WASHINGTON -- The Commodity Futures Trading Commission today will unveil an upbeat report on the derivatives market that calls for little restructuring in the way the products are regulated.

The report rebuffs suggestions that oversight of derivatives be dramatically strengthened or consolidated into a single agency. Instead, it proposes the creation of an inter-agency task force to coordinate regulation.

In discussing the report Tuesday, CFTC commissioner Sheila Bair said much of the concern about the riskiness of the market has been overblown.

Congress Mandated Report

"We're not trying to send any alarm bells," Ms. Bair said. "We have no cause for any immediate concerns in these markets."

The report, which will be presented at a CFTC conference, was mandated by Congress last year. Lawmakers asked the commission to assess the size, scope and riskiness of the activities, as well as the appropriate regulatory framework.

Derivatives are contracts with values pegged to underlying commodities or financial instruments. Unlike products like futures and options, over-the-counter derivatives are not traded on exchanges.

The CFTC estimates that at the end of 1992, the notional value of currency and interest rate swaps totaled $5 trillion. But only a small fraction of that is put at risk in derivatives deals.

Industry officials say they believe derivatives activity is already adequately monitored through regulation of the financial firms that use the products.

Bank regulators, for example, already keep close tabs on the derivatives activities of commercial banks, which are the largest players in the derivatives markets.

Merger Rejected

In its report, the commission largely agrees with this view. The report specifically rejects the merger of the Securities and Exchange Commission and the CFTC, or any other consolidation of derivatives regulation.

"The current regulatory scheme works well," said David Merrill, CFTC's deputy general counsel. "It is unlikely any merger would produce any identifiable benefit."

Instead, the report proposes the creation of a task force comprised of the CFTC, SEC and bank regulators. Ms. Bair suggested the group be set up through executive order by President Clinton, although it could also be set up by Congress.

Agenda Proposed

The commission suggested several agenda items for the new council, including: improving the flow of reliable data about the industry; encouraging disclosure of reliable pricing information: fostering strong internal controls by market participants; and considering proposals to develop clearing facilities for derivatives.

Comptroller of the Currency Eugene A. Ludwig has already set up an informal working group among the banking agencies. Doug Harris, the Comptroller's aide on derivativies issues, said the agency would support the creation of a broader, more formal organization.

"If the CFTC recommendation is followed, our informal group would probably be folded into the more formal committee," he said.

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