FR Doc 2010-26912[Federal Register: October 27, 2010 (Volume 75, Number 207)]
[Proposed Rules]
[Page 66014-66018]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27oc10-16]
=======================================================================
-----------------------------------------------------------------------
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: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Commodity Futures Trading Commission (``Commission'' or
``CFTC'') is proposing to amend its rules under part 160 of its
Regulations to implement new statutory provisions enacted by Titles VII
and X of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(``Dodd-Frank Act''). Section 1093 of the Dodd-Frank Act provides for
certain amendments to Title V of the Gramm-Leach-Bliley Act (``GLB
Act'')--which sets forth certain protections for the privacy of
consumer financial information--affirming the Commission's jurisdiction
in this area. This proposal broadens 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. In addition, the Commission proposes to
rename Part 160 as ``Privacy of Consumer Financial Information under
the Gramm-Leach-Bliley Act'' to harmonize the title of this part with
other parts of the Commission's Regulations.
DATES: Comments must be received on or before December 27, 2010.
ADDRESSES: You may submit comments, identified by RIN number 3038-AD13,
by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: [email protected].
Mail: David A. Stawick, 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.
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 is exempt from disclosure under the Freedom of
Information Act, 5 U.S.C. 552, a petition for confidential treatment of
the exempt information may be submitted according to the established
rules in section 145.9 of the Commission's Regulations.\1\
---------------------------------------------------------------------------
\1\ 17 CFR 145.9.
---------------------------------------------------------------------------
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 rulemaking will be retained in the public comment
file and will be considered as required under the Administrative
Procedure Act, 5 U.S.C. 551 et seq., and other applicable laws, and may
be accessible under the Freedom of Information Act.
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
On July 21, 2010, President Obama signed the ``Dodd-Frank Wall
Street Reform and Consumer Protection Act'' (``Dodd-Frank Act'').\2\
Title VII of the Dodd-Frank Act,\3\ which substantially amended the
Commodity Exchange Act (``CEA''),\4\ established a comprehensive new
regulatory framework for swaps and security-based swaps. It lowers risk
in the financial system, increases transparency, and promotes market
integrity by, among other things: (1) Providing for the comprehensive
regulation of swap dealers and major swap participants; (2) imposing
clearing and trade execution requirements on standardized products; (3)
creating a robust real-time reporting regime; and (4) enhancing the
Commission's enforcement authorities.
---------------------------------------------------------------------------
\2\ See Dodd-Frank Wall Street Reform and Consumer Protection
Act, Public Law 111-203, 124 Stat. 1376 (2010). The text of the
Dodd-Frank Act may be accessed at http://www.cftc.gov.
\3\ Under Section 701 of the Dodd-Frank Act, Title VII may be
cited as the ``Wall Street Transparency and Accountability Act of
2010.''
\4\ 7 U.S.C. 1 et seq.
---------------------------------------------------------------------------
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.
More specifically, the Dodd-Frank Act removes from the jurisdiction of
the Federal Trade Commission (``FTC'') its rulemaking and other
authorities granted pursuant to Federal consumer law, and cedes that
authority to the Bureau. In addition, section 1093 of the Dodd-Frank
Act amends Title V of the GLB Act (15 U.S.C. 6801 et seq.), to, inter
alia, reaffirm the Commission's authority to promulgate regulations to
require entities that are subject to the Commission's jurisdiction to
provide certain privacy protections for consumer financial information.
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
[[Page 66015]]
Act] with respect to any financial institutions and other persons
subject to the jurisdiction of the [CFTC] under section 5g of the
[CEA].'' (Emphasis added.)
As enacted, Title V of the GLB Act \5\ (``Title V''), inter alia,
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.\6\
---------------------------------------------------------------------------
\5\ Public Law 106-102, 113 Stat. 1338 (1999) (codified in
scattered sections of 12 U.S.C. and 15 U.S.C.).
\6\ GLB Act sections 501-510, 15 U.S.C. 6801-6809.
---------------------------------------------------------------------------
In 2000, the Commodity Futures Modernization Act of 2000 (``CFMA'')
created section 5g of the CEA, providing that the Commission be treated
as a Federal functional regulator within the meaning of Title V.\7\
Section 5g also granted the Commission the authority to adopt rules
that establish appropriate standards for financial institutions subject
to its jurisdiction to safeguard customer records and information.
Section 5g provides that the following entities are subject to the
Commission's jurisdiction for the purposes of Title V: Futures
commission merchants (``FCMs''), commodity trading advisors (``CTAs''),
commodity pool operators (``CPOs''), and introducing brokers (``IBs'')
(collectively, ``CFTC registrants'').
---------------------------------------------------------------------------
\7\ The other agencies subject to GLB Act jurisdiction include
the Office of the Comptroller of the Currency (``OCC''); Board of
Governors of the Federal Reserve System (``Board''); Federal Deposit
Insurance Corporation (``FDIC''); Office of Thrift Supervision
(``OTS''); National Credit Union Administration (``NCUA''); FTC; and
Securities and Exchange Commission (``SEC'').
---------------------------------------------------------------------------
The Commission's consumer information privacy rules are set out in
Part 160 of the Commission's regulations, which require CFTC
registrants 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. The protections provided in Part 160 inure to the benefit
of individual consumers.\8\ The Commission recently amended the scope
of Part 160 and the definition of ``financial institution'' to include
retail foreign exchange dealers (``RFEDs'').\9\
---------------------------------------------------------------------------
\8\ 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.''
\9\ See 75 FR 55410, 55450 (Sept. 10, 2010).
---------------------------------------------------------------------------
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'').\10\ The Commission proposes in this rulemaking
to: (1) Expand the scope of Part 160 of its Regulations to apply to SDs
and MSPs; (2) in accordance with the transfer of authority in Title X,
changing all references in Part 160 from the FTC to the Bureau; and (3)
rename Part 160 to ``Privacy of Consumer Financial Information under
the Gramm-Leach-Bliley Act'' to harmonize the title of part 160 with
the new part of the Commission's Regulations, which provide protections
to certain customer information under the FCRA.
---------------------------------------------------------------------------
\10\ The terms ``SD'' and ``MSP'' as used in this proposed
regulation 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 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 an amendment
to the CEA in 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.
---------------------------------------------------------------------------
The Commission requests comment on all aspects of these conforming
amendments, as well as comment on specific provisions and issues
highlighted in the section-by-section analysis below.
II. Section-by-Section Analysis
A. Specific Section Amendments
Renaming Part 160
Another provision in Title X of the Dodd-Frank Act, section 1088,
provides that the Commission promulgate regulations under various
sections of the Fair Credit Reporting Act, 15 U.S.C. 1608 et seq.
Similar to Title V of the GLB Act, the FCRA sets forth safeguards for
the protection of a broader range of consumer information. Under a
separate rulemaking, the Commission proposes to create a new part in
its Regulations to provide protections under the FCRA. To harmonize the
title of Part 160 with the new part being adopted by the Commission
promulgated under Title X of the Dodd-Frank Act, the Commission
proposes to rename Part 160 as ``Privacy of Consumer Financial
Information under the Gramm-Leach-Bliley Act.'' \11\
---------------------------------------------------------------------------
\11\ Section 1088 of the Dodd-Frank Act provides the CFTC with
authority to implement regulations under sections 624 and 628 of the
FCRA.
---------------------------------------------------------------------------
Regulation 160.1(b) Scope
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 whether they are required to
register with the Commission. The Commission proposes to add SDs and
MSPs to the scope of Part 160 (and to the definition of ``financial
institution'' therein) because, for example, these new entities may
enter into swap transactions with individuals who qualify as ``eligible
contract participants''.\12\ Section 1a(18)(A)(xi) defines ``eligible
contact participant'' to include any individual who has amounts
invested on a discretionary basis, the aggregate of which is in excess
of either $10,000,000 or, if certain other qualifications are met,
$5,000,000. As a result of this addition, SDs and MSPs that transact
swaps with individuals would have to comply with the various provisions
under Part 160, including requirements to protect the nonpublic
personal information of these individuals. Of course, if any SD or MSP
has no business interactions with natural persons, no obligations would
arise under this proposal. This proposal would ensure that all CFTC
registrants that enter into swap transactions with natural persons
would provide privacy protections to any nonpublic, consumer
information.
---------------------------------------------------------------------------
\12\ New section 2(e) of the CEA--as enacted under 723(a)(2) of
the Dodd-Frank Act--provides that it is ``unlawful for any person,
other than an eligible contract participant, to enter into a swap
unless the swap is entered into on, or subject to the rules of, a
board of trade designated as a contract market under section 5 [of
the CEA].''
---------------------------------------------------------------------------
Section 160.3--Definitions
Since the scope of the proposed regulations would extend to SDs and
MSPs, the Commission proposes to amend section 160.3 to add the
definitions of SDs and MSPs to the list of defined terms under section
160.3. Specifically, the Commission proposes to define ``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 proposes to define
``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
[[Page 66016]]
provisions under Part 160 that must be amended to include these new
registrants. Specifically, the definitions of ``financial
institution'', ``affiliate'', and ``you'' must be amended to include
swap dealers and major swap participants.
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, we changed the
reference from the FTC to the Bureau in section 160.15 to reflect that
the Bureau is now a Federal functional regulator.
Section 160.17(b)--Relation to State Laws
As a result of the creation of the Bureau and the transfer of
certain authority from the FTC to the Bureau, the Commission proposes
to amend paragraph (b) by replacing it with the language similar to
section 1041(a)(2) of the Dodd-Frank Act. This section clarifies the
relationship of Title V to state consumer protection laws.
Specifically, section 1041(a)(2) provides, ``For the purposes of this
section, a [State] statute, regulation, order, or interpretation * * *
is not inconsistent with the provisions of [Title V] if the protection
that such statute, regulation, order, or interpretation affords to
consumers is greater than the protection provided under [Title V]. A
determination regarding whether a [State] statute, regulation, order,
or interpretation * * * is inconsistent with the provisions of [Title
V] may be made by the Bureau on its own motion or in response to a
nonfrivolous petition initiated by any interested person.''
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 proposes to amend the introductory sentence
of section 160.30 to add SDs and MSPs to the list of CFTC registrants
that must comply with this requirement.
B. Effective Date
Pursuant to section 1100H of the Dodd-Frank Act, the Commission
proposes to make the proposed regulations--the affiliate marketing
rules and the disposal rules--become effective on the ``designated
transfer date'' of authority from various Federal agencies to the
Bureau. Section 1062 of the Dodd-Frank Act provides that the
``designated transfer date'' is a date designated in the Federal
Register no later than 60 days after the enactment of the Dodd-Frank
Act by the Secretary of the Treasury, the Chairman of the Board of
Governors, the Chairman of the Federal Trade Commission, and several
other Federal agencies.\13\ On September 20, 2010, these Federal
agencies issued a notice designating July 21, 2011 as the designated
transfer date.\14\ As a result, the Commission proposes to adopt the
affiliate marketing rules and the disposal rules on that date.
---------------------------------------------------------------------------
\13\ The heads of the other Federal agencies are: The
Comptroller of the Currency; the Director of the Office of Thrift
Supervision; the Secretary of the Department of Housing and Urban
Development; the Director of the Office of Management and Budget;
the Chairman of the National Credit Union Administration Board; and
the Chairperson of the Corporation.
\14\ See 75 FR 57252-02 (Sept. 20, 2010).
---------------------------------------------------------------------------
III. Related Matters
A. Cost-Benefit Analysis
Section 15(a) of the CEA \15\ requires the Commission to consider
the costs and benefits of its actions before issuing an order under the
CEA. By its terms, section 15(a) does not require the Commission to
quantify the costs and benefits of amendments to regulations to
determine whether the benefits of the amendments outweigh its costs;
rather, it requires that the Commission ``consider'' the costs and
benefits of its actions. Section 15(a) further 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 Act. The proposed
conforming rule amendments would broaden the scope of Part 160 to cover
SDs and MSPs.
---------------------------------------------------------------------------
\15\ 7 U.S.C. 19(a).
---------------------------------------------------------------------------
With respect to costs, the Commission has determined that the
proposed conforming amendments are necessary to implement various
consumer financial information privacy provisions as they relate to SDs
and MSPs, by adding these new registrants to the list of financial
institutions responsible for complying with its provisions under part
160 of its Regulations.
The Commission has determined that market participants and the
public may be harmed if these new registrants are not added to part
160. The notice requirements under part 160 were established to protect
individual customers who do business with CFTC registrants. 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. With
respect to benefits, the Commission has determined that requiring
financial institutions to protect the privacy of nonpublic personal
information about consumers is a benefit that must be maintained given
the risks to the public if it is not, given the minor costs to the
financial institutions affected by the conforming amendments.
The Commission invites public comment on its cost-benefit
considerations. Commenters are also invited to submit any data or other
information that they may have quantifying or qualifying the costs and
benefits of the proposal.
B. Paperwork Reduction Act
Under the Paperwork Reduction Act (``PRA'') 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 control
number.\16\ The proposed amendments to Part 160 of the Commission's
Regulations include a collection of information within the meaning of
the PRA. The Commission therefore is submitting this proposal to the
Office of Management and Budget (``OMB'') for review in accordance with
44 U.S.C. 3507(d) and 5 CFR 1320.11, together with a request for
approval of a revision to the Commission's currently approved
collection associated with part 160. The title of the collection of
information to be revised is ``Privacy of Consumer Financial
Information,'' OMB Control Number 3038-0055. If approved, the provision
of notice to this revised collection of information would be mandatory
for SDs and MSPs.
---------------------------------------------------------------------------
\16\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------
1. Information Provided by Reporting Entities
The proposed rule would require SDs and MSPs to provide initial and
annual privacy and opt-out notices to all customers that are natural
persons. It is not currently known how many SDs and MSPs will be
required to register as such with the Commission, and this will
[[Page 66017]]
not be known to the Commission until registration requirements for
these entities become effective after July 15, 2011, the date on which
the Dodd-Frank Act becomes effective.
Nonetheless, for purposes of calculating PRA burden, the Commission
estimates that there will be approximately 300 SDs and MSPs who would
be required to provide notices under part 160 on an initial and then on
an annual basis.\17\ It is anticipated that most SDs and MSPs will not
transact business with a significant number of natural persons, causing
the Commission to estimate that each SD and MSP will issue an average
of 20 notices per year. As previously estimated, the average time per
notice will be .24 hours. This will result in an annual aggregate of
1,440 burden hours.
---------------------------------------------------------------------------
\17\ While staff believes that there may likely be approximately
200 swap dealers, we have taken a conservative approach in
estimating that there will be 250 swap dealers for PRA purposes.
---------------------------------------------------------------------------
2. Information Collection Comments
The Commission invites the public and other Federal agencies to
comment on any aspect of the reporting and recordkeeping burdens
discussed above. Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission
solicits comments in order to: (i) Evaluate whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the information will
have practical utility; (ii) evaluate the accuracy of the Commission's
estimate of the burden of the proposed collection of information; (iii)
determine whether there are ways to enhance the quality, utility, and
clarity of the information to be collected; and (iv) minimize the
burden of the collection of information on those who are to respond,
including through the use of automated collection techniques or other
forms of information technology. Comments may be submitted directly to
the Office of Information and Regulatory Affairs, by fax at (202) 395-
6566 or by e-mail at [email protected]. Please provide the
Commission with a copy of submitted comments so that they can be
summarized and addressed in the final rule. Refer to the ADDRESSES
section of this notice of proposed rulemaking for comment submission
instructions to the Commission. A copy of the supporting statements for
the collections of information discussed above may be obtained by
visiting RegInfo.gov. OMB is required to make a decision concerning the
collection of information between 30 and 60 days after publication of
this release. Consequently, a comment to OMB is most assured of being
fully effective if received by OMB (and the Commission) within 30 days
after publication of this notice of proposed rulemaking.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (``RFA'') requires that agencies
consider whether their proposed regulations will have a significant
economic impact on a substantial number of small entities and, if so,
provide a regulatory flexibility analysis respecting the impact.\18\
The Commission's proposed regulations now will affect SDs and MSPs, in
addition to the CFTC registrants 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. Accordingly, the Commission has
determined that the obligations created by these rule amendments will
not create a significant economic impact on a substantial number of
small entities. Accordingly, the Chairman, on behalf of the Commission,
hereby certifies pursuant to 5 U.S.C. 605(b) that the proposed rules
will not have a significant impact on a substantial number of small
entities.
---------------------------------------------------------------------------
\18\ 5 U.S.C. 601 et seq.
---------------------------------------------------------------------------
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
proposes to amend Part 160 of Title 17 of the Code of Federal
Regulations as follows:
1. The heading of part 160 is revised to read as follows:
PART 160--PRIVACY OF CONSUMER FINANCIAL INFORMATION UNDER TITLE V
OF THE GRAMM-LEACH-BLILEY ACT
2. 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 title X, sec. 1093, Pub. L. 111-203, 124 Stat. 1376.
3. Amend Sec. 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.
* * * * *
4. Amend Sec. 160.3 as follows:
a. Revise paragraphs (a), (n)(1)(i), (n)(2)(i), and (o)(1)(i);
b. Redesignating paragraphs (w) and (x) as paragraphs (y) and (z);
c. Redesignating paragraphs (s) through (v) as paragraphs (t)
through (w);
d. Adding new paragraphs (s) and (x); and
e. Revising newly designated paragraphs (y)(4) and (5) and adding
new paragraphs (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
[[Page 66018]]
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
(ii) * * *
(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.
* * * * *
(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 subject to the jurisdiction of the Commission.
* * * * *
5. Amend Sec. 160.15 by revising paragraph (a)(4) to read as
follows:
Sec. 160.15 Other exceptions to notice and opt out requirements.
(a) * * *
(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;
* * * * *
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 to any consumer is
greater than the protection provided under this part. A determination
regarding whether a state statute, regulation, order, or interpretation
is inconsistent with the provisions of this part may be made by the
Bureau of Consumer Financial Protection, after consultation with the
Commission, on its own motion or in response to a nonfrivolous petition
initiated by any interested person.
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.
By the Commission.
Dated: October 19, 2010.
David A. Stawick,
Secretary.
Statement of Chairman Gary Gensler
Privacy of Consumer Financial Information; Conforming Amendments Under
Dodd-Frank Act
October 19, 2010
I support today's Commission vote on the notice of public
rulemaking, which expands the scope of the Commission's existing
protections afforded to consumers' information to two new entities
created by the Dodd-Frank Act. The proposed rulemaking expands the
Commission's Part 160 rules to customers of swap dealers and major swap
participants. Part 160 includes the Commission's existing privacy rules
for consumers.
[FR Doc. 2010-26912 Filed 10-26-10; 8:45 am]
BILLING CODE 6351-01-P
Last Updated: October 27, 2010