Leading financial market players have reached formal agreement with regulators on measures for safer handling of the $684 trillion global derivatives market.

These are the most explicit commitments yet from an industry widely accused of exacerbating the financial markets crisis. They're laid out in a letter, alongside an official acknowledgement from the New York Federal Reserve, posted on the central bank's Web site Tuesday.

The letter lists a series of deadlines, including registering of all credit derivatives trades, in either a central clearinghouse or a trade warehouse, by July 17. All equity derivative trades will be similarly logged by July 31, and interest-rate deals by the end of the year.

Clearing facilities must be available to all market participants by Dec. 15, and that service - which guarantees both sides of each trade - is to be extended to other over-the-counter products. Participants also agreed to work with supervisors on specific goals to be released Aug. 31.

The dealer community pledged to starting carrying out daily electronic synching of their portfolios by June 30. That will mean frequent reconciliation of around 70% of all outstanding derivatives transactions, according to the industry letter.

In a gesture toward breaking down the dominance of that dealer community in the marketplace, the industry letter also promised more democratic representation of buyers and sellers in trade groups, including leading decision-making bodies such as SIFMA and the MFA.

"We will continue to demand further improvements until our objectives are achieved," said William Dudley, President of the Federal Reserve Bank of New York, in the central bank's responding release.

Signatories to the industry letter comprised 27 of the derivatives market's most prominent participants, including all the leading dealer banks and, on the buyside, AllianceBernstein, Citadel Investment Group and BlueMountain Capital Management. Copies were sent to 11 regulatory bodies, including the Office of the Comptroller of the Currency, the Securities and Exchanges Commission and the United Kingdom Financial Services Authority. Missing from that list, though, were two bodies that have been closely involved in discussions of tighter oversight for derivatives - the Commodity and Futures Trading Commission, and the European Central Bank.

For more information, see http://www.newyorkfed.org/newsevents/news/markets/2009/ma090602.html

-By Emily Barrett, Dow Jones Newswires; 201-938-2248; emily.barrett@dowjones.com