Washington (Platts)--5May2011/507 pm EDT/2107 GMT

Since the US Commodity Futures Trading Commission began developing the rules that will ultimately make up their over-the-counter derivatives regulatory regime, the majority of concerns over who will be defined as a swap dealer have not come from big banks or other financial institutions, according to Dan Berkovitz, the CFTC's general counsel.

Instead, the majority of comments that the CFTC has received over roughly the past 10 months have come from electric utilities, large integrated energy companies, oil companies and oil and natural gas exploration companies, Berkovitz said Thursday during a panel discussion at an Energy Bar Association conference.

These energy firms argue that while they may hedge risk in the swaps market, their primary business is not in the swaps market and they feel they should not be classified as swaps dealers under the new regime, he said.

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Big banks, like JP Morgan and Goldman Sachs, know they will be defined as swaps dealers, but energy firms are unsure if they will be subject to a slew of new clearing, margin and reporting requirements.

"That's an issue we're looking at very closely," Berkovitz said. "That's a critical issue."

But the issue is one that energy firms have no more clarity on now, after the CFTC has proposed more than 50 new rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act, than when President Obama signed Dodd-Frank into law in July, according to David Holden, vice president, enterprise risk management at Dominion Resources.

"Nothing has changed," Holden said during the panel.

Holden said that when Dodd-Frank was first proposed he was concerned that energy firms, like Dominion, would be treated the same as banks with a business primarily in the swaps market.

"My concerns are still there," he said.

Berkovitz said that energy firms may, ultimately, get a limited designation as a swap dealer, which would impact a particular part of their swaps activity, but not their hedging activity.

Additionally, he said that the CFTC is looking at the abilities of all entities in complying with all the new requirements and potentially phasing in new rules for different entities.

In particular, Holden said that he viewed the new requirements for swaps reporting, particular numerous new steps his firm would need to take in getting a deal through a clearinghouse, as "daunting."

"We have good tools, good systems, but we are not engineered to support this requirement," he said.

The CFTC has yet to finalize any of the new swaps rules it has proposed and is currently in the process of determining what order these rules will be finalized. The agency last week announced it would reopen all proposed swaps rules for another 30 days of public comment.

--Brian Scheid, brian_scheid@platts.com