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Legislation Introduced to Merge SEC and CFTC

Last Thursday, Congressman Barney Frank (MA-D) and Congressman Mike Capuano (MA-D) introduced legislation which would merge the SEC and CFTC.  The two agencies overlap in overseeing derivatives and other exchange-traded products and many have argued that merging the two could avoid regulatory lapses.  Congressman Frank stated that “[t]he existence of a separate SEC and CFTC is the single largest structural defect in our regulatory system. . . . Had we sought to merge those institutions in the overall financial reform bill, it would almost certainly have caused the defeat of that legislation. Now that the basic policies have been adopted to cover security and derivatives regulation we can focus on the structural issue.”

Congressman Frank is the current Ranking Member of the House Financial Services Committee, however, he will retire from Congress at the end of the year.  He stated that he filed the bill in hope that the issue would be on the agenda for the next Congress.