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Looking Forward: Dodd-Frank and the Energy Industry

The Dodd-Frank Act became law in July 2010, establishing the Commodity Futures Trading Commission (CFTC) as a major new energy regulator. Energy companies that transact in energy commodities must reassess their practices because CFTC rules will affect hedging, risk management, and derivatives transacting activities.

Overlapping regulatory agency requirements will be a challenge. Not all new rules are final. Title VII of Dodd-Frank deals with over-the-counter derivatives, and will likely have the most significant effects for energy trading firms. Those entities categorized as a swap dealer or major swap participant will face new capital, margin, and reporting requirements, as well as increased regulatory scrutiny. Those companies not categorized as a swap dealer or major swap participant, but who transact in swaps, will also face increased obligations including position limits, end-user exception reporting, and potentially increased record keeping and reporting.  Compliance will require planning and assessment of current capabilities as well as new or modified processes, systems, and tools. As rules become final and deadlines start to arrive, energy company management attention should address these new obligations.

Featured insights

  • An interpretation of the “hedge or mitigate risk” criteria and the impact to compliance with the Dodd-Frank Act
    This paper provides a framework for implementing the hedging-related rules by the Commodity Futures Trading Commission (CFTC), and discusses potential implications and applications of specific rules approved or proposed by the CFTC addressing hedging.
  • Energy regulatory compliance: Moving forward strategically and effectively
    This reports summarizes selected insights about how companies are dealing with their regulatory challenges, featuring information gathered in three annual surveys of energy compliance practices.
  • Uncovering industry practices regarding calculation of notional value
    At the request of energy market participants, Deloitte & Touche LLP developed a brief and high-level survey to shed light on actual industry practices regarding the calculation of notional values of swap transactions.
  • Dodd-Frank compliance forces changes in CTRM vendor –provided capabilities
    Energy companies should not expect to rely on their commodity transacting and risk management (CTRM) vendors to provide Dodd-Frank compliance capabilities in the short to medium term, nor should they wait for niche vendors to emerge in this timeframe. Read the Deloitte article recently published in Oil & Gas Financial Journal.

More Dig deeper

  • Center for Energy Solutions
    Forum for innovation, thought leadership, groundbreaking research, and industry collaboration.
  • Virtual Symposium - Looking back and looking forward: The Dodd-Frank Act anniversary archives
    The Dodd-Frank Act anniversary.
  • Governance, Regulatory & Risk Strategies
    Addressing risk, Enabling growth, Driving Value.

Meet our Dodd-Frank for energy leaders

  • Paul Campbell
    Principal, Deloitte & Touche LLP

Watch, listen and learn

  • Dbriefs: The Dodd-Frank Act: A path forward for energy companies.

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