The ODT is led by the Chief Information Officer and delivers services to CFTC through three components: Systems and Services, Data Management, and Infrastructure and Operations. Systems and Services focuses on several areas: market and financial oversight and surveillance; enforcement and legal support; document, records, and knowledge management; CFTC-wide enterprise services; and management and administration. Managing data as an enterprise asset and applying a data-centric approach to service delivery, Data Management focuses on data analysis activities that support data acquisition, utilization, management, reuse, transparency reporting, and data operations support. Infrastructure and Operations organizes delivery of services around network infrastructure and operations, telecommunications, and desktop and customer services. These three service delivery components are unified by an enterprise-wide approach that is driven by the Commission’s strategic goals and objectives and incorporates information security, enterprise architecture, and project management.
|Data and Technology||$60,073||80||80||$62,139||85||$96,204||122|
|Mission Activity||FY 2012
|Data and Technology||$62,139||85||$96,204||122||$34,065||37|
|Registration and Registration Compliance||$2,235||5|
|Data Acquisition, Analytics, and Surveillance||$10,945||19|
Over the last decade, the futures and other derivatives markets have grown exponentially in terms of their innovation of products, trading practices, trading speed and complexity. These advances have been the result of massive changes and investments in technology and data use. In order to supervise the futures and derivatives markets effectively, the CFTC has to approach its use of data and technology strategically and holistically. The creation and integration of the enterprise-focused data function and the elevation of the Office of Data and Technology as a direct report to the Chairman are designed to give the Commission the ability to effectively leverage Data and Technology to facilitate a comprehensive approach to developing advanced technology investments, automate regulatory functions and improve the Commission’s data analysis.
Streamlining the entity submission process. The Commission will be applying technology to improve the efficiency of the process by which registered entities submit applications for registration and other filings. The current submission process is highly manual. Applications, filings, and requests are received via email and broadly distributed throughout the CFTC. Metadata from the submission is extracted from the submitted materials and manually entered into existing systems. This data is not shared with other Commission systems, leading to duplicative data entry efforts and the possibility of missing or erroneous data. In FY 2013, the CFTC will be continuing the phased deployment of a web-based registration system, called OPERA (organizations, products, events, rules and actions). The OPERA system will allow for the direct registration of entities, registration of FBOTs, rule and product filings, and requests for Commission actions or interpretations. With OPERA, market participants will be able to apply directly using CFTC.gov and the information collected will flow directly into internal CFTC systems.
Direct submission by registered entities. The Online Portal (Portal) located on the CFTC.gov website will be a secure online gateway that will provide a more efficient method of submitting entity registration applications and other submissions to the Commission. The Portal will become a central location for all external business interactions with the Commission. The Portal will improve data quality, minimize the need for CFTC to update participant data, and provide those interacting with the Commission with a view of their submissions to the CFTC. The Portal will improve transparency of CFTC processes and procedures, providing automated notifications to those interacting with the Commission regarding required actions.
Swap data acquisition and analytics for oversight and surveillance. In support of this activity ODT staff will review and update data reporting standards; govern information policies and standards; manage data taxonomies, dictionaries and inventories; manage information quality and confidentiality; direct external information requests and data rulemaking; steward master data and reference data; manage Commission dashboards and views of swap repository data; and provide data mining and analysis support. And they will deploy and maintain data systems and data analytics tools; implement and maintain direct access, data transfer, and data loading between the Commission and data repositories; and deploy information quality and confidentiality controls.
It is anticipated that the Commission will leverage existing repositories wherever possible. The standardized data sets that will be submitted to CFTC are expected to represent only the subset of data required for internal analysis and aggregation purposes. In FY 2012, the Commission will be implementing direct access to external swap data repositories for the purposes of market oversight activities, but to also further define data submission requirements for standardized data feeds. The Commission anticipates defining the data standards across multiple data categories including: position data, transaction data, and reference data. Once defined, the Commission will work with industry participants on the application and testing of those standards to their data submission processes. Similarly, the Commission will be developing software to load swaps data into a Commission data warehouse for use by CFTC staff for market surveillance, risk monitoring, enforcement, and economic analysis. The Commission anticipates that it will conduct data analysis, working with industry to define data standards, and develop data loading software to support Commission systems for swaps data.
Additional capabilities will also be required to support swaps position and transaction surveillance, enhancing surveillance systems to collect and incorporate that data into analyses covering both swaps and futures markets. The Commission anticipates developing automated surveillance capabilities by building new models to generate alerts, thereby facilitating market and financial surveillance. The Commission also anticipates needing to modify its large trader reporting and financial and risk surveillance systems to support new swaps data analysis, internal reporting requirements, and transparency reporting on the CFTC.gov website.
Aggregate Position Limits. The Commission will begin collecting commodity swap positions in future equivalent standards in FY 2012. Once data is collected, modifications will need to be made to the existing surveillance reports and new or modified surveillance processes will need to be developed. In addition, alerts will be written to notify staff when position limits have been violated and incorporated into the business process for surveillance. The CFTC will seek to acquire or develop a system that will support the analysis and monitoring of position limits and hedge exemptions, aggregating futures positions with enumerated commodity swap positions, and develop surveillance processes that combine swaps, futures and options for intra-day and end-of-day position limits surveillance.
National Futures Association. The staff assessing these sophisticated institutions will be supported by the integration of NFA systems and data with CFTC systems and data. Information will be presented for analysis in consolidated views so they can focus on analysis and review and spend less time correlating data from multiple sources.
Pre-Examination Management Tools. An overarching goal of the CFTC is to leverage and connect common business processes and technologies across the organization. The integration of examination tools and data with registration, surveillance, and case management tools and data in FY 2013 will allow the Commission to more effectively and efficiently conduct examinations and initiate and manage follow-on activities. The Commission will be looking at tools that will support the pre-examination management process of managing the selection and scheduling of examination activities, as well as the management of examination activities in the field and post examination report development.
The Commission will continue to sustain CFTC-wide enterprise technology solutions that enable the sharing and reuse of software across the Commission. The Commission continues to sustain technology to provide support for automated market and trade practice surveillance, enforcement and other legal counsel matters (eLaw), financial and risk surveillance, the CFTC.gov website, and document management. IT development, integration, and enhancements support critical business requirements through delivery of technological capability represented by quick, secure information access, analytical capabilities, and successful business process automation. To effectively accomplish its mission, the CFTC must adapt to frequent and innovative changes in the derivatives markets, increasing use of technology and growing market complexity. The Commission must invest heavily and judiciously in IT to timely track market activity, understand the markets and provide effective oversight. Prior year investments in infrastructure and system capabilities must be leveraged and built upon to provide services that multiply the effectiveness of staff, accomplishing integration between futures and swaps data and increased integration of CFTC systems and processes for monitoring registered entities, market and financial risk, market integrity, and trade practice as well as systems and processes for enforcement and economic analysis. The CFTC must sustain existing program initiatives, providing mission operations and maintenance. Several systems and services will require, in addition to ongoing routine maintenance and support, minor enhancements to support the implementation of the Dodd-Frank Act.
The Commission is expected to receive a continually increasing volume of transaction, position, reference, financial risk, and enforcement-related data. Each of these streams is increasing in variety and complexity and is sourced from an increasing number of participants. Transaction data will include pre-trade information and is complicated by the addition of swaps and high frequency trading. Position data must be aggregated from multiple sources for participants with complex organizational structures and must be correlated with transaction data. Definition and cataloguing of reference data related to exchange-traded futures was relatively straight-forward. Product reference data for standardized swaps transactions is significantly more complex and varies considerably by asset class. Financial risk data varies significantly by asset class and must be evaluated at multiple levels (trader, owner and counterparty; clearing member, clearing organization). Enforcement-related data has connections to the other data streams that can be mined and patterned. It is imperative that the CFTC have the appropriate capabilities to manage these data streams effectively, assist in applying the data streams in new and innovative ways to increase the efficiency and effectiveness of Commission oversight, and identify gaps that might reduce the effectiveness of the Commission.
CFTC network services are responsible for the underlying infrastructure of every single IT program at the Commission. The network enables messaging and communications, network security, database administration, IT business continuity, and data storage management. Storage and servers are at the core of our business. The CFTC network consist of over 300 servers between the primary network site in Washington, D.C., three secondary sites in Chicago, Kansas City, and New York, and a continuity facility at a remote site. The network handles internal email messages and the data transfer necessary to support Commission-wide technology solutions. Mission critical data on the network is replicated from the network hub site in Washington, D.C., to the co-location alternate computing facility. Enforcement and other staff, on an as-needed basis are also provided alternative, "off-network" access to the internet to support anonymity during investigations and access to external resources that pose a potential information security risk to the CFTC production network. As the scope of CFTC oversight increases and expands surveillance, analytics, enforcement, and transparency capabilities, the Commission must continue to scale communication, processing, and storage infrastructure to meet demand in both FY 2012 and FY 2013.
In addition to scaling up technology capacity, like industry participants and other regulators, the Commission must also continue to increase, automate, and scale information security controls in the face of evolving security threats. In FY 2012 the Commission will invest in automated physical network access controls and additional traffic monitoring and scanning tools and in FY 2013 the Commission will need to continue automating security controls and increasing the level of continuous monitoring of threats. The Commission is charged with protecting sensitive information assets that are critical to overseeing the markets, such as position data, and this data must be secured to ensure market integrity. CFTC anticipates continuing its investment in IT security to keep pace with ever evolving threats to data and systems.
The Commission currently stores more than 350 terabytes of data with data storage requirements increasing 64 percent annually. Implementation of the Dodd-Frank Act is anticipated to increase this rate of increase, particularly in the initial years of implementation. Increasingly aggressive automated surveillance strategies and analysis of very large datasets, as well as market reconstruction and simulation, valuation of complex swaps, and analysis of high speed and algorithmic trading require that the Commission acquire high speed computing capabilities for rapid analysis of datasets approaching one petabyte in FY 2013. Data communication capacity must also be increased to support connectivity to swap data repositories, high-volume DCMs, and increased communication with newly-regulated industry participants as well as other regulators.
In FY 2012, the Commission will complete the first phase of a three-phase effort to improve business continuity. The Commission has established an Alternate Computing Facility (ACF) as part of the first phase and will complete the first phase by implementing the replication of mission critical and mission essential data to the ACF. The second phase will implement the capability to restore mission critical and mission essential systems from the ACF in accordance with recovery time and recovery point objectives. With Phase 3, which will begin in FY 2013, we will implement recovery capability for all Commission systems.
Partnering with DMO and DCIO, ODT continued refining and extending automated surveillance systems to improve staff's ability to conduct market, trade practice, and financial and risk oversight. Market and trade practice surveillance systems were modified to profile market activity warranting review and to alert staff to potential front running and position concentrations. Reports and user views were also added and modified to improve usability to increase staff productivity. Financial oversight systems were enhanced to increase usability and to process bank and mutual fund data, variation margin data, and CDS data for currently-registered DCOs.
To support the Dodd-Frank rulemaking effort, a web-based online comment system was implemented. This system facilitated industry and public participation in the rulemaking process. It was integrated with CFTC eLaw technology, which has been providing legal support for enforcement activities, to increase rulemaking staff productivity by providing them with powerful document search, tagging, and analysis capabilities. Staff was also supported with customized SharePoint portals to improve their ability to collaborate during the rule writing process. The CFTC Filings and Actions System (FILAC) was modified to support the initial phase of Dodd-Frank rule implementation.
The Commission substantially completed the migration of Trade Capture Report (TCR) data to a FIXML-based, open industry standard. CFTC had been receiving this data from futures exchanges in disparate, legacy formats. The result is much-improved data quality which has produced a commensurate improvement in the effectiveness of automated alert systems. Data transparency has also been improved, increasing the effectiveness of data analysis for market and trade practice surveillance and for economic research. The effort has also prepared staff for data standardization activities in support of Dodd-Frank that will enable the effective correlation and aggregation of data from multiple industry sources. The Commission began systematically receiving Time and Sales data to improve surveillance and started a preliminary analysis of the potential receipt of order message data to improve surveillance. Enhancements to data receipt and loading systems were implemented that will also be applied to the receipt of swaps data.
In support of Commission transparency initiatives, the CFTC.gov public website was moved to a new hosting facility. As a result, time-sensitive information is posted much more rapidly. The new site will also better support future improvements to online services for industry and the public. Also, the 'This Month in Futures Report' was redesigned to improve usability, increase transparency, and reduce report preparation time.
The Commission substantially completed the first phase of a three-phase effort to improve business continuity. The Commission established an Alternate Computing Facility (ACF) and will complete Phase 1 with the replication of mission critical and mission essential data to the ACF. The second phase will implement the capability to restore mission critical and mission essential systems from the ACF in accordance with recovery time and recovery point objectives. Phase 3, which will begin in FY 2013, will implement recovery capability for all Commission systems.
The Commission will begin implementing software to load swaps data into a Commission data warehouse for use by CFTC staff for market surveillance, risk monitoring, enforcement, and economic analysis. The Commission will work with industry to define data standards and will develop data loading software to support Commission systems for swaps data. Additionally, staff assessing swap dealers and major swap participants will begin to be supported by the integration of NFA systems and data stored at NFA with CFTC systems and data. Information will be presented to them in consolidated views so they can focus on analysis and review and spend less time correlating data from multiple sources.
The CFTC will begin the phased deployment of a web-based registration system, called OPERA (Organizations, Products, Events, Rules and Actions). The OPERA system will allow for the direct registration of entities, registration of foreign boards of trade, submission of rules and products, and requests for Commission actions or interpretations. With OPERA, market participants will be able to apply directly using CFTC.gov and the information collected will flow directly into internal CFTC systems.
The CFTC will begin developing the capability to host on CFTC.gov and Online Submission and Communication Portal that will be a secure online gateway providing a more efficient method of submitting registration and other forms of data to the Commission. The CFTC Portal will become a central location for business interactions with the Commission. The Portal will improve data quality, minimize the need for CFTC to update submitted data, and provide users with an account-specific view of their submissions to the CFTC. It will improve transparency of CFTC processes and procedures, providing automated notifications to external accounts regarding required actions. The CFTC will also begin receiving electronic forms from traders, reporting firms, and exchanges to improve data and decrease the cost of ingesting the information. This will include the collection of account and trader identification data and account ownership and control data.
Futures and OTC Risk Management. Using data standardized by asset class, futures and swaps risk management software will begin to be implemented to enable the CFTC to analyze margin requirements; determine price impact on portfolios; conduct margin trend analyses and back testing; and stress test swaps positions - including interest rate swaps, energy swaps and credit default swaps. Current financial and risk surveillance systems will begin to be modified to monitor volatility, variation margin, and increased financial reporting.
The Commission will begin implementing a system to support the analysis and monitoring of position limits and hedge exemptions, aggregating futures positions with enumerated commodity swap positions. CFTC will also begin developing surveillance processes that combine swaps, futures and options for intra-day and end-of-day position limits surveillance.
eLaw technology will begin to be augmented to provide support for enforcement tips, referrals and early case assessment.
The Commission will enhance surveillance systems to collect and incorporate that data into analyses covering both swaps and futures markets. CFTC will develop new models to generate alerts, thereby facilitating market and financial surveillance. The Commission will also modify its large trader reporting and financial risk surveillance systems to support new swaps data analysis, internal reporting requirements, and transparency reporting on CFTC.gov.
The Commission will expand its current eLaw case management component or migrate to another commercial off the shelf product to support enterprise-wide case management, integrating surveillance referrals into the ingestion process for enforcement cases.
The Commission will begin using market order data to monitor disruptive trading activities and conduct additional automated market surveillance activities such as identifying withheld orders. This will also improve the quality and scope of and economic analysis for surveillance, compliance, and enforcement activities by providing transparency into the entire lifecycle of trades.
The integration of examination tools and data with registration, surveillance, and case management tools and data will allow the Commission to more effectively and efficiently conduct examinations and initiate and manage follow-on activities. The pre-examination process of managing the selection and scheduling of examination activities, the management of examination activities in the field, and post examination reporting will also be addressed.
Financial and risk surveillance systems will be augmented or modified to monitor Commodity Pool Operators and Commodity Trading Advisors.