The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) on Aug. 20 announced they will conduct a series of joint meetings starting Sept. 2-3 to solicit input on harmonizing the two agencies' regulation of similar types of financial instruments.
The meetings are part of a White House initiative on financial regulatory reform initiated in mid-June that called on the two agencies to develop recommendations for Congress by Sept. 30 on potential changes to laws and regulations designed to harmonize their respective regulation of futures and securities markets. The White House tasked the two agencies with identifying "all existing conflicts" in statutes and regulations concerning similar types of financial instruments. The CFTC and SEC are to either: 1) explain why those differences are essential to achieve underlying policy objectives with respect to investor protection, market integrity and price transparency; or 2) make recommendations for changes to statutes and regulations that would eliminate the differences.
In a joint statement, CFTC Chairman Gary Gensler said the initiative will address "gaps between the two agencies' financial regulatory authorities, assess the impacts of regulatory overlap and "bring appropriate consistency" to their respective regulation over similar financial products, practices and markets. Meanwhile, SEC Chairman Mary Schapiro said the joint meetings will "build on the progress the CFTC and SEC have made on designing a framework to regulate over-the-counter derivatives. It will move us further down the road of harmonizing our regulations to increase transparency, reduce regulatory arbitrage and rebuild confidence in our markets," she said.