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Commission at a Glance: Evolving Mission and Responsibilities & Keeping Pace with Change

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Evolving Mission and Responsibilities

Congress created the CFTC in 1974 as an independent agency with the mandate to regulate commodity futures and option markets in the United States. The Commission’s mandate was renewed and/or expanded in 1978, 1982, 1986, 1992, and 1995. In December 2000, the Commission was reauthorized through FY 2005 with passage of the CFMA. The CFMA repealed the ban on futures contracts based on individual securities and narrow-based security indexes, and instituted a regulatory framework for such products to be administered jointly by the CFTC and the SEC. The legislation also placed bilateral, Dodd-Frank Act transactions largely outside the CFTC’s jurisdiction and addressed CFTC anti-fraud authority over retail, off-exchange foreign currency (forex) transactions.

In FY 2008, the Commission was reauthorized as part of that year’s Food, Conservation, and Energy Act of 2008 (Farm Bill). The Farm Bill included other amendments to the CEA as well—primarily to increase the Commission’s regulatory oversight role with respect to forex transactions and significant price discovery contracts (SPDCs) traded on electronic trading facilities known as exempt commercial markets (ECMs). The Commission has adopted a rule to implement the new statutory responsibilities for SPDCs and is conducting evaluations for ECM contracts consistent with those regulatory provisions.

Although Congress changed the Commission’s approach to regulation over time, the Commission’s mission remains the same. The CFTC continues to be responsible for fostering the economic vitality of the regulated futures markets by encouraging their competitiveness and efficiency; ensuring their integrity; and protecting market participants against manipulation, abusive trading practices, and fraud. Through its oversight regulation, the CFTC enables the commodity futures and option markets to serve their vital function in the Nation’s economy, providing a mechanism for price discovery and a means of offsetting price risks.

During the past two years, Congress and Federal financial regulators began to re-examine the financial regulatory structure. The recent economic stress has resulted in heightened congressional scrutiny of Federal financial regulation, which is expected to continue in the year ahead. The Commission continues to undertake its own evaluation of its regulatory structure. For example, to address concerns about the growth of nontraditional participants in the futures markets and concerns and about excessive speculation, the Commission is evaluating whether to adopt speculative position limits for commodities with limited supplies, such as energy contracts. The Commission recently held a series of hearings on this subject.

Keeping Pace with Change

The CFTC Mission Statement, Strategic Goals and their related outcome objectives and performance metrics, as well as its multi-year Strategic Plans, create a template that allows management to articulate priorities, measure results, and conduct long-range planning while ensuring the flexibility to adapt its program to address market and financial emergencies and new regulatory concerns.

In 2007, the Commission issued Keeping Pace with Change, its Strategic Plan for FY 2007 through FY 2012. With the 2007 Strategic Plan, the Commission adopted a fourth strategic goal that assesses and measures organizational and management excellence. Establishing this fourth strategic goal allows the Commission to establish and measure its progress in achieving outcome objectives and strategic goals in a broad performance and management framework, evaluating not only program performance but the overall performance and management of the organization.

The following table is an overview of the Commission’s strategic mission, statement, strategic goals, and outcome objectives.

Mission Statement
The mission of the CFTC is to protect market users and the public
from fraud, manipulation, and abusive practices related to the sale of
commodity futures and options, and to foster open, competitive, and
financially sound commodity futures and option markets.
Strategic Goal One
Ensure the economic vitality of the commodity futures and option markets.
Outcome Objectives
  1. Markets that accurately reflect the forces of supply and demand for the underlying commodity and are free of disruptive activity.
  2. Markets that are effectively and efficiently monitored to ensure early warning of potential problems or issues that could adversely affect their economic vitality.
Strategic Goal Two
Protect market users and the public.
Outcome Objectives
  1. Violations of Federal commodities laws are detected and prevented.
  2. Commodities professionals meet high standards.
  3. Customer complaints against persons or firms falling within the jurisdiction of the CEA are handled effectively and expeditiously.
Strategic Goal Three
Ensure market integrity in order to foster open, competitive, and financially sound markets.
Outcome Objectives
  1. Clearing organizations and firms holding customer funds have sound financial practices.
  2. Commodity futures and option markets are effectively self-regulated.
  3. Markets are free of trade practice abuses.
  4. Regulatory environment is responsive to evolving market conditions.
Strategic Goal Four
Facilitate Commission performance through organizational and management excellence,
efficient use of resources, and effective mission support.
Outcome Objectives
  1. Productive, technically competent, competitively compensated, and diverse workforce that takes into account current and future technical and professional needs of the Commission.
  2. Modern and secure information system that reflects the strategic priorities of the Commission.
  3. Organizational infrastructure that efficiently and effectively responds to and anticipates both the routine and emergency business needs of the Commission.
  4. Financial resources are allocated, managed, and accounted for in accordance with the strategic priorities of the Commission.
  5. Commission’s mission is fulfilled and goals are achieved through sound management and organizational excellence provided by executive leadership.