SEC and NFA enter into memorandum of understanding to harmonize regulatory coordination

On May 21, 2026, the Securities and Exchange Commission (SEC) and the National Futures Association (NFA) announced that they entered into a Memorandum of Understanding (MOU) to enhance cooperation, coordination, and information sharing in areas of common regulatory interest.¹ The MOU formalizes a framework intended to reduce duplicative oversight burdens on regulated entities and promote consistent compliance with both federal securities and derivatives laws.

The SEC and NFA each oversee a broad range of financial services firms, and there is meaningful overlap in the entities subject to their respective jurisdictions. The SEC has regulatory authority over securities brokers and dealers, security-based swap dealers and major security-based swap participants, investment advisers, investment companies, clearing agencies, and other entities subject to the federal securities laws. The NFA, as a self-regulatory organization operating under the Commodity Exchange Act and Commodity Futures Trading Commission (CFTC) regulations, supervises commodity pool operators, commodity trading advisors, introducing brokers, futures commission merchants, retail foreign exchange dealers, and their associated persons, as well as swap dealers and major swap participants. Given the interconnected nature of the securities and derivatives markets, many firms are subject to examination and oversight by both organizations. Until now, the lack of a formal coordinated framework meant that those firms could face duplicative examinations and inconsistent compliance demands.

The announcement marks the first time the SEC and NFA have formally entered into such a coordinated framework to share information and coordinate oversight efforts. The MOU follows the memorandum of understanding entered into by the SEC and the CFTC on March 11, 2026 (March 2026 MOU)², and reflects a broader push toward inter-agency harmonization across the federal financial regulatory landscape.

Information Sharing and Examination Coordination

Under the MOU, the SEC and NFA may share information with each other on matters of mutual regulatory interest, including examination planning and findings, supervisory priorities, financial market conditions, and emerging risks, and staff from both organizations are expected to meet periodically to coordinate on these matters. The MOU establishes a bidirectional sharing structure where the SEC may provide the NFA with information regarding examinations of SEC-supervised persons and securities market conditions that may affect NFA-supervised persons, and the NFA may provide the SEC with corresponding information regarding NFA-supervised persons and derivatives market conditions that may affect SEC-supervised persons.

Notably, the MOU does not alter each organization’s independent authority. Instead, the SEC and NFA each retain full discretion over which entities it examines, how it conducts those examinations, and what findings it makes. Further, the MOU does not create legally binding obligations on either organization and does not confer any enforceable rights on third parties, including regulated entities.

Confidentiality and Permissible Use of Shared Information

The MOU includes detailed provisions governing the confidentiality and permissible use of information exchanged between the parties. All information shared under the MOU is presumed non-public and the receiving party may not disclose the information without the other party’s written consent, except where required by law (such as in response to subpoenas, court or administrative orders, or requests from duly authorized committees of the United States Congress). Non-public information received under the MOU may be used to inform examinations, enforcement investigations, proceedings, civil actions, and oversight activities. The MOU expressly indicates that sharing information between the SEC and NFA does not constitute a public disclosure or waiver of any privilege.

The MOU also addresses coordination with the CFTC. Where the SEC requests information that originates from the CFTC, the SEC must seek the information directly from the CFTC under the March 2026 MOU, rather than through the NFA. Similarly, if the CFTC requests information from the NFA that the NFA originally obtained from the SEC under this MOU, the CFTC must seek that information from the SEC under the March 2026 MOU. These provisions are intended to ensure that information flows between regulators in a controlled manner consistent with each agency’s confidentiality obligations.

Practical Implications for Regulated Firms

The MOU has several practical implications for firms operating across the securities and derivatives markets subject to oversight by the SEC and NFA.

First, firms should anticipate more coordinated examinations. The SEC and NFA have committed to sharing examination planning information and findings, which may result in more streamlined or sequenced examinations for dually regulated entities. While this may ultimately reduce the burden of parallel regulatory inquiries, firms should also expect that information provided to one regulator may, pursuant to the terms of the MOU, be accessible to the other.

Second, firms should review their information management and compliance practices with this expanded sharing framework in mind. The MOU does not limit the use of shared information for examination purposes; it allows the SEC and NFA to use information received from the other to inform enforcement investigations and civil actions. Firms subject to oversight by both the SEC and NFA should ensure that their compliance policies and examination preparation strategies account for the possibility of coordinated regulatory scrutiny.

Third, the MOU’s alignment with the March 2026 MOU between the SEC and CFTC suggests that the SEC, NFA, and CFTC will now be sharing information across a coordinated and interlocking framework. Firms registered with or supervised by more than one of these organizations should be mindful of this broader coordination when engaging with any one of them.

__________

If you have any questions about this Legal Briefing, please feel free to contact any of the attorneys listed or the Eversheds Sutherland attorney with whom you regularly work.

_{1 See SEC Release No. 2026-47, SEC and NFA Announce Memorandum of Understanding to Further Harmonize Regulatory Coordination (May 21, 2026), available at: https://www.sec.gov/newsroom/press-releases/2026-47.}

_{2 SEC Release No. 2026-26, SEC and CFTC Announce Historic Memorandum of Understanding Between Agencies (Mar. 11, 2026), available at: https://www.sec.gov/newsroom/press-releases/2026-26-sec-cftc-announce-historic-memorandum-understanding-between-agencies.}