SEC member: SEC, CFTC functions should be combined

WASHINGTON (Reuters) - The functions of securities, futures and pension plan regulators should be combined so that the United States has one entity responsible for all investment products, a member of the U.S. Securities and Exchange Commission said on Wednesday.

SEC Commissioner Luis Aguilar said combining the functions of his agency with those of the Commodity Futures Trading Commission and the Department of Labor’s employee benefits security administration would create a regulatory structure that “truly has oversight over the entire capital markets.”

“I would envision this integrated capital markets regulator as having the comprehensive investor protection mandate for all investment products,” Aguilar said at a Compliance Week conference in Washington.

“Today’s markets are so interconnected that centralized market oversight by a single independent regulator makes sense,” he said. The SEC polices securities markets, the CFTC regulates commodity futures markets and the labor department’s benefits security administration oversees nearly 700,000 retirement plans, among other things.

Aguilar’s proposal comes as the U.S. Congress and Obama administration try to revamp the country’s financial regulatory structure after lapses in oversight helped contribute to the global financial crisis.

Several proposals have been floated by policymakers, including one to create a new agency responsible for financial consumer products like mortgages and another to create a beefed-up investor/consumer protection agency that would combine the SEC and the CFTC.

SEC Chairman Mary Schapiro has said there is “logic” to combining her agency with the CFTC. However some CFTC commissioners have condemned such a move, as their agency has a more flexible approach to regulation than the SEC, which depends more on rules.

Such a merger has traditionally faced stiff opposition in Congress as different committees supervise the agencies and neither wants to cede authority.

Aguilar, one of five commissioners who makes decisions on federal securities rules, acknowledged the political difficulties but said if the merger were ever to happen, this would be the time.

Reporting by Rachelle Younglai, editing by Gerald E. McCormick