Title VII of Dodd-Frank brings all energy swaps under the jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) with the new regulatory framework for swaps, security-based swaps and related instruments subject to the same oversight as futures contracts.
The Dodd-Frank mandated changes are understandably creating adjustment issues. With all energy swaps under the jurisdiction of the CFTC, certain oil, gas, power and utility companies that have registered as swap dealers or major swap participants will face much stricter oversight and new reporting requirements. Energy companies that transact swaps will largely be required to replace traditional bilateral swap arrangements with a centrally cleared swap system intended to facilitate standardized transaction reporting and reconciliations.
This KPMG report outlines what energy companies should consider as they prepare and illustrates how strong data capture policies and procedures and deal capture systems are key to Title VII compliance.