February 19, 1998

I am pleased to be here today to participate in this important symposium on career options for minority students in the securities and futures industries. The time has long since passed for our industries to reach out and to diversify--to provide equal opportunities to all persons irrespective of race, ethnicity or gender--and I applaud the symposium's contribution to this effort.

The Commodity Futures Trading Commission (CFTC) was created by Congress in l974 as an independent federal agency with the mandate to regulate U.S. futures and option markets. The markets serve vital price discovery and hedging functions essential to a healthy economy. They are used by pension funds, mutual funds, financial institutions, manufacturers, farmers, exporters, commercial firms, governmental entities and many others to manage their price risks. The prices established on them are the basis for the commercial pricing of many agricultural products, energy products, metals and other commodities. The Commodity Exchange Act (CEA) grants the Commission exclusive jurisdiction over futures and commodity options, whether they are traded on- or off-exchange, and establishes the legal standards for trading such instruments.

Since its creation, the CFTC has witnessed a rapid evolution of the U.S. futures markets. On the futures exchanges, we have seen an explosion of trading in financial products such as foreign currency, stock index and interest rate futures, leaving the once-dominant trading in agricultural products only a small part of exchange trading today. We have witnessed enormous growth in the use of off-exchange derivatives contracts, again primarily in the financial sector. We also have seen the establishment of numerous new foreign futures exchanges, creating a truly global marketplace.

The ten U.S. futures and option exchanges are the strongest, most dynamic and most innovative in the world. Over the past 11 years, trading volume has more than quadrupled--increasing from 216 million contracts in 1986 to 905 million contracts in 1997. Two of the world's three largest futures exchanges, the Chicago Board of Trade (CBT) and the Chicago Mercantile Exchange (CME), are located right here in Chicago. These exchanges are thriving. Patrick Arbor, the Chairman of the CBT, the world's largest futures exchange, described 1997 as the "best year ever in the history of this exchange." The CME, the world's third largest exchange, enjoyed its second best year ever with trading volume growing by 13.4% over 1996.

Not surprisingly, as home to the world's leading futures exchanges, Chicago increasingly is recognized as a global leader in the field of financial risk management. According to a December 1996 report by the Risk Management Center of Chicago, the city's total direct commodities and securities industry employment is 50,000, with an additional indirect employment generated by these industries of over 100,000. Thus, given the ongoing need for persons to fill these jobs--traders, brokers, money managers, exchange employees, analysts, accountants, specialized bankers, lawyers and economists--there should be ample opportunity to share in this growth.

For too long, however, many of these jobs have not reflected the diversity of the population. For example, of the more than 6,000 CBT and CME exchange members, only about one-half of one percent are African American, and very few of the exchanges' senior staff, officers or directors are African American. Likewise, there are very few Asian Americans or Hispanic Americans in these positions and few women. Nor are the futures exchanges alone in this regard. Minority participation among the 64,000 commodity professionals and entities supervised by the Commission who trade on the floors of the exchanges or deal with customers likewise is small.

Indeed, for too long many of these jobs have been filled based on friendships and family relationships, and an incidental characteristic of these relationships has been that they usually did not include persons of color. Today I want to challenge the futures industry to go beyond its roots. The time has come to open up opportunities for all based on what they can contribute, not whom they know.

Notwithstanding the current health of our markets, they face significant challenges as a result of increased competition, globalization and technological change. These challenges can best be met by ensuring that talented people bringing innovative ideas and creative solutions are welcomed into the futures industry. In order to attract people with diverse backgrounds and outlooks, the industry should affirmatively commit to open up opportunities to all. A proactive recruitment effort is essential to this endeavor. Indeed, the industry will do itself a disservice if it fails to seek out people from the broadest possible base of participation--eliminating race, ethnicity and gender barriers.

The Commission, too, must continue its commitment to provide full employment opportunities to persons of color. Government service can provide a wonderful long-term career or enable employees to develop expertise that can serve as a stepping stone to the private sector.

Among the programs the Commission has that might be of interest to you is its summer student employment program. Students at the undergraduate and graduate levels are encouraged to apply for positions in our Chicago, Washington, D. C., New York, and Los Angeles offices. Last year 48 students were employed in paid positions in the Commission's Division of Enforcement, Division of Economic Analysis, Division of Trading and Markets, and Office of the Executive Director. This year the deadline for receipt of resumes is March 13, 1998. The Commission's summer program offers a wonderful opportunity to gain some experience in government service and some background in the futures industry.

In the Commission and in the futures industry, persons with different backgrounds have made and continue to make outstanding contributions and to achieve personal success and fulfillment. I challenge all of you here to join with me to work to ensure that our industry and markets remain strong and competitive by drawing the very best talent from a barrier-free pool.