The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are collaborating to support innovation, uphold market integrity, and ensure investor and customer protection.
The memorandum of understanding (MOU) reflects both agencies’ commitment to provide fair notice to market participants, respect individual liberty, and foster lawful innovation with the minimum dose of regulation to enhance U.S. competitiveness in finance.
“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,” SEC Chairman Paul Atkins said. “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.”
In addition, the agencies created a Joint Harmonization Initiative to advance coordinated oversight and promote regulatory clarity in areas of common regulatory interest. The initiative will support coordination across the policymaking, examination and enforcement functions of each agency, particularly for joint applications and shared policy efforts. Specifically, it includes:
- Clarifying product definitions through joint interpretations and rulemakings.
- Modernizing clearing, margin, and collateral frameworks.
- Reducing frictions for dually registered exchanges, trading venues, and intermediaries.
- Providing a fit-for-purpose regulatory framework for crypto assets and other emerging technologies.
- Streamlining regulatory reporting for trade data, funds, and intermediaries.
- 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).
“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,” CFTC Chairman Michael Selig said. “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.”
Public input on this initiative is encouraged and may be submitted through the written input form or a meeting request.