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2010-26912

  • FR Doc 2010-26912[Federal Register: October 27, 2010 (Volume 75, Number 207)]

    [Proposed Rules]

    [Page 66014-66018]

    From the Federal Register Online via GPO Access [wais.access.gpo.gov]

    [DOCID:fr27oc10-16]

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    COMMODITY FUTURES TRADING COMMISSION

    17 CFR Part 160

    RIN 3038-AD13

    Privacy of Consumer Financial Information; Conforming Amendments

    Under Dodd-Frank Act

    AGENCY: Commodity Futures Trading Commission.

    ACTION: Notice of proposed rulemaking.

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    SUMMARY: The Commodity Futures Trading Commission (``Commission'' or

    ``CFTC'') is proposing to amend its rules under part 160 of its

    Regulations to implement new statutory provisions enacted by Titles VII

    and X of the Dodd-Frank Wall Street Reform and Consumer Protection Act

    (``Dodd-Frank Act''). Section 1093 of the Dodd-Frank Act provides for

    certain amendments to Title V of the Gramm-Leach-Bliley Act (``GLB

    Act'')--which sets forth certain protections for the privacy of

    consumer financial information--affirming the Commission's jurisdiction

    in this area. This proposal broadens the scope of Part 160 to cover two

    new entities created by Title VII of the Dodd-Frank Act: Swap dealers

    and major swap participants. In addition, the Commission proposes to

    rename Part 160 as ``Privacy of Consumer Financial Information under

    the Gramm-Leach-Bliley Act'' to harmonize the title of this part with

    other parts of the Commission's Regulations.

    DATES: Comments must be received on or before December 27, 2010.

    ADDRESSES: You may submit comments, identified by RIN number 3038-AD13,

    by any of the following methods:

    Federal eRulemaking Portal: http://www.regulations.gov.

    Follow the instructions for submitting comments.

    E-mail: infoprivacy@cftc.gov.

    Mail: David A. Stawick, Secretary of the Commission,

    Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st

    Street, NW., Washington, DC 20581.

    Hand Delivery/Courier: Same as mail above.

    All comments must be submitted in English, or if not, accompanied

    by an English translation. Comments will be posted as received to

    http://www.cftc.gov. You should submit only information that you wish

    to make available publicly. If you wish the Commission to consider

    information that is exempt from disclosure under the Freedom of

    Information Act, 5 U.S.C. 552, a petition for confidential treatment of

    the exempt information may be submitted according to the established

    rules in section 145.9 of the Commission's Regulations.\1\

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    \1\ 17 CFR 145.9.

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    The Commission reserves the right, but shall have no obligation, to

    review, pre-screen, filter, redact, refuse or remove any or all of your

    submission from http://www.cftc.gov that it may deem to be

    inappropriate for publication, such as obscene language. All

    submissions that have been redacted or removed that contain comments on

    the merits of the rulemaking will be retained in the public comment

    file and will be considered as required under the Administrative

    Procedure Act, 5 U.S.C. 551 et seq., and other applicable laws, and may

    be accessible under the Freedom of Information Act.

    FOR FURTHER INFORMATION CONTACT: Carl E. Kennedy, Counsel, Office of

    General Counsel, (202) 418-6625, e-mail: c_kennedy@cftc.gov, Commodity

    Futures Trading Commission, Three Lafayette Centre, 1155 21st Street,

    NW., Washington, DC 20581.

    SUPPLEMENTARY INFORMATION:

    I. Background

    On July 21, 2010, President Obama signed the ``Dodd-Frank Wall

    Street Reform and Consumer Protection Act'' (``Dodd-Frank Act'').\2\

    Title VII of the Dodd-Frank Act,\3\ which substantially amended the

    Commodity Exchange Act (``CEA''),\4\ established a comprehensive new

    regulatory framework for swaps and security-based swaps. It lowers risk

    in the financial system, increases transparency, and promotes market

    integrity by, among other things: (1) Providing for the comprehensive

    regulation of swap dealers and major swap participants; (2) imposing

    clearing and trade execution requirements on standardized products; (3)

    creating a robust real-time reporting regime; and (4) enhancing the

    Commission's enforcement authorities.

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    \2\ See Dodd-Frank Wall Street Reform and Consumer Protection

    Act, Public Law 111-203, 124 Stat. 1376 (2010). The text of the

    Dodd-Frank Act may be accessed at http://www.cftc.gov.

    \3\ Under Section 701 of the Dodd-Frank Act, Title VII may be

    cited as the ``Wall Street Transparency and Accountability Act of

    2010.''

    \4\ 7 U.S.C. 1 et seq.

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    Title X of the Dodd-Frank Act creates a new consumer financial

    services regulator, the Bureau of Consumer Financial Protection (the

    ``Bureau''), that will assume most of the consumer financial services

    regulatory responsibilities currently spread among numerous agencies.

    More specifically, the Dodd-Frank Act removes from the jurisdiction of

    the Federal Trade Commission (``FTC'') its rulemaking and other

    authorities granted pursuant to Federal consumer law, and cedes that

    authority to the Bureau. In addition, section 1093 of the Dodd-Frank

    Act amends Title V of the GLB Act (15 U.S.C. 6801 et seq.), to, inter

    alia, reaffirm the Commission's authority to promulgate regulations to

    require entities that are subject to the Commission's jurisdiction to

    provide certain privacy protections for consumer financial information.

    Specifically, section 1093 of the Dodd-Frank Act amends section 504 of

    the GLB Act by providing that ``the [CFTC] shall have the authority to

    prescribe such regulations as may be necessary to carry out the

    purposes of [Title V of the GLB

    [[Page 66015]]

    Act] with respect to any financial institutions and other persons

    subject to the jurisdiction of the [CFTC] under section 5g of the

    [CEA].'' (Emphasis added.)

    As enacted, Title V of the GLB Act \5\ (``Title V''), inter alia,

    limits the instances in which a financial institution may disclose

    nonpublic personal information about a consumer to nonaffiliated third

    parties, and requires a financial institution to disclose to all of its

    customers the institution's privacy policies and practices with respect

    to information sharing with both affiliates and nonaffiliated third

    parties.\6\

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    \5\ Public Law 106-102, 113 Stat. 1338 (1999) (codified in

    scattered sections of 12 U.S.C. and 15 U.S.C.).

    \6\ GLB Act sections 501-510, 15 U.S.C. 6801-6809.

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    In 2000, the Commodity Futures Modernization Act of 2000 (``CFMA'')

    created section 5g of the CEA, providing that the Commission be treated

    as a Federal functional regulator within the meaning of Title V.\7\

    Section 5g also granted the Commission the authority to adopt rules

    that establish appropriate standards for financial institutions subject

    to its jurisdiction to safeguard customer records and information.

    Section 5g provides that the following entities are subject to the

    Commission's jurisdiction for the purposes of Title V: Futures

    commission merchants (``FCMs''), commodity trading advisors (``CTAs''),

    commodity pool operators (``CPOs''), and introducing brokers (``IBs'')

    (collectively, ``CFTC registrants'').

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    \7\ The other agencies subject to GLB Act jurisdiction include

    the Office of the Comptroller of the Currency (``OCC''); Board of

    Governors of the Federal Reserve System (``Board''); Federal Deposit

    Insurance Corporation (``FDIC''); Office of Thrift Supervision

    (``OTS''); National Credit Union Administration (``NCUA''); FTC; and

    Securities and Exchange Commission (``SEC'').

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    The Commission's consumer information privacy rules are set out in

    Part 160 of the Commission's regulations, which require CFTC

    registrants to adopt appropriate policies and procedures that address

    safeguards to customer records and information, including initial and

    annual privacy notice requirements, opt-out provisions to the extent

    that these registrants wish to share such records and information with

    non-affiliates and other measures to protect nonpublic consumer

    information. The protections provided in Part 160 inure to the benefit

    of individual consumers.\8\ The Commission recently amended the scope

    of Part 160 and the definition of ``financial institution'' to include

    retail foreign exchange dealers (``RFEDs'').\9\

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    \8\ Section 160.3(h)(1) of the Commission's Regulations defines

    the term consumer to mean ``an individual who obtains or has

    obtained a financial product or service from [a financial

    institution] that is to be used primarily for personal, family or

    household purposes, or that individual's legal representative.''

    \9\ See 75 FR 55410, 55450 (Sept. 10, 2010).

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    Title VII of the Dodd-Frank Act creates two new entities over which

    the Commission has jurisdiction: Swap dealers (``SDs'') and major swap

    participants (``MSPs'').\10\ The Commission proposes in this rulemaking

    to: (1) Expand the scope of Part 160 of its Regulations to apply to SDs

    and MSPs; (2) in accordance with the transfer of authority in Title X,

    changing all references in Part 160 from the FTC to the Bureau; and (3)

    rename Part 160 to ``Privacy of Consumer Financial Information under

    the Gramm-Leach-Bliley Act'' to harmonize the title of part 160 with

    the new part of the Commission's Regulations, which provide protections

    to certain customer information under the FCRA.

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    \10\ The terms ``SD'' and ``MSP'' as used in this proposed

    regulation refer to the statutory definitions of such terms as

    defined in Title VII of the Dodd-Frank Act, and as may be further

    defined by the Commission in a future rulemaking. See section 721(b)

    of the Dodd-Frank Act, which provides that the Commission has the

    authority to adopt rules further defining any term in an amendment

    to the CEA in the Dodd-Frank Act. See also section 721(c) which

    provides that the Commission is required to adopt a rule to further

    define, inter alia, the terms ``swap dealer'' and ``major swap

    participant'' to include transactions and entities that have been

    structured to evade provisions in the Dodd-Frank Act.

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    The Commission requests comment on all aspects of these conforming

    amendments, as well as comment on specific provisions and issues

    highlighted in the section-by-section analysis below.

    II. Section-by-Section Analysis

    A. Specific Section Amendments

    Renaming Part 160

    Another provision in Title X of the Dodd-Frank Act, section 1088,

    provides that the Commission promulgate regulations under various

    sections of the Fair Credit Reporting Act, 15 U.S.C. 1608 et seq.

    Similar to Title V of the GLB Act, the FCRA sets forth safeguards for

    the protection of a broader range of consumer information. Under a

    separate rulemaking, the Commission proposes to create a new part in

    its Regulations to provide protections under the FCRA. To harmonize the

    title of Part 160 with the new part being adopted by the Commission

    promulgated under Title X of the Dodd-Frank Act, the Commission

    proposes to rename Part 160 as ``Privacy of Consumer Financial

    Information under the Gramm-Leach-Bliley Act.'' \11\

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    \11\ Section 1088 of the Dodd-Frank Act provides the CFTC with

    authority to implement regulations under sections 624 and 628 of the

    FCRA.

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    Regulation 160.1(b) Scope

    Regulation 160.1(b) sets out the scope of the Commission's rules

    and identifies the financial institutions covered by the rules that

    include CFTC registrants regardless whether they are required to

    register with the Commission. The Commission proposes to add SDs and

    MSPs to the scope of Part 160 (and to the definition of ``financial

    institution'' therein) because, for example, these new entities may

    enter into swap transactions with individuals who qualify as ``eligible

    contract participants''.\12\ Section 1a(18)(A)(xi) defines ``eligible

    contact participant'' to include any individual who has amounts

    invested on a discretionary basis, the aggregate of which is in excess

    of either $10,000,000 or, if certain other qualifications are met,

    $5,000,000. As a result of this addition, SDs and MSPs that transact

    swaps with individuals would have to comply with the various provisions

    under Part 160, including requirements to protect the nonpublic

    personal information of these individuals. Of course, if any SD or MSP

    has no business interactions with natural persons, no obligations would

    arise under this proposal. This proposal would ensure that all CFTC

    registrants that enter into swap transactions with natural persons

    would provide privacy protections to any nonpublic, consumer

    information.

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    \12\ New section 2(e) of the CEA--as enacted under 723(a)(2) of

    the Dodd-Frank Act--provides that it is ``unlawful for any person,

    other than an eligible contract participant, to enter into a swap

    unless the swap is entered into on, or subject to the rules of, a

    board of trade designated as a contract market under section 5 [of

    the CEA].''

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    Section 160.3--Definitions

    Since the scope of the proposed regulations would extend to SDs and

    MSPs, the Commission proposes to amend section 160.3 to add the

    definitions of SDs and MSPs to the list of defined terms under section

    160.3. Specifically, the Commission proposes to define ``major swap

    participant'' to have the same meaning as in section 1a(33) of the CEA,

    as further defined by the Commission's Regulations, and includes any

    person registered as such thereunder. The Commission proposes to define

    ``swap dealer'' to have the same meaning as in section 1a(49) of the

    CEA, as further defined by the Commission's Regulations, and includes

    any person registered as such thereunder. There are existing

    definitions and related

    [[Page 66016]]

    provisions under Part 160 that must be amended to include these new

    registrants. Specifically, the definitions of ``financial

    institution'', ``affiliate'', and ``you'' must be amended to include

    swap dealers and major swap participants.

    Section 160.15--Other Exceptions to Notice and Opt Out Requirements

    As noted above, Title X of the Dodd-Frank Act transferred certain

    authority from the FTC to the Bureau. Accordingly, we changed the

    reference from the FTC to the Bureau in section 160.15 to reflect that

    the Bureau is now a Federal functional regulator.

    Section 160.17(b)--Relation to State Laws

    As a result of the creation of the Bureau and the transfer of

    certain authority from the FTC to the Bureau, the Commission proposes

    to amend paragraph (b) by replacing it with the language similar to

    section 1041(a)(2) of the Dodd-Frank Act. This section clarifies the

    relationship of Title V to state consumer protection laws.

    Specifically, section 1041(a)(2) provides, ``For the purposes of this

    section, a [State] statute, regulation, order, or interpretation * * *

    is not inconsistent with the provisions of [Title V] if the protection

    that such statute, regulation, order, or interpretation affords to

    consumers is greater than the protection provided under [Title V]. A

    determination regarding whether a [State] statute, regulation, order,

    or interpretation * * * is inconsistent with the provisions of [Title

    V] may be made by the Bureau on its own motion or in response to a

    nonfrivolous petition initiated by any interested person.''

    Section 160.30--Procedures To Safeguard Customer Records and

    Information

    Section 160.30 requires CFTC registrants to adopt policies and

    procedures that, among other things, address administrative, technical

    and physical safeguards for the protection of customer records and

    information. The Commission proposes to amend the introductory sentence

    of section 160.30 to add SDs and MSPs to the list of CFTC registrants

    that must comply with this requirement.

    B. Effective Date

    Pursuant to section 1100H of the Dodd-Frank Act, the Commission

    proposes to make the proposed regulations--the affiliate marketing

    rules and the disposal rules--become effective on the ``designated

    transfer date'' of authority from various Federal agencies to the

    Bureau. Section 1062 of the Dodd-Frank Act provides that the

    ``designated transfer date'' is a date designated in the Federal

    Register no later than 60 days after the enactment of the Dodd-Frank

    Act by the Secretary of the Treasury, the Chairman of the Board of

    Governors, the Chairman of the Federal Trade Commission, and several

    other Federal agencies.\13\ On September 20, 2010, these Federal

    agencies issued a notice designating July 21, 2011 as the designated

    transfer date.\14\ As a result, the Commission proposes to adopt the

    affiliate marketing rules and the disposal rules on that date.

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    \13\ The heads of the other Federal agencies are: The

    Comptroller of the Currency; the Director of the Office of Thrift

    Supervision; the Secretary of the Department of Housing and Urban

    Development; the Director of the Office of Management and Budget;

    the Chairman of the National Credit Union Administration Board; and

    the Chairperson of the Corporation.

    \14\ See 75 FR 57252-02 (Sept. 20, 2010).

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    III. Related Matters

    A. Cost-Benefit Analysis

    Section 15(a) of the CEA \15\ requires the Commission to consider

    the costs and benefits of its actions before issuing an order under the

    CEA. By its terms, section 15(a) does not require the Commission to

    quantify the costs and benefits of amendments to regulations to

    determine whether the benefits of the amendments outweigh its costs;

    rather, it requires that the Commission ``consider'' the costs and

    benefits of its actions. Section 15(a) further specifies that the costs

    and benefits shall be evaluated in light of five broad areas of market

    and public concern: (1) Protection of market participants and the

    public; (2) efficiency, competitiveness and financial integrity of

    futures markets; (3) price discovery; (4) sound risk management

    practices; and (5) other public interest considerations. The Commission

    may in its discretion give greater weight to any one of the five

    enumerated areas and could in its discretion determine that,

    notwithstanding its costs, a particular amendment is necessary or

    appropriate to protect the public interest or to effectuate any of the

    provisions or accomplish any of the purposes of the Act. The proposed

    conforming rule amendments would broaden the scope of Part 160 to cover

    SDs and MSPs.

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    \15\ 7 U.S.C. 19(a).

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    With respect to costs, the Commission has determined that the

    proposed conforming amendments are necessary to implement various

    consumer financial information privacy provisions as they relate to SDs

    and MSPs, by adding these new registrants to the list of financial

    institutions responsible for complying with its provisions under part

    160 of its Regulations.

    The Commission has determined that market participants and the

    public may be harmed if these new registrants are not added to part

    160. The notice requirements under part 160 were established to protect

    individual customers who do business with CFTC registrants. There is no

    reason why SDs and MSPs should be excluded from these requirements to

    the extent that they conduct business with a natural person. With

    respect to benefits, the Commission has determined that requiring

    financial institutions to protect the privacy of nonpublic personal

    information about consumers is a benefit that must be maintained given

    the risks to the public if it is not, given the minor costs to the

    financial institutions affected by the conforming amendments.

    The Commission invites public comment on its cost-benefit

    considerations. Commenters are also invited to submit any data or other

    information that they may have quantifying or qualifying the costs and

    benefits of the proposal.

    B. Paperwork Reduction Act

    Under the Paperwork Reduction Act (``PRA'') an agency may not

    conduct or sponsor, and a person is not required to respond to, a

    collection of information unless it displays a currently valid control

    number.\16\ The proposed amendments to Part 160 of the Commission's

    Regulations include a collection of information within the meaning of

    the PRA. The Commission therefore is submitting this proposal to the

    Office of Management and Budget (``OMB'') for review in accordance with

    44 U.S.C. 3507(d) and 5 CFR 1320.11, together with a request for

    approval of a revision to the Commission's currently approved

    collection associated with part 160. The title of the collection of

    information to be revised is ``Privacy of Consumer Financial

    Information,'' OMB Control Number 3038-0055. If approved, the provision

    of notice to this revised collection of information would be mandatory

    for SDs and MSPs.

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    \16\ 44 U.S.C. 3501 et seq.

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    1. Information Provided by Reporting Entities

    The proposed rule would require SDs and MSPs to provide initial and

    annual privacy and opt-out notices to all customers that are natural

    persons. It is not currently known how many SDs and MSPs will be

    required to register as such with the Commission, and this will

    [[Page 66017]]

    not be known to the Commission until registration requirements for

    these entities become effective after July 15, 2011, the date on which

    the Dodd-Frank Act becomes effective.

    Nonetheless, for purposes of calculating PRA burden, the Commission

    estimates that there will be approximately 300 SDs and MSPs who would

    be required to provide notices under part 160 on an initial and then on

    an annual basis.\17\ It is anticipated that most SDs and MSPs will not

    transact business with a significant number of natural persons, causing

    the Commission to estimate that each SD and MSP will issue an average

    of 20 notices per year. As previously estimated, the average time per

    notice will be .24 hours. This will result in an annual aggregate of

    1,440 burden hours.

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    \17\ While staff believes that there may likely be approximately

    200 swap dealers, we have taken a conservative approach in

    estimating that there will be 250 swap dealers for PRA purposes.

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    2. Information Collection Comments

    The Commission invites the public and other Federal agencies to

    comment on any aspect of the reporting and recordkeeping burdens

    discussed above. Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission

    solicits comments in order to: (i) Evaluate whether the proposed

    collection of information is necessary for the proper performance of

    the functions of the Commission, including whether the information will

    have practical utility; (ii) evaluate the accuracy of the Commission's

    estimate of the burden of the proposed collection of information; (iii)

    determine whether there are ways to enhance the quality, utility, and

    clarity of the information to be collected; and (iv) minimize the

    burden of the collection of information on those who are to respond,

    including through the use of automated collection techniques or other

    forms of information technology. Comments may be submitted directly to

    the Office of Information and Regulatory Affairs, by fax at (202) 395-

    6566 or by e-mail at OIRAsubmissions@omb.eop.gov. Please provide the

    Commission with a copy of submitted comments so that they can be

    summarized and addressed in the final rule. Refer to the ADDRESSES

    section of this notice of proposed rulemaking for comment submission

    instructions to the Commission. A copy of the supporting statements for

    the collections of information discussed above may be obtained by

    visiting RegInfo.gov. OMB is required to make a decision concerning the

    collection of information between 30 and 60 days after publication of

    this release. Consequently, a comment to OMB is most assured of being

    fully effective if received by OMB (and the Commission) within 30 days

    after publication of this notice of proposed rulemaking.

    C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA'') requires that agencies

    consider whether their proposed regulations will have a significant

    economic impact on a substantial number of small entities and, if so,

    provide a regulatory flexibility analysis respecting the impact.\18\

    The Commission's proposed regulations now will affect SDs and MSPs, in

    addition to the CFTC registrants that are currently subject to

    Commission's Regulations under Part 160. These regulations require

    periodic notice to be provided to individuals who obtain financial

    products or services primarily for personal, family, or household

    purposes from the institutions, and may be satisfied by the use of a

    model notice developed by the Commission and other regulatory agencies

    to minimize the burden of compliance. Accordingly, the Commission has

    determined that the obligations created by these rule amendments will

    not create a significant economic impact on a substantial number of

    small entities. Accordingly, the Chairman, on behalf of the Commission,

    hereby certifies pursuant to 5 U.S.C. 605(b) that the proposed rules

    will not have a significant impact on a substantial number of small

    entities.

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    \18\ 5 U.S.C. 601 et seq.

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    List of Subjects in 17 CFR Part 160

    Brokers, Dealers, Consumer protection, Privacy, Reporting and

    recordkeeping requirements.

    For the reasons articulated in the preamble, the Commission

    proposes to amend Part 160 of Title 17 of the Code of Federal

    Regulations as follows:

    1. The heading of part 160 is revised to read as follows:

    PART 160--PRIVACY OF CONSUMER FINANCIAL INFORMATION UNDER TITLE V

    OF THE GRAMM-LEACH-BLILEY ACT

    2. The authority citation for part 160 is revised to read as

    follows:

    Authority: 7 U.S.C. 7b-2 and 12a(5); 15 U.S.C 6801, et seq.,

    and title X, sec. 1093, Pub. L. 111-203, 124 Stat. 1376.

    3. Amend Sec. 160.1 by revising paragraph (b) to read as follows:

    Sec. 160.1 Purpose and scope.

    * * * * *

    (b) Scope. This part applies only to nonpublic personal information

    about individuals who obtain financial products or services primarily

    for personal, family, or household purposes from the institutions

    listed below. This part does not apply to information about companies

    or about individuals who obtain financial products or services

    primarily for business, commercial, or agricultural purposes. This part

    applies to all futures commission merchants, retail foreign exchange

    dealers, commodity trading advisors, commodity pool operators,

    introducing brokers, major swap participants and swap dealers that are

    subject to the jurisdiction of the Commission, regardless whether they

    are required to register with the Commission. These entities are

    hereinafter referred to in this part as ``you.'' This part does not

    apply to foreign (non-resident) futures commission merchants, retail

    foreign exchange dealers, commodity trading advisors, commodity pool

    operators, introducing brokers, major swap participants and swap

    dealers that are not registered with the Commission.

    * * * * *

    4. Amend Sec. 160.3 as follows:

    a. Revise paragraphs (a), (n)(1)(i), (n)(2)(i), and (o)(1)(i);

    b. Redesignating paragraphs (w) and (x) as paragraphs (y) and (z);

    c. Redesignating paragraphs (s) through (v) as paragraphs (t)

    through (w);

    d. Adding new paragraphs (s) and (x); and

    e. Revising newly designated paragraphs (y)(4) and (5) and adding

    new paragraphs (y)(6) and (7) to read as follows:

    Sec. 160.3 Definitions.

    * * * * *

    (a) Affiliate of a futures commission merchant, retail foreign

    exchange dealer, commodity trading advisor, commodity pool operator,

    introducing broker, major swap participant, or swap dealer means any

    company that controls, is controlled by, or is under common control

    with a futures commission merchant, retail foreign exchange dealer,

    commodity trading advisor, commodity pool operator, introducing broker,

    major swap participant, or swap dealer that is subject to the

    jurisdiction of the Commission. In addition, a futures commission

    merchant, retail foreign exchange dealer, commodity trading advisor,

    commodity pool operator, introducing broker, major swap participant, or

    swap dealer subject to the jurisdiction of the Commission will

    [[Page 66018]]

    be deemed an affiliate of a company for purposes of this part if:

    (1) That company is regulated under Title V of the GLB Act by the

    Bureau of Consumer Financial Protection or by a Federal functional

    regulator other than the Commission; and

    (2) Rules adopted by the Bureau of Consumer Financial Protection or

    another Federal functional regulator under Title V of the GLB Act treat

    the futures commission merchant, retail foreign exchange dealer,

    commodity trading advisor, commodity pool operator, introducing broker,

    major swap participant, or swap dealer as an affiliate of that company.

    * * * * *

    (n)(1) * * *

    (i) Any futures commission merchant, retail foreign exchange

    dealer, commodity trading advisor, commodity pool operator, introducing

    broker, major swap participant, or swap dealer that is registered with

    the Commission as such or is otherwise subject to the Commission's

    jurisdiction; and

    (ii) * * *

    (2) * * *:

    (i) Any person or entity, other than a futures commission merchant,

    retail foreign exchange dealer, commodity trading advisor, commodity

    pool operator, introducing broker, major swap participant, or swap

    dealer that, with respect to any financial activity, is subject to the

    jurisdiction of the Commission under the Act.

    * * * * *

    (o)(1) * * *:

    (i) Any product or service that a futures commission merchant,

    retail foreign exchange dealer, commodity trading advisor, commodity

    pool operator, introducing broker, major swap participant, or swap

    dealer could offer that is subject to the Commission's jurisdiction;

    and

    * * * * *

    (s) Major swap participant. The term ``major swap participant'' has

    the same meaning as in section 1a(33) of the Commodity Exchange Act, 7

    U.S.C. 1 et seq., as may be further defined by this title, and includes

    any person registered as such thereunder.

    * * * * *

    (x) Swap dealer. The term ``swap dealer'' has the same meaning as

    in section 1a(49) of the Commodity Exchange Act, 7 U.S.C. 1 et seq., as

    may be further defined by this title, and includes any person

    registered as such thereunder.

    (y) * * *

    (4) Any commodity pool operator;

    (5) Any introducing broker;

    (6) Any major swap participant; and

    (7) Any swap dealer subject to the jurisdiction of the Commission.

    * * * * *

    5. Amend Sec. 160.15 by revising paragraph (a)(4) to read as

    follows:

    Sec. 160.15 Other exceptions to notice and opt out requirements.

    (a) * * *

    (4) To the extent specifically permitted or required under other

    provisions of law and in accordance with the Right to Financial Privacy

    Act of 1978, 12 U.S.C. 3401 et seq., to law enforcement agencies

    (including a Federal functional regulator, the Secretary of the

    Treasury, with respect to 31 U.S.C. Chapter 53, Subchapter II (Records

    and Reports on Monetary Instruments and Transactions) and 12 U.S.C.

    Chapter 21 (Financial Recordkeeping), a State insurance authority, with

    respect to any person domiciled in that insurance authority's state

    that is engaged in providing insurance, and the Bureau of Consumer

    Financial Protection), self-regulatory organizations, or for an

    investigation on a matter related to public safety;

    * * * * *

    6. Amend Sec. 160.17 by revising paragraph (b) to read as follows:

    Sec. 160.17 Relation to state laws.

    * * * * *

    (b) Greater protection under state law. For purposes of this

    section, a state statute, regulation, order or interpretation is not

    inconsistent with the provisions of this part if the protection such

    statute, regulation, order or interpretation affords to any consumer is

    greater than the protection provided under this part. A determination

    regarding whether a state statute, regulation, order, or interpretation

    is inconsistent with the provisions of this part may be made by the

    Bureau of Consumer Financial Protection, after consultation with the

    Commission, on its own motion or in response to a nonfrivolous petition

    initiated by any interested person.

    7. Revise Sec. 160.30 to read as follows:

    Sec. 160.30 Procedures to safeguard customer records and information.

    Every futures commission merchant, retail foreign exchange dealer,

    commodity trading advisor, commodity pool operator, introducing broker,

    major swap participant, and swap dealer subject to the jurisdiction of

    the Commission must adopt policies and procedures that address

    administrative, technical and physical safeguards for the protection of

    customer records and information.

    By the Commission.

    Dated: October 19, 2010.

    David A. Stawick,

    Secretary.

    Statement of Chairman Gary Gensler

    Privacy of Consumer Financial Information; Conforming Amendments Under

    Dodd-Frank Act

    October 19, 2010

    I support today's Commission vote on the notice of public

    rulemaking, which expands the scope of the Commission's existing

    protections afforded to consumers' information to two new entities

    created by the Dodd-Frank Act. The proposed rulemaking expands the

    Commission's Part 160 rules to customers of swap dealers and major swap

    participants. Part 160 includes the Commission's existing privacy rules

    for consumers.

    [FR Doc. 2010-26912 Filed 10-26-10; 8:45 am]

    BILLING CODE 6351-01-P

    Last Updated: October 27, 2010