Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, April 22, 2010

GAO Issues Report on Efforts by SEC and CFTC To Harmonize Regulation

The GAO released a report entitled Clearer Goals and Reporting Requirements Could Enhance Efforts by CFTC and SEC to Harmonize Their Regulatory Approaches.  Perhaps that title says it all, but here is the GAO's summary:

The conference report accompanying the Consolidated Appropriations Act of 2010 directed GAO to assess the joint report of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) on harmonization of their regulatory approaches. In October 2009, CFTC and SEC issued this report in response to the Department of the Treasury’s recommendation that the two agencies assess conflicts in their rules and statutes with respect to similar financial instruments. GAO’s objectives were to review (1) how CFTC and SEC identified and assessed harmonization opportunities, (2) the agencies’ progress toward implementing the joint report’s recommendations, and (3) additional steps the agencies could take to reduce inconsistencies and overlap in their oversight.

To meet these objectives, GAO reviewed the joint report and related documentation, interviewed agency officials, and obtained and analyzed written comments on the report from market participants.

What GAO Recommends

GAO recommends that CFTC and SEC establish clearer goals for harmonization, including time frames for implementing the joint report’s recommendations, and develop requirements for reporting and evaluating progress toward these goals. CFTC and SEC generally agreed with our conclusions and concurred with our recommendation

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