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EO 12631Executive OrderReagan · R

Executive Order 12631

Working Group on Financial Markets

This executive order creates a high-level interagency Working Group on Financial Markets, chaired by the Treasury Secretary and including the heads of the Federal Reserve, SEC, and CFTC. It tasks the group with reviewing the causes of the October 1987 stock market crash and recommending actions to enhance market integrity, efficiency, and investor confidence. The group must submit an initial report within 60 days and periodically thereafter.

53 FR 9421
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Impact dates

  1. Initial report to President on progress and recommended legislative changes

Key directives

  • Establish Working Group composed of Treasury Secretary, Fed Chairman, SEC Chairman, and CFTC Chairman
  • Treasury Secretary to serve as Chairman
  • Review studies on October 19, 1987 market events and recommendations
  • Identify governmental and private sector actions to enhance market integrity, efficiency, orderliness, and competitiveness
  • Consult with exchanges, clearinghouses, self-regulatory bodies, and major market participants
  • Submit initial report to President within 60 days, with periodic reports thereafter
  • Department heads to provide information as required
  • Treasury to provide administrative and support services

Who is ordered

Timeline

Immediate

  • Working Group established with four agency heads
  • Treasury Secretary designated as Chairman

Near term (90d)

  • Initial report to President due within 60 days
  • Consultation with exchanges, clearinghouses, self-regulatory bodies, and major market participants begins
  • Review of October 1987 crash studies and recommendations

Long term

  • Periodic reporting to President on progress and legislative recommendations
  • Potential policy coordination and contingency planning reforms
  • Possible legislative changes recommended to Congress

Risks & tensions

  • Vague scope: 'periodically thereafter' leaves reporting frequency undefined
  • No enforcement mechanism for agency cooperation beyond 'to the extent permitted by law'
  • Potential tension between regulatory agencies with differing statutory mandates and cultures
  • Private sector consultation requirement may create capture concerns or delay action
  • 'If appropriate' qualifier on legislative recommendations weakens accountability
Executive Order 12631: Working Group on Financial Markets · Executive Orders