UBS: Frank-Dodd End-User Exemption Less of a Possibility

The Commodity Futures Trading Commission's desire to assert jurisdiction over power markets suggests that a broad end-user exemption from the Frank-Dodd regulations for the energy sector, "is less of a possibility," analysts at UBS Securities said in a research note to clients.

"We increasingly understand that the CFTC will push ahead with asserting its jurisdiction over power contracts, suggesting a broad end-user exemption from the Frank-Dodd regulations for the energy sector is less of a possibility," said a noted authored by UBS Securities' Electric Utilities & IPPs Group. UBS' observations grew out of recent meetings with several federal regulators as well as industry lobbyists and participants in Washington, D.C.

"We anticipate that this is likely to feature more prominently in utility concerns as discussion over the end-user exemption timeline moves forward in '12; we understand a political solution to this concern remains a possibility," UBS told clients.