It didn’t take long after Sen. Blanche Lincoln (D., Ark.) won her primary battle for the dismantling of her derivatives language to begin in earnest. As the conference committee continues its work on the bill at large, Lincoln is offering some “clarifications” to her her section 716, including measures that would:

1) Allow bank holding companies to spin off derivatives operations outside a bank but retain the business in a separately capitalized affiliate.
2) Give bank holding companies up to two years to spin off the business line.
3) Essentially exempt companies that aren’t major dealers in derivatives from the new rules.

Of course, there is quite a bit more going on here than mere “clarification,” especially in (1) and (3). Depending on how these bullet points get translated into legislative language, they could essentially nix the parts of Lincoln’s proposal that Wall Street finds most odious.