* Lawmakers afraid of another financial meltdown
* Gensler: CFTC rule-making "not against a clock"
* Under Republicans, changes to law would be minor
WASHINGTON, March 15 (Reuters) - U.S. financial market players are resigned to the idea that the Dodd-Frank financial reform package will not be overhauled and are preparing to cope with the new rules, insiders said on the sidelines of a Futures Industry Association meeting this week.
Trading firms, exchange operators and other industry players have made a political calculation that even if Republicans make a clean sweep in November elections, they will not rip up reforms sold as a way to guard against a repeat of the 2007-2009 financial crisis.
Besides the presidential race, the election season will include pivotal races in both chambers of Congress, especially in the Senate, where a third of its 100 seats are up for grabs.
Even if the Senate, where Democrats now hold a narrow six-vote majority, goes Republican, lawmakers could be afraid to overhaul the controversial 2010 Dodd-Frank only to get blamed if another market collapse occurs.
Republican presidential candidates Mitt Romney, Rick Santorum and Newt Gingrich have vowed to repeal Dodd-Frank.
Industry insiders, though, aren't buying into the campaign promises.
"If the Republicans controlled everything I think they would be very hesitant to just gut the whole thing. Maybe you'd see some changes in some of the details of things but my sense is that the gist of stuff will go forward as planned," said Donald Wilson Jr, chief executive of Chicago-based DRW Trading Group.
Rewriting it "would be a very risky thing for people to do. If you then got another AIG blowup it would be easy to point the finger at the guy who gutted Dodd-Frank," he said.
Widespread ignorance of the swaps exposures of troubled investment firms such as Lehman Brothers and mega-insurer AIG greatly aggravated the 2007-2009 crisis that led to taxpayer bailouts of Wall Street.
In response, Congress passed the Dodd-Frank law, which in part established a framework for regulators to boost oversight of the previously opaque $700 trillion OTC swaps market.
Wall Street banks are anxiously waiting for the U.S. Commodity Futures Trading Commission to finalize a series of rules such as definition of a swap dealer, what is an end-user and capital and margin requirements -- factors that will highlight who will have to comply with new, onerous and potentially costly measures.
Gary Gensler, CFTC chairman, has hinted the upcoming election will not dictate the pace of rule-writing or how the final measures look. The regulator will craft its rules in "a thoughtful, balanced way to get them right -- not against a clock", he told the industry on Wednesday.
At IntercontinentalExchange Inc, the exchange and clearinghouse operator is preparing for the rules passed by the CFTC to go into effect and does not expect "material" changes to the financial reform law, said Charles Vice, ICE president.
"For there to be any meaningful change it would require presumably a filibuster-proof Republican Senate, which no one is predicting," Vice told Reuters at the annual FIA meeting in Boca Raton, Florida.
REFORMING THE REFORMS
Market players do expect some tweaks to Dodd-Frank, even if they are skeptical of an overhaul.
Vice said one regulation that could change under a Republican White House is the Volcker rule that prevents banks which receive government backstops such as deposit insurance from making risky trades with their own funds.
Republicans who now control the House of Representatives have already tried to throw up roadblocks to some pieces of Dodd-Frank and have voiced concern about what they call an "irrational" rule-making process used by regulators.
They have introduced bills to overturn parts of Dodd-Frank that would narrow the scope of which entities the CFTC may designate as swap dealers and another to prevent regulators from subjecting most farm credit institutions and community banks to capital, margin and other expensive new regulations.
Lawmakers also have opposed funding boosts for regulatory agencies such as the CFTC and the Securities and Exchange Commission to put the brakes on implementation of the law.
Michael Dunn, a former CFTC commissioner who left the agency in October before joining the Washington D.C.-based law and lobbying firm Patton Boggs as a senior policy adviser, said he doubted Republicans could get enough support in the Senate to overhaul the rules even if they become the majority.
"I don't know if all the members of one party or the other are opposed to Dodd-Frank," Dunn said. "I think there are issues that they think might have gone too far or they think there needs to be a clarification. I don't think anyone in Congress wants to have another financial services meltdown."
The CFTC has finalized about 30 Dodd-Frank rules and has about 20 more to go. The futures regulator holds its next rule-making meeting on March 20.