Interested Parties Sign Joint Letter on OTC Trading in Hopes of Influencing Senate Legislation; Independent Producers Get Personal; Treasury Secretary Unveils OTC Regulatory Blueprint

摘要

Fourteen oil, gas, electric, and consumer associations1 signed a highly unusual joint letter on 7/10/09 pressing their concerns regarding the oversight and transparency of over-the-counter (OTC) markets for energy derivatives, i.e., instruments not traded on regulated exchanges. The chief concern is mandatory clearing of all OTC transactions on such exchanges. The ad hoc coalition addressed the letter to Senators who will take up House-passed H.R. 2454 or their own energy legislation sometime this fall. There appear to be several targets. One is H.R. 2454, the American Clean Energy and Security Act of 2009 and, in particular, the Commodity Exchange Act provisions. Earlier, in a June 12 letter to House Speaker Nancy Pelosi (D-Calif.), the Independent Petroleum Association of America (IPAA) - a member of the coalition - hit on some of the same issues. The group of 14 also took aim at the executive branch, where the Commodity Futures Trading Commission (CFTC) is about to explore the scope of existing authority to establish speculative position limits for traders of all commodities "of finite supply" (including natural gas). The agency will also reconsider whether its bona fide hedging exemption should continue to apply to parties hedging purely financial risk. Lastly, U.S. Treasury Secretary Timothy Geithner testified on July 10 at a joint hearing before the House Agriculture and Financial Services Committees on the regulation of OTC derivatives. He made a case for the very changes deplored by the industry.