The largest Wall Street banks are mobilizing to fight a new policy by the U.S. Commodity Futures Trading Commission (CFTC) that gives the regulator broader authority in overseas derivatives deals.

The policy, issued Nov. 14, negates a legal interpretation that banks have been using to keep some swaps trades off electronic platforms and away from CFTC rules enacted to make the market less opaque. The firms and their lawyers say the announcement, which the agency published as a "staff advisory," is written so broadly it could expose their overseas deals to even more U.S. regulation.

Within hours of its release, bank lobbyists met to discuss possible legal action against the agency and began contacting members of Congress, according to people involved in the pushback. The next day, CFTC Chairman Gary Gensler was getting letters from lawmakers saying he was upsetting the $693 trillion market by issuing policy with little consultation.