CFTC close to fixing Dodd-Frank commodity option woes

The Commodity Futures Trading Commission is said to be exploring solutions for the so-called 'seventh prong' problem created by its definition of a swap under the Dodd-Frank Act

CFTC chairman Timothy Massad

The US Commodity Futures Trading Commission (CFTC) and its new chairman, Timothy Massad, are said to be moving closer to resolving an ambiguity in the agency's Dodd-Frank Act regulations that is causing major headaches for energy companies.

The ambiguity lies in the definition of a swap, which was finalised in July 2012. Specifically, the CFTC designed a seven-part test to help companies determine whether physical contracts with embedded volumetric optionality should be classified as swaps or

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