trading environment. 

Techniques such as natural language processing can ingest massive numbers ofdocuments and produce only the 

information the analyst needs. AI can help identify data in legacy systems and move the analysis closer to where 

and when the data is stored, which reduces the time from analysis to action. 

Office ofthe Chairman and Commissioners 

The CFTC requests $17.7 million and 39 FTE for the Commission's leadership function. This request includes 23 

FTE for the immediate Office ofthe Chairman, inclusive ofthe Office ofLegislative and Interagency Affairs, 

Office of Public Affairs, Office of Minority and Women Inclusion, and Office ofTechnology and Innovation, and 

16 FTE to support the other four Commissioners. The Office ofthe Chairman and the Commissioners provides 

executive direction through the development and adoption of Commission policy that implements and enforces 

the CEA and other statutes, regulations, and rules. The request also provides funding for official reception and 

representation purposes and Commission Advisory Committees. 

9 
Attachment E 

FY 2025 0MB Budget Estimate Request 

Office of the Inspector General 

Budget 

Year Total Budget 

OIG 

Requested 

Budget 

Estimated 

Overhead 

Training 

Budget 

Estimate 

CIGIE FTE 

FY 2024 $6,245,244 $5,532,000 $913,244 $100,000 $22,000 16 

FY 2025 $6,580,562 $5,642,000 $938,562 $104,000 $26,000 16 

U.S. COMMODITY FUTURES TRADING COMMISSION :OIG Tiu,ee Lafayette Cen tre 

1155 21.st Street, NW, Washington, DC20581 

Telephone : (202) 4 18-5110 

August 11, 2023 

TO: Rostin Behnam, Chairman 

Kristin Johnson, Commissioner 

Christy Goldsmith Romero, Commissioner 

Summer Mersinger, Commissioner 

Carnline Pham, Commissioner 

FROM: Dr. Brett M. Baker 

Acting Inspector General 

SUBJECT: FY 2025 Office of Inspector General {OIG) Budget 

In accordance with the Inspector General Act of 1978, as amended (IG Act), I am requesting 

the OIG Fiscal Year (FY) 2025 budget to operate my office. Through audits, investigations, reviews, 

inspections, and other projects, OIG assists in improving the economy, efficiency, and effectiveness 

ofoperations, as well as in detecting and preventing fraud, waste, and mismanagement. For FY 2025 

I am requesting $5,642,000, representing an incremental increase (2%) over our requested FY 2024 

operating budget ($5,532,000) to cover anticipated cost increases. 

Our FY 2024 request increased OIG staff full-time equivalents (FTE) from 11 to 16. Staffing 

at that level is crucial to building and improving a compliant OIG that performs all work to a 

standard including quality assurance. Our FY 2025 request will support salaries/benefits for 16 FTE 

and consultants, as well as audit and service contracts. Of this amount, $104,000 is budgeted for 

training pwposes and will satisfy all training requirements. Finally, we include an estimated OIG 

contribution to the Council of the Inspectors General on Integrity and Efficiency (CIGIE), as the IG 

Act requires. 

The FY 2025 OIG budget amounts found on the next page are proposed by the OIG. CFTC will 

calculate and add overhead after receipt ofthis request, prior to transmittal to 0MB. This process reserves 

to the Agency maximum flexibility to manage Agency-wide overhead, while ensuring complianc.e with 

the Inspector General Act We respectfully request that Appropriations language or commentary limits 

CFTC on-rhead to the amount determined by Congress, and increases the OIG fl' 2024 total 

budget request reponed here in that amount (and ts not subtracted from it). 

Attac.hment 

10 
:O IG on,c, o, t1tr <1111,.("fl"llll e r11,1-,1, 

FY 2025 0MB Budget Estimate Request 

Office of the Inspector General 

U.S . COMMODITY FUTURES TRADING COMMISSION 

Three Lafayette Centre 

1155 21st Street, NW, Washington, DC 20581 

Telephone: (202) 418-5110 

Attachment 

OIG FY2025 Budget Request 

Salaries and Benefits (16 FTE and consultants) 

Travel 

Training 

Contract Audits 

Contract Services 

CIGIE Contribution 

Total Direct OIG Costs 

CFTC-wide overhead (OIG portion) TO BE ADDED 

TOTAL OIG FY 2025 BUDGET REQUEST 

($5,642,000 plus overhead) 

FTE 

S4,918,000 

$104,000 

$104,000 

$414,000 

$76,000 

$26,000 

'$5,642,000 

$-----------

II 

16 
Attachment F 

FY 2025 0 MB Budget Estimate Request 

CFTC Facility Lease, Replacement, and Relocation Cost Exhibits 

CFTC maintains a facility portfolio that includes four locations: the Washington D.C. Headquarters office and 

three regional offices in Kansas City, Chicago, and New York. The Commission currently maintains a sublease 

for its alternate facility site with the Federal Reserve Board (FRB), which supports the Continuity of Operations 

(COOP). 

1) Table 1: CFTC Rent Costs by Location - provides an overview ofCFTC's estimated rent costs under 

collapsed and current CFTC administered leases with the associated lease expiration dates and estimated 

GSA assignment annual rent costs. 

2) Table 2: CFTC Facility Relocation and Replication Costs by Location - provides an overview ofCFTC's 

actual and estimated costs ofthe relocation and replication efforts by location and fiscal year. 

The Commission signed Occupancy Agreements with GSA for replacement facility locations in Kansas City, 

Chicago, and New York in FY 2021. In FY 2021, the Kansas City CFTC lease collapsed and staff are working in 

the GSA assigned space. In FY 2022, the New York and Chicago CFTC leases collapsed and staff are now 

working in the GSA assigned spaces. The Washington, D.C. CFTC lease is the scheduled to expire in FY 2025. 

2 3 Table 1: CFTC Facility Rent Costs by Location 1

• • 

CFTC Facilit•, Rent Costs by Location 

FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 

Lease 

Facility Location I Expiration Estimate Estimate 

Estimate 

(BY) 

Estimate 

(BY+1) 

Estimate 

(BY+2) 

Estimate 

(BY+3) 

Kansas City 

GSA Assignment I $309 $313 $316 $319 $322 $325 

Chicago 

GSA Assignment I $1,587 $1,625 $1,633 $1,642 $1,651 $1,660 

New York 

GSA Assignment I $2,068 $2,072 $2,083 $2,094 $2,105 $2,1 16 

Washington, D.C. 

Legacy CFTC Lease I September 2025 $20,657 $21,277 $21,915 $0 $0 $0 

GSA Assignment I $0 $0 $1,543 $9,255 $9,255 $9,255 

Washington D.C. Sub Total $20,657 $21,277 $23,458 $9,255 $9,255 $9,255 

COOP Site I $232 $45 $0 $0 $0 $0 

Grand Total $24,853 $25,332 $27,490 $13,310 $13,333 $13,356 

1 The a1mualized rent costs for the locations are included in CFTC's annual funding request, is provided as reference infom1ation only. 2 FY 2025 requires a duplicate lease payment during the relocation phase ofthe project. 3 The COOP sublease with the FRB facility ends I 2/31/2023. The new COOP location will be in the New York location with no additional 

leasing costs. 

12 
The CFTC received $31.0 million in the FY 2020 appropriation as a separate line-item, no-year appropriation to 

support the three regional facility relocation and replication. The CFTC also received $62.0 million in the FY 

2022 appropriation as a separate line-item, no-year appropriation to support the headquarters facility relocation 

and replication. Table 2 displays actual and estimated costs for the items payable to GSA and other sources for 

alteration, relocation and replacement equipment for the new locations, such as IT infrastructure and 

telecommunications equipment, and furniture and personal property for CFTC' s facility portfolio. These costs are 

necessary to provide complete, habitable, and operational spaces for the Commission's occupancy. 

Table 2: CFTC Facility Relocation and Replication Costs by Location 

Location 

FY 2020 

Actuals 

FY 2021 

Actuals 

FY 2022 

Actuals 

FY 2023 

Estimate 

FY 2024 

Estimate 

FY 2025 

Estimate 

FY 2026 

Estimate Total 

Kansas Citv $1,776,321 $1 ,616,774 $0 $0 $0 $0 $0 $3,393,095 

Chicaqo $1,254,898 $7,902,257 $864,638 $28,664 $0 $0 $0 $10,050,457 

New York $7,018,886 $1 ,555,403 $1,394,685 $50,000 $0 $0 $0 $10,018,974 

All Reqional Locations $392,113 $442,002 $744,161 $0 $0 $0 $0 $1,578,276 

Unobliqated Reqional $0 $0 $0 $0 $0 $0 $0 $5,959,198 

Washinqton, D.C. $0 $0 $890,342 $317,592 $54,539,658 $5,782,408 $470,000 $62,000,000 

Total $10,442,218 $11 ,516,436 $3,893,826 $396,256 $54,539,658 $5,782,408 $470,000 $90,000,000 

13 
U.S. Commodity Futures Trading Commission 

Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581 

May 1, 2023 

BY ELECTRONIC DELIVERY 

The Honorable Glenn Thompson The Honorable David Scott 

Chainnan Ranking Member 

House Committee on Agriculture House Committee on Agriculture 

400 Cannon House Office Building 468 Cannon House Office Building 

Washington DC 20510 Washington DC 20510 

The Honorable Kay Granger The Honorable Rosa DeLauro 

Chairwoman Ranking Member 

House Committee on Appropriations House Committee on Appropriations 

2134 Rayburn House Office Building 2221 Rayburn House Office Building 

Washington DC 20510 Washington DC 20510 

The Honorable James Comer The Honorable Jamie Raskin 

Chainnan Ranking Member 

Committee on Oversight and Committee on Oversight and 

Accountability Accountability 

2157 Rayburn House Office Building 2157 Rayburn House Office Building 

Washington, DC 20515 Washington, DC 20515 

Dear Chairman Thompson, Chairwoman Granger, and Chairman Comer, and Ranking Members Scott, 

DeLauro, and Raskin: 

Pursuant to Section 8G(e) of the Inspector General Act of 1978, 5 U.S.C. App. 3 §§ I er seq., as 

amended by the Securing Inspector General Independence Act of 2022, Public Law 117-263 ( enacted 

December 23, 2022), Section 5202(a)(2), the Commodity Futures Trading Commission ("CFTC" or 

"Commission") hereby provides notice that it has voted to place A. Roy Lavik, the CFTC's Inspector 

General ("IG Lavik"), on non-duty status effective Wednesday, May 17, 2023. The Commission voted 

3-0 with two recusals (Chairman Rostin Behnam and Commissioner Caroline Pham) to place IG Lavik 

on non-duty status, thus satisfying the statutory requirement of a 2/3 Commission vote in the 

affirmative in order to do so. I am also sending a similar letter to your counterparts in the Senate as 

required by law. 

The Commission's determination was based on a report issued on February 13, 2023, by the Integrity 

Committee ofthe Council ofthe Inspectors General on Integrity and Efficiency ("Integrity 
Hon. Glenn Thompson 

Hon. Kay Granger 

Hon. James Comer 

Hon. David Scott 

Hon. Rosa DeLauro 

Hon. Jamie Raskin 

Page2 

Committee"). The Integrity Committee found, by a preponderance ofthe evidence, that IG Lavik 

engaged in substantial misconduct by wrongfully disclosi ng whistleblower identities, violating CFTC 

Information Technology security policy, wasting more than $165,000 in government funds by hiring a 

consultant who did minimal work, grossly mismanaging the CFTC's Office ofthe Inspector General 

by flagrantly disregarding well-established oversight standards, and engaging in conduct undem1ining 

the independence and integrity reasonably expected of an JG by demeaning and disparaging CFTC 

employees. On those bases, the [ntegrity Committee recommended "appropriate disciplinary action for 

JG Lavik- up to and including removal." 

Attached is a copy ofthe Integrity Committee's February 13, 2023 letter summarizing its findings. On 

the basis ofthose findings, the Commission believes it is necessary to place IG Lavik on non-duty 

status to protect the Government's interests in the proper functioning of the CFTC's Office ofthe 

Inspector General and preservation of taxpayer resources, pending the Commission's consideration of 

appropriate action for JG Lavik. Simultaneously, the Commission has voted to appoint Dr. Brett M. 

Baker, Inspector General for the National Archives and Records Administration, as the CFTC's Acting 

Inspector General effective at the time IG Lavik is placed on non-duty status. 

Should you have any questions regarding this interim measure, please feel free to contact the 

Commission for additional information. Thank you for your continued support ofthe CFTC. 

On behalfofthe Commission: 

Commissioner Summer K. Mersinger 

Attachment 
U.S. Commodity Futures Trading Commission 

Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581 

Rostin Behnam (202) 418-5575 

Chairman CFTCChairman@CFTC.gov 

February 13, 2023 

The Honorable Patty Murray The Honorable Kay Granger 

Chairwoman Chairwoman 

Committee on Appropriations Committee on Appropriations 

U.S. Senate U.S. House ofRepresentatives 

Washington, DC 20510 Washington, DC 20515 

The Honorable Susan Collins The Honorable Rosa DeLauro 

Vice Chairwoman Ranking Member 

Committee on Appropriations Committee on Appropriations 

U.S. Senate U.S. House ofRepresentatives 

Washington, DC 20510 Washington, DC 20510 

Dear Chairwoman Murray, Vice Chairwoman Collins, Chairwoman Granger, 

and Ranking Member DeLauro: 

In accordance with Section 608, Division E of the Consolidated Appropriations Act, 2023, 

Public Law 117-328, the Commodity Futures Trading Commission (CFTC) submits its FY 2023 

spending plan based on the FY 2023 appropriation of $365.0 million, ofwhich not less than 

$4.218 million is designated for the Office ofthe Inspector General. The plan supports an 

estimated 759 FTE. The following chart provides information about CFTC annual spending 

priorities by program. 

FY2023 

($000) 

Program President's 

Budget Request 

Congressional 

Adjustments 

Enacted 

Amount 

Salaries and Expenses 

Office of the Inspector General 

$360,433 

4,567 

$349 

(349) 

$360,782 

4,218 

Total $365,000 $0 $365,000 
The Salaries and Expenses program provides funding for all Commodity Exchange Act (CEA) 

related activities, including funding for federal staff salaries and benefits, leasing of facilities, 

travel, training, information technology, and general operations ofthe Commission. 

The Office ofthe Inspector General program provides audits, investigations, reviews, inspections, 

and other activities to evaluate the operations and programs ofthe Commission. Such activities 

assist in improving the efficiency and effectiveness ofoperations, as well as detecting and 

preventing fraud, waste, and mismanagement. 

The attached exhibits provide additional insight into how CFTC is planning the FY 2023 annual 

funds to conduct its work for the Salaries & Expenses and Inspector General programs. The 

CFTC considers the Salaries & Expenses, and Office ofthe Inspector General programs to be its 

sole annual programs, projects and activities (PPAs). 

Should you have any questions about the details of this plan, please contact Ann Wright (202-418-

5594; awright@cftc.gov). 

Sincerely, 

R~

Rostin Behnam 

cc: 

The Honorable Chris Van Hollen The Honorable Andy Harris 

Chairman Chairman 

Subcommittee on Financial Services Subcommittee on Agriculture, Rural 

and General Government Development, Food and Drug 

Committee on Appropriations Administration, and Related Agencies 

U.S. Senate Committee on Appropriations 

Washington, DC 20 510 U.S. House ofRepresentatives 

Washington, DC 20515 

The Honorable Bill Hagerty The Honorable Sanford D. Bishop, Jr. 

Ranking Member Ranking Member 

Subcommittee on Financial Services Subcommittee on Agriculture, Rural 

and General Government Development, Food and Drug 

Committee on Appropriations Administration, and Related Agencies 

U.S. Senate Committee on Appropriations 

Washington, DC 20510 U.S. House ofRepresentatives 

Washington, DC 20515 

2 
Exhibit A: CFTC FY 2023 Estimated Obligations by Object Class 

FY 2023 President's 

Object Class Budget Request FY 2023 Enacted 

($ millions) 

Personnel Compensation $ 169.86 $169.60 

Personnel Benefits 61.22 61.13 

Travel and Transportation of Persons 2.15 2.15 

Transportation ofThings 0.05 0.05 

Leasing, Rent, Communication, and Utilities 31.75 31.75 

Printing and Reproduction 0.66 0.66 

Other Services 90.92 91.27 

Supplies and Materials 2.61 2.61 

Equipment 5.76 5.76 

Building and Fixed Equipment 0.02 0.02 

Total $365.00 $365.00 

Exhibit B: CFTC FY 2023 Estimated Staffing 

The Projected Headcount in the table below uses current staffing, planned hiring, and assumed 

attrition by division to calculate the year-end values. Actual attrition may vary by division. The 

Commission expects to enter FY 2024 burning FTE at an annualized rate equal to the projected 

headcount shown below. 

09/30/2023 

Current Projected Projected 

Federal Staff hr Organization Headcount Headcount FTE 

Administration 125 136 136 

Chief Economist 19 20 20 

Clearing & Risk 84 91 91 

Data 32 43 43 

Enforcement 158 172 172 

International Affairs 17 20 20 

Inspector General 7 11 11 

General Counsel 56 59 59 

Market Oversight 74 93 93 

Market Participants 65 73 73 

Office ofthe Chairman & Commissioners 40 41 41 

Total 677 759 759 

3 
Current On-Board Contractors by Organization* 

Administration 

Chief Economist 

Clearing & Risk 

Data 

Enforcement 

International Affairs 

Inspector General 

General Counsel 

Market Oversight 

Market Participants 

Office ofthe Chairman & Commissioners 

FY 2023 Estimate 

231 

11 

3 

72 

6 

0 

5 

4 

1 

0 

4 

Total 337 

*Due to the nature ofcontracted services, the on-board contractor count is based on the number of 

cleared contractors as ofJanuary 3, 2023. Cleared contractors provide a variety ofservices, and 

should not be assumed to work full-time at the Commission. 

4 
U.S. Commodity Futures Trading Commission 

Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581 

www.cjic.gov 

Rostin Behnam (202)418-5575 

Chairman CFTCChairman@cftc.gov 

August 10, 2023 

The Honorable Patty Murray The Honorable Kay Granger 

Chairwoman Chairwoman 

Committee on Appropriations Committee on Appropriations 

U.S. Senate U.S. House of Representatives 

Washington, D. C. 20510 Washington, D. C. 20515 

The Honorable Susan Collins The Honorable Rosa DeLauro 

Vice Chairwoman Ranking Member 

Committee on Appropriations Committee on Appropriations U.S. Senate U.S. House of Representatives Washington, D. C. 20510 Washington, DC 20510 

Dear Chairwoman Murray, Vice Chairwoman Collins, Chairwoman Granger, and Ranking Member De Lauro : 

Consistent with the requirements set forth in the Consolidated Appropriations Act, 2023 (Division E of Public Law 

117-328, Sec. 634), the Commodity Futures Trading Commission (CFTC) submits the FY 2023 qua1terly budget report 

for the quarter beginning April 1, 2023 and ending June 30, 2023. 

- - Total FY23 Q3 

Treasury Symbol Fund Name Obligations1 

347,915.75 339-2223-1400 Salaries and Expenses Multi-Year I 

86,564,315.49 339-23-1400 Salaries and Expenses Annual 

1,313,009.54 339-23-1400 Salaries and Expenses - Annual IG 

539.12 339-23-1400 Salaries and Expenses - Reimbursable 

972,165.96 339-2324-1400 Salaries and Expenses Multi-Year 

0.00 339-X-1402 Salaries and Expenses No-Year- Lease Obligations 

30,718.82 95-X-1400 Salaries and Expenses No-Year 

296,377.58 95-X-1400 Salaries and Expenses No-Year DC 

1,307,250.47 95-X-4334 Whistleblower Expenses 

558,168.86 95-X-4334 Consumer Education Expenses 

625,000.00 I 95-X-4334 Whistleblower Awards 

Total $92,015,461.59 

1 Obligation amounts do not include commitments 
If you have any questions regarding this matter, I would be pleased to discuss them with you, or you may contact 

Andrea Busch, Acting Budget Officer, at 202-418-5052, or abusch@cftc.gov. 

cc: 

The Honorable Chris Van Hollen 

Chairman 

Subcommittee on Financial Services 

and General Government 

Committee on Appropriations 

U.S. Senate 

Washington, D. C. 20510 

The Honorable Bill Hagerty 

Ranking Member 

Subcommittee on Financial Services 

and General Government 

Committee on Appropriations 

U.S. Senate 

Washington, D. C. 20510 

Sincerely, 

Rostin Behnam 

The Honorable Andy Harris 

Chairman 

Subcommittee on Agriculture, Rural 

Development, Food and Drug 

Administration, and Related Agencies 

Committee on Appropriations 

U.S. House of Representatives 

Washington, DC 20515 

The Honorable Sanford D. Bishop, Jr. 

Ranking Member 

Subcommittee on Agriculture, Rural 

Development, Food and Drug 

Administration, and Related Agencies 

Committee on Appropriations 

U.S. House of Representatives 

Washington, DC 20515 
COMMODITY FUTURES TRADING COMMISSION 

QUESTIONS FOR THE RECORD 

HOUSE APPROPRIATIONS AGRICULTURE SUBCOMMITTEE HEARING 

The Honorable Rostin Behnam, Chairman, Commodity Futures Trading Commission, 

Washington, D.C. 

March 28, 2023 

The following question by 

Chairman Andy Harris, Maryland 

1. Are your Cloud migration contracts long-term contracts? 

Response: 

The intent ofusing the phrase long-term contracts is that we have existing, essential 

multi-year service contracts in place. The majority ofthe CFTC IT contracts are multiyear contracts, including our cloud service contract. A multi-year contract is made up of 

a Base Year+ Option Years to be funded each fiscal year. 

To specifically expand on cloud services in relation to costs, a major factor for the costs 

associated with our cloud services are linked to a cost model associated with the data 

storage for our market data intake and CPU utilization for our data analysis and 

querying. Due to the nature ofour business, working with large volumes ofdata will not 

be able to adjust down to align with our budget levels, therefore we would not be able 

slow many of our service contracts under a reduced budget. 

2. Please provide additional information related to the Senate Agriculture Committee 

testimony statement on why the CFTC would request the authority to "assess the 

diversity policies and practices of entities regulated by the agency". Why would the 

CFTC delve into regulated entities diversity policies? 

Response: 

Section 342 ofthe Dodd-Frank Wall Street Reform and Consumer Protection Act of2010 

("Dodd-Frank Act"), 12 U.S.C. § 5452(2010) required most federal financial regulatory 

agencies to create an Office ofMinority and Women Inclusion ("OMWI"). The CFTC is 

the only federal financial regulatory agency that was not required by the Dodd-Frank Act 

to establish an OMWI. Although not covered by the Dodd-Frank Act, the CFTC 

established its own OMWI and is seeking statutory authorization of its OMWI on par 

with all other federal financial regulatory agencies. Among other responsibilities, Section 

342(b )(2)(C) requires each OMWI Director to develop standards for assessing the 

diversity policies and practices of entities regulated by the agency. Following a series of 

roundtables and a notice and comment period in the Federal Register (78 FR 64052 and 

77792), in 2015 six ofthe federal financial regulatory agencies covered by Section 342 of 
the Dodd-Frank Act issued a Final Interagency Policy Statement establishing Joint 

Standards for Assessing the Diversity Policies and Practices ofthe Entities they Regulate 

("Joint Standards") (80 FR 33016 (June 10, 2015)). 

The Joint Standards provide a framework for regulated entities ofeach agency to 

voluntarily assess their diversity policies and practices annually in several key areas, 

including: 1) organizational commitment to diversity; 2) workforce profile and 

employment practices; 3) procurement and business practices- supplier diversity; and 4) 

practices to promote transparency of organizational diversity and inclusion. The Joint 

Standards envision regulated entities would provide information pertaining to their 

annual self-assessments to the OMWI Director of their primary federal financial 

regulator. Per Section 342(b)(l)(C), agencies use neither supervisory nor examination 

authority to enforce the assessment provisions of the statute. The development of 

standards per Section 342 and submission of regulated entities self-assessments 

strengthen the CFTC's ability to advance and promote diversity and inclusion across the 

financial industry by allowing the CFTC to monitor trends and highlight best practices, as 

does every other federal financial regulatory agency. 

The following question by: 

Representative Hinson, Iowa 

3. Provide information on any cooperation between the CFTC and DHS CISA and what 

is being doing to be proactive on cybersecurity threats? 

Response: 

The Commission works collaboratively with other agencies and partners on sharing threat 

intelligence, Indicators ofCompromise (IOC) and Indicators ofThreat (JOT). In the 

event the Commission experiences a cyber-attack, CFTC has the right agreements in 

place to work with DHA CISA and other partners to respond and mitigate the risk of 

cyber-attacks to the extent possible. CFTC proactively works with DHS CISA on cyber 

threats by subscribing to the Protective Domain Name System (DNS) Service, a new 

service offering from DHS CISA to replace the Einstein 3 Accelerated (E3A) sink holing 

capability. The service provides the Commission with increased DNS protections against 

malicious domains and enhanced incident detection and response capabilities. 

Additionally, CFTC continues to leverage the DHS CISA E3A protective email 

capability until it is replaced or decommissioned. CFTC has a deep working relationship 

with the DHS CISA Joint Cyber Defense Collaborative (JCDC) to better understand the 

Cyber Threat Intelligence (CTI) offering. 

The CFTC security team receives cyber hygiene and threat intelligence reports frequently 

as well as participates in a weekly meeting with DHS-CISA. The reports and meetings 

keep the team up to date on the cyber security threat landscape as a whole. The CFTC 

continually tracks, follows, and implements security controls set forth by CISA's Binding 
Operational Directive (BOD) 22-01 - Reducing Significant Risk of Known Exploited 

Vulnerabilities. 

Additionally, the CFTC participates in the DHS-CISA Continuous Diagnostics and 

Mitigation (CDM) Program. The CDM Program provides cybersecurity tools, integration 

services, and dashboards to participating agencies to support them in improving their 

respective security posture and take proactive measures to mitigate against cyber-attacks 

and reduce the attack surface. Program objectives are to: 

• Reduce agency threat surface 

• Increase visibility into the federal cybersecurity posture 

• Improve federal cybersecurity response capabilities 

• Streamline Federal Information Security Modernization Act (FISMA) reporting 

To be proactive on cybersecurity threats, the Commission has implemented a 

combination of security technical and management controls that are deemed effective in 

protecting the Commission from most cyber-attacks. We have modernized and continue 

to advance our cyber defensive tools to automate and manage alerts and are enhancing 

our technical and management security controls. In addition to having robust technical 

controls in place to identify, detect, monitor and respond to cyber threats, the 

Commission has implemented a repeatable user awareness training program to educate 

our staff on phishing and ransomware attacks. 
The proposed budget cuts to align FY 2024 with FY 2022 levels would significantly impact the 

Commodity Futures Trading Commission's {CFTC or Commission) ability to promote the integrity, 

resilience, and vibrancy of the U.S. derivatives markets. Funding would be cut $91M, or 22%, from the 

CFTC's FY 2024 request that identified a $411M requirement to achieve its mission. 

Staffing 

A $91M cut would reduce planned staffing levels by 286 FTE - i.e., from the requested 764 to 478 FTE. 

The Commission has not had staffing levels below 500 FTE since FY 2009 - which was prior to the CFTC 

incorporating its extensive new statutory and regulatory responsibilities under the Dodd-Frank Wall 

Street Reform and Consumer Protection Act and the regulations promulgated thereunder. 

Staffing reductions of this magnitude would reduce mission effectiveness and readiness across the 

Commission. For example, the CFTC would experience the following non-exhaustive list of missionimpacting consequences: 

• Degraded ability to protect the American public from fraud and market manipulation related to 

the derivative instruments under the Commission's jurisdiction 

• Severely curtail our ability to respond to requests/applications from market participants 

and stakeholders on registrations, orders, no action letters, compromising the US 

position as a desirable location do business 

• Reduced technological capabilities to identify threats to the financial sector 

• Reduced enforcement and regulation of derivative markets 

• Reduced oversight over derivative markets to ensure that compliance obligations are met by 

regulated entities and market participants 

• Suspended IT modernization efforts: migration to the cloud and Data Programs 

• Reduced modernization efforts that keep pace with digitized market innovations and 

capabilities 

• Degraded ability to identify and protect against emergent cybersecurity threats 

Because the CFTC is a relatively small agency, the reductions in staffing could not be contained to a 

particular section of the agency. All divisions and offices would lose resources. This would lead to a 

significant limitation on the CFTC's ability to quickly and comprehensively identify and respond 

appropriately to market problems, including, but not limited to, pursuing enforcement efforts when 

necessary. Additionally, a reduction of resources of this magnitude for even a single fiscal year would 

take the Commission years from which to recover - both to rehire essential staff and rebuild operational 

capability. 

FY 2023 and FY2024 Investments 

The FY 2023 and FY 2024 budget requests included $33M for multiple investments in our IT, Data, and 

Cyber programs. These areas ensure that our staff can perform their work in a secure, stable, and 

efficient manner. Cutting or pausing these investments could result in reducing the cut of up to 104 FTE 

from the 286 identified above. However, budget cuts to these investments would threaten the CFTC's 

ability to maintain pace with evolutions in the financial markets, protect against cyber threats, and 

optimize current systems that would provide long-term savings. Staff could be preserved, but may not 

have the tools required to be mission effective. 
Key FY 2023 and FY 2024 Investments: 

Zero Trust Architecture Implement Data Virtualization Modernization to Cloud-Enable 

Legacy Applications 

Data Leak Protection Procure and Implement New 

Visualization Tool 

Replace Legacy Data Loading 

Framework 

EndPoint Detection and 

Response 

Additional Data Systems and 

Cybersecurity Support 

Contract Right-Sizing Effort 

Cyber 

The Commission collects massive amounts of market data and must protect it with the highest 

standards to ensure the integrity of the US financial markets and the confidentiality of market 

participants. Cuts to cyber would reduce the effectiveness of our current investments and the ability to 

protect against emergent risks in an ever-evolving threat landscape and regulatory environment. The 

cyber investments included in the FY 2024 budget fund the tools and services required to meet the 

numerous Executive Orders, 0MB mandates, and CISA Binding Operational Directives (BOD). Failure to 

implement these tools and services will prevent the CFTC from meeting these Government-wide 

mandates which are meant to ensure agency and market data are protected commensurate with the 

data's sensitivity. Since the FY 2022 budget was finalized there have been at least 13 mandated 

compliance and reporting requirements related to cybersecurity. These directives have no funding at 

the FY 2022 funding level. 

Data 

The CFTC is modernizing its data collection capabilities to keep pace with the evolving complexity of the 

markets we regulate. Data standards that were adequate even a few years ago are no longer sufficient 

for today's markets. Additionally, we are modernizing our data architecture to provide an environment 

that can support analysis using tools and techniques that are common today, and modernizing our 

legacy applications to work in these modern data environments. The costs of contractual services have 

also risen due to inflationary pressures in the labor market. Failing to store or process modernized data 

in a modernized information environment would limit the data available to support mission-facing 

efforts, including market surveillance, enforcement, and risk analysis. 

Quick Numbers 

• The current fiscal year (2023) budget is $365M 

• Returning to FY 2022's budget would be an immediate cut of $45M, or 12%, from in-place 

resources 

• Impact of inflation: the CFTC would require $366M in FY 2024 dollars to repeat the executed FY 

2022 budget 

• Between FY 2018 and FY 2022 the CFTC has transferred more than $2.2B to the Treasury from 

fines and penalties collected. Over the same period the Commission's budget totaled $1.4B, 

indicating a $0.8B net positive contribution to the Treasury from CFTC operations. 
House Authorizing Committee Questions: 

Hiring 

QUESTION: Provide details behind what our recruiting and hiring strategies are. What is the average 

hiring timeline? How are you going to hire to your requested FTE levels? 

RESPONSE: The Commission has prioritized hiring and is completing an internal review of our recruiting 

and hiring practices to invest in our workforce planning. The review is focused on building a hiring 

model to define and streamline processes to support hiring advances. Some of the strategies that the 

Commission is beginning to employ include utilizing additional platforms to promote job opportunities, 

making multiple selections from a single certification, and utilizing direct hire-authority. 

It is important to note that hiring lags and keeping up with attrition is not a Commission-specific concern 

and many other Federal agencies are experiencing similar workforce challenges. 

FTE 

QUESTION: Provide the current FTE breakdown by Division 

RESPONSE: 

Division Current FTE 

Office of the Chairman and Commissioners 38 

Division of Administration 124 

Division of Clearing and Risk 84 

Division of Market Oversight 75 

Division of Data 36 

Enforcement 160 

Market Participants 65 

Office of the Chief Economist 18 

Office of the General Counsel 56 

Office of International Affairs 17 

Office of the Inspector General 7 

Total 680 

Enforcement - Digital Asset Tools 

QUESTION: Provide additional information on the digital asset tools and how they support the 

enforcement program. 

RESPONSE: In recent years, the Division of Enforcement has undertaken an increasing number of 

investigations in fraud and other violations involving digital assets. Access to additional tools and 

subscriptions increase the division's ability to investigate digital asset matters by providing staff with 

access to additional datasets associated with the digital markets. 

Page 1 of 2 
Procurement Model 

QUESTION: Explain why the contract model is now FFP vs. T&M and how the change took place. 

RESPONSE: The change in procurement model is one of the factors associated with the Commission's 

funding realignment strategy. This change does not apply to all contracts at the Commission, however it 

is a shift for some of our larger value contracts, such as IT support services. The shift from the costreimbursement or time and materials(T&M) contracts to firm fixed price (FFP) supports the 

Administration's expectations that agencies maximize FFP contracts and minimize t he use of T&M 

contracts as shared in 0MB Memo, M-21-11 - Increasing Attention on Federal Contract Type Decisions 

(attached). An FFP contract provides for a price that is not subject to any adjustment on the basis of the 

contractor's cost experience in performing the contract. This model for more operational and 

maintenance type contracts follows the Federal Acquisitions Regulations (FAR) guidance because it 

provides maximum incentive for the contractor to control costs and perform effectively and imposes a 

minimum administrative burden upon the contracting parties. The timing of the shift has been a more 

recent occurrence due to the timing of contract recompete timelines. 

Page 2 of 2 
DCCPA 

CFTC Preliminary Regulation Plan 

The summaries below provide the Commodity Futures Trading Commission's (CFTC or Commission) 

preliminary regulatory plan to support Bill S-4760: Digital Commodities Consumer Protection Act 

(DCCPA). 

The information provided is intended to be for informational purposes only. 

Estimated Registrants and Markets Analysis 

Analysis 

The Commission estimates that there would be approximately 100 possible registrants: 12 trading 

facilities, 75 broker dealers, and 20 custodians under the CFTC's purview following the passage ofthe 

DCCPA. 

• Trading Facilities: Our estimate is based on the number ofplatforms offering central limit 

order books (CLOBs) to U.S. customers and evidence of attempted compliance with existing 

U.S. regulation (e.g., FinCEN registration, state money transmitter licenses). We note that 

the top five trading facilities expected to register represent over $2.5 billion in daily spot 

volume based on data from August 2022, although volume metrics have been extremely 

volatile. 

• Broker-Dealers': An April 2021 Bank for International Settlements (BIS) report states that 

over 420 crypto-related firms are registered with FinCEN as money services businesses. Of 

that number, the Commission believes that many will cease to exist or would reorganize 

themselves so as not to be subject to registration as a broker and/or a dealer, based on our 

review ofFinCEN money services business (MSB) registration categories. 

• Custodians: Many custodial platforms also provide other trading services (i.e., act as a 

trading facility, broker, or dealer). There are also a handful oflarge custodians that are almost 

exclusively engaged in custody as an institutional service (e.g., BitGo, Anchorage, NYDIG). 

The Commission believes that required registration of custodians will result in significant 

consolidation and reduction in the number of custodians, and that custody would cease to be 

dispersed among hundreds of entities. 

1 Source: Supervising crypto assets for anti-money laundering 

(https://www.bis.org/fsi/publ/insights31.htm, page 13) 

CFTC Preliminary Regulation Plan 
DCCPA 

CFTC Cost Estimates2 

Forpurposes of this plan, theCFTCassumes that the DCCPA would be enactedJ anuary 1, 2023. A given 

fiscal year (FY) is from October 1 through September 30. 

The Commission estimates that the cost to execute the DCCPA would be approximately $127M over the 

first three years. The costs below provide the cost to hire staff, provide physical space, and support data 

information technology and other administrative needs. 

Table 1 : Three Year Resource Estimate by Division3,4 

Year 1 Year 2 Year 3 Total 

FY 2023 FY 2024 FY 2025 

Division HC FTE $(000) FTE $(000) FTE $(000) $(000) 

Enforcement 33 11 $4,141 32 $10,996 30 $10,730 $25,867 

Market Oversight 36 12 $4,517 34 $11,683 29 $10,373 $26,573 

Clearing and Risk 19 6 $2,384 17 $5,842 16 $5,723 $13,948 

Market Participants 18 6 $2,258 14 $4,811 11 $3,934 $11,004 

Office of the Chief Economist 6 2 $753 5 $1,718 3 $1,073 $3,544 

Office of the General Counsel 9 3 $1,129 9 $3,093 4 $1,431 $5,653 

Office of International Affairs 4 1 $502 4 $1,375 3 $1,073 $2,949 

Division of Data 6 2 $8,753 6 $6,062 4 $4,431 $19,245 

Division of Administration 4 1 $5,502 4 $5,375 3 $4,073 $14,949 

Office of the Chairman & Commissioners 4 1 $502 4 $1,375 4 $1,431 $3,307 

Office of the Inspector General 0 0 $0 0 $0 0 $0 so 

Total 139 46 $30,441 129 $52,328 107 $44,271 $127,040 

Columns may not add due to rounding 

Rulemaking 

Analysis 

The Commission plans to develop and review digital commodity related rules by establishing multiple, 

separate teams. Each team will work simultaneously and will include members from different divisions 

ofthe CFTC. 

The table below provides a cost estimate for full-time equivalent (FTE) and other resource requirements 

to draft, propose and publish final rules over a three year period by division. 

2 HC represents headcount 

3 Year 1 hiring FTE estimates are calculated to be one-third ofthe total headcount need. 4 Table 1 includes support costs that are not captured in Table 2 and Table 3. 

CFTC Preliminary Regulation Plan 2 
DCCPA 

Table 2: Three Year Resource Estimate for Rulemakingby Division 

Division HC 

Year 1 

FY 2023 

FTE $(000) 

Year 2 

FY 2024 

FTE $(000) FTE 

Year 3 

FY2025 

$(000) 

Total 

${000) 

Enforcement 3 1 $376 2 S687 0 so Sl,064 

Market Oversight 8 3 Sl,004 6 S2,062 1 S358 S3,423 

Clearing and Risk 4 1 S502 2 S687 1 S358 Sl,547 

Market Participants 8 3 $1,004 4 Sl,375 1 S358 S2,736 

Office of the Chief Economist 3 1 $376 2 S687 0 $0 Sl,064 

Office of the General Counsel 6 2 $753 6 $2,062 1 S358 S3,172 

Office of International Affairs 1 0 S125 1 S344 0 so S469 

Division of Data 2 1 S251 2 S687 0 so S938 

Division of Administration 1 0 S2,125 1 Sl,344 0 so S3,469 

Office of the Chairman & Commissioners 1 0 S125 1 S344 1 S358 S827 

Office of the Inspector General 0 0 so 0 $0 0 so $0 

Total 37 12 $6,642 27 $10,278 5 $1,788 $18,709 

Columns may not add due to rounding 

Implementation 

Analysis 

The Commission plans to implement digital commodity related rules by integrating qualified experts 

and staff within our infrastructure to complete compliance activities in support ofthe DCCAP. 

The table below provides an annual cost estimate for FTEs and other resource requirements to 

implement rules and maintain oversight of digital platforms by division. 

Table 3: Three Year Resource Estimate for Implementation by Division 

Year 1 Year 2 Year 3 Total 

FY 2023 FY 2024 FY 2025 

Division HC FTE ${000) FTE ${000) FTE $(000) ${000) 

Enforcement 30 10 $3,764 30 Sl0,309 30 Sl0,730 $24,803 

Market Oversight 28 9 S3,513 28 $9,622 28 Sl0,015 $23,150 

Clearing and Risk 15 5 $1,882 15 $5,154 15 $5,365 $12,402 

Market Participants 10 3 Sl,255 10 $3,436 10 $3,577 S8,268 

Office of the Chief Economist 3 1 $376 3 Sl,031 3 $1,073 S2,480 

Office of the General Counsel 3 1 $376 3 $1,031 3 $1,073 $2,480 

Office of International Affairs 3 1 S376 3 Sl,031 3 Sl,073 S2,480 

Division of Data 4 1 $502 4 $1,375 4 $1,431 $3,307 

Division of Administration 3 1 $3,376 3 $4,031 3 $4,073 $11,480 

Office of the Chairman & Commissioners 3 1 $376 3 $1,031 3 $1,073 $2,480 

Office of the Inspector General 0 0 so 0 so 0 so $0 

Total 102 34 $15,798 102 $38,050 102 $39,483 $93,331 

Columns may not add due to rounding 

CFTC Fees 

The Commission estimates that it will be well-positioned to begin estimating and collecting fees at some 

point during FY 2025, which begins October 1, 2024. 

CFTC Preliminary Regulation Plan 3 
DCCPA 

DCCPA Requirements 

The DCCPA includes requirements for multiple examinations, reports and publications. Asummary of 

the requirements and associated dues dates may be found below: 

Anti-Money Laundering Regulations 

The Commission shall consult with the Secretary ofthe Treasury to support the publication ofproposed 

and final regulations to require digital commodity platforms to submit a report of any suspicious 

transactions under section 5318(g) oftitle 31, United States Code. 

• Timeline: Proposed Regulations - Not later than 180 days after enactment of DCCPA 

• Final Regulations - Not later than 180 days after the date ofthe proposed regulations. 

Energy Consumption in Digital CommodityMarkets 

The Commission shall examine the energy consumptions and sources of energy used in connection with 

the creation and transfer ofthe most widely traded digital commodities. 

• Requirements: 

1. Describe an estimate of the energy consumption and sources of energy used in 

connection with the creation and transfer of the most widely traded digital 

commodities 

2. Describe the methodology used by the Commission to genera the estimate 

3. Publish the report on the Commission's public website. 

a. The report shall be updated periodically on a timely basis. 

• Timeline: Not later than 180 days after enactment of DCCPA 

Fees for Registration 

The Commission shall assess and collect fees, which shall be used to recover the annual costs of 

registering digital commodity platforms, conduct oversight of digital commodity trades, and carrying 

out education and outreach. 

• Requirements: 

1. Publish the fee rates for a given fiscal year 

2. Publish any estimates or projections on which those fee rates are based. 

• Timeline: Not later than 60 days after enactment ofappropriation Act for the Commission for 

a fiscal year 

Histo rically Underserved Customers Participating in Digital Commodity Markets 

The Commission shall examine the racial, ethnic, and gender demographics ofcustomers participating 

in digital commodity markets and provide a report to Congress. 

• Requirements: 

1. Describe how digital commodity markets customer demographics will inform the 

Commission's rules and regulations 

2. Propose ways in which the Commission can provide outreach to historically 

underserved customers 

3. Provide recommendations relating to activities that the Commission determines to be 

necessary to provide appropriate protection, outreach, or other similar activities to 

historically underservices customers 

• Timeline: Not later than 180 days after enactment of DCCPA 

CFTC Preliminary Regulation Plan 4 
U.S. Senate Committee on Agriculture, Nutrition, and Forestry 

Oversight ofthe Commodity Futures Trading Commission 

March 8, 2023 

Questions for the Record 

The Honorable Rostin Behnam 

Chairwoman Debbie Stabenow 

1. In Prime Int'! Trading, Ltd. v. BP PLC, the Second Circuit Court of Appeals blocked 

plaintiffs from suing for manipulation under the Commodity Exchange Act (CEA), 

finding that the CEA's antifraud provisions do not permit a plaintiff trading on a 

United States futures exchange to bring an action for fraud or manipulation where 

the misconduct occurred overseas. On the other hand, some courts have found that 

the Securities and Exchange Commission may pursue fraud or manipulation that 

takes place abroad where there is an effect on American securities markets or 

investors. 

How does the Second Circuit's decision in Prime Int'! impact the Commodity Futures 

Trading Commission's (CFTC) mission to protect U.S. persons and markets from 

fraudulent and manipulative conduct? 

Response: The CFTC believes that without congressional action, the Second Circuit's 

decision inPrime Int'/ and subsequent decisions, may hinder the CFTC's mission to protect 

U.S persons and markets from fraudulent and manipulative conduct. 

Recently in a CFTC action, a dish-ict court held that a CFTC claim that a false and 

misleading statement regarding the price of a Ten-Year Swap Spread that was trading in 

the United States, and being affected by the defendant's manipulative acts, was 

"impermissibly foreign" conduct because the statement of the U.S.-based price was made 

in Japan to a Japanese-affiliate of a U.S.-based bank. See, CFTC v. Gorman, 21-cv-870, 

2023 WL 2632111 (S.D.N.Y. Mar. 24, 2023). In the Department of Justice's criminal 

action against Sam Bankman-Fried (FTX), the defendant Bankman-Fried recently filed a 

motion to dismiss in part arguing that the commodities fraud charges must be dismissed 

because they are an impermissible extraterritorial application of the CEA. Specifically 

invoking the Second Circuit's "predominantly foreign" test, Bankman-Fried argued the 

relevant manipulative and deceptive conduct occurred outside the United States. 

The SEC is not subject to the same challenging precedent. Congress amended the federal 

securities laws to apply extraterritoriality when the statutory conduct-and-effects test is 

satisfied. 15 U.S.C. § 77v(c); 15 U.S.C. § 78aa(b). Without a congressional fix, the CFTC 

will argue that the holding in the Prime Int'! case is distinguishable because it relates to a 

private right of action and not a government enforcement action that focuses on the 

interests of the public. The CFTC will also argue that the plain language of the antimanipulation and anti-fraud authority set forth in Section 6(c)(l) of the CEA and 

Commission Regulation 180.1 , properly construed with other provisions of the CEA, 

1 
contain clear indicia of extraterritorial application. Those provisions apply in connection 

with swaps, contracts of sale of any commodity in interstate commerce, and to futures 

contracts on or subject to the rules of any registered entity. However, it must be noted that 

as to swaps, Congress has explicitly provided for extraterritorial application, which, in the 

absence ofcongressional action, could result in disparate outcomes depending on the nature 

of the jurisdictional product at issue in a particular action. 

2. During the hearing, you testified that the CEA limits the CFTC's use of funds from 

the Customer Protection Fund to educating customers about fraud and other 

violations ofthe Act or CFTC rules. You explained that customers would benefit from 

Congress expanding the agency's authority under CEA Section 23(g)(2), permitting 

it to engage more broadly with consumer advocacy groups and state regulators in 

education and outreach. 

If Congress were to expand the CFTC's authority to conduct education and outreach 

under CEA Section 23(g)(2), how would you propose that the agency enhance its 

outreach to customers, particularly those in historically underserved communities? 

Response: CEA Section §23(g)(2) limits the CFTC's Office of Customer Education and 

Outreach to (OCEO) to funding educational initiatives designed to help customers protect 

themselves against fraud or violations of the CEA and CFTC regulations. These limits 

prevent the office from developing material that addresses risks associated with new 

technologies, and users engaging with that technology. This is particularly problematic due 

to the increase in retail participation using phone apps and other easy to use applications. 

Lifting the strict limits would allow the CFTC to offer more effective education and 

outreach such as: 

• Material that addresses new technologies, such has cryptocurrency, where education of 

the risks is paramount to protecting market participants before they become victims of 

fraud. 

• Targeted education and outreach to diverse audiences and communities who have 

historically been shut out oftraditional finance to help them understand risk. 

• Research to fill research gaps pertaining to the growing number of retail traders in our 

markets to better inform programming and messaging. 

• Material to educate producers and agricultural end-users about hedging and about 

market and product fundamentals and the risks involved in using the derivative markets 

as a risk management tool. 

OCEO would also expand our outreach to community partners and organizations. Trusted 

local partners provide access to underserved communities where there may be limited 

exposure to materials about market risks and participation. Partner organizations could 

include, local low-income financial or housing counseling services, tribal organizations, 

public libraries, cooperative extension services, Annie's Project, National Black Farmers 

Association, Intertribal Agriculture Council, Farm Bureau, state AARP chapters, Latino 

Economic Development Center, Unidos US, military financial educators, veterans' 

organizations, other federal, state, and local government agencies. 

2 
Ifthe strict limits were lifted, the CFTC would undertake retail customer research to get a 

better understanding of who is using the markets, including trading activity, sources of 

trading/investing information, investing experience, financial literacy, demographics, 

geographic concentrations, media preferences, and income and asset levels. Data as well 

as qualitative studies, would provide the evidence needed to hone culturally relevant 

messaging, develop relevant multi-lingual materials, and deliver learning equitably and 

effectively. 

3. Section 342 of the Dodd-Frank Act required six federal financial agencies to each 

establish an Office ofMinority and Women Inclusion (OMWI) to be responsible for 

all matters relating to diversity in management, employment, and business activities. 

Section 342(b)(2)(C) ofthe Dodd-Frank Act also required the OMWI Director ofeach 

agency to develop standards for assessing the diversity policies and practices of 

entities regulated by the agency. To implement this requirement, the six financial 

agencies jointly issued an interagency policy statement that established joint 

standards to assess the diversity policies and practices of regulated entities. 

The CFTC was not included in Section 342 of the Dodd-Frank Act as an agency 

statutorily required to establish an OMWI office. How has this impacted the CFTC's 

ability to address diversity, both within the agency and across the markets it 

regulates? 

Response: As the only federal financial regulatory agency that was not required by the 

Dodd-Frank Act to establish an OMWI, the CFTC is easily a decade behind other financial 

regulatory agencies in our diversity and inclusion efforts. Prior to the aITival ofthe CFTC's 

first ChiefDiversity Officer in January of2022, the CFTC's OMWI was solely focused on 

equal employment opportunity (EEO) complaints processing and enforcement of EEOrelated statutes, regulations, and executive orders, which Section 342 (a)(3) ofthe Dodd-Frank Act 

specifically states are not included in OMWI office responsibilities. The lack of this statutory 

authorization impacts the CFTC OMWI's ability to fill the broader mandates of Section 

342 ofthe Dodd-Frank Act to address diversity within the CFTC's workforce, procurement 

and contracting activities, and regulated entities. 

Section 342 articulates robust mandates for advancing and promoting diversity in the 

workforce, requiring each agency to take affirmative steps to seek diversity in the 

workforce of the agency at all levels of the agency, including recruiting at colleges and 

universities; sponsoring and recruiting at job fairs; engaging in mass media 

communications; partnering with organizations that are focused on developing 

opportunities for minorities and women for industry internships, summer employment, and 

full-time positions; and partnering with majority minority high schools to establish or 

enhance financial literacy programs and provide mentoring. 

Furthermore, Section 342(b )(2)(C) of the Dodd Frank Act requires each OMWI Director 

to develop standards for assessing the diversity policies and practices of entities regulated 

by the agency. Following a series of roundtables and a notice and comment period in the 

Federal Register (78 FR 64052 and 77792), in 2015 the Department of Treasury; the 

3 
Federal Deposit Insurance Corporation (FDIC); the Federal Housing Finance Agency 

(FHF A); the Federal Reserve Banks; the Board of Governors of the Federal Reserve 

System (Board); the National Credit Union Administration (NCUA); the Office of the 

Comptroller of the Currency (OCC); the Securities and Exchange Commission (SEC); and 

the Consumer Finance Protection Bureau (CFPB) issued a Final Interagency Policy 

Statement establishing Joint Standards for Assessing the Diversity Policies and Practices 

of the Entities they Regulate ("Joint Standards") (80 FR 33016 (June 10, 2015)). Statutory 

authorization would enable the CFTC to similarly develop standards to assess diversity 

policies and practices of entities regulated by the CFTC, allowing the CFTC to monitor 

trends and highlight best practices. 

4. In a recent speech, CFTC Commissioner Johnson called on Congress to enhance the 

agency's authority to conduct due diligence on businesses that seek to purchase 

entities registered with the CFTC. 

What authority does the agency currently have under the CEA to review the purchase 

of a CFTC registrant by an unregistered entity? If there is no such authority, what 

risks does this present to customers and U.S. derivatives markets? 

Response: Agency rules and regulations include a notification obligation involving the 

transfer ofsignificant equity interest in a registered entity. In order to maintain registration 

with the CFTC, a DCO, DCM or SEF must at all times remain in compliance with 

applicable statutory core principles and CFTC regulations. This compliance obligation 

persists in the event ofa change in ownership. 

Ranking Member John Boozman 

1. The CFTC Division of Market Oversight issued a staff advisory (Advisory) in 

September 2021 on what triggers the requirement for a person to have to register as 

a swap execution facility (SEF). The Advisory has created confusion and alarm that 

the Commission is applying a new interpretation that goes beyond what market 

participants had understood from the SEF registration rules adopted in 2013, and 

moreover without the benefit of public rulemaking or cost-benefit analysis. Based on 

a common sense understanding ofthe CEA's SEF definition, including the "multipleto-multiple" element, reinforced by the Commission's statements in the original SEF 

rulemaking and in other contexts at the time, many market participants concluded 

that certain common swaps brokerage services were acceptable without the 

involvement of a SEF. The Commission seemed to reaffirm this long-held 

understanding when it decided not to adopt a more expansive SEF interpretation it 

had proposed in 2018 in the face of strong objections, to avoid unintended 

consequences and market disruption. End users and other market participants are 

now trying to work through the consequences of an Advisory that seems to call into 

question traditional swaps agency brokerage services, including those provided by 

introducing brokers and commodity trading advisors. Market participants depend 

on these established services to access derivatives markets. 

4 
a. In light ofthese concerns, will the CFTC consider suspending or revoking the 

2021 Advisory pending approval of a final rule that is subject to notice and 

public comment to better understand the costs and benefits of its new 

interpretation? 

Response: The 2021 advisory was intended to clarify when certain activities may trigger 

SEF registration. Agency staff are considering whether further clarification of the SEF 

registration standard may be appropriate. 

2. SEC Chairman Gary Gensler has repeatedly asserted that all "stable token[s] backed 

by securities ...are subject to the securities laws and must work within our securities 

regime." This designation would include all major stable coins, including USDT, 

USDC, and BUSD, as each are backed by at least some securities holdings. There is 

further evidence that the SEC views BUSD as a security, in light of the SEC's recent 

Wells notice to Paxos about BUSD. Moreover, Chairman Gensler recently indicated 

in an interview that all digital assets, except for bitcoin, are securities. However, long 

before Chairman Gensler's pronouncements and actions, the CFTC has been active 

in settling enforcement actions and filing law suits in court over the digital asset space. 

In several of these legal documents, the CFTC has asserted, without limitation, that 

digital assets are commodities. In particular, CFTC enforcement filings state that 

"stable coins such as [T]ether" and USDC are commodities and that Bitcoin, Ether, 

Litecoin, and Dogecoin are all commodities. It appears that the SEC disagrees with 

the CFTC's long-standing views on which digital assets are commodities, particularly 

with respect to centrally-issued stable coins, and is willing to impose its different views 

on the digital asset market. 

Do you currently support CFTC's prior positions on these digital assets? 

Response: Yes, I support the CFTC's positions in the digital asset-related cases that we 

have brought. I also recognize that there can be difficult legal issues presented in digital 

asset-related cases that may implicate the jurisdiction of multiple regulators. However, in 

the absence of Congressional legislation, the CFTC will continue being proactive in this 

space when our jurisdiction is implicated. We will work with the SEC and other agencies 

to ensure that wrongdoers are held accountable. 

3. Reports have stated that SEC Chairman Gensler, since June of last year, has implied 

that Ether is a security despite the fact the CFTC has already issued a number of 

settlements stating that Ether is a commodity. 

a. In light of these statements, is your current view that Ether remains a 

commodity? Why or why not? 

Response: Yes, my view is that ETH is a commodity. As multiple courts have held, 

digital assets generally fall within the broad definition of a commodity, and the 

CFTC's jurisdiction over ETH as a commodity is both well suppo1ted by the law 

5 
and by the practical fact that CFTC-regulated platforms have been offering 

derivatives tied to the value ofETH for multiple years. 

b. If you do believe it is still a commodity, do you think the SEC has jurisdiction 

over Ether if it is offered in a security product? 

Response: I cannot comment on a hypothetical product, but I can confirm that the 

SEC generally has primary jurisdiction over a security product. 

4. I appreciate the agency's Aluminum Futures Market Report issued in the Fall of 

2022, but I continue to hear concerns regarding aluminum markets and pricing. Does 

the agency have any concerns relating to these markets or pricing? 

Response: The CFTC holds primary regulatory authority over Designated Contract 

Markets ("DCMs") and Swap Execution Facilities ("SEF"). These markets are registered 

with the CFTC and are required to comply with many core principles and associated CFTC 

regulations that govern the operation of their facilities. All DCMs and SEFs are required 

to either self-certify to the Commission that new contracts comply with the CEA and CFTC 

regulations or submit those contracts to the CFTC for review and approval before offering 

them for trading. Particularly relevant here, Core Principle 3 for both DCMs and SEFs 

requires that these entities list only contracts that are not readily susceptible to 

manipulation. In addition, Appendix C to Part 38 ofthe CFTC's regulations provides nonbinding guidance for use in determining whether a contract is readily susceptible to 

manipulation. 

The Appendix C guidance states that when evaluating the susceptibility of a cash-settled 

contract, such as the COMEX Midwest Premium contract (MWP), to manipulation, the 

DCM should consider the size and liquidity of the underlying cash market and design the 

terms and conditions of the contract to avoid any impediments to convergence. 17 C.F.R. 

pt. 38 App. C. For cash-settled contracts, Appendix C notes that DCMs should consider 

the commercial acceptability and robustness of the cash price series. Also, each cashsettled contract's price series should be based on publicly available prices and should be 

available on a timely basis for calculating the cash settlement price at the expiration of the 

commodity contract. 

The CFTC's Division ofEnforcement furthers the CFTC's mission to protect market users 

and the public from fraud, manipulation, and abusive practices that are prohibited by the 

CEA. In addition, analysts within the Market Surveillance Unit of the Division of 

Enforcement work to detect potential violations, which are then referred to an investigative 

team within Enforcement. While the CFTC does not have direct regulatory authority over 

cash metals markets, it does have authority to address fraud or manipulation in those 

markets. 

The agency will continue to use its existing authority to ensure that contracts trading on 

platforms regulated by the CFTC are not subject to manipulation and to action ifnecessary 

to address any misconduct. 

6 
5. In instances where CFTC staff has consecutively extended no-action relief, will you 

commit to codifying that relief? Also, as part of your response, do you agree that 

waiting until the last minute to extend no-action relief creates uncertainty and 

enhances market risk and will you commit to working with the appropriate staff to 

extend no-action relief at least 6 months before expiration? 

Response: Under my leadership staff has been working to codify existing staff no-action 

letters and positions where appropriate. The Commission has proposed rules in the last year 

and staff is working on additional proposals that would, if approved by the Commission, codify 

several long-standing no-action position letters. Staff will endeavor to consider no-action 

requests in a timely fashion and will work to provide market participants with as much 

certainty as possible. 

6. Do you agree that market participants losing trust in the ability oftheir regulator to 

safeguard data enhances market risk and/or reduces resiliency? And can you commit 

to finding solutions that balance the agency's enforcement mandate and the need to 

keep registrant data secure? 

Response: I agree that if market participants lose trust in the ability of their regulator to 

safeguard data that could enhance market risk and/or reduce resiliency. I can also commit 

to finding solutions that will allow the CFTC to appropriately exercise its enforcement 

authority while keeping registrant data secure as well. 

To that end, the CFTC has implemented numerous protections to safeguard registrant data, 

including market sensitive data protected under Section 8 of the Commodity Exchange 

Act. These include, among other things: ensuring limited access to data; the encryption of 

data; storing data on hardened servers; malware and antivirus protection; annual security 

and privacy awareness training; the use of PIV cards and multi-factor authentication; and 

the use of a myriad of security devices and tools to protect the network and the computer 

systems from hackers and unauthorized users, such as firewalls, intrusion detection 

systems, and data leak prevention software. Registrant data is protected in accordance and 

in compliance with the Federal Information Security Modernization Act (FISMA), other 

Federal mandates and guidelines, and industry best practices. 

7. The CFTC website states that "data in the Commitment ofTraders (COT) reports is 

from Tuesday and released Friday," and that the CFTC "receives the data from the 

reporting firms on Wednesday morning and then corrects and verifies the data for 

release by Friday afternoon." Why is there lag between when the CFTC receives the 

data from reporting firms (Wednesday) to when the CFTC releases the data (Friday 

afternoon)? Is that delay statutorily mandated? Also, please provide a detailed 

description of the CFTC's internal process from the time the agency receives data to 

when the CFTC releases the data. 

Response: The Commitments ofTraders Report (COT Report) provides a breakdown of 

each Tuesday's open interest for futures and options on futures markets in addition to 

7 
aggregated trader positions for markets in which 20 or more traders hold positions equal to 

or above the reporting levels established by the CFTC. 

The time delay between the Commission's receipt of position data underlying the 

COT Reports and the publication of the COT Reports is not statutorily mandated. 

Rather, the current delay provides time for several proceses that ensure the quality 

ofthe COT Reports. A detailed description ofthese processes is enumerated below. 

Wednesday morning 

The Commission receives large trader position data detailing positions as of 

close-of-business Tuesday. The Commission also receives an identification 

of controlling accounts from reporting firms. The data is loaded into the 

Commission's computer systems and made available to Commission staff. 

Wednesday afternoon 

Commission staff use internal tools to review the data received from 

reporting firms. Potentially missing or incorrect position data, as well as 

missing account identifications, are identified. 

Commission staff send emails to individual reporting firms to request that 

they promptly investigate and resolve the discrepancies identified by 

Commission staff. Commission staff begin to receive corrected and missing 

data from reporting firms in response to Commission staff outreach. Since 

it is outside no1mal business hours for many ofthe reporting entities that are 

foreign firms, a significant number of firms do not provide corrected or 

missing data on Wednesday. 

Thursday morning 

C01Tected and missing data continues to be received from reporting firms in 

response to the Commission outreach that occurred on Wednesday. In some 

instances, corrected and missing data continues to be received throughout 

Thursday and into Friday. Upon receipt of newly submitted data, 

Commission technical staff load the data into the Commission's computer 

systems and validate the data. Validated data is passed to Commission 

subj ect matter experts for further review. 

Thursday afternoon 

Commission subject matter experts continue to analyze the data received 

and, when they are satisfied that the report data is correct, approve the COT 

Reports for publication. The COT Repo1ts are provided to the staff 

responsible for the Commission's website. In some instances, the 

Commission is unable to promptly receive corrected and missing data from 

reporting firms. In such instances, Commission staff engage in additional 

8 
outreach to specific reporting firms and these processes may continue until 

Friday morning. 

Friday morning 

CFTC staff responsible for the Commission's website prepare the COT 

Reports for publication. Commission subject matter experts review, and 

approve, the COT Reports in their final publication form. 

Friday afternoon 

The COT Reports are published at 3:30 pm ET. 

The Commission is currently engaged in several efforts that are expected to 

expedite the processes detailed above. During Ql 2023, the Commission began 

making a scorecard accessible to each reporting firm that details the firm's 

compliance, or non-compliance, with the data reporting requirements that enable 

the COT Reports. Commission staff have been engaging with firms regarding the 

non-compliance detailed in these scorecards, and expect that firms will make effo1ts 

to improve their compliance with the Commission 's data reporting regulations. 

Additionally, in June, the Commission proposed amendments to the position 

reporting requirements detailed in Pait 17 of the Commission's regulations. (See 

Large Trader Reporting Requirements, 88 Fed. Reg. 41522 (proposed June 27, 

2023, 2023-13459a.pdf (cftc.gov)) Commission staff expect that this proposal, if 

enacted by the Commission, would modernize the position reporting process and 

expedite the data analysis and firm outreach detailed above. Commission staff 

believe that these efforts will position the Commission in the future to be able to 

consider whether the timing ofthe COT Reports should be changed. 

8. I appreciate the Commission's desire for more transparency in the swaps market, 

while also working to safeguard a deep, liquid, swaps market in the United States. As 

you know, when the block trade rulemaking was finalized in fall 2020, there were 

concerns about adopting the new 67% notional threshold without taking into 

consideration data under the 2020 improvements to the Swaps Data Repository 

(SOR) and without receiving feedback from the industry on that data. Does the 

Commission intend to engage with and receive input from affected market 

participants, especially regarding potential unintended consequences to liquidity in 

the current economic environment? 

Response: Commission staff published revised post-initial appropriate minimum block 

sizes on April 13, 2023. The revised block sizes take into consideration the data 

improvements contemplated by the Commission's 2020 Swaps Data Rulemakings. 1 The 

1 The revised block sizes were calculated in accordance with Commission regulation 43.6(g), which requires use ofa 

67-percent notional amount calculation. The revised block sizes were calculated based on a one-year window of 

reliable swap transaction and pricing data transmitted to Swap Data Repositories (SDRs) between December 1, 2021 

and November 30, 2022. The SDR that receives the vast majority ofswap transaction and pricing data reports had 

9 
Commission does not intend for the publication of the revised block sizes, which are 

scheduled to take effect December 4, 2023, to be associated with any formal notice and 

public comment period.2 The Commission plans to continue to engage with market 

participants informally and monitor the liquidity ofits jurisdictional markets. 

As you know, the Commodity Exchange Act (CEA) directs the Commission to provide for 

both real-time public swaps reporting and appropriate block sizes. The Commission 

concluded in both 2013 and 2020 that a 67-percent notional amount block size calculation, 

applied to the most liquid categories of products in certain swap asset classes, strikes an 

appropriate balance between the benefits oftransparency and any potential costs to market 

participants. The Commission continues to believe that transparency will increase liquidity, 

improve market integrity and price discovery, while reducing information asymmetries 

enjoyed by market makers. The currently effective block sizes, which were calculated 

using a SO-percent notional amount calculation and intended as an initial step towards a 

phase-in of thresholds detennined using a 67-percent notional amount calculation, have 

not changed in a decade. The Commission is cognizant that the currently effective block 

thresholds result in less transparency than the Commission has previously dete1mined is 

appropriate to effectuate its CEA responsibilities. 

Senator Cory Booker 

1. The COVID-19 pandemic, supply chain bottlenecks, and Vladimir Putin's invasion 

of Ukraine has led to rising commodity prices and market volatility that has stifled 

the global economy. Despite the economy's notable wage growth and employment 

gains, this volatility has translated into higher prices for working families when 

heating their homes and buying groceries, increased costs and lower margins for 

family farmers, and a deepening of the global hunger crisis, pushing even more 

families on the brink of famine around the globe. Meanwhile, a report out this week 

found that the commodity industry made record profits of more than $115 billion 

from trading activities, up 60 percent from the year prior. In fact, the foreign banks, 

hedge funds, and Wall Street traders saw profits that were nearly three times higher 

than the pre-pandemic levels. 

already implemented several key aspects ofthe Commission's 2020 Swaps Data Rulemakings prior to December 1, 

2021. 

2 The Commission's regulations require the Commission to update the block sizes on its website at least once each 

calendar year, but modify the block swap categories and block calculation methodology through rulemaking. The 

Commission therefore does not intend for the publication ofthe revised block sizes to be associated with a formal 

notice and comment period, as the Commission noted its concern during the 2020 Swaps Data Rulemakings that 

opening the results of applying the block methodologies to data would suggest the methodologies are open to public 

comment annually, when opening the rules for public comment each year would be an inefficient use of 

Commission resources. The Commission expended significant time and resources in analyzing data and responding 

to public comments received during the comment period associated with the 2020 Swaps Data Rulemakings. 

10 
In October, I sent you a letter, along with Senator Warren, asking the CFTC to 

conduct a series of studies examining whether excessive speculation in key 

commodities markets - including natural gas, wheat, and oil - had contributed to 

higher prices of household necessities. Chairman Behnam, I am grateful for your 

commitment to addressing the pain felt by everyday Americans as a result of market 

volatility. However, I remain concerned that we lack the guardrails to ensure that 

Americans are not paying higher prices for the benefit of wealthy traders. In your 

response to my letter, you wrote: "statutory limitations solidify the policy 

considerations that circumscribe the Commission's ability to disclose information 

and analyses associated with its ongoing investigative and oversight function". 

a. Has the CFTC conducted the requested study analyzing potential excessive 

price speculation in the energy and wheat sectors, and could you share that 

study with this Committee? 

b. If not, what statutory changes would you need to make this information 

publicly available? 

Response: As you note, commodity markets have recently experienced a perfect storm of 

externalities, including persisting impacts of the Covid-19 pandemic, volatility relating to 

the conflict in Ukraine, and the escalating effects of climate change. Ensuring that 

commodity derivatives markets remain liquid, resilient and free from manipulative or 

disruptive conduct, so that they can effectively serve their risk management and price 

discovery functions, is the CFTC's highest priority. The CFTC has remained vigilant in 

order to ensure that this priority continues to be met in the face of recent market stress and 

volatility. Ourpreeminent analytic, surveillance and enforcement programs have continued 

to closely monitor the CFTC's regulated markets - analyzing data, conducting trading 

analyses for manipulative, inappropriate or disruptive conduct, and leveraging the agency's 

enforcement authorities to root out bad actors. CFTC staff have also continued to actively 

monitor compliance by exchanges, clearinghouses and intermediaries with their regulatory 

obligations, to ensure that they can thoroughly and effectively perform their critical roles 

in our markets. And, faced with an unprecedented array of stressors, our regulatory 

framework and market structures have served their functions well, enabling end-users to 

hedge their risks during a particularly challenging period. 

Heightened vigilance remains in order as we observe ongoing market impacts related to 

Russia's aggression against Ukraine and other volatility drivers. I continue to support the 

full exercise of the Commission's authorities to ensure - particular!y in light of these 

ongoing market impacts - that the relationship between commodity prices and the 

derivatives markets reflects economic factors, and that the Commission is following 

Congressional mandates to address the risk ofexcessive speculation. I continue to support 

the use ofall available resources and expertise to vigorously monitor the CFTC's regulated 

markets - including through ongoing, commodity-specific staff analyses, under strict 

parameters, to examine the role of speculators and how, if at all, their participation in the 

market has negatively impacted price discovery. 

11 
As an agency, we are constantly assessing what information and findings from these 

monitoring efforts may be shared outside of the agency without compromising our 

oversight, surveillance and enforcement functions. We must also weigh the extent to which 

such information and findings may be shared in compliance with statutory duties and 

obligations under the Commodity Exchange Act relating to the treatment of certain 

sensitive information, including information that would separately disclose the business 

transactions or market positions ofany person. 

I look forward to continuing to work closely with you and other members of the Senate 

Agriculture Committee to ensure that the prices paid by American families when heating 

their homes, and buying groceries and gas, reflect true supply and demand factors. I would 

like to reiterate that I am unconditionally committed to transparency. I also take the 

CFTC's role as a price-agnostic regulator seriously, and I believe that we must exercise 

particular care in the treatment of our data, analyses and investigations in order avoid any 

impact on the integrity of the derivatives markets that we oversee, and to safeguard the 

implementation and effectiveness of our market surveillance tools and enforcement 

program. 

2. Chairman Behnam, I'm grateful for your focus on improving the gender, racial, and 

ethnic diversity ofthe financial industry, both in your testimony and in your work as 

Chairman ofthe CFTC. The 2008 financial crisis revealed critical weaknesses in our 

economy and in the banking industry; as the Mayor of Newark, I saw firsthand how 

the risks taken by wealthy Wall Street bankers and traders devastated Black and 

Brown working families in my city. In its response to that crisis, the Dodd-Frank Act, 

Congress also recognized an alarming lack ofdiversity in the financial sector. Thanks 

to Section 342, most of the financial regulators established Offices of Minority and 

Women Inclusion to address the staggering issue, starting at the federal government. 

I've been proud to build on that work by pushing federal agencies to take a look at 

who is managing their assets, and promoting opportunities for emerging asset 

managers. Unfortunately, the CFTC was not included under Section 342, which 

hampers the CFTC's ability to engage in this work in a more meaningful way. 

a. Does the CFTC currently have data on the demographics ofits workforce, and 

can you share that information with this Committee? 

Response: Yes. A summary ofthe CFTC's demographic workforce data for FY 2021 and 

available data for FY 2022 is provided below. 

Fiscal Year 2021 

During Fiscal Year 2021, out of 690 total CFTC employees (permanent and temporary 

employees): 

• 68.26% (471 employees) identified as White; 

• 17 .10% (118 employees) identified as African American or Black; 

12 
• 10.43% (72 employees) identified as Asian American; 

• 3.62% (25 employees) identified as Hispanic; 

• Less than 1 % (<10 employees) identified as Native Hawaiian, Native American, or 

Two or More Races; 

• 58.26% (402 employees) identified as male and 41.74% (288 employees) identified as 

female; and 

• 5.80% (40 employees) identified as a person with a disability3, with less than one 

percent ofthe workforce ( < 10) identifying as a person with a targeted disability. 

4 

Across grade levels, out of 679 pennanent employees: 

• Employees identifying as White made up 34.78% of permanent employees at the CT 

12 and below level, 51.43% at the CT 13 level, 70.67% at the CT 14 level, 76.22% at 

the CT 15 level, and 77. 78% at the CT 16 and above level. 

• Employees identifying as minority5 employees made up 65.22% of permanent 

employees at the CT 12 and below level, 48.57% at the CT 13 level, 29.33% at the CT 

14 level, 23.78% at the CT 15 level, and 22.22% at the CT 16 and above level. 

• Employees identifying as male made up 32.61 % ofpermanent employees at the CT 12 

and below level, 60.00% at the CT 13 level, 58.67% at the CT 14 level, 62.94% at the 

CT 15 level, and 62.22% at the CT 16 and above level. 

• Employees identifying as female made up 67 .39% of permanent employees at the CT 

12 and below level, 40.00% at the CT 13 level, 41.33% at the CT 14 level, 37.06% at 

the CT 15 level, and 37.78% at the CT 16 and above level. 

Fiscal Year 2022 

Demographic information from Fiscal Year 2022 is still being analyzed and finalized. 

Initial numbers indicate that out of710 total CFTC employees (permanent and temporary): 

• 67.89% (482 employees) identified as White, a decrease in percentage 

compared to FY 2021; 

• 16.90% (120 employees) identified as African American or Black, a decrease 

in percentage compared to FY 2021; 

• 11.27% (80 employees) identified as Asian American, an increase in percentage 

compared to FY 2021; 

3 The Americans with Disabilities Act Amendments Act of2008 define disability as a physical or mental 

impairment that substantially limits one or more major life activities. 4 Targeted disabilities are a subset ofthe larger disability category and are defined as developmental disabilities; 

traumatic brain injuries; deafness or serious difficulty hearing; blindness or serious difficulty seeing even when 

wearing glasses; missing extremities (e.g., arm, leg, hand and/or foot); significant mobility impairments, benefitting 

from the utilization ofa wheelchair, scooter, walker, leg brace(s) and/or other supports; partial or complete paralysis 

(any cause); epilepsy and other seizure disorders; intellectual disabilities; significant psychiatric disorders, (e.g., 

bipolar disorder, schizophrenia, PTSD, or major depression); dwarfism; and significant disfigurement (e.g., 

disfigurements caused by bums, wounds, accidents, or congenital disorders). 

5 For these purposes, minority is defined as any individual indicating a racial or ethnic identity other than White. 

13 
• 3.66% (26 employees) identified as Hispanic, an increase in percentage 

compared to FY 2021; 

• Less than one percent (<10 employees) identified as Native Hawaiian, Native 

American, or Two or More Races, holding constant compared to FY 2021; 

• 58.30% (414 employees) identified as male, an increase in percentage 

compared to FY 2021, and 41.69% (296 employees) identified as female, a 

decrease in percentage compared to FY 2022. 

• 5.92% (42 employees) identified as a person with a disability, an increase in 

percentage compared to FY 2021, and less than one percent (<10) of the 

workforce identified as a person with a targeted disability, a decrease compared 

to FY 202 1. 

b. Could you speak to how the lack of authorization hampers your efforts to 

create a more inclusive Commission? 

Response: Creating a genuinely inclusive workplace goes beyond recruitment and working 

to diversify an organization's workforce. An inclusive workplace is a workplace where 

diversity, equity, inclusion and accessibility (DEIA) are reflected in the norms and values 

ofthe agency, integrated into and across agency functions and into organizational planning 

documents. As articulated in the November 2021 Government-Wide Strategic Plan to 

Advance DEIA in the Federal Workforce, prioritizing DEIA across functions requires 

senior leadership involvement and commitment at all levels. To create an inclusive 

environment where everyone can thrive and grow requires an understanding of and 

recognition that not all employees experience the same workplace challenges. Focusing 

on the employee experience requires collecting and analyzing data and metrics that provide 

insight into the employee experience, identifying areas of inequities and supporting 

leadership teams by providing actionable insights to support culture change and to address 

negative behaviors. OMWI offices that are statutorily authorized are uniquely positioned 

with the appropriate resources and expertise to collect and analyze data, develop strategies 

to increase employee engagement and inclusion, upskill leaders on inclusive behaviors and 

practices, and create ongoing voice of the employee feedback loops to ensure employees 

feel that their experiences are valued, seen and considered in decisions related to policy, 

processes, and overall agency and organization-specific strategies. 

3. Chairman, in a letter to you last October, I wrote to you about my concerns with the 

rapidly growing voluntary carbon offset market, which enables corporations to make 

claims about emission reductions while - in reality - taking little action to address the 

climate and environmental justice impacts of their industry. Carbon offsets, as they 

currently stand, are not compatible with climate justice goals, as they enable wealthy 

corporations to continue emitting while using fraught tactics that prioritize their 

bottom line over the health and well-being of vulnerable communities. 

a. Does the CFTC need additional authorities in order to thoroughly investigate 

fraud underlying greenhouse gas emission offset claims in the futures market? 

14 
Response: The CFTC has regulatory and enforcement authority over carbon offset 

futures listed on designated contract markets (DCMs), which are required to 

comply with the Commodity Exchange Act (CEA) and the Commission's 

regulations thereunder. DCMs must either self-certify to the Commission that new 

futures contracts comply with the CEA and CFTC regulations or submit those 

contracts to the CFTC for review and approval before offering them for trading on 

their respective exchange. Particularly relevant here, Core Principle 3 for DCMs 

requires that these entities list only contracts that are not readily susceptible to 

manipulation. In addition, Appendix C to Part 38 of the CFTC's regulations 

provides non-binding guidance for use in determining whether a contract is readily 

susceptible to manipulation. 

While the CFTC does not have regulatory authority over the voluntary carbon offset 

markets, it does have enforcement authority to bring a civil enforcement action 

against a person deemed to have engaged in carbon-offset derivative market or cash 

market fraud or manipulation. As the CFTC does not conduct ongoing surveillance 

of the underlying carbon markets, the CFTC agency relies on tips, complaints, or 

referrals submitted to the CFTC's Whistleblower Office as a catalyst to begin an 

anti-fraud or anti-manipulation enforcement action. The CFTC's Whistleblower 

Office issued an alert on June 20, 2023 to notify the public on how to identify and 

report potential Commodity Exchange Act (CEA) violations connected to fraud or 

manipulation in the carbon markets (available: 

https :/ /www.cftc.gov/PressRoom/PressReleases/8723-23). 

b. Are there additional data points or resources the CFTC needs to effectively 

oversee carbon offset futures contracts? 

Response: The agency has not identified any additional data points that it needs to 

oversee the carbon offset futures trading. The agency looks forward to supporting the 

work of the Agriculture Committees and Congress to bring any additional, appropriate 

authorities to the CFTC to ensure that these underlying carbon markets have integrity 

and are accomplishing their intended goals. 

4. Given the reports outlined in our letter, which suggest that the voluntary carbon 

market you think that self-certification of greenhouse gas emission offset contracts is 

appropriate, given the issues raised around market integrity? 

Response: As mentioned above, DCMs are required to either self-certify to the 

Commission that new contracts comply with the CEA and CFTC regulations or submit 

those contracts to the CFTC for review and approval before listing them for 

trading. DCMs must submit a new or amended contract pursuant to the Commission's 

regulations in Part 40 and the contracts must be consistent with the DCM Core Principles, 

including DCM Core Principle 3, which requires a DCM to only list contacts that are not 

readily susceptible to manipulation, and the Commission regulations applicable to DCMs. 

Appendix C to Part 38 of the CFTC's regulations also provides non-binding guidance for 

15 
how a DCM can demonstrate compliance that a contract is readily susceptible to 

manipulation. A DCM may self-certify or receive approval for a new contract as long as it 

complies with the CEA and Commission's regulations thereunder. The Commission may 

not deny or revoke a product listing on grounds beyond its statutory mandate within the 

CEA. 

Senator Ben Ray Luian 

1. In the past, the CFTC's diversity and Hispanic representation has been criticized for 

falling behind the relevant civilian workforce. In an evaluation conducted in the 

Commission's MD-715 report for FY19 concluded that the Commission had "No 

Commission wide D&I (Diversity and Inclusion) Strategy". 

Does the Commission currently have a strategic plan for improving equity through 

its mission operations, and attracting and retaining a diverse workforce? 

Response: This year, the CFTC's OMWI is leading a project team that includes liaisons 

from all CFTC divisions and offices to develop and implement an actionable, data-driven 

diversity, equity, inclusion and accessibility (DEIA} strategic plan that will be the first 

stand-alone DEIA Strategic Plan in the history ofthe CFTC. The CFTC's DEIA Strategic 

Plan will include goals, objectives, strategies, and performance measures that align with 

the CFTC' s overarching 2022-2026 agency strategic plan, my commitment to integrating 

DEIA into every aspect of the CFTC's talent and business operations, and with the 

administration's guidance in Executive Orders 14035 and 13985, and the GovernmentWide Plan to Advance DEIA in the Federal Workforce. The plan will include metrics for 

measuring success and accountability and will consist of two parts. The first part is 

intended to strengthen the CFTC's ability to recruit, hire, develop, and retain a workforce 

that reflects the diversity of America. The second part is intended to advance equity and 

remove barriers across all of the CFTC's policies and programs, so that the CFTC can 

advance equity for historically underserved communities through education 

about derivatives markets, managing risk, and avoiding fraud. The CFTC anticipates 

issuing its DEIA Strategic Plan, which will be subject to Commission approval, by the end 

of FY 2023. 

2. In your testimony, you summarize the potential benefits from statutorily authorizing 

the CFTC's Office of Minority and Women Inclusion. 

Please elaborate on how establishing the Commission's OMWI office in statute will 

better enable the CFTC to reach its long-term goals for diversity and inclusion. 

Response: Statutory authorization ofthe CFTC's OMWI office would: 1) place its scope 

of responsibility and authority on par with the CFTC' s peer financial regulators; 2) allow 

the CFTC to seek and allocate additional resources and staffing for its OMWI to execute 

the broader mandates of Section 342 of the Dodd-Frank Act; 3) insulate the OMWI from 

any future Commission who may seek to abolish the office or narrow its scope of authority; 

16 
and 4) strengthen the CFTC's ability to advance and promote diversity and inclusion within 

the CFTC and the financial industry overall through: a) increased transparency and 

accountability through the reporting requirements to Congress; b) establishment of 

standards for the utilization of minority and women-owned businesses in the agency; c) 

enhanced ability to staff and resource the CFTC's OMWI to develop and engage in 

proactive paitnerships, outreach and recruitment initiatives on par with peer OMWI 

offices; and d) development of standards to assess diversity policies and practices of 

entities regulated by the CFTC, allowing the CFTC to monitor trends and highlight best 

practices. 

3. We must ensure institutional bad actors who take advantage of consumers or 

participate in crimes like money laundering are held accountable for their action. 

Institutional bad actors too often see fines as the cost of doing business, and it's 

important that regulators are empowered to enact appropriate fines to deter future 

illegal activity. 

Are there statutory changes that would help the CFTC better hold bad actors, 

particularly repeat offenders and egregious violators, accountable when they break 

the law? 

Response: We must ensure institutional bad actors who take advantage of consumers or 

participate in crimes like money laundering are held accountable for their action. 

Institutional bad actors too often see fines as the cost ofdoing business, and it's important 

that regulators are empowered to enact appropriate fines to deter future illegal activity. 

Are there statutory changes that would help the CFTC better hold bad actors, 

particularly repeat offenders and egregious violators, accountable when they break 

the law? 

Response: As outlined in the CFTC's Division ofEnforcement's Civil Monetary Penalty 

Guidelines, the CFTC may consider a number offactors in setting civil monetary penalties 

for violation of the CEA and Commission regulations. See 

https://www.cftc.gov/media/3896/EnfPenaltyGuidance052020/download. While its 

current precedent and practice provide the CFTC with discretion in fashioning the 

appropriate relief for violations, amendment of its statutory penalty authority, and 

substantive and procedural CEA provisions would bolster its ability to deter future illegal 

activity. 

• Enhanced Penalty Provisions. While the CFTC's general penalty amounts have been 

adjusted for inflation, they were last statutorily modified in 2010 when $1 million 

penalties were established for manipulation violations. However, the deterrent effect 

of the Commission's enforcement program would be bolstered by statutory increases 

in the base penalty amounts with enhanced penalties for particularly harmful conduct, 

e.g., violations involving substantial harm, and violations affecting the conduct in 

markets. Further, because violators may either engage in repeated conduct in CFTC 

and related markets, stronger penalties for recidivists (i.e., persons or entities that have 

17 
engaged in related criminal violations or willful violations ofthe Commodity Exchange 

Act (CEA) and/or securities statutes). 

• Statute of Limitations. The CFTC enforcement program has found its ability to 

address misconduct limited by a 5-year statute of limitations for civil monetary 

penalties. Enlarging the statute of limitations to 10 years would empower the CFTC 

enforcement program by denying violators financial benefit from obscuring facts 

sufficient to give the Commission notice that a violation has occurred. 

• Obstruction of Justice in Commission Investigation or Enforcement Action. 

Enactment of this provision will allow the Commission to charge persons who engage 

in any effort to prevent the execution of lawful process or the administration ofjustice 

in a civil matter under the CEA. Civil enforcement agencies face the same obstructive 

acts by persons of interest that criminal enforcement authorities do. With a civil 

obstruction provision, the CFTC may be able to more swiftly address conduct that seeks 

to under the CFTC's mission to ensure market integrity and protect customers by 

detecting and prosecuting violations ofthe CEA. 

4. For new technologies like digital assets, if Congress doesn't give regulators the tools 

to do their jobs, consumers will continue bearing the costs of fraud, scams, and 

reckless behavior. 

What measures has the CFTC taken to ensure it has the technological expertise and 

knowledge within its workforce to effectively oversee modern financial products 

under its jurisdiction? 

Response: The CFTC has invested significant time and resources into ensuring that our 

workforce understands and can effectively oversee modem financial products in our 

jurisdiction. For over five years, we have had a dedicated office focused on technology 

innovation, originally called LabCFTC and now called the Office of Technology 

Innovation. This office conducts research and educates staff on cutting edge technical 

topics. Moreover, agency staff has significant experience through overseeing registrants 

and through enforcement investigations with understanding modem financial products. In 

the event that Congress decides to give the CFTC additional authority over portions of the 

digital asset market, we expect that we will request additional resources so that we have 

the means necessary to play that role. 

Senator Reverend Raphael Warnock 

1. Last year, the nickel market unraveled, causing massive price swings in a market that 

has generally experienced low-price volatility. 6 We later discovered that the cause of 

the price hike was a coordinated short squeeze against a large trader. 7 Recently, we've 

seen more traders look to game financial markets for quick profits. These are not so6 https://www.bloomberg.com/news/articles/2022-03-14/ins ide-nickel -s-short-squeeze-how-price-surges-halted-lmetrading 

7 ibid. 

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called "meme stocks." Nickel is a critical mineral listed by the U.S. Geological Survey, 

serving an important role in America's national security and economic development.

8 

a. Have price shocks and extraordinary market events, as we saw in the London 

Metals Exchange, had a material effect on downstream domestic industries, 

particularly those that rely on these commodities as inputs? 

Response: Commodity markets, including metals markets, have recently faced a 

period ofheightened stress and volatility. Ensuring that derivatives markets remain 

liquid and resilient during such periods, so that they can effectively serve their risk 

management and price discovery functions, is central to the agency's mission. One 

of my main priorities as Chairman of the CFTC has been to engage the agency's 

historical steady hand, transparent approach, and infonned decision-making to 

support U.S. and global market resilience. Our preeminent analytic, surveillance 

and enforcement staff have examined data, conducted trading analyses for 

manipulative, inappropriate or disruptive conduct, and leveraged the agency's 

enforcement authorities to root out bad actors. CFTC staff have also continued to 

actively monitor compliance by exchanges, clearinghouses, and intermediaries, 

with their regulatory obligations, to ensure that they can thoroughly and effectively 

perform their critical roles in our markets. Our regulatory framework and market 

structures, and the CFTC's thoughtful yet assertive approach, have served the 

American people and markets as intended, allowing end-users to hedge their risks 

during a particularly challenging period. 

It is important to note that CFTC-regulated derivatives exchanges - namely, 

designated contract markets - are already required to incorporate several features 

that the London Metal Exchange is addressing in response to recommendations 

from its independent review oflast year's events in the nickel market. In particular, 

these CFTC-regulated exchanges already have in place risk controls for trading 

such as: price-driven market halts, daily price limits, and review of large position 

holders, including their cash positions, during spot periods. 

b. Have you witnessed events like this in U.S. agricultural commodities markets? 

Response: As I have stated publicly, it is without question that 2022 was a 

challenging year across all commodity complexes, some more extreme than others. 

In the years to come we no doubt will recall it as a period oftime that put the CFTC 

on highest alert. 9 

At a time when the ongoing effects of the global pandemic, monetary and fiscal 

policy shifts, geopolitical uncertainty, cyber threats, and technology disruptions are 

8 https://www.usgs.gov/news/national-news-release/us-geological-survey-releases-2022-list-critical-minerals 

9 See, e.g., Rostin Behnam, Chairman, CFTC, Remarks ofChairman Rostin Behnam at the Commodity Markets 

Council 2023 State ofthe Industry Conference (Jan. 23, 2023), Remarks ofChairman Rostin Behnam at the 

Commodity Markets Council 2023 State ofthe Industry Conference, Fort Lauderdale. Florida ICFTC. 

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a mainstay in every risk scenario, it is not always possible to envision with complete 

clarity what could be at the end of the tail. That said the CFTC has had an 

opportunity in the last few years to demonstrate domestically and abroad how we 

tirelessly use all available resources, leverage expertise, and develop new skills to 

meet evolving market demands and developments - and how our core principles 

framework for exchanges, which contemplates the incorporation of critical risk 

controls for trading, helps to ensure that the derivatives markets that we regulate 

function with integrity and as intended. 

c. How is the CFTC monitoring these events and what signals does it look for? 

Response: The CFTC has remained vigilant during this recent period of market 

stress and volatility. As discussed above, the agency's analytic, surveillance and 

enforcement staff have examined data, conducted trading analyses for 

manipulative, inappropriate or disruptive conduct, and have leveraged the agency's 

enforcement authorities to root out bad actors. CFTC staff also have actively 

monitored compliance by exchanges, clearinghouses and intermediaries with their 

regulatory obligations, to ensure that they can thoroughly and effectively perform 

their critical roles in our markets. 

CFTC staff are using every tool the agency has to ensure that commodity 

derivatives markets continue to fairly, effectively and transparently serve their 

intended price discovery and risk management functions. 

2. I was proud to work with Senator Grassley last Congress on the Anti-Money 

Laundering Whistleblower Improvement Act which strengthens incentives for 

whistleblowers to step up and report financial crimes. Language from this bill was 

included in the Consolidated Appropriations Act, 2023, (Pub. L. 117-328), which 

President Biden signed into law on December 29, 2022. 10 

a. Especially as we've seen increased activity in commodities markets, is the 

CFTC whistleblower program prepared to handle a potentially higher volume 

of whistleblower cases involving market manipulation or other financial 

crimes? 

b. Are there more resources that the CFTC would like for Congress to provide 

the agency to ensure that whistleblower cases are properly handled? 

Response: I share your views that a strong whistleblower program is paramount to the 

agency's success as the chief regulator of the derivatives markets. 

In each of the past two calendar years Congress, working with Chairwoman Stabenow and 

Senator Grassley, has passed legislation that protects the agency's Whistleblower Office 

10 https://www.congress.gov/bill/l l 7th-congress/house-bill/2617 

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(WBO) and the Office ofCustomer Education and Outreach (OCEO). Due to the success 

of the WBO and increasingly higher payouts to whistleblowers, the agency and Congress 

have had to rethink the original construction of the Customer Protection Fund, which 

provides the salaries and expenses of those offices, as well as the payouts to 

whistleblowers. The agency looks forward to working with the Chairwoman and 

Committee on a permanent solution to the challenges facing the CFTC's Customer 

Protection Fund. 

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