FYI- see below.

Sincerely,

Michelle Hershel
Director of Regulatory Affairs
Florida Electric Cooperatives Assoc.
2916 Apalachee Parkway
Tallahassee, FL  32301
(850)877-6166 ext.3
(850)656-5485 (fax)

-----Original Message-----
From: Russell Wasson [mailto:russell.wasson@nreca.coop]
Sent: Wednesday, March 30, 2011 10:43 AM
To: Finance Community Listserv
Subject: [fincom] NFP Coalition Comment Letter to the CFTC on Position Limits

From the Cooperative.com Finance Community Listserv:
Colleagues, attached is a copy of the NFP Coalition comment letter on position limits which we filed with the CFTC Monday evening.  In the letter we made the following points:

The Commission should streamline the regulatory requirements for utilizing the bona fide hedging transaction exemption to parallel the recommended new âCFTC-Liteâ regulatory protocol for a non-financial entity electing the end-user exception for swaps.

The Commission should provide in its rules for exemptions from the account aggregation rules that recognize the unique affiliate relationships to which non-financial entities such as the NFP electric end users are party.

The Commission should revise its proposed rules on position limits to use consistently the terms defined in the act and defined elsewhere in the proposed rules implementing the Act, such that the proposed rules work together to implement the language of the statute and establish a clear position limits regime for referenced contract markets.

The Commission should define âDeliverable Supplyâ in the proposed rule.

The Commission should define âEconomically Equivalentâ in the proposed rules.

The Commission should explain clearly the calculation methodology for non- financial entities.

The Commission should evaluate the information it receives on the different commodity markets from the position reports on physical commodity swaps before it finalizes the âsecond phaseâ of the position limits regulations.

CEA section 4a(a) does not require the Commission to impose one-size-fits-all position limits on all commodity and commodity-related derivatives markets, or to make such position limits equally applicable to all participants in such markets as âtradersâ.

All comment periods should remain open until all the basic rules under Title VII of the Act have been promulgated.  Thereafter, once the rules are finalized, the Commission should provide extended transition periods tailored to the needs of non-financial entities in the diverse markets for different categories, classes and types of swaps used as commercial risk management tools.

The Commission must consider the overall impact of itâs rules promulgated under the act on small entities.

Let me know if you have any questions.

Russ

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