2015-32417
[Federal Register Volume 80, Number 247 (Thursday, December 24, 2015)]
[Notices]
[Pages 80327-80329]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32417]
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COMMODITY FUTURES TRADING COMMISSION
Agency Information Collection Activities: Proposed Collection
Revision, Comment Request: Final Rule for Records of Commodity Interest
and Related Cash or Forward Transactions
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice.
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SUMMARY: The Commodity Futures Trading Commission (``CFTC'' or the
``Commission'') is announcing an opportunity for public comment on the
proposed revision to the collection of certain information by the
Commission. Under the Paperwork Reduction Act (``PRA''), Federal
agencies are required to publish notice in the Federal Register
concerning each proposed collection of information and to allow 60 days
for public comment. The Commission recently adopted a final rule that
amends the Commission Regulation dealing with records of commodity
interest and related cash or forward transactions (the ``Final Rule'').
The Final Rule modifies some of the recordkeeping requirements that
apply to certain participants in the markets regulated by the
Commission. This notice solicits additional comments on the PRA
implications of the amended recordkeeping requirements that are set
forth in the Final Rule, including comments that address the burdens
associated with the modified information collection requirements of the
Final Rule.
DATES: Comments must be submitted on or before February 22, 2016.
ADDRESSES: You may submit comments, identified by ``OMB Control No.
3038-0090; Records of Commodity Interest and Related Cash or Forward
Transactions Collection,'' by any of the following methods:
The Commission's Web site, via its Comments Online process
at http://comments.cftc.gov/. Follow the instructions for submitting
comments through the Web site.
Mail: Christopher Kirkpatrick, 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.
Federal eRulemaking Portal: http://www.regulations.gov/.
Follow the instructions for submitting comments through the Portal.
Please submit your comments using only one method.
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.
FOR FURTHER INFORMATION CONTACT: Katherine Driscoll, Associate Chief
Counsel, (202) 418-5544, [email protected]; August A. Imholtz III,
Special Counsel, (202) 418-5140, [email protected]; or Lauren Bennett,
Special Counsel, (202) 418-5290, [email protected], Division of Swap
Dealer and Intermediary Oversight, Commodity Futures Trading
Commission, 1155 21st Street NW., Washington, DC 20581.
SUPPLEMENTARY INFORMATION: The Final Rule amends Regulation 1.35(a).
The collections of information related to Regulation 1.35(a) have been
previously reviewed and approved by OMB in accordance with the PRA \1\
and assigned OMB Control Number 3038-0090. Section 3506(c)(2)(A) of the
PRA, 44 U.S.C. 3506(c)(2)(A), requires Federal agencies to provide a
60-day notice in the Federal Register concerning each proposed
collection of information before submitting the collection to OMB for
approval. To comply with this requirement, the CFTC is publishing
notice of the proposed revision to the collection of information listed
below.
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\1\ 44 U.S.C. 3501 et seq.
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Title: Adaption of Regulations to Incorporate Swaps--Records of
Transactions (OMB Control No. 3038-0090). This is a request for an
extension
[[Page 80328]]
and revision of a currently approved information collection.
Abstract: The Commission amended Regulation 1.35(a) to: (1) Exclude
members of designated contract markets (``DCMs'') and members of swap
execution facilities (``SEFs'') that are not registered or required to
register with the Commission (``Unregistered Members'') from the
requirement to keep written communications that lead to the execution
of a commodity interest transaction and related cash or forward
transactions; (2) exclude Unregistered Members from the requirement to
maintain records in a particular form and manner; (3) exclude
Unregistered Members from the requirement to retain text messages; (4)
exclude commodity trading advisors (``CTAs'') from the oral
recordkeeping requirement; and (5) provide that all records required to
be kept under the regulation must be kept in a form and manner which
permits prompt, accurate and reliable location, access, and retrieval
of any particular record, data, or information; and clarify that all
records, except records of oral and written communications leading to
the execution of a transaction in a commodity interest and related cash
or forward transactions, must be kept in a form and manner that allows
for identification of a particular transaction.
With respect to the collection of information, the CFTC invites
comments on:
Whether the proposed revision to the collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information will have a practical
use;
The accuracy of the Commission's estimate of the burden of
the proposed revision to the collection of information, including the
validity of the methodology and assumptions used;
Ways to enhance the quality, usefulness, and clarity of
the information to be collected; and
Ways to minimize the burden of collection of information
on those who are to respond, including through the use of appropriate
automated electronic, mechanical, or other technological collection
techniques or other forms of information technology; e.g., permitting
electronic submission of responses.
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 you believe is exempt from disclosure under the
Freedom of Information Act, a petition for confidential treatment of
the exempt information may be submitted according to the procedures
established in Regulation 145.9.\2\
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\2\ 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 information collection request will be retained in
the public comment file and will be considered as required under the
Administrative Procedure Act and other applicable laws, and may be
accessible under the Freedom of Information Act.
Burden Statement: In the Notice of Proposed Rulemaking, the
Commission's preliminary estimate stated that no additional
recordkeeping or information collection requirements or changes to
existing collection requirements would result from the proposed
amendments to Regulation 1.35(a).\3\ The Commission subsequently
determined, however, that the amendments to Regulation 1.35(a) likely
will reduce the current information collection burdens on affected
market participants under OMB control number 3038-0090.
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\3\ See Records of Commodity Interest and Related Cash or
Forward Transactions, 79 FR 68140, 68144 (Nov. 4, 2014).
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1. Exclusion of Unregistered Members From Requirement To Maintain
Records of Pre-Trade Written Communications
Pursuant to the prior version of Regulation 1.35(a), which was
published in 2012, Unregistered Members were required to keep written
communications that lead to the execution of a commodity interest
transaction and related cash or forward transactions.\4\ The Final Rule
states that Unregistered Members are not required to keep written
communications that lead to the execution of a commodity interest
transaction and related cash or forward transactions. Therefore, their
compliance costs, and the associated information collection burden,
with respect to this particular aspect of the rule will be eliminated.
The Commission estimates that this change to Regulation 1.35(a) will
decrease the information collection burden under the rule by
approximately one-half hour per week per entity. The Commission
estimates based on select market data that there are approximately
3,200 Unregistered Members that will have their recordkeeping
obligations reduced as a result of this element of the Final Rule.
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\4\ See Adaptation of Regulations to Incorporate Swaps--Records
of Transactions, 77 FR 75523 (Dec. 21, 2012) (the ``2012 Rule'').
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2. Exclusion of Unregistered Members From Requirement To Maintain
Records in a Particular Form and Manner
Pursuant to the prior version of Regulation 1.35(a), which was
published in 2012, Unregistered Members were required to comply with
the form and manner requirements of the rule.\5\ The Final Rule states
that Unregistered Members are not required to keep their required
records in a prescribed form and manner. Therefore, their compliance
costs, and the associated information collection burden, with respect
to this particular aspect of the rule will be eliminated. The
Commission estimates that this change to Regulation 1.35(a) will
decrease the information collection burden under the rule by
approximately one-half hour per month per entity. The Commission
estimates based on select market data that there are approximately
3,200 Unregistered Members that will have their recordkeeping
obligations reduced as a result of this element of the Final Rule.
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\5\ Id.
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3. Exclusion of Unregistered Members From Requirement To Retain Text
Messages
The records that must be kept under Regulation 1.35 include text
messages, as well as other forms of electronic records. The Final Rule
amends Regulation 1.35(a) to provide that Unregistered Members are not
required to maintain records of text messages.\6\ The Final Rule
defines ``text messages'' as written communications sent from one
telephone number to one or more telephone numbers by short message
service (``SMS'') or multimedia messaging service (``MMS''). It can be
difficult or cumbersome to transfer SMS and MMS messages to computers,
storage devices, or storage media, and to maintain and access the
messages on an ongoing basis. Therefore, the Commission believes that
eliminating this requirement for Unregistered Members will reduce their
recordkeeping burden by eliminating the time required to periodically
[[Page 80329]]
transfer these messages to computers, storage devices, or storage
media, as well as the time required to periodically confirm the
transfer and retention of the messages. The Commission estimates that
Unregistered Members would spend approximately one-half hour per month
preserving and maintaining text messages in the manner described above.
The Commission estimates based upon select market data that there are
approximately 3,200 Unregistered Members that will have their
recordkeeping obligations reduced as a result of this element of the
Final Rule.
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\6\ Although the 2012 Rule required Unregistered Members to keep
text messages, Commission staff granted Unregistered Members no-
action relief from this requirement in May 2014 (see CFTC Staff
Letter No. 14-72).
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4. Exclusion of CTAs From Requirement To Record Oral Communications
Pursuant to the Final Rule, CTAs will no longer be required to
record oral communications.\7\ In the 2012 Rule, the Commission added
the requirement that certain types of firms, including CTAs that are
members of a DCM or of a SEF, record all oral communications that lead
to the execution of a transaction. Under the Final Rule, CTAs that are
members of a DCM or of a SEF no longer have to comply with this
requirement, and they therefore no longer have to administer a
recording program and maintain a recording infrastructure. The
Commission estimates that these CTAs would spend approximately one-half
hour per week administering a recording program and maintaining
recording infrastructure. The Commission estimates that there are
approximately 1,175 CTAs that will have their recordkeeping obligations
reduced as a result of this element of the Final Rule.\8\
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\7\ Pursuant to CFTC Staff Letter Nos. 14-60, 14-147 and 15-65,
Commission staff granted no-action relief to CTAs from the
requirement to record oral communications.
\8\ As of November 2015, there were approximately 2,350 CTAs
registered with the Commission. For the purposes of this analysis,
the Commission is conservatively estimating that half of registered
CTAs are members of a DCM or of a SEF.
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5. Form and Manner Requirements, in General
Pursuant to the Final Rule, all records required to be kept under
Regulation 1.35(a) must be kept in a form and manner which permit
prompt, accurate and reliable location, access, and retrieval of any
particular record, data, or information. In addition, the Final Rule
also states that all records, except records of oral and written
communications leading to the execution of a transaction in a commodity
interest and related cash or forward transactions, must be kept in a
form and manner that allows for identification of a particular
transaction. These new requirements replace the former requirement in
the previous version of the rule that required records be
``identifiable and searchable by transaction.'' The Commission views
these revised form and manner requirements as a clarification of the
prior requirements. Accordingly, the revised form and manner
requirements do not increase or decrease the information collection
burden for market participants that are subject to Regulation 1.35(a).
The Commission estimates the burden of this collection of
information as follows:
Respondents/Affected Entities: Futures Commission Merchants, Retail
Foreign Exchange Dealers, Introducing Brokers, and Members of a DCM or
of a SEF.
Estimated number of respondents: 6,000.
Estimated total annual burden on respondents: 319,707 hours.
Frequency of collection: Ongoing.
Authority: 44 U.S.C. 3501 et seq.)
Dated: December 18, 2015.
Christopher J. Kirkpatrick,
Secretary of the Commission.
[FR Doc. 2015-32417 Filed 12-23-15; 8:45 am]
BILLING CODE 6351-01-P