CFTC Issues Proposed Order to Exempt Certain SPP Transactions from Regulation Under Most Provisions of the CEA and CFTC Rules
On May 19, 2015, the Commodity Futures Trading Commission (“CFTC” or “Commission”) issued an order in response to an application from Southwest Power Pool, Inc. (“SPP”) proposing to exempt three categories of SPP transactions (“Covered Transactions”) from all but the anti-fraud and anti-manipulation provisions of the Commodity Exchange Act (“CEA”) and CFTC Regulations, subject to certain conditions (“Proposed Exemption”). The Proposed Exemption was published in the Federal Register today and comments are due by June 22, 2015.1
SPP’s Proposed Exemption would apply to any person entering into the Covered Transactions or rendering services with respect to the Covered Transactions, including rendering advice with respect to the Covered Transactions. The Proposed Exemption is substantially similar to the final exemption order that the CFTC approved in April 2013 for transactions in several other independent system operators and regional transmission organization (“ISO-RTO”) markets.2 The Commission is requesting comments on several aspects of the Proposed Exemption. Below, we provide: (1) an analysis of key issues in the Proposed Exemption that are ripe for comment; and (2) a summary of the scope of, and the conditions applicable to, the Proposed Exemption.