CFTC no-action letter could end public utilities' hedging woes

‘Operations-related’ swaps excluded from Dodd-Frank special entity threshold

CFTC in Washington, DC

US public utilities are welcoming a no-action letter from the Commodity Futures Trading Commission (CFTC) that makes it less likely market participants transacting swaps with publicly owned utilities will have to register as swap dealers under the US Dodd-Frank Act. On March 21, the CFTC released a letter exempting certain swaps transacted with public utilities from counting towards a de minimis threshold that required firms to register as swap dealers if they transacted more than $25 million