JPMorgan Chase & Co., Goldman Sachs Group Inc. and other banks won greater ability to fall under foreign regulations when they trade swaps overseas under guidance proposed Friday for the Dodd-Frank Act's international reach.

Commodity Futures Trading Commission members, in a private vote, unanimously approved proposing interpretive guidance allowing for so-called substituted compliance for branches, subsidiaries and other overseas affiliates of U.S. banks when foreign jurisdictions have comparable rules. Banks have spent two years lobbying against efforts to automatically apply Dodd- Frank to their overseas operations, saying doing so would hurt their ability to compete.

"During a default or crisis, the risk that builds up offshore inevitably comes crashing back onto U.S. shores," CFTC Chairman Gary Gensler said yesterday in a statement. The 111-page proposal is open for public comment, which Gensler said isn't required for guidance.