Proposed Order and Request for Comment on a Petition From Certain Independent System Operators and Regional Transmission Organizations To Exempt Specified Transactions Authorized by a Tariff or Protocol Approved by the Federal Energy Commission or the Public Utility Commission of Texas From Certain Provisions of the Commodity Exchange Act
The Commodity Futures Trading Commission (``CFTC'' or ``Commission'') is requesting comment on a proposed exemption (the ``Proposed Exemption'') issued in response to a consolidated petition (``Petition'') \1\ from certain regional transmission organizations (``RTOs'') and independent system operators (``ISOs'') (collectively, ``Petitioners'') to exempt specified transactions from the provisions of the Commodity Exchange Act (``CEA'' or ``Act'') \2\ and Commission regulations. The Proposed Exemption would exempt the contracts, agreements and transactions for the purchase or sale of the limited electricity-related products that are specifically described within the proposed order from the provisions of the CEA and Commission regulations, with the exception of sections 2(a)(1)(B), 4b, 4c(b), 4o, 4s(h)(1)(A), 4s(h)(4)(A), 6(c), 6(d), 6(e), 6c, 6d, 8, 9 and 13 of the Act and any implementing regulations promulgated thereunder including, but not limited to Commission regulations 23.410(a) and (b), 32.4 and part 180. To be eligible for the Proposed Exemption, the contract, agreement or transaction would be required to be offered or entered into in a market administered by a Petitioner pursuant to that Petitioner's tariff or protocol for the purposes of allocating such Petitioner's physical resources; the relevant tariff or protocol would be required to have been approved or permitted to have taken effect by either the Federal Energy Commission (``FERC'') or the Public Utility Commission of Texas (``PUCT''), as applicable; and the contract, agreement or transaction would be required to be entered into by persons who are ``appropriate persons,'' as defined in section 4(c)(3)(A) through (J) of the Act \3\ or ``eligible contract participants,'' as defined in section 1a(18) of the Act and Commission regulations.\4\ The exemption as proposed also would extend to any person or class of persons offering, entering into, rendering advice or rendering other services with respect to such transactions. Finally, the exemption would be subject to other conditions set forth therein. Authority for issuing the exemption is found in section 4(c)(6) of the Act.\5\
Registration of Intermediaries
The Commodity Futures Trading Commission (Commission) is adopting regulations to further implement new statutory provisions enacted by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) regarding registration of intermediaries. Specifically, the Commission is adopting certain conforming amendments to the Commission's regulations regarding the registration of intermediaries, consistent with other Commission rulemakings issued pursuant to the Dodd-Frank Act, and other non- substantive, technical amendments to its regulations.
Proposal To Exempt Certain Transactions Involving Not-for-Profit Electric Utilities; Request for Comments
The Commodity Futures Trading Commission (``CFTC'' or the ``Commission'') is proposing to exempt certain transactions between not-for-profit utilities (entities described in section 201(f) of the Federal Power Act (``FPA'')), and other electric utility cooperatives, from the provisions of the Commodity Exchange Act (``CEA'' or ``Act'') and the regulations there under, subject to certain antifraud, anti- manipulation, and recordkeeping conditions. Authority for this exemption is found in section 4(c) of the CEA. The Commission is requesting comment on every aspect of this Notice of Proposed Order (``Notice'').
Clearing Exemption for Swaps Between Certain Affiliated Entities
The Commodity Futures Trading Commission (``CFTC'' or ``Commission'') is proposing a rule to exempt swaps between certain affiliated entities within a corporate group from the clearing requirement (the ``inter-affiliate clearing exemption'' or the ``proposed exemption'') under Section 2(h)(1)(A) of the Commodity Exchange Act (``CEA''). The Commission also is proposing rules that detail specific conditions counterparties must satisfy to elect the proposed inter-affiliate clearing exemption, as well as reporting requirements for affiliated entities that avail themselves of the proposed exemption. The Commission has finalized a rule that addresses swaps that are subject to the end-user exception. Counterparties to inter-affiliate swaps that qualify for the end-user exception would be able to elect to not clear swaps pursuant to the end-user exception or the proposed rule. The proposed rule does not address swaps that an affiliate enters into with a third party that are related to inter- affiliate swaps that are subject to the end-user exception. The Commission intends separately to propose a rule addressing swaps between an affiliate and a third party where the swaps are used to hedge or mitigate commercial risk arising from inter-affiliate swaps for which the end-user exception has been elected.
Agency Information Collection Activities; Proposed Collection, Comment Request: Further Definition of “Swap,” “Security-Based Swap,” and “Security-Based Swap Agreement”; Mixed Swaps; Security-Based Swap Agreement Recordkeeping: Book-out Agreement Confirmation
The Commodity Futures Trading Commission (``Commission'' or ``CFTC'') is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (``PRA''), 44 U.S.C. 3501 et seq., Federal agencies are required to publish notice in the Federal Register concerning each proposed collection of information and to allow 60 days for public comment. The Commission recently adopted a final rule and interpretations, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (``Dodd-Frank Act''), requiring that oral book- out agreements must be followed in a commercially reasonable timeframe by a confirmation in some type of written or electronic form. This notice solicits comments on the recordkeeping requirement that is embedded in the final interpretation's reporting requirement.
Real-Time Public Reporting of Swap Transaction Data; Correction
The Commodity Futures Trading Commission (``CFTC'' or ``Commission'') published the Real-Time Public Reporting of Swap Transaction Data (``Real-Time Public Reporting'') rule and an accompanying preamble in the Federal Register on Monday, January 9, 2012 (77 FR 1182). This document makes an editorial correction to language of the preamble that conflicted with the rule text of the final rule.
Further Definition of “Swap,” “Security-Based Swap,” and “Security-Based Swap Agreement”; Mixed Swaps; Security-Based Swap Agreement Recordkeeping
In accordance with section 712(a)(8), section 712(d)(1), sections 712(d)(2)(B) and (C), sections 721(b) and (c), and section 761(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (``Dodd-Frank Act''), the Commodity Futures Trading Commission (``CFTC'') and the Securities and Exchange Commission (``SEC'') (collectively, ``Commissions''), in consultation with the Board of Governors of the Federal Reserve System (``Board''), are jointly adopting new rules and interpretations under the Commodity Exchange Act (``CEA'') and the Securities Exchange Act of 1934 (``Exchange Act'') to further define the terms ``swap,'' ``security-based swap,'' and ``security-based swap agreement'' (collectively, ``Product Definitions''); regarding ``mixed swaps;'' and governing books and records with respect to ``security-based swap agreements.'' The CFTC requests comment on its interpretation concerning forwards with embedded volumetric optionality, contained in Section II.B.2.(b)(ii) of this release.
Clearing Requirement Determination Under Section 2(h) of the CEA
The Commodity Futures Trading Commission (Commission or CFTC) is proposing regulations to establish a clearing requirement under new section 2(h)(1)(A) of the Commodity Exchange Act (CEA or Act), enacted under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The regulations would require that certain classes of credit default swaps (CDS) and interest rate swaps (IRS), described herein, be cleared by a derivatives clearing organization (DCO) registered with the Commission. The Commission also is proposing regulations to prevent evasion of the clearing requirement and related provisions.
Agency Information Collection Activities Under OMB Review
In compliance with the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), this notice announces that the Information Collection Request (ICR) abstracted below has been forwarded to the Office of Management and Budget (OMB) for review and comment. The ICR describes the nature of the information collection and its expected costs and burden; it includes the actual data collection instruments [if any].