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US power, gas industry seeks more time to comply with Dodd-Frank
September 26, 2012 / 5:00 PM / in 5 years

US power, gas industry seeks more time to comply with Dodd-Frank

* Groups say CFTC Dodd-Frank rules still in flux
    * Costs could rise for consumers due uncertain rules

    Sept 26 (Reuters) - U.S. energy trade groups have asked the
U.S. Commodity Futures Trading Commission (CFTC) for more time
to comply with the Dodd-Frank regulations for certain energy
market participants.
    As part of its call for more time, the energy trade groups -
Edison Electric Institute (EEI), the American Gas Association
(AGA), and the Electric Power Supply Association (EPSA) - said
in a joint statement, a number of the CFTC rulemakings "are
still in a state of flux, pending the resolution of the
Commission's requests for further comments," among other things.
    The energy trade groups warned earlier this week that
uncertainty in the rules could lead to higher energy costs for
    This request by the energy trade groups is part of a growing
number of industry efforts to defer or delay implementation of
what they say are still very "confusing" regulations.
    Last week, for example, the Commodity Markets Council, which
represents non-banks with large swaps desks like Cargill Inc
 and Kraft Foods, asked the CFTC to postpone an
Oct. 12 start date for tallying swaps trades towards the key
"dealer" threshold, arguing they need more clarity on the rules
and time to build up compliance regimes. 
    Under the 2010 Dodd-Frank financial reform law, the CFTC has
embarked on a significant restructuring of the nation's
derivatives rules aimed at boosting transparency and limiting
risk in the $648 trillion over-the-counter global swaps market.
    The energy trade groups warned that uncertainty in the rules
could "inadvertently disrupt the liquidity of the derivatives
markets and the delivery of commodities related to electric and
gas operations, resulting in higher prices for consumers and
commodity market participants.
    The groups also said market participants may be deterred
from engaging in certain trading or hedging transactions that
could increase the cost of risk management for commercial end
users of swaps, again resulting in higher prices for customers.
    Specifically, the energy trade groups want the CFTC to defer
the compliance dates for non-swap dealer/non-major swap
participant energy market participants for a minimum of 12
months after the commission completes the rulemaking process for
the Dodd-Frank regulations.
    The CFTC has estimated that 125 businesses will be tagged as
swap dealers. Large banks like Goldman Sachs Group Inc 
and JPMorgan Chase & Co have been widely expected to be
caught up in the category.
    Swap dealers will have to register by the end of the year if
they reach an $8 billion threshold in swaps trading activity.

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