The U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission announced Tuesday the formation of a joint committee to address emerging regulatory issues, starting with last week’s unexplained market plunge.

The joint committee, whose creation was one of the 20 recommendations included in the agencies’ harmonization report issued last year, will be charged with developing recommendations on emerging and ongoing issues relating to both agencies.

The first item on the committee’s agenda, the regulators report, is conducting a review of the extreme volatility that seized markets last week, and making 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 SEC chairman, Mary Schapiro. “The Joint Committee will serve an essential role in addressing that challenge.”

Apart from just examining that specific event the committee will also be charged with identifying emerging regulatory risks; assessing and quantifying of the impact of such risks and their implications for investors and market participants; and, furthering the SEC’s and CFTC’s efforts on regulatory harmonization.

The committee is being co-chaired by Schapiro and her counterpart at the CFTC, its’ chairman, Gary Gensler. It also includes former CFTC chair, Brooksley Born; former CEO and chairman of Vanguard, Jack Brennan, former SEC chair, David Ruder; the current chairman and CEO of the Financial Industry Regulatory Authority, Richard Ketchum; and a trio of academics; with more members to be added in the future.

IE