CFTC and SEC Seek Public Comment to Harmonize Derivatives Product Definitions

The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have issued a joint request for public comment to review, clarify, and harmonize product definitions and interpretive guidance governing derivatives. The initiative is designed to assess whether existing regulatory frameworks, definitions, and jurisdictional divisions under Title VII of the Dodd-Frank Act accurately reflect modern market structures, financial products, and trading practices. Regulators are seeking feedback on several critical areas, including the scope of exclusions from swap definitions, the regulatory treatment of mixed swaps, and the oversight of novel or emerging financial instruments, including event-based products. The agencies are also soliciting feedback on broader jurisdictional questions, definitional boundary lines, and potential alternative compliance pathways. CFTC Chairman Michael S. Selig stated that the joint effort provides an opportunity to resolve longstanding ambiguities in Title VII that have hindered competition and responsible innovation, highlighting the importance of clear jurisdictional boundaries between the two agencies. SEC Chairman Paul S. Atkins noted that clarifying Title VII definitional issues is essential to establishing a level playing field across financial markets. Atkins emphasized that cooperative alignment will allow both established market participants and new entrants to innovate effectively, regardless of whether their regulatory registration sits with the SEC or the CFTC. The public comment period will remain open for 60 days following the formal publication of the joint request in the Federal Register.