Comment Text:
Meeting with Shell Oil Company
Monday, March 21, 2011
Memo from
Fajfar, Mark
CFTC Staff :
Dan Berkovitz
Mark Fajfar
External Attendees :
Mark Quartermain (Shell Energy North America)
Bob Reilley (Shell Energy North America)
Kevin O’Donovan (Shell Oil Company)
Additional Information :
The meeting discussed the timing and implementation of the regulations under Dodd Frank in general, as well as the following points:
1) Definition of "swap" - how to distinguish forwards from physical options, how to treat instruments that may be regulated by the Federal Energy Regulatory Commission, how to treat derivatives on emissions certificates.
2) Position limits - Shell asserted that swaps between affiliates that constitute internal, risk allocating transactions should be aggregated and netted together before applying position limits. Shell also asked for clarification regarding when a bona fide hedging exception from position limits would apply.
3) Definition of swap dealer - Shell asserted that participating in an electronic, anonymous market for swaps should not be viewed as swap dealing unless the participation is intended as part of a swap dealing business. Overall, Shell said there should be a clear dividing line between activity that is considered to be dealing and activity that is not.
