The body, which supervises elections in Britain, launched an investigation to decide if the content of political ads should be covered by a code.
They have been been exempt from the industry's code of practice since 1999.
In a consultation paper, the commission says the current position allows agencies to make full use of their creative skills, which could be curbed by a new code.
However, the paper suggested that regulation might bring benefits to the ad industry. "Under the current, non-regulated position, an agency might devise a controversial advertisement which could reflect badly on that agency, risking a damage to its reputation," it said.
The commission accepted that a new code might encourage political parties to make complaints about their opponents' campaigns.
It also accepted there was a "strong case" for political ads not to be covered by the same code as commercial ones.
Since 1999, the parties have resisted calls to draw up their own code, but the inquiry may increase pressure on them to agree one before the next general election. The ad industry will be asked to send its views to the inquiry by 9 January.