P.M. BRIEFING : Dual-Trading Restrictions Seen

WASHINGTON — Federal futures market regulators are now ready to restrict dual trading, the controversial practice that allows traders to conduct transactions for their own accounts as well as those of customers, a Senate committee was told today.

Wendy L. Gramm, chairwoman of the Commodity Futures Trading Commission, said a long-awaited study by the agency found that dual trading does not have the impact on futures markets that its supporters have claimed.

She told the Senate Committee on Agriculture, Nutrition and Forestry that the CFTC, which regulates the nation’s futures markets, “is prepared to write rules to restrict dual trading subject to certain exceptions.”

Dual trading is not illegal, but critics have said it raises serious conflict-of-interest problems for traders who might put their own interests ahead of those of their customers. But supporters say it is necessary to keep the markets liquid when there is little trading--especially on small, low-volume exchanges.