82 FR 22118 - Agency Information Collection Activities: Notice of Intent To Renew Collection Number 3038-0075, Protection of Collateral of Counterparties to Uncleared Swaps; Treatment of Securities in a Portfolio Margining Account in a Commodity Broker Bankruptcy

COMMODITY FUTURES TRADING COMMISSION

Federal Register Volume 82, Issue 91 (May 12, 2017)

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 each proposed extension of an existing collection of information, and to allow 60 days for public comment. This notice solicits comments on the collections of information mandated by requirements that swap dealers (``SDs'') and major swap participants (``MSPs'') with respect to the treatment of collateral by their counterparties to margin, guarantee, or secure uncleared swaps.

[Federal Register Volume 82, Number 91 (Friday, May 12, 2017)]
[Notices]
[Pages 22118-22119]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-09686]



[[Page 22118]]

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COMMODITY FUTURES TRADING COMMISSION


Agency Information Collection Activities: Notice of Intent To 
Renew Collection Number 3038-0075, Protection of Collateral of 
Counterparties to Uncleared Swaps; Treatment of Securities in a 
Portfolio Margining Account in a Commodity Broker Bankruptcy

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 each proposed extension 
of an existing collection of information, and to allow 60 days for 
public comment. This notice solicits comments on the collections of 
information mandated by requirements that swap dealers (``SDs'') and 
major swap participants (``MSPs'') with respect to the treatment of 
collateral by their counterparties to margin, guarantee, or secure 
uncleared swaps.

DATES: Comments must be submitted on or before July 11, 2017.

ADDRESSES: You may submit comments, identified by ``Protection of 
Collateral of Counterparties to Uncleared Swaps; Treatment of 
Securities in a Portfolio Margining Account in a Commodity Broker 
Bankruptcy,'' and OMB Control No. 3038-0075 by any of the following 
methods:
     The Agency's Web site, at http://comments.cftc.gov/. 
Follow the instructions for submitting comments through the Web site.
     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.
     Federal eRulemaking Portal: http://www.regulations.gov/. 
Follow the instructions for submitting comments through the Portal.
    Please submit your comments using only one method.

FOR FURTHER INFORMATION CONTACT: Gregory Scopino, Special Counsel, 
Division of Swap Dealer and Intermediary Oversight, Commodity Futures 
Trading Commission, (202) 418-5175, email: [email protected].

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, 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.
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    \1\ 44 U.S.C. 3501 et seq.
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    Title: Protection of Collateral of Counterparties to Uncleared 
Swaps; Treatment of Securities in a Portfolio Margining Account in a 
Commodity Broker Bankruptcy (OMB Control No. 3038-0075). This is a 
request for an extension of a currently approved information 
collection.
    Abstract: On November 6, 2013, the Commission issued final rules 
implementing statutory provisions pursuant to Title VII of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (``Dodd-Frank 
Act'') and imposing requirements on SDs and MSPs with respect to the 
treatment of collateral posted by their counterparties to margin, 
guarantee, or secure uncleared swaps.\2\ Additionally, the final rule 
includes revisions to ensure that, for purposes of subchapter IV of 
chapter 7 of the Bankruptcy Code, securities held in a portfolio 
margining account that is a futures account or a Cleared Swaps Customer 
Account constitute ``customer property''; and owners of such accounts 
constitute ``customers.'' \3\ Section 4s(l) of the CEA sets forth 
certain requirements concerning the rights of counterparties of SDs and 
MSPs with respect to the segregation of money, securities, or other 
property used to margin, guarantee, or otherwise secure uncleared 
swaps. Regulation 23.701 implements part of the new statutory 
requirements by specifying that certain information must be provided to 
counterparties about the terms and conditions of segregation, including 
price information, to the extent that the SD or MSP has such 
information, and the identity of one or more independent depositories 
for segregated collateral. Regulation 23.704 implements the 
requirements of CEA Section 4s(l)(4), which dictates that, in certain 
circumstances, an SD or MSP must report to the counterparty, on a 
quarterly basis, ``that the back office procedures of the swap dealer 
or major swap participant relating to margin and collateral 
requirements are in compliance with the agreement of the 
counterparties.''
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    \2\ 78 FR 66621.
    \3\ Id.
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    As discussed above, the rules establish reporting andrecordkeeping 
requirements that are mandated by Section 4s(l) of the CEA, which 
states that SDs and MSPs must notify their counterparties of the right 
to have their initial margin segregated and to maintain the 
confirmations and elections related to such notices as business 
records. The reporting and recordkeeping requirements are necessary to 
implement the objectives of Section 4s(1). For example, the information 
received by uncleared swap counterparties pursuant to Regulation 23.701 
would alert counterparties to their statutory right, if they so choose, 
to have funds or property used as margin in uncleared swaps 
transactions with SDs and MSPs kept segregated from the property of the 
SD or MSP. Likewise, the information provided would further alert 
counterparties of the need to request such segregation if they wish to 
exercise this right. Simlarly, the information received by uncleared 
swap counterparties pursuant to Regulation 23.704 would be used to 
confirm that the back office procedures followed by a SD or MSP with 
whom they are dealing comply with the agreement of the parties.
    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

[[Page 22119]]

     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.
    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 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.\4\
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    \4\ 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 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 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 the Freedom of Information Act.
    Burden Statement: The Commission is revising its estimate of the 
burden for this collection to reflect the current number of registered 
SDs and MSPs. Accordingly, the respondent burden for this collection is 
estimated to be as follows:
    Number of Registrants: 102.
    Estimated Average Burden Hours per Registrant: 3,406.
    Estimated Aggregate Burden Hours: 347,412.
    Frequency of Reporting: As applicable.

    Authority:  44 U.S.C. 3501 et seq.

    Dated: May 9, 2017.
Robert N. Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2017-09686 Filed 5-11-17; 8:45 am]
 BILLING CODE 6351-01-P