Senate Changes to FinReg Ahead? Analyst Says No

Now that the US House passed financial regulatory reform, Edward Mills of FBR Capital Markets says the legislation can no longer be amended and will pass the Senate in a fortnight.

Speaker Nancy Pelosi has said she wouldn't let FinReg pass the House, says Mills, if she didn't think the Democrats had the 60 votes needed for it to pass the Senate. With the legislation having passed the House, its content cannot be changed, he says. So when the Senate resumes, they have the option to pass or defeat the bill. But no slicing and dicing!

The only reason the Senate has delayed the vote until July 12, Mills adds, is to accommodate for the late Senator Robert Byrd's funeral arrangements.

Regarding the effect of the legislation, Mills says it remains to be seen who the regulators will be, including the national bank supervisor and the head of the CFPA. The regulations could be tough, depending on who's appointed. With some regulations starting day one and others starting in year 12, he says it will be a long time before banks really know what FinReg really entails.

What's the Trade?

The exchanges win with FinReg, says Joe Terranova of Virtus Investment Partners, adding that he likes the capital markets. He gave Goldman Sachs , Morgan Stanley , Bank of America , Citigroup and JPMorgan Chase as possible plays in financials.

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Trader disclosure: On June 28, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova owns (IPSU), (BX), (AGU), (PFE), (TER), (GMCR), (RSX), (TER), (AXP), (KO), (KR), (COST), (AMZN), (TEVA), (BMO), (DIS), (XCO), (SWN), (GMCR), (IPI), (SU), (XOM), (RDS.A), (COP), (OXY), (V), (FXB), (UPL), (JPM), (MS), ( C), (BAC), (GMCR); Terranova owns (GLD) 123 JULY PUTS; Terranova owns (FS) 135 JULY CALLS; Terranova owns (GLD) July 120 puts; Kelly owns (BP) puts; Kelly owns (FCX) puts; Kelly owns (GLD); Kelly owns (GDXJ); Kelly is short (GS); Grasso owns (ASTM), (ABK), (BAC), (BGP), (C), (DYN), (JPM), (LPX), (NDAQ), (PRST)

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