Massad, along with former SEC chairman Jay Clayton, detailed the theory in the Wall Street Journal last week.
"We strongly support enforcement of the laws, but what we're saying is, we need more than that, and the reason is twofold," Massad said.
"Let's not get hung up on that, or rather, let's have a parallel track which says, regardless of the classification issue, we need standards today."
He added that this solution would be a way to get some basic industry standards in place without having to rewrite securities laws.
"This is a way to get investor protection standards into the industry as it exists today without having to fundamentally change the securities or the derivatives laws."
Persons:
Timothy Massad, CNBC's Jim Cramer, Jay Clayton, Massad
Organizations:
Futures Trading Commission, SEC