Federal Register, Volume 76 Issue 141 (Friday, July 22, 2011)[Federal Register Volume 76, Number 141 (Friday, July 22, 2011)]
[Rules and Regulations]
[Pages 43874-43879]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-17710]
-----------------------------------------------------------------------
COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 160
RIN 3038-AD13
Privacy of Consumer Financial Information; Conforming Amendments
Under Dodd-Frank Act
AGENCY: Commodity Futures Trading Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Commodity Futures Trading Commission (``Commission'' or
``CFTC'') is amending its rules implementing new statutory provisions
enacted by titles VII and X of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the ``Dodd-Frank Act''). Section 1093 of the
Dodd-Frank Act provides for certain amendments to title V of the Gramm-
Leach-Bliley Act (the ``GLB Act''). The GLB Act sets forth certain
protections for the privacy of consumer financial information and was
amended by the Dodd-Frank Act to affirm the Commission's jurisdiction
in this area. The Commission's amendments to its regulations, inter
alia, broaden the scope of part 160 to cover two new entities created
by title VII of the Dodd-Frank Act: swap dealers and major swap
participants.
DATES: Effective date: September 20, 2011.
Compliance dates: Futures commission merchants, commodity pool
operators, commodity trading advisors, introducing brokers, and retail
foreign exchange dealers shall be in compliance with these rules not
later than November 21, 2011. Swap dealers and major swap participants
shall be in compliance with these rules not later than 60 days after
the effective date of the final entities definition rulemaking, which
the Commission will publish in the Federal Register at a future date.
FOR FURTHER INFORMATION CONTACT: Carl E. Kennedy, Counsel, Office of
General Counsel, (202) 418-6625, e-mail: [email protected], Commodity
Futures Trading Commission, Three Lafayette Centre, 1155 21st Street,
NW., Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
I. Background
Section 5g(b) of the CEA provides the Commission with the authority
to
[[Page 43875]]
prescribe regulations that establish appropriate standards for
financial institutions subject to its jurisdiction to safeguard
customer records and information in accordance with title V of the GLB
Act.\1\ Pursuant to this authority, the Commission promulgated part 160
of its regulations to require certain CFTC-regulated entities \2\ to
adopt appropriate policies and procedures that address safeguards to
customer records and information, including initial and annual privacy
notice requirements, opt-out provisions to the extent that these
registrants wish to share such records and information with non-
affiliates, and other measures to protect nonpublic consumer
information.\3\
---------------------------------------------------------------------------
\1\ See Gramm-Leach-Bliley Act, Public Law 106-102, 113 Stat.
1338 (1999) (codified in scattered sections of 12 U.S.C. and 15
U.S.C.). As enacted, title V of the GLB Act limits the instances in
which a financial institution may disclose nonpublic personal
information about a consumer to nonaffiliated third parties, and
requires a financial institution to disclose to all of its customers
the institution's privacy policies and practices with respect to
information sharing with both affiliates and nonaffiliated third
parties. Section 5g(b) of the CEA treats the Commission as a Federal
functional regulator within the meaning of title V of the GLB Act.
\2\ The Commission did not become subject to title V of the GLB
Act until 2000. Section 5g of the CEA was added by the Commodity
Futures Modernization Act of 2000 (7 U.S.C. 7b-2) to make the
Commission a ``Federal functional regulator'' subject to the GLB Act
Title V. Section 5g provides that the following entities are subject
to the Commission's jurisdiction for the purposes of title V of the
GLB Act: futures commission merchants (``FCMs''), commodity trading
advisors (``CTAs''), commodity pool operators (``CPOs''), and
introducing brokers (``IBs''). The scope of the part 160 rules
mirrors this list of entities.
The Commission jointly promulgated final rules with the Office
of the Comptroller of the Currency, the Board of Governors of the
Federal Reserve System, the Federal Depository Insurance
Corporation, the Office of Thrift Supervision, the National Credit
Union Administration, and the Securities and Exchange Commission
(collectively, the ``Agencies'') on April 27, 2001. See 66 FR 21236,
Apr. 27, 2001. On September 10, 2010, the Commission expanded the
scope of entities subject to the part 160 rules to include retail
foreign exchange dealers (``RFEDs'').
\3\ Section 160.3(h)(1) of the Commission's regulations defines
the term consumer to mean ``an individual who obtains or has
obtained a financial product or service from [a financial
institution] that is to be used primarily for personal, family or
household purposes, or that individual's legal representative.''
---------------------------------------------------------------------------
On October 27, 2010, the Commission published for comment in the
Federal Register proposed amendments to part 160 of its regulations
(the ``Proposal'') \4\ to implement certain provisions in titles VII
and X of the Dodd-Frank Wall Street Financial Reform and Consumer
Protection Act (the ``Dodd-Frank Act'').\5\
---------------------------------------------------------------------------
\4\ See 75 FR 66014, Oct. 27, 2010.
\5\ See Public Law 111-203, 124 Stat. 1376 (2010). The text of
the Dodd-Frank Act may be accessed at http://www.cftc.gov. Title X
of the Dodd-Frank Act creates a new consumer financial services
regulator, the Bureau of Consumer Financial Protection (the
``Bureau''), that will assume most of the consumer financial
services regulatory responsibilities currently spread among numerous
agencies. However, these rules will continue to apply to financial
institutions that are subject to the Commission's jurisdiction. In
addition, the Commission will continue to have plenary oversight
authority over such institutions.
---------------------------------------------------------------------------
In the Proposal, the Commission sought comments on proposed
amendments to part 160 in accordance with section 1093 \6\ and title
VII of the Dodd-Frank Act to, inter alia, broaden the types of entities
that are subject to the Commission's jurisdiction \7\ to provide
certain privacy protections for consumer financial information to
include swap dealers (SDs) and major swap participants (MSPs). In
addition, the Commission proposed: (1) in accordance with the transfer
of authority in title X, changing all references in part 160 from the
FTC to the Bureau; and (2) renaming part 160 to ``Privacy of Consumer
Financial Information under the Gramm-Leach-Bliley Act'' to harmonize
the title of part 160 with a new part of the Commission's
regulations.\8\
---------------------------------------------------------------------------
\6\ Specifically, section 1093 of the Dodd-Frank Act amends
section 504 of the GLB Act by providing that ``the [CFTC] shall have
the authority to prescribe such regulations as may be necessary to
carry out the purposes of [title V of the GLB Act] with respect to
any financial institutions and other persons subject to the
jurisdiction of the [CFTC] under section 5g of the [CEA].'' As
discussed in the proposing release, the Commission has determined
that section 1093 simply reaffirms its authority to prescribe
regulations under title V of the GLB Act.
\7\ Title VII of the Dodd-Frank Act creates two new entities
over which the Commission has jurisdiction: swap dealers (``SDs'')
and major swap participants (``MSPs''). The terms ``SD'' and ``MSP''
as used in this final rule refer to the statutory definitions of
such terms as defined in title VII of the Dodd-Frank Act, and as may
be further defined by the Commission in a future final rulemaking.
See section 721(b) of the Dodd-Frank Act, which provides that the
Commission has the authority to adopt rules further defining any
term in the CEA in a manner that is consistent with the Dodd-Frank
Act. See also section 721(c) which provides that the Commission is
required to adopt a rule to further define, inter alia, the terms
``swap dealer'' and ``major swap participant'' to include
transactions and entities that have been structured to evade
provisions in the Dodd-Frank Act.
\8\ In a forthcoming release, the Commission plans to promulgate
a new part 162, which provides privacy protections under the Fair
Credit Reporting Act, 15 U.S.C. 1681 et seq. (``FCRA'').
---------------------------------------------------------------------------
The 60-day public comment period on the Proposal expired on
December 27, 2010. In response to the Proposal, the Commission received
a total of six comments: Two substantive comments and four other
comments that did not address the merits or substance of the Proposal.
The Securities Industry and Financial Markets Association
(``SIFMA'') commented on the following aspects of the proposal: (1) The
proposed compliance date; (2) the annual burden estimate for the
purpose of the Paperwork Reduction Act analysis and cost-benefit
analysis; and (3) the appropriate standard applicable with regard to
state laws.
The International Swaps and Derivatives Association, Inc.
(``ISDA'') and the Financial Services Roundtable (``FSR'') jointly
submitted a comment letter generally in support of the Proposal. That
is, ISDA and the FSR did not provide specific comments in response to
the Proposal. ISDA and the FSR, however, encouraged the Commission to
work collaboratively with other agencies to decrease duplication in
regulation and increase efficiency industry-wide.
The Commission's final rules, the specific comments noted above and
the Commission's responses to those specific comments are discussed in
greater detail below.\9\
---------------------------------------------------------------------------
\9\ This final rule incorporates technical revisions to its
proposed amendments to add clarity. These revisions are not
substantive and are not of the nature for which notice and comment
must be provided under the Administrative Procedure Act. For
example, in Sec. 160.3(x)(7), the Commission deleted the language
``subject to the jurisdiction of the Commission'' after the term
``Any swap dealer,'' since the Commission believes that the
inclusion of such language was redundant and unnecessary.
---------------------------------------------------------------------------
II. Rule Amendments
A. Renaming the Title of Part 160
The Commission is renaming the title of part 160 to reflect the
scope of the part 160 regulations. The Commission's part 160
regulations implement certain protections for the privacy of consumer
financial information under the GLB Act. To harmonize the title of part
160 with the new part 162 being adopted under a separate
rulemaking,\10\ Part 160 is renamed ``Privacy of Consumer Financial
Information under the Gramm-Leach-Bliley Act.''
---------------------------------------------------------------------------
\10\ In a forthcoming release titled ``Business Affiliate
Marketing and Disposal of Consumer Information Rules,'' the
Commission will adopt a new part 162 of its regulations.
---------------------------------------------------------------------------
B. Scope of 17 CFR 160.1(b)
Regulation 160.1(b) sets out the scope of the Commission's rules
and identifies the financial institutions covered by the rules that
include CFTC registrants regardless of whether they are required to
register with the Commission. As referenced above, the Commission is
amending the scope of part 160 to add SDs and MSPs.
C. Section 160.3--Definitions
Since the scope of the regulations extends to SDs and MSPs, the
Commission amends Sec. 160.3 to add the definitions of SDs and MSPs to
the list
[[Page 43876]]
of defined terms under Sec. 160.3. Specifically, the Commission
defines ``major swap participant'' to have the same meaning as in
section 1a(33) of the CEA, as further defined by the Commission's
regulations, and includes any person registered as such thereunder. The
Commission defines ``swap dealer'' to have the same meaning as in
section 1a(49) of the CEA, as further defined by the Commission's
regulations, and includes any person registered as such thereunder.
There are existing definitions and related provisions under part
160 that are amended to include these new registrants. Specifically,
the definitions of ``financial institution'', ``affiliate'', and
``you'' are amended to include swap dealers and major swap
participants.
D. Section 160.15--Other Exceptions to Notice and Opt-out Requirements
As noted above, title X of the Dodd-Frank Act transferred certain
authority from the FTC to the Bureau. Accordingly, the Commission is
changing the reference from the FTC to the Bureau in Sec. 160.15 to
reflect that the Bureau is now a Federal functional regulator.
E. Section 160.17(b)--Relation to State Laws
Existing Sec. 160.17(b) of the Commission's regulations clarifies
the relationship of title V to state consumer protection laws. As a
result of the creation of the Bureau and the transfer of certain
authority from the FTC to the Bureau, the Commission proposed to amend
Sec. 160.17(b) by replacing it with the standard set out in section
1041(a)(2) of the Dodd-Frank Act. In the Commission's view, while the
language of the standard in section 1041(a)(2) is structured slightly
different from the existing standard in Sec. 160.17(b), the Commission
believed that the proposed language was nearly identical in substance
to the current standard in Sec. 160.17(b).
SIFMA commented that the standard for relation to state laws should
be the same as the standard under section 507(b) of the GLB Act. SIFMA
asserted that the appropriate standard should more closely follow
section 507(b)--not section 1041 of the Dodd-Frank Act--because the
former standard would achieve maximum consistency with the rules of the
Office of the Comptroller of the Currency, the Board of Governors of
the Federal Reserve System, the Federal Depository Insurance
Corporation, the Office of Thrift Supervision, the National Credit
Union Administration, and the Securities and Exchange Commission
(collectively, the ``Agencies'') and would maintain the settled
expectations of the market participants, which have complied with the
standards of GLB Act for several years.
The Commission has carefully considered SIFMA's comment and has
amended Sec. 160.17(b) to use the language of section 507(b) of the
GLB Act, as amended by section 1093(6) of the Dodd-Frank Act. The
Commission recognizes that market participants are familiar with the
standard in section 507(b) of the GLB Act, and therefore, changing the
language of the standard ever so slightly from what is in section
507(b) may create unnecessary and unintended confusion.
F. Section 160.30--Procedures to Safeguard Customer Records and
Information
Section 160.30 requires CFTC registrants to adopt policies and
procedures that, among other things, address administrative, technical
and physical safeguards for the protection of customer records and
information. The Commission amends the introductory sentence of Sec.
160.30 to add SDs and MSPs to the list of CFTC registrants that must
comply with this requirement.
III. Effective Date
In the Proposal, the Commission proposed to adopt the amendments to
part 160 on July 21, 2011, which coincides with the designated transfer
date when various Federal agencies transfer their consumer protection
authority to the Consumer Financial Protection Bureau pursuant to
section 1100H of the Dodd-Frank Act.\11\ In response to the proposed
effective date, SIFMA expressed concern that this timeframe would not
provide covered entities with a reasonable amount of time to address
and implement the new rules. To address this concern, SIFMA requested
that the Commission extend the effective date of the final rules to
commence nine months from the date of the rules' publication in the
Federal Register to ensure a reasonable time for compliance.
---------------------------------------------------------------------------
\11\ See 75 FR 57252-02, Sept. 20, 2010.
---------------------------------------------------------------------------
The Commission partly agrees with SIFMA's comment in that SDs and
MSPs may need a reasonable amount of time to comply with the amendments
to part 160 since these are two new types of Commission-regulated
entities. The Commission, however, believes that nine months is more
time than is necessary for these new regulated entities to comply with
part 160. The Commission has decided to establish staggered compliance
dates for its regulated entities that fall within the scope of part
160.\12\ Specifically, with respect to those Commission-regulated
entities that were previously complying with part 160--FCMs, IBs, CPOs,
CTA, and RFEDs--the amendments to part 160 will not require that these
entities materially alter their compliance programs. Accordingly, in
the Commission's view, the appropriate compliance date for these
entities is 120 days from the date of publication in the Federal
Register. With respect to SDs and MSPs, the compliance date for these
entities is 60 days from the date of publication of the Commission's
final entities definitional rulemaking, which shall be published in the
Federal Register at a date in the future.\13\
---------------------------------------------------------------------------
\12\ The effective date of the amendments to part 160 shall be
60 days from the date of publication in the Federal Register.
\13\ See the Commission's proposed entities definitional
rulemaking at 75 FR 80174, Dec. 21, 2010.
---------------------------------------------------------------------------
IV. Related Matters
A. Cost-Benefit Considerations.
Section 15(a) of the CEA explicitly requires the Commission to
consider the costs and benefits of its actions before issuing a rule or
order under the CEA. By its terms, section 15(a) neither requires the
Commission to quantify the costs and benefits of amendments to
regulations, nor does it require the Commission to determine whether
the benefits of the amendments outweigh its costs. Section 15(a)
specifies that the costs and benefits shall be evaluated in light of
five broad areas of market and public concern: (1) Protection of market
participants and the public; (2) efficiency, competitiveness and
financial integrity of futures markets; (3) price discovery; (4) sound
risk management practices; and (5) other public interest
considerations. The Commission may in its discretion give greater
weight to any one of the five enumerated areas and could in its
discretion determine that, notwithstanding its costs, a particular
amendment is necessary or appropriate to protect the public interest or
to effectuate any of the provisions or accomplish any of the purposes
of the CEA.
Promulgated in 2001, part 160 of the Commission's regulations
currently applies to several types of Commission-regulated entities,
including FCMs, IBs, CTAs, CPOs and RFEDs. The Commission proposed and
later promulgated the rules in part 160 in concert with the Agencies in
order to broadly protect individual customers from all types of
regulated businesses
[[Page 43877]]
(including businesses that are regulated with the Commission) that have
access to nonpublic personal information. Part 160 imposes disclosure
and procedural requirements that are either mandated by or fully
consistent with the privacy provisions of the GLB Act and section 5g of
the CEA.
The Dodd-Frank Act created two new entities over which the
Commission has jurisdiction (i.e., SDs and MSPs), and specifically
mandated that the Commission has the authority to prescribe regulations
as necessary to carry out the purposes of title V of the GLB Act for
entities under its jurisdiction. In its Proposal, the Commission
primarily sought to expand the scope of part 160 to cover these new
entities because the Commission believes that, like FCMs, IBs, CTAs,
CPOs and RFEDs, these new entities are more likely to have access to
nonpublic personal information. The cost-benefit discussion in the
Proposal analyzed the costs and benefits of extending the existing
regulatory regime in part 160 to these new entities.
The Commission has considered the costs and benefits of the final
rule in light of comments received and the specific areas of concern
identified in section 15(a). An analysis of the section 15(a) factors
is set out immediately below, followed by a discussion of the comments
received in response to the Commission's cost-benefit discussion in the
Proposal.
1. Protection of market participants and the public. The
requirements to provide opt out notices and to protect customer
information will benefit market participants and the public by
protecting the privacy of their nonpublic personal information. The
Commission believes that extending these requirements to SDs and MSPs
will further ensure the protection of nonpublic personal information.
The Commission further believes that the costs, which will be placed on
these new entities will not exceed those costs currently placed on
FCMs, IBs, CTAs, CPOs and RFEDs. In the Commission's view, SDs and MSPs
will likely have similar resources and administrative infrastructure to
comply with the part 160 requirements. Moreover, while these new
entities will likely incur some incremental costs in complying with
part 160, the privacy protection benefits that will accrue to the
general public far outweigh those costs.
2. Efficiency and competition. The requirements to provide initial
and annual privacy notices will benefit efficiency and competition by
allowing customers to compare the privacy policies of financial
institutions. The Commission's final rules also will benefit efficiency
and competition by allowing SDs and MSPs flexibility to distribute
notices and to adopt policies and procedures to protect customer
information that are best suited to the institution's business and
needs. As noted above, the Commission believes that the costs, which
will be placed on these new entities will not exceed those costs
currently placed on FCMs, IBs, CTAs, CPOs and RFEDs. Indeed, SDs and
MSPs will likely have similar resources and administrative
infrastructure to comply with the part 160 requirements.
3. Price discovery and financial integrity of futures and swaps
markets, price discovery and sound risk management practices. The final
rules should have no effect, from the standpoint of imposing costs or
creating benefits, on the price discovery function or financial
integrity of the futures and swaps markets or on the risk management
practices of SDs or MSPs.
4. Other public interest considerations. In the same manner that
part 160 was designed to minimize the costs of compliance on FCMs, IBs,
CTAs, CPOs and RFEDs, part 160 will similarly provide SDs and MSPs with
maximum flexibility, consistent with legal requirements, to design
their own compliance systems. Ultimately, the Commission believes that
extending the scope of part 160 to SDs and MSPs will harmonize privacy
protections for individual customers across the futures and swaps
markets.
5. Response to comments. In its Proposal, the Commission solicited
comment on its consideration of these costs and benefits. The
Commission received one comment with respect to costs and benefits of
the Proposal. Specifically, SIFMA argued that the Commission also
should consider anticipated additional costs associated with monitoring
the privacy and opt-out notice process, addressing consumer issues, and
adjusting records to comport with consumer requests. SIFMA did not
provide specific cost information to support its comments.
Despite SIFMA's argument that the Commission did not consider the
additional costs identified above, there are several Commission-
regulated entities that already comply with part 160, and the final
rule simply extends this protection to new registrants, SDs and MSPs.
As noted above, the Commission believes that the costs, which will be
placed on these new entities will be no greater than those costs
currently placed on FCMs, IBs, CTAs, CPOs and RFEDs. In the
Commission's view, there is no reason why SDs and MSPs should be
excluded from these requirements to the extent that they conduct
business with a natural person. SDs and MSPs will likely have similar
resources and administrative infrastructure to comply with the part 160
requirements. The additional costs that SIFMA raised (but did not
articulate with specificity) were subsumed within the considerations
discussed in the Proposal.\14\
---------------------------------------------------------------------------
\14\ See the Commission's cost-benefit discussion and Paperwork
Reduction Act analysis at 75 FR at 66016-17.
---------------------------------------------------------------------------
In line with Section 15(a) of the CEA, the Commission believes that
extending these provisions to SDs and MSPs is in the public interest
and will further protect market the general public, promote efficiency
and competition, and address other public interest considerations such
as the harmonization of regulation across the futures and swaps
markets. In the Commission's view, these benefits far outweigh the
additional costs that SIFMA cited.
B. Paperwork Reduction Act.
This rule contains information collection requirements. As required
by the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq., the
Commission submitted a copy of the Proposal to the Office of Management
and Budget (``OMB'') for review. The Commission may not sponsor, and a
person is not required to respond to an information collection unless
it displays a currently valid OMB control number.
The final rule, affecting part 160, titled ``Privacy of Consumer
Financial Information,'' OMB Control Number 3038-0055, expands the
scope of this part to cover SDs and MSPs, two new classes of
registrants, now subject to Commission jurisdiction. The final rule
imposes mandatory requirements for these entities. SDs and MSPs must
provide initial and annual privacy and opt-out notices to all customers
that are natural persons.
In response to the Commission's request in the notice of proposed
rulemaking for comments on any potential paperwork burden associated
with this regulation, only one commenter provided a substantive comment
addressing the merits of the Commission's proposed PRA calculations. In
particular, SIFMA proposed that the burden estimate should be refined
to reflect anticipated additional burden hours associated with
monitoring the privacy and opt-out notice process, addressing consumer
issues, and adjusting records to comport with consumer requests.
[[Page 43878]]
Based on this comment, the Commission estimates that the
approximately 300 SDs and MSPs may incur additional burden hours.
Consequently, it is anticipated the 300 SDs and MSPs may incur an
additional aggregate of 1440 burden hours than what was stated in the
Proposal, monitoring an average of 20 notices per year, with an average
monitoring time of .24 hours per notice. Accordingly, the Commission
has submitted to the OMB an amended calculation of the annual burden
hours for SDs and MSPs. OMB has approved a revision to Control Number
3038-0055 to cover the revision in the Commission's annual burden
calculation.
C. Regulatory Flexibility Act.
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires that
Federal agencies consider whether their proposed regulations will have
a significant economic impact on a substantial number of small
entities. The rule amendments adopted herein now will affect SDs and
MSPs, in addition to the certain Commission regulated entities that are
currently subject to Commission's regulations under part 160. These
regulations require periodic notice to be provided to individuals who
obtain financial products or services primarily for personal, family,
or household purposes from the institutions, and may be satisfied by
the use of a model notice developed by the Commission and other
regulatory agencies to minimize the burden of compliance. The
Commission certified in the Proposal that these rules will not have a
significant economic impact on a substantial number of small entities.
Accordingly, because the Commission received no substantive comments
from the public addressing the merits of the proposed rule, nothing
alters the Commission's determination that the obligations created by
these rule amendments will not create a significant economic impact on
a substantial number of small entities.
D. Regulatory Text.
List of Subjects in 17 CFR Part 160
Brokers, Dealers, Consumer protection, Privacy, Reporting and
recordkeeping requirements.
For the reasons articulated in the preamble, the Commission amends
part 160 of title 17 of the Code of Federal Regulations as follows:
0
1. The authority citation for part 160 is revised to read as follows:
Authority: 7 U.S.C. 7b-2 and 12a(5); 15 U.S.C 6801, et seq.,
and sec. 1093, Pub. L. 111-203, 124 Stat. 1376.
0
2. The heading for part 160 is revised to read as follows:
PART 160--PRIVACY OF CONSUMER FINANCIAL INFORMATION UNDER TITLE V
OF THE GRAMM-LEACH-BLILEY ACT
0
3. Amend section 160.1 by revising paragraph (b) to read as follows:
Sec. 160.1 Purpose and scope.
* * * * *
(b) Scope. This part applies only to nonpublic personal information
about individuals who obtain financial products or services primarily
for personal, family, or household purposes from the institutions
listed below. This part does not apply to information about companies
or about individuals who obtain financial products or services
primarily for business, commercial, or agricultural purposes. This part
applies to all futures commission merchants, retail foreign exchange
dealers, commodity trading advisors, commodity pool operators,
introducing brokers, major swap participants and swap dealers that are
subject to the jurisdiction of the Commission, regardless whether they
are required to register with the Commission. These entities are
hereinafter referred to in this part as ``you.'' This part does not
apply to foreign (non-resident) futures commission merchants, retail
foreign exchange dealers, commodity trading advisors, commodity pool
operators, introducing brokers, major swap participants and swap
dealers that are not registered with the Commission.
0
4. Amend Sec. 160.3 as follows:
0
a. Revise paragraphs (a), (n)(1)(i), (n)(1)(ii), and (o)(1)(i);
0
b. Redesignating paragraphs (w) and (x) as paragraphs (y) and (z);
0
c. Redesignating paragraphs (s) through (v) as paragraphs (t) through
(w);
0
d. Adding new paragraphs (s) and (x);
0
e. Revising new designated paragraphs (y)(4) and (y)(5); and
0
f. Adding new paragraph (y)(6) and (7) to read as follows:
Sec. 160.3 Definitions.
* * * * *
(a) Affiliate of a futures commission merchant, retail foreign
exchange dealer, commodity trading advisor, commodity pool operator,
introducing broker, major swap participant, or swap dealer means any
company that controls, is controlled by, or is under common control
with a futures commission merchant, retail foreign exchange dealer,
commodity trading advisor, commodity pool operator, introducing broker,
major swap participant, or swap dealer that is subject to the
jurisdiction of the Commission. In addition, a futures commission
merchant, retail foreign exchange dealer, commodity trading advisor,
commodity pool operator, introducing broker, major swap participant, or
swap dealer subject to the jurisdiction of the Commission will be
deemed an affiliate of a company for purposes of this part if:
(1) That company is regulated under title V of the GLB Act by the
Bureau of Consumer Financial Protection or by a Federal functional
regulator other than the Commission; and
(2) Rules adopted by the Bureau of Consumer Financial Protection or
another Federal functional regulator under title V of the GLB Act treat
the futures commission merchant, retail foreign exchange dealer,
commodity trading advisor, commodity pool operator, introducing broker,
major swap participant, or swap dealer as an affiliate of that company.
* * * * *
(n)(1) * * *
(i) Any futures commission merchant, retail foreign exchange
dealer, commodity trading advisor, commodity pool operator, introducing
broker, major swap participant, or swap dealer that is registered with
the Commission as such or is otherwise subject to the Commission's
jurisdiction; and
* * * * *
(2) * * *
(i) Any person or entity, other than a futures commission merchant,
retail foreign exchange dealer, commodity trading advisor, commodity
pool operator, introducing broker, major swap participant, or swap
dealer that, with respect to any financial activity, is subject to the
jurisdiction of the Commission under the Act.
* * * * *
(o)(1) * * *
(i) Any product or service that a futures commission merchant,
retail foreign exchange dealer, commodity trading advisor, commodity
pool operator, introducing broker, major swap participant, or swap
dealer could offer that is subject to the Commission's jurisdiction;
and
* * * * *
(s) Major swap participant. The term ``major swap participant'' has
the same meaning as in section 1a(33) of the Commodity Exchange Act, 7
U.S.C. 1 et seq., as may be further defined by this title, and includes
any person registered as such thereunder.
* * * * *
[[Page 43879]]
(x) Swap dealer. The term ``swap dealer'' has the same meaning as
in section 1a(49) of the Commodity Exchange Act, 7 U.S.C. 1 et seq., as
may be further defined by this title, and includes any person
registered as such thereunder.
* * * * *
(y) * * *
(4) Any commodity pool operator;
(5) Any introducing broker;
(6) Any major swap participant; and
(7) Any swap dealer.
* * * * *
0
5. Revise Sec. 160.15(a)(4) to read as follows:
Sec. 160.15 Other exceptions to notice and opt out requirements.
* * * * *
(4) To the extent specifically permitted or required under other
provisions of law and in accordance with the Right to Financial Privacy
Act of 1978, 12 U.S.C. 3401 et seq., to law enforcement agencies
(including a Federal functional regulator, the Secretary of the
Treasury, with respect to 31 U.S.C. Chapter 53, Subchapter II (Records
and Reports on Monetary Instruments and Transactions) and 12 U.S.C.
Chapter 21 (Financial Recordkeeping), a State insurance authority, with
respect to any person domiciled in that insurance authority's state
that is engaged in providing insurance, and the Bureau of Consumer
Financial Protection), self-regulatory organizations, or for an
investigation on a matter related to public safety;
* * * * *
0
6. Amend Sec. 160.17 by revising paragraph (b) to read as follows:
Sec. 160.17 Relation to state laws.
* * * * *
(b) Greater protection under state law. For purposes of this
section, a state statute, regulation, order or interpretation is not
inconsistent with the provisions of this part if the protection such
statute, regulation, order or interpretation affords any person is
greater than the protection provided under this part, as determined by
the Bureau of Consumer Financial Protection, after consultation with
the Commission, on its own motion or upon the petition of any
interested party.
0
7. Revise Sec. 160.30 to read as follows:
Sec. 160.30 Procedures to safeguard customer records and information.
Every futures commission merchant, retail foreign exchange dealer,
commodity trading advisor, commodity pool operator, introducing broker,
major swap participant, and swap dealer subject to the jurisdiction of
the Commission must adopt policies and procedures that address
administrative, technical and physical safeguards for the protection of
customer records and information.
Issued in Washington, DC on July 7, 2011 by the Commission.
David A. Stawick,
Secretary of the Commission.
Appendices to Privacy of Consumer Financial Information; Conforming
Amendments Under Dodd-Frank Act--Commission Voting Summary and
Statements of Commissioners
Note: The following appendices will not appear in the Code of
Federal Regulations.
Appendix 1--Commission Voting Summary
On this matter, Chairman Gensler and Commissioners Dunn,
Sommers, O'Malia and Chilton voted in the affirmative; no
Commissioner voted in the negative.
Appendix 2--Statement of Chairman Gary Gensler
I support the final rulemaking to expand the scope of privacy
protections for consumer financial information under the Gramm-
Leach-Bliley Act. The rulemaking expands the scope of the
Commission's existing privacy protections afforded to consumers'
information--under the Commission's Part 160 rules--to swap dealers
and major swap participants.
[FR Doc. 2011-17710 Filed 7-21-11; 8:45 am]
BILLING CODE 6351-01-P
Last Updated: July 22, 2011