Wall Street to SEC: Re-propose derivatives rules

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The groups also note that lawmakers on both sides of aisle say the SEC should take as much time as needed to weigh public input on the rules. And they contend that a fresh round of proposed rules would delay implementation of Dodd-Frank by "months, not years, and the costs of any such delay will be far outweighed by the benefits resulting from further industry, market and public input."

The letter comes as regulators are hard at work writing rules to implement Dodd-Frank. The law states that the bulk of the new regulatory work should be finished by July 21 -- one year after it was signed into law.

To give a sense of scale to the task regulators are taking on with Dodd-Frank, the groups point out that at the beginning of May, roughly 62 percent of the 387 required rules under Dodd-Frank still needed to be proposed. However, regulators had already published over three million words for the 38 percent of rules that had been drafted.

The groups acknowledged that regulators are trying to phase in the new rules, calling it "critical for a smooth implementation." However, phasing in the new rules is only helpful if the rules themselves work well, they added.

"It is not enough to phase-in implementation if the final rules themselves are unworkable," they wrote.

The letter comes as Republicans are mounting the case that regulators are being forced to rush through the rulewriting process to meet Dodd-Frank deadlines. Several GOP lawmakers have aired concerns that regulators are failing to consider the economic impact of their rules as they write them, and House Republicans are pushing legislation that would delay for over one year the new rules on derivatives.

However, Democrats maintain that Republicans simply want to delay the implementation of the law because they oppose it.