Wall Street won a delay in a controversial U.S. derivativespolicy that extends the overseas reach of Dodd-Frank Act tradingregulations.

The Commodity Futures Trading Commission (CFTC) will postpone enforcing a provision applying the rules totrades structured in the U.S. that banks then book in overseasaffiliates, according to a notice posted on its website Friday. Theagency granted the delay until as late as Sept. 30, 2015.

The policy, first devised in 2013, extended the agency'soversight and drew opposition from lobbying groups representingGoldman Sachs Group Inc., JPMorgan Chase & Co., and DeutscheBank AG, as well as overseas regulators. The groups unsuccessfully sued the CFTC to try to overturn theregulation.

Timothy Massad, the agency's chairman, told traders in Chicagoon Nov. 5 that he supported a delay to give regulators “thenecessary time to consider” the issues.

“We should strive for rules that are clear and predictable—andthat, as much as possible, do not create negative effects oncompetition,” Massad said at the Futures Industry Associationconference.

The agency was empowered by Dodd-Frank to put in place new rulesfor the $700 trillion global swaps market after the products helpedfuel the 2008 credit crisis. The regulations seek to have mostswaps guaranteed at clearinghousees and traded on exchanges orother platforms that are designed to foster transparency inprices.

Massad's predecessor, Gary Gensler, argued that extending CFTCrules to trades in other jurisdictions was crucial to protectingthe U.S. financial system from a foreign-born crisis. Swap-tradingat a London unit of American International Group Inc. led to a U.S.bailout of the insurer during the crisis.

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