The United States’ Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) on Wednesday singed a Memorandum of Understanding (MOU) to guide coordination and collaboration between the two agencies to support lawful innovation, uphold market integrity, and ensure investor and customer protection.
The MoU reflects both agencies’ commitment to provide fair notice to market participants, respect individual liberty, and foster lawful innovation with the minimum effective dose of regulation to enhance U.S. competitiveness in finance.
Commenting on the deal, the SEC Chairman, Paul S. Atkins, said: “For decades, regulatory turf wars, duplicative agency registrations, and different sets of regulations between the SEC and CFTC have stifled innovation and pushed market participants to other jurisdictions.
“This updated Memorandum of Understanding will serve as a roadmap for a new era of harmonization between the agencies – one that is critical to support U.S. leadership in this next chapter of financial innovation. By aligning regulatory definitions, coordinating oversight, and facilitating seamless, secure data sharing between agencies, we will ensure our rules and regulations deliver the clarity market participants deserve”, he added.
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In his remarks, CFTC Chairman, Michael S. Selig, enthused: “America’s financial markets are the envy of the world because they scale and adapt to meet investor demands. Like our markets, the CFTC’s and SEC’s regulatory frameworks must also evolve and modernize to accommodate the needs of our market participants.
“This Memorandum of Understanding solidifies the agencies’ commitment to harmonize regulatory frameworks to provide comprehensive and seamless financial market oversight. By working together, we’ll eliminate duplicative, burdensome rules and close gaps in regulation for the benefit of all Americans and usher in a Golden Age of American finance”, Selig assured.
In conjunction with the MOU, the two agencies also created a Joint Harmonization Initiative to advance coordinated oversight and promote regulatory clarity in areas of common regulatory interest.
In a statement issued on the initiatives, the SEC clarifies that the Join Harmonisation Initiative will support coordination across the policymaking, examination and enforcement functions of each agency, particularly for joint applications and shared policy efforts, including Clarifying product definitions through joint interpretations and rulemakings; Modernizing clearing, margin, and collateral frameworks; and Reducing frictions for dually registered exchanges, trading venues, and intermediaries.
In addition, it will help in Providing a fit-for-purpose regulatory framework for crypto assets and other emerging technologies; Streamlining regulatory reporting for trade data, funds, and intermediaries; as well as Coordinating cross-market examinations, economic analyses, risk monitoring, surveillance, and enforcement.
The Joint Harmonization Initiative will be co-led by Robert Teply (SEC) and Meghan Tente (CFTC).
