Congress created the CFTC in 1974 as an independent agency with the mandate to regulate commodity futures and option markets in the United States. The Commission’s mandate was renewed and/or expanded in 1978, 1982, 1986, 1992, and 1995. In December 2000, the Commission was reauthorized through FY 2005 with passage of the CFMA. The CFMA repealed the ban on futures contracts based on individual securities and narrow-based security indexes, and instituted a regulatory framework for such products to be administered jointly by the CFTC and the SEC. The legislation also placed bilateral, Dodd-Frank Act transactions largely outside the CFTC’s jurisdiction and addressed CFTC anti-fraud authority over retail, off-exchange foreign currency (forex) transactions.
In FY 2008, the Commission was reauthorized as part of that year’s Food, Conservation, and Energy Act of 2008 (Farm Bill). The Farm Bill included other amendments to the CEA as well—primarily to increase the Commission’s regulatory oversight role with respect to forex transactions and significant price discovery contracts (SPDCs) traded on electronic trading facilities known as exempt commercial markets (ECMs). The Commission has adopted a rule to implement the new statutory responsibilities for SPDCs and is conducting evaluations for ECM contracts consistent with those regulatory provisions.
Although Congress changed the Commission’s approach to regulation over time, the Commission’s mission remains the same. The CFTC continues to be responsible for fostering the economic vitality of the regulated futures markets by encouraging their competitiveness and efficiency; ensuring their integrity; and protecting market participants against manipulation, abusive trading practices, and fraud. Through its oversight regulation, the CFTC enables the commodity futures and option markets to serve their vital function in the Nation’s economy, providing a mechanism for price discovery and a means of offsetting price risks.
During the past two years, Congress and Federal financial regulators began to re-examine the financial regulatory structure. The recent economic stress has resulted in heightened congressional scrutiny of Federal financial regulation, which is expected to continue in the year ahead. The Commission continues to undertake its own evaluation of its regulatory structure. For example, to address concerns about the growth of nontraditional participants in the futures markets and concerns and about excessive speculation, the Commission is evaluating whether to adopt speculative position limits for commodities with limited supplies, such as energy contracts. The Commission recently held a series of hearings on this subject.
The CFTC Mission Statement, Strategic Goals and their related outcome objectives and performance metrics, as well as its multi-year Strategic Plans, create a template that allows management to articulate priorities, measure results, and conduct long-range planning while ensuring the flexibility to adapt its program to address market and financial emergencies and new regulatory concerns.
In 2007, the Commission issued Keeping Pace with Change, its Strategic Plan for FY 2007 through FY 2012. With the 2007 Strategic Plan, the Commission adopted a fourth strategic goal that assesses and measures organizational and management excellence. Establishing this fourth strategic goal allows the Commission to establish and measure its progress in achieving outcome objectives and strategic goals in a broad performance and management framework, evaluating not only program performance but the overall performance and management of the organization.
The following table is an overview of the Commission’s strategic mission, statement, strategic goals, and outcome objectives.
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