CFTC Signs Information-Sharing Agreement with NASAA

NASAA members that sign-on to the agreement will receive a number of benefits as a result of the deal

The Commodity Futures Trading Commission (CFTC), a US regulator, announced on Monday that it has formed a mutual cooperation agreement with the North American Securities Administrators Association (NASAA), an investor protection agency.

The agreement will put in place a framework that will allow the sharing of information between the CFTC and state securities regulators in the United States. Shared information can be used to enforce the Commodity Exchange Act (CEA).

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Alongside a number of other stipulations, the CEA requires all futures and commodity options to be traded on organized exchanges. The legislation is not new, it was brought into law in 1936, and both the CFTC and state securities regulators can enforce it.

Until now, however, these two entities have largely pursued their enforcement efforts alone. The partnership will mean that, even as both organizations ensure companies adhere to CEA regulation individually, they will have a greater capacity to do so as they start to share information with one another.

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Greater enforcement

The partnership will also improve the CTFC’s ability to enforce other laws within its remit. In its statement yesterday, the regulator highlighted state securities laws and commodity codes as legal areas it hopes to engage with further as a result of the agreement.

To receive the benefits from the partnership, each jurisdiction under the NASAA will be required to sign the mutual cooperation agreement. Members will receive investigative leads from the CFTC’s whistleblowing office as well as any tips and referrals pertinent to their business.

Commenting on the agreement, CTFC’s Chairman, J. Christopher Giancarlo, said: “This agreement provides the CFTC and NASAA an opportunity to build on our long-standing cooperative relationship. Information-sharing is key to cooperative enforcement operations, and by working together, we can ensure that the rapidly evolving financial technology space has the appropriate oversight to pursue bad actors, protect market participants, and allow for market-enhancing innovation.”


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