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Appendix 4 – FY 2013 Planned Objectives by Strategic Goal (continued)

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Overview of Planned Objectives by Strategic Goal

The Commission allocates budgetary resources by Strategic Goal in accordance with the Government Performance and Results Act (GPRA). The Dodd-Frank reforms passed on July 21, 2010 will require a thorough review of the Commission’s Strategic Goals structure and an update of those Goals and or at the least the underlying outcomes objectives and business processes.  Since that process is not yet complete this budget allocates resources under the structure of the Commission’s current strategic plan, incorporating where appropriated, new responsibilities flowing from Dodd-Frank.

The CFTC FY 2011 – 2015 Strategic Plan was issued February 2011.  The issuance of the CFTC Strategic Plan creates a unique situation in that the mission expanding the Dodd-Frank Act was passed in July 2010.

The goals of the CFTC largely remain the same with the regulation of swaps being incorporated within the regulatory structure currently applied to the futures and options markets.  The CFTC’s primary focus will be to write the rules to regulate the swaps markets, implement those rules, test and adjust those rules and write new rules as necessary to bring effective regulation to all derivatives markets over the next five years.

The Dodd-Frank Act will greatly increase the scope of regulation by the CFTC by bringing oversight to the swaps marketplace.  The regulation of the swaps markets included in the Dodd-Frank Act builds upon:

Summary of Goals, Objectives, and Strategies

Goal One: Protect the public and market participants by ensuring market integrity, promoting transparency,
competition and fairness and lowering risk in the system.
Objective Strategy
1.1 Ensure that markets are structured to reflect the forces of supply and demand for the underlying commodity and are free from manipulation, disruptive activity and abusive trading practices.
  1. Develop automated surveillance systems to monitor market conditions and trader activity, and develop an alert and case management system to identify and track potential trading violations.
  2. Review and update the content requirements of currently used trader reporting forms and identify potential new reporting forms or methods.
  3. Increase efficiency and reduce errors through the adoption of electronic filing of CFTC reporting forms.
  4. Review all contracts that have significant market impact for compliance with Core Principles in a timely manner.
  5. Timely review of new rules and rule changes for compliance with Core Principles.
  6. Ensure that new exchanges adopt rules that comply with Core Principles.
1.2 Ensure that U.S. DCMs and SEFs have the systems, procedures and resources necessary for effective self-regulation and ongoing compliance with Core Principles.
  1. Conduct examinations of individual DCMs and SEFs to ensure the structural sufficiency of their self-regulatory and Core Principle compliance programs.
  2. Conduct regular reviews of DCMs’ and SEFs’ automated systems and business continuity and disaster recovery programs for compliance with Core Principles related to market continuity.
1.3 Promote transparency by producing and publishing summary market statistics for the futures, options and swaps markets.
  1. Develop and publish swaps market reports.
Goal Two: Protect the public and market participants by ensuring the financial integrity of derivatives transactions,
mitigation of systemic risk, and the fitness and soundness of intermediaries and other registrants.
Objective Strategy
2.1 Clearing organizations and firms participating in the derivatives industry are financially sound.
  1. Monitor, review and assess DCOs’ compliance with Core Principles.
  2. Review and assess designated contract markets’ applications for compliance with the financial integrity provisions of the CEA.
  3. Review and analyze monthly and annual filings and conduct risk-based direct examination of FCMs’ and RFEDs’ compliance with financial requirements.
  4. Review swaps submitted to the Commission for a determination regarding whether such swaps are required to be cleared.
  5. Review new rules and rule amendments submitted by DCOs.
  6. Review and analyze financial risks on large trader and clearing member positions and determine whether they are being appropriately managed by traders, firms and DCOs.
2.2 Registered intermediaries meet standards for fitness and conduct.
  1. Review Swap Dealers and Major Swap Participants to ensure that they comply with the CEA and Commission regulations.
  2. Review RFAs to ensure they fulfill their statutory and delegated responsibilities.
  3. Conduct risk-based examination of intermediaries not holding customer funds to ensure they are in compliance with Commission requirements.
2.3 Ensure that self-regulatory organizations fulfill their financial surveillance responsibilities.
  1. Conduct oversight of the financial surveillance programs of SROs.
2.4 Ensure that information technology systems support the Commission's existing and expanded responsibilities to ensure financially sound markets, mitigate systemic risk, and monitor intermediaries.
  1. Deliver technology infrastructure, systems, and services that support the financial integrity of derivatives transactions, the mitigation of systemic risk, and the fitness and soundness of intermediaries.
Goal Three: Protect the public and market participants through a robust enforcement program.
Objective Strategy
3.1 Identify and stop violations of the Commodity Exchange Act and Regulations; deter others from engaging in future misconduct.
  1. Investigate and prosecute potential violations of the Commodity Exchange Act and Commission Regulations.
3.2 Increase cooperative enforcement.
  1. Leverage resources through active cooperative enforcement with domestic entities.
Goal Four: Enhance integrity of U.S. markets by engaging in cross-border cooperation, promoting strong international
regulatory standards, and encouraging ongoing convergence of laws and regulation worldwide.
Objective Strategy
4.1 Cooperate and coordinate with domestic and foreign regulatory authorities.
  1. Develop arrangements for expeditious cooperation with foreign governments.
4.2 Promote high levels of internationally accepted standards of best practice.
  1. Promote high-quality principles internationally.
4.3 Provide Global Technical Assistance.
  1. Provide technical assistance to foreign regulators.
Goal Five: Promote Commission excellence through executive direction and leadership,
organizational and individual performance management, and effective management of resources.
Objective Strategy
5.1 An organizational structure that is aligned and streamlined to operate and carry out its mission efficiently and effectively.
  1. Ensure organizational structure best reflects the needs of the CFTC.
5.2 Effectively respond to a the regulatory needs of a dynamic and complex derivatives market place and efficiently allocate limited resources to the highest priority activities.
  1. Develop and implement a set of integrated Strategic, Budget and Operating Plan processes.
5.3 Attract, engage, develop and retain an exceptionally qualified, diverse, and productive workforce.
  1. Assess, develop and implement automated hiring system.
  2. Develop, implement, execute and sustain a workplace that is top in its class.
  3. Develop, implement and execute a robust learning program.
5.4 Information Technology (IT) supports and enhances mission accomplishment through effective and efficient infrastructure, systems and services.
  1. Ensure the highest practical return on both business and IT investments.
  2. Facilitate the usefulness and usage of information, increasing its availability, ensuring quality and reducing staff time necessary to analyze relevant data.
  3. Automate key business processes.
5.5 Ensure effective stewardship and management of CFTC financial resources.
  1. Reengineer budget process accounting codes (BPAC).
  2. Improve budget formulation and audit processes.
  3. Implement web-based time and attendance system.


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