Wednesday, September 30, 2009

SEC and CFTC will address White House mandate on regulatory differences

Stock ExchangeThe White House on June 17 released a White Paper on Financial Regulatory Reform calling on the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) to “make recommendations to Congress for changes to statutes and regulations that would harmonize regulation of futures and securities.” 

Subject to consideration of the Commissions, a report is expected to be issued on October 15 to address harmonization of futures and securities regulation. It is anticipated that the report will include discussion of the following issues:

• Product listing and approval;

• Exchange/clearinghouse rule approval under rules- versus principles-based approaches;

• Risk-based portfolio margining and bankruptcy/insolvency regimes;

• Linked national market and common clearing versus separate markets and exchange-directed clearing;

• Market manipulation and insider trading rules;

• Customer protection standards applicable to broker-dealers, investment advisors and commodity trading advisors; and

• Cross-border regulatory matters.

In addition, the Chairmen expect that the report will contain recommendations to Congress and the President designed to (1) strengthen their respective enforcement powers; (2) enhance and harmonize customer protection standards; and (3) establish an ongoing coordination and advisory process.

“The CFTC and the SEC have been working very closely to tailor our regulations in the best interest of the American public,” CFTC Chairman Gary Gensler said. “I look forward to reporting to Congress and the President on identifying substantive changes that both agencies can make to close regulatory gaps, address inconsistencies and ensure that any overlap best serves the public.”

“We must continue to build upon the progress we are making to reduce regulatory arbitrage, avoid unnecessary duplication and close regulatory gaps,” said SEC Chairman Mary Schapiro. “We are fully committed to continuing on the path toward reform.”

Posted By Valerie Garner

Categories: Finance, Politics

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