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