CFTC Extends No-Action Relief to Regional Transmission Organization (CFTC Letter 15-69)

The CFTC Division of Clearing and Risk, Division of Market Oversight and Division of Swap Dealer and Intermediary Oversight further extended no-action relief for a Regional Transmission Organization ("RTO") from certain CEA provisions for specified transactions that are offered or entered into pursuant to its FERC-approved tariff. The additional no-action relief exempts agreements, contracts and transactions for the purchase and sale of certain "transmission congestion rights," "energy transactions," and "operating reserve transactions," ("Subject Transactions") from the provisions of the CEA and CFTC regulations. Specifically, the additional no-action relief exempts agreements primarily from CEA Section 4(c)(6) ("Regulation of Futures Trading and Foreign Transactions - Public Interest Exemptions,") other than the enforcement provisions. These transactions are offered on the RTO's Integrated Marketplace.

The CFTC stipulated that in order to qualify for the exemption, in addition to the Subject Transactions being offered or sold pursuant to the RTO's FERC-approved tariff, each party to the agreement, contract or transaction must be the RTO, its members or other market participants who meet the requirements of an "appropriate person" as defined in the CFTC's RTO-ISO Final Order of April 2, 2013 (78 Fed. Reg. 19,880). That Final Order granted similar exemptive relief to certain RTOs and independent system operators.

The initial no-action relief was scheduled to expire on the earlier of August 31, 2014 or the date on which the CFTC took final action on the RTO's application for an exemption under CEA Section 4(c)(6) and Dodd-Frank Section 712(f)(4) ("Review of Regulatory Authority - Rules and Registration Before Final Effective Dates"). Subsequently, the CFTC extended the no-action relief to February 28, 2015, to September 30, 2015, and to December 31, 2015.

The extended no-action relief will expire on February 15, 2016.