Federal Register, Volume 83 Issue 220 (Wednesday, November 14, 2018) 
[Federal Register Volume 83, Number 220 (Wednesday, November 14, 2018)]
[Pages 56828-56830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-24761]



Agency Information Collection Activities: Notice of Intent To
Extend Collection 3038-0094; Clearing Member Risk Management

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice.


SUMMARY: The Commodity Futures Trading Commission (CFTC) is announcing
an opportunity for public comment on the extension 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 and
to allow 60 days for public comment. This notice solicits comments on
the obligation to maintain records related to clearing documentation
between the customer and the customer's clearing member.

DATES: Comments must be submitted on or before January 14, 2019.

ADDRESSES: You may submit comments, identified by OMB Control No. 3038-
0094, by any of the following methods:

[[Page 56829]]

     The Agency's website, at http://comments.cftc.gov/. Follow
the instructions for submitting comments through 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. 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: Jocelyn Partridge, Special Counsel,
Division of Clearing and Risk, Commodity Futures Trading Commission,
(202) 418-5926; email: [email protected].

SUPPLEMENTARY INFORMATION: Under the PRA, 44 U.S.C. 3501 et seq.,
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 before submitting the collection to OMB for approval. To
comply with this requirement, the CFTC is publishing notice for the
extension of the 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.
    Title: Clearing Member Risk Management (OMB Control No. 3038-0094).
This is a request for extension of a currently approved information
    Abstract: Section 3(b) of the Commodity Exchange Act (``Act'' or
``CEA'') provides that one of the purposes of the Act is to ensure the
financial integrity of all transactions subject to the Act and to avoid
systemic risk. Section 8a(5) authorizes the Commission to promulgate
such regulations that it believes are reasonably necessary to
effectuate any of the provisions or to accomplish any of the purposes
of the Act. Risk management systems are critical to the avoidance of
systemic risks.
    Section 4s(j)(2) requires each Swap Dealer (``SD'') and Major Swap
Participant (``MSP'') to have risk management systems adequate for
managing its business. Section 4s(j)(4) requires each SD and MSP to
have internal systems and procedures to perform any of the functions
set forth in Section 4s.
    Section 4d requires FCMs to register with the Commodity Futures
Trading Commission (``Commission''). It further requires Futures
Commission Merchants (``FCMs'') to segregate customer funds. Section 4f
requires FCMs to maintain certain levels of capital. Section 4g
establishes reporting and recordkeeping requirements for FCMs.
    Pursuant to these provisions, the Commission adopted Sec.  1.73
which applies to clearing members that are FCMs and Sec.  23.609 which
applies to clearing members that are SDs or MSPs. These provisions
require these clearing members to have procedures to limit the
financial risks they incur as a result of clearing trades and liquid
resources to meet the obligations that arise. The regulations require
clearing members to: (1) Establish credit and market risk-based limits
based on position size, order size, margin requirements, or similar
factors; (2) use automated means to screen orders for compliance with
the risk-based limits; (3) monitor for adherence to the risk-based
limits intra-day and overnight; (4) conduct stress tests of all
positions in the proprietary account and all positions in any customer
account that could pose material risk to the futures commission
merchant at least once per week; (5) evaluate its ability to meet
initial margin requirements at least once per week; (6) evaluate its
ability to meet variation margin requirements in cash at least once per
week; (7) evaluate its ability to liquidate the positions it clears in
an orderly manner, and estimate the cost of the liquidation at least
once per month; and (8) test all lines of credit at least once per
    Each of these items has been observed by Commission staff as an
element of an existing sound risk management program at an SD, MSP, or
FCM. The Commission regulations require each clearing member to
establish written procedures to comply with this regulation and to keep
records documenting its compliance. The information collection
obligations imposed by the regulations are necessary to implement
certain provisions of the CEA, including ensuring that registrants
exercise effective risk management and for the efficient operation of
trading venues among SDs, MSPs, and FCMs. 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.\1\

    \1\ The OMB control numbers for the CFTC's regulations were
published on December 30, 1981. See 46 FR 63035 (Dec. 30, 1981).

    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
     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.
    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.\2\

    \2\ 17 CFR 145.9.

    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 respondent burden for this collection is
estimated to average 2 hours per response for an estimated annual
burden of 504 hours per respondent. This estimate includes the total
time, effort, or financial resources expended by persons to generate,
maintain, retain, disclose, or

[[Page 56830]]

provide information to or for a federal agency.
    Respondents/Affected Entities: Clearing member Swap Dealers, Major
Swap Participants, and Futures Commission Merchants.
    Estimated Number of Respondents: 166 (101 Clearing Member Swap
Dealers and 65 Clearing Member Futures Commission Merchants).
    Estimated Average Burden Hours per Respondent: 504.
    Estimated Total Annual Burden Hours: 83,664 hours.
    Frequency of Collection: As needed.
    There are no capital costs or operating and maintenance costs
associated with this collection.

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

    Dated: November 8, 2018.
Robert Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2018-24761 Filed 11-13-18; 8:45 am]