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On September 13, 2016 the Financial CHOICE Act was approved by the House Financial Services Committee by a vote of 30-26.  The bill would overhaul regulation of the financial markets and is an important development for derivatives market participants, including energy companies.  For example, the bill would alter the functioning of the Commodity Futures Trading Commission (“CFTC”), by:

  • Requiring development of procedures governing no-action and other exemptive relief, including a requirement that the commissioners have the opportunity to review any responses to a request for relief.
  • Require notice-and-comment before issuance of policy statements, guidance, interpretive rules, or other procedural rules.
  • Allowing for judicial review of CFTC rules, along the lines of that allowed for Securities and Exchange Commission (“SEC”) rules.

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Continue Reading “Financial CHOICE Act” Approved by House Financial Services Committee

Chairman Timothy Massad and Commissioner J. Christopher Giancarlo of the Commodity Futures Trading Commission (the “CFTC”) delivered speeches at the Energy Risk Summit in Houston this week, providing a roadmap for the CFTC’s current and upcoming rulemaking as well as a policy perspective on the CFTC’s proposed position limit rules.

In remarks to the conference…

The Commodity Futures Trading Commission’s (CFTC) proposed rule on position limits continues to be a priority for energy market participants, as both Congress and the CFTC are actively reviewing this issue.  The final rule threatens well-established hedging and risk management practices related to the trading of futures and swaps by energy market participants.

Recently, the…

On Tuesday, June 3, the Senate approved the nominations of Timothy Massad to be Chairman of the CFTC and Christopher Giancarlo and Sharon Bowen to be Commissioners of the CFTC.  Messrs. Massad’s and Giancarlo’s nominations were approved by voice vote.  Ms. Bowen’s nomination, however, was more controversial as demonstrated by its approval by a recorded…

At a recent speech at an energy industry conference CFTC Commissioner Scott D. O’Malia highlighted energy market participant concerns with the CFTC’s Dodd-Frank Rulemakings.  These concerns indicate potential regulatory changes at the CFTC that could impact energy market participants.

Commissioner O’Malia noted that the CFTC must re-visit the swap dealer definition rule to “establish a…

Earlier this year, the CFTC and FERC announced an information sharing Memorandum of Understanding (MOU) between the two agencies. The agencies have now announced that they have begun sharing market data pursuant to this MOU.  In addition, they have created an Interagency Surveillance and Data Analytics Working Group “to coordinate information sharing between the…

On January 2, 2014, the Federal Energy Regulatory Commission (FERC) and the Commodity Futures Trading Commission (CFTC) entered into two Memoranda of Understanding (the MOUs) to set forth procedures to address circumstances of overlapping jurisdiction (the Jurisdiction MOU) and to share information in connection with market surveillance and investigations into potential market manipulation, fraud or abuse (the Information MOU).

The MOUs were entered into in response to a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) that directed the FERC and CFTC to develop the MOUs.  The directive in the Dodd-Frank Act was the result, in part, of jurisdictional disputes in recent years related to investigations that implicated the jurisdictions of both the FERC and the CFTC, particularly in cases dealing with the potential manipulation of the natural gas markets.  Specifically, in Hunter v. FERC, No. 11-1477 (D.C. Cir. Mar. 15, 2013), the D.C. Circuit Court rejected FERC’s assertion of jurisdiction over the trading of natural gas futures contracts when the Court held that the CFTC has exclusive jurisdiction over all transactions involving futures (the underlying FERC case was filed prior to the passage of the Dodd-Frank Act).  In addition to directing the FERC and CFTC to enter into the MOUs, the Dodd-Frank Act also clarified the jurisdiction of the respective agencies.  The MOUs supersede a 2005 Memorandum of Understanding the agencies had been employing for the exchange of information related to oversight or investigations.
Continue Reading FERC and CFTC Enter into Long-Awaited MOUs in Response to Dodd-Frank Act

On December 19, 2013 President Obama nominated Sharon Y. Bowen to serve as a Commissioner of the CFTC.  If confirmed by the Senate, Ms. Bowen would assume the seat currently occupied by Commissioner Bart Chilton, a Democrat.

Ms. Bowen is currently a securities lawyer at Latham & Watkins LLP in New York.  Ms. Bowen was…