SEC and CFTC Regulatory Labs Try Joint Venturing: Landmark Memorandum Sets the Terms

On March 11, 2026, the SEC and the Commodity Futures Trading Commission (CFTC) signed what both agencies have called a “historic” memorandum of understanding. The memorandum is intended to create a new level of cooperation between the two agencies and end decades of turf wars when developing appropriate treatments for financial products. SEC Chairman Paul Atkins declared that the era when “regulatory turf wars, duplicative agency registrations, and different sets of regulations between the SEC and CFTC have stifled innovation and pushed market participants to other jurisdictions” is over. CFTC Chairman Michael Selig promised a “golden age of American finance.”

The agencies have created a joint harmonization initiative to provide coordinated oversight of this venture 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, including:

• 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.

Although the working relationship between the SEC and the CFTC has at times been strained, the two agencies appear to recognize that, in an increasingly convergent financial ecosystem, they share significant areas of common regulatory interest, including oversight of pooled investment vehicles, products that span securities and derivatives frameworks, and the broad infrastructure that supports the trading of these products. Moreover, the agencies appear to appreciate that they operate at a pivotal moment where financial markets are rapidly evolving and becoming more interconnected through global technologies. New trading models, digital infrastructure, and on-chain, automated systems increasingly blur traditional lines of regulation.

The memorandum takes a fresh and proactive approach to regulatory harmonization, building on a forthright acknowledgement that, historically, the working relationship between the two agencies has at times been strained. For example, the Shad-Johnson Accord of 1981, which ultimately divided regulatory jurisdiction for certain emerging types of securities-based futures and options, has been described as the product of a “seven-year turf battle.”

A subsequently emerging form of financial product — swaps — created another area of serious regulatory overlap. When Congress passed the 2010 Dodd-Frank Act in the aftermath of the 2007–2008 global financial crisis, the CFTC was given jurisdiction over “swaps” while the SEC was given jurisdiction over “securities-based swaps.” Still, the agencies took two years to hammer out definitions of the varying types of swaps, ultimately leaving significant gray areas and effectively requiring two sets of rules for margin, reporting, and examination matters.

The most recent decade has witnessed a further SEC/CFTC turf war, this time over digital assets. The CFTC in 2015 declared bitcoin a commodity, and later declared ether a commodity, while the SEC under Chairman Gary Gensler took the position that most crypto tokens are securities under the Howey test. These differing interpretations led to what Atkins has called a “maze of overlapping and often inconsistent regulatory frameworks.” The industry breathed a sigh of relief, though, when in 2025 the SEC and CFTC held a joint roundtable on regulatory harmonization, followed by the two agencies in 2026 issuing a joint interpretation addressing the regulatory status of different types of digital assets. For more detail about this joint interpretation, please refer to this issue’s article “Gensler-Era Crypto Regulation Goes Under the Knife”

The memorandum clearly represents a significant step forward in building a cohesive and coordinated SEC/CFTC venture to study new products and develop appropriate regulatory frameworks for the future. This augurs well for the successful introduction of products that are currently awaiting release, as well as products that are not yet even on the drawing board.