SEC Chairman Mary Schapiro and Commodity Futures Trading Commission Chairman Gary Gensler announced the formation of a joint committee that will address emerging regulatory issues. The establishment of the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues was one of the 20 recommendations included in the agencies' harmonization report issued last year. In addition, the financial reform bill passed by the House calls for the agencies to establish such a committee to address emerging and ongoing issues of common interest in the futures and securities markets and to identify emerging regulatory risks in the markets.

The joint committee will develop recommendations on emerging and ongoing issues relating to both agencies. The committee will initially review the recent one-day market volatility event and make recommendations related to market structure issues that may have contributed to the volatility, as well as disparate trading conventions and rules across various markets. "As last week's events remind us, our markets are increasingly interrelated and interdependent so we need to appreciate how events in one arena can potentially impact investors and markets elsewhere," said Chairman Schapiro. She added that the joint committee will serve an essential role in addressing that challenge. "It is important that we hear from this prominent panel of market practitioners, academics and former regulators about emerging risks in our markets," Chairman Gensler said. He noted that it is important for the CFTC and SEC to hear from the panel together because the markets are so intertwined

The committee's charter provides for a broad scope of interest, including 1) identifying of emerging regulatory risks, 2) assessing and quantifying of the impact of such risks and their implications for investors and market participants and 3) furthering the SEC-CFTC efforts on regulatory harmonization. Chairman Schapiro and Chairman Gensler will serve as co-chairs of the joint committee. The initial members of the committee are:

• Former CFTC Chairman Brooksley Born;

• Former Vanguard CEO Jack Brennan;

• Prof. Michael Armellino of New York University;

• FINRA Chairman Richard Ketchum;

• Prof. Maureen O’Hara of Cornell University;

• Prof. Susan Phillips of George Washington University; and

• Former SEC Chairman David Ruder.

Additional committee members are expected to be named soon.