Wall Street can breathe easier after a key regulator signed off on a rule Wednesday that will free the industry's U.S. banking units from having to post billions of dollars of collateral for certain derivatives trades.

The Commodity Futures Trading Commission's (CFTC's) rule endorses the move by banking regulators to soften requirements from an earlier proposal, despite the objections of one commissioner and prominent supporters of tougher standards including senators Elizabeth Warren and Sherrod Brown. The result of the CFTC measure, approved with a 2-1 vote, is a one-sided posting of margin when a swaps-trading division of a company trades with its banking unit, instead of making both sides collect collateral from each other.

After largely unregulated credit-default trades helped fuel the 2008 market meltdown, regulators have been working for years on how to handle collateral for a wide range of trades. The decision about non-cleared swaps between a bank's own divisions dominated regulatory debates this year and prompted lobbying by firms such as Goldman Sachs Group Inc. and Citigroup Inc., according to federal records.