Summary: GAO previously recommended the establishment of an independent agency to regulate the commodity futures industry and still believes that such an agency is the most effective means of regulating the industry. A review of the Commodity Futures Trading Commission resulted in tentative findings that: more emphasis on planning is needed to improve the effectiveness and efficiency of operations; there are weaknesses in organization and management, such as limited management experience, division of responsibility, high rate of turnover, and use of outside experts who may not best represent the public interest; improvements are needed in the process for designating exchanges as contract markets; review of exchange rule enforcement is deficient; efforts at curbing abusive trading practices should be intensified; registration and audit programs could be more effective; market surveillance should be improved; and the Commission has been unable to provide effective regulation of the sale of commodity options. The newness of the Commission accounts for many problems.
