A move by Nasdaq OMX Group Inc. (NDAQ) to limit bank stakes in derivatives clearinghouses and swap trading platforms, tucked into a U.S. House derivatives bill, could give the exchange a competitive edge if it becomes law.

The restrictions were sponsored by Rep. Stephen Lynch, (D., Mass.) and were added on a voice vote by the House Financial Services Committee during debate on a broader derivatives regulation bill. The provision would prohibit dealer banks from owning more than a 20% voting stake in the derivatives entities and limit the number of directors banks could have on their corporate boards.

The amendment targets what Lynch says are conflicts of interest in having banks control significant stakes in clearinghouses and swaps trading platforms being developed to mitigate risks that contributed to the financial crisis.

"They are making money in assembling the product and then they're making money when it is cleared," Lynch said of the banks. "They are sitting in judgment of their own product. That is the problem."

Survival of the amendment remains uncertain. It recently hit a procedural snag and was removed, at least temporarily, from the bill. Lynch said he's working to restore it before a derivatives bill hits the U.S. House floor.

Nasdaq OMX, which is trying to break into the interest-rate swaps clearing business with its International Derivatives Clearing Group unit, acknowledged its interest in the provision but said the amendment would apply the types of restrictions that have long governed existing exchanges.

"This is a modest amendment and we find ourselves in agreement with Rep. Lynch," a Nasdaq spokesman said. "Limits on governance of critical pieces of market infrastructure have been a fact of life for many years."

The provision could be problematic for Nasdaq rival LCH.Clearnet, a London-based clearing entity largely controlled by major banks that dominates the inter-dealer interest rate swap market.

It could additionally affect the nascent New York Portfolio Clearing facility, a joint venture between NYSE Euronext (NYX) and the Depository Trust and Clearing Corp., also aimed at clearing interest rate derivatives. The DTCC operates as a utility, owned by the financial firms that are its biggest users. LCH.Clearnet, NYSE Euronext and the DTCC declined comment on specifics of Lynch's proposal.

The scope of the provision has raised concerns in the financial industry, which says it could impact existing clearing structures and that the 20% control restriction applies collectively to all bank stakes.

Lynch said he intended for the voting cap to prevent one entity from controlling a clearinghouse and that he is planning to meet with affected parties to clarify and possibly make changes. Both Lynch and Nasdaq said the provision does not apply retroactively to exchange and clearing structures.

Even if the language of the provision is modified, it could still face industry opposition. Some said it is unfair that banks, which are clearing members, would need to put their capital at risk and get little say in how the clearinghouse is run.

If Lynch succeeds in reattaching the amendment to the bill, he will still need support from others in Congress for the measure to survive. The House Agriculture Committee recently approved its own version of a derivatives bill with no limits on clearinghouse or exchange ownership.

At least one member of the House Agriculture Committee, Rep. Tim Walz, (D., Minn.), supports Lynch's measure and plans to advocate for its inclusion in a final bill, according to his spokesman.

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