Published

MFA Letter on Harmonization of SEC/CFTC Regulations

On November 15, MFA submitted a letter to the SEC and the CFTC proposing a harmonized approach to the regulation of firms that are SEC-registered investment advisers and also CFTC-registered commodity pool operators. MFA proposes a primary regulator safe harbor framework, under which a dual registrant would establish through a bright line test either the CFTC or the SEC as its primary regulator.  A dual registrant that complies with its primary regulators’ adviser/CPO requirements would be deemed to have met the requirements of the other regulator.

MFA believes this “primary regulator safe harbor” would:

(1) Support the goals of the CFTC, SEC and Treasury Department that relate to promoting coordination, harmonization and efficiency across regulators;

(2) Assist regulators in prioritizing resources and reducing unnecessary costs that are ultimately passed along to and borne by investors; and,

(3) Be consistent with and complementary to the CFTC Chairman’s support of a similar approach to substituted compliance in the cross border context and the SEC’s statement regarding their approach to business conduct requirements for security-based swap dealers that are also CFTC-registered swap dealers.