The chairmen of the Senate and House Agriculture committees this week proposed preventing the Commodity Futures Trading Commission from regulating derivatives until Sept. 30, 1999.

In a Sept. 15 letter, Sen. Richard G. Lugar, R-Ind., and Rep. Robert F. Smith, R-Ore., asked that a one-year moratorium be placed on the commission's "ability to issue regulations concerning the over-the-counter derivatives market."

The letter was sent to Sen. Thad Cochran, R-Miss., and Rep. Joe Skeen, R-N.M., chairmen, respectively, of the Senate and House agriculture subcommittees of the Appropriations committees.

"This gives it a very strong chance," according to Mark C. Brickell, a managing director at J.P. Morgan & Co., who said the letter should convince lawmakers working on must-pass appropriations legislation to adopt the moratorium.

The move is "a meaningful step to reassure banks that use swaps," said Mr. Brickell, an International Swaps and Dealers Association board member. "Now the regulatory framework won't change until Congress has a chance to review the issues."

The Commodity Futures Trading Commission has asserted its right to regulate derivatives this year while bankers, their regulators, and some lawmakers like House Banking Committee Chairman Jim Leach have objected, arguing that the market already has enough oversight.

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