Major Gas Producers Group and Corn Growers Jointly Make Recommendations on End User Exemptions from Over-the-Counter Clearing Rules under Review in Congress; EPA's Fracking Study Unsettles Some Members of Congress

摘要

The Natural Gas Supply Association (NGSA) joined the National Corn Growers Association (NCGA) in sending a letter to Senators Dodd, Chairman of the Senate Committee on Banking, Housing and Urban Affairs, and Blanche Lincoln, Chairman of Senate Committee on Agriculture, Nutrition and Forestry, this week, expressing (1) appreciation for the financial reform bill's intent to exclude commercial end-users from mandatory clearing in the over-the-counter (OTC) derivatives market, but stating (2) that a more carefully considered definition of "Swap Dealer" in the bill is needed. Without the change, "the practical effect of the legislation is mandatory clearing for many commercial end-users." NGSA has steadily argued that companies in the energy sector rely on the OTC markets to hedge transactions and provide market liquidity, to the benefit of consumers. NCGA and NGSA are concerned that the "Swap Dealer" definition as currently drafted will limit the effectiveness of the end-user clearing exclusion, unnecessarily removing productive capital from the economy.