SEC, CFTC Seek Public Comment to Further Clarify and Harmonize Derivatives Product Definitions

The Securities and Exchange Commission and the Commodity Futures Trading Commission today issued a joint request for public comment on potential opportunities to further update, clarify, and harmonize certain derivatives product definitions and interpretive issues.

The request for comment is intended to support the Commissions' ongoing evaluation of whether current regulatory definitions, interpretations, and jurisdictional frameworks appropriately reflect evolving market structures, financial products, and trading practices.

"Clarification is long overdue on Title VII definitional issues, including event-based products. Through good-faith cooperation efforts, we can create a level playing field where established firms and new entrants alike can compete and innovate on equal footing regardless of whether they're registered with the SEC or CFTC," said SEC Chairman Paul S. Atkins.

"Today's joint request for public comment presents an opportunity to address longstanding ambiguities within Title VII of Dodd-Frank that have stifled fair competition and responsible innovation," said CFTC Chairman Michael S. Selig. "I appreciate the partnership of the SEC and Chairman Atkins as we work together to further clarify jurisdictional lines and enhance cooperation between our agencies."

The joint request for comment seeks input on topics including:

• Definitions relating to swaps and security-based swaps, including the scope of certain exclusions from the swap definition.
• Treatment of mixed swaps
• Treatment of novel or emerging products
• Jurisdictional and interpretive questions
• Potential areas in need of greater clarity regarding regulatory definitional lines
• Potential areas for alternative compliance

The SEC and CFTC encourage the public to provide input on these topics, as identified in the agencies' request for comment. The public comment period will remain open for 60 days following publication of the request for comment in the Federal Register.