U.S. Commodity Futures Trading Commission (CFTC) chairman Gary Gensler and U.K. Financial Services Authority (FSA) chairman Lord Turner today announced that they have agreed on steps to strengthen cross border supervision of energy futures markets. This action builds upon the existing cooperative efforts by the two agencies to address cross border oversight of US and UK energy markets and will enhance the on-going information sharing agreed to in the 2006 CFTC – FSA arrangement on linked contracts.
The respective organizations will immediately work toward implementing strengthened surveillance over linked energy contracts including, where appropriate:
• enhanced direct access rights to trade execution and audit trail data;
• mutual on-site visits of exchange operators;
• the sharing of exchange regulations and notices;
• the sharing of disciplinary notices; and
• the framework to consider the coordination of taking emergency action.
“I believe that we must effectively utilize all existing powers to ensure that futures markets remain free of manipulation, fraud, or other market abuses.” chairman Gensler said. “Achieving this goal requires a coordinated international response. The CFTC will work closely with the United Kingdom’s Financial Services Authority to respond to these challenges in a coordinated manner.”
“It is important that we continue to pursue all means to maintain fair, orderly and efficient markets both nationally and internationally.” FSA chairman Lord Turner said. “The measures announced today will facilitate coordinated action, where appropriate. I am pleased that we continue to work collaboratively with the CFTC to achieve our common goals.”
In November 2006, the CFTC and FSA signed a Memorandum of Understanding to share information necessary for the respective authorities to detect potential abusive or manipulative trading practices that involve trading in related contracts on U.K. and U.S. derivatives exchanges. The CFTC and FSA will continue to work together on oversight of related contracts traded in both of their markets and other matters of mutual concern.
