81 FR 15138 - Submission for OMB Review; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 54 (March 21, 2016)

Page Range		15138-15139
FR Document		2016-06230
Federal Register, Volume 81 Issue 54 (Monday, March 21, 2016)
[Federal Register Volume 81, Number 54 (Monday, March 21, 2016)]
[Notices]
[Pages 15138-15139]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-06230]


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SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: US Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 
20549-2736.

Extension:
    Order Granting Conditional Exemptions Under the Securities 
Exchange Act of 1934 in Connection with Portfolio Margining of Swaps 
and Security-Based Swaps; SEC File No. S7-13-12, OMB Control No. 
3235-0698.

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange 
Commission (``Commission'') has submitted to the Office of Management 
and Budget (``OMB'') a request for approval of extension of the 
existing collection of information provided for in the Order Granting 
Conditional Exemptions Under the Securities Exchange Act of 1934 
(``Exchange Act'') in Connection with Portfolio Margining of Swaps and 
Security-Based Swaps, Exchange Act Release No. 68433 (Dec. 14, 2012), 
77 FR 75211 (Dec. 19, 2012) (``Order'').
    On December 14, 2012, the Commission found it necessary or 
appropriate in the public interest and consistent with the protection 
of investors to grant the conditional exemptions discussed in the 
Order. Among other things, the Order requires dually-registered broker-
dealer and futures commission merchants (``BD/FCMs'') that elect to 
offer a program to commingle and portfolio margin customer positions in 
credit default swaps (``CDS'') in customer accounts maintained in 
accordance with Section 4d(f) of the Commodity Exchange Act (``CEA'') 
and rules thereunder, to obtain certain agreements and opinions from 
its customers regarding the applicable regulatory regime, and to make 
certain disclosures to its customers before receiving any money, 
securities, or property of a customer to margin, guarantee, or secure 
positions consisting of cleared CDS, which include both swaps and 
security-based swaps, under a program to commingle and portfolio margin 
CDS. The Order also requires BD/FCMs that elect to offer a program to 
commingle and portfolio margin CDS positions in customer accounts 
maintained in accordance with Section 4d(f) of the CEA and rules 
thereunder, to maintain minimum margin levels using a margin 
methodology approved by the Commission or the Commission staff.
    When it adopted the Order, the Commission discussed the burden 
hours and costs associated with complying with certain provisions of 
the Order that contain ``collection of information requirements'' 
within the meaning of the PRA.\1\ The collection of information 
requirements are designed, among other things, to provide appropriate

[[Page 15139]]

agreements, disclosures, and opinions to BD/FCM customers to clarify 
key aspects of the regulatory framework that will govern their 
participation in a program to commingle and portfolio margin CDS 
positions and to ensure that appropriate levels of margin are 
collected. Because the Order is still in effect, the Commission 
believes it is prudent to extend this collection of information.
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    \1\ See Order, 77 FR at 75221-23.
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    The Commission estimates that 45 firms may seek to avail themselves 
of the conditional exemptive relief provided by the Order and therefore 
would be subject to the information collection.\2\ The Commission 
estimates that each of the 45 firms that may seek to avail themselves 
of the conditional exemptive relief provided by the Order would spend a 
total of 3,430 burden hours to comply with the existing collection of 
information, calculated as follows: (20 hours to develop a 
subordination agreement for each non-affiliate cleared credit default 
swap customers in accordance with paragraph IV(b)(1)(ii) of the Order) 
x (109 non-affiliate credit default swap customers) \3\ + ((20 hours to 
develop a subordination agreement for each affiliate cleared credit 
default swap customers in accordance with paragraph IV(b)(2)(ii) of the 
Order) + (2 hours developing and reviewing the opinion required by 
paragraph IV(b)(2)(iii) of the Order)) x (11 affiliate credit default 
swap customers) + (1,000 hours to seek the Commission's approval of 
margin methodologies under paragraph IV(b)(3) of the Order) + (8 hours 
to disclose information to customers under paragraph IV(b)(6) of the 
Order) = 3,430 burden hours, or approximately 154,350 burden hours in 
the aggregate, calculated as follows: (3,430 burden hours per firm) x 
(45 firms) = 154,350 burden hours. Amortized over three years, the 
annualized burden hours would be 1,143 hours per firm, or a total of 
51,450 for all 45 firms.
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    \2\ The Commission bases this estimate on the total number of 
entities that are dually registered as broker-dealers and futures 
commission merchants. See Financial Data for FCMs as of July 31, 
2015, Commodity Futures Trading Commission, available at http://www.cftc.gov/MarketReports/FinancialDataforFCMs/index.htm.
    \3\ Based on information that the Commission receives on a 
monthly basis, as well as current projections regarding the 
estimated increase in the number of customers per respondent, the 
Commission anticipates an average number of credit default swap 
customers to be 120 per respondent, 109 of which would be non-
affiliates and 11 of which would be affiliates. The Commission notes 
that these estimates are based on current data and the current 
regulatory framework.
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    The Commission further estimates that each respondent will incur a 
one-time cost of $8,000 in outside legal cost expenses per firm, 
calculated as follows: (200 hours to obtain opinions of counsel from 
affiliate cleared credit default swap customers under paragraph 
IV(b)(2)(iii) of the Order) x ($400 per hour for outside legal counsel) 
= $8,000, for an aggregate burden of $360,000, calculated as follows: 
($8,000 in external legal costs per firm) x (45 firms) = $360,000. 
Amortized over three years, the annualized capital external cost would 
be $2,667 per firm, or a total of $120,000 for all 45 firms.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information under the PRA unless it 
displays a currently valid OMB control number.
    The public may view background documentation for this information 
collection at the following Web site: www.reginfo.gov. Comments should 
be directed to: (i) Desk Officer for the Securities and Exchange 
Commission, Office of Information and Regulatory Affairs, Office of 
Management and Budget, Room 10102, New Executive Office Building, 
Washington, DC 20503, or by sending an email to: 
[email protected]; and (ii) Pamela Dyson, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or by sending an 
email to: [email protected]. Comments must be submitted to OMB within 
30 days of this notice.

    Dated: March 15, 2016.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-06230 Filed 3-18-16; 8:45 am]
 BILLING CODE 8011-01-P
15138 Federal Register / Vol. 81, No. 54 / Monday, March 21, 2016 / Notices

all market participants and improve Paper Comments Order Granting Conditional Exemptions
competition on the Exchange. Under the Securities Exchange Act of
The Exchange notes that it operates in • Send paper comments in triplicate 1934 in Connection with Portfolio
a highly competitive market in which to Secretary, Securities and Exchange Margining of Swaps and Security-Based
Commission, 100 F Street NE., Swaps; SEC File No. S7–13–12, OMB
market participants can readily favor Control No. 3235–0698.
competing venues. In such an Washington, DC 20549–1090.
environment, the Exchange must All submissions should refer to File Notice is hereby given that pursuant
continually review, and consider Number SR–NYSEMKT–2016–35. This to the Paperwork Reduction Act of 1995
adjusting, its fees and credits to remain file number should be included on the (‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
competitive with other exchanges. For subject line if email is used. To help the Securities and Exchange Commission
the reasons described above, the Commission process and review your (‘‘Commission’’) has submitted to the
Exchange believes that the proposed comments more efficiently, please use Office of Management and Budget
rule change reflects this competitive only one method. The Commission will (‘‘OMB’’) a request for approval of
environment. post all comments on the Commission’s extension of the existing collection of
Internet Web site (http://www.sec.gov/ information provided for in the Order
C. Self-Regulatory Organization’s rules/sro.shtml). Copies of the Granting Conditional Exemptions Under
Statement on Comments on the submission, all subsequent the Securities Exchange Act of 1934
Proposed Rule Change Received From amendments, all written statements (‘‘Exchange Act’’) in Connection with
Members, Participants, or Others with respect to the proposed rule Portfolio Margining of Swaps and
No written comments were solicited change that are filed with the Security-Based Swaps, Exchange Act
or received with respect to the proposed Commission, and all written Release No. 68433 (Dec. 14, 2012), 77
rule change. communications relating to the FR 75211 (Dec. 19, 2012) (‘‘Order’’).
On December 14, 2012, the
III. Date of Effectiveness of the proposed rule change between the
Commission found it necessary or
Proposed Rule Change and Timing for Commission and any person, other than
appropriate in the public interest and
Commission Action those that may be withheld from the consistent with the protection of
public in accordance with the investors to grant the conditional
The foregoing rule change is effective provisions of 5 U.S.C. 552, will be
upon filing pursuant to section exemptions discussed in the Order.
available for Web site viewing and Among other things, the Order requires
19(b)(3)(A) 20 of the Act and printing in the Commission’s Public
subparagraph (f)(2) of Rule 19b–4 21 dually-registered broker-dealer and
Reference Room, 100 F Street NE., futures commission merchants (‘‘BD/
thereunder, because it establishes a due, Washington, DC 20549 on official
fee, or other charge imposed by the FCMs’’) that elect to offer a program to
business days between the hours of commingle and portfolio margin
Exchange. 10:00 a.m. and 3:00 p.m. Copies of the
At any time within 60 days of the customer positions in credit default
filing also will be available for swaps (‘‘CDS’’) in customer accounts
filing of such proposed rule change, the inspection and copying at the principal
Commission summarily may maintained in accordance with Section
office of the Exchange. All comments 4d(f) of the Commodity Exchange Act
temporarily suspend such rule change if received will be posted without change;
it appears to the Commission that such (‘‘CEA’’) and rules thereunder, to obtain
the Commission does not edit personal certain agreements and opinions from
action is necessary or appropriate in the identifying information from
public interest, for the protection of its customers regarding the applicable
submissions. You should submit only regulatory regime, and to make certain
investors, or otherwise in furtherance of information that you wish to make
the purposes of the Act. If the disclosures to its customers before
available publicly. All submissions receiving any money, securities, or
Commission takes such action, the should refer to File Number SR–
Commission shall institute proceedings property of a customer to margin,
NYSEMKT–2016–35, and should be guarantee, or secure positions consisting
under section 19(b)(2)(B) 22 of the Act to submitted on or before April 11, 2016.
determine whether the proposed rule of cleared CDS, which include both
For the Commission, by the Division of swaps and security-based swaps, under
change should be approved or Trading and Markets, pursuant to delegated
disapproved. a program to commingle and portfolio
authority.23 margin CDS. The Order also requires
IV. Solicitation of Comments Robert W. Errett, BD/FCMs that elect to offer a program
Interested persons are invited to Deputy Secretary. to commingle and portfolio margin CDS
submit written data, views, and [FR Doc. 2016–06228 Filed 3–18–16; 8:45 am] positions in customer accounts
arguments concerning the foregoing, BILLING CODE 8011–01–P maintained in accordance with Section
including whether the proposed rule 4d(f) of the CEA and rules thereunder,
change is consistent with the Act. to maintain minimum margin levels
Comments may be submitted by any of SECURITIES AND EXCHANGE using a margin methodology approved
the following methods: COMMISSION by the Commission or the Commission
staff.
Electronic Comments Submission for OMB Review; When it adopted the Order, the
• Use the Commission’s Internet Comment Request Commission discussed the burden hours
comment form (http://www.sec.gov/ and costs associated with complying
Upon Written Request, Copies Available
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rules/sro.shtml); or with certain provisions of the Order that
From: US Securities and Exchange
• Send an email to rule-comments@ Commission, Office of FOIA Services,
contain ‘‘collection of information
sec.gov. Please include File Number SR– requirements’’ within the meaning of
100 F Street NE., Washington, DC the PRA.1 The collection of information
NYSEMKT–2016–35 on the subject line. 20549–2736.
requirements are designed, among other
20 15 U.S.C. 78s(b)(3)(A). Extension: things, to provide appropriate
21 17 CFR 240.19b–4(f)(2).
22 15 U.S.C. 78s(b)(2)(B). 23 17 CFR 200.30–3(a)(12). 1 See Order, 77 FR at 75221–23.

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Federal Register / Vol. 81, No. 54 / Monday, March 21, 2016 / Notices 15139

agreements, disclosures, and opinions to expenses per firm, calculated as follows: (the ‘‘Commission’’) the proposed rule
BD/FCM customers to clarify key (200 hours to obtain opinions of counsel change as described in Items I, II, and
aspects of the regulatory framework that from affiliate cleared credit default swap III below, which Items have been
will govern their participation in a customers under paragraph IV(b)(2)(iii) prepared by the self-regulatory
program to commingle and portfolio of the Order) × ($400 per hour for organization. The Commission is
margin CDS positions and to ensure that outside legal counsel) = $8,000, for an publishing this notice to solicit
appropriate levels of margin are aggregate burden of $360,000, calculated comments on the proposed rule change
collected. Because the Order is still in as follows: ($8,000 in external legal from interested persons.
effect, the Commission believes it is costs per firm) × (45 firms) = $360,000.
prudent to extend this collection of I. Self-Regulatory Organization’s
Amortized over three years, the
information. Statement of the Terms of Substance of
annualized capital external cost would
The Commission estimates that 45 the Proposed Rule Change
be $2,667 per firm, or a total of $120,000
firms may seek to avail themselves of for all 45 firms. The Exchange proposes to amend its
the conditional exemptive relief An agency may not conduct or Price List to exclude from its average
provided by the Order and therefore sponsor, and a person is not required to daily volume and certain other
would be subject to the information respond to, a collection of information calculations any trading day on which
collection.2 The Commission estimates under the PRA unless it displays a the Exchange is not open for the entire
that each of the 45 firms that may seek currently valid OMB control number. trading day and/or a disruption affects
to avail themselves of the conditional The public may view background an Exchange system that lasts for more
exemptive relief provided by the Order documentation for this information than 60 minutes during regular trading
would spend a total of 3,430 burden collection at the following Web site: hours. The Exchange proposes to
hours to comply with the existing www.reginfo.gov. Comments should be implement the fee change effective
collection of information, calculated as directed to: (i) Desk Officer for the March 1, 2016. The text of the proposed
follows: (20 hours to develop a Securities and Exchange Commission, rule change is available on the
subordination agreement for each non- Office of Information and Regulatory Exchange’s Web site at www.nyse.com,
affiliate cleared credit default swap Affairs, Office of Management and at the principal office of the Exchange,
customers in accordance with paragraph Budget, Room 10102, New Executive on the Commission’s Web site at
IV(b)(1)(ii) of the Order) × (109 non- Office Building, Washington, DC 20503, http://www.sec.gov, and at the
affiliate credit default swap customers) 3 or by sending an email to: Shagufta_ Commission’s Public Reference Room.
+ ((20 hours to develop a subordination Ahmed@omb.eop.gov; and (ii) Pamela
agreement for each affiliate cleared II. Self-Regulatory Organization’s
Dyson, Director/Chief Information Statement of the Purpose of, and
credit default swap customers in Officer, Securities and Exchange
accordance with paragraph IV(b)(2)(ii) Statutory Basis for, the Proposed Rule
Commission, c/o Remi Pavlik-Simon, Change
of the Order) + (2 hours developing and 100 F Street NE., Washington, DC
reviewing the opinion required by 20549, or by sending an email to: PRA_ In its filing with the Commission, the
paragraph IV(b)(2)(iii) of the Order)) × Mailbox@sec.gov. Comments must be self-regulatory organization included
(11 affiliate credit default swap submitted to OMB within 30 days of statements concerning the purpose of,
customers) + (1,000 hours to seek the this notice. and basis for, the proposed rule change
Commission’s approval of margin and discussed any comments it received
methodologies under paragraph IV(b)(3) Dated: March 15, 2016.
on the proposed rule change. The text
of the Order) + (8 hours to disclose Robert W. Errett, of those statements may be examined at
information to customers under Deputy Secretary. the places specified in Item IV below.
paragraph IV(b)(6) of the Order) = 3,430 [FR Doc. 2016–06230 Filed 3–18–16; 8:45 am] The Exchange has prepared summaries,
burden hours, or approximately 154,350 BILLING CODE 8011–01–P set forth in sections A, B, and C below,
burden hours in the aggregate, of the most significant parts of such
calculated as follows: (3,430 burden statements.
hours per firm) × (45 firms) = 154,350 SECURITIES AND EXCHANGE
burden hours. Amortized over three COMMISSION A. Self-Regulatory Organization’s
years, the annualized burden hours Statement of the Purpose of, and the
would be 1,143 hours per firm, or a total [Release No. 34–77371; File No. SR– Statutory Basis for, the Proposed Rule
NYSEMKT–2016–33] Change
of 51,450 for all 45 firms.
The Commission further estimates Self-Regulatory Organizations; NYSE 1. Purpose
that each respondent will incur a one- MKT LLC; Notice of Filing and
time cost of $8,000 in outside legal cost The Exchange proposes to amend its
Immediate Effectiveness of Proposed Price List to exclude from its average
2 The Commission bases this estimate on the total
Change To Amend Its Price List daily volume (‘‘ADV’’) and certain other
number of entities that are dually registered as Effective March 1, 2016 calculations any trading day on which
broker-dealers and futures commission merchants. the Exchange is not open for the entire
See Financial Data for FCMs as of July 31, 2015, March 15, 2016.
Commodity Futures Trading Commission, available Pursuant to Section 19(b)(1) 1 of the trading day and/or a disruption affects
at http://www.cftc.gov/MarketReports/Financial Securities Exchange Act of 1934 (the an Exchange system that lasts for more
DataforFCMs/index.htm.
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 than 60 minutes during regular trading
3 Based on information that the Commission
mstockstill on DSK4VPTVN1PROD with NOTICES

notice is hereby given that, on March 1, hours. The Exchange proposes to
receives on a monthly basis, as well as current
projections regarding the estimated increase in the 2016, NYSE MKT LLC (the ‘‘Exchange’’ implement the fee change effective
number of customers per respondent, the or ‘‘NYSE MKT’’) filed with the March 1, 2016.
Commission anticipates an average number of Securities and Exchange Commission As provided in the Exchange’s Price
credit default swap customers to be 120 per List, many of the Exchange’s transaction
respondent, 109 of which would be non-affiliates
and 11 of which would be affiliates. The
1 15 U.S.C. 78s(b)(1). fees and credits are based on trading,
Commission notes that these estimates are based on 2 15 U.S.C. 78a. quoting and liquidity thresholds that
current data and the current regulatory framework. 3 17 CFR 240.19b–4. member organizations, including

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Document Created: 2016-03-19 01:00:17
Document Modified: 2016-03-19 01:00:17
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		81 FR 15138