Federal Register, Volume 84 Issue 68 (Tuesday, April 9, 2019)
[Federal Register Volume 84, Number 68 (Tuesday, April 9, 2019)]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-06939]
COMMODITY FUTURES TRADING COMMISSION
Agency Information Collection Activities: Notice of Intent To
Extend Collection 3038-0024; Regulations and Forms Pertaining to the
Financial Integrity of the Marketplace
AGENCY: Commodity Futures Trading Commission.
SUMMARY: The Commodity Futures Trading Commission (``Commission'') 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, including proposed revision of an existing collection of
information, and to allow 60 days for public comment. This notice
solicits comments on the obligation of registrants to provide records
related to their minimum financial requirements.
DATES: Comments must be submitted on or before June 10, 2019.
ADDRESSES: You may submit comments, and ``OMB Control No. 3038-0024''
by any of the following methods:
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: Joshua Beale, Associate Director,
Division of Swap Dealer and Intermediary Oversight, Commodity Futures
Trading Commission, (202) 418-5447; 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, including each proposed revision of an existing 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 listed below.
Title: Regulations and Forms Pertaining to the Financial Integrity
of the Marketplace (OMB Control No. 3038-0024). This is a request for
an extension of a currently approved information collection.
Abstract: The Commission is the independent federal regulatory
agency charged with providing various forms of customer protection so
that users of the commodity markets can be assured of the financial
integrity of the markets and the intermediaries that they employ in
their trading activities. Part 1 of the Commission's regulations
requires, among other things, that commodity brokers--known as futures
commission merchants (``FCMs''), or Introducing Brokers (``IBs''),
comply with certain minimum financial requirements. In order to monitor
compliance with these financial standards, the Commission has required
FCMs and IBs to file financial reports with the Commission and with the
designated self-regulatory organization of which they are members as
well as to report to the Commission should certain financial
requirements drop below prescribed minimums.
In 2008, the U.S. Congress passed the Food, Conservation, and
Energy Act of 2008, Public Law 110-246, 122 Stat. 1651, 2189-2204
(2008), also known as the Farm Bill. The Farm Bill provided the
Commission with new authority with regard to the regulation of off-
exchange retail forex transactions. Among other things, it directed the
Commission to draft rules effectuating registration provisions for a
new category of registrant--the retail foreign exchange dealer
(``RFED''). Under the
terms of the legislation, RFEDs are subject to the same capital
requirements as FCMs that are engaged in retail forex transactions,
and, therefore, subject to the same reporting requirements.
Accordingly, this collection was amended to reflect the financial
reporting requirements of the new category of registrant, RFEDs.
In 2010, the U.S. Congress passed the Wall Street Reform and
Consumer Protection Act (the ``Dodd-Frank Act''), Public Law 111-203,
124 Stat. 1376 (2010), giving the Commission the authority to regulate
certain swap markets and participants in those markets. Section 731 of
the Dodd-Frank Act, amended the Commodity Exchange Act (``CEA''), 7
U.S.C. 1 et seq., to add, as section 4s(e) thereof, provisions
concerning the setting of initial and variation margin requirements for
swap dealers (``SDs'') and major swap participants (``MSPs''). In 2016,
the Commission finalized the Margin Requirements for Uncleared Swaps
for Swap Dealers and Major Swap Participants rule to implement those
requirements. Specifically, Regulation 23.154(b) require SDs and MSPs
that do not have a prudential regulator (``Covered Swap Entities'' or
``CSEs'') that are using a model to compute initial margin requirements
to submit the model for review and approval by the Commission or a
registered futures association. CSEs must also notify the Commission
upon making certain changes to the model. The information required for
the prior written approval of the margin model or for certain changes
to such model, is needed to demonstrate that the model satisfies all of
the requirements of Regulation 23.154(b).
Separately, in 2013, the Commission finalized rules in an effort to
prevent unauthorized usage of customer funds by FCMs and RFEDs. The
final rules include modifications to the reporting requirements
required by the Commission which resulted in changes to the financial
statements filed by FCMs and RFEDs, and made some of the recordkeeping
requirements already contained in this OMB Collection Number 3038-0024
into reporting requirements. These rules added additional recordkeeping
requirements by FCMs to assure the segregation of customer funds.
This collection, OMB Control No. 3038-0024, is needed for the
Commission to continue its financial monitoring of its registrants. The
burden hours are being revised to reflect the current number of
registrants and updated to reflect more accurate numbers regarding the
number of financial reports filed, based on current historical data.
With respect to the collection of information, the CFTC invites
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
\1\ 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
Burden Statement: The Commission is revising its estimate of the
burden for this collection for approximately 66 FCMs and RFEDs, 50 CSEs
and 1,178 IBs. The respondent burden for this collection is estimated
to be as follows:
Respondents/Affected Entities: FCMs, RFEDs, IBs, SDs, and MSPs that
do not have a Prudential Regulator.
Estimated Number of Respondents: 1,294.
Estimated Average Burden Hours per Respondent: 62.
Estimated Total Annual Burden Hours: 80,837.
Frequency of Collection: Various. For example, FCMs have both daily
and monthly financial reporting obligations, annual certified financial
and compliance report obligations, and periodic notice requirements.
There are no capital costs or operating and maintenance costs
associated with this collection.
(Authority: 44 U.S.C. 3501 et seq.)
Dated: April 3, 2019.
Deputy Secretary of the Commission.
[FR Doc. 2019-06939 Filed 4-8-19; 8:45 am]
BILLING CODE 6351-01-P