FERC and the Commodity Futures Trading Commission (CFTC) have begun transmitting market data under terms of a pair of memoranda of understanding (MOU) to address overlapping jurisdiction and information sharing for use in analyzing market activities and protecting market integrity, the heads of the two regulatory agencies said Wednesday.
The agencies have also created a staff-level Interagency Surveillance and Data Analytics Working Group to coordinate information sharing and focus on data security, data sharing infrastructure, and the use of analytical tools for regulatory purposes, said CFTC Acting Chairman Mark Wetjen and Federal Energy Regulatory Commission Acting Chairman Cheryl LaFleur.
"Sharing of this market data will benefit customers by strengthening oversight of the energy markets in order to promote their fairness and effectiveness," LaFleur said. She recently said that the sharing of information will help in speeding up fraud and manipulation investigations, allowing quicker resolutions that will keep market participants better informed, though there could be more legislation in terms of how the boundaries are defined (see Daily GPI, Jan. 28).
"I am pleased that the CFTC and FERC staffs were able to work swiftly to execute on the information sharing MOU," Wetjen said. "This significant step and the creation of the Interagency Surveillance and Data Analytics Working Group represent a milestone in inter-agency market oversight and will better ensure the integrity of the energy markets."
FERC and CFTC signed the MOUs in January in connection with market surveillance and investigations into potential market manipulation, fraud or abuse (see Daily GPI, Jan. 3). The jurisdiction MOU set out a process under which the agencies will notify each other of activities that may involve overlapping jurisdiction and coordinate to address the agencies' regulatory concerns.
The agencies agreed to notify each other when either "becomes aware that an entity regulated or proposed to be regulated...has filed a request for authorization or an exemption permitting such entity to engage in activities, or the agency is sua sponte considering such an authorization or exemption, which, in either case, may arguably fall within the overlapping jurisdiction of the other agency…"
The second MOU established procedures through which FERC and CFTC will share information of mutual interest related to their respective market surveillance and investigative responsibilities.
Last April, Sens. Dianne Feinstein (D-CA), Ron Wyden (D-OR) and Lisa Murkowski (R-AK) called on FERC and the CFTC to execute more robust MOUs to resolve their jurisdictional disputes, which the lawmakers said were hampering oversight of the nation's energy markets (see Daily GPI, May 1, 2013). While federal statute divides the jurisdiction of FERC and the CFTC between cash markets and futures markets, respectively, federal law also recognizes that detecting many forms of manipulation in these integrated markets requires the active oversight of both markets in an integrated fashion, the senators said a letter to the heads of both agencies. The Dodd-Frank Wall Street Reform Act directed FERC and CFTC to negotiate an MOU that would integrate market oversight efforts and improve information sharing.