Will the Securities and Exchange Commission be “modernized” out of existence? That’s just one of the numerous questions the corporate world is mulling as it digests the details of the long-awaited Treasury Department blueprint for overhauling regulation of the U.S. financial markets.

Under a controversial plan for modernizing U.S. financial markets regulation unveiled last week by Treasury Secretary Henry Paulson, the SEC, as the corporate world currently knows it, would cease to exist.

As proposed in the more than 200-page report, many of the SEC’s current functions would be merged with those of the Commodity Futures Trading Commission to create a ...