On April 11, 2011, CFTC staff met with representatives from Rabobank Nederland (“Rabobank”) and their attorneys at Davis Polk & Wardell LLP (“Davis Polk”) to discuss issues relating to the implementation of Title VII of the Dodd-Frank Act and the extra-territorial application of the CFTC’s regulations to foreign banks.  Rabobank and Davis Polk requested the meeting as a follow up to a letter dated February 17, 2011, which Rabobank co-signed and submitted to the CFTC, the Securities and Exchange Commission, and the Board of Governors of the Federal Reserve System (“Federal

Discussion of the LEI implementation issues.

The participants discussed various issues related to commodities markets, particularly the role of speculators and commodity index funds.

AGA and its members provided information on the naturgal gas distribution industry.  Participants also discussed the commodity options segment of the Ag Swaps and Commodity Options rulemaking.  Participants also discussed aspects of the proposed product defintions as they relate to options and certain transactions used by AGA's members in securing physical supply for their natural gas distribution obligations.

External participants asked questions about when swap dealers would be required to collect margin from counterparties under recently proposed CFTC rules, and raised the potential for increased legal costs for commercial end-users if they and their swap dealers must document credit support annex.

At the meeting, Americans for Financial Reform (AFR) made the following points regarding the proposed rules further defining major swap participant (MSP) and swap dealer.

The meeting discussed issues raised in a comment letter prepared by Chatham Financial on behalf of 19 community and regional banks (comment number 27974).  Primarily, the meeting focused on the exception from the definition of swap dealer available to insured depository institutions (IDI) entering into swaps in connection with the origination of loans.  Chatham believes the exception should be available so long as the aggregate notional amount of swaps between a bank and a borrower are no greater than the amount of outstanding loans to the borrower.

Northland Energy Trading (aka Hedge Solutions) elaborated on points in its comment letter dated February 22, 2011 (Comment No.

In connection with an open meeting of the European Parliament's Economic and Monetary Affairs Committee, Gary Gensler and Sharon Bowles discussed derivatives regulations under consideration by the European Parliament and the US authorities, including whether and how US regulations would apply to European banks that enter into swaps with the European subsidiaries of US banks and whether the US regulations would apply to European banks that limited their swaps activities to non-US counterparties.