* SEC, CFTC split oversight of derivatives

* US, EU have different approach to troubled firms

By Rachelle Younglai and Emily Chasan

NEW YORK, Nov 4 (Reuters) - Attempts to supervise the $450 trillion private over-the-counter derivatives market and ensure that the government has a way to unwind large, troubled firms may lead to more regulatory gaps, former and current U.S. officials said on Wednesday.

The United States and the European Union have embarked on sweeping reforms to oversee the financial markets after regulatory lapses contributed to the worst economic crisis in decades.

But differing approaches on both sides of the Atlantic and a failure to consolidate U.S. securities and futures regulators could lead to the same kind of fragmentation blamed for the current problems, the experts told a Practising Law Institute conference.

"Imagine what happens as we now have two regulators splitting the oversight of the over-the-counter derivatives market," said Annette Nazareth, a former U.S. Securities and Exchange Commission commissioner now in private practice.

Nazareth said she feared further regulatory fragmentation.

The Obama administration shied away from consolidating the SEC and Commodity Futures Trading Commission out of concern it would take too much time and political capital.