Senate Agriculture Committee Chairman Richard Lugar criticized commodities regulators Thursday for refusing to delay rules for swaps until late next year.

Sen. Lugar argued at a hearing that the Commodity Futures Trading Commission should not act until lawmakers have had an opportunity to decide which agency, if any, should regulate swaps.

"In the event we don't have reassurance, there is a strong possibility we would join others in simply saying no" to any regulation, Sen. Lugar told Brooksely Born, the commission's chairwoman.

House Banking Committee Chairman Jim Leach has introduced a bill to bar the agency from issuing swaps regulations until Congress has authorized the agency's fiscal 2000 budget, which normally would happen in September 1999. The House committee could vote on the bill as early as next week.

The commodities agency sparked a controversy in May by indicating it might regulate swaps, a type of derivative commonly used to guard against interest rate or foreign currency risk.

Ms. Born reiterated her July 24 promise not to propose any new regulation until Congress reconvenes in January. But that pledge contradicted House Agriculture Committee Chairman Robert Smith, who announced this week that he had a deal with Ms. Born to postpone a rule until Congress acts on the agency's budget.

"We are deeply disappointed Ms. Born has backed off the agreement," said Mark C. Brickell, managing director at J.P. Morgan & Co.

A CFTC spokesman, however, said the agency never agreed to a delay beyond January.

Financial services firms, along with the Treasury Department, the Federal Reserve Board, and the Securities and Exchange Commission, have howled that even the possibility of regulation by the commodities agency could cause the derivatives markets to shift overseas.

Ms. Born emphasized that the commission has not decided whether it will propose any regulation. "We don't have any preconceived notions about this effort," she said.

Sen. Tom Harkin, the Agriculture Committee's ranking Democrat, said worries about the agency's effort are exaggerated. "I have not seen any hard evidence of disruption in the market," he said. "I don't think the CFTC is going to take any precipitous action."

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