At the 2026 Futures Industry Association (FIA) Global Cleared Markets Conference on March 10, 2026, Securities and Exchange Commission (SEC) Chairman Paul Atkins outlined a series of initiatives aimed at improving regulatory coordination between the SEC and the Commodity Futures Trading Commission (CFTC).1 Atkins’s remarks were quickly followed by the release on March 11, 2026 of a memorandum of understanding (MOU) between the two agencies “Regarding Harmonization in Areas of Common Regulatory Interest.”2 This alert summarizes the key takeaways for legal and compliance professionals and provides practical considerations for how firms may be impacted.
Key Takeaways from SEC-CFTC MOU and Harmonization Initiative
These developments may have meaningful implications for dually regulated firms, market innovators, and entities seeking clarity on cross regime product classification. As Atkins emphasized, when these markets are “burdened by fragmentation and regulatory friction, liquidity recedes, costs rise, and resilience weakens.” CFTC Chairman Michael Selig noted in his agency’s announcement that the MOU “solidifies the agencies’ commitment to harmonize regulatory frameworks to provide comprehensive and seamless financial market oversight. By working together, we’ll eliminate duplicative, burdensome rules and close gaps in regulation for the benefit of all Americans and usher in a Golden Age of American finance.”3
In conjunction with the MOU, the agencies created a Joint Harmonization Initiative to advance coordinated oversight and promote regulatory clarity in areas of common regulatory interest. The initiative will support coordination across the policymaking, examination, and enforcement functions of each agency, particularly for joint applications and shared policy efforts. The Joint Harmonization Initiative will be co-led by the SEC’s Robert Teply, who has served on its Crypto Task Force and in its Division of Trading and Markets, and the CFTC’s Meghan Tente, previously of its Division of Clearing and Risk and its Division of Market Oversight. The SEC’s Joint Harmonization Initiative website notes that it invites stakeholder engagement from industry leaders, market participants, and the public and includes a link to request a meeting.4
The MOU and Joint Harmonization Initiative seek to establish coordinated oversight, shared data practices, and joint approaches to examinations and enforcement. Under the MOU, the SEC and CFTC will work to build a framework in which the agencies coordinate seamlessly, reduce duplicative regulation, and provide clarity to market participants by:
- clarifying product definitions through joint interpretations and rulemakings
- modernizing clearing, margin, and collateral frameworks
- reducing frictions for dually registered exchanges, trading venues, and intermediaries
- providing a fit-for-purpose regulatory framework for crypto assets and other emerging technologies
- streamlining regulatory reporting for trade data, funds, and intermediaries
- coordinating cross-market examinations, economic analyses, risk monitoring, surveillance, and enforcement
In a notable development, Atkins signaled in his FIA remarks an interest in employing a “substituted compliance” principle where the regulatory requirements of both the SEC and CFTC apply. He explained that applying this substituted compliance principle could meaningfully ease operational burdens for firms regulated by both agencies. While the MOU does not adopt this “substituted compliance” terminology, it commits to reducing duplicative regulatory requirements.
The MOU outlines specific procedures for collaboration and coordination between the two agencies to be established through:
- a senior-level coordination process
- regular meetings
- the sharing of data between the agencies
- ongoing advance notifications of agency actions that may impact the regulatory interests of the other agency
- cross-training of the agencies’ staffs
In Atkins’s FIA remarks, he also identified several product related areas as priorities for coordinated regulatory evaluation under these harmonization efforts:
- Cross-margining: Atkins noted there are opportunities for liquidity optimization through coordinated cross margining arrangements remain a focus, with both agencies assessing pathways for unlocking excess collateral efficiency.
- “Package trade” innovations for correlated cash and futures products: Atkins noted that market participants are encouraged to present novel structures that combine cash and futures exposures and said that both agencies are considering potential exemptive relief needed to operationalize such products.
- Event based products and Title VII definitions: Atkins acknowledged the need for the SEC and CFTC to jointly provide definitional clarity on whether certain event-based contracts constitute security-based swaps or other types of securities. Title VII of the Dodd Frank Act establishes the regulatory framework for these products and divides oversight of derivatives between the SEC (responsible for security based swaps) and the CFTC (responsible for swaps), with both agencies jointly regulating mixed swaps.
The MOU, however, does not specifically mention any of these product-related areas.
Regarding examinations, under the MOU, the parties will strive to conduct coordinated exam planning, administer joint or aligned examinations where appropriate, and share exam findings and supervisory insights. To effect this effort, the MOU notes that the agencies’ examination functions shall meet periodically to discuss matters of mutual interest, such as risk assessments, examination planning, supervisory priorities, and emerging risks. In addition, the SEC and CFTC agree under the MOU to share information about their respective supervision and related activities around regulated entities in an effort to “reduce duplicative efforts.” In addition, where a regulated entity is on the examination plan of both agencies, the agencies “will consider how to minimize the burden on the [regulated entity],” including considering whether to conduct a “coordinated examination.”
On enforcement, Atkins noted in his remarks that “the regrettable era of duplicative enforcement actions” brought by the SEC and CFTC in connection with “the same conduct is over.” The MOU accordingly outlines that at the outset of “any enforcement investigation that may involve potential overlapping jurisdiction,” the investigating agency will identify the matter to the other agency and both will coordinate as appropriate throughout the investigative process. However, the MOU notes that parallel enforcement actions may still be possible and, in those cases, the agencies will seek to file and sequence the matters contemporaneously.
The MOU also includes a few caveats. First, it “does not supersede any applicable laws or regulations nor does it create any legally binding obligations.” Second, it supersedes the prior 2018 MOU between the agencies “Regarding Coordination in Areas of Common Regulatory Interest and Information Sharing,” but reaffirms the earlier 2004 MOU between the agencies “Regarding the Oversight of SFP Trading and the Sharing of SFP Information.”5 Finally, given the number of provisions in the MOU related to data sharing between the agencies, the MOU includes a term noting that the agencies’ intent is that the cross-agency sharing of nonpublic information contemplated by the MOU does not constitute public disclosure nor waiver of confidentiality or any privilege applicable to the information.
Practical Considerations for Legal and Compliance Professionals
In light of the new MOU and Joint Harmonization Initiative, legal and compliance professionals can anticipate both expanded opportunities and heightened responsibilities as the SEC and CFTC move toward a more coordinated supervisory and regulatory framework. Legal and compliance teams should consider:
- Reviewing supervisory frameworks, using this issuance of the MOU as an opportunity for dually regulated firms to review their respective supervisory frameworks across both regulatory regimes and to consider inconsistencies and possible enhancements before joint SEC/CFTC examinations become more common
- Monitoring forthcoming definitional guidance, particularly regarding event contracts, security-based swaps, and other instruments that may raise cross jurisdictional classification questions
- Preparing for potential updates to reporting obligations for swaps and security-based swaps, including efforts to harmonize data standards and modernize reporting requirements
- Engaging proactively with both agencies on novel or hybrid product structures, especially where proposed innovations may fall within overlapping jurisdictional boundaries or require coordinated exemptive relief
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1 SEC, Chairman Paul S. Atkins, Remarks, “Fostering Regulatory Harmony Between the SEC and CFTC” (Mar. 10, 2026), https://www.sec.gov/newsroom/speeches-statements/atkins-fostering-regulatory-harmony-between-sec-cftc-031026.
2 SEC and CFTC, Memorandum of Understanding Between the SEC and the CFTC Regarding Harmonization in Areas of Common Regulatory Interest (Mar. 11, 2026), https://www.sec.gov/files/mou-sec-cftc-2026.pdf; see also, SEC, Press Release, “SEC and CFTC Announce Historic Memorandum of Understanding Between Agencies” (Mar. 11, 2026), https://www.sec.gov/newsroom/press-releases/2026-26-sec-cftc-announce-historic-memorandum-understanding-between-agencies, and CFTC, Press Release, “CFTC and SEC Announce Historic Memorandum of Understanding Between Agencies” (Mar. 11, 2026), https://www.cftc.gov/PressRoom/PressReleases/9192-26.
3 Id.
4 SEC, SEC-CFTC Harmonization Initiative (last accessed Mar. 12, 2026), https://www.sec.gov/featured-topics/sec-cftc-harmonization-initiative.
5 Memorandum of Understanding Between the US Securities and Exchange Commission and the US Commodity Futures Trading Commission Regarding Coordination in Areas of Common Regulatory Interest and Information Sharing (Jun. 28, 2018), https://www.cftc.gov/sites/default/files/2018-07/CFTC_MOU_InformationSharing062818.pdf; Memorandum of Understanding Between the US Securities and Exchange Commission and the US Commodity Futures Trading Commission Regarding the Oversight of SFP Trading and the Sharing of SFP Information (Mar. 17, 2004), https://www.cftc.gov/sites/default/files/idc/groups/public/@internationalaffairs/documents/file/moubetweencftcandsec031704.pdf.
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