Goal Four Background and Context

The fulfillment of the Commission’s mission and the achievement of our goals depend on a foundation of sound management and organizational excellence. This foundation is essential to support the work of the Commission in the Washington D.C. headquarters and three regional offices in Chicago, Kansas City, and New York. The Commission is committed to maintaining a well-qualified workforce supported by a modern support infrastructure that enables the Commission to achieve its programmatic goals. Building and sustaining this foundation requires continuous investments in people, management initiatives systems, and facilities.

Agency Direction. The Office of the Chairman and the Commissioners provide executive direction and leadership to the Commission—specifically as it develops and adopts agency policy that implements and enforces the CEA and amendments to that Act including the CFMA. This policy is designed to foster the financial integrity and economic utility of commodity futures and option markets for hedging and price discovery, to conduct market and financial surveillance, and to protect the public and market participants against manipulation, fraud, and other abuses. Executive leadership, in this regard, is the responsibility of the Chairman and Commissioners and includes the offices of the Chairman: the Office of External Affairs; the Secretariat; the Office of Inspector General; and the Office of Equal Employment Opportunity.

The Commission continues to implement the CRA, (part of the 2008 Farm Bill), making critical improvements to the CEA and the Commission’s authority. Specifically, the new legislation reauthorized the Commission through FY 2013, provided enhanced Commission oversight of ECMs that trade contracts performing a significant price discovery function, increased CFTC penalty authority for manipulation, clarified CFTC anti-fraud authority for off-exchange principal-to-principal energy trades, and clarified CFTC off-exchange retail foreign currency fraud authority.

Human Resources Management. The Commission employees play a vital role in protecting the integrity of the futures and option markets—one of America’s most innovative and competitive financial services industries. To maintain the U.S. role as the world leader in setting the standard for ensuring market integrity and protection for market users, the Commission must have sufficient resources to attract, train, promote, and retain a professional workforce.

The Commission continually refines and enhances its strategic human resource initiatives. A governance committee of senior managers draws on frequent employee input to develop programs that will support long-term mission goals of knowledgeable, diverse and productive human capital. The goal is a workforce that reacts and adapts quickly in terms of size, skills and composition to meet changes in the industry, technology and/or statutory or regulatory developments. The governance process has contributed to annual successes in the development and implementation of a comprehensive pay and benefits program mandated by Section 10702 of Public Law 107-171, the FSRIA of 2002. CFTC is in its second full year of measuring performance under a merit pay system to foster a performance culture. The Commission system for classifying its mission-critical positions is under review by the governance committee. Next steps include consideration of differentiating compensation for supervisory responsibilities and a review of the executive management classification system. This ongoing strategic management of human capital initiatives commits the agency to improving its ability to: 1) plan for anticipated change in workforce composition; 2) target and recruit employees to fill critical skill deficiencies; 3) support employee development; 4) identify and justify staff resources needed to perform statutory mandates; and 5) implement the Title V-exempt CT pay plan envisioned by FISRA.

Information Technology Management. The Commission’s ability to fulfill its mission successfully depends on the collection, analysis, communication and presentation of information in forms useful to Commission employees and other interested parties, such as the industry it regulates: Federal, state, and international agencies with which we cooperate, the Congress, and the American public. A secure modern information technology infrastructure is a vital tool that enables the Commission to serve these stakeholders effectively. The Commission is making a concerted effort to use commercial best practices when developing and maintaining its information technology (IT) systems, applications and infrastructure, deploying a modern data analysis, reporting, messaging, archiving, and document management solution. The Commission’s FY 2011 Budget includes approximately $32 million for information technology. The resources will allow the Commission to make improvements in information technology by upgrading hardware and software, improving existing systems and developing new systems critical to maintaining adequate market oversight and innovating new ways to assure transparency. See Appendix 3 for a more detailed summary of the information technology budget.

With the growth of trade and order volumes, the amount of reported trade and order data has grown multifold. Alongside that data growth, the Commission is frequently engaged in more complex and time sensitive information analysis efforts. The Commission is actively engaged in modernizing the technology base of core, mission-critical market surveillance systems – automating detection methods to identify and analyze market manipulation and trade practice violations in a global environment. Previously, such detection relied on the manual detection by Commission staff members. With the market growth experienced in the industry over recent years, manual detection methods are inadequate and extremely burdensome on staff. The Commission is making a significant investment to bring these systems in line with the requirements of 21^st century surveillance.

The Commission is in the process of fully implementing the Trade Surveillance System (TSS), which will allow the Division of Market Oversight to better detect and assess a range of possible trade practice violations and market manipulation scenarios. TSS information is also being used by the Office of the Chief Economist for economic analyses and by the Division of Enforcement for investigatory purposes. The TSS implementation is an essential component of the technology modernization being undertaken at the Commission. This system takes advantage of state-of-the-art commercially available software to enhance market surveillance capability over the expanding and diverse electronic trading platforms. TSS will ultimately replace outdated legacy surveillance systems, which have limited capability to assess new trading techniques, such as inter-exchange trading. Several new custom trade practice surveillance models, reports, and alerting mechanisms are being developed. The implementation of TSS will facilitate the utilization of the essential trading-related data, around which considerable Commission industry analysis is based.

CFTC uses the Integrated Surveillance System (ISS) to receive end of day positions from large traders active in commodity markets. The Commission is planning a significant modernization of this mission critical system, which was originally developed when manual detection methods were sufficient to monitor market conditions. This system will be modernized to focus on greater market manipulation detection and reporting, increased internal and external data transparency enhanced reports, improved case management to track market surveillance activities, integration of large trader data with intraday trading activity, improving the automated collection of data from industry participants, and enhancing capabilities to manage position limits. The modernization of ISS, along with TSS, is an essential initiative that will be part of the technological foundation of the Commission’s 21^st century surveillance program in the global economy.

The Commission continues to upgrade its information technology management capabilities in the areas of analytics, statistical processing and market research. This ongoing initiative involves acquiring and implementing new and emerging software technologies that enhance and leverage our current information assets. The Commission is concentrating on leading edge technology that can be applied throughout the organization, using this new capability to assist staff in conducting market research that impacts policy decisions and provides the interpretive analysis necessary for Congressional inquiries and inter-agency programs.

The eLaw Program provides law office automation and modernization by seamlessly integrating technology and work processes to support managers and staff across the Commission in their investigative, trial, and appellate work. eLaw provides support in the areas of case planning, case management, litigation, and document management. The eLaw program has been an essential component of the Commission’s successful execution of its enforcement objectives. With the eLaw program, the Commission has a state-of-the-art technology base to conduct investigations and bring enforcement actions through the analysis of massive quantities of data. We will be expanding this system into the Office of Proceedings and planning further expansion into the Office of General Counsel. Additional technical enhancements will also be introduced as the existing eLaw suite of products are upgraded or expanded. One such expansion of the eLaw suite is the addition of audio analytics capability. Audio analytics software is being phased-in to complement the investigative process. Electronic trial support capability is also being added to provide onsite trial support for our litigation teams interfacing with electronic courtrooms.

CFTC.gov and the Commission’s intranet Web site, Open Interest, are being enhanced as part of an initiative to enhance both internal and external transparency of information. The objective for both sites is to provide a more dynamic, accessible and informative Web site with rich multi-media content and web 2.0 services. An evaluation and functional assessment of both CFTC.gov and Open Interest will be performed. Completion of these initiatives will ensure that the Commission’s Web sites comply with government best practices, legal requirements, and industry guidelines, while leveraging emerging internet technologies.

The Commission’s ability to fulfill its mission depends on the collection, analysis, communication, and presentation of information in forms that are easily retrieved and useful to Commission employees, the regulated industry, Federal, state, and international agencies, the Congress, and the American public. The Commission is planning the implementation of a new Records and Document Management System to modernize, centralize and automate the management of the Commission’s information resources. When complete, the new system will transform the Commission’s document management practices, technical solutions, and business process.

To effectively implement and sustain the modernization of the mission critical surveillance systems, the improved internet and intranet Web sites, and implementation of a document management system, the Commission will use enterprise architecture and data architecture best practice frameworks, tools, and processes. This approach will ensure that the development of an information management strategy that will transform a growing data stream and growing data analysis requirements into the Commission-wide information management environment. This strategic initiative will examine current capabilities, emerging data needs, data governance, data organization, data privileges, and software capabilities to provide an information architecture framework that supports current mission requirements. The resulting solution will provide the CFTC with more effective information analysis capability by modernizing the Commission existing data management environment.

Management Operations. The Office of Management Operations provides support to Commission staff by ensuring the timely delivery of products and services, the safety and security of all employees, and operations and maintenance of the facilities at Headquarters and in the regional offices. Many improvements in critical administrative service areas have occurred during the last few years, including the development of a property management system for non-capitalized, sensitive items and better tools for planning and managing space and construction requirements to meet the requirements of additional personnel.

Financial Management. Improved accountability for performance, together with unquestionable fiscal integrity, serves as key mission delivery cornerstones. Effective financial management systems and services facilitate Commission performance, and earning unqualified audit opinions demonstrates financial accountability. Reliance on Department of Transportation systems and accounting services ensures that the financial resources entrusted to the Commission are well managed and judiciously deployed. The Budget and Performance and Accountability Report permit the public to see how well programs perform, and the cost incurred to achieve that performance.

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