Harmonization Report.pdf

The U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) released a joint report on harmonization of regulation, following a White Paper on Financial Regulatory Reform. The report aims to identify conflicts in statutes and regulations between the two agencies and make recommendations for changes. The agencies held joint meetings with the public, hearing from 30 panelists on topics such as exchange and clearing issues, regulation of intermediaries, and enforcement. The report concludes with specific recommendations for strengthening oversight and enforcement, enhancing investor protection, and improving coordination between the agencies. Key areas of focus include product listing and approval, exchange rule changes, risk-based portfolio margining, and price manipulation. The report highlights differences in regulatory approaches between the SEC and CFTC, including the lack of authority for the CFTC to disapprove product listings and the use of self-certification by exchanges. Public feedback suggested the need for a method to resolve jurisdictional disputes promptly and address regulatory gaps.