US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have formed a joint committee that will address emerging regulatory issues.
The establishment of the joint CFTC-SEC advisory committee on emerging regulatory issues was one of the 20 recommendations included in the agencies’ harmonization report issued last year.
The joint committee will develop recommendations on emerging and ongoing issues relating to both agencies. The first item on the committee’s agenda is conducting a review of May 6th market events and making recommendations related to market structure issues that may have contributed to the volatility, as well as disparate trading conventions and rules across various markets.
To orient the committee’s work, the staff of the SEC and CFTC will provide their joint preliminary findings to the committee regarding last May 6th market events.
The committee’s charter provides for a scope of interest, including: identifying of emerging regulatory risks; assessing and quantifying of the impact of such risks and their implications for investors and market participants; furthering the SEC’s and CFTC’s efforts on regulatory harmonization.
Mary Schapiro, chairman of SEC and chairman of CFTC, Gary Gensler, will serve as co-chairs of the joint committee.
Mr Schapiro said: “As last week’s events remind us, our markets are increasingly interrelated and interdependent so we need to appreciate how events in one arena can potentially impact investors and markets elsewhere. The joint committee will serve an essential role in addressing that challenge.”
Mr Gensler said: “It is important that we hear from this prominent panel of market practitioners, academics and former regulators about emerging risks in our markets. It is critical that the CFTC and SEC hear from the panel together because our markets are so intertwined. I am particularly interested in the committee’s first focus: advising on courses of action in response to the lessons learned from the market events of May 6.”