March 29, 2023

DealBook: Regulators Overhaul Derivatives Market, but With a Caveat

Gary Gensler, chairman of the Commodity Futures Trading Commission, voted in favor of the new overhaul of the derivatives market.Peter W. Stevenson for The New York TimesGary Gensler, chairman of the Commodity Futures Trading Commission, voted in favor of the new overhaul of the derivatives market.

Federal regulators approved new rules on Thursday to shine a light on Wall Street trading, but they also softened a crucial aspect of the plan in the face of lobbying pressure from the nation’s biggest banks.

In a long-awaited vote to tackle an essential cause of the 2008 financial crisis, the Commodity Futures Trading Commission voted to adopt an overhaul of the derivatives market, pushing the risky trading from the shadows of Wall Street into the light of trading platforms. For decades, such trading has eluded regulators and the public.

“This is a paradigm shift for the American markets,” Gary Gensler, the chairman of the commission, said at the meeting. “When light shines on a market, the economy and public benefit.”

Yet, in the fine print, the agency also effectively empowered a handful of select banks to continue controlling the $700 trillion derivatives market.

Just five banks hold more than 90 percent of all derivatives contracts, which allow companies to either speculate in the markets or protect against risk. This tight grip came under fire amid concerns that those banks overcharge some companies for derivatives and pose a systemic risk to the economy. Derivatives, for example, pushed the insurer American International Group to the brink of collapse before it was rescued by the government.

In the wake of the crisis, the commission initially planned to require hedge funds, asset managers and other corporations to contact at least five banks when seeking a price for a derivatives contract. The proposed requirement was intended to bolster competition among the banks.

Under pressure from the banks — and some firms that buy derivatives — the agency agreed to lower the requirement to two banks. In about 15 months, the standard will automatically rise to three banks, but the agency agreed to produce a study that could undermine that broader standard.

The move was the product of a compromise among the agency’s five commissioners, who voted 4 to 1 in favor of the plan. Mr. Gensler, a Democrat, pushed for the higher standard. So did Bart Chilton, a fellow Democrat and frequent critic of financial risk-taking. But their plan met opposition from the Republican commissioners, and from Mark P. Wetjen, a Democrat who has sided with Wall Street on other rules.

Mr. Wetjen argued that five price quotes was an arbitrary number. He pushed for the two-bank plan, arguably the minimum required under Dodd-Frank Act of 2010, the law that mandated an overhaul of derivatives.

Even that compromise failed to please Wall Street. The Securities Industry and Financial Markets Association, the industry’s main lobbying group, said in a statement that the rules “impair market liquidity at the expense of all market participants.”

But consumer advocates, and even some regulators, have questioned whether the agency ceded too much ground. In the futures market, regulators note, a request for a price quote must be broadcast to the entire market.

“I’ve never been a more reluctant and reticent regulator than today on these rules,” Mr. Chilton said at the meeting. “I just wish we had reached a different compromise.”

Mr. Chilton joined Mr. Gensler in supporting the measure. Mr. Wetjen, who said that the more flexible plan “is not code for status quo as some might suggest,” also voted for the plan.

Jill E. Sommers, a Republican commissioner, cast the lone vote against the proposal.

In some ways, the compromise overshadowed the broader magnitude of the agency’s effort.

Under the adopted plan, many types of derivatives that have traded exclusively in private must now shift to a regulated trading platform. The platforms, known as swap execution facilities, will open a rare window into the secretive world of derivatives trading and serve as a check on risky activity.

In another rule, adopted in a 3-to-2 vote on Thursday, the agency required that large swaths of derivatives trades enter a swap execution facility. The rule captured more derivatives than the financial industry had hoped.

“No longer will this be a closed door market,” Mr. Gensler said.

Mr. Chilton was not satisfied. Before casting his vote for the plan, he said, “I’m still holding my nose and biting my tongue.”

A version of this article appeared in print on 05/17/2013, on page B8 of the NewYork edition with the headline: Regulators Tighten Rules On Trading of Derivatives.

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DealBook: Lawmakers Clash on Regulation at JPMorgan Hearing

Jamie Dimon and his regulators visited Capitol Hill on Tuesday for another round of scrutiny for a recent multibillion-dollar trading loss at JPMorgan Chase.

But before Mr. Dimon faced the firing line, lawmakers sparred with each other.

“I am a little surprised by all of the hemming and hawing by my colleagues on the other side of aisle over a private business losing private money when the federal government continues to lose billions of taxpayer dollars every day,” Representative Scott Garrett, Republican of New Jersey, said in an opening statement for the hearing before the House Financial Services Committee.

Michael Capuano, Democrat of Massachusetts, hurled blame at Republicans for introducing legislation to weaken new rules for Wall Street. In a tirade against Republican lawmakers, he argued that JPMorgan’s trading blowup raises broader questions about the safety of Wall Street.

“I’m not outraged by this particular loss,” he said, pushing regulators to say whether other big banks could take on similarly risky bets.

The hearing on Tuesday was the final in a string of inquiries planned for JPMorgan’s loss, which has grown to at least $3 billion. It was also the second opportunity for lawmakers to quiz Mr. Dimon on the losses, which were tied to a soured bet on credit derivatives.

A panel of regulators served as the opening act. In the opening panel, the House committee heard testimony from officials at five federal agencies, including the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and Commodity Futures Trading Commission.

But the comptroller of the currency, Thomas J. Curry, and the general counsel of the Federal Reserve, Scott Alvarez, faced the toughest inquiries. The regulators are under fire for failing to catch the risky trades.

Under questioning from Representative Randy Neugebauer, Republican of Texas, each of the five regulators acknowledged that their agencies were unaware of the losses until media reports emerged in early April.

“I’m wondering how this was missed,” said Representative Shelley Moore Capito, Republican of West Virginia. “Even with the matrix of communication, no one was catching it. Is the communication really working?”

In reply, Mr. Curry explained that “we were initially relying on the information available to the bank.”

Mr. Alzarez concurred. “We have to rely on information we get from the organization itself,” he said. “If that’s flawed,” he added, then regulators will have a problem.

In questioning, the House panel focused mainly a series of new rules that would rein in Wall Street risk-taking. The hearing often devolved into partisan squabbles over the rules, which stem from the Dodd-Frank financial regulatory law.

Democrats who support the overhaul highlighted how new oversight would rein in the risky derivatives trading that prompted the blowup at JPMorgan.

“The question is: Does this not argue against the proposal to deregulate derivatives?” said Representative Barney Frank, the Massachusetts Democrat who co-authored the law. “To me, this is not a hearing about JPMorgan Chase. They are an example of the larger issues.”

While Mr. Dimon has argued that the trading losses have only nicked the bank’s “fortress balance sheet,” Mr. Frank noted that other banks were not healthy. “Some have a picket fence balance sheet or a chain link balance sheet,” said Mr. Frank, the ranking Democrat on the committee.

Mr. Frank and Republicans traded barbs over Dodd-Frank throughout the hearing, with some Republicans blaming the law for allowing trading losses like that at JPMorgan.

“You can see we’re not ready to break into a ‘Kumbaya’,” Spencer Bachus, a Texas Republican and the committee’s chairman, told the regulators in a moment of levity. “Welcome to the serenity of the financial services committee.”

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DealBook: Regulator Approves ‘MF Global Rule’

Gary Gensler, chairman of the Commodity Futures Trading Commission, testified on Dec. 1 at a Senate Agriculture Committee hearing.Yuri Gripas/ReutersGary Gensler, the Commodity Futures Trading Commission chairman, testified last week before the Senate agriculture committee.

Federal regulators approved tougher constraints on Wall Street risk-taking on Monday, adopting the “MF Global rule,” named after the collapsed brokerage firm that is believed to have improperly used hundreds of millions of dollars of customer money.

The new rule will limit how the brokerage industry can invest customer money, largely barring firms from using client funds to buy foreign sovereign debt. It also prevents a complex transaction that allowed MF Global, in essence, to borrow money from its own customers.

The Commodity Futures Trading Commission, which voted unanimously to approve the rule, originally planned to finalize it months ago.

But the agency delayed action as a result of strong opposition from Jon S. Corzine, who at the time was chief executive of MF Global. Mr. Corzine resigned on Nov. 4, four days after MF Global filed for bankruptcy protection.

“I believe that this rule is critical for the safeguarding of customer money,” Gary Gensler, the agency chairman, said at a public meeting in Washington.

The revelation that client money was missing at MF Global has incited panic in the once-quiet futures industry. MF Global’s customers, including farmers, hedge funds and other investors, are still owed millions of dollars.

Now, some customers say they are losing faith in a system that promised to protect their money. While brokerage firms can invest client money, such funds must never be comingled with company funds.

MF Global violated that principle in its final chaotic days, tapping its segregated client accounts to meet its own financial obligations, people briefed on the matter have said. About $200 million in customer money that disappeared from MF Global surfaced at one point at JPMorgan Chase in Britain, the people said.

The missing money, thought to be as much as $1.2 billion, has prompted several federal investigations in recent weeks. The futures commission is leading the hunt for the money, while the Federal Bureau of Investigation is examining potential wrongdoing.

Some regulators are also examining a flood of new rules for brokerage firms, part of an effort to prevent a repeat of the MF Global debacle.

The Securities and Exchange Commission is weighing new accounting disclosures for the industry.

MF Global’s collapse has also led to renewed calls for federal regulators to keep a closer watch of brokerage firms, reclaiming oversight authority now delegated to for-profit exchanges like the CME Group.

Bart Chilton, a Democratic member of the Commodity Futures Trading Commission, is pushing for Congress to create an insurance account for futures industry customers similar to the Federal Deposit Insurance Corporation’s fund.

The rule adopted by the futures commission on Monday is aimed at the industry’s use of customer money. While firms can invest customer funds in United States Treasury securities, money markets and other plain-vanilla funds, the agency reined in some riskier bets.

Until now, brokerage firms could invest client money in a number of securities, including sovereign debt. Under the administration of President George W. Bush, regulators gradually lengthened the list of permitted investments.

But under the new rule, if firms want to invest customer funds in foreign government bonds, they must petition the agency for a special exemption. The new rule also bars firms from using client money so that one arm of the company can lend to another, a complex transaction known as an in-house repurchase agreement.

“I believe there is an inherent conflict of interest between parts of a firm doing these transactions,” Mr. Gensler said. Mr. Gensler’s agency initially proposed the crackdown in October 2010, and neared a vote on the plan this summer.

But at the time, the agency met a powerful roadblock in Mr. Corzine, former Democratic governor of New Jersey.

The rules were unnecessary, Mr. Corzine said, because federal laws already prevented brokerage firms from mixing client money with company funds. In a letter, MF Global insisted to regulators that they were trying to “fix something that is not broken.”

Mr. Corzine’s efforts culminated on July 20, as MF Global executives were on four different calls with the agency’s staff. Mr. Corzine personally participated in two of those calls. Ultimately, the aggressive lobbying campaign helped delay the proposal.

But in the wake of MF Global’s collapse, the agency’s commissioners moved quickly to adopt the new constraints. The agency voted 5-0 on Monday for the rule, drawing support from two Republican commissioners who have opposed many new rules for Wall Street, signifying the seriousness of the MF Global situation.

“As recent events have highlighted, the protection and preservation of customer funds is fundamental to our markets,” Scott O’Malia, a Republican member of the commission, said in a statement. “By limiting investments of customer funds to a subset of instruments that currently have minimal risk, this final rule is a step towards enhancing customer protection.”

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DealBook: Congressional Panel Seeks to Question Corzine

Jon S. Corzine, former chief executive of MF Global.Rich Schultz/Associated PressJon S. Corzine, the former chief executive of MF Global.

A Congressional panel has asked Jon S. Corzine to testify about the downfall of MF Global, and the hundreds of millions of dollars in customer money that went missing in the brokerage firm’s final days.

The hearing, scheduled for Dec. 15, will be a role reversal for Mr. Corzine, who spent five years on Capitol Hill as a Democratic senator from New Jersey. As a Congressional witness, Mr. Corzine is expected to come under fire for presiding over MF Global as it caused the futures industry’s first major breach of customer money. A spokesman for Mr. Corzine declined to comment on Tuesday.

The hearing, organized by the oversight unit of the House Financial Services Committee, could present the first public grilling of Mr. Corzine about his risky bets on European sovereign debt, wagers that ultimately doomed the firm.

Lawmakers are also planning to question Bradley Abelow, the firm’s chief operating officer and Mr. Corzine’s chief of staff when he was governor of New Jersey.

It is unclear whether Mr. Abelow and Mr. Corzine, who resigned as MF Global’s chief executive earlier this month, will accept the request that they testify, though the subcommittee could subpoena the executives if they balk. Mr. Abelow received the request on Tuesday and plans to respond soon to lawmakers, said a person close to the company who was not authorized to speak publicly.

The hearing will overlap with an intensifying federal investigation into MF Global. The Commodity Futures Trading Commission is leading the search for the missing money while the Federal Bureau of Investigation and federal prosecutors in New York and Chicago are examining potential criminal wrongdoing.

Neither the firm nor Mr. Corzine have been accused of wrongdoing.

Investigators now believe that much of the unaccounted-for customer money left the firm as the company was beginning a tailspin late last month, said people briefed on the matter who requested anonymity because the investigation was still under way. Regulators suspect that MF Global used some of the money to meet its own financial obligations, which could mean that those funds are gone forever.

The exact amount of missing money is undetermined, and it changes by the day. On Monday, the trustee overseeing the dismantling of MF Global’s brokerage unit pegged the number at around $1.2 billion, twice the previous estimate. Forensic accountants from Deloitte and Ernst Young working for the trustee, James Giddens, came to the much larger estimate after they spent roughly three weeks reconstructing the firm’s books.

Regulators were taken aback by the announcement, signaling the first hiccup in an otherwise smooth investigation, according to people briefed on the matter. The trustee’s office gave regulators little more than 20 minutes’ notice before it publicly released the finding, according to the people.

Now, some regulators are questioning the $1.2 billion figure, suspecting that the trustee double-counted $220 million that had been transferred between units of MF Global, according to one of the people briefed on the matter. Over the last day, the C.F.T.C. has tried to independently check the numbers.

The CME Group, the exchange where MF Global did most of its business, disputed the larger figure on Tuesday. In a statement, the exchange said it was “confident reports of significantly larger shortfalls are incorrect.”

Kent Jarrell, a spokesman for the trustee, stood by the larger estimate, while noting that it was preliminary.

Mr. Giddens is charged with returning money to MF Global’s customers. Customers — including farmers in Iowa and hedge funds in New York — have slowly received a portion of their accounts. The trustee has distributed at least $1.5 billion over the last three or more weeks, though that remains a fraction of what customers are owed.

In bankruptcy court in Lower Manhattan on Tuesday, Judge Martin Glenn approved a proposed claims process for the trustee to dispense additional funds. Mr. Jarrell said that electronic application forms would be posted to the trustee’s Web site and that claims would be evaluated soon.

Also on Tuesday, the trustee started receiving a flow of some $1.3 billion in MF Global customer funds that were stored at Harris Bank.

The funds, made up of foreign currencies, securities and cash, will give the trustee additional money to return to the MF Global customers, though it does not reduce the overall shortfall in funds.

“It’s the last big pot of money held in U.S. depositories,” Mr. Jarrell said.

The CME Group also increased a guarantee it had offered the trustee in case there was a shortfall as customers received their money. The exchange will now provide, in essence, a $550 million insurance policy to the trustee’s office, up from $250 million.

Lawmakers are also questioning the sluggish progress in returning money to customers. At the MF Global hearing next month, the House subcommittee plans to scrutinize the lingering woes that the firm’s customers face.

Lawmakers hope to interview top regulators about their oversight of the firm. They plan to call on Robert Cook, head of the Securities and Exchange Commission’s office of trading and markets, and William C. Dudley, the president of the Federal Reserve Bank of New York.

Gary Gensler, chairman of the C.F.T.C., will also be asked to testify, though Mr. Gensler has recused himself from the case after fearing that his past ties to Mr. Corzine would distract from the investigation.

Mr. Gensler, who once worked for Mr. Corzine at Goldman Sachs, is unlikely to testify, a person with knowledge of the matter said.

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DealBook: Regulators Move to Rein In Speculative Trading

Gary Gensler, chairman of the Commodity Futures Trading Commission.Scott Eells/Bloomberg NewsGary Gensler, chairman of the Commodity Futures Trading Commission.

A divided Commodity Futures Trading Commission on Tuesday adopted new constraints on speculative Wall Street trading, a business that some regulators have blamed for inflating prices at the gas pump and the grocery store.

But the fight over the rule may continue if Wall Street, as expected, takes its complaints to the courts.

The commodity commission, facing threats that the financial industry will sue to block the overhaul, agreed to delay many new limits for at least a year. The agency also exempted some trades altogether, leaving consumer advocates calling for a tougher crackdown.

The so-called position limits rule will cap the number of derivatives contracts a trader can hold on 28 commodities, affecting dozens of traders who now exceed the new limits. The limits will cover an array of goods — oil, wheat, gold and the like — the first time federal authorities have reined in speculative trading in both energy and metals.

“Position limits help to protect the markets both in times of clear skies and when there is a storm on the horizon,” Gary Gensler, the agency’s chairman, said at a public meeting in Washington.

The much-anticipated rule was approved by a 3-2 vote. Three Democratic members approved the rule over the vocal objections of two Republican colleagues.

Scott O’Malia, a Republican member, said he was disappointed by the rule. “Unfortunately, in its exuberance and attempt to justify doing so, the commission has overreached.”

The limits will not take effect anytime soon. Caps on most trading will kick in 60 days after the agency completes a related rule, which is likely to take months. Other commodities will escape the restrictions for at least a year.

The position limits plan has emerged as one of the most contentious rules stemming from the Dodd-Frank act. The Commodity Futures Trading Commission was inundated with letters about position limits — 15,000 comments in total.

Wall Street trade groups were especially vocal. Some industry lobbyists note that Dodd-Frank leaves it to regulators to enforce position limits only “as appropriate.” The groups pushed regulators to interpret the fine print to mean that, in fact, no limits were appropriate.

Other groups even issued thinly veiled threats of legal action. In March, the Futures Industry Association urged the commission to scrap its position limits plan, saying it “may be legally infirm.”

The threats have resonated at the agency in the wake of a court ruling this summer that struck down a separate Dodd-Frank rule at the Securities and Exchange Commission. After the ruling, the commodity commission revamped the position limits rule to better account for the regulation’s costs and benefits.

But Mr. O’Malia said the cost-benefit section was still not up to snuff, leaving the rule “vulnerable to legal challenge.”

Mr. Gensler, however, praised the rule as the nation’s best hope for reining in speculative commodities trading. Over the last few years, the financial industry has increased its speculation in the futures market. At the same time, the prices of the underlying commodities have fluctuated wildly.

Consumer groups and some regulators have faulted excessive speculation for driving a spike in oil and gas prices, saying Wall Street is driving up costs for consumers.

Industry groups contend that speculators are needed to keep liquidity flowing. They also argue that regulators lack data tying speculative trading to price distortions, concerns echoed by Republican regulators.

While the agency has enforced position limits on a handful of agricultural goods for decades, the sprawling new rules apply to 28 commodities, including metal and energy commodities. Existing position limits apply to only nine items.

The new rule adopted on Tuesday would enforce spot-month position limits, or limits on a contract closest to maturity, prohibiting traders from acquiring more than 25 percent of the deliverable supply for a given commodity. For other contracts, the agency will phase in position limits over time, once it gathers additional data.

But some consumer advocates say the rule is not tough enough. It exempts broad ranges of trades placed as hedges against risk and allows firms that trade in certain natural gas contracts to face lighter limits. The final rule did close an earlier loophole that would have relaxed position limits for trades settled with cash payments rather than by exchanging the actual commodity.

At the otherwise contentious meeting on Tuesday, the agency celebrated Mr. Gensler’s 54th birthday, singing “Happy Birthday.”

Mr. O’Malia, saying he would vote against the rule, told Mr. Gensler “You are old enough to know that you don’t get everything you want.”

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DealBook: Volcker Rule Divides Regulators

Regulators have faced a barrage of complaints from lawmakers and financial industry lobbyists in their 14-month-long quest to constrain risky trading on Wall Street, an effort known as the Volcker Rule. Now, as regulators begin a push to produce a final draft of the rule, they face hurdles from an unexpected group: themselves.

Though several federal agencies agreed last week to propose the initial version of the Volcker Rule, they are divided over some of its crucial details. The Federal Deposit Insurance Corporation, for example, has pushed for tough language that would require bank executives to vouch for their compliance with the Volcker Rule — a measure that the Office of the Comptroller of the Currency has been fiercely resisting, say people close to the regulators.

In recent weeks, some regulators even quarreled over which agency would vote first on the rule, according to one of the people close to the regulators. And while four regulators ultimately did vote, a fifth agency, the Commodity Futures Trading Commission, was conspicuous by its silence.

The commission, according to another person with direct knowledge of the issue, raised concerns that an earlier draft overlooked the costs and benefits of the Volcker Rule, an important standard whose absence could expose regulators to a legal challenge.

Both the rule’s critics and supporters fear that an escalating turf war could sidetrack regulators as they shape a final version of the overhaul by July 2012. While Wall Street opposes the proposal, it worries that the regulatory fracture will generate additional uncertainty over how to comply.

“You do see a split,” said Thomas Quaadman, a lobbyist for the Chamber of Commerce, which opposes the Volcker Rule. “They might be trying to get to the same place, but it’s difficult to get there.”

Henry Klehm, a lawyer at Jones Day and a former Securities and Exchange Commission official, noted that regulators would try to reconcile their differences, though “this means delay.”

The Volcker Rule bickering reflects broader tensions among financial regulators, who have amassed broad and sometimes overlapping powers in the aftermath of the financial crisis. The Dodd-Frank Act of 2010, the sprawling overhaul that spawned the Volcker Rule among 300 other regulations, transformed the regulatory landscape and is at the heart of the squabbling.

For one, regulators are divided on Dodd-Frank’s requirement that banks keep risk on their books when selling mortgage securities. Proposed rules for the derivatives industry, too, vary between agencies.

The Volcker Rule presents a particularly thorny task. Named for Paul A. Volcker, a former Federal Reserve chairman who campaigned for the rule, it aims to curb outsize risk-taking on Wall Street.

The rule would limit most proprietary trading, where a bank places bets for itself rather than for clients, a major money maker for the industry. Wall Street has warned that the rule will eat into profits just as banks are trying to regain their footing.

Anticipating complaints, regulators have already fashioned multiple exemptions to the ban, allowing banks to place trades when hedging against risk. Banks can also buy securities from one client with an eye toward later selling them to another, though the line is often fuzzy between that business and proprietary betting.

The proposal reflects the rule’s complexity, spanning nearly 300 pages and taking aim at some of the most arcane financial minutia. Davis Polk, a law firm that advises some of the nation’s biggest banks, has churned out multiple summaries of the proposal for clients and even started a Web site,

The regulatory discord, analysts say, only compounds the confusion. While the Volcker Rule itself “would be a worthy study for Talmudic scholars, complicate this with five agencies having to write the rules and you have geometric expansion of complexity,” the accounting firm PricewaterhouseCoopers said in a recent report.

Still, regulators are open to tweaking the rule. The proposal posed nearly 400 questions, replete with multiple follow-up queries, for the industry and the public to ponder.

The question section ballooned in recent weeks as it became a favored destination for controversial provisions. When regulators failed to reach a compromise, a rule was relegated to a question for the public.

In recent weeks, the deepest divide centered on provisions that spelled out how regulators would enforce the Volcker Rule. One idea would require bank executives to promise compliance.

In August, a confidential draft proposal included the “C.E.O. attestation” clause in brackets, meaning it was “included for discussion purposes only, pending resolution at the principal level.”

The Office of the Comptroller of the Currency objected, according to the people close to the regulators, who spoke on the condition of anonymity because the discussions were private. The agency, which oversees national banks, flagged the executive compliance rule as a deal-breaker.

Over the last month, regulators scrambled to draft a compromise. The agencies formed Volcker Rule working groups, which held weekly phone calls and regularly gathered in a conference room at the F.D.I.C.’s Washington headquarters, the people said. Treasury Department lawyers occasionally mediated the dispute.

But in recent days only one compromise emerged: turn the C.E.O. rule into a question. Ultimately, regulators asked whether the rule would “be a preferable approach.”

The Office of the Comptroller of the Currency, with support from the Federal Reserve, also opposed an F.D.I.C. proposal that would force banks to turn over a battery of trading data to independent warehouses where regulators could keep an eye on the trades. Again, the provision was demoted to a question.

Regulators are playing down their differences.

Elise Walter, a Democratic commissioner at the Securities and Exchange Commission, said at a public meeting last week that the Volcker Rule had “been a very effective exercise in cooperation.”

At the same meeting, however, the agency’s lone Republican commissioner, Troy Paredes, voted to approve the rule but warned that he had “significant reservations.”

At the Federal Reserve, which quietly voted by e-mail recently, one board member, Sarah Bloom Raskin, opposed the proposal, according to a person with knowledge of the vote. It is unclear why she voted against the rule.

The Fed and the F.D.I.C. declined to comment.

“Developing any interagency rule is a complex process, particularly when regulators with different missions are involved, and this is quite a complex rule,” Bryan Hubbard, a spokesman for the comptroller’s office, said in a statement. He added that “banking and market supervisors were able to reach consensus.”

But the consensus did not include the Commodity Futures Trading Commission. The agency, according to the person with direct knowledge of the issue, objected to an August version of the proposal because it failed to include a full cost-benefit analysis of the Volcker Rule.

The agency is concerned that Wall Street will mount lawsuits against its policies, especially in light of a court decision over the summer that struck down a separate S.E.C. rule.

The latest draft of the Volcker Rule does outline the economic effects of the proposal.

The C.F.T.C., the smallest of the regulators, also says it feels it cannot currently spare the time and staff needed to review the Volcker Rule while it juggles dozens of other Dodd-Frank policies. It is unclear whether the agency will adopt a similar version of the rule.

Wall Street groups have already seized on what they see as a split among the agencies. One group, the Chamber of Commerce, sent a letter last week outlining its concerns with the Volcker Rule to Treasury Secretary Timothy F. Geithner.

“The Chamber is concerned that the lack of coordination,” the letter said, “injects additional uncertainty into an already fragile economy, and threatens to further endanger the economic recovery.”

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DealBook: Wall Street Continues to Spend Big on Lobbying

As the Dodd-Frank Act reaches its one-year anniversary, Wall Street’s army of lobbyists continue its aggressive campaign to tame the financial regulatory law.

The financial industry has spent more than $100 million so far this year to court regulators and lawmakers, who are finalizing new regulations for lending, trading and debit card fees. During the second quarter, Wall Street spent $50.3 million on lobbying, a small dip from the prior period, according to an analysis by the Center for Responsive Politics.

“In 2010, the Dodd-Frank financial reform was one of the biggest shows in town, and that continues this year,” said Michael Beckel, a spokesman for the center.

Big banks are among the most prolific spenders. JPMorgan Chase’s team of in-house lobbyists spent $3.3 million, a slight uptick over last year. The biggest war chest among organizations focused primarily on Dodd-Frank belongs to the American Bankers Association, which so far spent $4.6 million on lobbying. The organization wrestled the top spending spot from the Financial Services Roundtable, a fellow trade group that represents 100 of the nation’s largest financial firms.

Overall lobbying is down about 5 percent from last year when lawmakers were writing Dodd-Frank, though spending remains high as financial regulators carry out the broad mandate. Rather than dictate the minutiae of every rule, lawmakers instructed regulators to write some 300 new rules for Wall Street.

“Until it is chiseled in stone, the lobbying continues,” Mr. Beckel said.

Lobbyists focused their fight in recent months on the first major batch of Dodd-Frank deadlines that loomed in July, the law’s one-year anniversary. The milestone was supposed to be Day One for many Dodd-Frank derivatives rules.

But under pressure from industry lobbyists, regulators backed off the deadlines. In June, the Commodity Futures Trading Commission and the Securities and Exchange Commission agreed to delay the derivatives rules for up to six months. Meanwhile, The Commodity Futures Trading Commission is also backing off a plan curb banks’ control over the derivatives market, according to people with knowledge of the matter.

Wall Street’s campaign also yielded results from the Federal Reserve. In late June, the Fed softened restrictions on fees that banks charge retailers for debit card purchases, saving the financial industry an estimated $3.5 billion a year.

Much of the wrangling over the rules has played out during closed-door meetings in Washington. Over all, regulators held more than 2,100 Dodd-Frank meetings since the law passed last July.

The commodities commission, in particular, has been a hot spot for lobbying action. The agency’s chairman, Gary Gensler, has held at least 165 meetings on Dodd-Frank — the most of any regulator, according to the Sunlight Foundation, a watchdog group that monitors lobbying in Washington. Next in line with 106 meetings is Elizabeth Warren, the Obama administration official who helped start the new Consumer Financial Protection Bureau.

The petitioners include a range of banks, Wall Street lobbying firms and consumer groups. Goldman paid 83 visits to regulators, the most of any bank, to discuss derivatives among other topics.

But Dodd-Frank meetings are not limited to technical discussions of arcane financial products.

The Banking Agency of the Federation of Bosnia-Herzogovina met with the Federal Reserve about “implications of the Dodd-Frank Act to emerging economies,” according to the Sunlight Foundation. The Democratic Republic of Congo also dispatched officials to huddle with the S.E.C. about Dodd-Frank’s little-known requirement that corporations disclose whether they manufacture products using so-called conflict minerals from Congo. A cross section of corporate interests — including 7-Eleven, Target, the Burlington Northern Santa Fe Railroad and JetBlue Airways — also weighed in.

“It’s amazing how far-reaching Dodd-Frank is, and how much impact it will have beyond the financial sector,” said Bill Allison, Sunlight’s editorial director.

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DealBook: C.F.T.C. Faces More Budget Woes

Gary Gensler is fighting for funding — again.

The Republican-controlled House of Representatives on Tuesday debated a measure that would slash the budget at the Commodity Futures Trading Commission by $30 million.

The proposed 15 percent cut comes as the agency, led by Mr. Gensler, struggles with a widening mandate under the Dodd-Frank regulatory overhaul. The C.F.T.C. recently delayed the implementation of certain rules surrounding the derivatives market, which was at the center of the financial crisis.

Mr. Gensler is making his case for extra funds on Wednesday.

“Only with reform can we reduce risk in the swaps market – risk that contributed to the 2008 financial crisis,” Mr. Gensler said in prepared testimony before the Senate Agriculture Committee. “Until the C.F.T.C. completes its rule-writing process and implements and enforces those new rules, the public remains unprotected.”

But “reform” does not come cheaply, he said.

For months, Mr. Gensler has been fighting attacks on his agency’s spending. Republicans, contending that the agency is overstepping its authority in the derivatives markets, have pushed to curtail the C.F.T.C.’s spending.

Although the C.F.T.C. received a 20 percent funding increase April, bringing its budget to $202 million, it fell short of what President Obama had requested for the agency.

As DealBook has previously reported, the agency is still struggling to fill crucial jobs, enforce new rules and upgrade market surveillance technology. The budget woes also have forced the agency to delay some investigations and forgo other potential enforcement cases altogether.

Spending cuts, Mr. Gensler said, would only further undermine the agency’s enforcement efforts.

“It would hamper our ability to seek out fraud, manipulation and other abuses,” he told the committee on Wednesday.

Mr. Gensler has long called for a $108 million funding increase. The funds are necessary, he said, to prevent another financial crisis.

“The C.F.T.C. must be adequately resourced to police the markets and protect the public,” he said on Wednesday. “Without sufficient funding for the agency, our nation cannot be assured of effective enforcement of new rules in the swaps market to promote transparency, lower risk and protect against another crisis.”

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