Amid the CLARITY Act stalling due to disagreements over regulatory authority, Atkins talks of a new era for US financial markets.
US Securities and Exchange Commission (SEC) Chairman Paul Atkins has called for closer coordination with the Commodity Futures Trading Commission (CFTC).
Speaking at the FIA Global Cleared Markets Conference on 10 March, Paul Atkins, Chairman of the SEC, said the split oversight between the agencies has become outdated as financial markets have become more complex.
The two agencies oversee different parts of the US financial system, with the SEC regulating securities markets and the CFTC supervising derivatives. However, innovation in areas such as digital assets and financial products has overlapped the responsibilities of the two regulators.
“This division perhaps made some sense at a time when these two markets were distinct ecosystems. But over time, innovation has a way of blurring those boundaries,” Atkins said.
Market participants have raised concerns that the overlapping mandates of the two regulators have created confusion for firms operating across both markets. Financial institutions often fall under both regimes, facing separate examinations, enforcement actions, and regulatory expectations.
The issue has become particularly prominent in emerging sectors such as crypto assets, where uncertainty over whether tokens should be classified as securities or commodities has created regulatory challenges.
Recently, this lack of clarity has become a sticking point in the US’ ambition to become the crypto capital of the world, with the CLARITY Act being held up by disagreements over how regulatory authority should be divided between the SEC and the CFTC.
While Atkins did not mention any specific case, he suggested the current system has created unnecessary complexity for firms operating in increasingly integrated markets.
“Firms should not be shuffled back and forth between regulators when a product touches elements of both regulatory frameworks. Nor should clarity depend on which agency happens to speak first,” he said.
The SEC and CFTC are not merging
There were reports last year the two agencies would potentially merge as the Department of Government Efficiency, led by Elon Musk, reviewed federal agencies with the goal of reducing duplication and cutting spending.
Since then this has looked less likely with the CFTC hiring both a new Chairman in Michael Selig and David Miller as its new Director of Enforcement. However, Atkins has stated the agencies are “reorienting our approach toward a new golden age of regulatory coherence.”
As part of this change, the SEC has directed staff to begin holding joint meetings with their counterparts at the CFTC when reviewing product applications. Additionally, the two regulators are working toward updating a Memorandum of Understanding.
“As we speak, the SEC and CFTC are considering an updated Memorandum of Understanding between the agencies to guide coordination and collaboration that can support innovation, uphold market integrity, and ensure investor and consumer protection,” he said.
The speech also noted closer collaboration in supervisory and enforcement activities, with Atkins suggesting duplicative regulatory actions have added unnecessary burdens for firms operating under both frameworks.
He said the agencies should coordinate examinations of firms which fall under both regulators and share supervisory findings where appropriate.
“With regards to enforcement, let me be clear: the regrettable era of duplicative enforcement actions and conflicting remedial obligations for the same conduct is over,” Atkins said.
A new, new day
Calls for greater alignment between the two agencies are not new. Last year the SEC and CFTC held a joint roundtable aimed at improving collaboration, where then acting CFTC Chair Caroline Pham said the rivalry between the regulators was beginning to ease.
Pham said at the time: “It’s a new day. And the turf war is over. Can we take a moment to appreciate how far we’ve come under this Administration?”
Despite challenges persisting since then, Atkins’ latest pledge of coordination has been widely well received.
Christopher Perkins, President of CoinFund, said the focus on harmonisation could drive greater efficiency across US markets. Others suggested the effort could herald a significant regulatory shift if successfully implemented.
Neal Kumar, Chief Legal Officer at Polymarket, said the initiative could deliver “generational regulatory reform” and urged regulators to let Atkins and Siegel “cook.”
