Federal Register, Volume 85 Issue 138 (Friday, July 17, 2020)
[Federal Register Volume 85, Number 138 (Friday, July 17, 2020)]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15466]
COMMODITY FUTURES TRADING COMMISSION
Agency Information Collection Activities: Notice of Intent To
Extend Collection 3038-0091: Disclosure and Retention of Certain
Information Relating to Cleared Swaps Customer Collateral
AGENCY: Commodity Futures Trading Commission.
SUMMARY: The Commodity Futures Trading Commission (CFTC) 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 proposed extension of an existing collection of
information, and to allow 60 days for public comment. This notice
solicits comments on proposed extension of the existing collection of
information relating to Cleared Swaps Customer Collateral.
DATES: Comments must be submitted on or before September 15, 2020.
ADDRESSES: You may submit comments, identified by OMB Control No. 3038-
0091 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 and identify that
it is for the renewal of Collection Number 3038-0091. All comments must
be submitted in English, or if not, accompanied by an English
translation. Comments will be posted as received to https://www.cftc.gov.
FOR FURTHER INFORMATION CONTACT: Mark Bretscher, Special Counsel,
Division of Swap Dealers and Intermediary Oversight, Commodity Futures
Trading Commission, (312) 353-0529; 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 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 extension of an existing 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: Disclosure and Retention of Certain Information Relating to
Cleared Swaps Customer Collateral (OMB Control No. 3038-0091). This is
a request for an extension of a currently approved information
Abstract: Section 724(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, Public Law 111-023, 124 stat. 1376, amended
the Commodity Exchange Act (``CEA''), 7 U.S.C. 1 et seq., to add, as
section 4d(f) thereof, provisions concerning the protection of
collateral provided by a Cleared Swaps Customer to margin, guaranty, or
secure a swap cleared by or through a derivatives clearing organization
(``DCO''). Broadly speaking, in cleared swaps transactions customers
provide collateral to futures commission merchants (``FCMs'') through
whom they clear their transactions. FCMs, in turn, may provide customer
collateral to DCOs, through which FCMs clear transactions for their
customers. 17 CFR part 22 is intended to implement CEA section 4d(f).
Several of the sections of Part 22 require collections of information.
Section 22.2(g) requires each FCM with Cleared Swaps Customer
Accounts to compute daily the amount of Cleared Swaps Customer
Collateral on deposit in Cleared Swaps Customer Accounts, the amount of
such collateral required to be on deposit in such accounts and the
amount of the FCM's residual financial interest in such accounts. The
purpose of this collection of information is to help ensure that FCMs'
Cleared Swaps Customer Accounts are in compliance at all times with
statutory and regulatory requirements for such accounts.
Section 22.5(a) requires an FCM or DCO to obtain, from each
depository with which it deposits cleared swaps customer funds, a
letter acknowledging that such funds belong to the Cleared Swaps
Customers of the FCM, and not the FCM itself or any other person. The
purpose of this collection of information is to confirm that the
depository understands its responsibilities with respect to protection
of cleared swaps customer funds.
Section 22.11 requires each FCM that intermediates cleared swaps
for customers on or subject to the rules of a DCO, whether directly as
a clearing member or indirectly through a Collecting FCM, to provide
the DCO with information sufficient to identify each customer of the
FCM whose swaps are cleared by the FCM. Section 22.11 also requires the
FCM, at least once daily, to provide the DCO with information
sufficient to identify each customer's portfolio of rights and
obligations arising out of cleared swaps intermediated by the FCM. The
purpose of this collection of information is to facilitate risk
management by DCOs in the event of default by the FCM, to enable DCOs
to perform their duty, pursuant to section 22.15, to treat the
collateral attributed to each customer of the FCM on an individual
Section 22.12 requires that each DCO and FCM, on a daily basis,
calculate, based on information received pursuant to section 22.11 and
on information generated and used in the ordinary course of business by
the DCO or FCM, and record certain information about the amount of
collateral required for each Cleared Swaps Customer and the sum of
these amounts. As with section 22.11, the purpose of this collection of
information is to facilitate risk management by DCOs and in the event
of default by the FCM, to enable DCOs to perform their duty, pursuant
to section 22.15, to treat the collateral attributed to each customer
of the FCM on an individual basis.
Section 22.16 requires that each FCM who has Cleared Swaps
Customers disclose to each of such customers the governing provisions,
as established by DCO rules or customer agreements between collecting
and depositing FCMs, relating to use of customer collateral, transfer,
neutralization of the risks, or liquidation of cleared swaps in the
event of a default by a Depositing FCM relating to a Cleared Swaps
Customer Account. The purpose of this collection of information is to
ensure that Cleared Swaps Customers are informed of the procedures to
which accounts containing their swaps collateral may be subject in the
event of a default by their FCM.
Section 22.17 requires that each FCM produce a written notice of
the reasons and the details concerning withdrawals from a Cleared Swaps
Customers Account not for the benefit of Cleared Swap Customers if such
withdrawal will exceed 25% of the FCMs residual interest in such
With respect to the collection of information, the CFTC invites
Whether the proposed extension of 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 https://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 78 respondents (63 FCMs and 15 DCOs).
The respondent burden for this collection is estimated to be as
Estimated Number of Respondents: 78.
Estimated Average Burden Hours per Respondent: 331.
Estimated Total Annual Burden Hours: 25,890.
Frequency of Collection: Section 22.2(g)--Daily. Section 22.5(a)--
Once. Section 22.11--Daily. Section 22.12--Daily. Section 22.16--Once.
Section 22.17--On occasion.
There is no capital cost associated with this collection.
(Authority: 44 U.S.C. 3501 et seq.)
Dated: July 14, 2020.
Deputy Secretary of the Commission.
[FR Doc. 2020-15466 Filed 7-16-20; 8:45 am]
BILLING CODE 6351-01-P