New US Senate ag chief sees 'narrow' OTC role

WASHINGTON, Sept 9 (Reuters) - There is a "small, narrow place" for over-the-counter derivatives in an overhaul of U.S. financial regulation, said the new chairman of the Senate Agriculture Committee on Wednesday.

Arkansas Democrat Blanche Lincoln told reporters there should be more regulation of derivatives.

"I think there is a small, narrow place for the over-the-counter" trade, said Lincoln, when asked about proposals to move OTC derivatives onto exchanges. She said the committee was mulling how to define it.

"It is going to be critical and important for us to provide greater oversight, greater transparency" to reduce the risk of manipulation or market disruptions, said Lincoln.

"The CFTC (the Commodity Futures Trading Commission) is the appropriate place," said Lincoln.

Her predecessor, Tom Harkin of Iowa, filed a bill to ban OTC trading. The Obama administration has proposed mandatory clearing of OTC derivatives when possible and would move trading onto regulated exchanges. (Reporting by Charles Abbott)