CFTC and U.S. Securities and Exchange Commission (SEC)
Memorandum of Understanding Regarding the Oversight of Security Futures Product Trading and the Sharing of Security Futures Product Information, March 17, 2004
The CFTC-SEC Memorandum of Understanding covers the oversight of security futures product (SFP) trading and the sharing of security futures product information. Pursuant to the Commodity Futures Modernization Act of 2000 the CFTC and the SEC have joint authority for the oversight and regulation of security futures products. With respect to security futures products, the MOU provides that the CFTC and the SEC 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 CFTC and the SEC 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. In November 2002, OneChicago and NQLX began trading these products under the joint supervision of the agencies. The sharing of information and coordination recognized under this memorandum is an important element in providing oversight that is effective but avoids unnecessary regulatory burdens.