U.S. CFTC to restructure to reflect changing role
WASHINGTON, Feb 1 (Reuters) - The Commodity Futures Trading Commission, which oversees U.S. futures markets, said on Friday it would restructure itself to help implement a major overhaul of U.S. futures laws cleared by Congress in late 2000.
The legislation deregulated U.S. futures and derivatives markets with the aim of helping them better face growing global competition. It also changed the CFTC's role from a front-line regulator to more of an oversight agency.
Under the restructuring, the functions previously performed by the agency's divisions of Trading and Markets and Economic Analysis will be performed by two new divisions and one new office, the CFTC said in a statement.
A new Division of Market Oversight will take responsibility for the recognition and continuing oversight of traditional futures exchanges and derivatives trading systems. Its functions will include market surveillance, trade practice investigations and rule enforcement reviews, the agency said.
The 2000 legislation based the level of oversight exchanges get on the products they trade and investors they serve.
Markets in financial futures, which are not easily subject to manipulation, were judged able to operate with less direct regulation than markets in physical commodities. Similarly, sophisticated, institutional traders get less attention than retail customers assumed to need more protections.
Fallout from the recent collapse of Enron Corp. , a major player in U.S. energy and financial derivatives markets, have led to questions about whether the deregulation effort went too far. But the CFTC told Congress this week it saw no immediate need for any new powers.
A second new division, the Division of Clearing and Intermediary Oversight, will take over responsibility for oversight of clearing organizations and market intermediaries such as futures brokers.
Its duties will include financial integrity reviews, customer fund protection reviews, stock-index margin reviews, broker registration and sales practice reviews, the CFTC said.
The agency will also set up an Office of the Chief Economist to provide economic analysis to the commission, and will combine its current Public Affairs and Legislative Affairs offices into a single External Affairs office.
``Given the significant modernization effort of futures regulation initiated by our commission and by the Congress...we believed an analysis of the existing staff structure was in order,'' CFTC Chairman James Newsome said. ``Today's announcement reflects changes that will allow the commission to fulfill its new mission and to do so efficiently and responsibly.'' |
