More than one billion futures and
option contracts are traded on
U.S. futures exchanges.
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![Representation of World Markets](/peth04/20041015025224im_/http://www.cftc.gov/images/main_pic.jpg) |
An Important Mission in the Ever-Changing World of Finance
The mission of the Commodity Futures Trading Commission (CFTC) is to protect market
users and the public from fraud, manipulation, and abusive practices related to the
sale of commodity and financial futures and options, and to foster open, competitive,
and financially sound futures and option markets.
Futures and Option Contracts
Futures contracts for agricultural commodities have been traded in the U.S. for more
than 150 years and have been under Federal regulation since the 1920s. In recent
years, trading in futures contracts has expanded rapidly beyond traditional physical
and agricultural commodities into a vast array of financial instruments, including
foreign currencies, U.S. and foreign government securities, and U.S. and foreign
stock indices.
Evolving Mission and Responsibilities
Congress created in the CFTC in 1974 as an independent agency with the mandate to
regulate commodity futures and option markets in the United States. The agency's
mandate has been renewed and expanded several times since then, most recently by the
Commodity Futures Modernization Act of 2000 (CFMA). Today, the CFTC assures the
economic utility of the futures markets by encouraging their competitiveness and
efficiency, ensuring their integrity, protecting market participants against
manipulation, abusive trading practices, and fraud, and ensuring the financial
integrity of the clearing process. Through effective oversight, the CFTC enables the
futures markets to serve the important function of providing a means for price
discovery and offsetting price risk.
How the CFTC is Organized
The Commission consists of five Commissioners
appointed by the President to serve staggered five-year terms. The President, with
the consent of the Senate, designates one of the Commissioners to serve as Chairman.
No more than three Commissioners at any one time may be from the same political
party.
The Chairman's staff has direct responsibility for providing information about
the Commission to the public and interacting with other governmental agencies and the
Congress, and for the preparation and dissemination of Commission documents. The
Chairman's staff also ensures that the Commission is responsive to requests filed
under the Freedom of Information Act. The Chairman's staff includes the Office of
the Inspector General, which conducts audits of CFTC programs and operations, and the
Office of International Affairs, which is
the focal point for the Commission's global regulatory coordination efforts.
The Chairman's staff is also responsible for liaison with the public, the
Congress, and the media. The Office of External Affairs (OEA) is the
Commission's liaison with the domestic and foreign news media, producer and
market user groups, educational and academic groups and institutions, and
the general public. OEA provides timely and relevant information about the
Commission's regulatory mandate, the economic role of the futures markets,
new market instruments, market regulation, enforcement actions, and customer
protection initiatives, actions, and issues. OEA also provides assistance to
members of the media and the general public accessing the CFTC's Internet
website.
The CFTC monitors markets and market participants closely by maintaining, in addition
to its headquarters office in Washington, offices in cities that have futures
exchanges—New York, Chicago, Kansas City, and Minneapolis.
Major Operating Units
Division of Clearing and Intermediary
Oversight
The functions of the Division of Clearing and Intermediary Oversight include
oversight of derivatives clearing organizations, financial integrity of registrants,
customer fund protection, stock-index margin, registration and fitness of
intermediaries, sales practice reviews, National Futures Association activities
related to intermediaries, and foreign market access by intermediaries.
Division of Market Oversight
The Division of Market Oversight has regulatory responsibility for initial
recognition and continuing oversight of trade execution facilities, including new
registered futures exchanges and derivatives transaction execution facilities. The
regulatory functions of the Division include, among other things, market
surveillance, trade practice reviews and investigations, rule enforcement reviews,
review of product-related and market-related rule amendments, and associated product
and market-related studies.
Division of Enforcement
The Division of Enforcement investigates and prosecutes alleged violations of the
Commodity Exchange Act and CFTC regulations. Violations may involve commodity futures
or option trading on domestic commodity exchanges, or the improper marketing of
commodity investments. The Division may, at the direction of the Commission, file
complaints before the agency's administrative law judges or in the U.S. District
Courts. Alleged criminal violations of the Commodity Exchange Act or violations of
other Federal laws which involve commodity futures trading may be referred to the
Justice Department for prosecution. The Division also provides expert help and
technical assistance with case development and trials to U.S. Attorneys’
Offices, other Federal and state regulators, and international authorities.
Office of Chief Economist
The Office of the Chief Economist is an independent office with responsibility for
providing expert economic advice to the Commission. Its functions include policy
analysis, economic research, expert testimony, education, and training.
Office of the General Counsel
The Office of the General Counsel (OGC) is the Commission's legal advisor. OGC
staff represents the Commission in appellate litigation and certain trial-level
cases, including bankruptcy proceedings which involve futures industry professionals.
As the Commission’s legal advisor, OGC reviews all substantive regulatory,
legislative, and administrative matters presented to it and advises the Commission on
the application and interpretation of the Commodity Exchange Act and other
administrative statutes. OGC also assists the Commission in performing its
adjudicatory functions.
Office of the Executive Director
The Office of the Executive Director (OED) formulates and implements the management
and administrative policies and functions of the agency. OED staff formulate the
agency's budget, supervise the allocation and use of agency resources, promote
management controls and financial integrity, and develop and maintain the
agency's automated information systems. The Office of Proceedings, which is under
the administrative direction of OED, provides an inexpensive and expeditious forum
for handling customer complaints against people or firms registered with NFA through
its reparations program. The Office of
Proceedings also hears and decides enforcement cases brought by the Commission.
CFTC Organization Chart [ HTML ] [ PDF ]