The two top US financial regulators have agreed to better coordinate oversight of financial markets, seeking to end decades of “regulatory wars” between them.
According to a memorandum of understanding written on Wednesday, the U.S. Securities and Exchange Commission and the U.S. Financial Futures Trading Commission said it has become a “critical time” for regulatory compliance as new technologies, such as crypto, make it more difficult to monitor markets:
“New business models, digital infrastructure and automated systems are increasingly blurring traditional jurisdictional lines,” they said, especially as market participants operate across platforms and asset classes.
To address these challenges, the SEC and CFTC said they will aim to provide regulatory clarity and certainty built on technology-neutral rules and to share data and information on matters of “general regulatory interest” to carry out their regulatory mandates.
In a separate statement, SEC Chairman Paul Atkins said the memo is the latest step toward restoring the relationship between the agencies:
“For decades, regulatory battles, overlapping agency registrations and different sets of rules between the SEC and the CFTC have stifled innovation and pushed market participants into other territories.”
In keeping with US President Donald Trump’s mission to make the US the “crypto capital of the world”, both the SEC and the CFTC have created a crypto task force and formed an advisory committee to continue to advance crypto, AI and other technological innovations.
The agencies also noted in the memo that they are working to create a “reasonable regulatory framework for crypto assets.”
related to: SEC chairman calls for “coordinated oversight” among US regulators
Regulatory clarity is provided to market participants who use everything from trading platforms, clearinghouses and data repositories to pooled investment vehicles, dealers and intermediaries, in addition to products that cover securities and derivatives.
SEC, CFTC to adopt ‘minimum effective dose’ strategy
The two agencies said they also plan to adopt a “minimum effective dose” regulatory strategy to foster innovation while maintaining market integrity and remaining competitive in the global marketplace.
The term “minimum effective dose” is a pharmacological term and is defined as the smallest dose of medication that produces the desired therapeutic benefit.
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