(Reuters) - The U.S. power industry gave a cautious thumbs up to new rules defining what constitutes a "swap", a designation that some feared could raise costs or impose new limits on a large swathe of the nation's electricity markets.
Power traders, utilities and other big players worried the Commodity Futures Trading Commission (CFTC) might count transactions intended for physical delivery -- such as commodity "forward" contracts typically held until delivery -- as swaps that must be reported and may require margin or clearing costs.
But the CFTC on Tuesday appears to have excluded physically deliverable forward contracts from the swaps definition and included a seven-part test for determining the distinction between a physical "forward" and a purely financial "swap".
"We think that the CFTC did a good job of coming up with rules that seem to be well balanced and in line with the direction of congress," Richard McMahon, VP of finance at Edison Electric Institute
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