2022-09019
[Federal Register Volume 87, Number 81 (Wednesday, April 27, 2022)]
[Notices]
[Pages 24974-24975]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-09019]
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COMMODITY FUTURES TRADING COMMISSION
Agency Information Collection Activities Under OMB Review
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice.
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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 May 27, 2022.
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. 3038-0094, 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.
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\1\ 17 CFR 145.9.
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
[[Page 24975]]
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20581; (202) 418-5086; email: [email protected].
SUPPLEMENTARY INFORMATION:
Title: Clearing Member Risk Management (OMB Control No. 3038-0094).
This is a request for an extension of a currently approved information
collection.
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 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) of the CEA
requires each SD and MSP to have internal systems and procedures to
perform any of the functions set forth in Section 4s.
Section 4d of the CEA requires Futures Commission Merchants
(``FCMs'') to register with the Commission. It further requires FCMs to
segregate customer funds. Section 4f of the CEA requires FCMs to
maintain certain levels of capital and Section 4g of the CEA
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 member 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.
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 February 22, 2022, 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, 87 FR 9582 (``60-Day
Notice''). The Commission did not receive any relevant comments on the
60-Day Notice.
Burden Statement: The Commission is revising its estimate of the
burden for this collection to reflect the current number of respondents
and estimated burden hours. 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: April 22, 2022.
Robert Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2022-09019 Filed 4-26-22; 8:45 am]
BILLING CODE 6351-01-P