In case their lobbying falls short, the industry -- largely dealer banks and commodities firms -- has been pushing legislation that would pre-empt the rulemaking process and tie the agencies' hands. So far, no fewer than 10 such derivatives bills have been introduced in the House; two have passed and several more have cleared committee.


Neither the SEC nor the CFTC has been arbitrary or closed to the industry view. In March, the CFTC met with roughly 100 outside parties, holding numerous sessions with banks, users and public-interest groups. Given that Dodd-Frank was enacted in July 2010 and the rulemaking is still in process, the agencies have been a model of deliberation.

It is hard to see why industry would attempt an end run around the rulemaking -- save that it wants to protect one of the most lucrative and highly concentrated sectors on Wall Street. The House bills are so specific they are almost comical. It is doubtful that members even understand what they are voting on.


According to the ISDA, the requirement that quotes be posted on a centralized screen "may limit competition" by deterring users who are wary of such exposure. Maybe, but in virtually every other market, openness results in better prices. And when lawmakers forbid regulators from requiring that trading venues "have a minimum number of participants receive a bid or offer," it sounds like a funny way to spur competition. Turbeville, the former Goldman banker, says the industry-backed bill would turn the new trading venues into "a glorified telephone."

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