The top Republican on the Senate Banking Committee is calling for a regulatory watchdog to investigate the oversight of now-bankrupt brokerage MF Global Holdings Ltd.

Senator Richard Shelby wrote a letter to the inspector general of the Commodity Futures Trading Commission asking for a detailed account of the commission's role in monitoring the firm and its customer funds.

MF Global collapsed in October after it was forced to reveal that it had made a $6.3 billion bet on European sovereign debt.

An effort to sell the firm failed, partially due to the revelation that hundreds of millions of dollars in customer money was not where it should be.

Investigators have been scouring the company's books, described as messy and unorganized. The fund shortfall has been estimated at up to $1.2 billion by the trustee liquidating the company.

The fact that all of MFGI's customer funds cannot be accounted for raises serious public policy concerns, Shelby said in the letter to CFTC Inspector General Roy Lavik, dated November 30.

Shelby also wants Lavik to probe CFTC Chairman Gary Gensler's decision to recuse himself from the agency's MF Global investigation.

Gensler said in early November that he was not participating in the investigation of MF Global so he would not become a distraction or risk creating an appearance of a conflict of interest.

Gensler and Jon Corzine, who resigned as MF Global's chief executive last month, worked at Goldman Sachs Group Inc at the same time and held prominent positions. They both left the investment bank in the late 1990s.

A CFTC spokesman did not immediately respond to a request for comment.

Gensler and Securities and Exchange Commission Chairman Mary Schapiro are scheduled to testify on Thursday before the Senate Agriculture Committee in the first major congressional hearing about MF Global since it filed for bankruptcy on October 31.

(Reporting by Karey Wutkowski; editing by John Wallace)