SEC and CFTC Enter New Memorandum of Understanding

Background

On March 11, 2026, the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) entered a new Memorandum of Understanding on Regulatory Coordination (MOU), superseding the prior MOU between the agencies dated July 11, 2018.[1] The new MOU establishes a comprehensive framework for coordination and collaboration between the two agencies across areas of common regulatory interest to “support lawful innovation, uphold market integrity, and ensure investor and customer protection.” Of relevance to our clients, the MOU expressly includes within its scope firms that are registered with the SEC as investment advisers and simultaneously registered with the CFTC as commodity pool operators (CPOs) and/or commodity trading advisors (CTAs). Importantly, the MOU does not supersede any applicable laws or regulations, creates no legally binding obligations and does not alter, expand, or limit either agency's existing statutory authority or jurisdiction.

How the Agencies Will Coordinate

The MOU establishes a senior-level coordination process and ongoing mechanisms for inter-agency cooperation. Regular meetings will be held so that representatives of both agencies can identify and discuss, at early stages, issues of regulatory interest to either or both agencies. Data sharing will occur upon request for matters of common regulatory interest connected to specific incidents, events, or activities. Advance notifications require each agency, to the extent practicable, to inform the other in advance of issues that may affect entities, products, or markets under common jurisdiction, including planned rulemakings, enforcement actions, and novel products (including crypto and derivatives). Cross-training programs will enable appropriate staff at each agency to develop a deeper understanding of the other's mission and jurisdiction.

Key Regulatory Areas Covered

The MOU identifies six areas where the agencies will work to harmonize their regulatory frameworks:

• Clarifying product definitions through joint interpretations and rulemakings.
• Modernizing clearing, margin, and collateral frameworks.
• Reducing frictions for dually registered exchanges, trading venues, and intermediaries, including investment advisers registered as CPOs or CTAs.
• Providing a fit-for-purpose regulatory framework for crypto assets and other emerging technologies, a priority for investment advisers with exposure to digital assets.
• Streamlining regulatory reporting for trade data, funds, and intermediaries, which may ease the dual reporting burdens currently faced by dual-registered investment advisers and CPOs/CTAs.
• Coordinating cross-market examinations, economic analyses, risk monitoring, surveillance, and enforcement.

Examinations and Enforcement.

For "Covered Firms" (as defined in the MOU), the agencies will hold periodic joint meetings to discuss risk assessments, coordinate examination planning and supervisory priorities, and share examination findings and emerging risks. For dual-registered investment advisers and CPOs/CTAs, this could mean that an SEC and CFTC examination may in the future be coordinated or even conducted jointly, potentially minimizing burdens through aligned document productions, interviews, and on-site visits.

The agencies will endeavor to consult on enforcement investigations involving potential jurisdictional overlap to the extent practicable and appropriate, to promote consistency, efficiency, and proportionality while avoiding duplicative relief and conflicting remedial obligations. Dual-registered investment advisers and CPOs/CTAs should be aware that conduct implicating both the Investment Advisers Act and the Commodity Exchange Act, such as alleged misrepresentations to fund investors, trading in commodity interests, or inadequate disclosure of conflicts, may now trigger coordinated investigations and parallel enforcement proceedings by both agencies.

Key Takeaways for Clients

• Investment advisers, CPOs, and CTAs are squarely in scope. While coordination may reduce the duplicative burdens of simultaneous examinations, it will also increase cross-agency information sharing about these firms, including examination letters and reports, registration and risk assessment data.
• Crypto assets are a central focus. Providing a fit-for-purpose regulatory framework for crypto assets and other emerging technologies is explicitly identified as a priority area. Firms active in digital assets should anticipate increasing joint activity.
• Further joint interpretations and rulemakings are expected.

Closing

Honigman will continue to monitor developments under the MOU, including any joint rulemakings, guidance, or policy statements, particularly with respect to examination coordination, regulatory requirements, and reporting simplification. Please do not hesitate to contact a member of our Investment Funds team with any questions about how these developments may affect your firm's compliance program, examination readiness, dual-registration obligations, or regulatory strategy.

[1] Memorandum of Understanding Between the SEC and CFTC Regarding Harmonization in Areas of Common Regulatory Interest (March 11, 2026) (available at www.sec.gov/files/mou-sec-cftc-2026.pdf)