Fundamental changes in the technology, products and platforms of U.S. futures trading have increased the Commission's need for sophisticated technology, specialized skills and additional resources to keep pace.
In the futures industry, exchanges, in particular, have undergone a decade-long transition from geographically-defined trading pits to electronic platforms with global reach. From 2000 to 2010, electronic trading grew from approximately nine percent of volume to 78 percent on all U.S. DCMs. Over the same time period, the number of actively-traded futures and options contracts listed on U.S. exchanges increased more than nine-fold, from approximately 266 contracts in 2000 to approximately 2,466 contracts in 2010. Total DCM futures and options trading volume rose from approximately 580 million contracts in 2000 to approximately 3.11 billion in 2010, an increase of more than 436 percent.
The Commission's regulatory scope encompasses trading entities, clearing entities, and data repositories and the sole registered futures association, NFA. For the overwhelming number of market participants, the Commission's role is as a second-line regulator, where the agency relies on the DSROs to perform critical regulatory responsibilities. The Commission's direct regulatory activities in registration, product reviews, and examinations are primarily focused on the DCMs, DCOs, SDRs, NFA, and soon, SEFs. The Commission also conducts direct examinations of intermediary trading entities on a "for cause" basis and periodic routine direct examinations as resources are available. While the DSRO's are obligated to conduct surveillance and enforcement activities for entities under their purview, the Commission conducts surveillance and enforcement activities across all market participants.
A cross-walk of regulated entities and registrants and CFTC's mission activities follows. Activities and entities for which CFTC is the first-line regulator are identified as "CFTC". Activities and major entities for which the agency is the second-line regulator are identified as "SRO/CFTC", "DSRO/CFTC" or "NFA/CFTC", where DSRO is the acronym for Designated SRO. Activities and entities for which the CFTC has delegated responsibility to the NFA are identified as "NFA".
Entity | Acronym | CFTC Mission-Activity | |||||
---|---|---|---|---|---|---|---|
Registration and Registration Compliance |
Product Reviews |
Surveillance | Examinations | Enforcement | Economic and Legal Analysis |
||
Trading Entities | |||||||
Designated Contract Market | DCM | CFTC | CFTC | CFTC | CFTC | CFTC | CFTC |
Swap Execution Facility | SEF | CFTC | CFTC | CFTC | CFTC | CFTC | CFTC |
Foreign Board of Trade | FBOT | CFTC | CFTC | N/A | N/A | CFTC | CFTC |
Clearing Entities | |||||||
Derivatives Clearing Organization | DCO | CFTC | CFTC | CFTC | CFTC | CFTC | CFTC |
Systemically Important Derivatives Clearing Organization |
SIDCO | CFTC | CFTC | CFTC | CFTC/ Federal Reserve |
CFTC | CFTC |
Data Repositories | |||||||
Swap Data Repository | SDR | CFTC | N/A | N/A | CFTC | CFTC | CFTC |
Registered Futures Association | |||||||
National Futures Association | NFA | CFTC | N/A | N/A | CFTC | CFTC | CFTC |
Intermediaries | |||||||
Futures Commission Merchant | FCM | NFA | N/A | DSRO/CFTC | DSRO/CFTC | DSRO/CFTC | CFTC |
Swap Dealer | SD | NFA | CFTC | NFA/CFTC | NFA/CFTC | NFA/CFTC | CFTC |
Major Swap Participant | MSP | NFA | CFTC | NFA/CFTC | NFA/CFTC | NFA/CFTC | CFTC |
Retail Foreign Exchange Dealer | RFED | NFA | N/A | NFA/CFTC | NFA/CFTC | NFA/CFTC | CFTC |
Managed Funds | |||||||
Commodity Trading Advisor | CTA | NFA | N/A | NFA/CFTC | NFA | NFA/CFTC | CFTC |
Commodity Pool Operator | CPO | NFA | N/A | NFA/CFTC | NFA | NFA/CFTC | CFTC |
Other Registrants | |||||||
Introducing Broker | IB | NFA | N/A | NFA/CFTC | NFA | NFA/CFTC | CFTC |
Floor Broker | FB | NFA | N/A | CFTC | N/A | SRO/CFTC | CFTC |
Floor Trader | FT | NFA | N/A | CFTC | N/A | SRO/CFTC | CFTC |
Associated Person (Sales) | AP | NFA | N/A | CFTC | N/A | SRO/CFTC | CFTC |
Entity | Acronym | Number of Registered Entities/Registrants | ||
---|---|---|---|---|
FY 2012 Actuals |
FY 2013 Assumptions |
FY 2014 Assumptions |
||
Trading Entities | ||||
Designated Contract Market | DCM | 16 | 23-26 | 23-26 |
Swap Execution Facility | SEF | 0 | 15 | 15 |
Foreign Board of Trade | FBOT | 21 | 21 | 21 |
Clearing Entities | ||||
Derivatives Clearing Organization | DCO | 17 | 18 | 20 |
Clearing Member | 191 | 200 | 210 | |
Systemically Important DCO | SIDCO | 2 | No more than 4 | No more than 4 |
Data Repositories | ||||
Swap Data Repository1 | SDR | 3 | 5-7 | 5-7 |
Intermediaries | ||||
Futures Commission Merchant2 | FCM | 128 | 115 | 115 |
Swap Dealer | SD | 0 | 120 | 120 |
Major Swap Participant | MSP | 0 | 0-6 | 0-6 |
Retail Foreign Exchange Dealer | RFED | 14 | 12 | 12 |
Managed Funds | ||||
Commodity Trading Advisor | CTA | 2,470 | 2,600 | 2,600 |
Commodity Pool Operator | CPO | 1,172 | 1,800 | 1,800 |
Other Registrants | ||||
Introducing Broker | IB | 1,354 | 1,500 | 1,500 |
Floor Broker | FB | 5,650 | 5,600 | 5,600 |
Floor Trader | FT | 1,102 | 1,100 | 1,100 |
Associated Person | AP | 51,068 | 54,000 | 54,000 |
1 Number of SDR registrants in 2012 are for those entities with provisional registration status. (back to text)
2 Excludes FCMs registered as RFEDs. (back to text)