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Working with energy and agricultural firms on Dodd-Frank Title VII for the last two years, I have encountered many misconceptions, misperceptions and assumptions about the impacts of Dodd Frank on their business. One in particular is the potentially significant impact of Title VII on acquisitions in the future. The impacts come from three areas -- transactional activity, reporting obligations and position limits. I will discuss each in order.

Transactional activity is a participant level impact from Title VII -- every entity transacting swaps is impacted. There are certain decisions that must be made for every transaction -- under Dodd-Frank it is possible to inadvertently execute a transaction illegally -- even a transaction that you have executed multiple times in the past. If you wish to be able to continue executing transactions for the new merged entity the day after closing the transaction with certainty of legality, then the transactional analysis and documentation must occur before closing. This analysis would include but not be limited to:

• Corporate classification of the new entity under Dodd-Frank;

• Revalidation of utilization of the end use exception for the new entity (if applicable);

• Validation of the reporting obligations of the acquired entity to assure contractual reporting

• bligations are understood and complied with;

• Validation of transactional operating controls for the acquired entity with acquiring firm controls;

• Validation of SEF ("Swap Execution Facility"), DCO ("Derivatives Clearing Organization") and SDR ("Swap Data Repository") contractual relationships to assure the acquiring firm can service existing DCO and SDR obligations as well as whether the new entity has appropriate SEF channels of liquidity

Reporting obligations come in two areas -- first, as noted above, the acquired firm may have preexisting reporting obligations that would continue for the life of all trades already on the books; and second, there will be specific reporting obligations that arise as part of the acquisition. The primary of these is the shift in the LEI -- Legal Entity Identifier -- for all reported swaps of the acquired firm. This LEI is included in the Primary Economic Term ("PET") data for all swaps once reporting commences. The acquisition of a firm triggers a shift of the LEI -- an event that must be reported to the appropriate SDR for each transaction on the acquired firm's books within 24 hours of the closure. This includes not just energy swaps but also any interest rate, foreign exchange or other swaps subject to Dodd Frank reporting requirements.

Finally, position limits reporting may be applicable for the new combined entity. Position limits under Dodd Frank regulations vary greatly from those previously managed by the CME and ICE as SROs ("Self Regulatory Organizations"). Under the CFTC rules, there is not just a violation regime, there is also a separate reporting regime. The reporting regime is applicable to hedging entities even if their transactions are not speculative if their positions exceed the position limits for a reference contract. Position limits are applicable on an intra-day basis -- meaning that on the day after closing, the new entity may need to calculate and report on an intraday basis.

In summary, the implication of Dodd Frank Title VII is that a firm acquiring another firm with any existing swaps -- commodity, interest rate, foreign exchange or other -- is, in essence, obligated to have full transaction data integration on the day after closing or an interim solution that will allow Dodd Frank compliance while integration occurs. While most of these Dodd Frank impacts are unlikely to be effective until sometime in 2013, certain of them -- such as position limits -- are likely to be effective sometime in Q3 or Q4 of 2012. Consideration and analysis of these obligations as part of the due diligence and acquisition process is advised.