Earlier this year, the CFTC and FERC announced an information sharing Memorandum of Understanding (MOU) between the two agencies. The agencies have now announced that they have begun sharing market data pursuant to this MOU. In addition, they have created an Interagency Surveillance and Data Analytics Working Group “to coordinate information sharing between the agencies and focus on data security, data sharing infrastructure, and the use of analytical tools for regulatory purposes.”
The MOU derives from the Dodd-Frank Act, which sought to resolve jurisdictional disputes between the two agencies regarding regulation of futures activity that affected energy markets. In recent congressional testimony, FERC Office of Enforcement Director Norman Bay identified the inability to access financial data from CFTC-regulated markets as creating a “gap in the Commission’s ability to conduct effective and comprehensive surveillance of the natural gas and electric markets” that “prevents Commission staff from seeing the complete picture of what is occurring in its jurisdictional markets and from fully integrating the financial information into its automated screens.” In his remarks, Bay identified the implementation of this MOU as a “first step” toward effective information sharing between the two agencies.
This close coordination by the CFTC and FERC means that energy companies must have effective programs in place to monitor their trade and market data, as this very data will be accessible by both agencies as part of their surveillance efforts.