Changes To Commodity Laws: What Private Equity Firms Need To Know

You may have read recently about the changes to the commodity laws resulting from the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and new Commodity Futures Trading Commission (the "CFTC") rules. This alert examines how those changes will affect private equity firms.

Why Should Private Equity Firms Care About the Recent Changes to Commodity Laws?

Prior to the Dodd-Frank Act, "commodity interests" included futures contracts, options on futures contracts, and options on commodities. As a result, most private equity firms did not need to concern themselves with commodity laws. However, the Dodd-Frank Act added the term "swap" to the existing list of commodity interests, which is a broadly defined concept that includes most over-the-counter derivatives contracts.