CFTC, SEC plan joint hearings on “harmonization”

August 20, 2009

sec2    By Christopher Doering
   WASHINGTON, Aug 20 (Reuters) – The Commodity Futures Trading Commission and the Securities and Exchange Commission will hold hearings next month to iron out opposing regulatory philosophies in order to make it easier to find violators and introduce new financial instruments, the two agencies said on Thursday.
   They said the hearings will be held on Sept. 2 at the CFTC and Sept. 3 at the SEC. The agencies will hear testimony from market experts and participants on how to harmonize the two regulatory systems.
   “Harmonizing our regulatory policies will improve market integrity by applying consistent standards to market participants,” said CFTC Chairman Gary Gensler.
   “There are three areas where this review will most benefit the American public: to address gaps between the two agencies’ financial regulatory authorities, to assess the effects of regulatory overlap and to bring appropriate consistency to the two agencies’ regulation over similar products, practices and markets.”
   In June, the White House, as part of a broader vision released by President Barack Obama to reshape the battered U.S. financial regulatory system, said the growth of derivatives markets “highlighted the need for addressing gaps and inconsistencies in the regulation of these products by the CFTC and SEC.”
   The White House said many instruments traded on commodity and securities exchanges and over-the-counter markets fall into the oversight of both the CFTC and the SEC. As a result, instruments may be overseen by two agencies with “conflicting regulatory philosophies and statutes.”
   The administration urged greater communication between the SEC and CFTC. It said the agencies must agree to a common foundation for regulation that is precise enough to identify market practices that violate those rules and can be subject to enforcement by regulators.
   The report urged the CFTC and SEC to complete a report to Congress by Sept. 30 that identifies conflicts in statutes and regulations in similar financial instruments. (Editing by Jim Marshall) ((christopher.doering@thomsonreuters.com ; +202 898 8394)) ((For help:  Click “Contact Us” in your desk top, click here [HELP] or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: training.americas@thomsonreuters.com ; +1 646-223-5546)) Keywords: USA CFTC/SEC
  
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 Thursday, 20 August 2009 15:51:10RTRS [nN20515484] {EN}ENDS

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