2017-09686
Federal Register, Volume 82 Issue 91 (Friday, May 12, 2017)
[Federal Register Volume 82, Number 91 (Friday, May 12, 2017)]
[Notices]
[Pages 22118-22119]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-09686]
[[Page 22118]]
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COMMODITY FUTURES TRADING COMMISSION
Agency Information Collection Activities: Notice of Intent To
Renew Collection Number 3038-0075, Protection of Collateral of
Counterparties to Uncleared Swaps; Treatment of Securities in a
Portfolio Margining Account in a Commodity Broker Bankruptcy
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice.
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SUMMARY: The Commodity Futures Trading Commission (``CFTC'' or
``Commission'') 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 collections of
information mandated by requirements that swap dealers (``SDs'') and
major swap participants (``MSPs'') with respect to the treatment of
collateral by their counterparties to margin, guarantee, or secure
uncleared swaps.
DATES: Comments must be submitted on or before July 11, 2017.
ADDRESSES: You may submit comments, identified by ``Protection of
Collateral of Counterparties to Uncleared Swaps; Treatment of
Securities in a Portfolio Margining Account in a Commodity Broker
Bankruptcy,'' and OMB Control No. 3038-0075 by any of the following
methods:
The Agency's Web site, at http://comments.cftc.gov/.
Follow the instructions for submitting comments through the Web site.
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.
Federal eRulemaking Portal: http://www.regulations.gov/.
Follow the instructions for submitting comments through the Portal.
Please submit your comments using only one method.
FOR FURTHER INFORMATION CONTACT: Gregory Scopino, Special Counsel,
Division of Swap Dealer and Intermediary Oversight, Commodity Futures
Trading Commission, (202) 418-5175, email: [email protected].
SUPPLEMENTARY INFORMATION: Under the PRA,\1\ 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 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.
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\1\ 44 U.S.C. 3501 et seq.
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Title: Protection of Collateral of Counterparties to Uncleared
Swaps; Treatment of Securities in a Portfolio Margining Account in a
Commodity Broker Bankruptcy (OMB Control No. 3038-0075). This is a
request for an extension of a currently approved information
collection.
Abstract: On November 6, 2013, the Commission issued final rules
implementing statutory provisions pursuant to Title VII of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (``Dodd-Frank
Act'') and imposing requirements on SDs and MSPs with respect to the
treatment of collateral posted by their counterparties to margin,
guarantee, or secure uncleared swaps.\2\ Additionally, the final rule
includes revisions to ensure that, for purposes of subchapter IV of
chapter 7 of the Bankruptcy Code, securities held in a portfolio
margining account that is a futures account or a Cleared Swaps Customer
Account constitute ``customer property''; and owners of such accounts
constitute ``customers.'' \3\ Section 4s(l) of the CEA sets forth
certain requirements concerning the rights of counterparties of SDs and
MSPs with respect to the segregation of money, securities, or other
property used to margin, guarantee, or otherwise secure uncleared
swaps. Regulation 23.701 implements part of the new statutory
requirements by specifying that certain information must be provided to
counterparties about the terms and conditions of segregation, including
price information, to the extent that the SD or MSP has such
information, and the identity of one or more independent depositories
for segregated collateral. Regulation 23.704 implements the
requirements of CEA Section 4s(l)(4), which dictates that, in certain
circumstances, an SD or MSP must report to the counterparty, on a
quarterly basis, ``that the back office procedures of the swap dealer
or major swap participant relating to margin and collateral
requirements are in compliance with the agreement of the
counterparties.''
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\2\ 78 FR 66621.
\3\ Id.
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As discussed above, the rules establish reporting andrecordkeeping
requirements that are mandated by Section 4s(l) of the CEA, which
states that SDs and MSPs must notify their counterparties of the right
to have their initial margin segregated and to maintain the
confirmations and elections related to such notices as business
records. The reporting and recordkeeping requirements are necessary to
implement the objectives of Section 4s(1). For example, the information
received by uncleared swap counterparties pursuant to Regulation 23.701
would alert counterparties to their statutory right, if they so choose,
to have funds or property used as margin in uncleared swaps
transactions with SDs and MSPs kept segregated from the property of the
SD or MSP. Likewise, the information provided would further alert
counterparties of the need to request such segregation if they wish to
exercise this right. Simlarly, the information received by uncleared
swap counterparties pursuant to Regulation 23.704 would be used to
confirm that the back office procedures followed by a SD or MSP with
whom they are dealing comply with the agreement of the parties.
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
use;
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
[[Page 22119]]
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.
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. 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 Commission's regulations.\4\
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\4\ 17 CFR 145.9.
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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 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 to reflect the current number of registered
SDs and MSPs. Accordingly, the respondent burden for this collection is
estimated to be as follows:
Number of Registrants: 102.
Estimated Average Burden Hours per Registrant: 3,406.
Estimated Aggregate Burden Hours: 347,412.
Frequency of Reporting: As applicable.
Authority: 44 U.S.C. 3501 et seq.
Dated: May 9, 2017.
Robert N. Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2017-09686 Filed 5-11-17; 8:45 am]
BILLING CODE 6351-01-P
Last Updated: May 12, 2017