Agency to Delay New Derivatives Rules

The Commodity Futures Trading Commission agreed to wait at least until early next year, when a newly elected Congress is seated, to offer new regulations for the $28-trillion market for derivatives not traded on exchanges. The CFTC said it hoped the move will calm other federal regulators and members of Congress who fear domestic dealers may move overseas if the CFTC continues to review whether regulation of the market is enough to protect investors. Derivatives--used by banks, mutual funds and other investors to hedge risk--are complex instruments not traded on exchanges but negotiated privately based on the value of underlying currencies, interest rates or assets. Federal Reserve Board Chairman Alan Greenspan said he was not sure whether the CFTC’s offer to delay new rules would be enough for investors worried that the “over-the-counter” transactions they enter into may later be deemed illegal. Greenspan and senior officials of the Treasury and Securities and Exchange Commission teamed up to oppose what they view as a power grab by the CFTC.