Good afternoon and thank you for joining us. Before I begin, I must remind you that the views that I express here are my own and do not necessarily represent those of the Securities and Exchange Commission or my fellow commissioners. I should also like to thank Acting Chairman Pham, as well as SEC and CFTC staff for organizing this joint roundtable with little advance notice, and of course, our stellar group of panelists for lending their time and expertise to today’s program.
Today, I believe, marks a turning point in the history of American financial markets. For too long, the SEC and CFTC have operated in parallel lanes, too often in conflict with one another, leaving the American public to bear the costs of duplication, delay, and uncertainty. That era is behind us. We are charting a new course, one that will solidify America’s position as the world’s financial leader. Today, I look forward to hearing from industry leaders on how the two agencies can better coordinate on behalf of the American public.
Let me be clear: our focus is on harmonization, not on a merger of the SEC and CFTC, which would be up to Congress and the President. Fanciful talk of reorganizing the government risks distracting us from the monumental opportunity we have in front of us. What matters is building a framework where our agencies coordinate seamlessly, reduce duplicative regulation, and give markets the clarity they deserve. The path forward right now is collaboration, not consolidation. I look forward to working with Congress and my counterparts across the Administration to ensure the SEC and CFTC operate in concert, side by side, hand in glove, so that American innovation and investment can thrive.
Fields Littered with the Bodies of Would-Be Products
Unfortunately, decades of regulatory fragmentation have left innovation stranded. Entrepreneurs forced to navigate two, often conflicting, rulebooks have taken their ideas overseas. Investors have been saddled with duplicative collateral requirements, locking up capital that could otherwise drive growth. America, the nation that gave the world the deepest, most dynamic markets, has watched innovation migrate abroad as our two agencies protected their turf at the expense of the American investor.
This regulatory fragmentation may have been appropriate for a different era, but the complexity of today’s financial markets demands a harmonized approach. Congress created the CFTC in 1974, giving it exclusive regulatory jurisdiction over commodity futures. This initiative reflected the realities of that era—distinct markets, separate participants, and clear lines between securities and commodity derivatives. But markets, like rivers, have a way of finding new channels. What were once separate streams have converged into a rushing torrent of innovation that demands a new approach. Today’s torrent of financial innovation demands a unified response.
The Stakes: America's Global Financial Leadership
We are at a crossroads. If we follow the path of our predecessors, America risks ceding leadership in the next chapter of financial history. Already, novel products have fled to foreign markets. Entrepreneurs have built offshore structures to avoid our fragmented, convoluted system.
This ends now.
To achieve this ambitious vision, our two agencies must work in lockstep to transform dual regulation from a source of confusion into a source of strength. Together, we can offer the best of both worlds: the investor protections that have defined U.S. markets, combined with the innovation-friendly approach that will keep us at the frontier of financial technology throughout the 21st century.
A New Day for U.S. Capital Markets
Ladies and gentlemen, it is indeed a new day at the SEC and the CFTC. The era of regulatory fragmentation is ending. The age of harmonized, innovation-friendly oversight is here.
We stand at an inflection point. The choices we make in the next few years will determine whether America leads the digital age, or whether we watch from the sidelines as others seize the opportunities we should be creating. And together, our two agencies will ensure that the next chapter of financial innovation is written right here in America.
The winds of change are blowing. It is our task to ensure they carry American leadership forward to new frontiers—from the buttonwood tree to the blockchain, and beyond. It is our responsibility to ensure that all market participants—whether incumbents or new entrants—who are hungry to innovate are not hindered by unnecessary regulatory hurdles in bringing new products and services to investors in our markets.
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I am very much interested in learning from our panelists today. We first will start with a discussion of how we got to where we are over the last half- century, although I am perhaps the only one who has been around that long. Then, we will delve into more specific issues regarding areas of overlapping and sometimes conflicting jurisdictions.
Unfortunately, I cannot stay the whole time, but I look forward to your input and welcome a continuing dialogue over the coming months and years as we work together.
Thank you, and let's get to work.
