Proposal to clarify CFTC-SEC Interpretation on Forward Contracts with Embedded Volumetric Optionality

    This proposal modifies the “seven-part” test of swap definition to: 1) to clarify that the interpretation applies to embedded volumetric optionality in the form of both puts and calls; and 2) modify the seventh element to clarify that the embedded volumetric optionality “must be primarily intended, at the time that the parties enter into the agreement, contract, or transaction, to address physical factors or regulatory requirements that reasonably influence demand for, or supply of, the nonfinancial commodity.”

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