Alert December 06, 2011

CFTC Issues Proposed Interpretive Guidance Regarding Anti-Fraud Authority in Retail Commodity Transactions

The CFTC voted to issue proposed interpretive guidance regarding an exception to the CFTC’s expanded authority over certain retail commodity transactions under Section 742(a) of the Dodd-Frank Act, which requires them to be conducted on a regulated exchange and subjects them to the CFTC’s anti-fraud authority.  Addressing an exception to those requirements that applies if “actual delivery” of the commodity is made within 28 days, the proposed guidance describes the CFTC’s approach to determining whether there has been “actual delivery” and provides examples of when “actual delivery” does and does not occur.  Comments on the proposed guidance are due no later than 60 days after the proposal is published in the Federal Register.