Will the SEC and CFTC Merge?by
Years before getting President-Elect Barack Obama’s nod to head the Securities and Exchange Commission, Mary Schapiro did stints on both the SEC and its sometime rival, the Commodity Futures Trading Commission. It’s easy to read that as one of many signs that a merger of the two institutions is looming.
Obama hinted as much this morning, as his press conference announcing Schapiro’s nomination, at which he referred pointedly to “the need to potentially consolidate the regulatory agencies out there, the need to streamline them.” And, of course — as we pointed out last night — Schapiro also has experience merging similar but once-rival entities: the regulatory arms of the New York Stock Exchange and NASD.
And yet, powerful interests could stand in the way of an actual consolidation of the two agencies. Among them: Congress.
The CFTC, after all, isn't all pork bellies, winter wheat and cocoa (part of a nutritious breakfast?). It regulates trading in a bunch of contracts closely related to the financial securities that the SEC regulates: commodity futures and options, as well as options on futures and some derivatives.
Small wonder, then, that some, including Treasury Secretary Henry Paulson, have called for merging at least some of the agencies' functions.
Yet, it also could help explain why Wall Street has been so generous over the years in contributing to the campaigns of lawmakers heading up the House and Senate agricultural committees. While the Senate Banking and House Financial Services committees oversee the SEC, the agriculture committees oversee the CFTC.
And, wouldn't you know it, financial-services and real-estate interests are the biggest single group of campaign donors to House Agriculture Committee members in the 2008 election cycle -- PACs and individuals gave a combined $7.7 million, exceeding even the $6.3 million from agribusiness. (See the breakdown at the Center for Responsive Politics.)
The same holds true in the Senate, where financial, insurance and real-estate interests gave nearly $29 million, while agribusiness gave just $9.6 million. (See CRP's breakdown.)