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Outcome Objective 1.2

Outcome Objective 1.2: Markets are effectively and efficiently monitored to ensure early warning of potential problems or issues that could adversely affect their economic vitality.

Performance Measure 1.2.1


Performance Measure 1.2.1: Percentage of derivatives clearing organization applications demonstrating compliance with CFTC Core Principles.
Status: Effective
Data Source: DCO applications(s) for registration.
Verification: Agency files containing applications, staff reviews, memoranda to the Commission, and proposed Orders.
ACTUAL
FY 2006
ACTUAL
FY 2007
ACTUAL
FY 2008
ACTUAL
FY 2009
PLAN
FY 2009
N/A1 N/A 1 N/A 1 100% 100%
1No applications for registration as a DCO were received in FY 2006, FY 2007, and FY 2008. (back to text)

Lead Program Office

Division of Clearing and Intermediary Oversight

Performance Analysis & Review

DCIO met the performance target for FY 2009. Four DCO applications were subject to DCIO staff review during FY 2009. Two DCO applications were reviewed in approximately 120 days; DCIO staff determined that the applications met compliance with CFTC Core Principles and the applicants were granted registration as DCOs. Another DCO application was subsequently stayed pursuant to Section 6 of the Act until the application is materially complete. A fourth DCO application was filed in the fourth quarter of FY 2009, and staff review of this application will not be completed until FY 2010.

Performance Highlights

None to report.

Performance Measure 1.2.2


Performance Measure 1.2.2: Ratio of contracts surveilled per economist.
Status: Adequate
Data Source: Exchanges submit data to the Commission on all traded contracts, which are maintained in the Commission’s database.
Verification: Data is validated by internal program edits and quality checks in central database.
ACTUAL
FY 2006
ACTUAL
FY 2007
ACTUAL
FY 2008
ACTUAL
FY 2009
PLAN
FY 2009
12 13 14 14 12

Lead Program Office

Division of Market Oversight

Performance Analysis & Review

The target ratio of contracts surveilled per economist is above ideal levels. For this reason, an “Adequate” status of Performance Result has been selected in spite of the fact that the actual number of contracts surveilled per economist met expectations. To increase the efficiency of the surveillance efforts of DMO, similar contracts on the same underlying commodity are generally analyzed together. Even though the number of contracts increased during the year, the increase was mostly due to additional products on existing commodities. These additional products may not materially add to the economists’ surveillance burden. Thus, they were not counted as distinct contracts for the purpose of arriving at the relevant ratio.

Performance Highlights

The ratio of contracts surveilled per economist is too high to ensure full surveillance coverage of all futures markets. The efficiency and productivity of surveillance economists are very high, but they are being stretched too thin, with consequential effects on the adequacy of surveillance coverage for some market.

Performance Measure 1.2.3


Performance Measure 1.2.3: Percentage of contract expirations without manipulation.
Status: Effective
Data Source: Surveillance reports and large trader position reports.
Verification: Economists daily track and monitor futures expirations and economic fundamentals.
ACTUAL
FY 2006
ACTUAL
FY 2007
ACTUAL
FY 2008
ACTUAL
FY 2009
PLAN
FY 2009
99.9% 99.9% 99.9% 99.9% 99.9%

Lead Program Office

Division of Market Oversight

Performance Analysis & Review

This measurement examines the number of contract expirations without manipulation compared to the total number of futures and option expirations. The total number of expirations may vary throughout the year as different contracts enter and exit the market.

Performance Highlights

Surveillance of energy markets has been the greatest challenge during FY 2009. During this year, DMO has enhanced its data collection, information processing, and surveillance analyses to keep pace with the rapidly growing and changing energy markets. Special calls were issued to IntercontinentalExchange to obtain daily large trader reports on this OTC market. DMO started to receive and analyze daily NYMEX transaction data to detect possible manipulative schemes. Software enhancements were made to ISS1 to better display and analyze positions in deferred futures months.

1 Refer to the CFTC Information Technology Systems in the Appendix for a description of functionality. (back to text)