The House Agriculture Committee will meet Thursday to vote on a controversial proposal to reform derivatives regulation.

This latest version, which was drafted and introduced Wednesday by Chairman Collin Peterson, D-Minn., would give the Commodity Futures Trading Commission criminal authority for the first time in its history and also empower the agency to suspend the trading of credit-default swaps with the concurrence of the President.

It also would preclude the Federal Reserve from establishing regulations for over-the-counter derivatives clearing - a move that could put a cramp in IntercontinentalExchange Inc.'s (ICE) plans to form a credit-default swap clearing platform under the watchful eye of the Fed. Under the current language in the bill, ICE would be required to register its clearinghouse with either the CFTC or the Securities and Exchange Commission.

The bill's language has evolved drastically since last year, when it hit the floor of the U.S. House. At that time, the bill focused mostly on reining in excessive speculation in the agricultural and energy commodities and improving the CFTC's ability to obtain trading data on commodity index funds. The bill passed the House in September with a veto-proof majority, but never became law.

Since then Peterson has added provisions that aim to improve transparency in the over-the-counter markets. A version debated at hearings last week, for instance, required mandated clearing for most over-the-counter derivatives and contained a controversial proposal to ban so-called "naked" credit-default swaps in which investors do not own the underlying bonds.

The proposed ban is not in the version Peterson introduced Wednesday, but the bill still contains provisions to mandate clearing for over-the-counter products unless otherwise exempted. The bill would allow for an alternative to clearing as long as the clearing parties can demonstrate their financial integrity and they can fulfill net capital requirements imposed by the CFTC.

The bill also still contains provisions for reining in excessive speculation.

The committee is slated to review the bill Thursday at 1 p.m.

-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634; sarah.lynch@dowjones.com