Leaders of the Securities and Exchange Commission and the Commodity Futures Trading Commission have pledged to build a stronger working relationship between their two agencies, in the face of ever-more blurry lines between securities, commodities, and futures.
An agreement signed last week establishes a permanent regulatory liaison between the two, provides for enhanced information sharing, and sets out principles governing the review of new derivative securities. The Memorandum of Understanding establishes a framework to facilitate discussions and coordination on other areas of joint interest, such as portfolio margining, foreign security index products, and the oversight of firms registered with both agencies. Under the agreement, the SEC and CFTC staffs will meet formally every quarter.
