The chief U.S. derivatives regulator proposed on Thursday that swaps could be traded on venues as transparent as stock markets, a second attempt at rules to establish where big swap transactions will be brokered.

One week after Gary Gensler, head of the Commodity Futures Trading Commission, said his staff was only human for delaying the long-awaited plan, the agency unveiled a proposal that was largely similar to the original.

Firms such as IntercontinentalExchange Inc hope to qualify as swap trading houses as the largely secretive swaps market is forced onto the public stage as part of the Wall Street financial overhaul mandated by the U.S. Congress.

How the CFTC and the Securities and Exchange Commission define these Swap Execution Facilities, or SEFs, will determine who will be in the business of trading and brokering the swap contracts.

The proposal would allow SEFs to have electronic trading systems similar to stock market order books, where bids and offers are continuously updated.

Swap venues also could have a request for quote system, as long as the request for a quote to buy or sell a swap was sent to at least five market players in the trading system.

But Republican Commissioner Jill Sommers, who said the original proposal was too narrow in scope, levied fresh criticism at today's plan and said it may limit competition.

Under the CFTC plan, the SEF must give all market participants the option to post both firm and indicative quotes on a centralized electronic screen that can be viewed by SEF participants.

In my view this provision is not mandated by Dodd-Frank and may limit competition by shutting out applicants who wish to offer (Request For Quote) systems without this type of functionality, Sommers said at public agency meeting.

Fellow Republican Commissioner Scott O'Malia also had concerns and questioned whether the plan would serve all markets in a manner that is transparent.

Under the Dodd-Frank overhaul, the CFTC has been given the power to police most of the estimated $600 trillion over-the-counter derivatives market. The SEC is in charge of security-based swaps, which is at most about a 10th of the market. The SEC is expected to offer a similar plan in the new year.

The original CFTC proposal offered three tiers of transactions: larger trades that meet a specific level of volume, smaller trades that are not block trades but don't have major volume, and other transactions such as block trades where an SEF could provide end users the chance to trade even though it is not required.

Companies that traditionally have been big players in the over-the-counter swaps market are working to ensure they stay in the game as the business moves under the CFTC's regulatory oversight. Barclays, Credit Suisse, Morgan Stanley and others have met with the agency to discuss the new trading platforms.

The CFTC proposal is open for a 60-day comment period.

(Additional reporting by Christopher Doering and Ayesha Rascoe; Editing by Robert MacMillan)