Merger of SEC, CFTC Sought by Paul Volcker

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A new report by the former Federal Reserve Chairman Paul Volcker proposes major changes in the government’s regulatory regime overseeing the financial industry, including the merger of the SEC and CFTC and the abolition of the Office of the Comptroller of the Currency. Volcker has been a close financial advisor to President Barack Obama and was Chairman of the Federal Reserve under Presidents Jimmy Carter and Ronald Reagan.

The 63 page report and three corresponding background papers were issued today by the Volcker Alliance. The mission of the group, launched in 2013 by Paul Volcker, is to improve how government works at local, state and federal levels and to restore the public’s faith in government. Last week, Volcker called for changes to the system of financial regulation in an editorial published in the Washington Post.

This is not the first time someone has called for the Securities & Exchange Commission and Commodity Futures Trading Commission to be under one roof.  Congressmen Barney Frank and Mike Capuano introduced legislation in 2012 to that effect.  At the time, Frank called the “existence of a separate SEC and CFTC … the single largest structural defect in our regulatory system.”  The legislation was spurred by a House Financial Services oversight panel report on the collapse of MF Global which criticized the two regulators for failing to communicate with each other and called for an inquiry into whether they should be merged.

In 2008, Bart Chilton, a CFTC Commissioner from 2007 until 2014, released a statement concerning the discussion that were going on during the financial crisis about merging the two financial regulators. The statement called the discussion a fair question that “deserves thoughtful consideration.” However, it does express concern that the CFTC will be swallowed up by the larger securities regulator and misconduct in the futures industry would be deprioritized.

Last year at a Securities Industry and Financial Markets Association conference in New York City, SEC Chair Mary Jo White joked that there was no need for a merger as the SEC should be given all of the power.  This comment caused CFTC Chair Timothy Massad to defend the agency’s role and its cooperation with the SEC.

Additional information to follow once we have had time to digest the report. It is available at

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