Global derivative reform is beginning to hit rough waters (and uncharted territory) as deadlines loom. 

As the all critical one-year mark of Dodd-Frank financial reform approaches, it is easy to see that all is not well in the land of derivative regulation. Delays in rule-writing prompting fears of the legality of swap contracts; a popular banker publicly questioning the Fed chairman over the negative impact of regulatory reform and bickering between global regulatory bodies all point to a reform effort in crisis.

Delays. Over the past several months, the Commodity Futures Trading Commission and the Securities & Exchange Commission have admitted that their overwhelmed staffs would probably not meet the July 16 Dodd-Frank implementation deadline. But now that that deadline is just about a month away, industry groups and Congress are wondering what the legal impact of delays will mean. Some fear a “wave of lawsuits,” as the Wall Street Journal put it, as the legality of some derivative contracts come into question after July 16. This could hit corporates particularly as some OTC derivative trades could lose legal protection, experts say.

But Scott O’Malia, one of five commissioners at the CFTC, told Reuters on Tuesday that the agency was “going to provide some temporary safe harbor until the underlying rule or definition is provided; so all of this will hopefully be clear in a week or two.”

Legislatively, a Republican effort to delay reform could nullify any issues but the legislation would ever become law. In late May the House Financial Services Committee agreed to legislation that would delay the implementation of the derivatives and swaps market reform portions of the Dodd-Frank Act – Title VII – for two years. But it’s doubtful legislation would pass the Senate.

Roll them back. Meanwhile, JPMorgan Chase CEO Jamie Dimon, in the audience of a banking conference in Atlanta, asked Fed Chair Ben Bernanke during a Q&A period whether anyone had studied the impact of all the rules on the economy. Will people look back in 20 years, Mr. Dimon wondered, and find that the flood of regulation was “the reason it took so long that our banks, our credit, our businesses and most importantly job creation to start going again. Is this holding us back at this point?”

Mr. Dimon’s question and recent comments on regulation have made him the defacto standard bearer for rolling back reforms. In May he said Basel III would “put a nail in the coffin” of big US banks.

Cross-Atlantic bickering. And as if the unsettled regulatory atmosphere in the US were not enough, derivative rule coordination between the US and European regulators is not going well. “The high policy debate is going in the wrong direction right now,” Futures and Options Association Chief Executive Anthony Belchambers reportedly said at a London derivatives conference. “We need to get close together and we need to stop sound bites floating across the water in the way they do from both sides.”

Mr. Belchambers was responding to remarks from US Treasury Secretary Timothy Geithner Monday that suggested the UK and other European regulators would ease up on their regulation to take business away from the US. He said the UK’s “experiment in a strategy of ‘light touch’ regulation to attract business to London away from New York and Frankfurt ended tragically,” he said. “That should be a cautionary note for other countries deciding whether to try to take advantage of the rise in standards in the United States.”