On September 19, 2014, the Center for Risk Management Education and Research Student Fellows had the opportunity to visit the Commodity Futures Trading Commission (CFTC) while on a trip to Chicago, IL. Hannah Ropp, an analyst in the surveillance unit of the CFTC, gave a presentation entitled ‘Regulating Derivatives’ through a live video feed. Ms. Ropp has worked for the CFTC for four years in the Washington D.C. office and had plenty to share on the topic of regulating financial derivatives.
The presentation began with an overview of the history, structure, and goals of the CFTC. The operating functions of the three different divisions of the CFTC were discussed. Ms. Ropp expanded on the market surveillance and data collection and reporting units in greater detail. The student fellows were impressed by the amount of data that the CFTC stores and analyzes to ensure that each market is not undergoing manipulation. It was interesting to learn that this data is also used for the CFTC Market Reports that are accessible to the public through CFTC’s website, http://www.cftc.gov.
Another takeaway for the student fellows was learning about the cooperation between the CFTC and the exchange groups, such as the CME Group, in order to ensure a fair market. The CFTC and the exchange groups share information with each other and occasionally take action together if the need arises. One of the main focuses of Ms. Ropp’s presentation was that the CFTC sets regulations in order to ensure that the market works for consumers and business. Sometimes this can result in charges brought against people, but it keeps the market free of manipulation and reduces the risk for those in the market.
Through the visit to the Commodity Futures Trading Commission, the Center for Risk Management Education and Research Student Fellows were able to gain a better understanding of how this regulatory commission impacts financial derivative markets. The Center for Risk Management greatly appreciates the time that Ms. Ropp took to present this educational information and answer the questions that followed.