The Commodity Futures Trading Commission (CFTC) was created in 1974 through enactment of the Commodity Futures Trading Commission Act to regulate commodities futures and options markets, which at the time were poised to expand beyond their traditional base in agricultural commodities to encompass contracts based on financial variables, such as interest rates and stock indexes. The CFTC's mission is to prevent excessive speculation, manipulation of commodity prices, and fraud. The agency administers the Commodity Exchange Act (CEA), which was passed in 1936. Prior to the CFTC's creation, trading in agricultural commodities regulated by the CEA was overseen by an office within the U.S. Department of Agriculture called the Commodity Exchange Administration, which was also formed in 1936. The CFTC oversees industry self-regulatory organizations (SROs)—the futures exchanges and the National Futures Association—and requires the registration of a range of industry firms and personnel, including futures commission merchants (brokers), floor traders, commodity pool operators, and commodity trading advisers. Since passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), the CFTC's jurisdiction has expanded significantly to include over-the-counter (OTC) derivatives, also called swaps. As a result of Dodd-Frank, major participants in the swaps markets are required to register with the CFTC, and certain swaps are required to be cleared by clearinghouses. Such newly regulated swap market participants include swap dealers, major swap participants, swap clearing organizations, swap execution facilities, and swap data repositories. These entities are subject to new business conduct standards contained in the statute or promulgated as CFTC rules. Like the Securities and Exchange Commission (SEC), the CFTC does not directly regulate the safety and soundness of individual firms, with the exception of newly regulated swap dealers and major swap participants, for whom it will set capital standards pursuant to Dodd-Frank. Although most derivatives trading these days relates to financial variables (interest rates, currency prices, and stock indexes), congressional oversight remains vested in the House and Senate Agriculture Committees in part because of the market's historical origins in agricultural commerce. Appropriations for the CFTC are under the jurisdiction of the Agriculture Appropriations Subcommittee in the House and the Financial Services and General Government Appropriations Subcommittee in the Senate. To meet additional responsibilities for oversight of swaps, the Obama Administration has requested additional funding for the CFTC since FY2011. For FY2011, P.L. 112-10 provided $202 million for the CFTC, up 20% from the $169 million provided for FY2010 before enactment of the Dodd-Frank Act. For FY2012, the President requested $308 million, or $105 million more than FY2011 enacted appropriations. For FY2012, P.L. 112-55 provided $205.3 million for the CFTC, an increase of $3.3 million over FY2011. This amount was $33.3 million more than the House recommended, but $34.7 million less than the Senate Appropriations Committee's recommendation, and about $103 million (33%) below the Administration's request. For FY2013, the Administration again requested $308 million. The enacted amount in P.L. 113-6 was a constant $205.3 million, but across-the-board rescissions reduced that amount to about $199.7 million. For FY2014, the Administration is requesting $315 million. The House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies approved a bill that would provide $194.6 million for the CFTC. Senate action on FY2014 appropriations has not yet occurred. For more on CFTC appropriations, see CRS Report R42596, Agriculture and Related Agencies: FY2013 Appropriations , by [author name scrubbed]. Organizationally, the CFTC is led by five commissioners appointed by the President, with the advice and consent of the Senate, to serve staggered five-year terms. No more than three commissioners at any one time may be from the same political party. The President designates one commissioner to serve as chair. The agency is organized around four divisions: Clearing and Risk, which oversees derivatives clearing organizations and other major market participants; Enforcement, which investigates and prosecutes alleged violations of the Commodity Exchange Act and of CFTC regulations; Market Oversight, which conducts trade surveillance and oversees trading facilities such as futures exchanges; and Swap Dealer and Intermediary Oversight, which oversees registration and compliance by self-regulatory organizations (SROs), such as the futures exchanges (e.g., the Chicago Mercantile Exchange), the National Futures Association, and registration of swap dealers and major swap participants. The CFTC currently faces a range of issues—many of them related to the many rulemakings it was charged with under the Dodd-Frank Act regarding bringing the swaps market under regulation. Other issues relate to the CFTC's role in overseeing the derivatives markets. Some CFTC rulemakings have generated criticism from market participants, the financial industry, Members of Congress, or foreign regulators. What follows are some of the major issues that have sparked debate or spurred legislation, as well as other enforcement issues and additional challenges. It is a selective, not exhaustive, list. This topic relates to the question of to what degree did Congress intend, and did the Dodd-Frank Act authorize, the CFTC to regulate swaps that may extend beyond U.S. borders, or be transacted between U.S. and non-U.S. persons? Because the swaps market is international in nature, with considerable cross-border trading, this question is material. Section 722(d) of the Dodd-Frank Act stated that swaps reforms shall not apply to activities outside the United States unless the activities have "a direct and significant connection with activities in, or effect on, commerce of the United States." This mandate left much discretion to the CFTC as to how to interpret it. CFTC Chair Gary Gensler has stated that "Failing to bring swaps market reform to transactions with overseas branches and overseas affiliates guaranteed by U.S. entities would mean American jobs and markets would likely move offshore, but, particularly in times of crisis, risk would come crashing back to our economy." To give some practical examples, Gensler and others have noted that derivatives trading by overseas affiliates of U.S. financial conglomerates can and has resulted in significant losses to the U.S.-based entity. They cite examples such as American International Group Inc.'s (AIG's) London-based Financial Products Group, which sold credit default swap derivatives related to mortgage-backed securities that incurred losses during the financial crisis, or the more recent J.P. Morgan "London Whale" derivatives trading losses of roughly $6 billion. On the other hand, industry participants have warned that if the CFTC proposed rule were not modified or postponed, then "swap business will migrate, in the short term, away from U.S. financial institutions to other jurisdictions that are putting in place similar regulatory reform initiatives but are not as far advanced in doing so as the United States"—and have warned that, once gone, such business is unlikely to return. The CFTC issued proposed guidance on the cross-border application of Title VII of Dodd-Frank. In it, the agency sought to clarify who would count as a "U.S. person" for the purposes of meeting the requirements of Dodd-Frank, such as the clearing requirement for swaps, among other questions. More recently, on December 21, 2012, the agency issued a temporary exemption, extending the deadline for meeting all the requirements for cross-border swaps, while the CFTC continued to try to work with foreign regulators to create a more uniform system of requirements. Then, on May 1, 2013, the SEC proposed a rule and interpretive guidance on cross-border "security-based swaps"—swaps related to a security, such as an equity—which the SEC regulates. The SEC's proposed rule has been widely interpreted as taking a narrower approach to defining who is a "U.S. person" than did the CFTC—and thus restricting the reach of Dodd-Frank requirements on security-based swaps to fewer overseas transactions or entities. In addition, legislation was passed by the House ( H.R. 1256 ) on June 12, 2013, which would mandate that the CFTC and SEC issue joint, identical rules "relating to cross-border swaps and security-based swaps transactions involving U.S. persons or non-U.S. persons." The legislation, if enacted, thus would likely supersede the proposed CFTC and SEC rules on cross-border swaps. Instead, the CFTC and SEC would be required to jointly introduce a new proposed rule on cross border swaps. Also, H.R. 1256 requires the CFTC and SEC to allow non-U.S. persons in compliance with the laws of any countries with one of the nine largest swaps markets to be exempt from U.S. regulatory requirements on swaps, unless the two agencies issue a joint rule finding that the regulatory requirements of any of these nine countries or administrative regions "are not broadly equivalent to U.S. swaps requirements." In House floor debate, opponents of the bill asserted that it would weaken the Dodd-Frank requirements on swaps by allowing foreign banks and overseas affiliates of large U.S. conglomerates to escape these swaps requirements, and that it would slow down the pace of agency rulemakings and implementation of the Dodd-Frank derivatives reforms.