2014-05465
Federal Register, Volume 79 Issue 49 (Thursday, March 13, 2014)[Federal Register Volume 79, Number 49 (Thursday, March 13, 2014)]
[Rules and Regulations]
[Pages 14174-14175]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-05465]
=======================================================================
-----------------------------------------------------------------------
COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 30
RIN 3038-AD88
Enhancing Protections Afforded Customers and Customer Funds Held
by Futures Commission Merchants and Derivatives Clearing Organizations;
Correction
AGENCY: Commodity Futures Trading Commission.
ACTION: Correcting amendments.
-----------------------------------------------------------------------
SUMMARY: The Commodity Futures Trading Commission (CFTC) is correcting
final rules published in the Federal Register of November 14, 2013 (78
FR 68506). Those rules, 17 CFR Parts 1, 3, 22, 30, and 140, took effect
on January 13, 2014. This correction amends Appendix E to Part 30
correcting a typographical error contained in that appendix.
DATES: Effective on March 13, 2014.
FOR FURTHER INFORMATION CONTACT: Thomas Smith, Deputy Director, 202-
418-5495, [email protected], or Mark Bretscher, Attorney-Advisor, 312-
596-0529, [email protected], Division of Swap Dealer and Intermediary
Oversight, Commodity Futures Trading Commission, Three Lafayette
Centre, 1155 21st Street NW., Washington, DC 20581.
SUPPLEMENTARY INFORMATION: In the Federal Register of November 14, 2013
(78 FR 68506), the CFTC published final rules adopting new regulations
and amending existing regulations to require enhanced customer
protections, risk management programs, internal monitoring and
controls, capital and liquidity standards, customer disclosures, and
auditing and examination programs for futures commission merchants.
Those rules include Appendix E to Part 30--Acknowledgement Letter for
CFTC Regulation 30.7 Customer Secured Account (``acknowledgment
letter''). The third sentence of the second full paragraph of the body
of the Appendix E acknowledgement letter contains a typographical
error. Specifically, the phrase ``lines or credit'' should read ``lines
of credit''. The Commission is making a correcting amendment to
Appendix E to Part 30 to correct that error.
List of Subjects in 17 CFR Part 30
Commodity futures, Consumer protection, Currency, Reporting and
recordkeeping requirements.
Accordingly, 17 CFR part 30 is corrected by making the following
correcting amendment:
PART 30--FOREIGN FUTURES AND FOREIGN OPTIONS TRANSACTIONS
0
1. The authority citation for part 30 continues to read as follows:
Authority: 7 U.S.C. 1a, 2, 6, 6c, and 12a, unless otherwise
noted.
0
2. Revise Appendix E to part 30 to read as follows:
Appendix E to Part 30--Acknowledgment Letter for CFTC Regulation 30.7
Customer Secured Account
[Date]
[Name and Address of Depository]
We refer to the Secured Amount Account(s) which [Name of Futures
Commission Merchant] (``we'' or ``our'') have opened or will open
with [Name of Depository] (``you'' or ``your'') entitled:
[Name of Futures Commission Merchant] [if applicable, add ``FCM
Customer Omnibus Account''] CFTC Regulation 30.7 Customer Secured
Account under Section 4(b) of the Commodity Exchange Act [and, if
applicable, ``, Abbreviated as [short title reflected in the
depository's electronic system]'']
Account Number(s): [ ] (collectively, the ``Account(s)'').
You acknowledge that we have opened or will open the above-
referenced Account(s) for the purpose of depositing, as applicable,
money, securities and other property (collectively ``Funds'') of
customers who trade foreign futures and/or foreign options (as such
terms are defined in U.S. Commodity Futures Trading Commission
(``CFTC'') Regulation 30.1, as amended); that the Funds held by you,
hereafter deposited in the Account(s) or accruing to the credit of
the Account(s), will be kept separate and apart and separately
accounted for on your books from our own funds and from any other
funds or accounts held by us, in accordance with the provisions of
the Commodity Exchange Act, as amended (the ``Act''), and Part 30 of
the CFTC's regulations, as amended; that the Funds may not be
commingled with our own funds in any proprietary account we maintain
with you; and that the Funds must otherwise be treated in accordance
with the provisions of Section 4(b) of the Act and CFTC Regulation
30.7.
Furthermore, you acknowledge and agree that such Funds may not
be used by you or by us to secure or guarantee any obligations that
we might owe to you, and they may not be used by us to secure or
obtain credit from you. You further acknowledge and agree that the
Funds in the Account(s) shall not be subject to any right of offset
or lien for or on account of any indebtedness, obligations or
liabilities we may now or in the future have owing to you. This
prohibition does not affect your right to recover funds advanced in
the form of cash transfers, lines of credit, repurchase agreements
or other similar liquidity arrangements you make in lieu of
liquidating non-cash assets held in the Account(s) or in lieu of
converting cash held in the Account(s) to cash in a different
currency.
In addition, you agree that the Account(s) may be examined at
any reasonable time by the director of the Division of Swap Dealer
and Intermediary Oversight of the CFTC or the director of the
Division of Clearing and Risk of the CFTC, or any successor
divisions, or such directors' designees, or an appropriate officer,
agent or employee of our designated self-regulatory organization
(``DSRO''), [Name of DSRO], and this letter constitutes the
authorization and direction of the undersigned on our behalf to
permit any such examination to take place without further notice or
consent from us.
You agree to reply promptly and directly to any request for
confirmation of account balances or provision of any other
information regarding or related to the Account(s) from the director
of the Division of Swap Dealer and Intermediary Oversight of the
CFTC or the director of the Division of Clearing and Risk of the
CFTC, or any successor divisions, or such directors' designees, or
an appropriate officer, agent, or employee of [Name of DSRO], acting
in its capacity as our DSRO, and this letter constitutes the
authorization and direction of the undersigned on our behalf to
release the requested information without further notice to or
consent from us.
You further acknowledge and agree that, pursuant to
authorization granted by us to you previously or herein, you have
provided, or will promptly provide following the opening of the
Account(s), the director of the Division of Swap Dealer and
Intermediary Oversight of the CFTC, or any successor division, or
such director's designees, with technological connectivity, which
may include provision of hardware, software, and related technology
and protocol support, to facilitate direct, read-only electronic
access to transaction and account balance information for the
Account(s). This letter constitutes the authorization and direction
of the undersigned on our behalf for you to establish this
connectivity and access if not previously established, without
further notice to or consent from us.
The parties agree that all actions on your part to respond to
the above information and access requests will be made in accordance
with, and subject to, such usual and customary authorization
verification and authentication policies and procedures as may be
employed by you to verify the authority of, and authenticate the
identity of, the individual making any such information or access
request, in order to provide for the secure transmission and
delivery of the
[[Page 14175]]
requested information or access to the appropriate recipient(s).
We will not hold you responsible for acting pursuant to any
information or access request from the director of the Division of
Swap Dealer and Intermediary Oversight of the CFTC or the director
of the Division of Clearing and Risk of the CFTC, or any successor
divisions, or such directors' designees, or an appropriate officer,
agent, or employee of [Name of DSRO], acting in its capacity as our
DSRO, upon which you have relied after having taken measures in
accordance with your applicable policies and procedures to assure
that such request was provided to you by an individual authorized to
make such a request.
In the event we become subject to either a voluntary or
involuntary petition for relief under the U.S. Bankruptcy Code, we
acknowledge that you will have no obligation to release the Funds
held in the Account(s), except upon instruction of the Trustee in
Bankruptcy or pursuant to the Order of the respective U.S.
Bankruptcy Court.
Notwithstanding anything in the foregoing to the contrary,
nothing contained herein shall be construed as limiting your right
to assert any right of offset or lien on assets that are not 30.7
customer funds maintained in the Account(s), or to impose such
charges against us or any proprietary account maintained by us with
you. Further, it is understood that amounts represented by checks,
drafts or other items shall not be considered to be part of the
Account(s) until finally collected. Accordingly, checks, drafts and
other items credited to the Account(s) and subsequently dishonored
or otherwise returned to you or reversed, for any reason, and any
claims relating thereto, including but not limited to claims of
alteration or forgery, may be charged back to the Account(s), and we
shall be responsible to you as a general endorser of all such items
whether or not actually so endorsed.
You may conclusively presume that any withdrawal from the
Account(s) and the balances maintained therein are in conformity
with the Act and CFTC regulations without any further inquiry,
provided that, in the ordinary course of your business as a
depository, you have no notice of or actual knowledge of a potential
violation by us of any provision of the Act or Part 30 of the CFTC
regulations that relates to the holding of customer funds; and you
shall not in any manner not expressly agreed to herein be
responsible to us for ensuring compliance by us with such provisions
of the Act and CFTC regulations; however, the aforementioned
presumption does not affect any obligation you may otherwise have
under the Act or CFTC regulations.
You may, and are hereby authorized to, obey the order, judgment,
decree or levy of any court of competent jurisdiction or any
governmental agency with jurisdiction, which order, judgment, decree
or levy relates in whole or in part to the Account(s). In any event,
you shall not be liable by reason of any action or omission to act
pursuant to any such order, judgment, decree or levy, to us or to
any other person, firm, association or corporation even if
thereafter any such order, decree, judgment or levy shall be
reversed, modified, set aside or vacated.
The terms of this letter agreement shall remain binding upon the
parties, their successors and assigns and, for the avoidance of
doubt, regardless of a change in the name of either party. This
letter agreement supersedes and replaces any prior agreement between
the parties in connection with the Account(s), including but not
limited to any prior acknowledgment letter agreement, to the extent
that such prior agreement is inconsistent with the terms hereof. In
the event of any conflict between this letter agreement and any
other agreement between the parties in connection with the
Account(s), this letter agreement shall govern with respect to
matters specific to Section 4(b) of the Act and the CFTC's
regulations thereunder, as amended.
This letter agreement shall be governed by and construed in
accordance with the laws of [Insert governing law] without regard to
the principles of choice of law.
Please acknowledge that you agree to abide by the requirements
and conditions set forth above by signing and returning to us the
enclosed copy of this letter agreement, and that you further agree
to provide a copy of this fully executed letter agreement directly
to the CFTC (via electronic means in a format and manner determined
by the CFTC) and to [Name of DSRO], acting in its capacity as our
DSRO. We hereby authorize and direct you to provide such copies
without further notice to or consent from us, no later than three
business days after opening the Account(s) or revising this letter
agreement, as applicable.
[Name of Futures Commission Merchant]
By:
Print Name:
Title:
ACKNOWLEDGED AND AGREED:
[Name of Depository]
By:
Print Name:
Title:
Contact Information: [Insert phone number and email address]
DATE:
Issued in Washington, DC, on March 7, 2014, by the Commission.
Christopher J. Kirkpatrick,
Deputy Secretary of the Commission.
[FR Doc. 2014-05465 Filed 3-12-14; 8:45 am]
BILLING CODE 6351-01-P
Last Updated: March 13, 2014