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: [email protected].

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

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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