Federal Register, Volume 85 Issue 207 (Monday, October 26, 2020)
[Federal Register Volume 85, Number 207 (Monday, October 26, 2020)]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23671]
COMMODITY FUTURES TRADING COMMISSION
Agency Information Collection Activities Under OMB Review
AGENCY: Commodity Futures Trading Commission.
SUMMARY: In compliance with the Paperwork Reduction Act of 1995 (PRA),
this notice announces that the Information Collection Request (ICR)
abstracted below has been forwarded to the Office of Information and
Regulatory Affairs (OIRA), of the Office of Management and Budget
(OMB), for review and comment. The ICR describes the nature of the
information collection and its expected costs and burden.
DATES: Comments must be submitted on or before November 25, 2020.
ADDRESSES: Written comments and recommendations for the proposed
information collection should be submitted within 30 days of this
notice's publication to OIRA, at https://www.reginfo.gov/public/do/PRAMain. Please find this particular information collection by
selecting ``Currently under 30-day Review--Open for Public Comments''
or by using the website's search function. Comments can be entered
electronically by clicking on the ``comment'' button next to the
information collection on the ``OIRA Information Collections Under
Review'' page, or the ``View ICR--Agency Submission'' page. A copy of
the supporting statement for the collection of information discussed
herein may be obtained by visiting https://www.reginfo.gov/public/do/PRAMain.
In addition to the submission of comments to https://Reginfo.gov as
indicated above, a copy of all comments submitted to OIRA may also be
submitted to the Commodity Futures Trading Commission (the
``Commission'' or ``CFTC'') by clicking on the ``Submit Comment'' box
next to the descriptive entry for OMB Control No. 3038-0092, at https://comments.cftc.gov/FederalRegister/PublicInfo.aspx
Or by either of the following methods:
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.
All comments must be submitted in English, or if not, accompanied
by an English translation. Comments submitted to the Commission should
include 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.\1\ 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 Information Act.
\1\ 17 CFR 145.9.
FOR FURTHER INFORMATION CONTACT: Megan Wallace, Senior Special Counsel,
Division of Clearing and Risk, Commodity Futures Trading Commission,
(202) 418-5150; email: [email protected], and refer to OMB Control No.
SUPPLEMENTARY INFORMATION: Title: Customer Clearing Documentation and
Timing of Acceptance for Clearing
(OMB Control No. 3038-0092). This is a request for extension of a
currently approved information collection.
Abstract: Section 4d(c) of the Commodity Exchange Act (``CEA''), as
amended by the Dodd-Frank Wall Street and Reform Consumer Protection
Act (``Dodd-Frank Act''), directs the Commission to require futures
commission merchants (``FCMs'') to implement conflict of interest
procedures that address such issues the Commission determines to be
appropriate. Similarly, section 4s(j)(5) of the CEA, as added by the
Dodd-Frank Act, requires swap dealers (``SDs'') and major swap
participants (``MSPs'') to implement conflict of interest procedures
that address such issues the Commission determines to be appropriate.
Section 4s(j)(5) also requires SDs and MSPs to ensure that any persons
providing clearing activities or making determinations as to accepting
clearing customers are separated by appropriate informational
partitions from persons whose involvement in pricing, trading, or
clearing activities might bias their judgment or contravene the core
principle of open access. Section 4s(j)(6) of the CEA prohibits a SD or
MSP from adopting any process or taking any action that results in any
unreasonable restraint on trade or imposes any material anticompetitive
burden on trading or clearing, unless necessary or appropriate to
achieve the purposes of the Act. Section 2(h)(1)(B)(ii) of the CEA
requires that derivatives clearing organization (``DCOs'') rules
provide for the nondiscriminatory clearing of swaps executed
bilaterally or through an unaffiliated designated contract market or
swap execution facility.
To address these provisions, the Commission promulgated regulations
that prohibit arrangements involving FCMs, SDs, MSPs, and DCOs that
would (a) disclose to an FCM, SD, or MSP the identity of a customer's
original executing counterparty (Sec. Sec. 1.72(a), 23.608(a), and
39.12(a)(1)(vi)); (b) limit the number of counterparties with whom a
customer may enter into a trade (Sec. Sec. 1.72(b), 23.608(b), and
39.12(a)(1)(vi)); (c) restrict the size of the position a customer may
take with any individual counterparty, apart from an overall credit
limit for all positions held by the customer at the FCM (Sec. Sec.
1.72(c), 23.608(c), and 39.12(a)(1)(vi)); (d) impair a customer's
access to execution of a trade on terms that have a reasonable
relationship to the best terms available (Sec. Sec. 1.72(d),
23.608(d), and 39.12(a)(1)(vi)); or (e) prevent compliance with
specified time frames for acceptance of trades into clearing set forth
in 1.74(b), 23.610(b), or 39.12(b)(7) (Sec. Sec. 1.72(e), 23.608(e),
and 39.12(a)(1)(vi)). Additionally, the Commission requires, through
regulation 39.12(b)(7)(i)(B), DCOs to coordinate with clearing members
to establish prompt processing of trades. Regulations 1.74(a) and
23.610(a) require reciprocal coordination by FCMs, SDs, and MSPs that
are clearing members.
Under the above regulations, SDs, MSPs, FCMs, and DCOs are required
to develop and maintain written customer clearing documentation and
trade processing procedures. Maintenance of contracts, policies, and
procedures is prudent business practice. All SDs, MSPs, FCMs, and DCOs
maintain documentation consistent with these regulations. The
regulations are crucial both for effective risk management and for the
efficient operation of trading venues among SDs, MSPs, FCMs, and DCOs.
Each of these entities has a general recordkeeping obligation for these
requirements under the Commission's regulations (Sec. 39.20 for DCOs;
Sec. 23.606 for SDs and MSPs; and Sec. 1.73 for FCMs).
The information collection burden arising from the regulations
primarily is restricted to the costs associated with the affected
registrants' obligation to maintain records related to clearing
documentation between the customer and the customer's clearing member,
and trade processing procedures between DCOs and FCMs, SDs, and MSPs.
The information collection obligations 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, FCMs, and DCOs.
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. On August 17, 2020, the Commission
published in the Federal Register notice of the proposed extension of
this information collection and provided 60 days for public comment on
the proposed extension, 85 FR 50013 (``60-Day Notice'') The Commission
did not receive any comments on the 60-Day Notice.
Burden Statement: The respondent burden for this collection is
estimated to be as follows:
Estimated Number of Respondents: 183.
Estimated Average Burden Hours per Respondent: 40.
Estimated Total Annual Burden Hours: 7,320.
Frequency of Collection: Daily, annually, or 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: October 21, 2020.
Deputy Secretary of the Commission.
[FR Doc. 2020-23671 Filed 10-23-20; 8:45 am]
BILLING CODE 6351-01-P