CFTC and SEC: Issues Related to the Shad-Johnson Jurisdictional Accord
GGD-00-89
Published: Apr 06, 2000. Publicly Released: Apr 06, 2000.
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Highlights
Pursuant to a congressional request, GAO reviewed the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) and the issues the two have in relation to the Shad-Johnson Jurisdictional Accord, focusing on: (1) the extent to which U.S. securities, foreign futures, and over-the-counter (OTC) markets trade stock-based derivatives that are economically similar to the futures prohibited from trading by the accord; (2) the potential effect of the accord trading prohibitions on derivatives market participants; (3) concerns about calls to repeal the accord trading prohibitions; and (4) jurisdictional and other approaches to addressing these concerns.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Commodity Futures Trading Commission | Given the potential benefits of repealing the accord trading prohibitions and the potential for jurisdictional differences to continue to impede such efforts, the Chairman, SEC, and the Chairman, CFTC, should: (1) work together and with Congress to develop and implement an appropriate legal and regulatory framework for allowing the trading of futures on single stocks and all stock indexes; and (2) submit to Congress legislative proposals for repealing the accord trading prohibitions. |
SEC and CFTC agreed on a legal framework to allow for the trading of futures on single stocks and submitted a legislative proposal to Congress. On December 21, 2000, the President signed the Commodity Futures Modernization Act of 2000 which, among other things, lifted the ban on trading futures on single stocks.
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| United States Securities and Exchange Commission | Given the potential benefits of repealing the accord trading prohibitions and the potential for jurisdictional differences to continue to impede such efforts, the Chairman, SEC, and the Chairman, CFTC, should: (1) work together and with Congress to develop and implement an appropriate legal and regulatory framework for allowing the trading of futures on single stocks and all stock indexes; and (2) submit to Congress legislative proposals for repealing the accord trading prohibitions. |
SEC and CFTC agreed on a legal framework to allow for the trading of futures on single stocks and submitted a legislative proposal to Congress. On December 21, 2000, the President signed the Commodity Futures Modernization Act of 2000 which, among other things, lifted the ban on trading futures on single stocks.
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Commodity futuresDerivative securitiesFuturesHedgingJurisdictional authorityRestrictive trade practicesSecurities regulationStock exchangesStocks (securities)Securities