Harmony Talks Kick Off

By Lisa Valentine

When describing music, harmony is the use of simultaneous pitches or chords to make a pleasing sound. When describing financial industry regulations, harmony will be the ability for two separate and distinct government agencies to “harmonize financial regulations to protect the American public,” according to Gary Gensler, Chairman of the Commodity Futures Trading Commission (CFTC) in the opening remarks of the Joint Meeting on Harmonization of Regulation.

It’s a historic meeting in that this is the first time that the CFTC and the Securities and Exchange Commission have met jointly in this manner.  (The SEC regulates securities markets and the CFTC regulates the derivatives markets.) The September 2 meeting was held at the CFTC; the host of tomorrow’s meeting is the SEC.

Gensler specifically mentioned that OTC derivatives would be a special focus area since these instruments tend to fall through the gaps of the regulatory system. He also cautioned against regulatory overlap and has asked his own staff to “check turf at the door and focus solely on striving for the best public policy. All options should be on the table and there should be no sacred cows.”

Gensler gave a nod to the difficulties of achieving harmony, noting that, “There are certainly differences between our regulations where some will prefer the status quo.” President Obama has asked to receive joint recommendations from the SEC and CFTC by September 30. Written comments from the public will be accepted until September 14.

Once the meetings are completed, ComplianceAsia will provide a summary of what was discussed.