• Summary of Proposed Rulemaking Regarding Commodity Options & Agricultural Swaps
  • February 15, 2011
  • Law Firm: Cadwalader Wickersham Taft LLP - New York Office
  • The Dodd-Frank Wall Street Reform and Consumer Protection Act1 prohibits swaps in an agricultural commodity unless conducted pursuant to a rule or order under the Commodity Futures Trading Commission’s (“CFTC” or “Commission”) 4(c) exemptive authority. In the CFTC’s Notice of Proposed Rulemaking regarding Commodity Options and Agricultural Swaps,2 the Commission proposes to adopt new rules that would expressly require eligible parties that enter into swaps in an agricultural commodity to be subject to the same provisions of the CEA and the CFTC’s regulations that apply to all other commodity swaps. In addition, all over-the-counter commodity option transactions, including options on physical commodities, would be subject to the same requirements that apply to commodity swaps.