SEC and CFTC Sign Memorandum of Understanding Regarding Oversight of Security Futures Product Trading and Sharing of Security Futures Product Information


Washington, D.C., Mar. 17, 2004 -- Securities and Exchange Commission Chairman William H. Donaldson and Commodity Futures Trading Commission (CFTC) Chairman James E. Newsome today signed a Memorandum of Understanding (MOU) regarding the oversight of security futures product (SFP) trading and the sharing of security futures product information.

The Commodity Futures Modernization Act of 2000 gives the SEC and CFTC joint authority for the oversight and regulation of security futures products. In November 2002, OneChicago and NQLX began trading these products under the joint supervision of the agencies.

"The coordination and information sharing envisioned by this MOU are important steps in ensuring effective oversight of this jointly regulated market," SEC Chairman Donaldson said. "We look forward to working with the CFTC in fulfilling our respective responsibilities in this developing market."

CFTC Chairman Newsome said, "It gives me great pleasure to sign this MOU, which I believe will result in more effective and efficient joint CFTC and SEC oversight of security futures products while, at the same time, avoiding unnecessary regulatory burdens on market participants."

With respect to security futures products, the MOU provides that the SEC and CFTC will notify each other of any planned examinations, advise the other of reasons for an intended examination, provide each other with examination-related information, and conduct examinations jointly, if feasible. The SEC and CFTC will also notify each other of significant issues arising from these markets and share trading data and related information for SFP activity. Implementation of this MOU should serve to increase the effectiveness and efficiency of the joint CFTC/SEC oversight of SFPs.

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Last modified: 3/17/2004