Congress should consider combining the Securities and Exchange Commission and Commodity Futures Trading Commission, a House Financial Services subcommittee said on Thursday.
“Congress [should] explore whether customers and investors would be better served if the SEC and the CFTC streamline their operations or merge into a single financial regulatory agency that would have oversight of capital markets as a whole,” a report by the House Financial Services Subcommittee on Oversight and Investigations said. The report concluded a year-long investigation into the collapse of brokerage firm MF Global, which declared bankruptcy in October 2011.
There was “no meaningful coordination” among the regulators that were supervising the firm, Financial Services Committee Chairman Spencer Bachus, R-Ala., said in a statement.
The MF Global case is indicative of broader-scale regulatory inefficiencies, the subcommittee said in a statement announcing the report's release. “As financial products, markets, and market participants have converged, the SEC’s and the CFTC’s regulatory jurisdictions have increasingly overlapped. It only makes sense to collapse these entities and create a regulatory framework that brings us into the 21st century,” it said.
The subcommittee relied on three hearings, over 50 interviews and more than 200,000 documents to conduct its review, it said. Among the report’s other recommendations was enacting legislation to impose civil liability on the officers and directors of firms like MF Global that sign the financial statements or authorize transfers from customer segregated accounts.
The full report can be read here.