FIA/ISDA Comment Letter
RIN 3038-AD21
April 1, 2011
FIA and ISDA File Comment Letter on Commodity Options and Agricultural Swaps (April 1, 2011) FIA and ISDA filed a joint letter on April 1 commenting on the CFTC's proposed rule on the regulation of commodity options and agricultural swaps that are traded over-the-counter.
The two associations expressed support for the proposal to apply the same rules to agricultural swaps that apply to all other OTC commodity derivatives under the Dodd-Frank Act, rather than applying separate or more restrictive rules to these products, and to treat agricultural trade options in the same way as all other commodity options (except for options on futures). Lastly, the two associations urged the CFTC to continue to treat certain transactions that have embedded options as forward contracts, and urged the CFTC to address the issue of whether agricultural options should be treated as swaps in the context of a separate rulemaking process being carried out jointly with the SEC.
Cross References
Dodd-Frank Act, Title VII, Secs. 723(c)(3) 733; new CEA Sec. 5h(b)(2); 76 Fed. Reg. 6095