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Exhibit 1. Information Technology at CFTC

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The Commission’s over-arching information technology (IT) strategy is to manage data as an enterprise asset, promote and adopt industry data standards, give priority to services that provide the greatest mission benefit, architect services using small components that can be assembled and reassembled with agility, and deliver solutions in short, iterative phases. The Dodd-Frank Act expanded the regulatory scope of the CFTC nearly eight fold and the effective use of information technology will help the CFTC exercise this unprecedented increase in authority by providing staff with information and tools that serve as force multipliers.

IT Investment Portfolio: Surveillance, Enforcement, Infrastructure and Management

The Commission has organized its IT investments into three areas: Surveillance, Enforcement, and Infrastructure.  The Surveillance Investment supports market oversight, trade practice oversight, and financial and risk oversight.  Surveillance is highly dependent on the ability to acquire large volumes of data and the development of sophisticated analytics to identify trends and/or outlying events that warrant further investigation.  The Commission’s ability to view aggregated data across the futures and swaps landscape is essential.  Surveillance technology receives and processes seven to eight million transaction per day and alerts Commission staff to questionable activity. The details of each individual trade are collected from exchanges overnight and loaded and processed for reporting, analysis, and profiling, providing staff with greater efficiency and flexibility by performing sophisticated pattern recognition and data mining, helping detect novel and complex abusive practices. Alerts of potential trade practice violations are generated for review by market compliance and surveillance staff.  Surveillance technology also allows staff to identify large traders whose positions may pose financial risk to the industry or a clearing firm, analyze an owner's holdings and project the effect of market moves on these holdings, perform "what if" stress testing and risk scenarios to determine the effect of market movement on margin, and evaluate overall portfolio risk under different market conditions. It allows staff to monitor intermediaries by storing and analyzing monthly financial statements and annual reports provided to the Commission to report net capital positions and other financial information. 

The Enforcement Investment provides a variety of critical automated litigation support services to Commission staff that facilitate the overall management of documents and data:

The investment also supports the Commission's defensive litigation, internal investigations, the processing of privacy and Freedom of Information Action (FOIA) requests, and the preservation of electronically stored information that is subject to a "litigation hold" or other preservation obligations.

Both the Surveillance and Enforcement depend on the Infrastructure and Management, which provides the underlying infrastructure for IT services including messaging and communications, network security, database administration, IT business continuity, and data storage management. The investment also provides transparency through the website, staff collaboration and knowledge management through the CFTCnet intranet, Commission-wide document and records management, and internal management and administrative systems that supplement Commission use of financial and human resource services provided by government service providers. 

Management of the IT Portfolio in FY 2012

Management of the IT Portfolio in FY 2013

Total IT Budget
($ in thousands)
  FY 2011
FY 2012
FY 2013
Surveillance 17.64 26.61 43.32
DME 6.12 12.71 22.94
Services 4.98 11.31 20.17
FTE 1.13 1.40 2.77
O&M 11.52 13.90 20.38
Services 6.33 7.52 9.09
FTE 5.19 6.38 11.29
Enforcement 7.73 4.91 9.79
DME 1.35 1.10 2.66
Services 1.20 0.90 2.45
FTE 0.15 0.20 0.21
O&M 6.38 3.81 7.13
Services 5.78 3.01 6.28
FTE 0.60 0.80 0.85
Infrastructure and Management 27.87 30.62 43.09
DME 5.03 5.99 6.23
Services 4.33 4.99 5.16
FTE 0.70 1.00 1.07
O&M 22.84 24.63 36.86
Services 16.51 17.27 26.85
FTE 6.34 7.36 10.01
Total IT Budget 53.25 62.14 96.20
Non-personnel IT 39.13 45.00 70.00
FTE 14.11 17.14 26.20

DME – Costs related to the development, modernization, and enhancement of technology.
O&M – Costs related to the operations and maintenance of technology.
FTE – Costs of government personnel.
IT – Hardware, software, and contracted data and technology services and labor.


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