[ by Larry Goldfarb ]

Three years of protests and hundreds of millions by Wall Street lobbyists - the usually able-bodied, influential power brokers - failed to derail the Dodd-Frank Reform Act from its tracks.  That's not to say that the lobbying effort was in vain, because It's too soon to tell how watered down the Act's final version will be - or, put another way, how many cars the lobbyists succeeded in uncoupling.  But in one form or another, Dodd-Frank will be implemented law. 

With this in mind, the lobbyists may soon pass the mantle for waging  protests to their more unassuming colleagues - lawyers and compliance officers.  It's altogether possible, however, that these Wall Street professionals will spend less time protesting and more time grudgingly steering their banking institutions and clients through the sprawling maze of terms and conditions that will dictate Wall Street's next phase of regulations and federal oversight. 

Regulators are now putting the finishing touches on the Dodd-Frank Act, the sprawling regulatory overhaul, leaving lawyers and compliance officials to steer banks through the new era.  The specialists are drawing up training manuals and interactive programs to guide traders, prodding regulators to clarify the minutiae of new rules and, when all else fails, begging for more time.  Next year "is about one word: implementation," said Gary Gensler, the chairman of the Commodity Futures Trading Commission, which is writing the derivatives trading rules under Dodd-Frank.  "We've gone from a general law to the specific rules to the superspecific rollout."

As a result, Wall Street is bracing for the unpleasant reality that Dodd-Frank is bearing down on them.  "The banks say, 'We don't like the rules, but just tell us what they are and we'll figure them out,' " said Brian Gardner, a Washington research executive at KBW.  The figure-it-out stage, analysts say, will define Wall Street's regulatory agenda next year.  Banks like Morgan Stanley have been bulking up on compliance officers and technology experts, a natural step in anticipation of a torrent of rules.  The bank alone allocated 100 people, new and existing employees alike, to focus on Dodd-Frank.  Morgan Stanley is also holding two conference calls a month with clients to lay out the scope of compliance requirements.  Goldman Sachs, like others, is building computer systems to track its derivatives trading.

"It's very much a transition year," said Annette Nazareth, a partner at the Wall Street law firm Davis Polk and a former regulator at the Securities and Exchange Commission.  "After rules become final, the focus immediately shifts to compliance."

For more information, please read [NYT Dealbook, 12/10/12].