The two organizations pledge to work in closer harmony when it comes to common regulatory forays.
The Securities and Exchange Commission (SEC) and the National Futures Association (NFA), a self-regulatory organization (SRO) for the U.S. derivatives industry, have signed a Memorandum of Understanding (MoU) designed to improve their “cooperation, coordination, and information sharing” for common regulatory interests, officials say.
The MoU is intended to foster closer cooperation “on matters of mutual regulatory interest such as emerging risks, examination planning, and financial markets’ conditions,” according to officials.
“The MoU will also provide for periodic meetings between staff. This improved coordination will further enhance the SEC and NFA’s ability to promote compliance with derivatives and securities laws, maintain the highest level of oversight quality, and minimize duplicative efforts,” officials add.
“Regulatory bodies working together should not be a novel concept. It should be the norm. Coordination between regulatory organizations provides businesses a predictable, straightforward path to compliance and comprehensive protections for investors that build trust in our markets,” says Paul S. Atkins, chairman of the SEC, in a prepared statement.
“We believe this memorandum represents an important milestone for NFA and will allow us to further foster our mission of protecting customers and ensuring market integrity,” says Thomas W. Sexton, president and CEO of the NFA, in a statement.
Among its many functions, the NFA has registration responsibilities under the Commodity Exchange Act (CEA), which requires key firms and individuals in the derivatives industry to register with the Commodity Futures Trading Commission (CFTC). The NFA also helps out with rulemaking, enforcement, member education and resources, arbitration, investor protection, outreach programs, and market regulation.
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