83 FR 52767 - Government Securities Act Regulations: Large Position Reporting Rules

DEPARTMENT OF THE TREASURY

Federal Register Volume 83, Issue 202 (October 18, 2018)

Page Range		52767-52768
FR Document		2018-22732
The Department of the Treasury (Treasury) is issuing a final
Federal Register, Volume 83 Issue 202 (Thursday, October 18, 2018)
[Federal Register Volume 83, Number 202 (Thursday, October 18, 2018)]
[Rules and Regulations]
[Pages 52767-52768]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-22732]



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DEPARTMENT OF THE TREASURY



17 CFR Part 420




Government Securities Act Regulations: Large Position Reporting 

Rules



AGENCY: Office of the Assistant Secretary for Financial Markets, 

Treasury.



ACTION: Final rule.



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SUMMARY: The Department of the Treasury (Treasury) is issuing a final 

rule to amend its Large Position Reporting rules (LPR Rules). These 

technical amendments make no substantive changes to the rules but are 

designed to provide Treasury with additional flexibility to specify in 

its notice requesting large position reports where and how reports are 

to be filed. Accordingly, Treasury will provide notice by issuing a 

public announcement and subsequently publishing the notice in the 

Federal Register. Treasury believes these amendments may also minimize 

the costs and burden on reporting entities.



DATES: The amendments are effective November 17, 2018.



ADDRESSES: This final rule is available at http://www.treasurydirect.gov and http://www.regulations.gov.



FOR FURTHER INFORMATION CONTACT: Lori Santamorena, Kurt Eidemiller, 

Kevin Hawkins, or John Garrison, Department of the Treasury, Bureau of 

the Fiscal Service, Government Securities Regulations Staff, (202) 504-

3632 or email us at [email protected].



SUPPLEMENTARY INFORMATION: 



I. Background



A. Treasury's Large Position Reporting Rules



    The LPR Rules \1\ are issued under the Government Securities Act 

(GSA),\2\ as amended, for the purposes of monitoring the impact of 

large positions in Treasury securities in the Treasury securities 

market and otherwise assisting the Securities and Exchange Commission 

(SEC) in enforcing the GSA.\3\ The LPR Rules provide an on-demand 

reporting system \4\ that requires reports to be filed by entities that 

control 10 percent or more in a particular Treasury security (or 

securities) as of a particular date. The reports provide information on 

large positions in Treasury securities held by market participants and 

additional insight into the supply and demand dynamics in certain 

Treasury securities.\5\ This information allows



[[Page 52768]]



Treasury to monitor the impact of concentrations of positions.\6\ Since 

the rules became effective in 1997, Treasury has conducted 16 large 

position report calls.

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    \1\ 78 FR 73414 December 10, 2014.

    \2\ Public Law 103-202, 107 Stat. 2344 (1993) [15 U.S.C. 78o-

5(f)].

    \3\ Treasury does not believe that large positions in Treasury 

securities are inherently problematic and there is no presumption of 

manipulative or illegal intent merely because a reporting entity's 

position is large enough to be subject to Treasury's LPR Rules.

    \4\ An ``on-demand'' reporting system, rather than a regular, 

ongoing system of reporting, provides Treasury with the information 

necessary to understand supply and demand dynamics in the Treasury 

securities market, while minimizing the potential impact on the 

market's efficiency and liquidity and the cost to taxpayers of 

funding the federal debt. It also minimizes the cost and burden to 

those reporting entities affected by the LPR Rules.

    \5\ The GSA specifically provides that Treasury shall not be 

compelled to disclose publicly any information required to be kept 

or reported for large position reporting. In particular, the GSA 

exempts such information from disclosure under the Freedom of 

Information Act. See 15 U.S.C. 78o-5(f)(6).

    \6\ Under current rules, this information is also made available 

to the Federal Reserve Bank of New York (FRBNY), as Treasury's 

agent, and the SEC. See 15 U.S.C. 78o-5(f)(1).

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B. Who Is Subject to the LPR Rules



    Treasury's LPR Rules apply to all foreign and domestic persons and 

entities that control a reportable position in a Treasury security, 

including but not limited to: Government securities brokers and 

dealers; registered investment companies; registered investment 

advisers; custodians, including depository institutions that exercise 

investment discretion; hedge funds; pension funds; insurance companies; 

and foreign affiliates of U.S. entities. Central banks (including U.S. 

Federal Reserve Banks for their own account), foreign governments, and 

international monetary authorities may voluntarily submit large 

position reports when they meet or exceed a reporting threshold.



C. The Existing Large Position Report Submission Process



    Under the current LPR Rules, reports are required to be filed by 

facsimile (fax) or delivered by hardcopy to FRBNY. A report is 

considered filed when received by FRBNY. Reporting entities typically 

have three and one-half business days to submit reports, and most 

reports are filed by fax with FRBNY. Following previous calls for large 

position reports, many reporting entities have commented that it is 

difficult to find functional fax machines and would prefer an alternate 

means of submission. In response to this feedback, Treasury is 

currently exploring alternate options for the submission of reports.



II. Technical Amendments to the LPR Rules



    These technical amendments make no substantive changes to the LPR 

Rules. They are designed to provide Treasury with the flexibility to 

specify in its notice requesting large position reports where and how 

reports are to be filed. These amendments will also provide Treasury 

with the added flexibility to consider alternate means of submission, 

which may further reduce the burden on reporting entities. Treasury 

will provide notice of a request for reports, and how the reports are 

to be delivered, by issuing a public announcement and subsequently 

publishing the notice in the Federal Register.

    Specifically, the technical amendments replace references to 

``press release'' with ``public announcement;'' provide the option for 

Treasury to specify in its public announcement that reports can be 

submitted to Treasury directly; and provide the option for Treasury to 

specify in its public announcement how reports are to be submitted by 

removing references to ``facsimile'' and ``delivered hard copy.''



III. Special Analyses



    Executive Orders 13563 and 12866 direct agencies to assess costs 

and benefits of available regulatory alternatives and, if regulation is 

necessary, to select regulatory approaches that maximize net benefits 

(including potential economic, environmental, public health and safety 

effects, distributive impacts, and equity). Executive Order 13563 

emphasizes the importance of quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, and of promoting flexibility. 

This rule is not a significant regulatory action for purposes of 

Executive Order 12866.

    This final rule is procedural in nature under 5 U.S.C. 553(b)(A) 

and therefore prior notice and comment procedures are not required. In 

addition, because the final rule makes no substantive change to the 

existing rules and imposes no additional requirements, we find under 5 

U.S.C. 553(b)(B) that there is good cause that notice and public 

procedures are unnecessary, and that the rule can be issued in final 

form.

    Because no notice of proposed rulemaking is required, the 

provisions of the Regulatory Flexiblity Act (5 U.S.C. 601 et seq.) do 

not apply. These amendments reflect Treasury's continuing interest in 

meeting its informational needs while minimizing the cost and burden on 

those entities affected by the regulations.



List of Subjects in 17 CFR Part 420



    Banks, Banking, Brokers, Government securities, Reporting and 

recordkeeping requirements.



    For the reasons stated in the preamble, 17 CFR part 420 is amended 

as follows:



PART 420--LARGE POSITION REPORTING



0

1. The authority citation for part 420 continues to read as follows;



    Authority:  15 U.S.C. 78o-5(f).





0

2. Amend Sec.  420.3 by revising the second sentence of paragraph (a) 

and revising paragrphs (h), (i), and (j) to read as follows:





Sec.  420.3  Reporting.



    (a) * * * Treasury will provide notice of the large position 

thresholds by issuing a public announcement and subsequently publishing 

the notice in the Federal Register. * * *

* * * * *

    (h) The report must be filed before noon Eastern Time on the fourth 

business day following issuance of a public announcement.

    (i) A report to be filed pursuant to paragraph (c) of this section 

will be considered filed when received by Treasury or the Federal 

Reserve Bank of New York according to the instructions provided in the 

public announcement.

    (j) A reporting entity that has filed a report pursuant to 

paragraph (c) of this section shall, at the request of Treasury, or the 

Federal Reserve Bank of New York at the direction of Treasury, timely 

provide any supplemental information pertaining to such report.

* * * * *



Brian Smith,

Deputy Assistant Secretary for Federal Finance.

[FR Doc. 2018-22732 Filed 10-17-18; 8:45 am]

 BILLING CODE 4810-AS-P
52768 Federal Register / Vol. 83, No. 202 / Thursday, October 18, 2018 / Rules and Regulations

Treasury to monitor the impact of issuing a public announcement and ■ 2. Amend § 420.3 by revising the
concentrations of positions.6 Since the subsequently publishing the notice in second sentence of paragraph (a) and
rules became effective in 1997, Treasury the Federal Register. revising paragrphs (h), (i), and (j) to read
has conducted 16 large position report Specifically, the technical as follows:
calls. amendments replace references to
§ 420.3 Reporting.
B. Who Is Subject to the LPR Rules ‘‘press release’’ with ‘‘public
announcement;’’ provide the option for (a) * * * Treasury will provide notice
Treasury’s LPR Rules apply to all Treasury to specify in its public of the large position thresholds by
foreign and domestic persons and announcement that reports can be issuing a public announcement and
entities that control a reportable submitted to Treasury directly; and subsequently publishing the notice in
position in a Treasury security, provide the option for Treasury to the Federal Register. * * *
including but not limited to: specify in its public announcement how * * * * *
Government securities brokers and reports are to be submitted by removing (h) The report must be filed before
dealers; registered investment references to ‘‘facsimile’’ and ‘‘delivered noon Eastern Time on the fourth
companies; registered investment hard copy.’’ business day following issuance of a
advisers; custodians, including public announcement.
depository institutions that exercise III. Special Analyses
(i) A report to be filed pursuant to
investment discretion; hedge funds; Executive Orders 13563 and 12866 paragraph (c) of this section will be
pension funds; insurance companies; direct agencies to assess costs and considered filed when received by
and foreign affiliates of U.S. entities. benefits of available regulatory Treasury or the Federal Reserve Bank of
Central banks (including U.S. Federal alternatives and, if regulation is New York according to the instructions
Reserve Banks for their own account), necessary, to select regulatory provided in the public announcement.
foreign governments, and international approaches that maximize net benefits (j) A reporting entity that has filed a
monetary authorities may voluntarily (including potential economic, report pursuant to paragraph (c) of this
submit large position reports when they environmental, public health and safety section shall, at the request of Treasury,
meet or exceed a reporting threshold. effects, distributive impacts, and or the Federal Reserve Bank of New
C. The Existing Large Position Report equity). Executive Order 13563 York at the direction of Treasury, timely
Submission Process emphasizes the importance of provide any supplemental information
Under the current LPR Rules, reports quantifying both costs and benefits, of pertaining to such report.
are required to be filed by facsimile (fax) reducing costs, of harmonizing rules, * * * * *
or delivered by hardcopy to FRBNY. A and of promoting flexibility. This rule is
not a significant regulatory action for Brian Smith,
report is considered filed when received
purposes of Executive Order 12866. Deputy Assistant Secretary for Federal
by FRBNY. Reporting entities typically Finance.
have three and one-half business days to This final rule is procedural in nature
under 5 U.S.C. 553(b)(A) and therefore [FR Doc. 2018–22732 Filed 10–17–18; 8:45 am]
submit reports, and most reports are
filed by fax with FRBNY. Following prior notice and comment procedures BILLING CODE 4810–AS–P

previous calls for large position reports, are not required. In addition, because
many reporting entities have the final rule makes no substantive
commented that it is difficult to find change to the existing rules and imposes DEPARTMENT OF DEFENSE
functional fax machines and would no additional requirements, we find
prefer an alternate means of submission. under 5 U.S.C. 553(b)(B) that there is Department of the Navy
In response to this feedback, Treasury is good cause that notice and public
currently exploring alternate options for procedures are unnecessary, and that 32 CFR Part 706
the submission of reports. the rule can be issued in final form.
Because no notice of proposed Certifications and Exemptions Under
II. Technical Amendments to the LPR rulemaking is required, the provisions the International Regulations for
Rules of the Regulatory Flexiblity Act (5 Preventing Collisions at Sea, 1972
These technical amendments make no U.S.C. 601 et seq.) do not apply. These AGENCY: Department of the Navy (DoN),
substantive changes to the LPR Rules. amendments reflect Treasury’s Department of Defense (DoD).
They are designed to provide Treasury continuing interest in meeting its
ACTION: Final rule.
with the flexibility to specify in its informational needs while minimizing
notice requesting large position reports the cost and burden on those entities SUMMARY: The Department of the Navy
where and how reports are to be filed. affected by the regulations. (DoN) is amending its certifications and
These amendments will also provide exemptions under the International
Treasury with the added flexibility to List of Subjects in 17 CFR Part 420
Regulations for Preventing Collisions at
consider alternate means of submission, Banks, Banking, Brokers, Government Sea, 1972 (72 COLREGS), to reflect that
which may further reduce the burden on securities, Reporting and recordkeeping the Deputy Assistant Judge Advocate
reporting entities. Treasury will provide requirements. General (DAJAG) (Admiralty and
notice of a request for reports, and how For the reasons stated in the Maritime Law) has determined that USS
the reports are to be delivered, by preamble, 17 CFR part 420 is amended BILLINGS (LCS 15) is a vessel of the
as follows: Navy which, due to its special
khammond on DSK30JT082PROD with RULES

information required to be kept or reported for large
position reporting. In particular, the GSA exempts
construction and purpose, cannot fully
such information from disclosure under the PART 420—LARGE POSITION comply with certain provisions of the 72
Freedom of Information Act. See 15 U.S.C. 78o– REPORTING COLREGS without interfering with its
5(f)(6). special function as a naval ship. The
6 Under current rules, this information is also
■ 1. The authority citation for part 420 intended effect of this rule is to warn
made available to the Federal Reserve Bank of New continues to read as follows;
York (FRBNY), as Treasury’s agent, and the SEC. mariners in waters where 72 COLREGS
See 15 U.S.C. 78o–5(f)(1). Authority: 15 U.S.C. 78o–5(f). apply.

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Document Created: 2018-10-18 03:06:00
Document Modified: 2018-10-18 03:06:00
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		Rules and Regulations
Action		Final rule.
Dates		The amendments are effective November 17, 2018.
Contact		Lori Santamorena, Kurt Eidemiller,
FR Citation		83 FR 52767
CFR Associated		Banks; Banking; Brokers; Government Securities and Reporting and Recordkeeping Requirements