Like companies that sell derivatives, derivatives users are fighting a new Securities and Exchange Commission regulation they say will be cumbersome to comply with and supply little useful information to investors.

Despite the adversarial relationship between bankers and derivatives clients in the past, the two sides are united in opposition to the new regulation, which required additional disclosure from users.

The SEC rule, which took effect April 11, requires derivatives users to quantify how the instruments could affect their business.

"It's a great thing for lawyers and accountants but a nightmare for users," a lawyer who represents users said at the annual meeting last week in Washington of the End Users of Derivatives Association.

The group also joins traders in its wariness of a proposed Financial Accounting Standards Board rule on derivatives, which they say would make reported income appear more volatile to investors.

The board had said it would issue the rule in final form June 30. But Timothy Lucas, its director of technical activities, told the skeptical conference crowd that the board might possibly work up a new proposal instead.

The end-user group opposes the FASB proposal in part because it is hard to understand and implement, said Mary S. Carey, associate general counsel at Massachusetts Mutual Life Insurance Co. "Grasping what exactly the FASB wants is going to be really difficult for a lot of people," she said.

Other critics say that enough information on how companies use derivatives is already included in the footnotes of financial statements.

It's unusual for the users association to agree with traders.

The users began meeting annually three years ago, in the wake of scandals over how traders at Bankers Trust New York Corp. were manipulating derivatives buyers and withholding information on their risks.

The experience made derivatives users realize the bankers who sold them the instruments were perhaps poorly equipped to advise on how to use them, although bankers insist this has improved.

The end-user association acts like a self-help group for derivatives buyers. Its annual convention was laden with talks from lawyers and corporate treasurers on how to price complex derivatives and how to teach board members on whether the instruments are appropriate for a company's risk management strategy.

"If the understanding is not within the company, it shouldn't come from the bank," said Ernst & Young partner Robert J. Baldoni, and one of many vendors prowling the halls in search of clients.

Still, the story of derivatives is not the Barings scandal or other spectacular cases, said Sue A. Brecht, treasurer at Duke Power Co., Charlotte, N.C., and member of the group's board.

"The real story is how banks have such greater understanding than many of us in business about these complicated instruments," she said. "We ask the questions derivatives dealers won't or can't."

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