U.S. and European Union (EU) financial regulators took a step toward bringing derivatives trading under an integrated framework of global regulation designed to reduce risks in the $633 trillion swaps market.

The accord, announced jointly yesterday in Washington and Brussels by the EU and the U.S. Commodity Futures Trading Commission (CFTC), broke a deadlock over whether the U.S. could impose its rules on trades booked in Europe. Banks and other swaps traders said the deal reduces the chance they will be forced to comply with conflicting regulatory regimes.

"This shows that the CFTC recognizes that other countries and other jurisdictions have equally made a lot of progress and that they have to recognize those rules," Ken Bentsen, president of the Securities Industry and Financial Markets Association, said in a telephone interview. "The devil's in the details. But it would appear to be a shift in a positive way."

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