[Federal Register Volume 87, Number 35 (Tuesday, February 22, 2022)]
[Pages 9582-9583]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-03700]



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 (``Commission'' or 
``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 each proposed extension 
of an existing 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 a customer 
and the customer's clearing member, as required under Commission 

DATES: Comments must be submitted on or before April 25, 2022.

ADDRESSES: You may submit comments, identified by ``OMB Control No. 
3038-0094'' by any of the following methods:
     The Agency's website, at https://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 https://www.cftc.gov.

FOR FURTHER INFORMATION CONTACT: Melissa A. D'Arcy, Special Counsel, 
Division of Clearing and Risk, Commodity Futures Trading Commission, 
Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581; 
(202) 418-5086; 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 Commission is publishing 
notice of the proposed extension of the 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.\1\

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

    Title: Clearing Member Risk Management (OMB Control No. 3038-0094). 
This is a request for an 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) of the CEA authorizes the Commission to 
promulgate such

[[Page 9583]]

regulations that it believes are reasonably necessary to effectuate any 
of the provisions or to accomplish any of the purposes of the CEA. Risk 
management systems are critical to the avoidance of systemic risk.
    Section 4s(j)(2) of the CEA 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 Futures Commission Merchants (``FCMs'') to 
register with the Commission. It further requires 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 Commission 
regulation 1.73 which applies to clearing members that are FCMs and 
Commission regulation 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 each 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 quarter.
    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.
    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 for 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 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 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 Information Collection Request 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 is revising its estimate of the 
burden for this collection of information from clearing members of 
derivatives clearing organizations who are swap dealers, major swap 
participants, and/or futures commission merchants. The respondent 
burden for this collection is estimated to be as follows:
    Estimated Number of Respondents: 167 (108 Clearing Member Swap 
Dealers and 59 Clearing Member Futures Commission Merchants).
    Estimated Average Burden Hours per Respondent: 504 hours.
    Estimated Total Annual Burden Hours: 84,168 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: February 16, 2022.
Robert Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2022-03700 Filed 2-18-22; 8:45 am]