Rep. Dan Rostenkowski, the futures industry's most powerful ally in Congress, has all but conceded defeat in a battle over who should regulate trading of at least some types of futures contracts. Rostenkowski, chairman of the House Ways and Means Committee, said ``the cards are stacked'' against the Chicago Board of Trade and Chicago Mercantile Exchange. The two dominate global futures trading and favor continued oversight by the Commodity Futures Trading Commission rather than by the Securities and Exchange Commission. The Illinois Democrat also said Congress appears to favor a merger of the two federal regulatory agencies over proposals to transfer to the SEC jurisdiction over only the financial futures markets or over stock-index futures alone. ``If there's any movement at all with respect to partial consolidation, there will be total consolidation,'' Rostenkowski said. ``I think the cards are stacked against the members of the Chicago trading faction.'' Rostenkowski commented on the situation in a meeting Monday with the Chicago Tribune's editorial board. His remarks were reported in Tuesday's editions. The CFTC currently regulates all futures trading. Leaders of the Chicago exchanges fear the SEC, which oversees stock and bond trading, would be a stricter regulator whose actions could raise the cost of trading futures in the United States, driving business overseas. Treasury Secretary Nicholas Brady and SEC Chairman Richard Breeden favor giving the SEC at least some of the CFTC's regulatory authority. The Chicago Mercantile Exchange, the world's largest market for stock-index futures, is opposed to any transfer of jurisdiction, said spokesman Andrew Yemma. ``The position advocted by some in Washington of shifting jurisdiction to the SEC, we just don't consider that a negotiable matter,'' Yemma said in a telephone interview. The battle over jurisdiction of the industry stems in part from the government's investigation of illegal trading practices at the Merc and Board of Trade. Forty-eight people, mostly traders, have been indicted in the probe, prompting criticism that the CFTC has been lax in policing the exchanges. The turf battle also is rooted in the belief among some experts that stock-index futures trading increases volatility in the stock market. Stock-index futures are contracts that represent baskets of stocks. Rostenkowski portrayed the fight as reflecting a rivalry between New York and Chicago over dominance of the nation's financial markets. ``This shows the strength of the New York operators,'' he said, noting that Brady, former head of a powerful Wall Street firm, ``is part of the Eastern establishment.'' Sen. Alan Dixon, D-Ill., another futures industry ally, on Monday introduced a compromise bill that would put a member of each agency on the counterpart regulatory body. ``I think cross-membership is a good idea to give each agency a better appreciation of the issues the other has to face,'' Dixon said. The measure ``does not call for fundamental restructuring of our regulatory structure,'' he said, noting such restructuring is unnecessary. The debate over jurisdiction is likely to heat up Thursday, when top regulators are expected to testify before a Senate subcommittee headed by Sen. Christopher Dodd, D-Conn. Dodd has said he favors shifting regulation of stock-index futures to the SEC from the CFTC.