NEW YORK (CNNMoney.com) -- It's a brave new world for the derivatives market. Or is it?
Congress' efforts to reshape this murky corner of the nation's financial system may have little impact on the Wall Street firms that dabble in these complex financial investments.
As part of the financial regulatory reform bill hammered out early Friday, financial firms will still be allowed to hold onto those businesses that engage in buying and selling less risky derivatives products like foreign exchange and interest rate swaps.
Only riskier products, including the kind of credit default swaps that helped sink insurance giant AIG as well as certain commodity derivatives, and those traded by agriculture companies and airlines to mitigate risk, would have to be spun off into other businesses.
"You don't say 'Boy, not being able to do agricultural swaps is going to impair JPMorgan's core business,' " said Benjamin Grimes, a securities analyst at the Westborough, Mass.-based wealth management firm Grimes and Company Inc.
Those types of derivatives tend to make up a far smaller part of their derivatives business. At Goldman Sachs (GS, Fortune 500), for example, the lion's share of derivatives contracts are for interest rate swaps, or investment products that are bought and sold by businesses to hedge themselves against a change in the direction of interest rates.
But there still could be an impact on the derivatives operations of banks. As part of the proposed bill, financial firms would be required to put many of these derivatives onto clearinghouses and exchanges. Banks have resisted the idea since greater transparency would ultimately mean lower profits for them.
"It may make it less attractive to hedge risk," said Robert Park, president and CEO of Fincad, a Vancouver-based software firm which develops derivatives pricing models. "That is regrettable."
Financial trade organizations frowned on the new rules as well. The American Bankers Association said it remained "strongly opposed" to the legislation, in a statement issued Friday.
The Securities Industry and Financial Markets Association, which represents the interests of hundreds of financial services firms, called the bill "tough", adding it would have "profound effects" on both financial services companies and financial markets.
Wells Fargo is under increasing pressure to punish the executives who oversaw the bank during a massive fraud that involved creating more than 2 million unauthorized accounts. More
American voters of all different political and socioeconomic backgrounds tell CNNMoney they are really unhappy with Donald Trump and Hillary Clinton. The concern is whether they will stay home on Election Day -- or pull back on their spending. More
Twitter and Square CEO Jack Dorsey is putting a link to voter registration on everyone's digital Square receipts. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
The nationwide college financial aid form, FAFSA, has changed. That means you need to apply earlier -- as soon as October 1. Here's what you need to know. More