REMARKS OF BROOKSLEY BORN
CHAIRPERSON
COMMODITY FUTURES TRADING COMMISSION
BEFORE THE SYMPOSIUM ON CAREER OPTIONS FOR MINORITY
STUDENTS IN THE SECURITIES AND COMMODITY FUTURES
INDUSTRIES AT NORTHWESTERN UNIVERSITY SCHOOL OF
LAW
February 19, 1998
I am pleased to be here today to participate in this important
symposium on career options for minority students in the securities
and futures industries. The time has long since passed for our
industries to reach out and to diversify--to provide equal
opportunities to all persons irrespective of race, ethnicity or
gender--and I applaud the symposium's contribution to this
effort.
The Commodity Futures Trading Commission (CFTC) was created by
Congress in l974 as an independent federal agency with the mandate to
regulate U.S. futures and option markets. The markets serve vital
price discovery and hedging functions essential to a healthy economy.
They are used by pension funds, mutual funds, financial institutions,
manufacturers, farmers, exporters, commercial firms, governmental
entities and many others to manage their price risks. The prices
established on them are the basis for the commercial pricing of many
agricultural products, energy products, metals and other commodities.
The Commodity Exchange Act (CEA) grants the Commission exclusive
jurisdiction over futures and commodity options, whether they are
traded on- or off-exchange, and establishes the legal standards for
trading such instruments.
Since its creation, the CFTC has witnessed a rapid evolution of the
U.S. futures markets. On the futures exchanges, we have seen an
explosion of trading in financial products such as foreign currency,
stock index and interest rate futures, leaving the once-dominant
trading in agricultural products only a small part of exchange trading
today. We have witnessed enormous growth in the use of off-exchange
derivatives contracts, again primarily in the financial sector. We
also have seen the establishment of numerous new foreign futures
exchanges, creating a truly global marketplace.
The ten U.S. futures and option exchanges are the strongest, most
dynamic and most innovative in the world. Over the past 11 years,
trading volume has more than quadrupled--increasing from 216 million
contracts in 1986 to 905 million contracts in 1997. Two of the
world's three largest futures exchanges, the Chicago Board of
Trade (CBT) and the Chicago Mercantile Exchange (CME), are located
right here in Chicago. These exchanges are thriving. Patrick Arbor,
the Chairman of the CBT, the world's largest futures exchange,
described 1997 as the "best year ever in the history of this
exchange." The CME, the world's third largest exchange,
enjoyed its second best year ever with trading volume growing by 13.4%
over 1996.
Not surprisingly, as home to the world's leading futures
exchanges, Chicago increasingly is recognized as a global leader in
the field of financial risk management. According to a December 1996
report by the Risk Management Center of Chicago, the city's total
direct commodities and securities industry employment is 50,000, with
an additional indirect employment generated by these industries of
over 100,000. Thus, given the ongoing need for persons to fill these
jobs--traders, brokers, money managers, exchange employees, analysts,
accountants, specialized bankers, lawyers and economists--there should
be ample opportunity to share in this growth.
For too long, however, many of these jobs have not reflected the
diversity of the population. For example, of the more than 6,000 CBT
and CME exchange members, only about one-half of one percent are
African American, and very few of the exchanges' senior staff,
officers or directors are African American. Likewise, there are very
few Asian Americans or Hispanic Americans in these positions and few
women. Nor are the futures exchanges alone in this regard. Minority
participation among the 64,000 commodity professionals and entities
supervised by the Commission who trade on the floors of the exchanges
or deal with customers likewise is small.
Indeed, for too long many of these jobs have been filled based on
friendships and family relationships, and an incidental characteristic
of these relationships has been that they usually did not include
persons of color. Today I want to challenge the futures industry to go
beyond its roots. The time has come to open up opportunities for all
based on what they can contribute, not whom they know.
Notwithstanding the current health of our markets, they face
significant challenges as a result of increased competition,
globalization and technological change. These challenges can best be
met by ensuring that talented people bringing innovative ideas and
creative solutions are welcomed into the futures industry. In order to
attract people with diverse backgrounds and outlooks, the industry
should affirmatively commit to open up opportunities to all. A
proactive recruitment effort is essential to this endeavor. Indeed,
the industry will do itself a disservice if it fails to seek out
people from the broadest possible base of participation--eliminating
race, ethnicity and gender barriers.
The Commission, too, must continue its commitment to provide full
employment opportunities to persons of color. Government service can
provide a wonderful long-term career or enable employees to develop
expertise that can serve as a stepping stone to the private
sector.
Among the programs the Commission has that might be of interest to
you is its summer student employment program. Students at the
undergraduate and graduate levels are encouraged to apply for
positions in our Chicago, Washington, D. C., New York, and Los Angeles
offices. Last year 48 students were employed in paid positions in the
Commission's Division of Enforcement, Division of Economic
Analysis, Division of Trading and Markets, and Office of the Executive
Director. This year the deadline for receipt of resumes is March 13,
1998. The Commission's summer program offers a wonderful
opportunity to gain some experience in government service and some
background in the futures industry.
In the Commission and in the futures industry, persons with different
backgrounds have made and continue to make outstanding contributions
and to achieve personal success and fulfillment. I challenge all of
you here to join with me to work to ensure that our industry and
markets remain strong and competitive by drawing the very best talent
from a barrier-free pool.