82 FR 13971 - Capital Requirements of Swap Dealers and Major Swap Participants
COMMODITY FUTURES TRADING COMMISSION Federal Register Volume 82, Issue 50 (March 16, 2017)
Federal Register Volume 82, Issue 50 (March 16, 2017)
| Page Range | 13971-13972 | |
| FR Document | 2017-05277 |
[Federal Register Volume 82, Number 50 (Thursday, March 16, 2017)] [Proposed Rules] [Pages 13971-13972] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-05277] ======================================================================== Proposed Rules Federal Register ________________________________________________________________________ This section of the FEDERAL REGISTER contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules. ======================================================================== Federal Register / Vol. 82, No. 50 / Thursday, March 16, 2017 / Proposed Rules [[Page 13971]] COMMODITY FUTURES TRADING COMMISSION 17 CFR Parts 1, 23, and 40 RIN 3038-AD54 Capital Requirements of Swap Dealers and Major Swap Participants AGENCY: Commodity Futures Trading Commission. ACTION: Notice of proposed rulemaking; extension of comment period. ----------------------------------------------------------------------- SUMMARY: On December 16, 2016, the Commodity Futures Trading Commission (Commission or CFTC) published in the Federal Register a notice of proposed rulemaking (Proposal) to adopt new regulations and to amend existing regulations to implement sections 4s(e) and (f) of the Commodity Exchange Act (CEA), as added by section 731 of the Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Section 4s(e) requires the Commission to adopt capital requirements for swap dealers (SDs) and major swap participants (MSPs) that are not subject to capital rules of a prudential regulator. Section 4s(f) requires the Commission to adopt financial reporting and recordkeeping requirements for SDs and MSPs. The Commission also proposed to amend existing capital rules for futures commission merchants (FCMs), providing specific capital deductions for market risk and credit risk for swaps and security-based swaps entered into by an FCM. The Commission further proposed several technical amendments to the regulations. As is explained below, the Commission is extending for 60 days the comment period for the Proposal. DATES: The comment period for the Proposal published on December 16, 2016, at 81 FR 91252, is extended until May 15, 2017. ADDRESSES: You may submit comments, identified by RIN 3038-AD54 and ``Capital Requirements for Swap Dealers and Major Swap Participants'', by any of the following methods:CFTC Web site, via its Comments Online process: http://comments.cftc.gov. Follow the instructions for submitting comments through the Web site. Mail: Send to Chris Kirkpatrick, Secretary, Commodity Futures Trading Commission, 1155 21st Street NW., Washington, DC 20581. Hand delivery/Courier: Same as Mail above. Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. 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 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, a petition for confidential treatment of the exempt information may be submitted according to the procedures set forth in Regulation 145.9 of the Commission's regulations.\1\ --------------------------------------------------------------------------- \1\ Commission regulations referred to herein are found at 17 CFR chapter 1. Commission regulations are accessible on the Commission's Web site, http://www.cftc.gov. --------------------------------------------------------------------------- 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 and other applicable laws, and may be accessible under the Freedom of Information Act. FOR FURTHER INFORMATION CONTACT: Eileen T. Flaherty, Director, Division of Swap Dealer and Intermediary Oversight, 202-418-5326, [email protected]; Thomas Smith, Deputy Director, Division of Swap Dealer and Intermediary Oversight, 202-418-5495, [email protected]; Jennifer C.P. Bauer, Special Counsel, Division of Swap Dealer and Intermediary Oversight, 202-418-5472, [email protected]; Joshua Beale, Special Counsel, Division of Swap Dealer and Intermediary Oversight, 202-418-5446, [email protected]; Rafael Martinez, Senior Financial Risk Analyst, Division of Swap Dealer and Intermediary Oversight, 202-418- 5462, [email protected]; Paul Schlichting, Assistant General Counsel, Office of the General Counsel, 202-418-5884, [email protected]; or Lihong McPhail, Research Economist, 202-418-5722, [email protected], Office of the Chief Economist; Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581. SUPPLEMENTARY INFORMATION: I. Background Section 731 of the Dodd-Frank Act amended the CEA by adding sections 4s(e) and 4s(f). Section 4s(e) requires that the Commission adopt rules establishing capital requirements for SDs and MSPs to help ensure the safety and soundness of the SDs and MSPs. Section 4s(f), among other things, requires that the Commission adopt regulations related to financial reporting and recordkeeping by SDs and MSPs. The Proposal would adopt new regulations and amend existing regulations to implement the requirements of these CEA sections.\2\ --------------------------------------------------------------------------- \2\ The Commission previously proposed capital and financial reporting rules for SDs and MSPs in 2011. See Capital Requirements of Swap Dealers and Major Swap Participants, 76 FR 27802 (May 12, 2011). --------------------------------------------------------------------------- The Proposal generally permits the application of three alternative approaches to the treatment of capital based upon existing U.S. bank regulators' capital requirements or the CFTC's future commission merchant and the Securities and Exchange Commission's broker-dealer net liquid asset capital requirements. The Proposal further provides that SDs predominantly engaged in non-financial activities and MSPs may elect minimum capital requirements based upon the tangible net worth of the entities. SDs may use internal models for purposes of computing their regulatory capital, subject to prior approval by either the Commission or the National Futures Association. The Proposal would also require certain SDs and MSPs to satisfy defined liquidity and funding requirements and would place certain [[Page 13972]] limitations on the withdrawal of capital from SDs as part of the SD capital requirements. In implementing the provisions of Section 4s(f) of the CEA, the Proposal includes recordkeeping, reporting and notification requirements for SDs and MSPs relative to their respective capital requirements. The Proposal would also allow foreign SDs to comply with comparable capital requirements in the home jurisdiction under a program of substituted compliance. In addition to proposing minimum capital and financial reporting requirements for SDs and MSPs, the Proposal would also amend existing capital requirements for FCMs to establish specific capital requirements for FCMs that engage in swaps or security-based swaps that are not cleared by a clearing organization. The Proposal also includes certain technical amendments to several regulations as part of the proposed capital and financial recordkeeping and reporting requirements. II. Extension of Comment Period The comment period for the Proposal is due to expire on March 16, 2017. By letters dated February 24, 2017 and March 2, 2017, respectively, the Securities Industry and Financial Markets Association (SIFMA) and The Futures Industry Association (FIA), membership organizations representing many firms that would be affected by the Proposal, requested a 60-day extension of the comment period. In support of their requests, SIFMA and FIA explained that firms have extensive work to do in order to calculate the effect on their activities of the different types of proposed capital requirements. SIFMA further explained that the initial comment period overlaps with firms' year-end accounting and reporting cycles as well as with the deadline for firms' compliance with the Commission's uncleared swaps margin rules, resulting in a significant drain on their resources. SIFMA and FIA noted that given the complexity of the Proposal it will require significant time beyond the Commission's initial March 16 comment deadline to fully assess the potential impact of the Proposal on firms' operations. In light of the foregoing, and in response to the SIFMA and FIA requests, by this Federal Register release the Commission is extending the comment period for the Proposal for 60 days, until May 15, 2017. Issued in Washington, DC, on March 13, 2017, by the Commission. Robert N. Sidman, Deputy Secretary of the Commission. Note: The following appendix will not appear in the Code of Federal Regulations. Appendix to Capital Requirements of Swap Dealers and Major Swap Participants--Commission Voting Summary On this matter, Acting Chairman Giancarlo and Commissioner Bowen voted in the affirmative. No Commissioner voted in the negative. [FR Doc. 2017-05277 Filed 3-15-17; 8:45 am] BILLING CODE 6351-01-P
![13972 Federal Register / Vol. 82, No. 50 / Thursday, March 16, 2017 / Proposed Rules
limitations on the withdrawal of capital their resources. SIFMA and FIA noted Commission’s rulemaking proceeding
from SDs as part of the SD capital that given the complexity of the by T-Mobile USA, Inc.
requirements. Proposal it will require significant time DATES: Comments to the Petition must
In implementing the provisions of beyond the Commission’s initial March be filed on or before March 31, 2017.
Section 4s(f) of the CEA, the Proposal 16 comment deadline to fully assess the Reply Comments must be filed on or
includes recordkeeping, reporting and potential impact of the Proposal on before April 10, 2017.
notification requirements for SDs and firms’ operations.
MSPs relative to their respective capital In light of the foregoing, and in ADDRESSES:Federal Communications
requirements. The Proposal would also response to the SIFMA and FIA Commission, 445 12th Street SW.,
allow foreign SDs to comply with requests, by this Federal Register Washington, DC 20554.
comparable capital requirements in the release the Commission is extending the FOR FURTHER INFORMATION CONTACT:
home jurisdiction under a program of comment period for the Proposal for 60 Michael Scott, Consumer and
substituted compliance. days, until May 15, 2017. Governmental Affairs Bureau, email:
In addition to proposing minimum Michael.Scott@fcc.gov; phone: (202)
Issued in Washington, DC, on March 13,
capital and financial reporting 2017, by the Commission. 418–1264.
requirements for SDs and MSPs, the
Robert N. Sidman, SUPPLEMENTARY INFORMATION: This is a
Proposal would also amend existing
Deputy Secretary of the Commission. summary of the Commission’s
capital requirements for FCMs to
establish specific capital requirements Note: The following appendix will not document DA 17–197, released
for FCMs that engage in swaps or appear in the Code of Federal Regulations. February 27, 2017. The full text of the
security-based swaps that are not Petition is available for viewing and
cleared by a clearing organization. The Appendix to Capital Requirements of copying at the FCC Reference
Proposal also includes certain technical Swap Dealers and Major Swap Information Center, 445 12th Street SW.,
amendments to several regulations as Participants—Commission Voting Room CY–A257, Washington, DC 20554
part of the proposed capital and Summary or may be accessed online via the
financial recordkeeping and reporting Commission’s Electronic Comment
On this matter, Acting Chairman Giancarlo
requirements. and Commissioner Bowen voted in the
Filing System at: https://ecfsapi.fcc.gov
affirmative. No Commissioner voted in the /file/102231846629100/T-Mobile%20RT
II. Extension of Comment Period T%20Petition%20for%20Clarification
negative.
The comment period for the Proposal %20(2-22-17)%20FINAL.pdf. The
[FR Doc. 2017–05277 Filed 3–15–17; 8:45 am]
is due to expire on March 16, 2017. By Commission will not send a copy of this
BILLING CODE 6351–01–P
letters dated February 24, 2017 and document pursuant to the Congressional
March 2, 2017, respectively, the Review Act, 5 U.S.C. 801(a)(1)(A),
Securities Industry and Financial because this document does not have an
Markets Association (SIFMA) and The FEDERAL COMMUNICATIONS impact on any rules of particular
Futures Industry Association (FIA), COMMISSION applicability.
membership organizations representing Subject: Transition from TTY to Real-
many firms that would be affected by 47 CFR Parts 6, 7, 14, 20, 64, and 67
Time Text Technology, FCC 16–169,
the Proposal, requested a 60-day [CG Docket No. 16–145 and GN Docket No. published at 82 FR 7699, January 23,
extension of the comment period. In 15–178; DA 17–197] 2017 in CG Docket No. 16–145 and GN
support of their requests, SIFMA and Docket No. 15–178. This document is
FIA explained that firms have extensive Petition for Clarification, or in the
being published pursuant to 47 CFR
work to do in order to calculate the Alternative Reconsideration of Action
1.429(e). See also 47 CFR 1.4(b)(1) and
effect on their activities of the different in Rulemaking Proceeding
1.429(f), (g).
types of proposed capital requirements. AGENCY: Federal Communications Number of Petitions Filed: 1.
SIFMA further explained that the initial Commission.
comment period overlaps with firms’ Federal Communications Commission.
ACTION: Petition for clarification or
year-end accounting and reporting Karen Peltz Strauss,
reconsideration.
cycles as well as with the deadline for Deputy Chief, Consumer and Governmental
firms’ compliance with the SUMMARY: A Petition for Clarification, or Affairs Bureau.
Commission’s uncleared swaps margin in the Alternative Reconsideration [FR Doc. 2017–05191 Filed 3–15–17; 8:45 am]
rules, resulting in a significant drain on (Petition) has been filed in the BILLING CODE 6712–01–P
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Document Created: 2017-03-16 02:19:00
Document Modified: 2017-03-16 02:19:00
| 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 | Proposed Rules | |
| Action | Notice of proposed rulemaking; extension of comment period. | |
| Dates | The comment period for the Proposal published on December 16, 2016, at 81 FR 91252, is extended until May 15, 2017. | |
| Contact | Eileen T. Flaherty, Director, Division of Swap Dealer and Intermediary Oversight, 202-418-5326, [email protected]; Thomas Smith, Deputy Director, Division of Swap Dealer and Intermediary Oversight, 202-418-5495, [email protected]; Jennifer C.P. Bauer, Special Counsel, Division of Swap Dealer and Intermediary Oversight, 202-418-5472, [email protected]; Joshua Beale, Special Counsel, Division of Swap Dealer and Intermediary Oversight, 202-418-5446, [email protected]; Rafael Martinez, Senior Financial Risk Analyst, Division of Swap Dealer and Intermediary Oversight, 202-418- 5462, [email protected]; Paul Schlichting, Assistant General Counsel, Office of the General Counsel, 202-418-5884, [email protected]; or Lihong McPhail, Research Economist, 202-418-5722, [email protected], Office of the Chief Economist; Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581. | |
| FR Citation | 82 FR 13971 | |
| RIN Number | 3038-AD54 | |
| CFR Citation | 17
CFR
1 17 CFR 23 17 CFR 40 |
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