2014-00406
Federal Register, Volume 79 Issue 9 (Tuesday, January 14, 2014)[Federal Register Volume 79, Number 9 (Tuesday, January 14, 2014)]
[Rules and Regulations]
[Pages 2370-2371]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-00406]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 42
RIN 3038-AB90
Updates to Cross-References to Bank Secrecy Act Regulations
AGENCY: Commodity Futures Trading Commission.
ACTION: Final rule; technical amendments.
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SUMMARY: The Commodity Futures Trading Commission (``Commission'') is
adopting technical amendments to the Commission's regulations that
correct cross-references to regulations administered by the Financial
Crimes Enforcement Network (``FinCEN''), a bureau of the U.S.
Department of Treasury, under the Bank Secrecy Act (``BSA''). FinCEN's
regulations have been reorganized and transferred to a new chapter in
the Code of Federal Regulations. The amendments update the cross-
references to FinCEN regulations and are to be made effective upon
publication of this rulemaking.
DATES: Effective January 14, 2014.
FOR FURTHER INFORMATION CONTACT: Helene D. Schroeder, Special Counsel,
(202) 418-5424, [email protected], Commodity Futures Trading
Commission, Division of Swap Dealer and Intermediary Oversight, Three
Lafayette Centre, 1155 21st Street NW., Washington DC 2058.
SUPPLEMENTARY INFORMATION:
I. Background
The BSA \1\ authorizes the Secretary of the Treasury (the
``Secretary'') to issue regulations requiring financial institutions to
keep records and file reports that the Secretary determines have a high
degree of usefulness in criminal, tax, or regulatory investigations or
proceedings, or in the conduct of intelligence or counterintelligence
activities, including analysis, to protect against international
terrorism.\2\ The authority of the Secretary to administer the BSA has
been delegated to the Director of FinCEN.\3\
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\1\ The BSA is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959
and 31 U.S.C. 5311-5314; 5316-5332.
\2\ 31 U.S.C. 5311.
\3\ See Treasury Order 180-01 (Sept. 26, 2002).
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Section 5318(h) of the BSA requires ``financial institutions'' to
establish anti-money laundering (``AML'') programs and specifies that
these programs must contain certain minimum requirements.\4\ Section
1010.100 of FinCEN's regulations defines futures commission merchants
(``FCMs'') and introducing brokers (``IBs'') as financial
institutions.\5\ As such, FCMs and IBs are required to establish AML
programs under section 5318(h) of the BSA. FinCEN regulations also
require FCMs and IBs to establish customer identification programs,\6\
establish special due diligence programs for certain foreign
accounts,\7\ detect and report suspicious activity on suspicious
activity reports,\8\ and file currency transaction reports on certain
cash transactions,\9\ among other obligations. Section 42.2 of the
Commissions regulations implements the authority FinCEN delegated to
the Commission to examine FCMs and IBs and ensure that they comply with
the BSA regulations to which they are subject,\10\ and specifically
requires every FCM and IB to comply with the applicable provisions of
the BSA, the FinCEN regulations promulgated thereunder, the
requirements of 31 U.S.C. 5318(l) and 31 CFR 103.123, which require
that a customer identification program be adopted as part of the firm's
BSA compliance program.\11\
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\4\ Section 5318(h)(1) identifies these minimum requirements as
follows: In order to guard against money laundering through
financial institutions, each financial institution shall establish
anti-money laundering programs, including, at a minimum--(A) the
development of internal policies, procedures, and controls; (B) the
designation of a compliance officer; (C) an ongoing employee
training program; and (D) an independent audit function to test
programs.
\5\ 31 CFR 1010.100(t)(8) and (9).
\6\ 31 CFR 1026.220.
\7\ 31 CFR 1026.610 and 1026.620.
\8\ 31 CFR 1026.320.
\9\ 31 CFR 1026.300.
\10\ See 31 U.S.C. 5318(a)(1) (permitting the Secretary of the
Treasury to delegate BSA duties and powers to an appropriate
supervising agency) and 31 CFR 1010.810(b)(9) (delegating BSA
examination authority to the Commission).
\11\ 17 CFR 42.2.
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II. Amending Sec. 42.2 of the Commission's Regulations
Until March 1, 2011, FinCEN regulations implementing the BSA
appeared at 31 CFR part 103. Section 42.2 of the Commission's
regulations currently references these part 103 regulations. Effective
March 1, 2011, FinCEN's regulations were re-organized, re-numbered and
transferred to a new chapter, chapter X, within title 31. The re-
numbered and re-organized regulations appear within parts 1000 through
1099 of chapter X and are now generally organized by financial
industry. Thus, part 1026 of chapter X, for example, sets forth the
regulations applicable to FCMs and IBs. Based on the reorganization and
transfer of
[[Page 2371]]
FinCEN regulations, the Commission is adopting technical amendments to
part 42 of its regulations to replace outdated references to part 103
with the appropriate references to chapter X.
III. Related Matters
A. Administrative Procedure Act
Notice of proposed rulemaking is not required under section
553(b)(3)(B) of the Administrative Procedure Act (``APA'') when an
agency, for good cause, finds ``that notice and public procedure
thereon are impracticable, unnecessary, or contrary to the public
interest.'' \12\ The amendments described herein are technical changes
that are required to correct inaccurate cross- references in the
relevant regulation and will not impose any new substantive regulatory
requirements on any person. For these reasons, the Commission finds
that it is unnecessary to publish notice of these amendments under
section 553(b)(3)(B) of the APA.
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\12\ 5 U.S.C. 553(b)(3)(B).
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The Commission also finds good cause to dispense with the 30-day
delayed effective date requirement under section 553(d)(3) of the
APA.\13\ The technical amendments update inaccurate cross references.
Accordingly, the amendments will be effective on the date of
publication of this action, January 14, 2014.
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\13\ 5 U.S.C. 553(d)(3).
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B. Regulatory Flexibility Analysis
The Regulatory Flexibility Act (``RFA'') requires the Commission to
consider whether a rule it proposes will have a significant economic
impact on a substantial number of small entities and either provide a
regulatory flexibility analysis respecting the significant impact or
certify that the rule will not have such an impact.\14\ The RFA is
applicable only to a rule for which the Commission publishes a general
notice of proposed rulemaking pursuant to 5 U.S.C. 553(b).\15\ The
Commission has determined that it is unnecessary to publish a general
notice of proposed rulemaking for the amendments to part 42 of the
Commission regulations that are being adopted by this notice, as the
amendments are only technical in nature and do not subject any party to
any new substantive regulatory requirements. Therefore, neither a
regulatory flexibility analysis nor a certification is required for
this rulemaking action.
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\14\ 5 U.S.C. 601 et seq.
\15\ 5 U.S.C. 601(2).
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C. Paperwork Reduction Act
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it is approved by the
Office of Management and Budget as required by the Paperwork Reduction
Act.\16\ This final rulemaking will not impose any new recordkeeping or
information collection requirements, or other collections of
information.
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\16\ 44 U.S.C. 3501 et seq.
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D. Cost-Benefit Analysis
Section 15(a) of the Commodity Exchange Act (``CEA'') \17\ requires
the Commission to consider the costs and benefits of its actions before
promulgating a regulation under the CEA. Section 15(a) specifies that
the costs and benefits shall be considered against 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 give greater weight to one or more of the five enumerated
considerations to determine, in its discretion, that a particular rule
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.
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\17\ 7 U.S.C. 19(a).
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This final rule does not impose any substantive regulatory
obligations on any person. Rather, the Commission solely is adopting
technical amendments to Sec. 42.2 of its regulations to ensure that
its regulations implementing its BSA examination authority accurately
refer to the BSA regulations administered by FinCEN. Accordingly, there
are no quantifiable costs associated with this rulemaking. The sole
qualitative benefit associated with this rulemaking is accuracy.
List of Subjects in 17 CFR Part 42
Anti-money laundering, Brokers, Reporting and recordkeeping
requirements, Terrorist financing.
Authority and Issuance
For the reasons stated in the preamble, the Commodity Futures
Trading Commission is amending part 42 of title 17 of the Code of
Federal Regulations as set forth below:
PART 42--ANTI-MONEY LAUNDERING, TERRORIST FINANCING
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1. The authority citation for part 42 continues to read as follows:
Authority: 7 U.S.C. 1a, 2, 5, 6, 6b, 6d, 6f, 6g, 7, 7a, 7a-1,
7a-2, 7b, 7b-1, 7b-2, 9, 12, 12a, 12c, 13a, 13a-1, 13c, 16 and 21;
12 U.S.C. 1786(q), 1818, 1829b and 1951-1959; 31 U.S.C. 5311-5314
and 5316-5332; title III, secs. 312-314, 319, 321, 326, 352, Pub. L.
107-56, 115 Stat. 307.
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2. Section 42.2 is revised to read as follows:
Sec. 42.2 Compliance with Bank Secrecy Act.
Every futures commission merchant and introducing broker shall
comply with the applicable provisions of the Bank Secrecy Act and the
regulations promulgated by the Department of the Treasury under that
Act at 31 CFR chapter X, and with the requirements of 31 U.S.C. 5318(l)
and the implementing regulation jointly promulgated by the Commission
and the Department of the Treasury at 31 CFR 1026.220, which require
that a customer identification program be adopted as part of the firm's
Bank Secrecy Act compliance program.
Issued in Washington, DC, on January 8, 2014, by the Commission.
Melissa D. Jurgens,
Secretary of the Commission
Appendix to Technical Amendments Updating Cross-References to Bank
Secrecy Act Regulations
Note: The following appendix will not appear in the Code of
Federal Regulations.
Appendix 1--Commission Voting Summary
On this matter, Acting Chairman Wetjen and Commissioners Chilton
and O'Malia voted in the affirmative.
[FR Doc. 2014-00406 Filed 1-13-14; 8:45 am]
BILLING CODE 6351-01-P
Last Updated: January 14, 2014