The Energy and Commerce Committee of the U.S. House of Representatives approved H.R. 2454, The American Clean Energy and Security Act (Energy Act), a bill containing provisions directly aimed at over-the-counter derivatives. The Energy Act establishes default regulatory authority of the Commodity Futures Trading Commission over allowance derivative markets, and amends the Commodity Exchange Act to provide greater oversight of energy derivatives and credit default swaps (CDS). More specifically, Sec. 355 of the Energy Act limits the eligibility of CDS purchasers by providing that each such purchaser must (i) own a credit instrument insured by the CDS; (ii) experience financial loss if an event subject of the CDS occurs with respect to the credit instrument; and (iii) meet certain minimum capital adequacy standards.
A copy of the current draft of the Energy Act is available here.