Washington (Platts)--12Nov2012/131 pm EST/1831 GMT

More than half of commodity trading companies, particularly oil and natural gas producers and electric and gas utilities, have budgeted no money to comply with new derivatives reform regulations, according to a survey released Monday.

According to the survey of nearly 50 companies, more than half said they have budgeted nothing to comply with new reporting and record keeping rules the Commodity Futures Trading Commission plans to have in place early next year. Many of the firms with no budget are producers and utilities that believe they will be classified as end users under the CFTC's derivatives regulatory regime and not subject to the costly rules swap dealers and major swap participants are expected to face, the survey said. However, even end users will be subject to some reporting and recordkeeping rules, the survey said.

"In reviewing the data, there appears to be a general lack of urgency on the part of many market participants -- low or no budgets, few resources assigned to compliance efforts, and little engagement with third parties that could provide expert opinion or technology solutions that could facilitate compliance," the survey said.

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The survey was written by Patrick Reames, managing director of CommodityPoint, a Texas-based research and analysis firm, and Ed Bell, a founding member of the University of Houston's Global Energy Management Institute.

Reames said that both he and Bell "were a bit surprised to discover a significant lack of urgency on the part of many energy market participants."

Reames said many companies may have been waiting for the conclusion of this month's presidential election before moving forward with compliance efforts. Republican nominee Mitt Romney had pledged to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act and while many market participants believed that a repeal was unlikely they expected that the rules would be weakened or eliminated under with a Republican in the White House. President Barack Obama's reelection likely ensures that many of these rules will be imposed as planned.

In their survey, Reames and Bell wrote that if firms are late to comply with these new rules they "will likely remain under CFTC scrutiny for a very long time."

"As with all regulations, companies exposed to Dodd-Frank rules will be considered guilty until they prove themselves innocent ... continuously and consistently," they wrote.

--Brian Scheid, brian_scheid@platts.com
--Edited by Jeff Barber, jeff_barber@platts.com

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