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Introduction to Strategic Goal Three

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The Commission focuses on issues of market integrity, seeking to protect the economic integrity of the markets so that they may operate free from manipulation; the financial integrity of the markets so that the insolvency of a single participant does not become a systemic problem affecting other market participants; and the operational integrity of the markets so that transactions are executed fairly and proper disclosures to existing and prospective customers are made.

MARKET INTEGRITY

STRATEGIC GOAL THREE

Ensure market integrity
in order to foster
open, competitive, and
financially sound markets.

Photo showing the trading floor of the New York Stock Exchange.
FY 2010 Investment FY 2010 Performance Results
  FY 2010
Actual
Change (+/-) from
FY 2009
Targets: Exceeded Met Not Met Results Not
Demonstrated
Cost: $42.3 Million +$8.7 Million Results: 2 9 1 0
Staffing: 149 FTE +35 FTE   Total Number of Results: 12


Goal Three Summary of Performance

The table below provides a summary of selected performance measures to demonstrate the Commission’s performance towards ensuring market integrity in the 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 3.2 Commodity futures and option markets are effectively self-regulated.
Performance Measures FY 2010
Target
FY 2010
Actual
FY 2010
Met or
Not Met
Performance Trends
FY 2006 – FY 2010
Comment
3.2.1 Percentage of intermediaries who meet risk-based capital requirements. 100% 100% Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 100% 100% 100% 100% 100%
Results 100% 100% 100% 100% 100%
Continue audit and financial surveillance oversight program. In FY 2010, DCIO monitored intermediaries to ensure their compliance with capital requirements.
Outcome Objective 3.3 Markets are free of trade practice abuses.
3.3.1 Percentage of exchanges deemed to have adequate systems for detecting trade practice abuses. 100% 100% Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 100% 100% 100% 100% 100%
Results 100% 100% 100% 100% 100%
DMO staff conducts RERs of DCMs on a regular cycle that includes review and analysis of exchange programs for detecting trading abuses and violations of exchange rules. In FY 2010, DMO did not find any exchange to have inadequate systems in place for detecting trade practice abuses.
Outcome Objective 3.4 Regulatory environment is flexible and responsive to evolving market conditions.
3.4.2 Number of rulemakings, studies, interpretations, and statements of guidance to ensure market integrity and exchanges’ compliance with regulatory requirements. 59 58 Not Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 8 18 17 36 59
Results 20 19 41 63 58
The final number of these combined statistics is driven, in part, by changes in the marketplace, or in the structure of the exchanges, clearing organizations, and intermediaries that operate within that marketplace. The number can be a function of what is needed to allow appropriate market interrelationships to be maintained and to allow the exchanges, clearing organizations, and intermediaries to operate in the most efficient manner possible. These factors may not be foreseeable at the time the performance estimate is prepared.
3.4.4 Percentage of total requests for guidance and advice receiving CFTC response. 87% 95% Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 100% 95% 75% 87% 87%
Results 95% 95% 75% 93% 95%
Commission staff make every effort to respond to requests as quickly as possible, but the timeliness of a response also is affected by the speed with which a requester provided additional information sought by staff. To the extent that staff are unable to provide an informal response to such requests, the requester is advised to submit a formal request for guidance. Staff strive to address such formal requests within six months of receipt.

 

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