SEC and CFTC aim to align regulatory frameworks

The SEC and the CFTC are getting in sync.

The heads of the agencies, SEC Chair Paul Atkins and acting US Commodity Futures Trading Commission (CFTC) chair Caroline Pham, have announced a goal to better align their regulatory frameworks, with the aim of fostering the growth of new financial markets and products.

In many countries, the same regulator oversees the trading of both securities and derivatives. That’s not the case in the US, where the SEC regulates securities and the CFTC supervises derivatives trading.

Differences between the two agencies’ regulations, Atkins and Pham wrote in a joint statement, could create a “regulatory ‘no man’s land’” with the potential to hinder innovation in finance. The agency heads plan to hold a roundtable in late September to discuss “regulatory harmonization.”

Pham is currently the only commissioner working at the CFTC. The agency is typically led by a bipartisan group of five commissioners, but four commissioners have left this year and President Donald Trump has not named any successors.

Usual suspect. If you’re thinking the harmonization efforts have something to do with crypto, you guessed right. Atkins and Pham’s list of priorities for the roundtable include topics associated with the crypto world, including 24/7 markets, perpetual contracts, and decentralized finance. Earlier this month, the agencies jointly announced that trading of some “spot crypto asset products” would be permitted on registered exchanges. Under Atkins, the SEC has dismissed enforcement actions against major crypto platforms such as Robinhood, Coinbase, and Kraken. Trump’s nominee to lead the CFTC, Brian Quintenz, is head of policy for crypto at venture capital fund Andreessen Horowitz and a member of Kalshi’s board.

Other topics on the agenda include portfolio margining and “event contracts,” or gambling bidding on the outcomes of such events as Fed meetings and sporting competitions. (Kalshi, the first CFTC-regulated exchange for event futures, even accepts bids on whether or not influencers will cut their hair on camera.)

Atkins and Pham’s statement shows a marked deregulatory bent, containing mentions of cutting “red tape” and potentially permitting “innovation exemptions” that would allow peer-to-peer crypto trading to take place while regulations are being developed.

“It is a new day at the SEC and the CFTC,” the agency heads wrote, “and today we reaffirm the need to ensure regulation does not stand in the way of progress.”