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Speech by SEC Chairman:
Remarks Concerning Regulatory Harmonization Report


Chairman Mary L. Schapiro

U.S. Securities and Exchange Commission

Joint SEC/CFTC Press Teleconference
Washington, D.C.
October 16, 2009

Thank you for joining us today.

We are both pleased to issue our joint report on harmonization.

This report is another step forward in our effort to reform the regulatory landscape and ensure greater harmonization between our agencies.

As you know, the Administration called on our agencies to develop a report that would identify existing conflicts in our regulations and either explain the need for those differences or recommend ways to eliminate them.

Over the past several months, our agencies have been working closely together to do just that — assessing our current regulatory regimes and identifying ways to harmonize our efforts. .

Today's joint report is a product of our extensive discussions — and a product of the comments we received from the public. The report covers everything from risk-based portfolio margining to rules regarding clearinghouses and exchanges. From product listing and approvals to price manipulation and insider trading and more.

In particular, the joint report offers 20 specific recommendations:

  • to strengthen the agencies' oversight and enforcement,
  • to enhance market efficiency and investor and customer and investor protection, and
  • to improve coordination and cooperation between the agencies.

I just wanted to highlight three specific recommendations for you.

First, we recommend legislation to allow more efficient ways for investors and customers to manage risk in their accounts across products regulated by the CFTC and SEC. This would include facilitating the holding of futures products in a securities portfolio margin account. And, it would facilitate the holding of securities options and security futures in a futures portfolio margin account.

Second, we recommend legislation to authorize a Joint Advisory Committee that would be tasked with developing solutions to issues of common interest in the futures and securities markets. While both agencies have — or have had in the past — advisory committees, it's often the case that the advisors selected tend to come at an issue from either the SEC or CFTC-perspective. This would resolve that.

Finally, we recommend creating a Joint Enforcement Task Force that would enhance and further coordinate our enforcement efforts. The task force would pore through shared market surveillance data, improve market oversight, and relieve duplicative regulatory burdens.

These are just some of the many ideas outlined in the report.

I believe these recommendations will help to fill regulatory gaps, eliminate inconsistent oversight, and promote greater collaboration.

And, through this harmonization initiative we will help to rebuild confidence and protect the integrity of our markets.

Thank you.


Modified: 10/16/2009