U.S. SEC, CFTC step up regulatory coordination…push for joint oversight of financial markets including digital assets

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) said they will strengthen their cooperation framework to better align their financial-market oversight regimes.

According to an SEC press release dated the 11th (local time), the SEC and the CFTC signed a memorandum of understanding (MOU) aimed at enhancing cooperation and coordination between the two agencies. The agreement is intended to reduce duplicative regulation that hampers innovation and to better align the financial-market supervisory framework.

Under the agreement, the SEC and the CFTC plan to bolster efforts including refining regulatory definitions, expanding supervisory cooperation, and sharing data. In particular, they agreed to work together to establish a clearer regulatory framework for emerging technology areas, including digital assets.

SEC Chair Paul S. Atkins said that regulatory conflicts between the SEC and the CFTC and overlapping registration requirements have long hindered innovation and driven market participants to other jurisdictions, adding that the MOU will serve as a roadmap ushering in a new era of regulatory alignment between the two agencies.

CFTC Chair Michael S. Selig also said that as financial markets evolve rapidly, the regulatory regime must be modernized in step, noting that the cooperation will help reduce duplicative and excessive regulation and close gaps in financial-market oversight.

Alongside the agreement, the two agencies also launched the Joint Harmonization Initiative. The initiative will strengthen cooperation across key regulatory functions including policymaking, examinations and enforcement, and will play a role in improving regulatory clarity for emerging financial-technology areas such as digital assets.

Going forward, the SEC and the CFTC plan to expand cooperation across a range of areas including joint interpretations and rulemaking, improvements to clearing and margin frameworks, streamlined trade-data reporting, and enhanced market surveillance and risk monitoring.