2020-13465
Federal Register, Volume 85 Issue 122 (Wednesday, June 24, 2020)
[Federal Register Volume 85, Number 122 (Wednesday, June 24, 2020)]
[Notices]
[Pages 37880-37922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13465]
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COMMODITY FUTURES TRADING COMMISSION
RIN 3038-0023; 3038-0072
Adoption of Revised Registration Form 8-R
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice.
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SUMMARY: The Commodity Futures Trading Commission (the ``Commission''
or ``CFTC'') is revising its Form 8-R, the application form that
individuals must use to register with the Commission as an associated
person of a registrant, floor broker, or floor trader, or to be listed
as a principal of a registrant (collectively, ``applicants''). These
revisions, which are essentially technical and non-substantive in
nature, have been adopted to assist the National Futures Association
(``NFA'') in the performance of the registration functions authorized
by the Commission, and in the implementation and operation of NFA's
program to register and regulate directly the associated persons
sponsored by members of NFA.
DATES: The new, revised version of Form 8-R shall come into effect (and
the prior version shall cease to be in effect) when the NFA makes the
new, revised version of the Form 8-R available on the NFA website for
use by individual applicants.
FOR FURTHER INFORMATION CONTACT: Joshua Sterling, Director, (202) 418-
6700, [email protected]; Amanda Olear, Deputy Director, (202) 418-
5283, [email protected]; or Christopher Cummings, Special Counsel, (202)
418-5445, [email protected], Division of Swap Dealer and Intermediary
Oversight, Commodity Futures Trading Commission, 1155 21st Street NW,
Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
I. Background
Form 8-R requests information about the applicant that can be used
to assess the applicant's fitness to engage in business as a
derivatives professional. Form 8-R is a Commission form administered
and used by NFA. Individuals acting in certain capacities in the
markets regulated by the Commission must file a completed Form 8-R with
NFA.\1\ These applicants include: associated persons of futures
commission merchants, retail foreign exchange dealers, introducing
brokers, commodity trading advisors, commodity pool operators, and
leverage transaction merchants; floor brokers; and floor traders.\2\
Additionally, any individual acting in the capacity as principal of a
futures commission merchant, retail foreign exchange dealer,
introducing broker, commodity trading advisor, commodity pool operator,
swap dealer, major swap participant, floor trader or leverage
transaction merchant also must file a completed Form 8-R.\3\ Lastly,
individuals that enter orders for floor trader firms must file the Form
8-R as well.\4\ Individual applicants have been required to use Form 8-
R since 1977.\5\
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\1\ 17 CFR 3.10(a)(2), 3.11(a), and 3.12(c).
\2\ 17 CFR 3.11(a); 3.12(c).
\3\ 17 CFR 3.1(a); 3.10(a)(2); 3.11(a)(1). While ``principal''
is not technically a registration class and principals do not apply
for registration, for purposes of this Notice, the Form 8-R filings
by principals will be referred to with the other Form 8-R filings as
``registration applications.''
\4\ 17 CFR 3.11(a)(1).
\5\ Revision of Registration Forms and Amendment of Related
Rules, 42 FR 23988 (May 11, 1977) (Form 8-R replaced Forms 2-R, 4-R
and 94).
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NFA is currently the only registered futures association authorized
by the Commission in accordance with Section 17 of the Commodity
Exchange Act (``Act'').\6\ Pursuant to Section 17(o) of the Act,\7\
Regulation 3.2,\8\ and a series of orders, the Commission delegated to
NFA certain registration functions including, among other things, the
processing of all Form 8-R filings.\9\
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Since the first delegation to NFA in 1984, NFA has developed
substantial expertise in registration matters, including reviewing and
processing completed Forms 8-R. In 2002, with the approval of the
Commission, NFA replaced its paper-based registration system with an
online registration system that utilizes, among other things, an
electronic version of Form 8-R.\10\
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\6\ 7 U.S.C. 21 (2012).
\7\ 7 U.S.C. 21(o) (2012).
\8\ 17 CFR 3.2.
\9\ See, e.g., Introducing Brokers and Associated Persons of
Introducing Brokers; Authorization of National Futures Association
to Perform Commission Registration Functions, 48 FR 35158 (Aug. 3,
1983); Performance of Registration Functions by National Futures
Association, 49 FR 39593 (Oct. 9, 1984) (futures commission
merchants, commodity pool operators, commodity trading advisors, and
associated persons thereof); Performance of Registration Functions
by National Futures Association; Delegation of Authority, 51 FR
34490 (Sept. 29, 1986) (floor brokers); Performance of Registration
Functions by National Futures Association with Respect to Floor
Traders and Floor Brokers, 58 FR 19657 (Apr. 15, 1993); and
Performance of Registration Functions by National Futures
Association with Respect to Swap Dealers and Major Swap
Participants, 77 FR 2708 (Jan. 19, 2012).
\10\ Registration of Intermediaries, 67 FR 38869 (June 6, 2002).
The transition to an online registration system has permitted
greater efficiencies, including allowing individuals to update their
existing Forms 8-R instead of completing a separate Form 3-R. To
that end, in 2012, the Commission eliminated the requirement that
registrants and individuals use Form 3-R to update information in
their existing Form 7-R or 8-R, and provided that an update to a
registrant's online Form 7-R or 8-R would automatically create a
record of changes equivalent to a completed Form 3-R. Registration
of Intermediaries, 77 FR 51898 (Aug. 28, 2012); see also,
Registration of Intermediaries, 76 FR 12888, 12891 (proposed Mar. 9,
2011).
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II. Revisions to Commission Form 8-R
NFA has requested that the Commission make several changes to Form
8-R.\11\ Upon consideration, the Commission is making all of the
changes requested by NFA and revising and updating Form 8-R
accordingly. In addition, the Commission is updating the Form 8-R
Privacy Act and Paperwork Reduction Act Statements. The Form 8-R
revisions are described below.
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\11\ Request from NFA to CFTC, dated February 14, 2020, which is
on file with the Commission.
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In the ``Completing the Proficiency Requirements Section'' of the
Form 8-R, the Commission is adding a paragraph that describes the
obligation of an individual seeking approval as a swap associated
person or as a sole-proprietor swap firm to satisfy the Swaps
Proficiency Requirements, and what constitutes satisfaction of those
requirements. In the application itself, the Commission is adding a
question that asks whether the applicant has completed the Swaps
Proficiency Requirements within the past two years.\12\ The Commission
is making these changes to conform Form 8-R to the Swaps Proficiency
Requirements in NFA Bylaw 301 and Compliance Rule 2-24,\13\ recently
implemented by NFA pursuant to CEA section 17(j).\14\ The Commission
believes that this question is a necessary addition to the form, as
Form 8-R is a screening instrument assessing fitness of a swaps
associated person, so this question only effectuates this new
requirement, ensuring that it has been met.\15\
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\12\ The Commission acknowledges that this requirement is not
effective until January 31, 2021, so an applicant's response, before
that date, would not have an effect on meeting their fitness
requirements.
\13\ Interpretive Notice 9075-NFA Bylaw 301 and Compliance Rule
2-24: Proficiency Requirements for Swap APs,'' effective January 31,
2020, available at https://www.nfa.futures.org/rulebook/rules.aspx?Section=9&RuleID=9075. See generally section 17(p)(1) of
the Act, 7 U.S.C. 21(p), which requires a futures association to
establish training standards and proficiency testing for persons
involved in the solicitation of swaps and their supervisors.
\14\ CEA section 17(j) (7 U.S.C. 21(j)) permits a registered
futures association such as NFA to make rule changes effective ten
days after receipt by the Commission of such changes, provided the
Commission does not notify the registered futures association within
that ten-day period that it intends to review the changes for
approval. The Commission did not so notify NFA in this instance.
\15\ The Commission expects those individuals that meet this
standard to still retain documentation of proof.
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The revised Form 8-R also replaces the Federal Bureau of
Investigation (``FBI'')-mandated disclosure for persons whose
fingerprints are taken for purposes other than criminal justice with an
updated version of that disclosure. In 2018, the FBI updated its
Privacy Rights notice \16\ and Privacy Act disclosure; \17\ therefore,
the Commission is making conforming changes to Form 8-R.\18\
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\16\ See, https://www.fbi.gov/file-repository/compact-council-noncriminal-justice-applicants-privacy-rights.pdf/view.
\17\ 5 U.S.C. 552a.
\18\ 28 CFR 16.30-34.
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In the ``Definition of Terms'' section, the Commission is revising
the definition of ``adversary action'' to conform the definition to the
way the term is used in the form's ``Disciplinary Information
Section.'' The Commission is revising this definition to make the use
of the term ``adversary action'' in Form 8-R internally consistent.
Finally, the words ``entity'' and ``person'' are underlined where
they occur in the text to indicate that they are terms that are defined
in the ``Definition of Terms'' section.
A revised version of Form 8-R that incorporates the changes
discussed above is attached as Appendix A to this Notice.
III. Related Matters
Paperwork Reduction Act. Recordkeeping or information collection
requirements under the Paperwork Reduction Act (``PRA'') related to
Form 8-R exist under current law. The titles for the existing
information collections are ``Registration Under the Commodity Exchange
Act,'' OMB control number 3038-0023, and ``Registration of Swap Dealers
and Major Swap Participants,'' OMB control number 3038-0072. The
preliminary view of the Commission is that the revisions to Form 8-R
may modify the existing recordkeeping or information collection
requirements under the PRA. To ensure compliance with the PRA, the
Commission will publish in the Federal Register a separate notice and
request for comment on the amended PRA burden associated with the
revised Form 8-R.\19\ The Commission also will submit to OMB an
information collection request to amend the information collection, in
accordance with 44 U.S.C. 3506(c)(2)(A) and 5 CFR 1320.8(d).
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\19\ The notice and request for comment on the amended PRA
burden will also address reassigning from Form 3-R to Form 8-R the
PRA burden associated with providing updated information on Form 8-
R.
Issued by the Commission on June 18, 2020, in Washington, DC
Robert Sidman,
Deputy Secretary of the Commission.
Note: The following appendices will not appear in the Code of
Federal Regulations.
Appendices to Adoption of Revised Registration Form 8-R--Form 8-R and
Commission Voting Summary
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Appendix 1--Commission Voting Summary
On this matter, Chairman Tarbert and Commissioners Quintenz,
Behnam, Stump, and Berkovitz voted in the affirmative. No
Commissioner voted in the negative.
[FR Doc. 2020-13465 Filed 6-23-20; 8:45 am]
BILLING CODE 6351-01-C