The Commodity Futures Trading Commission plans to shift enforcement staff in 2012 to oversee new applications from the Dodd-Frank Act that overhauled regulation for exchange-traded markets. They are making this move even though they failed in 2011 to adequately oversee CME Group and did not meet the goals of reviewing CME, the Chicago Board of Trade, and ICE Futures.
"The commission acknowledges that this realignment creates risks in its critical oversight roles," CFTC Chairman Gary Gensler said in the budget and performance plan describing its priorities for 2012."The agency's performance is affected by the challenges of limited resources."
CFTC has been considering changes to oversight since the collapse of MF Global. According to a letter from Republican Commissioner Jill Sommers last month to Senator Pat Roberts, R-Kan., some of the changes could require Congressional action.
"In light of the MF Global insolvency, we must remain vigilant in our oversight of the futures markets for both systemic and operational risks," Sommers and Scott O'Malia, a Republican commissioner, said in a dissent from the CFTC report. "Unfortunately, resources have been redirected to Dodd-Frank-related rulemakings and reduce our capacity to appropriately oversee these markets."
President Obama in his budget proposal released Monday requested a 50% increase in funding for the CFTC for Fiscal Year 2013 at $308 million. He also has requested a 18.5% increase for the Securities and Exchange Commission, which would increase the SEC budget from $1.321 billion to $1.566 billion.
"Confidence in the markets is important to economic growth and demands a strong investor protection agency," SEC Chairman Mary Schapiro said in a statement on Monday. "This additional funding will allow us to continue strengthening our enforcement and examination programs."
Obama on Monday also called for an additional $50 million into a special reserve fund created in the 2010 Dodd-Frank law that would be financed with registration fees. That money would go toward modernizing the SEC's website and online database for corporate disclosure reports.