2023-14248
[Federal Register Volume 88, Number 128 (Thursday, July 6, 2023)]
[Notices]
[Pages 43085-43086]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-14248]
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COMMODITY FUTURES TRADING COMMISSION
Agency Information Collection Activities: Notice of Intent To
Extend Collection 3038-0079: Swap Dealer and Major Swap Participant
Conflicts of Interest and Business Conduct Standards With
Counterparties
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice.
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SUMMARY: The Commodity Futures Trading Commission (``CFTC'' or
``Commission'') is announcing an opportunity for public comment on the
proposed renewal of a collection of certain information by the agency.
Under the Paperwork Reduction Act (``PRA''), Federal agencies are
required to publish notice in the Federal Register concerning each
proposed collection of information, including a proposed extension of
an existing collection of information, and to allow 60 days for public
comment. This notice solicits comments on the information collections
included in certain Commission's regulations, requiring swap dealers
(``SDs'') and major swap participants (``MSPs'') to follow specified
procedures and provide specified disclosures in their dealings with
counterparties, to adopt and implement conflicts of interest procedures
and disclosures, and to maintain specified records related to those
requirements.
DATES: Comments must be submitted on or before September 5, 2023.
ADDRESSES: You may submit comments, identified by ``OMB Control No.
3038-0079,'' by any of the following methods:
Online: The CFTC Comments Portal, on the agency's website,
is available at https://comments.cftc.gov. Select the ``Submit
Comments'' link for this rulemaking and follow the instructions on the
Public Comment Form.
Mail: Christopher Kirkpatrick, Secretary of the
Commission, Commodity Futures Trading Commission, Three Lafayette
Centre, 1155 21st Street NW, Washington, DC 20581.
Hand Delivery/Courier: Follow the same instructions as for
Mail above.
Please submit your comments using only one of these methods. All
comments must be submitted in English, or if not, accompanied by an
English translation. Comments will be posted as received to https://www.cftc.gov.
FOR FURTHER INFORMATION CONTACT: Dina Moussa, Special Counsel, 202-418-
5696, [email protected], Market Participants Division, Commodity Futures
Trading Commission, Three Lafayette Centre, 1155 21st Street NW,
Washington, DC 20581.
SUPPLEMENTARY INFORMATION: Under the PRA,\1\ Federal agencies must
obtain approval from the Office of Management and Budget (``OMB'') for
each collection of information they conduct or sponsor. ``Collection of
Information'' is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3 and
includes agency requests or requirements that members of the public
submit reports, keep records, or provide information to a third party.
Section 3506(c)(2)(A) of the PRA \2\ requires Federal agencies to
provide a 60-day notice in the Federal Register concerning each
proposed collection of information, including each proposed extension
of an existing collection of information, before submitting the
collection to OMB for approval. To comply with this requirement, the
CFTC is publishing notice of the proposed collection of information
listed below. 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.\3\
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\1\ 44 U.S.C. 3501 et seq.
\2\ 44 U.S.C. 3506(c)(2)(A).
\3\ 44 U.S.C. 3512, 5 CFR 1320.5(b)(2)(i) and 1320.8 (b)(3)(vi).
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Title: Swap Dealer and Major Swap Participant Conflicts of Interest
and Business Conduct Standards with Counterparties (OMB Control No.
3038-0079). This is a request for an extension of a currently approved
information collection.
Abstract: Section 731 of Title VII of the Dodd-Frank Wall Street
Reform and Consumer Protection Act \4\ amended the Commodity Exchange
Act (``CEA'') to add sections 4s(h) and 4s(j)(5) \5\, which provide the
Commission with both mandatory and discretionary rulemaking authority
to impose business conduct requirements on SDs and MSPs in their
dealings with counterparties, including ``Special Entities,'' \6\ and
require that each SD and MSP implement conflicts of interest systems
and procedures. Congress granted the Commission broad discretionary
authority to promulgate business conduct requirements, as appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the CEA.\7\
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\4\ Dodd-Frank Act, Public Law 111-203, 124 Stat. 1376 (2010).
\5\ 7 U.S.C. 6s(h) and (j)(5).
\6\ Such entities are generally defined to include Federal
agencies, States and political subdivisions, employee benefit plans
as defined under the Employee Retirement Income Security Act of 1974
(``ERISA''), governmental plans as defined under ERISA, and
endowments.
\7\ See section 4s(h)(3)(D) of the CEA, 7 U.S.C. 6s(h)(3)(D)
(Business conduct requirements adopted by the Commission shall
establish such other standards and requirements as the Commission
may determine are appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes
of the CEA); see also sections 4s(h)(1)(D), 4s(h)(5)(B) and 4s(h)(6)
of the CEA; 7 U.S.C. 6s(h)(1)(D), 6s(h)(5)(B) and 6s(h)(6).
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Accordingly, the Commission has adopted subpart H of part 23 of its
regulations (``EBCS Rules'') \8\ and Sec. 23.605,\9\ requiring SDs and
MSPs to follow specified procedures and provide specified disclosures
in their dealings with counterparties, to adopt and implement conflicts
of interest procedures and disclosures, and to maintain specified
records related to those requirements.
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\8\ 17 CFR part 23, subpart H. Subpart H of part 23 (titled
Business Conduct Standards for Swap Dealers and Major Swap
Participants Dealing with Counterparties, Including Special
Entities) includes the following provisions: Sec. 23.400 (Scope);
Sec. 23.401 (Definitions); Sec. 23.402 (General Provisions); Sec.
23.410 (Prohibition on fraud, manipulation and other abusive
practices); Sec. 23.430 (Verification of counterparty eligibility);
Sec. 23.431 (Disclosures of material information); Sec. 23.432
(Clearing disclosures); Sec. 23.433 (Communications--fair dealing);
Sec. 23.434 (Recommendations to counterparties--institutional
suitability; Sec. 23.440 (Requirements for swap dealers acting as
advisors to Special Entities); Sec. 23.450 (Requirements for swap
dealers and major swap participants acting counterparties to Special
Entities); and Sec. 23.451 (Political contributions by certain swap
dealers).
\9\ 17 CFR 23.605. Section 23.605 is titled Conflicts of
interest policies and procedures.
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The recordkeeping and third-party disclosure obligations imposed by
the regulations are essential to ensuring that SDs and MSPs develop and
maintain procedures and disclosures required by the CEA and Commission
regulations.\10\
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\10\ Reporting under Sec. 23.451 (Political contributions by
certain swap dealers) is optional and it is unknown how many
registrants, if any, will engage in such reporting and how much
burden, if any, will be incurred. Nevertheless, the Commission is
providing an estimate of the regulation's burden for purposes of the
PRA below.
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With respect to the collection of information, the CFTC invites
comments on:
Whether the proposed collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information will have a practical
use;
The accuracy of the Commission's estimate of the burden of
the proposed collection of information, including the validity of the
methodology and assumptions used;
Ways to enhance the quality, usefulness, and clarity of
the information to be collected; and
Ways to minimize the burden of collection of information
on those who
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are to respond, including through the use of appropriate automated
electronic, mechanical, or other technological collection techniques or
other forms of information technology; e.g., permitting electronic
submission of responses.
You should submit 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
(``FOIA''), 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.\11\
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\11\ 17 CFR 145.9.
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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 Information Collection Request 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 FOIA.
Burden Statement: The Commission is revising its estimate of the
burden for this collection based on a decrease in the current number of
Commission-registered SDs.\12\ The respondent burden for this
collection is estimated to be as follows:
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\12\ Specifically, the change for the renewal is based solely on
the decreased number of entities provisionally-registered with the
Commission as SDs (109 at the last renewal in 2020 and 106,
currently, as of June 7, 2023), as the annual total burden hours has
remained the same--at 2,352.9 hours per respondent. And just as
before, there are no entities currently registered as MSPs.
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Estimated Number of Respondents: 106.
Estimated Average Burden Hours per Respondent: 2,352.9 hours.
Estimated Total Annual Burden Hours: 249,412 hours.
Frequency of Collection: Ongoing.
There are no capital costs or operating and maintenance costs
associated with this collection.
(Authority: 44 U.S.C. 3501 et seq.)
Dated: June 30, 2023.
Robert Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2023-14248 Filed 7-5-23; 8:45 am]
BILLING CODE 6351-01-P