1. Dodd-Frank For Smaller Energy Companies
March 2013
Deloitte Center for Energy Solutions
Deloitte Center for Regulatory Strategies

2. Today’s Speakers
Paul Campbell, Deloitte
Principal, Energy & Resources Practice
Michael Hinton, Allegro
Chief Customer Officer
1 Copyright © 2013 Deloitte Development LLC. All rights reserved.

3. Why the Dodd-Frank Act1 applies to you
Requirements applicable to all energy companies
Understand your swaps transactions
Understand your counterparties and establish reporting protocols
Data record-keeping and reporting obligations
End-user exception requirements
Update all swap contractual language
1 http://www.cftc.gov/LawRegulation/DoddFrankAct/index.htm
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4. Minimum requirements to be completed by April 10th
• Understand which transactions are “swaps” under Dodd-Frank
• Determine entity status (quantitative and qualitative analysis)
• Understand your reporting obligations
• Have a system set up (possibly interim) to capture all relevant data
fields
• Confirm ability to identify and aggregate all needed transaction data
• Determine whether you will be using the ISDA (International Swaps
and Derivatives Association) Protocol or IECA (International Energy
Credit Association) documentation
• Establish reporting protocols with counterparties
• Establish SDR connectivity and ability to report
• Have historical swaps identified and reported
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5. What you should consider doing now
1) Deploying Cross-functional 2) Assessing Likelihood of 3) Evaluating Technology
Dodd-Frank Implementation Being an SD/MSP Requirements and Capabilities
Team
• Engage risk, IT, compliance, • Detail all swap transactions • Develop short term reporting
accounting • Confirm ability to identify and solutions
• Engage external counsel aggregate all needed data • Identify immediate and long term
• Deploy a detailed plan, with • Disaggregate cleared vs. non- changes to ETRM systems
estimates of resources/budget cleared and hedges • Understand and build connectivity
• Maintain awareness with Senior • Document counterparties and with SEF/SDR
Management and Board of “special entities” dealing
Directors • Conduct rule by rule gap
assessment
4) Validating Recordkeeping 5) Evaluating Potential Credit 6) Preparing for Position Limit
Capabilities and Preparing for and Contract Implications Obligations (TBD)
Real-Time and General
Reporting Obligations
• Identify process changes across • Analyze liquidity impacts of • Work with IT to document needed
front, middle, and back office margin posting for cleared swaps changes and functional
• Ensure all transition swap • For uncleared swaps, determine requirements for tracking
documentation is being if counterparties are subject to positions
maintained CFTC or bank regulator margin • Identify and aggregate positions
• Identify reporting counterparty rules across entities
• Develop the process for data • Determine if changes are needed • Confirm internal notification
verification and correction to counterparty mix capabilities exist
• Develop processes for capturing • Determine the impact of DF
recordkeeping data elements contract amendments
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6. Understanding your current efforts
Identifying • Who is responsible for coordination and planning? Data management?
Stakeholders / Implementation? Ongoing compliance?
Assessing • Does our existing IT infrastructure and data management capability enable us
Capabilities to support Dodd-Frank recordkeeping and reporting requirements?
Engaging • Have we engaged external counsel?
Counsel • How are they being involved?
• Have we started to plan for implementation?
Planning for
• What is the status of our readiness and the estimated costs associated with
Implementation
implementation?
• Can we analyze and disaggregate our transaction portfolio with respect to
Dodd-Frank rules (i.e., do we know which transactions are subject to Dodd-
Portfolio
Frank and which ones are not)?
Analysis
• Do we know which of our counterparties are willing to assume reporting
responsibility?
• What is our potential classification: Swap Dealer (SD), Major Swap Participant
Entity (MSP), or non-SD/non-MSP? Do we intend to maintain this classification?
Classification • Do we know where we stand in relation to de minimis thresholds? Can we get
the right information to calculate gross notional values, etc.?
5 Copyright © 2013 Deloitte Development LLC. All rights reserved.

7. Dodd-Frank readiness stages
Stage 0 Stage 1 Stage 2 Stage 3 Stage 4
• No action • Identify internal • Counterparty • Develop process for • Scenario analysis
• Basic Dodd-Frank analysis (special swap analysis ‒ What happens
awareness implementation entity understanding) • System analysis for if prices go up?
of rule team • Hedging analysis reporting ability ‒ What happens
requirements • Engage external • Document key • Understand the if thresholds
• Limited or no counsel decisions, impacts of move?
understanding • Basic qualitative conclusions, and becoming an SD • Analyze the impact
of business analysis rationale (with legal • Determine whether of clearing
impacts (dealing vs. trading) counsel buyoff) to use ISDA or • Analyze the impact
• Basic quantitative • Contact IECA (repapering of futurization
analysis counterparties to and contractual (transacting model
‒ Notional value understand who considerations) going forward)
calculation will be reporting • Code rules and • Business model/
(including historical logic in system
‒ De minimis strategic analysis
swaps)
calculation • Implement SDR (what category do
• Start system updates interface I want to be in)
• Contract analysis
to accommodate (ICE Trade Vault) ‒ Is there a swap
(what's in/what's
data fields
out) • Determine the reporting
• Decide on deal cost/benefit of premium?
• Developing manual
reporting dealing with ‒ What is the
workarounds
reconciliation SD/MSPs versus
(database or Special Entity
strategy (yes or no) Non-SD/MSPs
spreadsheet) premium?
• Decide entity
classification
Each stage is inclusive of all prior stages
6 Copyright © 2013 Deloitte Development LLC. All rights reserved.

8. About the Deloitte Center for Energy Solutions
The Deloitte Center for Energy Solutions provides a forum for innovation, thought leadership, groundbreaking research, and industry collaboration to help
companies solve the most complex energy challenges.
Through the Center, Deloitte’s Energy & Resources Group leads the debate on critical topics on the minds of executives – from legislative and regulatory
policy, to operational efficiency, to sustainable and profitable growth. We provide comprehensive solutions through a global network of specialists and
thought leaders.
With locations in Houston and Washington, D.C., the Deloitte Center for Energy Solutions offers interaction through seminars, roundtables and other
forms of engagement, where established and growing companies can come together to learn, discuss and debate. www.deloitte.com/energysolutions
About the Deloitte Center for Regulatory Strategies
The Deloitte Center for Regulatory Strategies provides valuable insight to help organizations in the financial services, health care, life sciences, and
energy industries keep abreast of emerging regulatory requirements, regulatory trends, and compliance leading practices. Home to a team of experienced
executives, former regulators, and Deloitte professionals with extensive experience solving complex regulatory issues, the Center exists to bring relevant
information and specialized perspectives to our clients through a range of media including thought leadership, research, forums, webcasts, and events.
www.deloitte.com/us/centerregulatorystrategies
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