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2017-09686

  • Federal Register, Volume 82 Issue 91 (Friday, May 12, 2017)

    [Federal Register Volume 82, Number 91 (Friday, May 12, 2017)]

    [Notices]

    [Pages 22118-22119]

    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

    [FR Doc No: 2017-09686]

    [[Page 22118]]

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    COMMODITY FUTURES TRADING COMMISSION

    Agency Information Collection Activities: Notice of Intent To

    Renew Collection Number 3038-0075, Protection of Collateral of

    Counterparties to Uncleared Swaps; Treatment of Securities in a

    Portfolio Margining Account in a Commodity Broker Bankruptcy

    AGENCY: Commodity Futures Trading Commission.

    ACTION: Notice.

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

    ``Commission'') is announcing an opportunity for public comment on the

    proposed renewal of a collection of certain information by the agency.

    Under the Paperwork Reduction Act (``PRA''), Federal agencies are

    required to publish notice in the Federal Register concerning each

    proposed collection of information, including each proposed extension

    of an existing collection of information, and to allow 60 days for

    public comment. This notice solicits comments on the collections of

    information mandated by requirements that swap dealers (``SDs'') and

    major swap participants (``MSPs'') with respect to the treatment of

    collateral by their counterparties to margin, guarantee, or secure

    uncleared swaps.

    DATES: Comments must be submitted on or before July 11, 2017.

    ADDRESSES: You may submit comments, identified by ``Protection of

    Collateral of Counterparties to Uncleared Swaps; Treatment of

    Securities in a Portfolio Margining Account in a Commodity Broker

    Bankruptcy,'' and OMB Control No. 3038-0075 by any of the following

    methods:

    The Agency's Web site, 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.

    FOR FURTHER INFORMATION CONTACT: Gregory Scopino, Special Counsel,

    Division of Swap Dealer and Intermediary Oversight, Commodity Futures

    Trading Commission, (202) 418-5175, email: gscopino@cftc.gov.

    SUPPLEMENTARY INFORMATION: Under the PRA,\1\ Federal agencies must

    obtain approval from the Office of Management and Budget (``OMB'') for

    each collection of information they conduct or sponsor. ``Collection of

    Information'' is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3 and

    includes agency requests or requirements that members of the public

    submit reports, keep records, or provide information to a third party.

    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, including each

    proposed extension of an existing collection of information, before

    submitting the collection to OMB for approval. To comply with this

    requirement, the CFTC is publishing notice of the proposed collection

    of information listed below. 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 OMB control number.

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    \1\ 44 U.S.C. 3501 et seq.

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    Title: Protection of Collateral of Counterparties to Uncleared

    Swaps; Treatment of Securities in a Portfolio Margining Account in a

    Commodity Broker Bankruptcy (OMB Control No. 3038-0075). This is a

    request for an extension of a currently approved information

    collection.

    Abstract: On November 6, 2013, the Commission issued final rules

    implementing statutory provisions pursuant to Title VII of the Dodd-

    Frank Wall Street Reform and Consumer Protection Act (``Dodd-Frank

    Act'') and imposing requirements on SDs and MSPs with respect to the

    treatment of collateral posted by their counterparties to margin,

    guarantee, or secure uncleared swaps.\2\ Additionally, the final rule

    includes revisions to ensure that, for purposes of subchapter IV of

    chapter 7 of the Bankruptcy Code, securities held in a portfolio

    margining account that is a futures account or a Cleared Swaps Customer

    Account constitute ``customer property''; and owners of such accounts

    constitute ``customers.'' \3\ Section 4s(l) of the CEA sets forth

    certain requirements concerning the rights of counterparties of SDs and

    MSPs with respect to the segregation of money, securities, or other

    property used to margin, guarantee, or otherwise secure uncleared

    swaps. Regulation 23.701 implements part of the new statutory

    requirements by specifying that certain information must be provided to

    counterparties about the terms and conditions of segregation, including

    price information, to the extent that the SD or MSP has such

    information, and the identity of one or more independent depositories

    for segregated collateral. Regulation 23.704 implements the

    requirements of CEA Section 4s(l)(4), which dictates that, in certain

    circumstances, an SD or MSP must report to the counterparty, on a

    quarterly basis, ``that the back office procedures of the swap dealer

    or major swap participant relating to margin and collateral

    requirements are in compliance with the agreement of the

    counterparties.''

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    \2\ 78 FR 66621.

    \3\ Id.

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    As discussed above, the rules establish reporting andrecordkeeping

    requirements that are mandated by Section 4s(l) of the CEA, which

    states that SDs and MSPs must notify their counterparties of the right

    to have their initial margin segregated and to maintain the

    confirmations and elections related to such notices as business

    records. The reporting and recordkeeping requirements are necessary to

    implement the objectives of Section 4s(1). For example, the information

    received by uncleared swap counterparties pursuant to Regulation 23.701

    would alert counterparties to their statutory right, if they so choose,

    to have funds or property used as margin in uncleared swaps

    transactions with SDs and MSPs kept segregated from the property of the

    SD or MSP. Likewise, the information provided would further alert

    counterparties of the need to request such segregation if they wish to

    exercise this right. Simlarly, the information received by uncleared

    swap counterparties pursuant to Regulation 23.704 would be used to

    confirm that the back office procedures followed by a SD or MSP with

    whom they are dealing comply with the agreement of the parties.

    With respect to the collection of information, the CFTC invites

    comments on:

    Whether the proposed 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 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

    [[Page 22119]]

    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 Sec. 145.9 of the Commission's regulations.\4\

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    \4\ 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: The Commission is revising its estimate of the

    burden for this collection to reflect the current number of registered

    SDs and MSPs. Accordingly, the respondent burden for this collection is

    estimated to be as follows:

    Number of Registrants: 102.

    Estimated Average Burden Hours per Registrant: 3,406.

    Estimated Aggregate Burden Hours: 347,412.

    Frequency of Reporting: As applicable.

    Authority: 44 U.S.C. 3501 et seq.

    Dated: May 9, 2017.

    Robert N. Sidman,

    Deputy Secretary of the Commission.

    [FR Doc. 2017-09686 Filed 5-11-17; 8:45 am]

    BILLING CODE 6351-01-P

    Last Updated: May 12, 2017