These markets are highly developed for commodities such as liquid energy and others, such as electricity, are rapidly maturing. Market participants should be just as free to negotiate OTC commodity contracts as they are OTC financial contracts. This has happened in OTC energy contracts. Action should be taken now so those problems do not grow. We need to encourage the same innovation in commodity markets that we now enjoy in financial markets.
Innovation helps consumers and producers better manage risk.
Commercial counterparties should be able to negotiate private contracts, be they financial or commodity based, on the same set of rules. This definition raises as many questions as it answers. Many contracts that seem to have a nearly inexhaustible supply, such as U.S. Treasury securities, have been subject to price manipulation. And their supply is far from inexhaustible. But clearly no one feels they should be excluded from trading on a DTF facility.