By FY 2014, participants in the swaps market under CFTC jurisdiction will, by and large, be operating under the framework established by the Dodd-Frank Act. The low-tech, high-touch bilateral voice transactions era for swaps trading will be subsumed by trading on regulated platforms, central clearing and real-time trade reporting. The regulatory uncertainty for these market participants will have been lifted and, while some phasing and fine-tuning will likely be ongoing, the market place will be trading, settling, and reporting swaps, and reaping the benefits of risk-mitigated hedging strategies. CFTC's resource needs will have shifted from its rule-writing focus, through a period of intense interpretative guidance development, to daily oversight of this large and complex market. This evolution is predictable and affects all of the CFTC's mission activities, but cannot be accomplished without adequate funding.
- In FY 2014, the allocation of the 1,015 staff and $315 million (including $73 million for IT), will be adjusted among the mission activities to reflect the evolution for the rule-writing and interpretive guidance Dodd-Frank "start-up" activities to sustaining activities. At this level, the Commission will be positioned to build its operational capabilities, evaluate changes in the industry as it responds to the new Dodd-Frank regulatory framework, and address any unanticipated issues that will naturally arise in implementing the Dodd-Frank Act regulatory reforms.
- The Commission will spend just over one-third (34 percent) of the Commission's resources on surveillance (including data acquisition and analytics) and examinations of systemically important derivatives clearing organizations as required by Title VIII of the Dodd-Frank Act, and examinations of other significant registered entities.
- Another 22 percent of its resources will be focused on registering new entities and ensuring that currently registered entities comply with new core principle requirements; reviewing new contracts, making mandatory clearing determinations, and other product review activities; providing economic analyses and legal guidance and interpretations on the new regulatory framework; and coordinating with international regulators to ensure cross-border harmonization of these global markets.
- Approximately 18 percent of the Commission's resources will be dedicated to enforcement activities.
- The remaining 26 percent of the Commission's resources will be responsible for supporting the Commission's data infrastructure (16 percent) and agency direction, management, and administrative support (10 percent).