WASHINGTON (Reuters) - The top U.S. futures regulator’s proposed insider trading ban has been refined so that the so-called “Eddie Murphy rule” does not curb the flow of information in commodity markets, the president of an industry group said.

The Commodity Futures Trading Commission had named its insider trading ban proposal after the actor’s role in the movie “Trading Places,” in which traders stole an Agriculture Department report on the orange crop and then placed positions on the market.

Traders can put to rest fears that the proposed ban on trades using nonpublic information from government sources would cut off dialogue between analysts in the private sector and the Agriculture and Energy departments, the president of the Commodity Markets Council told Reuters late Wednesday.

“We all agree that a true Eddie Murphy rule serves the market, and serves the public. But getting it crafted in such a way that the net wasn’t too wide was critically important,” said Christine Cochran, whose group represents futures exchanges and commodities trading houses.

CFTC Chairman Gary Gensler said there should be an explicit ban in law against trading on insider government information. In March, he said the agency would suggest legislative text for the ban to the Senate Agriculture Committee for its derivatives reform bill.

The bill is slated to be merged into the Senate’s overall financial regulatory package that begins debate on Thursday.

In 1905, a USDA employee used window shades to leak results about the cotton crop to a trader, leading to a series of strict rules about how market-sensitive information is released. But, there have been no known cases of USDA leaks in recent decades.

“We had a lot of concerns with the initial draft -- not with the intent of the language, but about the implications of how it was drafted,” Cochran said.

Commodities traders were concerned the language would prevent them from trading on data that they themselves had reported to the government, but which the government had not yet aggregated and released, such as mandatory reporting of export sales data issued each Thursday by the USDA.

They were also worried that analysts from the USDA, Energy Department, and the CFTC itself would be prevented from answering questions from private sector analysts and traders.

But the group worked with staff at the CFTC and Senate Agriculture Committee on technical changes to the provision to prevent curbs on information exchange, Cochran said.

“Futures markets trade on information. The markets need information to flow -- both from government agencies to the private sector, and vice versa,” Cochran said.