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  • [Federal Register: July 2, 2009 (Volume 74, Number 126)]

    [Proposed Rules]

    [Page 31642-31647]

    From the Federal Register Online via GPO Access []





    17 CFR Part 16

    RIN 3038-AC63

    Account Ownership and Control Report

    AGENCY: Commodity Futures Trading Commission (``Commission'').

    ACTION: Advanced notice of proposed rulemaking (``Advanced Notice'')

    and request for public comment.


    SUMMARY: The Commission has determined to collect certain ownership,

    control, and related information for all trading accounts active on

    U.S. futures exchanges. The information collected will enhance market

    transparency, leverage the Commission's existing surveillance systems,

    and foster synergies between its market surveillance, trade practice,

    enforcement, and economic research programs. The Commission will

    collect relevant data via an account ``Ownership and Control Report''

    (``OCR'') submitted periodically by all reporting entities.\1\

    Tentatively, the OCR will include a trading account number; the names

    and addresses of the account's owners and controllers; the last four

    digits of the owners' and controllers' social security or tax ID

    numbers; the special account number, if one has been assigned; an

    indication of whether the account is a reportable account pursuant to

    large trader thresholds set forth under Part 18 of the Commission's

    regulations; and other relevant information.\2\ This Advanced

    [[Page 31643]]

    Notice seeks public comment on that tentative content, as well as on

    other features of the OCR's planned design. Public comments collected

    in response to this Advanced Notice will be used in developing a

    proposed rule at a later date.


    \1\ The Commission anticipates that most reporting entities will

    be designated contract markets, but they could be any registered

    entity that provides trade data to the Commission on a regular


    \2\ Under the CFTC's Large Trader Record Format, special account

    numbers contain two elements: (1) A reporting firm ID and (2) a

    unique account number assigned by the reporting firm. Special

    accounts numbers are discussed more fully in Section III(C), below.


    DATES: Comments must be received on or before August 17, 2009.

    ADDRESSES: Comments should be sent to David Stawick, Secretary,

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

    Street, NW., Washington, DC 20581. Comments may be submitted via e-mail

    at ``Account Ownership and Control Report'' must be

    in the subject field of responses submitted via e-mail, and clearly

    indicated on written submissions. Comments may also be submitted at

    FOR FURTHER INFORMATION CONTACT: Sebastian Pujol Schott, Special

    Counsel, 202-418-5641, or Cody J. Alvarez, Attorney Advisor, 202-418-

    5404, Division of Market Oversight, Commodity Futures Trading

    Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington,

    DC 20581.


    I. Background

    A. The Ownership and Control Report Will Enhance Regulatory Oversight

    in an Electronic Trading Environment

    Since the late 1990s, U.S. designated contract markets (``DCMs'')

    have rapidly evolved from open-outcry trading pits to global electronic

    platforms. In 1999, electronic trading accounted for only 5% of volume

    on all U.S. exchanges. By 2008, it was responsible for some 80% of

    volume.\3\ In addition, every new exchange designated since the year

    2000 has offered only electronic trading, and many contracts that were

    once offered in open-outcry are now available only electronically.

    While open-outcry trading remains important in specific contexts,

    including options on futures, electronic platforms are now dominant in

    the United States.


    \3\ Derived from volume data for what is today CBOT, CME, NYMEX,

    and ICE Futures U.S. These exchanges collectively account for 99% of

    the futures and options on futures trading volume on regulated

    exchanges in the U.S.


    The ascendancy of electronic trading has revolutionized the

    business of futures, and the Commission has worked diligently to keep

    pace in every respect. The Commission, and its Division of Market

    Oversight (``DMO''), have been especially vigilant in the area of

    regulatory data and technology. Under all circumstances, Commission

    staff must have the information necessary to conduct effective

    oversight, ensure market integrity, and protect customers from fraud

    and abuse. The Commission has invested heavily to modernize its

    regulatory systems, and is equally committed to obtaining the raw data

    necessary for effective surveillance of futures markets.

    In many cases, the Commission already receives the information it

    requires for effective regulation, including large trader reports for

    market surveillance and exchange trade registers for trade practice

    surveillance.\4\ The OCR will integrate these existing resources, and

    leverage them in dynamic new ways. It will facilitate innovative trade

    practice and market surveillance by DMO; bridge the gap between

    individual transactions reported on exchange trade registers and

    aggregate positions reported in large trader data; and allow other

    Commission Offices and Divisions to better utilize regulatory data in

    support of their own missions.\5\ Each of these benefits is discussed

    more fully in Section III of this Advanced Notice. In addition, as

    explained immediately below, the OCR will increase market transparency

    and respond to new regulatory data needs in an era of electronic



    \4\ ``Trade register'' is a generic term for a comprehensive,

    daily record of every trade facilitated by an exchange, whether

    executed via open-outcry, electronically, or non-competitively.

    Trade registers contain detailed information with respect to the

    terms of a trade, the parties involved, and other data points. They

    also contain trading account numbers, but no information with

    respect to the owners or controllers of those accounts. In addition,

    the trading account numbers in exchange trade registers often do not

    correspond to account numbers reported in other Commission data

    systems, including its large trader reporting system. The Commission

    has recently standardized the content and format of all trade

    registers submitted to it, which are now required to be FIXML Trade

    Capture Reports. FIXML and the Trade Capture Report are discussed in

    Section I (B), below.

    \5\ Efficient integration of large trader and trade register

    data will be one of the most important regulatory benefits deriving

    from the OCR. At present, the Commission can sometimes link the two

    data sets on a case-by-case basis, but the process is extremely

    labor-intensive, requires assistance from exchange clearing members

    and others, and does not lend itself to more routine, automated

    surveillance and follow-up investigation. See Section III (C),



    For both the Commission and exchange compliance staffs, electronic

    trading has conferred a host of informational advantages, including

    more detailed and accurate order histories, trade records, and audit

    trails. Paradoxically, it has also challenged regulatory programs

    through the growing dispersion and anonymity of market participants.

    The Commission once monitored trading on regulated exchanges via on-

    site surveillance of open-outcry pits. Today, that surveillance is

    primarily electronic and data-driven. Indeed, as exchange trading has

    shifted to electronic platforms, trade data has become the device by

    which the Commission ``sees'' its regulated markets.\6\ Together with

    trade registers and large trader reports, the OCR will allow the

    Commission to see more clearly and completely by identifying otherwise

    anonymous market participants and revealing links between apparently

    unrelated trading accounts whose aggregate behavior is of regulatory



    \6\ The Commission notes that it continues to conduct on-site

    surveillance of exchange's remaining trading floors.


    The detail and depth of the regulatory data available to the

    Commission is substantial, but insufficient to substitute for the

    unique information once imparted by a physical presence on exchanges'

    trading floors. Member brokers and locals, once clustered in compact

    rings and readily identifiable to Commission staff, have given way to

    large, widely dispersed pools of opaque persons trading on electronic

    platforms. While case-by-case manual inquiry is possible, the

    Commission has no way to identify traders and trading accounts quickly

    and independently. To the contrary, what is now visible to the

    Commission--trade data--instead reflects unknown individuals directing

    trades on behalf of unnamed accounts. The result is a growing lack of

    transparency from which even exchange compliance departments sometimes

    suffer.\7\ The OCR project seeks to redress this imbalance of

    information, and to realign the Commission's data resources with its

    modern regulatory needs. Moreover, OCR data will also enhance

    exchanges' internal regulatory efforts.


    \7\ While accounts and persons executing trades are uniquely

    designated in the trade data, those designations do not reveal the

    actual identities of traders or of account owners or controllers,

    nor do they reveal relationships between trading accounts. Gathering

    such information requires a time consuming manual effort by

    Commission staff with the aid of exchanges, exchange clearing

    members, and others. Exchange compliance departments must engage in

    their own time consuming efforts when they require information with

    respect to trading account owners, controllers, and relationships

    for self-regulatory purposes.


    B. The Commission's Surveillance Systems and the Trade Capture Report

    The Commission's surveillance programs include daily collection of

    trade data from all U.S. DCMs or their

    [[Page 31644]]

    regulatory service providers.\8\ The data collected is central to the

    Commission's trade practice surveillance program, and of growing

    importance to market surveillance and other regulatory efforts, as

    explained below. Presently, market and trade practice surveillance

    utilize distinct platforms--the Integrated Surveillance System

    (``ISS'') for market surveillance and the Trade Surveillance System

    (``TSS'') for trade practice surveillance. Broadly speaking, ISS

    facilitates the storage, analysis, and mining of large trader data

    while TSS does the same for trade data. The systems include a range of

    tools for automated surveillance, pattern detection, ad hoc examination

    of raw data, and investigation. One valuable benefit of the OCR is that

    it will effectively integrate these two primary systems by linking

    individual transactions reported on exchange trade registers (TSS) with

    aggregate positions reported in large trader data (ISS). TSS and ISS

    are described more fully in Section III, below.


    \8\ At present, there are 14 DCMs with listed contracts.


    While ISS is a long-standing system, TSS and the data streams that

    support it are newer. The Commission has invested significant resources

    to develop TSS, adopting a comprehensive new platform better suited for

    monitoring electronic trading than TSS's predecessor. One important

    component of TSS is the Trade Capture Report, a new data standard

    governing the trade registers submitted daily to the Commission by all

    DCMs. The Trade Capture Report was developed through a collaborative

    effort between the Commission, DCMs, and others, under the auspices of

    the Joint Compliance Committee.\9\ Design of the Trade Capture Report

    was formally completed in August of 2008.


    \9\ The Joint Compliance Committee (``JCC'') is an information

    sharing organization whose members include compliance officials from

    all U.S. DCMs. Commission staff representing DMO's Market Compliance

    Section also participates in JCC meetings. In May of 2007, at the

    Commission's request, the JCC created the Trade Surveillance Data

    Subcommittee (``TSDS'') to improve the manner in which trade data

    was submitted to the Commission. The TSDS determined to pursue the

    Trade Capture Report.


    Briefly stated, the Trade Capture Report is an electronic file that

    employs the Financial Information eXchange Markup Language (``FIXML'')

    to uniformly tag or designate trade information provided to the

    Commission. Exchanges transmit their Trade Capture Reports daily via

    Secure File Transfer Protocol (``SFTP''). All information received is

    processed overnight by TSS and available to Commission staff early the

    following morning.\10\ Trade Capture Reports contain trade and related

    order data for every matched trade facilitated by an exchange, whether

    executed via open-outcry, electronically, or non-competitively.\11\

    Among the data included in the Trade Capture Report are trade date,

    product, contract month, trade time, price, quantity, trade type (e.g.,

    open outcry outright future, electronic outright option, give-up,

    spread, block, etc.), executing broker, clearing member, opposite

    broker and clearing member, customer type indicator, trading account

    numbers, and numerous other data points. Additional information is also

    required for options on futures, including put/call indicators and

    strike price, as well as for give-ups, spreads, and other special trade

    types. Noticeably absent from Trade Capture Report data, however, is

    any account ownership or control information.


    \10\ As noted above, the Commission already receives trade

    registers from all DCMs, and has developed a new trade register

    format called the Trade Capture Report. DCMs are currently

    transitioning to the Trade Capture Report, a process which the

    Commission expects to be completed by the end of 2009.

    \11\ E.g., block trades.


    The Trade Capture Report is central to the OCR project. As noted

    above, the Trade Capture Report provides the trading account numbers

    for both sides of a reported trade; the OCR, in turn, will provide

    biographical data for those account numbers. The elements of an OCR are

    set forth below.

    II. Ownership and Control Report Outline

    The OCR will serve as an ownership, control, and relationship

    directory for every trading account number reported to the Commission

    through exchanges' Trade Capture Reports. The data points contemplated

    for the OCR have been specifically selected to achieve four Commission

    objectives. These include: (1) Identifying with certainty all accounts

    that are under common ownership or control at a single exchange; (2)

    identifying with certainty all accounts that are under common ownership

    or control at multiple exchanges; (3) identifying all trading accounts

    whose owners or controllers are also included in the Commission's large

    trader reporting program (including Forms 40 and 102); and (4)

    identifying the entities to which the Commission should have recourse

    if additional information is required, including the trading account's

    executing firm and clearing firm, and the name(s) of the firm(s)

    providing OCR information for the trading account.

    A. Specific Data Points Required by the Ownership and Control Report

    To ensure that the objectives outlined above are achieved, the

    Commission believes the OCR should include the following information:

    --The trading account number, as reported in the Trade Capture Report

    (see TCR tags 448 and 452, Party Role 24);

    --Name and address of the trading account's owner(s);

    --Date on which the trading account was assigned to its current


    --Name and address of the trading account's controller(s);

    --Date on which the trading account was assigned to its current


    --The account controller or controllers' Commodity Trading Advisor

    number(s), if applicable;

    --Special account number, if one has been assigned;

    --Indication of whether the trading account is a reportable account;

    --Indication of whether the trading account is a firm omnibus account,

    and if so, the name of the firm;

    --Name of the executing firm for the trading account, and its unique

    identifier as reported in the TCR (see TCR tags 448 and 452, Party Role


    --Name of the clearing firm for the trading account, and its unique

    identifier as reported in the TCR (see TCR tags 448 and 452, Party Role


    --The last four digits of the Social Security number or taxpayer

    identification number of the trading account's owner(s) and


    --Name of the firm(s) providing OCR information for the trading


    --Name of the exchange or other entity submitting the OCR to the


    --OCR transmission date.

    B. Form, Manner, and Frequency of the Ownership and Control Report

    The Commission anticipates that exchanges (and possibly other

    registered entities) will submit their OCRs weekly, in FIXML via SFTP.

    Each exchange's first OCR submission will constitute a ``master file''

    containing the required data for all trading account numbers present in

    the Trade Capture Report during the previous 30 days. The master file

    will establish a baseline directory. Each subsequent OCR should be a

    weekly ``change file'' reporting only additions, deletions, or

    amendments to the master file; if the reported change includes changes

    to an account's owners or controllers, the precise date of such

    [[Page 31645]]

    change should also be reported. The Commission understands that

    exchanges may not possess all of the information contemplated for the

    OCR, and that they may have to collect it from outside sources.

    III. Additional Benefits Derived From the Ownership and Control Report

    The OCR will facilitate important regulatory objectives in the

    areas of market transparency; trade practice and market surveillance;

    and enhanced enforcement and research programs. Many of the OCR's

    systemic benefits have already been outlined above. It will allow the

    Commission to see its regulated markets more clearly and completely

    than before, and help it adjust to new regulatory data needs given that

    electronic platforms have become the dominant venue for regulated

    futures trading in the United States. It will also enhance the

    Commission's surveillance capabilities--for example, by allowing staff

    to aggregate trading accounts under common ownership or control;

    facilitating links between reporting firms' large trader reports and

    exchanges' trade registers; and improving the Commission's detection

    and deterrence capabilities with respect to specific trading practices

    and market abuses.\12\ Similarly, the OCR will introduce new

    efficiencies in surveillance and enforcement programs by automating

    what are currently slow, labor-intensive practices. The OCR will also

    allow the Commission to compensate for the loss of exchange trading

    floors and the information imparted by daily physical surveillance of a

    small, concentrated, and well-known universe of exchange members.

    Furthermore, it will allow the Commission to maximize the benefits of

    more detailed and accurate electronic trading records, and to better

    oversee trading by widely dispersed individuals and accounts whose

    identities and relationships otherwise cannot be ascertained quickly

    and efficiently by Commission staff.


    \12\ Reporting firms include exchange clearing members, futures

    commission merchants, and foreign brokers.


    In addition to broad, Commission-wide benefits, the OCR will

    facilitate specific programs administered by the Commission's Division

    of Enforcement (``DOE''), Office of the Chief Economist (``OCE''), and

    DMO. Specific examples from each Office and Division are provided


    A. The Division of Enforcement

    DOE investigates and prosecutes alleged violations of the Commodity

    Exchange Act (``Act'') and Commission regulations. It can act against

    any number of persons and entities suspected of such violations,

    including individuals and firms registered with the Commission, those

    who are engaged in commodity futures and option trading on designated

    domestic exchanges, and those who improperly market futures and options

    contracts. DOE proceedings typically begin with careful investigations

    based on leads developed internally or information referred by other

    Commission divisions, industry self-regulatory associations; state,

    federal, and international authorities; and members of the public. At

    the conclusion of any investigation, DOE may recommend that the

    Commission initiate administrative proceedings or take action in

    Federal court. When DOE obtains evidence that criminal violations of

    the Act have occurred, it may refer the matter to the Department of

    Justice for prosecution.

    The OCR will be of immediate help to DOE's investigatory work,

    especially work that relies on aggregating related trading accounts.

    DOE investigations in the areas of intra-day manipulation and trade

    practice rely on exchange trade registers/Trade Capture Reports. At

    present, however, the inherent absence of ownership and control

    information in Trade Capture Report data presents an obstacle when DOE

    is investigating potential price manipulations or trade practice

    abuses, such as front-running. As noted previously, the Trade Capture

    Report does not identify account owners or controllers, nor does it

    aggregate accounts under common ownership or control. Thus, any DOE

    investigations that are dependent on such information face special

    obstacles. DOE staff must first identify the universe of accounts

    traded in a relevant period, then request and await information from

    outside the Commission to identify the entity associated with the

    account number, and finally aggregate all identified entities that

    relate to a common owner. Only then can staff assess a particular

    owner's trading activity. This time-consuming process must be re-

    created every time DOE initiates an intra-day trading manipulation

    investigation. The Commission believes the information contained in the

    OCR will significantly reduce the time and resources expended in

    determining the identities and relationships between account holders,

    and thus facilitate DOE investigative activity across markets and


    B. The Office of the Chief Economist

    OCE conducts research on major policy issues facing the Commission

    and assesses the economic impact of regulatory changes on the futures

    markets. It also participates in the development of Commission

    rulemakings, provides expert advice to other Commission offices and

    divisions, and conducts special studies and evaluations as required. An

    important objective of OCE is to help the Commission achieve deeper and

    more sophisticated knowledge of the futures markets from the data

    available to it. The OCR will advance this objective in significant


    OCE is particularly interested in the OCR as a tool for enhancing

    the transparency of regulated markets through the disclosure of

    information on related accounts. It has a number of initiatives under

    way designed to enhance the Commission's surveillance capabilities,

    assist in enforcement, and improve data integrity. Related account

    information derived from the OCR will help OCE to better link traders'

    intraday transactions with their end-of-day positions. It will also

    help OCE to calculate how different categories of traders contribute to

    market wide open-interest. Building on these results, OCE will achieve

    more sophisticated benefits for the Commission, including new avenues

    of surveillance and enforcement tools. For example, armed with OCR/

    Trade Capture Report-derived data, OCE will eventually be able to

    accurately identify and categorize market participants based on their

    actual trading behavior on a contract-by-contract basis, rather than on

    how they self-report to the Commission (e.g. registration type,

    marketing/merchandising activity, etc. on Commission Form 40).

    In addition to these specific projects, ownership and control

    information available via the OCR will allow OCE to perform more

    complete and accurate studies and provide more targeted guidance to

    other Commission staff in pursuing trade practice violations and

    attempted manipulations.

    C. The Division of Market Oversight

    DMO's primary responsibility is to ensure that U.S. futures markets

    accurately reflect the underlying forces of supply and demand for all

    products traded, and that futures markets are free from fraud and

    abuse. DMO monitors all futures and option markets to detect and

    prevent price manipulation, abusive trading practices, and customer

    harm. It is concerned with both aggregate abuses against the market

    (market surveillance)

    [[Page 31646]]

    and individual trading violations (trade practice surveillance); often,

    the two are connected. DMO's surveillance efforts include routine

    monitoring of markets and trades, and detailed, data-driven

    investigations of both when appropriate.

    DMO's market surveillance and trade practice surveillance programs

    rely on ISS and TSS, respectively, as their primary technology

    platforms. ISS tools and data serve to detect and prevent price

    manipulation and market congestion on regulated exchanges, and to

    enforce speculative position limits pursuant to section 4g of the Act.

    ISS receives data from reporting firms via large trader reports filed

    daily with the Commission. Large trader reports show open end-of-day

    positions in futures and options that are at or above specific

    reporting levels set by the Commission (``large traders''). Related

    accounts are aggregated by reporting firms and given a ``special

    account number'' which DMO uses to track their consolidated end of day

    positions. Through ISS, DMO can account for 70 to 90% of the total open

    interest in a given market.

    ISS' strength lies in capturing market-wide open interest and the

    large traders most responsible for that open interest. At the same

    time, ISS is limited by its inability to reconstruct trading and

    determine how large traders established their reportable positions.

    ISS, whose data includes large traders' names but not their trading

    account numbers, cannot communicate with TSS, whose data includes

    trading account numbers, but no names. This simple disconnect prevents

    the efficient integration of market and trade practice surveillance by

    DMO. The Commission is determined to link TSS trading account numbers

    with ISS large trader names though the OCR.

    As previously explained, DMO's trade practice surveillance program

    relies on TSS as its primary technology platform. Armed with trade

    register/Trade Capture Report data, TSS aids in the detection,

    analysis, and investigation of numerous abusive trading practices,

    including trading ahead of customer orders, wash trading, pre-arranged

    trading, money-passing, and other violations. TSS and trade register/

    Trade Capture Report data also aid in the detection of market abuses,

    such as banging the close, and in enforcement and research programs led

    by other Commission offices and Divisions.

    Like ISS, TSS possesses both strengths and limitations arising from

    its raw data resources. TSS' power lies in its totality of information:

    it is a detailed record of every trade executed on every U.S. futures

    exchange every day. It is a robust instrument for customer protection,

    direct monitoring of markets by DMO, and oversight of exchange self-

    regulation. In this era of electronic trading, TSS is an unparalleled

    means of ``seeing'' regulated markets directly and without filter. TSS'

    limitations, however, are equally data-driven. TSS is unable to quickly

    aggregate related trading accounts because its Trade Capture Report

    data feeds do not contain the necessary ownership and control

    information. DMO cannot efficiently police for small and medium sized

    traders whose open interest does not reach reportable levels, but who

    can still have deleterious effects on the markets during concentrated

    periods of intra-day trading. Similarly, trade practice violations

    whose discovery might depend on recognizing concerted action by related

    accounts are more difficult to detect. The Commission can resolve each

    of these limitations via the OCR.

    While DMO's current data resources are substantial, the OCR will

    elevate them to a level of sophistication and completeness that is

    appropriate for the size and complexity of modern futures markets.

    Integrated data--large trader reports in ISS, trade data in TSS, and

    OCR ownership and control information to bind them together--will

    complete the information chain for the Commission's entire surveillance

    infrastructure. For the first time, DMO will be empowered to monitor

    the totality of a market in an efficient, integrated, and automated

    manner. No more than 24 hours after trades are executed and positions

    are established, DMO will see everything from large reportable

    positions to the individual trades responsible for those positions, and

    down further to the individual account owners and controllers

    responsible for those trades. Similarly, DMO will be empowered to

    monitor markets from the bottom up, linking individual accounts under

    common ownership and control, aggregating their intra-day trading, and

    viewing their end-of-day positions even when they do not reach

    reporting thresholds.

    Equipped with the OCR and its resulting synergies, all futures

    transactions will be fully transparent to DMO. DMO staff will have the

    ability to perform more timely analyses of trading activity in order to

    detect price distortions, manipulative conduct, trade practice abuses,

    and customer harm on individual markets and across markets and


    D. Exchange Compliance Departments

    While this Advanced Notice has focused primarily on the OCR's

    benefit to the Commission, OCR data may also be useful to exchange

    compliance departments and other regulatory entities in the futures

    industry. Many of the information challenges faced by the Commission

    are shared by other industry regulatory bodies who are themselves

    striving for maximum market transparency and effective regulation.

    Indeed, at least one major exchange already works with an information

    file that seeks to accomplish some of the same goals as the OCR. The

    exchange uses a ``related accounts file'' to aggregate certain trading

    accounts that are under common control, if those trading accounts are

    associated with a reportable account. The information collected thus

    acts as a reference file and supplement to the exchange's large trader

    reporting system. The exchange's related accounts file does not

    necessarily collect the same information as the Commission's

    contemplated OCR. However, the Commission believes that all exchanges

    can benefit from the OCR, and from the complete data set proposed in

    this Advanced Notice.

    IV. Request for Comments

    The Commission invites public comment on any relevant aspect of the

    OCR contemplated in this Advanced Notice. In addition, to help the

    Commission formulate an effective and practical rule implementing the

    OCR, the Commission encourages responses to the following specific


    1. Is there additional information, not included in Section II(A),

    that should be included in the OCR?

    2. What is the lifecycle of the information required by the OCR?

    Who possesses it at a root level? From what types of entities will

    exchanges draw the information required by the OCR (e.g. exchange

    clearing members, non-member futures commission merchants, etc.)? How

    will exchanges obtain OCR information?

    3. Will OCR information be more difficult to acquire for some

    account types than for others? If so, what types of accounts will

    present a greater challenge and why? How can the challenge be overcome?

    4. The Commission expects that initially the OCR will be submitted

    in FIXML via FTP. Is there a better way to electronically transmit the

    OCR? Is there an existing FIXML report that may be used to transmit OCR

    information? If not, is there an existing FIXML report that can be

    easily modified to supply the information contained in the OCR?

    5. The Commission anticipates that each exchange will initially

    transmit a ``master file'' containing the required information for

    every trading account

    [[Page 31647]]

    number included in the Trade Capture Report during the previous month

    or longer. The master file will effectively establish a baseline of

    account information. Subsequently, each exchange would be required to

    file a weekly ``change file'' reporting only changes that occurred

    during the week (e.g., new accounts, deleted accounts, or changes to

    accounts already in the master file). Is there a more convenient way to

    provide the required information on a regular basis? Do changes occur

    so frequently that a change file should be submitted daily instead of


    6. What entities will have to report raw data to exchanges so that

    exchanges can compile the information required by the OCR? Since these

    entities will already be in possession of OCR information, what

    additional measures will they have to take to transmit it to exchanges

    or prepare it for transmission? What will be the dollar and staff-hour

    cost of those measures? To the extent possible, please itemize costs

    related to initial implementation as well as regular reporting costs.

    7. How long will it take exchanges to assemble the necessary

    information and transmit the first OCR to the Commission? What will be

    the dollar and staff-hour costs associated with providing the OCR? To

    the extent possible, please itemize costs related to initial

    implementation as well as regular reporting.

    8. Will the OCR impose any disparate impact on small businesses? If

    so, how can it be minimized? Please describe and estimate the number of

    small entities that will be impacted.

    V. Conclusion

    The Commission invites comment on this Advanced Notice and the

    specific questions presented above. The comments and answers received

    will be used in developing a proposed rule with respect to the OCR at a

    later date.

    Issued in Washington, DC, on June 26, 2009 by the Commission.

    David Stawick,

    Secretary of the Commission.

    [FR Doc. E9-15665 Filed 7-1-09; 8:45 am]

    Last Updated: May 9, 2012

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