Wall Street Granted Another Brief Repreive

Wall Street received a brief but important reprieve on Monday, as federal regulators quietly postponed another set of new rules.

At first, when regulators announced their action, the delay went undetected. In a statement on Monday, the Commodity Futures Trading Commission instead highlighted how it approved a package of reforms that will bring clarity to derivatives trading, one of the foggiest corners of Wall Street.

But buried in the 254-page document, the agency also granted a separate extension for several other rules. The agency's decision was reached behind closed-doors - rather than at a public meeting in Washington.

The various rules for derivatives trading stem from the Dodd-Frank regulatory overhaul law, passed in response to the 2008 financial crisis. The derivatives industry was at the center of the storm, producing billions of dollars in losses across the financial industry.

The ruling on Monday came at the urging of the financial indus try. In the final version of the rule, the C.F.T.C. acknowledged that members of the International Swaps and Derivatives Association, a trade group comprising several big banks, ”have requested that the commission align the compliance dates” of several rules.

The decision to delay is time-limited yet significant. Wall Street now has until Jan. 1, instead of October as initially planned, to adopt a battery of standards. The move grants Wall Street additional time to comply with rules that, for example, will require firms to verify that their trading partners meet certain “eligibility standards” and to confirm that they recommend trading strategies “in the best interests” of their clients.

The move represented the latest stalling of the C.F.T.C.'s derivatives overhaul. In June, the C.F.T.C. proposed a plan to give banks based solely in the United States until Dec. 31 to adopt other internal control standards. Other standards, including anti-fraud and manipulation measures, remain on track to kick in this fall.

While the extra few months will not alter the regulatory landscape, some Wall Street critics argue that the banks have had plenty of time to comply with Dodd-Frank. The law was enacted in 2010.

For its part, the C.F.T.C. notes that it did on Monday unanimously adopt crucial new measures for derivatives trading. Under the plan, banks must have “timely and accurate” confirmation and valuation of all so-called swaps trades, a common type of derivatives contract, to reduce risk and bolster transparency. The standards, the agency said, will help settle disputes about the value of derivatives trades and, in turn, diminish uncertainty in the event of future financial calamities.

When American International Group, the giant insurance company, nearly toppled in 2008, concerns swirled about the vagueries of its swaps portfolio. It took months resolve the disputes.

“The 2008 financial crisis brought to light how large financial institutions, including AIG, had valuation disputes and other problems regarding documentation standards,” Gary Gensler, the agency's chairman, said in a statement on Monday. “These rules will directly address many of those issues, highlighting issues for senior management and regulators at an earlier stage.”