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US budget proposes $93m extra for CFTC but only if Obama plan becomes law
09 March 2010
The CFTC, which oversees most US futures and options, could receive an extra $93m, or 55% of its present annual budget of $168.8m, which would bring its total funding to $261m. The SEC, which regulates all derivatives linked to securities, could be given a budget of $1.13bn in 2011.
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However, the increases in budgets will only be awarded if US President Barack Obama’s plan for overhauling the US financial markets becomes law.
Of the extra $93m, $45m is dependant on whether the proposed legislation is passed. Obama’s plans would give the CFTC new powers to regulate over-the-counter derivatives.
Under the White House budget plan, the SEC budget would decrease by $24m if a financial measure is not enacted.
The CFTC’s budget report, which was published on February 1, said that it has earmarked the money for technological modernisation and new staff.
The regulator said that $34m from its fiscal year 2010 and 2011 budgets will be used to combine two existing surveillance systems. The regulator’s two systems — one for position data and the other for trade data — will be combined. Doing this would enable it to provide “timely reporting of quality and meaningful market information”.
The CFTC said that as a result of the technological investment, it will be able to better record detailed data by trader, account ownership, inter-day transactions and intra-day transactions across all markets.
The increased budget will also allow the CFTC to employ more staff; something it has long pleaded for. It said that if it is awarded the full 2011 budget, it will employ 95 new full-time employees from its 2010 staffing levels of 650 members of staff.
Gary Gensler, chairman of the CFTC, has long championed an increase in funding to expanding the staffing levels of the regulator. In its 2011 budget report, it echoed the longstanding view that staffing levels are only recovering from a “serious staffing shortfall”.
The futures regulator said that as part of its expansion of staff it will employ an extra 39 enforcement staff members, 29 people in its market oversight team, nine in its agency direction; seven in the clearing and intermediary oversight and risk management team, four chief economists, three in its enterprise risk management teams, two new employees in its commission planning, one in its international affairs department and one in its proceedings team.
The budgets of the CFTC and the SEC still require the approval of the US Congress before taking effect. The US fiscal year starts on October 1.