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Introduction to Strategic Goal One

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The focus of Goal One is the marketplace. If U.S. commodity futures and option markets are protected from, and are free of, abusive practices and influences, they will fulfill their vital role in the U.S. market economy, accurately reflecting the forces of supply and demand and serving market users by fulfilling an economic need.

MARKET VITALITY

STRATEGIC GOAL ONE

Ensure the economic vitality
of the commodity futures
and option markets.

Photo showing the Chicago Mercantile Exchange Global Command Center Technology Facility.
FY 2010 Investment FY 2010 Performance Results
  FY 2010
Actual
Change (+/-) from
FY 2009
Targets: Exceeded Met Not Met Results Not
Demonstrated
Cost: $53.3 Million +$8.2 Million Results: 3 3 4 0
Staffing: 196 FTE +40 FTE   Total Number of Results: 10


Goal One Summary of Performance

The table below provides a summary of selected performance measures to demonstrate the Commission’s performance towards ensuring the economic vitality of the commodity futures and option markets. For a detailed analysis of all performance measures, please refer to the Performance Section of this report.

Performance Summary
Outcome Objective 1.1 Markets that accurately reflect the forces of supply and demand for the underlying commodity and are free of disruptive activity.
Performance Measures FY 2010
Target
FY 2010
Actual
FY 2010
Met or
Not Met
Performance Trends
FY 2006 – FY 2010
Comment
1.1.1 Percentage growth in market volume. 28% 15.7% Not Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 20% 25% 27% 24% 28%
Results 26% 27% 12.8% -22.1% 15.7%
The percentage growth in the market increased at a rate of 15.7% for FY 2010. However, excluding the first quarter of FY 2010, volume increased at just over 20%. October 2009 was almost 17% down from October 2008.
1.1.2 Percentage of novel or innovative market proposals or requests for CFTC action addressed within six months to accommodate new approaches to, or the expansion in, derivatives trading, enhance the price discovery process, or increase available risk management tools. 75% 100% Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 100% 100% 90% 75% 75%
Results 100% 100% 100% 75% 100%
DMO handled a number of formal and informal proposals or requests for Commission action during this fiscal year. The items, which included innovative products and exchange processes, were all addressed within six months of formal receipt.
1.1.3 Percentage increase in number of products traded. 10% 25.6% Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 15% 10% 20% 10% 10%
Results 25% 20% 11.4% 22.7% 25.6%
The number of products traded grew by 25.6% due to the growth in number of new products offered on the exchanges during FY 2010, and the recovery from the economic downturn of 2008.
1.1.5 Percentage of new contract certification reviews completed within three months to identify and correct deficiencies in contract terms that make contracts susceptible to manipulation. 70% 37% Not Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 60% 75% 75% 82% 70%
Results 81% 82% 82% 71% 37%
Coupled with an increasing backlog of new product certifications, and added responsibilities resulting from the Farm Bill to review contracts traded on ECMs to determine whether each contract performs a significant price discovery function, the percentage of completed reviews declined in FY 2010 and, thus, the percentage was significantly lower than anticipated.
1.1.6 Percentage of rule certification reviews completed within three months, to identify and correct deficiencies in exchange rules that make contracts susceptible to manipulation or trading abuses or result in violations of law. 75% 29% Not Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 80% 85% 75% 86% 75%
Results 86% 82% 86% 73% 29%
The percentage of trading rule amendment certification reviews completed within three months of receipt by the Commission decreased over last year. This decrease in performance is due to the fact that DMO did not have sufficient staff to keep up with the influx of submissions and added responsibilities resulting from the Farm Bill and the rulemakings mandated by the Dodd-Frank Act.

 

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