WSPP Dodd-Frank Presentation

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Overview of the Swap Regulations (cont.) • Forward Contract with Embedded Option 1. may be used to adjust the forward contract price; may not undermine the overall nature of the contract as a forward contract 2. does not target the delivery term, so that the predominant feature of the contract is actual delivery; and 3. cannot be severed and marketed separately from the overall forward contract in which it is embedded
Overview of the Swap Regulations (cont.) • Forward Contract with Embedded Volumetric Optionality 1. does not undermine the overall nature of the contract as a forward contract 2. the predominant feature of the contract is actual delivery 3. cannot be severed and marketed separately from the overall contract in which it is embedded 4. the seller intends to deliver if the optionality is exercised 5. the buyer intends to take delivery if it exercises the embedded volumetric optionality 6. both parties are commercial parties 7. the exercise or non-exercise of the embedded volumetric optionality is based primarily on physical factors, or regulatory requirements, that are outside the control of the parties and are influencing demand for, or supply of, the nonfinancial commodity.
Page 1 and 2: Dodd-Frank Swap Regulations and the
Page 3 and 4: Overview of the Swap Regulations
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Page 11 and 12: WSPP Agreement Transaction As Forwa
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Page 25: Contact For more information, pleas

WSPP Dodd-Frank Presentation

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