CFTC requests 33% increase in funding for 2013

The US Commodity Futures Trading Commission (CFTC) has requested $308m in funding for the 2013 financial year in the US federal budget – a 33% increase on the $205.3m it received for 2012.

The agency argues it needs extra funding to meet its Dodd-Frank Act responsibilities for supervision of the over-the-counter derivatives market.

Funding at the agency has almost doubled from a pre-crisis annual budget of $111 million in 2008, but the 2012 uplift was just $3 million.

CFTC commissioners have consistently complained that while the body’s jurisdiction has been massively expanded since the passage of Dodd-Frank in July 2010, it has not received the extra resources it needs. Staffing is the key concern – and the CFTC signalled it hopes to boost employee numbers (or full-time equivalents, in the agency’s jargon) in yesterday’s funding request.

“In 2013, the commission’s focus will shift to full implementation of the swaps market regulation. To that end, the commission proposes an increase of $103 million and 296 full-time equivalents (FTEs) in 2013 over the 2013 enacted level for a total request of $308 million and 1,015 FTEs,” the budget estimate reads.

The budget was swiftly criticised by the CFTC’s two Republican-appointed commissioners, who maintained the agency should focus on upgrading technology, rather than hiring extra staff.

“This budget request, like several requests before it, makes an unsubstantiated case for a massive expansion in staffing that is both unrealistic and unsustainable in this deficit environment. The commission consistently fails to recognise that in the face of its broad new statutory authority to oversee and monitor both the futures and derivatives markets, it cannot afford to continue to push off the key development and deployment of high-tech automated surveillance tools, real-time trade-monitoring systems, integrated trade-data capture and analysis tools and new risk analytics,” warned commissioner Scott O’Malia.

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