FERC, CFTC, and State Energy Law Developments

The Commodity Futures Trading Commission (CFTC) has delayed implementation of the reduction in the de minimis threshold by an additional year. Under the de minimis exception, a person is not considered to be a swap dealer unless its swap dealing activity exceeds an aggregate gross notional amount threshold. Currently, that threshold is set at $8 billion, and is subject to a phase-in period after which the threshold will be reduced to $3 billion. The phase-in period was scheduled to terminate on December 31, 2018, but on October 26, the CFTC issued an order extending the phase-in period by one year, terminating on December 31, 2019 instead of December 31, 2018. The CFTC previously extended the phase-in period by one year in October 2016, and at that time explained that the extension provides additional time for further information to become available to reassess the de minimis exception.

The amendments to the CFTC’s registration rules will codify no-action relief that permits non-US asset managers to rely on an exemption from the requirement to register with the CFTC by virtue of trading uncleared swaps in the United States on behalf of non-US clients.

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On October 18, the Commodity Futures Trading Commission (CFTC) issued a Final Rule codifying regulations that establish limits on speculative positions in 28 physical commodity futures contracts traded pursuant to the rules of a Designated Contract Market (DCM) and economically equivalent swaps. The CFTC's Final Rule implements Section 737 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), which directed the CFTC to issue a rule limiting the amount of positions, other than bona fide hedging positions, that may be held By any person in connection with commodity futures and option contracts traded pursuant to the rules of a DCM.

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