The SEC is probing the accounting treatment that helped mask MF Global's exposure to risky foreign sovereign debt, Mary Schapiro,  told Senate Agriculture Committee hearing today.  Schapiro also said regulators are talking about whether accounting rule changes are needed in the wake of MF Global's collapse. Schapiro said the Financial Accounting Standards Board, which sets U.S. accounting standards, recently decided that repo-to maturity is the only kind of repo transaction that qualifies for off-balance sheet treatment. But in light of MF Global's demise, regulators are now rethinking that approach. "We are talking to FASB about whether that is a policy that ought to be changed," she said. "They did improve the disclosure around it, but there is a question I think about whether repos-to-maturity should be included on the balance sheet." At least one senator seemed to think that was a good idea. "That is a loophole so big you could drive a Mack Truck through it," said Democratic Senator Kent Conrad. "If that's not closed down, we really got to ask ourselves what we're doing." Schapiro said MF Global did disclose its net exposure to sovereign debt in a regulatory filing. The company also disclosed its gross exposure, though "not as clearly," she said. MF Global collapsed after the firm was forced to reveal that it had made a $6.3 billion bet on European sovereign debt, spooking investors. An effort to sell the firm failed, partly because of the revelation that hundreds of millions of dollars in customer money was not where it should have been.  For more info, go to [Reuters 12/1/11]