US SEC, CFTC ready laws for OTC derivatives crackdown-sources
* Agencies working on legislation to govern OTC trade
* SEC may take charge of regulating CDS - source
* Merger between SEC, CFTC seen unlikely
By John Poirier and Rachelle Younglai
WASHINGTON, June 10 (Reuters) - The two primary U.S. financial market regulators are drafting legislation to implement the Obama administration's proposed crackdown on over-the-counter derivatives, said sources familiar with discussions at the agencies late on Wednesday.
In another sign that a merger is unlikely between the Securities and Exchange Commission and the Commodity Futures Trading Commission, the sources said the agencies could split oversight of OTC derivatives under the legal language they are working on for eventual submission to Congress.
The SEC, the larger and older of the two agencies, may take charge of regulating credit default swaps, a type of OTC derivative, for publicly traded companies, one source said.
The administration and congressional Democrats are working on tightening the rules for banks and markets to prevent a recurrence of the severe financial crisis that has been hammering economies worldwide for months.
On May 13, the administration proposed exerting more government control over the shadowy OTC derivatives market, which has widely been implicated in the credit crisis. Continuación...