(Dow Jones) Break out the stogies. Congressional leaders are moving debate over financial overhaul into the proverbial smoke-filled back room.

The outcome of those negotiations to reconcile competing overhaul bills passed by the Senate and House will affect a host of financial stocks, from banks to insurers to credit-card processors.

For investors, the frustrating part will be that the process is so opaque. There will be some public meetings of the conference committee working on the legislation, but the real negotiations will happen behind closed doors.

And while some aspects of the talks will likely leak, there won't be a level playing field for information that could affect share prices. That could give some investors a trading advantage and fuel share-price volatility.

How will companies be affected? For banks, there are a few big, unresolved issues to watch. It is widely expected that a provision forcing banks to spin off derivatives-trading businesses will be watered down or pulled completely. The administration, a number of regulators and big banks like J.P. Morgan Chase oppose it.

The outcome of a separate provision backed by Sen. Susan Collins to beef up bank capital is tougher to call. If she digs in her heels, banks may lose, because Sen. Collins was one of only four Republicans to vote for the financial-overhaul legislation.

Meanwhile, big question marks still hang over a ban on proprietary trading by banks, the so-called Volcker rule. As included in the Senate bill, the provision doesn't clearly define proprietary trading versus, say, market making. Nor does it make clear if trading in instruments like government securities or mortgage-backed bonds backed by the government would be exempt.

Just how painful such a provision could be depends on where the conference committee draws the lines. For example, which hedge-fund and private-equity holdings would banks have to divest and how much time would they have to do so? But the bottom line, as a note from Sanford C. Bernstein analysts said Friday, is that the final bill will likely include some version of the Volcker rule.

The congressional wrangling could also affect insurers like Prudential Financial and MetLife, given their banking or thrift units. The insurers have argued that Congress didn't intend to rope them into the Volcker rule, but so far, efforts to exclude them haven't flown. That said, insurers have a degree of Senate support for a carve-out.

There is also uncertainty, for example, as to whether an amendment pushed by Sen. Richard Durbin on credit-card interchange fees was intended to also extend regulatory oversight to other card fees. A spokesman for the senator said that wasn't his intention. But if that isn't spelled out, investors will be concerned about the potential impact on card processors like Visa and MasterCard and card issuers like American Express.

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