Redrawing the Boundaries: Dodd-Frank's Impact on the Regulatory Framework of the Energy Market

Abstract

On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) into law. Title VII of Dodd-Frank establishes a new regulatory framework for over-the-counter derivatives; it specifically provides that the Commodity Futures Trading Commission (“CFTC”) will regulate “swaps,” “swap dealers,” “major swap participants,” “swap execution facilities,” “swap data repositories” and specifies that the CFTC shall take part in further defining such terms. Traditionally, under the current Commodity Exchange Act (“CEA”), the CFTC has regulated “futures,” options and options on futures which, with the new Dodd-Frank legislation, give the CFTC jurisdiction to regulate the full spectrum of commodity derivatives. Congress created the CFTC in 1974 as an independent agency designed to regulate the commodity futures and options on futures markets in the United States, and its stated mission is to protect the integrity of the markets and market users and the public from fraud, manipulation, and systemic risk related to derivatives subject to the CEA.