Firms shy away from public utilities despite CFTC relief

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Utility counterparties fear being caught on the wrong side of the line

US public utilities claim they are still being avoided by counterparties in the over-the-counter derivatives market as a result of the Dodd-Frank Act, despite a recent no-action letter from the Commodity Futures Trading Commission (CFTC). On October 12, the CFTC released a no-action letter that would make it easier for firms to do business with public utilities without being labelled ‘swap dealers’. Dodd-Frank brings in stricter oversight for swap dealers, which will become subjec