The US House of Representatives has approved legislation that would exempt foreign derivatives trading by US firms from federal oversight, raising hopes that US regulators will relax their proposals.
However, despite the landslide support from the House, the bill still needs to pass the Senate and the White House has already indicated it will veto the move.
The industry has argued that the proposed regulation, which would require the Commodities and Futures Trading Commission (CFTC) to oversee all derivatives trades by US institutions regardless of where they occur, would put US companies at a competitive disadvantage.
Supporters of the bill have called on politicians to force the CFTC to adopt a position similar to that of the Securities and Exchange Commission (SEC), which does not apply oversight in countries where a similar regulatory regime already exists.
The Senate passed the bill by 301-124, but the White House is fiercely opposed to any change in the CFTC's attempts to regulate the derivatives market, and said the House's passage of the bill would be "premature and disruptive".
While the bill will likely be vetoed, its supporters are hopeful that the support of the House will put pressure on regulators to take a more lenient approach towards foreign derivatives trading.