Remarks at the SEC-CFTC Roundtable on Regulatory Harmonization Efforts – Harmonization with a Purpose

Good afternoon and welcome to another roundtable-this one on regulatory harmonization efforts between the Commission and the CFTC.

Harmonization sounds like a laudable objective. This is perhaps unsurprising since harmony is, by definition, pleasing to the human ear.[1] To the extent that the regulatory regimes of our two agencies could be better harmonized to eliminate unnecessary dissonance while still adhering to our agencies' missions and our governing statutes, great! But harmonization should never be an end in itself.

You have all likely heard the oft-repeated three-part mission of the Commission: to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. At the same time, the CFTC has its own mission statement: "to promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound regulation."[2] When investigating paths forward regarding regulatory harmonization, these respective missions should be our north stars. Without that guidance, efforts to harmonize can all too easily lead us astray.

For instance, to illustrate an admittedly extreme example, one way for our agencies to harmonize our approaches would be to eliminate all regulation in our respective markets. That would, obviously, be absurd. But I fear that less obvious absurdities might creep into our regulatory regimes if harmonization becomes the goal in and of itself. Harmonization should never supplant our agencies' respective missions and the mandates in our respective governing statutes. And it should not be used as a means to elide meaningful differences in the markets that our agencies regulate.

With that in mind, I urge you to keep our statutory missions-in particular investor protection-in mind as you consider opportunities for regulatory harmonization between our agencies. Anything less would be a disservice to the markets we regulate and the investors who trust that these markets are safe for them to participate in.

Thank you all for taking the time to join us today.