Wall Street faces intrusive new government oversight of tradingafter U.S. regulators issued what they billed as a stricter Volckerrule today, imposing restrictions designed to prevent blowups whileleaving many of the details to be worked out later.

The Federal Reserve, the Federal Deposit Insurance Corp. (FDIC),and three other agencies are set to sign off today on theproprietary trading ban, which has been contested by JPMorgan Chase& Co., Goldman Sachs Group Inc., and their industry allies formore than three years. Agencies were proceeding with plans torelease the rule in Washington even as a snowstorm forced thefederal government to close.

Wall Street's lobbying paid off in part. Regulators granted abroader exemption for banks' market-making desks, on the conditionthat traders aren't paid in a way that rewards proprietary trading,according to the final rule released today. The regulation alsoexempts some securities tied to foreign sovereign debt. At the sametime, regulators gave banks less leeway for bets considered hedgesfor other risks.