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2018-00469

  • Federal Register, Volume 83 Issue 9 (Friday, January 12, 2018)

    [Federal Register Volume 83, Number 9 (Friday, January 12, 2018)]

    [Notices]

    [Pages 1609-1611]

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

    [FR Doc No: 2018-00469]

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    COMMODITY FUTURES TRADING COMMISSION

    Agency Information Collection Activities: Notice of Intent To

    Revise Collection Numbers 3038-0052 and 3038-0074, Core Principles and

    Other Requirements for Designated Contract Markets, and Core Principles

    and Other Requirements for Swap Execution Facilities

    AGENCY: Commodity Futures Trading Commission.

    [[Page 1610]]

    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 revision of two collections 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, as described below, on

    the proposed Information Collection Requests (``ICR'') titled: OMB

    Control Number 3038-0074 and Part 38, Relating to Core Principles and

    Other Requirements for Designated Contract Markets; and OMB Control

    Number 3038-0052 and Part 37, Relating to Core Principles and Other

    Requirements for Swap Execution Facilities. This notice also solicits

    comments on the collection of information mandated by the Commission

    regulation on Contents of Notice of Disciplinary or Access Denial

    Action. The collection of information burden associated with that

    regulation belongs to OMB Control Nos. 3038-0052 and 3038-0074.

    DATES: Comments must be submitted on or before March 13, 2018.

    ADDRESSES: You may submit comments, identified by OMB Control Nos.

    3038-0052 and 3038-0074 by any of the following methods:

    CFTC website: https://comments.cftc.gov. Follow the

    instructions for submitting comments through the Comments Online

    process on the website.

    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.

    Please submit your comments using only one method.

    FOR FURTHER INFORMATION CONTACT: David Steinberg, Associate Director,

    Division of Market Oversight, Commodity Futures Trading Commission,

    (202) 418-5102; email: dsteinberg@cftc.gov.

    SUPPLEMENTARY INFORMATION: Under the PRA, 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 amendments

    to the collections 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.

    Title: Core Principles and Other Requirements for Designated

    Contract Markets (OMB Control No. 3038-0052), and Core Principles and

    Other Requirements for Swap Execution Facilities (OMB Control No. 3038-

    0074). This is a request for an extension of currently approved

    information collections.

    Abstract: The regulations governing designated contract markets

    (``DCMs'') were adopted pursuant to the requirements of the Commodity

    Futures Modernization Act of 2000 (``CFMA'').\1\ Part 38 of the

    Commission's regulations governs the activities of DCMs. The

    information collected pursuant to part 38 is necessary for the

    Commission to evaluate whether entities operating as, or applying to

    become DCMs, comply with the part 38 requirements including 23 core

    principles.

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

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    In June 2012, the Commission implemented core principles and other

    requirements for DCMs (``DCM Final Rules'').\2\ The Commission stated

    in the DCM Final Rules that 18 DCMs were registered with the

    Commission.\3\ However, since publication of the DCM Final Rules, the

    number of DCMs registered with the Commission has decreased from 18 to

    15. Accordingly, the Commission is revising the below burden statement

    from the DCM Final Rules to account for the decrease in the number of

    registered DCMs.

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    \2\ 77 FR 36612 (June 19, 2012).

    \3\ Id. at 36663.

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    Title VII of the Dodd-Frank Wall Street Reform and Consumer

    Protection Act (``Dodd-Frank Act'') added new section 5h to the

    Commodity Exchange Act (``CEA'') to impose requirements concerning the

    registration and operation of swap execution facilities (``SEFs''),

    which the Commission has incorporated in part 37 of its regulations.

    These information collections are needed for the Commission to ensure

    that SEFs comply with these requirements. Among other requirements,

    part 37 of the Commission's regulations imposes SEF registration

    requirements for a trading platform or system, obligates SEFs to

    provide transaction confirmations to swap counterparties, and requires

    SEFs to comply with 15 core principles.

    In September 2016, the Commission published a 30-Day Notice of

    Intent to Renew Collection 3038-0074 (30-Day Renewal Notice) and stated

    that 23 SEFs were registered with the Commission.\4\ However, since

    publication of the 30-Day Renewal Notice, the Commission has granted

    permanent registration to two additional SEFs, for a total of 25

    registered SEFs. Therefore, the Commission is revising the below burden

    statement from the 30-Day Renewal Notice to account for the increase in

    the number of registered SEFs.

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    \4\ 81 FR 65630 (Sept. 23, 2016).

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    In a separate document published elsewhere in this issue of the

    Federal Register, the Commission adopted regulation 9.11(b)(3)(ii)

    requiring a DCM or SEF (collectively, ``exchange'') to include two

    additional elements in the disciplinary or access denial notice action

    provided to the National Futures Association. First, an exchange must

    include the type of product (as applicable) involved in the adverse

    action.\5\ Requiring an exchange to provide this information in the

    disciplinary or access denial notice will provide the Commission,

    market participants, the public, and other exchanges with greater

    transparency concerning where market abuses originate and whether the

    abuses are concentrated among certain product types. Second, an

    exchange must indicate in its notice of disciplinary or access denial

    actions whether the violation underlying the notice resulted in

    financial harm to any customers. This requirement codifies the

    clarification contained in an advisory previously issued by the

    Commission (``Part 9 Advisory'').\6\ The Commission believes

    [[Page 1611]]

    that the inclusion of customer harm is essential because it cannot

    effectively perform its regulatory and oversight functions without

    knowledge of those instances in which brokers violate their fiduciary

    duty to customers by taking advantage of customer orders and engaging

    in fraudulent activity. The collections of information are mandatory.

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    \5\ For example, a product trading on a designated contract

    market might be specified as a July 2016 Eurodollar future; while a

    product trading on a swap execution facility may be a CDX North

    American High Yield Series 26 5 year.

    \6\ The Part 9 Advisory permitted an exchange to file

    disciplinary or access denial notices with the Commission or the

    National Futures Association. 64 FR 39915 (July 23, 1999).

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    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

    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.\7\

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    \7\ 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 ICR 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 believes that the additional

    burden for an exchange to add the two additional elements in the

    contents of the disciplinary or access denial notice is de minimis.\8\

    Accordingly, the Commission is maintaining its current estimate of the

    burden for both collections as result of these reporting requirements.

    However, the Commission is amending its estimates for the collections

    to account for the change in the number of DCMs and SEFs currently

    registered with the Commission. The current respondent burden for these

    collections are estimated to be as follows:

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    \8\ The Commission stated in the Notice of Proposed Rulemaking

    that the burden associated with Commission regulation 9.11(b)(3)(ii)

    requiring an exchange to specify the product involved in the

    disciplinary or access denial action would be de minimis. 82 FR 7745

    (Jan. 23, 2017). The Commission did not receive any comments

    regarding this determination. The Commission estimates that it will

    take an exchange just a few seconds to add the product involved in

    the adverse action and whether the violation underlying the notice

    resulted in financial harm to any customers.

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    OMB Control No. 3038-0052 (Core Principles and Other

    Requirements for Designated Contract Markets).

    Number of Respondents: 15.

    Estimated Annual Burden Hours per Respondent: 490.5.

    Estimated Total Burden Hours on Respondents: 7,357.5.

    Frequency of Collection: As applicable.

    OMB Control No. 3038-0074 (Core Principles and Other

    Requirements for Swap Execution Facilities).

    Number of Respondents: 25.

    Estimated Annual Burden Hours per Respondent: 1,000.

    Estimated Total Burden Hours on Respondents: 25,000.

    Frequency of Collection: As applicable.

    The regulations require no new startup or operations and

    maintenance costs.

    (Authority 44 U.S.C. 3501 et seq.)

    Dated: January 9, 2018.

    Christopher Kirkpatrick,

    Secretary of the Commission.

    [FR Doc. 2018-00469 Filed 1-11-18; 8:45 am]

    BILLING CODE 6351-01-P

    Last Updated: January 12, 2018