Strategic Goal Four
Strategic Goal Four Enhance integrity of U.S. markets by engaging in cross-border cooperation, promoting strong international regulatory standards, and encouraging ongoing convergence of laws and regulation worldwide. |
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Net Cost: $8.4 Million Staffing: 30 FTE |
The Commission recognizes that markets are global as the result of electronic access, linkages, mergers, and cooperative business arrangements. The CFTC historically has supported programs that facilitate cross-border access to markets and products, such as our recognition program for intermediaries and our registration category for foreign boards of trade. Both of these programs are based on recognition of foreign home country regulators that comparably and comprehensively provide oversight, allowing the CFTC to rely on this foreign regulation. These programs reflect our understanding that no one regulator alone will have all of the information or authority to supervise global business.
Effective regulation requires international coordination and necessitates that the Commission cooperate with foreign market authorities to supervise U.S. markets and protect U.S. customers. Additionally, the Commission works closely with relevant international organizations to promote high-quality derivatives regulation worldwide and convergence where possible. The CFTC also provides technical assistance to emerging and recently-emerged markets to help these jurisdictions in establishing and implementing laws and regulations that foster global market integrity.
The Dodd-Frank Act increases the need for international outreach. Section 752 of the Act states that the Commission "shall consult and coordinate" with foreign authorities to establish "consistent international standards" regarding regulation of swaps. Many of the new entities subject to regulation under the Dodd-Frank Act are located abroad and the Commission will closely coordinate with foreign regulators in order to supervise these global entities.
Goal Four Key Results
- Coordinated Dodd-Frank outreach: Coordinated staff and Chairman's engagement with the European Commission and Parliament with the objective of encouraging harmonization of European regulatory development with Dodd-Frank policies. Initiated similar discussions with other foreign regulators.
- Created international working groups: The CFTC exceeded its performance target for international working group participation as it began technical level working groups on OTC derivatives with the European Commission, European Securities Markets Authority (ESMA), and regulatory authorities in Japan, Singapore, and Hong Kong. Additionally, the Office of International Affairs organized a joint CFTC-SEC roundtable on the cross-border application of Dodd-Frank.
- Participated in internal Dodd-Frank policy development: Coordinated a review of cross-border arrangements that will be needed under Dodd-Frank and developed draft Memorandum of Understanding (MOU) on the supervision of dually-regulated cross-border clearinghouses. Participated in rule development where there were international implications.
- Led the effort within the IOSCO Task Force on commodity futures markets to develop a final report on "Principles for the Regulation and Supervision of Commodity Derivatives Markets," as requested by IOSCO and the G-20. IOSCO determined to convert the task force into a permanent standing committee.
- Coordinated Commission policy within the IOSCO Technical Committee and Standing Committee 2 on secondary markets, Standing Committee 3 on intermediaries, the OTC derivatives task force, and the task force on implementation of the IOSCO Principles, which revised the IOSCO Methodology.
- Represented the Commission in U.S. Treasury-led dialogues, such as China Strategic and Economic dialogue, India, NAFTA, and Europe. Participated in a G-20 study groups on commodities and on fossil fuel volatility and coordinated policy with the National Security Council on agricultural commodity volatility.
- Requests and referrals to and from foreign authorities continued to grow during FY 2011. In FY 2011, the Division handled over 530 international requests and referrals, an approximate 20 percent increase over FY 2010.
- The performance target of training at least 60 non-U.S. regulators was met in FY 2011.
- Planned the annual international regulatory conference at Boca Raton, Florida and the annual symposium for foreign regulators in Chicago. Coordinated staff technical assistance mission to Ethiopia and a second program for the Korean Financial Supervisory Service.