The Commodity Futures Trading Commission has proposed to amend its order exempting specified electric energy-related transactions administered by regional transmission organizations (RTOs) and independent system operators (ISOs) from certain provisions of the Commodity Exchange Act (CEA). As set forth in the order, these transactions currently are exempt from all provisions of the CEA with the exception of the CFTC’s general anti-fraud and anti-manipulation authority and scienter-based prohibitions under CEA Sections 2(a)(1)(B), 4(d), 4b, 4c(b), 4o, 4s(h)(1)(A), 4s(h)(4)(A), 6(c), 6(d), 6(e), 6c, 6d, 8, 9 and 13, and any regulations promulgated thereunder.
The US Court of Appeals for the Fifth Circuit recently held that the CFTC’s RTO-ISO order proscribes private rights of action under Section 22 of the CEA. As a result, the CFTC is proposing to amend its RTO-ISO order to provide that these energy-related transactions are subject to the private rights of action provisions of Section 22.
Public comments on this proposal should be submitted within 30 days after the proposal’s publication in the Federal Register.
The CFTC’s proposal is available here.