In this article, We learn about "Commodity Futures Trading Commission (CFTC)".Let's Go!
The Commodity Futures Trading Commission (CFTC) is a US-based agency that regulates the derivatives market, including options, swaps and futures contracts.
CFTC plays an important role in regulating financial markets.
Without such regulation and regulators, market participants could be defrauded by unscrupulous individuals and lose confidence in our capital markets.
This may prevent capital markets from effectively allocating financial resources to the most worthwhile means of production and productive economic activities, thereby harming investors, consumers, and society.
It was established in 1974 as an independent organization, taking over the responsibilities of its predecessor, the Commodity Exchange Administration (CEA) regulator.
In the past, futures contracts were typically traded in the context of agricultural commodities. This is one reason CEA is affiliated with the U.S. Department of Agriculture (USDA). However, the futures industry has become increasingly complex, with a wide variety of contracts.
CFTC organizations include:
- Members
- Chairman’s Office
- Agency Operating Unit
The Commission is composed of five members appointed by the President, with the advice and consent of the Senate, to serve staggered five-year terms.
With the consent of the Senate, the President designates a member to serve as Chairman.
No more than three members from the same political party may be present at the same time.
Department
Liquidation and Risk (DCR)
The Department of Clearing and Risk (DCR) oversees the Derivatives Clearing Organization (DCO) and other market participants in the clearing process.
Enforcement (DOE)
Law enforcement investigates and prosecutes alleged violations of the Commodity Exchange Act and Commission regulations. Potential violations include fraud, manipulation and other abuses involving commodity derivatives and swaps, threatening market integrity, market participants and the public.
Market Regulation (DMO)
The Department of Market Regulation (DMO) fosters open, transparent, fair, competitive and secure markets by regulating derivatives platforms and swap data repositories.
Swaps Dealers and Intermediaries Oversight (DSIO)
The Division of Supervision of Swaps Dealers and Intermediaries (DSIO) mainly regulates derivatives market intermediaries, including commodity pool operators, commodity trading advisors, futures commission merchants, introducing brokers, major swap participants, and retail foreign exchange dealers. and swap dealers, as well as designated self-regulatory organizations.
Office
Office of the Chief Economist (OCE)
The Office of the Chief Economist provides economic support and advice to the Commission, conducts research on policy issues facing the Commission, and educates and trains Commission staff.
OCE plays an integral role in the implementation of new financial market regulations by providing economic expertise and cost-benefit considerations behind these regulations.
Office of Data and Technology (ODT)
The Office of Data and Technology provides technical and data management support for market and financial surveillance, surveillance, enforcement, legal support and public transparency activities. ODT also provides general networking, communications, storage, comg and information management infrastructure and services.
Office of the Executive Director (OED)
The Executive Director ensures that the Commission adapts to the changing markets it oversees, directs the allocation of CFTC resources, develops and implements management and administrative policies, and ensures that program performance is measured and tracked across the Commission.
Office of General Counsel (OGC)
The Office of the General Counsel provides legal services and support to the Commission and all of its programs.
These services include: representing the Commission in appeals, bankruptcy and other proceedings; assisting in the performance of adjudicatory functions; providing legal advice and support for Commission programs; drafting and assisting in the preparation of Commission regulations; interpreting the CEA; and advising on legislative, regulatory and operational issues suggestion.
Office of Inspector General (OIG)
The Office of the Inspector General is an independent organizational unit of the CFTC. Its mission is to detect waste, fraud, and abuse, and to promote the integrity, economy, efficiency, and effectiveness of CFTC programs and operations.
Therefore, it has the ability to review all plans, activities and records of the Committee. Pursuant to the Inspector General Act of 1978, the Office of the Inspector General publishes semi-annual reports detailing its activities, findings and recommendations.
Office of International Affairs (OIA)
The Office of International Affairs advises the Commission on international regulatory initiatives; provides guidance on international issues raised in ODRG) and other international forums; coordinate Committee policies related to policies and initiatives of key foreign jurisdictions, the G20, the Financial Stability Board (FSB), and the U.S. Treasury Department; negotiate cooperative arrangements and respond to inquiries regarding supervisory cooperation or information sharing inquiries; and technical assistance to foreign market authorities, including advice, training, and annual conferences and seminars.
Office of Legislative and Intergovernmental Affairs (OLIA)
The Office of Legislative and Intergovernmental Affairs (OLIA) serves as the CFTC Chairman’s principal advisor on matters before the U.S. Congress and serves as the Commission’s official liaison to members of Congress, federal agencies, and the government.
Office of Minority and Women Inclusion (OMWI)
The Office of Minority and Women's Inclusion leads CFTC's civil rights, equal employment opportunity, diversity and inclusion programs.
Office of Public Affairs (OPA)
The Office of Public Affairs is the Commission's primary public-facing office, serving internal and external stakeholders across the divisions by providing honest, timely, and useful information through all communication platforms to accomplish and advance the Commission's mission. OPA actively conducts outreach and creates messages designed to increase CFTC brand awareness in order to increase public trust.
Whistleblower Office (WBO)
The CFTC’s Whistleblower Program provides monetary rewards to individuals who report potential violations of the Commodity Exchange Act, leading to successful enforcement actions, and provides privacy, confidentiality, and anti-retaliation protections for whistleblowers who share information with or assist the CFTC.
CFTC Committee
The CFTC Advisory Committee was established to provide advice and recommendations to the Commission on a variety of regulatory and market issues affecting the integrity and competitiveness of U.S. markets.
Committee facilitates communication between the Committee and the U.S. futures markets, trading firms, market participants, and end users.
Committee currently includes:
- Agriculture Advisory Committee
- Energy and Environmental Market Advisory Committee
- Global Market Advisory Committee
- Market Risk Advisory Committee
- Technical Advisory Committee
- CFTC-SEC Joint Advisory Committee
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