2022-21545
[Federal Register Volume 87, Number 192 (Wednesday, October 5, 2022)]
[Notices]
[Pages 60382-60385]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-21545]
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COMMODITY FUTURES TRADING COMMISSION
Agency Information Collection Activities Under OMB Review
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice.
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SUMMARY: In compliance with the Paperwork Reduction Act of 1995
(``PRA''), this notice announces that the Information Collection
Request (``ICR'') abstracted below has been forwarded to the Office of
Information and Regulatory Affairs (``OIRA''), of the Office of
Management and Budget (``OMB''), for review and comment. The ICR
describes the nature of the information collection and its expected
costs and burden.
DATES: Comments must be submitted on or before November 4, 2022.
ADDRESSES: Written comments and recommendations for the proposed
information collection should be submitted within 30 days of this
notice's publication to OIRA, at https://www.reginfo.gov/public/do/PRAMain. Please find this particular information collection by
selecting ``Currently under 30-day Review--Open for Public Comments''
or by using the website's search function. Comments can be entered
electronically by clicking on the ``comment'' button next to the
information collection on the ``OIRA Information Collections Under
Review'' page, or the ``View ICR--Agency Submission'' page. A copy of
the supporting statement for the collection of information discussed
herein may be
[[Page 60383]]
obtained by visiting https://www.reginfo.gov/public/do/PRAMain.
In addition to the submission of comments to https://Reginfo.gov as
indicated above, a copy of all comments submitted to OIRA may also be
submitted to the Commodity Futures Trading Commission (the
``Commission'' or ``CFTC'') by clicking on the ``Submit Comment'' box
next to the descriptive entries for OMB Control Nos. 3038-0096 and
3038-0070, at https://comments.cftc.gov/FederalRegister/PublicInfo.aspx.
Or by either of the following methods:
Mail: Christopher Kirkpatrick, 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 submitted to the Commission should
include only information that you wish to make available publicly. If
you wish the Commission to consider information that you believe is
exempt from disclosure under the Freedom of Information Act, a petition
for confidential treatment of the exempt information may be submitted
according to the procedures established in Sec. 145.9 of the
Commission's regulations.\1\ 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 https://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 ICR will be retained in the
public comment file and will be considered as required under the
Administrative Procedure Act and other applicable laws, and may be
accessible under the Freedom of Information Act.
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\1\ 17 CFR 145.9.
FOR FURTHER INFORMATION CONTACT: Tom Guerin, Assistant Chief Counsel,
Division of Market Oversight, at (202) 836-1933 or [email protected], or
Paul Chaffin, Assistant Chief Counsel, Division of Market Oversight, at
(202) 418-5185 or [email protected], Commodity Futures Trading
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Commission, 1155 21st Street NW, Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
Title: ``Swap Data Recordkeeping and Reporting Requirements'' (OMB
Control No. 3038-0096) and ``Real-Time Public Reporting'' (OMB Control
No. 3038-0070). This is a request for revisions to currently approved
information collections.
Abstract: Pursuant to section 2(a)(13)(G) of the Commodity Exchange
Act (``CEA''), all swaps, whether cleared or uncleared, must be
reported to SDRs.\2\ CEA section 21(b) directs the Commission to
prescribe standards for swap data recordkeeping and reporting.\3\ Part
45 of the Commission's regulations implements the swap data reporting
rules. Section 2(a)(13) of the CEA authorizes and requires the
Commission to promulgate regulations for the real-time public reporting
of swap transaction and pricing data.\4\ Part 43 of the Commission's
regulations implements the real-time public reporting rules.
Regulations 45.14 and 43.3(e) require that if a SEF, DCM, or reporting
counterparty determines that it will fail to timely correct an error in
swap data or swap transaction and pricing data, respectively, it shall
notify staff of its determination that it will fail to timely correct
the error.\5\
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\2\ 7 U.S.C. 2(a)(13)(G).
\3\ See 7 U.S.C. 24a(b)(1)-(3).
\4\ 7 U.S.C. 2(a)(13)(E).
\5\ 17 CFR 45.14(a)(1); 17 CFR 43.3(e)(1). Commission
regulations referred to herein are found at 17 CFR Ch. 1.
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On June 10, 2022, DOD published a ``Swap Data Error Correction
Notification Form,'' which sets out the form and manner for
notifications pursuant to regulations 45.14 and 43.3(e) and enumerates
information sufficient to provide an initial assessment of the scope of
the error or errors that were discovered and any initial remediation
plan for correcting the error or errors, if an initial remediation plan
exists.\6\ The Swap Data Error Correction Notification Form requests,
among other things: (1) identifying information for the swap execution
facility (``SEF''), designated contract market (``DCM''), or reporting
counterparty making the notification; (2) clarification whether errors
relate to previously reported and/or unreported swaps; (3) unique swap
identifiers and/or unique transaction identifiers for transactions
representative of the error or errors; (4) the asset classes to which
the error or errors pertain; (5) the number of transactions impacted by
the error or errors; (6) the percentage of the SEF, DCM, or reporting
counterparty's reported swap transactions affected by the error and
that percentage for each impacted asset class; (7) the date the SEF,
DCM, or reporting counterparty discovered the error or errors and a
description of how discovery came about; (8) an indication whether the
issues underlying the error or errors are still producing new errors;
and (9) any initial remediation plan or, if no initial remediation plan
exists, an indication of when the SEF, DCM, or reporting counterparty
expects to have a remediation plan. The Swap Data Error Correction
Notification Form, which will be required for error data notifications
after December 5, 2022, is appended to CFTC Letter 22-06 and is
available as a stand-alone form on the Commission's website.\7\
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\6\ See CFTC Letter 22-06.
\7\ See Swap Data Error Correction Notification Form, available
at https://www.cftc.gov/LawRegulation/DoddFrankAct/Rulemakings/DF_17_Recordkeeping/index.htm.
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As the Swap Data Error Correction Notification Form provides the
form and manner and specifies sufficient information required to
satisfy information collections under regulations 45.14 and 43.3(e),
the Commission does not believe it imposes new information collection
requirements beyond those adopted by the Commission in November
2020.\8\ The information collection requirements under OMB Control Nos.
3038-0096 and Information Collection 3038-0070 are necessary to obtain
information detailing the cause, nature, and scope of swap data errors.
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\8\ See Final Rule, Certain Swap Data Repository and Data
Reporting Requirements, 85 FR 75601, 75633-75634 (Nov. 25, 2020).
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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 OMB control number. On June 24, 2022, the Commission
published in the Federal Register notice of the proposed revision of
this information collection and provided 60 days for public comment on
the proposed revision, 87 FR 37839 (``60-Day Notice''). The Commission
received two relevant comments on the 60-Day Notice,\9\ which are
discussed below.
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\9\ The following entities submitted a relevant comment letter:
Bloomberg SEF LLC (``BSEF'') and BP Energy Company (``BPEC''). Other
comments submitted did not concern the PRA burden for information
collections under regulations 45.14 and 43.3(e).
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First, BSEF commented on aspects of the error correction
notification process related specifically to SEFs. BSEF proposed that
SEFs be permitted to submit the Swap Data Error Correction Notification
Forms through the CFTC portal rather than via email, but did not
specify any impact of this proposal on the Commission's burden
estimate.\10\ It also stated that it believes certain notifications
related to open swaps that may be required by the Swap Data Error
[[Page 60384]]
Correction Notification Form will be impossible for a SEF to complete,
as SEFs do not generally possess open swaps information.\11\ BSEF
suggests this would impose a new collection of information.\12\ BSEF
also stated it believed the Commission has underestimated the burden
hours required by the information collection because, for a SEF, there
may be multiple reports per year triggered by its participants.\13\
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\10\ BSEF at 2.
\11\ BSEF at 2-4.
\12\ BSEF at 2-4.
\13\ BSEF at 5.
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Second, BSEF and BPEC both commented on the timelines for error
correction notifications. BSEF stated that the Swap Data Error
Correction Notification Form should be revised to account for the fact
that a remediation plan may not be available at the time the form is
required to be filed.\14\ BPEC stated that it may be difficult to
complete the Swap Data Error Correction Notification Form within the
twelve-hour timeframe provided in regulation 45.14(a)(1).\15\ Both BSEF
and BPEC also expressed concerns that notifying entities may make
unintentional misstatements through the Swap Data Error Correction
Notification Form if they are required to complete the Form within the
timeframe provided in regulations 45.14 and 43.3(e).\16\ Both BSEF and
BPEC requested the Commission consider adopting a materiality threshold
to trigger the requirement to answer some or all questions included in
the Swap Data Error Correction Notification Form.\17\
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\14\ BSEF at 4-5.
\15\ BPEC at 2.
\16\ BSEF at 4; BPEC at 3.
\17\ BSEF at 5; BPEC at 3.
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Third, BPEC commented on certain of the questions included in the
Swap Data Error Correction Notification Form. Specifically, BPEC stated
that questions 3, 7, and 10 through 14 should be removed from the Swap
Data Error Correction Notification Form, or applied only after a
materiality threshold is met or after a longer time-frame.
The Commission has determined to retain the burden hour estimates
described in the 60-Day Notice for the reasons described below. The
Swap Data Error Notification Form specifies the form and manner for
reporting in compliance with Commission regulations but does not impose
new information collection obligations not already mandated by
regulations 45.14 and 43.3(e).
First, the introduction of the Swap Data Error Correction
Notification Form to implement regulations 45.14 and 43.3(e) does not
impose new requirements on SEFs. With respect to BSEF's statements that
SEFs should be permitted to submit Swap Data Error Correction
Notification Forms through the CFTC Portal, many market participants do
not have access to the CFTC Portal. Rather than receiving error
notifications in a variety of formats, staff published the Swap Data
Error Notification Form to ensure notifications are submitted in a
uniform format and manner. BSEF also expressed concern that SEFs may be
unable to submit the required notifications because they generally lack
access to open swaps reports. BSEF's concern appears to be based not on
any aspect of the Swap Data Error Correction Notification Form that is
the subject of this notice, but rather on statements in CFTC Letter 22-
06 that encourage general compliance with pre-existing error correction
requirements.\18\ Neither CFTC Letter 22-06 nor the Swap Data Error
Correction Notification Form establish any independent requirement that
a market participant review open swaps that differs from existing
requirements in CFTC regulations. Finally, the Commission takes under
advisement BSEF's prediction that, for a SEF, there could be multiple
reports triggered per year. The frequency of reporting was previously
subject to comment in 2019,\19\ and the revisions to the information
collection at issue in the notice of June 24, 2022 \20\ do not alter
that aspect of the Commission's burden estimates. Nonetheless, the
Commission will continue to review reporting volumes and may revise its
burden estimates if necessary following implementation of the new Form.
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\18\ See CFTC Letter 22-06, at 3 n.11. BSEF also encouraged the
Commission to amend the Swap Data Error Notification Form to account
for the fact that SEFs do not have access to open swap information.
BSEF at 2-4. Because the Swap Data Error Notification Form does not
refer to open swaps, however, it is unclear what amendment would be
necessary to address BSEF's concern.
\19\ See 85 FR 75633-75634. Moreover, the commenter's prediction
that a particular SEF or SEFs may submit multiple Swap Data Error
Correction Notification Forms in a single year is not inconsistent
with the Commission's burden estimates. As the Commission previously
noted, its burden estimate is based on analysis of the average
number of error notifications per SEF, DCM, and reporting
counterparty. See id. (stating that the Commission's estimate that
each SEF, DCM, and reporting party will, on average, need to provide
notice to the Commission once per year is based on analysis showing
that ``currently, [the Commission] receives significantly less than
one notice and initial assessment of reporting errors and omissions
per SEF, DCM, or reporting counterparty per year. . . .'').
\20\ Notice of Intent to Revise Collection 3038-0096 (Swap Data
Recordkeeping and Reporting Requirements) and Collection 3038-0070
(Real-Time Public Reporting), 87 FR 37839 (June 24, 2022).
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Second, the introduction of the Swap Data Error Correction
Notification Form does not alter the timelines for reporting and
correcting errors established by regulations 45.14 and 43.3(e). With
respect to BSEF's statements regarding initial remediation plans,\21\
the requirement that a notifying entity submit an initial remediation
plan for correcting the error or errors, if an initial remediation plan
exists, is established in regulations 45.14(a)(1)(ii) and
43.3(e)(1)(ii).\22\ The Swap Data Error Correction Notification Form
does not add to or alter any burden imposed by that requirement.
Although BSEF and BPEC expressed concern about the timeline for
required filings, the 12-hour period for filing error correction
notices was adopted in regulations 45.14 and 43.3(e). When adopting the
12-hour reporting period, the Commission considered comments on the
timeline for correcting errors and notifying the Commission, and
extended the period to correct errors specifically ``to provide the
entity making the correction a more accurate understanding of the scope
of the error.'' \23\ Similarly, BSEF and BPEC's statements with respect
to a materiality threshold do not relate to the Swap Data Error
Correction Notification Form, but rather to requirements established
under regulations 45.14 and 43.3(e). The Commission previously
considered comments on a materiality threshold and declined to adopt
such a threshold.\24\
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\21\ BSEF Comment at 4-5.
\22\ 17 CFR 45.14(a)(1)(ii); 17 CFR 43.3(e)(1)(ii).
\23\ 85 FR 75629.
\24\ See Final Rule, Certain Swap Data Repository and Data
Reporting Requirements, 85 FR 75601, 75628-629 (Nov. 25, 2020)
(``The Commission similarly declines to accept recommendations to
limit the scope of the error correction rules by adopting a
materiality requirement. . . .'').
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Third, the questions included in the Swap Data Error Correction
Notification Form do not impose information collection obligations not
previously required by regulations 45.14 and 43.3(e). With respect to
questions 3 and 7, which seek unique swap identifiers or unique
transaction identifiers representative of the error and information
concerning the volume of swaps affected by the error, BPEC states that
it will be difficult to provide this information within twelve hours of
determining it will be unable to timely correct an error or errors.\25\
However, in order for a notifying entity to determine it will be unable
to timely correct an error, it must possess some information concerning
the scope of that error. The
[[Page 60385]]
identification of representative affected swaps and the number of those
swaps is necessary to specify the scope of an error or errors.
Questions 10 through 14 seek a brief narrative description of the
error; clarification whether the underlying issues are producing new
errors; any initial or other remediation plan or, if none exists, an
estimated date for an initial or other remediation plan; an indication
whether the notifying entity has reviewed its swap reporting processes
to identifying other potential reporting issues similar to that
underlying the errors; and clarification whether the error impacted the
notifying entity's reporting obligations under part 45, part 43, or
both parts 45 and 43. BPEC states that because responding to these
questions could raise compliance implications independent of the
underlying swap data error, a reporting counterparty will be unable to
complete questions 10 through 14 without legal review, senior level
review, and IT support.\26\ However, this information concerning the
scope of the error or errors is necessary for staff to assess the
impact of the error or errors, including the extent to which erroneous
swap data has been disseminated to the public.
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\25\ BPEC at 3.
\26\ BPEC Comment at 2-3.
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Burden Statement: The Commission estimates that the respondent
burden for these collections is as follows:
Collection 3038-0070 (Real-Time Reporting).
Respondents/Affected Entities: SEFs, DCMs, and reporting
counterparties.
Estimated Number of Respondents: 1,742.
Estimated Average Burden Hours per Respondent: 6.\27\
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\27\ The Commission estimates that each SEF, DCM, and reporting
counterparty will, on average, need to provide notice to the
Commission under regulation 43.3(e) once per year and that each
instance will require 6 burden hours.
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Estimated Total Annual Burden Hours: 10,452.
Frequency of Collection: As needed.
The Commission does not anticipate any capital costs or annual
operating and maintenance costs associated with this collection.
Collection 3038-0096 (Swap Data Recordkeeping and
Reporting Requirements).
Respondents/Affected Entities: SEFs, DCMs, and reporting
counterparties.
Estimated Number of Respondents: 1,742.
Estimated Average Burden Hours per Respondent: 6.\28\
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\28\ The Commission estimates that each SEF, DCM, and reporting
counterparty will, on average, need to provide notice to the
Commission under regulation 45.14(a) once per year and that each
instance will require 6 burden hours.
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Estimated Total Annual Burden Hours: 10,452.
Frequency of Collection: As needed.
The Commission does not anticipate any capital costs or annual
operating and maintenance costs associated with this collection.
(Authority: 44 U.S.C. 3501 et seq.)
Dated: September 29, 2022.
Robert Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2022-21545 Filed 10-4-22; 8:45 am]
BILLING CODE 6351-01-P