The Interstate Natural Gas Association of America and its members (collectively, “INGAA”) submit these comments in response to the Commission’s request for comments relating to certain interpretive guidance in the Commission’s Swap Definition Final Rule. INGAA offers these comments on the Commission’s interpretation in subsection II.B.2.(b)(iii) (“Certain Physical Commercial Agreements, Contracts, or Transactions”) of the Swap Definition Final Rule.
INGAA respectfully requests that the Commission, and to the extent necessary the Securities and Exchange Commission (“SEC”), confirm that the Commission will follow the standards adopted in the 1985 Interpretative Statement concerning the characteristics of an option in determining whether a transaction will be regulated as an option subject to the swap definition.
Consistent with the 1985 Interpretative Statement, INGAA requests that the Commission take the following specific actions concerning its Facility Services Agreement Guidance: (1) remove in its entirety or otherwise strike the three-part test on page 48,242 of the Swap Definition Final Rule (the “Three-Part Test”); (2) remove in its entirety or otherwise strike the paragraph on page 48,242 of the Swap Definition Final Rule referring to a “demand charge or reservation fee” and “usage fees” (the “However Paragraph”); and (3) as explained below, clarify that agreements for service on natural gas pipeline and storage facilities that do not have the characteristics of an option under the 1985 Interpretative Statement and related precedent are not options subject to the swap definition and that the mere existence of a two-part fee structure is not determinative of whether a particular agreement is an option subject to the swap definition.