Dodd-Frank commodity option rules sow confusion among energy firms

Confusion over CFTC rules is tying US energy firms in knots, as they struggle to determine whether their physically settled commodity options need to comply with critical rules issued under the US Dodd-Frank Act. Alexander Osipovich reports

As the US Commodity Futures Trading Commission (CFTC) has written thousands of pages of rules to implement the Dodd-Frank Act, many market participants have complained that the new regulations are confusing and difficult to put into practice. But few issues have sown quite as much confusion as the CFTC's treatment of commodity options.

Oil companies, natural gas suppliers and distributors and electric utilities all use various contracts that provide for the physical delivery of an energy