6.1. ERMUSR 08-11-2009 - Laserfiche WebLink

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Public Power Weekly announced July 7 that the commission would hold hearings this summer on what it should do "to ensure the fair, open and efficient functioning of futures markets," including the energy commodities markets. Gensler said the commission would look at whether it needs additional powers from Congress to reach that goal. APPA and the others said they have concerns with recent proposals to impose mandatory clearing of all OTC transactions, as well as requirements that OTC derivative transactions be moved onto an exchange. The high cash margin requirements of a clearinghouse or an exchange "would significantly increase transaction costs, and tie up needed cash at a time when the cost of capital is high, access to capital markets is uncertain, and our industries need to invest billions in new energy infrastructure," the groups said. And because clearinghouses and exchanges require a high level of standardization and liquidity in the derivatives and commodities products traded, "we believe that such proposals would greatly reduce the ability of companies to find the customized derivative products they need to manage their risks," they said. "Ultimately these increased costs and risks will be borne by all consumers." "We believe that there are far better ways to accomplish the goals of greater transparency and effective regulatory oversight of OTC energy derivatives and commodities markets without mandatory clearing or forcing these products to be moved onto an exchange," they concluded. -JEANNINE ANDERSON White House wants to tighten oversight of credit rating firms The Obama administration on July 21 sent proposed legislation to Capitol Hill to increase transparency, tighten oversight and reduce reliance on credit rating companies. The legislation is designed to reduce conflicts of interest at credit rating companies-notably by barring the companies from providing consulting services to companies they also rate-while strengthening the Securities and Exchange Commission's authority over and supervision of rating agencies, the Treasury Department said. The draft bill also would require an issuer to disclose all of the preliminary ratings it had received from different credit rating companies so investors would see how much "ratings shopping" happened and whether there were discrepancies with the final rating, Treasury said. Companies would be required to provide a much fuller picture of the risks in .,, `'~~`~ Vice President, Publishing :Jeanne Wickline LaBella !202/467-2948 JLaBella(p~APPAnet.orp Editor :Robert Varela '202/467-2947 !RVarelaC~APPAnet.org http://www.naylornetwork.com/app-ppw/printFriendly.asp?projlD=3214 (2 of 21)7/28/2009 3:37:08 AM