Two of America’s most influential financial regulators have agreed to better coordinate their oversight of financial markets, ending a decades-long “regulatory turf war” between them.
The U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission said this is a “pivotal time” for harmonized regulation as new technologies such as virtual currencies make it more difficult to monitor markets, according to a memo written Wednesday.
“New trading models, digital infrastructure and on-chain automation systems are increasingly blurring traditional jurisdictional lines, especially as market participants operate across platforms and asset classes,” they said.
To address this issue, the SEC and CFTC said they aim to provide regulatory clarity and certainty under technology-neutral regulations and to share information and data on matters of “common regulatory interest” to meet their respective regulatory obligations.
SEC Chairman Paul Atkins said in a separate statement that the memo is the latest step toward repairing relations between the two agencies.
“For decades, regulatory turf wars, overlapping agency registrations, and a disparate set of regulations between the SEC and CFTC have stifled innovation and driven market participants to other jurisdictions.”
The SEC and CFTC are both moving forward to fulfill President Donald Trump’s mission to make the United States the “crypto capital of the world,” creating a virtual currency-specific task force and establishing an advisory board to ensure that virtual currencies, AI, and other emerging innovations continue to move forward in the United States.
The two agencies also said in the memo that they strive to provide a “fit-for-purpose regulatory framework for cryptoassets.”
Related: SEC Chairman calls for ‘coordinated oversight’ among US regulators
Regulatory clarity will be provided to market participants operating everything from trading platforms, clearinghouses and data repositories to co-investment vehicles, dealers and intermediaries, as well as products across the securities and derivatives framework.
SEC and CFTC to adopt “minimum effective dose” strategy
The agencies also said they plan to adopt a “minimum effective dose” regulatory strategy to maintain market integrity and foster innovation while remaining competitive in global markets.
The term “minimum effective dose” is a pharmacological term and is defined as the lowest dose of a drug that produces the desired therapeutic effect.
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