WASHINGTON — Reps. Barney Frank and Mike Capuano have introduced a bill to combine the Securities and Exchange Commission and the Commodity Futures Trading Commission, calling the existence of the two separate agencies a "structural defect."

The legislation sponsored by the two Massachusetts Democrats comes on the heels of a report issued by Republicans on the House Financial Services Committee looking at the downfall of brokerage firm MF Global that suggested combining the two agencies. The report cited the agencies' "apparent inability" to coordinate leading up the collapse of the firm. Democrats on the banking panel, including Frank and Capuano, did not sign on to the report, citing insufficient time to review it.

The new bill would set up a single regulatory body run by five commissioners to monitor securities, futures, derivatives and other financial markets and instruments.

"The existence of a separate SEC and CFTC is the single largest structural defect in our regulatory system," said Frank, who serves as ranking member on the House Financial Services Committee and is slated to retire at the end of the year. "Unfortunately, this is deeply rooted in major cultural, economic and political factors in America."

Frank has said he did not try to include a merger in Dodd-Frank because he worried it would have killed the bill.

"Had we sought to merge those institutions in the overall financial reform bill, it would almost certainly have caused the defeat of that that legislation," Frank said. "Now that the basic policies have been adopted to cover security and derivatives regulation, we can focus on the structural issue. I file this bill now because I believe it is time for this to be on the agenda of the next Congress."

A spokesman for Rep. Spencer Bachus, R-Ala., the committee chairman, did not have a comment on the legislation.

Earlier this week, the SEC underwent its own internal shuffling, as chairman Mary Schapiro announced she would step down. Commissioner Elisse Walter will take her place. Schapiro has suggested that a merger of the two agencies would make sense.

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