Wall Street watchdogs are poised to take a major step towardoverhauling Volcker Rule limits on banks’ ability to tradewith their own funds, according to four people familiar with theeffort, moving to ease post-crisis safeguards reviled by theindustry.

Regulators responsible for the Dodd-Frank Act rule couldcomplete work as soon as next week on revisions that includeloosening restrictions on banks investing their own money inprivate equity and hedge funds, according to the people, whorequested anonymity because the process isn’t public.

The group of five agencies led by the Federal Reserve hasfocused on a new definition of “proprietary trading”—whichis specifically banned by Dodd-Frank. They’ve chosen to implementthe changes without re-proposing the rule and seeking comment,according to three of the people, a step that could open theprocess to legal challenges.