[Federal Register Volume 85, Number 139 (Monday, July 20, 2020)]
[Notices]
[Pages 43821-43822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15604]
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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 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 Subpart H
of Part 23 of the Commission's regulations and Commission regulation
23.605, 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 18, 2020.
ADDRESSES: You may submit comments, identified by ``OMB Control No.
3038-0079,'' by any of the following methods:
The Agency's website, at https://comments.cftc.gov/.
Follow the instructions for submitting comments through the website.
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.
Please submit your comments using only one method. 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: Jacob Chachkin, Special Counsel,
Division of Swap Dealer and Intermediary Oversight, Commodity Futures
Trading Commission, (202) 418-5496; email: [email protected].
SUPPLEMENTARY INFORMATION: Under the PRA, 44 U.S.C. 3501 et seq.,
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, 44
U.S.C. 3506(c)(2)(A), 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.
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 (Dodd-Frank Act, Pub L. No. 111-203,
124 Stat. 1376 (2010)) amended the Commodity Exchange Act (CEA) to add
sections 4s(h) and 4s(j)(5) (7 U.S.C. 6s(h) and (j)(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,'' \1\
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.\2\
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\1\ 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.
\2\ See CEA Section 4s(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).
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[[Page 43822]]
Accordingly, the Commission has adopted Subpart H of Part 23 of its
regulations (EBCS Rules) and Commission regulation 23.605,\3\ requiring
swap dealers and major swap participants 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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\3\ 17 CFR part 23, subpart H and 17 CFR 23.605. Subpart H of
Part 23 is titled ``Business Conduct Standards for Swap Dealers and
Major Swap Participants Dealing with Counterparties, Including
Special Entities.'' Subpart H 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). Sec. 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 swap dealers and major
swap participants develop and maintain procedures and disclosures
required by the CEA and Commission regulations.\4\
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\4\ Reporting under Commission regulation 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 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,
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.\5\
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\5\ 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 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.
Burden Statement: The Commission is revising its estimate of the
burden for this collection based on the current number of registered
SDs.\6\ The respondent burden for this collection is estimated to be as
follows:
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\6\ Specifically, the change for the renewal is based solely on
the increased number of entities registered as swap dealers (102
previously and 107 currently), since 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: 107.
Estimated Average Burden Hours per Respondent: 2,352.9 hours.
Estimated Total Annual Burden Hours: 251,765 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: July 15, 2020.
Robert Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2020-15604 Filed 7-17-20; 8:45 am]
BILLING CODE 6351-01-P