Breaking New Ground: SEC and NFA Sign First-Ever Memorandum of Understanding

The Securities and Exchange Commission (SEC) and the National Futures Association (NFA) announced an unprecedented step in regulatory coordination. On May 21, the SEC and NFA announced that they had reached a memorandum of understanding (MOU) to enhance cooperation, coordination and information sharing in areas of common regulatory interest. While the SEC has long collaborated with the Commodity Futures Trading Commission (CFTC), which designated NFA as the only registered futures association for the US derivatives industry, this marks the first time the SEC has entered into such a formal arrangement directly with NFA.

Why This MOU Is Unique

The significance of this MOU lies in its parties. Unlike the CFTC, which is a federal agency with broad rulemaking and enforcement authority over derivatives markets, NFA is a congressionally authorized registered futures association.[1]  Its mission is to safeguard the integrity of the derivatives markets, protect investors, and ensure its member firms meet their regulatory responsibilities.[2]  

The SEC, of course, is charged with protecting investors, maintaining fair and efficient securities markets, and facilitating capital formation. Despite their overlapping interests, particularly in entities dually registered or affiliated across securities and derivatives markets, no direct coordination framework existed between these two bodies until now. In our experience, market participants, particularly those operating across both the securities and derivatives spaces, have increasingly sought greater alignment between the regulators that oversee them.

SEC Chairman Paul S. Atkins emphasized the broader philosophy behind this cooperation: “Regulatory bodies working together should not be a novel concept. It should be the norm. Coordination between regulatory organizations provides businesses a predictable, straightforward path to compliance and comprehensive protections for investors that build trust in our markets. This memorandum is another step in furthering the SEC’s efforts to streamline cooperation with other regulatory organizations and alleviate the potential for duplicative or conflicting oversight.”

Key Areas of Focus

The MOU establishes a framework for cooperation across several important areas:

• Information Sharing on Common Regulatory Interests. The SEC and NFA have agreed to share information regarding examinations of their respective supervised persons, financial market conditions and regulatory issues that may affect entities under the other’s oversight. This includes data on securities and derivatives markets that may materially impact the operations or financial condition of each other’s regulated entities.
• Coordinated Examinations and Risk Assessment. Both regulators have agreed to leverage each party’s expertise and registrant data, which should be welcome news for dually regulated entities. The staff from both organizations will also meet periodically to discuss examination planning, risk assessment, examination findings, supervisory priorities and emerging risks related to their dually supervised persons. This coordination is designed to reduce unnecessary burdens on regulated entities while maintaining robust oversight.
• Confidentiality Protections. The MOU includes robust confidentiality provisions for non-public information shared between the regulators. Information shared under the MOU is presumed to be non-public, and the parties have committed to maintaining appropriate administrative, technical and physical safeguards, including encryption and access controls, consistent with federal government information security standards established by the National Institute of Standards and Technology.
• Relationship with the SEC-CFTC Framework. The MOU expressly contemplates its relationship with the March 2026 SEC-CFTC MOU. To the extent any information requested by the SEC is owned by the CFTC, the SEC will request it directly from the CFTC under its separate arrangement. Similarly, if the CFTC, in its oversight capacity over NFA, requests information that NFA obtained from the SEC, NFA must inform the CFTC of its source and direct the CFTC to seek it from the SEC.

Broader Implications: A Harmonization Era

This SEC-NFA MOU appears to be consistent with the broader harmonization efforts underway between the SEC and CFTC. The March 2026 SEC-CFTC MOU established a framework for joint interpretations, coordinated examinations, aligned enforcement, and the development of streamlined regulatory approaches, particularly for digital assets and emerging financial technologies. By extending similar coordination principles to NFA, the SEC is building out a more cohesive regulatory ecosystem that spans both federal agencies and self-regulatory organizations.

For dually registered or affiliated firms, these coordination frameworks could translate into practical reductions in compliance burdens: fewer duplicative examinations, more predictable regulatory expectations, and a clearer path for addressing issues that span both securities and derivatives regulations. These are outcomes that, anecdotally, many market participants have been hoping for.

NFA President and CEO Tom Sexton echoed the collaborative spirit of the arrangement: “We look forward to continuing our coordination efforts with the SEC under this formal framework. We believe this memorandum represents an important milestone for NFA and will allow us to further foster our mission of protecting customers and ensuring market integrity.”

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Katten is continually monitoring the latest US financial regulatory developments, including matters concerning regulatory coordination and harmonization efforts. For more information about the SEC-NFA MOU and how this may impact your regulatory compliance obligations, please contact one of the authors of this article or your primary Katten attorney.