Cox Gives Support for Merger of SEC, CFTC

New York (HedgeCo.Net) – SEC Chairman Christopher Cox said he was all for a merger between the Commodity Futures Trading Commission and the Securities and Exchange Commission.

Hopping on board with U.S. Treasury Secretary Henry Paulson, this was the first time Cox has publically supported a merger that was first brought to the table years ago.  The issue was brought up again in March, when Paulson laid out his regulatory reform blueprint which supported the merger of the two agencies.

The SEC and CFTC currently meet every quarter after signing a March memorandum in which they agreed to increase communication and cooperation.  While the CFTC oversees the futures market and the SEC serves as an overall police for the markets, many feel the two would perform best under one roof seeing as how their functions tend to overlap. 

“This would bring futures within the same general framework that currently governs economically similar securities,” Cox said during a Congressional hearing yesterday.

The House Oversight Committee hearing where Cox gave his public support for the merger was staged in hopes of holding Cox along with former Treasury Secretary John Snow and former Federal Reserve Chairman Alan Greenspan accountable for the lack of regulation that ultimately led to the credit crisis and the demise of several large financial institutions.

Cox, who has been notoriously lax on regulation ever since his appointment by Bush in 2005, reiterated that Congress must also act this year to finalize the regulation of credit default swaps, an act that both agencies have endorsed.

Met with a mix of agreement and disdain, questions remain as to whether the merger can actually take place.  Rep. Henry Waxman of California wasn’t about to look to the future without reminding Cox of the mess he helped get us in.  "The reality, Mr. Cox, is you weren’t doing that job of proposing these regulations beforehand. You either didn’t anticipate the problem or you agreed with the philosophy that we didn’t need regulation."

Julie Scuderi
Senior Editor for HedgeCo.Net

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