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Democrats and Republicans sparred Wednesday over whether big banks should be forced to trade some over-the-counter derivatives on regulated trading platforms.

The debate came as the House Financial Services Committee geared up to vote on a major bill that would impose sweeping new regulations on the mostly opaque over-the-counter market.

An original draft of the bill did not try to force derivative dealers or some companies heavily involved in speculative swaps trading to trade their routine contracts on exchanges or electronic platforms. Instead the draft contained provisions requiring them to have some of their swaps processed through clearinghouses, which guarantee trades, and reported to central repositories.

But on Wednesday, House Financial Services Chairman Barney Frank, D-Mass., signaled he wants to go in a different direction and proposed to insert a new provision into the bill that would force major market players to both clear and trade routine products on exchanges or electronic platforms unless the exchanges refuse to list them.

Companies who do not hold significant over-the-counter positions, however, would be exempt from the requirements.

Frank said he believes the lessons of past years have "been that the systemic risk of not having this or a lot of this on exchanges is a negative."

Republicans balked at the idea, however, saying such a drastic change would prove harmful to businesses.

"We are now moving in the wrong direction," said Rep. Scott Garrett, R-N.J.

Major exchanges including CME Group Inc (CME) and NYSE Euronext (NYX) have said in recent months they do not favor a trading mandate on derivatives.

The provision Frank proposed on Wednesday is similar to one being proposed by the House Agriculture Committee. Frank indicated that anything his committee approves will be tentative and subject to future discussions with the House Agriculture Committee.

-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634; sarah.lynch@dowjones.com.

(Michael R. Crittenden contributed to this article).