The U.S. Securities Industry and Financial Markets Association is calling for reform in the regulatory structure for financial institutions.

SIFMA today called for reform to both the structure and content of financial regulation. Its input came in response to the U.S. Department of the Treasury’s request for comment on the issue.

On the content side, it called for more principles-based regulation, that the competitiveness of the economy be made a priority when approaching regulatory reform, that regulators implement a more consultative approach to regulation, that rules and regulations should address the differences between wholesale and retail markets, and that regulators should eliminate the prior review process for new financial products.

As for the structural reform it would like to see, SIFMA called for consolidation of the Securities and Exchange Commission and the Commodity Futures Trading Commission. It also proposed a reduction in the number of financial regulators, and the creation of a framework in which each financial institution is supervised by only one primary regulator. It also said that reforms of banking, state and insurance regulators may be warranted.

Additionally, SIFMA suggested an update in cross-border regulations. SIFMA said, “it supports a phased and tiered approach to cross-border regulatory reform, which addresses pressing issues facing investors and markets under current law in the short term, and works toward broader reforms in the longer term.”

“One of the great challenges facing the financial services industry is the need for regulatory reform in the U.S.,” said Marc Lackritz, SIFMA president and CEO. “This process, initiated by Secretary Paulson, provides an excellent opportunity to reform an antiquated system and simultaneously move financial services regulation in the U.S. into the 21st century. With a regulatory landscape plagued by duplication and conflicting standards, the need to improve regulation couldn’t be greater. Doing nothing is not an option.”

“Our businesses and our markets are increasingly converging and driven by technology. It’s time for regulation to catch up,” Lackritz added. “The U.S. regulatory regime is in need of both substantive and structural reform. We need reform to move to principles-based regulation, coupled with prudential supervision and liability reform, to ensure that regulation becomes flexible, encourages innovation and competition, protects against systemic risk, and protects investors.”