83 FR 63450 - Privacy of Consumer Financial Information-Amendment To Conform Regulations to the Fixing America's Surface Transportation Act
COMMODITY FUTURES TRADING COMMISSION Federal Register Volume 83, Issue 236 (December 10, 2018)
Federal Register Volume 83, Issue 236 (December 10, 2018)
| Page Range | 63450-63456 | |
| FR Document | 2018-26523 |
[Federal Register Volume 83, Number 236 (Monday, December 10, 2018)] [Proposed Rules] [Pages 63450-63456] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-26523] ======================================================================= ----------------------------------------------------------------------- COMMODITY FUTURES TRADING COMMISSION 17 CFR Part 160 RIN 3038-AE80 Privacy of Consumer Financial Information--Amendment To Conform Regulations to the Fixing America's Surface Transportation Act AGENCY: Commodity Futures Trading Commission. ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: The Commodity Futures Trading Commission (``CFTC'' or [[Page 63451]] ``Commission'') is proposing to revise its regulations requiring covered persons to provide annual privacy notices to customers. The proposed revisions implement the Fixing America's Surface Transportation Act's (``FAST Act'') December 2015 statutory amendment to the Gramm-Leach-Bliley Act (``GLB Act'') by providing an exception to the annual notice requirement under certain conditions. DATES: Comments must be received on or before February 8, 2019. ADDRESSES: You may submit comments, identified by RIN 3038-AE80, by any of the following methods:CFTC Comments Portal: https://comments.cftc.gov. Select the ``Submit Comments'' link for this rulemaking and follow the instructions on the Public Comment Form. Mail: Send to Christopher Kirkpatrick, Secretary of the Commission, Commodity Futures Trading Commission, Three Lafayette Center, 1155 21st Street, NW, Washington, DC 20581. Hand Delivery/Courier: Follow the same instructions as for Mail, above. Please submit your comments using only one of these methods. Submissions through the CFTC Comments Portal are encouraged. All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to https://comments.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 (``FOIA''), 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.\1\ --------------------------------------------------------------------------- \1\ 17 CFR 145.9. Commission regulations referred to herein are found at 17 CFR Chapter I. --------------------------------------------------------------------------- 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://comments.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 FOIA. FOR FURTHER INFORMATION CONTACT: Matthew Kulkin, Director, (202) 418- 5213, [email protected]; Frank Fisanich, Chief Counsel, (202) 418-5949, [email protected]; or Jacob Chachkin, Special Counsel, (202) 418-5496, [email protected], Division of Swap Dealer and Intermediary Oversight, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581. SUPPLEMENTARY INFORMATION: I. Background Title V, Subtitle A of the GLB Act \2\ (``Title V'') mandates that financial institutions provide their consumers with whom they have customer relationships (``customers'') with annual notices regarding those institutions' privacy policies and practices.\3\ Further, subject to certain exceptions, if financial institutions share nonpublic personal information with particular types of third parties, the financial institutions must also provide their consumers with an opportunity to opt out of the sharing.\4\ The Commission and entities subject to its jurisdiction were originally excluded from Title V's coverage.\5\ However, section 124 of the Commodity Futures Modernization Act of 2000 \6\ amended the Commodity Exchange Act (``CEA'') to add section 5g,\7\ providing that futures commission merchants (``FCMs''), commodity trading advisors (``CTAs''), commodity pool operators (``CPOs''), and introducing brokers (``IBs'') \8\ fall under the requirements of Title V and requiring the Commission to prescribe regulations in furtherance of Title V. Thus, in 2001, the Commission promulgated part 160 of its regulations to establish standards relating to Title V.\9\ --------------------------------------------------------------------------- \2\ Title V, Subtitle A, Public Law 106-102, 113 Stat. 1338 (1999), as codified at 15 U.S.C. 6801-6809. \3\ See 15 U.S.C. 6803. \4\ See 15 U.S.C. 6802(b). See also 15 U.S.C. 6809(4)(A) (defining ``nonpublic personal information''). \5\ 15 U.S.C. 6809(3)(B). \6\ Section 124, Appendix E of Public Law 106-554, 114 Stat. 2763 (2000). \7\ 7 U.S.C. 7b-2. \8\ For the definitions of these intermediary categories, see section 1a of the CEA and Sec. 1.3 of the Commission's regulations. 7 U.S.C. 1a and 17 CFR 1.3. \9\ Privacy of Customer Information, 66 FR 21235 (April 27, 2001). The Commission later modified its part 160 regulations to apply them to retail foreign exchange dealers (``RFEDs''), swap dealers (``SDs''), and major swap participants (``MSPs''). Regulation of Off-Exchange Retail Foreign Exchange Transactions and Intermediaries, 75 FR 55409 (Sept. 10, 2010) for RFEDs, and Privacy of Consumer Financial Information; Conforming Amendments Under Dodd- Frank Act, 76 FR 43874 (July 22, 2011) for SDs and MSPs. For the definition of RFED, see Sec. 5.1(h). 17 CFR 5.1(h). For the definitions of SD and MSP, see section 1a of the CEA and Sec. 1.3 of the Commission's regulations. 7 U.S.C. 1a and 17 CFR 1.3. --------------------------------------------------------------------------- Consistent with Title V, part 160 requires that, generally, all FCMs, RFEDs, CTAs, CPOs, IBs, MSPs, and SDs that are subject to the jurisdiction of the Commission, regardless of whether they are required to register with the Commission (``Covered Persons''), provide a clear and conspicuous notice to customers that accurately reflects their privacy policies and practices not less than annually during the life of the customer relationship.\10\ --------------------------------------------------------------------------- \10\ 17 CFR 160.1 and 160.5. Part 160 does not apply to foreign (non-resident) FCMs, RFEDs, CTAs, CPOs, IBs, MSPs, and SDs that are not registered with the Commission. 17 CFR 160.1. Therefore, they are not ``Covered Persons'' as defined in this release. --------------------------------------------------------------------------- On December 4, 2015, Congress amended Title V as part of the FAST Act.\11\ This amendment, titled ``Eliminate Privacy Notice Confusion,'' added section 503(f) to the GLB Act to limit the circumstances under which a financial institution must provide a privacy notice to its customers on an annual basis.\12\ In particular, under section 503(f), a financial institution is excepted from the requirement to send privacy notices on an annual basis if that financial institution (1) does not share nonpublic personal information except as described in certain specified exceptions; and (2) has not changed its policies and practices with regard to disclosing nonpublic personal information from those policies and practices that the institution disclosed in the most recent disclosure it sent to consumers in accordance with section 503.\13\ This amendment to the GLB Act became effective upon enactment of the FAST Act in December 2015. The Commission is now proposing to amend Sec. 160.5 of the Commission's regulations (the ``Proposal'') to implement the FAST Act amendments to the GLB Act with respect to Covered Persons, as described below.\14\ --------------------------------------------------------------------------- \11\ Section 75001, Public Law 114-94, 129 Stat. 1312 (2015), available at http://transportation.house.gov/uploadedfiles/fastact_xml.pdf (last visited Nov. 30, 2018). \12\ Id. \13\ See 15 U.S.C. 6803(f). \14\ In developing the Proposal, pursuant to Section 6804(a)(2) of the GLB Act, the Commission consulted and coordinated with the Bureau of Consumer Financial Protection (``BCFP''), the Securities and Exchange Commission, the Federal Trade Commission, and the National Association of Insurance Commissioners, including regarding consistency and comparability with the regulations prescribed by such agencies. See 15 U.S.C. 6804(a)(2). In addition, the Proposal is consistent with rules recently finalized by the BCFP (``BCFP Final Rule''). See Amendment to the Annual Privacy Notice Requirement Under the Gramm-Leach-Bliley Act (Regulation P), 83 FR 40945 (Aug. 2018). --------------------------------------------------------------------------- [[Page 63452]] II. Proposal The Proposal would amend Sec. 160.5 to modify the first sentence of paragraph (a) and add a new paragraph (d). The modification to Sec. 160.5(a) would add a reference to the exception, contained in new paragraph (d), to the requirement that a Covered Person annually provide a clear and conspicuous notice to customers that reflects the Covered Person's privacy policies and practices (``annual privacy notice'') during the life of the customer relationship. Section 160.5(d)(1) would describe that exception by stating that a Covered Person is not required to deliver an annual privacy notice to customers pursuant to Sec. 160.5(a) if it: (1) Provides nonpublic personal information to nonaffiliated third parties only in accordance with the provisions of Sec. Sec. 160.13, 160.14, 160.15 and any other exceptions adopted by the Commission pursuant to section 504(b) of the GLB Act;\15\ and (2) has not changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed to the customer under Sec. 160.6(a)(2) through (5) and Sec. 160.6(a)(9) in the most recent privacy notice provided to such customer pursuant to part 160 of the Commission's regulations. --------------------------------------------------------------------------- \15\ Section 503(f)(1) of the GLB Act permits a financial institution to share nonpublic personal information in accordance with the provisions of sections 502(b)(2) or (e) of the GLB Act or regulations prescribed under section 504(b) of the GLB Act. See 15 U.S.C. 6802 and 6803. Sharing by a financial institution, as described in sections 502(b)(2) or (e), does not trigger the consumer's statutory right to opt out of such sharing. These exceptions are incorporated into existing Commission regulations at 17 CFR 160.13 (Exception to opt out requirements for service providers and joint marketing), 160.14 (Exceptions to notice and opt out requirements for processing and servicing transactions), and 160.15 (Other exceptions to notice and opt out requirements). Section 504(b) of the GLB Act gives the Commission and other relevant agencies authority to include additional exceptions to certain regulations promulgated under Title V as are deemed consistent with Title V's purposes. See 15 U.S.C. 6804(b). --------------------------------------------------------------------------- Paragraphs (1) through (9) of Sec. 160.6(a) set forth the specific types of information that a Covered Person must include in its privacy notices.\16\ The information required by Sec. 160.6(a)(2) through (5) and Sec. 160.6(a)(9), which Sec. 160.5(d)(1)(ii) references, specifically relate to the policies and practices connected to disclosing nonpublic personal information. The Commission believes that other types of information required by Sec. 160.6(a), such as the information under Sec. 160.6(a)(1) (information collection) and Sec. 160.6(a)(8) (confidentiality and security), do not relate to disclosure of nonpublic personal information.\17\ Thus, since new GLB Act section 503(f)(2) states that a condition for the annual privacy notice exception is that a financial institution must not have changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed in the most recent notice sent to consumers, the Commission is proposing to frame the scope of the exception to reference only the types of information listed in Sec. 160.6(a)(2) through (5) and Sec. 160.6(a)(9). --------------------------------------------------------------------------- \16\ 17 CFR 160.6 (a)(1)-(9). Section 160.6(a) provides that a Covered Person must include the following information in annual privacy notices sent to customers: (1) The categories of nonpublic personal information it collects; (2) the categories of nonpublic personal information it discloses; (3) subject to limited exception, the categories of affiliates and nonaffiliated third parties to whom it discloses nonpublic personal information; (4) subject to limited exception, the categories of nonpublic personal information about its former customers that it discloses and the categories of affiliates and nonaffiliated third parties to whom it discloses nonpublic personal information about its former customers; (5) if it discloses nonpublic personal information to a nonaffiliated third party under Sec. 160.13 (and no other exception applies to that disclosure), a separate statement of the categories of information it discloses and the categories of third parties with whom it has contracted; (6) an explanation of the customer's rights under Sec. 160.10(a) to opt out of the disclosure of nonpublic personal information to nonaffiliated third parties, including the method(s) by which the customer may exercise that right at that time; (7) any disclosures that it makes under section 603(d)(2)(A)(iii) of the Fair Credit Reporting Act (``FCRA'') (15 U.S.C. 1681a(d)(2)(A)(iii)) (that is, notices regarding the ability to opt out of disclosures of information among affiliates); (8) its policies and practices with respect to protecting the confidentiality and security of nonpublic personal information; and (9) any disclosure that it makes under Sec. 160.6(b). \17\ Id. The Commission notes that Sec. 160.6(a)(7) requires that annual privacy notices incorporate opt-out disclosures provided under FCRA section 603(d)(2)(A)(iii) (that is, notices regarding the ability to opt out of disclosures of information among affiliates). GLB Act section 503(f)(1) does not mention these FCRA affiliate opt- out disclosures. The Commission believes that changes to these FCRA disclosures do not affect whether GLB Act section 503(f)(1) is satisfied and therefore should not affect whether a Covered Person satisfies proposed Sec. 160.5(d)(1). The proposed rule is also consistent in this respect with the BCFP Final Rule. --------------------------------------------------------------------------- GLB Act section 503(f) states that a financial institution that meets the requirements for the annual notice exception will not be required to provide annual notices ``until such time'' as that financial institution fails to comply with the criteria described in section 503(f)(1) and 503(f)(2), which would be implemented in proposed Sec. 160.5(d)(1).\18\ Covered Persons that no longer meet the conditions for the exception must provide customers with annual privacy notices. However, because the GLB Act is silent as to when a financial institution that has relied on and no longer meets the requirements of the exception must next provide an annual privacy notice, the Commission is proposing a framework for these circumstances. Specifically, Sec. 160.5(d)(2) states that a Covered Person who has been excepted from delivering an annual privacy notice pursuant to Sec. 160.5(d)(1) and who changes its policies or practices in such a way that it no longer meets the requirements for that exception, would, if such a change required a revised privacy notice pursuant to Sec. 160.8,\19\ be required to provide an annual privacy notice in accordance with the timing requirements in Sec. 160.5(a), treating the revised privacy notice as an initial privacy notice. Further, if the change in policies or practices did not require a revised privacy notice pursuant to Sec. 160.8 to be sent, a Covered Person who has been previously excepted from delivering an annual privacy notice would be required to provide an annual privacy notice to customers within 100 days of the change in their policies or practices.\20\ --------------------------------------------------------------------------- \18\ 15 U.S.C. 6803(f). \19\ 17 CFR 160.8 (Revised privacy notices). \20\ In developing this framework, the Commission looked to Sec. 160.8 because that provision already addresses circumstances in which a Covered Person might change its privacy policies or practices in a way that affects the content of the notices. Specifically, Sec. 160.8 requires that a Covered Person provide a revised notice to consumers before implementing certain types of changes. In other cases, part 160 currently contemplates that a change in policy or practice that affects the content of the notices would simply be reflected on the next regular annual notice provided to customers pursuant to Sec. 160.5. The Commission is therefore proposing different timing requirements for resumption of delivery of annual notices, depending on whether the change at issue would trigger the requirement for a revised notice under Sec. 160.8 prior to the change taking effect. --------------------------------------------------------------------------- The Commission is proposing a 100-day period for providing the annual privacy notice under these circumstances because, as affected customers would not receive a revised notice from the Covered Person prior to the Covered Person's change in policies or practices, the Commission believes the annual privacy notice should be delivered within a relatively short time so that customers are informed of the change in a timely manner. Further, the Commission preliminarily believes that 100 days would allow a Covered Person to meet the notice requirement without imposing additional costs on Covered Persons. Particularly, a 100-day delivery period would accommodate the inclusion of the notice with their quarterly statements.\21\ In addition, this [[Page 63453]] 100-day delivery period is required under the BCFP Final Rule and proposing the same delivery requirement as the BCFP furthers the Commission's goal of having its regulations be consistent with those of other regulators, where appropriate. --------------------------------------------------------------------------- \21\ The Commission also notes that a delivery requirement resulting from a change in policies and practices described under proposed Commission regulation 160.5(d)(1)(ii) is effectively a one- time burden for a Covered Person absent additional changes to its policies and practices. Specifically, after providing the one annual privacy notice, the Covered Person would once again meet both of the conditions for the exception--it would not be sharing other than as described under Commission regulation 160.5(d)(1)(i) and its policies and practices would not have changed since it provided the annual privacy notice. Because the Covered Person would once again meet the conditions for the exception, it would not be required to provide future annual privacy notices. --------------------------------------------------------------------------- To ensure that the Proposal, if adopted, achieves its stated purpose, the Commission requests comment generally on all aspects of the Proposal and this release. III. Related Matters A. Regulatory Flexibility Act The Regulatory Flexibility Act \22\ (``RFA'') requires federal agencies to consider whether the rules they propose will have a significant economic impact on a substantial number of small entities and, if so, to provide a regulatory flexibility analysis regarding the economic impact on those entities. The Proposal would add an exception to Sec. 160.5's requirement that Covered Persons deliver annual privacy notices, as discussed above. --------------------------------------------------------------------------- \22\ 5 U.S.C. 601 et seq. --------------------------------------------------------------------------- The Proposal would affect Covered Persons (i.e., certain FCMs, RFEDs, CTAs, CPOs, IBs, MSPs, and SDs). To the extent that the Proposal would impact Covered Persons that may be small entities for purposes of the RFA,\23\ the Commission considered whether the Proposal would have a significant economic impact on such Covered Persons. --------------------------------------------------------------------------- \23\ The Commission has previously determined that certain entities are not ``small entities'' for purposes of the RFA. See, e.g., 47 FR 18618, 18619 (Apr. 30, 1982) (registered FCMs); 75 FR 55410, 55416 (Sept. 10, 2010) (RFEDs); 77 FR 2613, 2620 (Jan. 19, 2012) (SDs and MSPs). However, the Commission has determined that CPOs exempt pursuant to 17 CFR 4.13(a) are small entities. See 46 FR 26004 (May 8, 1981); 47 FR at 18619. The definitions of IB and CTA are also broad enough to potentially encompass ``small entities.'' See 48 FR 35248, 35276 (Aug. 3, 1983) (recognizing that the IB definition ``undoubtedly encompasses many business enterprises of variable size''); 47 FR at 18620 (the category of CTAs is ``too broad'' for a general determination regarding their small entity status). --------------------------------------------------------------------------- As a Covered Person may continue to provide annual privacy notices and not avail itself of the proposed exception to the annual privacy notice requirement in Sec. 160.5, the Proposal would not impose any new regulatory obligations on Covered Persons, including Covered Persons that may be small entities for purposes of the RFA. Rather, to the extent that a Covered person relies on the proposed exception, it would simply avoid providing a privacy notice annually until such time as it is no longer eligible for the exception. The Proposal's clarification that, once it is no longer eligible for the exception, the Covered Person would need to provide a privacy notice either in accordance with existing Sec. 160.8 or within 100 days would also not result in any new burdens. Sections 160.5 and 160.8 are existing requirements to deliver annual privacy notices and revised privacy notices under certain circumstances. Further, the Commission endeavored to reduce any burdens for those Covered Persons utilizing the exception by allowing the proposed 100-day period following loss of the exception to resume delivery of an annual privacy notice where a notice is not already required pursuant to Sec. 160.8, as discussed above. The Commission does not, therefore, expect that any small entities that may be impacted by the rule to incur any additional costs as a result of the Proposal. Therefore, the Commission believes that the Proposal will not have a significant economic impact on a substantial number of small entities, as defined in the RFA. Accordingly, the Chairman, on behalf of the Commission, hereby certifies pursuant to 5 U.S.C. 605(b) that the Proposal will not have a significant economic impact on a substantial number of small entities. The Commission invites comment on the impact of the Proposal on small entities. B. Paperwork Reduction Act The Paperwork Reduction Act of 1995 (``PRA'') \24\ imposes certain requirements on Federal agencies, including the Commission, in connection with their conducting or sponsoring any collection of information, as defined by the PRA. The Commission may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid Office of Management and Budget (``OMB'') control number. --------------------------------------------------------------------------- \24\ 44 U.S.C. 3501 et seq. --------------------------------------------------------------------------- The Commission believes that the Proposal would not impose any new recordkeeping or information collection requirements, or other collections of information that require approval of OMB under the PRA. However, by providing the exception to the requirement to provide annual privacy notices to customers discussed above, the Proposal would modify a collection of information for which the Commission has previously received a control number from OMB. The title for this collection of information is ``Privacy of Consumer Financial Information, OMB control number 3038-0055''.\25\ Collection 3038-0055 is currently in force with its control number having been provided by OMB. Accordingly, the Commission will submit to OMB revisions to OMB control number 3038-0055 to reflect the proposed addition of this exception and the resulting reduction of burden. In particular, the Commission estimates that the availability of the exception in Commission regulation 160.5(d) will reduce the current number of annual privacy notices by approximately 30%. Accordingly, in accordance with its previous estimates, the Commission estimates that the Proposal would reduce the total number of responses by 113,620 responses annually and reduce the time burden by approximately 1,136 hours annually. The Commission believes that the one-time cost of adopting the annual privacy notice exception for Covered Persons that adopt it is de minimis. --------------------------------------------------------------------------- \25\ See OMB Control No. 3038-0055, http://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=3038-0055# (last visited Nov. 30, 2018). --------------------------------------------------------------------------- The Commission invites the public and other Federal agencies to comment on any aspect of the proposed information collection requirements discussed above. Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits comments in order to: (1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have practical utility; (2) evaluate the accuracy of the Commission's estimate of the burden of the proposed collection of information; (3) determine whether there are ways to enhance the quality, utility, and clarity of the information to be collected; and (4) minimize the burden of the collection of information on those who are to respond, including through the use of automated collection techniques or other forms of information technology. Comments may be submitted directly to the Office of Information and Regulatory Affairs, by fax at (202) 395-6566, or by email at [email protected]. Please provide the Commission with a copy of submitted [[Page 63454]] comments so that all comments can be summarized and addressed in the final rule preamble. Refer to the ADDRESSES section of this document for comment submission instructions to the Commission. A copy of the supporting statements for the collection of information discussed above may be obtained by visiting RegInfo.gov. OMB is required to make a decision concerning the collection of information between 30 and 60 days after publication of this document in the Federal Register. Therefore, a comment is best assured of having its full effect if OMB receives it within 30 days of publication. C. Cost-Benefit Considerations Section 15(a) of the CEA requires the Commission to consider the costs and benefits of its actions before promulgating a regulation under the CEA. Section 15(a) further specifies that the costs and benefits shall be evaluated in light of the following five broad areas of market and public concern: (1) Protection of market participants and the public; (2) efficiency, competitiveness, and financial integrity of futures markets; (3) price discovery; (4) sound risk management practices; and (5) other public interest considerations. The Commission considers the costs and benefits resulting from its discretionary determinations with respect to the section 15(a) considerations. As discussed above, the Commission is proposing to implement the FAST Act's amendments to the GLB Act by amending Sec. 160.5 to incorporate an exception to a Covered Person's obligation to provide an annual privacy notice under certain specified circumstances, consistent with section 503(f) of the GLB Act and address when a Covered Person that has relied on and no longer meets the requirements of that exception must next provide an annual privacy notice. Below, the Commission discusses the costs and benefits of the Proposal.\26\ The baseline against which the costs and benefits are considered is the current status quo for Covered Persons with respect to their obligation to provide annual privacy notices. The Commission recognizes that there are inherent costs and benefits to Covered Persons and their customers associated with providing an exception to the annual privacy notice requirement, which Congress took into account in amending the GLB Act under the FAST Act. The Commission further recognizes that there are costs and benefits due to discretionary actions taken by the Commission in implementing the exception. In formulating the Proposal, the Commission was mindful of the policy goals that drove Congress to create this exception and endeavored not to impose unnecessary burdens on Covered Persons in proposing when a Covered Person would next need to provide an annual privacy notice after loss of the exception.\27\ --------------------------------------------------------------------------- \26\ The Commission endeavors to assess the expected costs and benefits of its proposed rule in quantitative terms where possible. Where estimation or quantification is not feasible, the Commission provides its discussion in qualitative terms. Given a general lack of relevant data, the Commission's assessment is generally provided in qualitative terms. \27\ The Commission notes that the consideration of costs and benefits below is based on the understanding that the markets function internationally, with many transactions involving United States firms taking place across international boundaries; with some commission registrants being organized outside of the United States; with some leading industry members typically conducting operations both within and outside the United States; and with industry members commonly following substantially similar business practices wherever located. Where the Commission does not specifically refer to matters of location, the discussion of costs and benefits below refers to the effects of this proposal on all activity subject to the proposed and amended regulations, whether by virtue of the activity's physical location in the United States or by virtue of the activity's connection with or effect on United States commerce under CEA section 2(i). In particular, the Commission notes that some Covered Persons are located outside of the United States. --------------------------------------------------------------------------- The Commission anticipates that some Covered Persons may avail themselves of the exception in the Proposal and not provide annual privacy notices. The Proposal would benefit these Covered Persons that are opting out of providing annual privacy notices by reducing their costs associated with sending such notices. Further, because no Covered Person is required to avail themselves of the exception in the Proposal, as discussed above, the Commission believes that it is reasonable to conclude that only those Covered Persons that expect a net benefit from the Proposal will stop providing annual privacy notices under the proposed exception. The Commission recognizes that, as a result of the Proposal, certain customers of Covered Persons may no longer receive privacy notices annually and therefore would not be made aware of the Covered Persons' policies and procedures as frequently. However, the scope of the exception is tailored such that customers of Covered Persons could only not receive an annual privacy notice to the extent that the Covered Person: (1) Provides nonpublic personal information to nonaffiliated third parties only in accordance with the provisions of Sec. Sec. 160.13, 160.14, 160.15 and any other exceptions adopted by the Commission pursuant to section 504(b) of the GLB Act; and (2) has not changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed to the customer under Sec. 160.6(a)(2) through (5) and Sec. 160.6(a)(9) in the most recent privacy notice provided to such customer pursuant to part 160 of the Commission's regulations. Thus, the Proposal may reduce confusion among customers by providing them with disclosures when they would be most relevant, i.e., when disclosure policies change after the customer relationship begins and to the extent an institution shares sensitive personal information with third parties for marketing purposes. In proposing when to require the resumption of annual privacy notices following the loss of the proposed exception, the Commission endeavored to propose requirements consistent with existing timing requirements for privacy notices under current regulations, as discussed above, and to provide clarity to Covered Persons.\28\ Specifically, in proposing to require the resumption of annual privacy notices within 100 days of the loss of the exception where a revised privacy notice is not required under Sec. 160.8, the Commission has tried not to impose unnecessary burdens on Covered Persons while taking into account the potential impact on a Covered Person's customers of not receiving such notices in a timely manner. The Commission considered different requirements for the resumption of annual privacy notices in these circumstances (e.g., requiring a notice before the change in the policy or practice causing the loss of the availability of the exception or immediately following such change, or within 60 or 90 days of such change). The Commission is proposing the 100 day period because it believes the proposal to be consistent with the revisions of the GLB Act in the FAST Act and current regulations while allowing Covered Persons some flexibility in resuming annual privacy notices. This flexibility would allow, for example, these notices to be included with quarterly statements to reduce any costs from resuming providing such notices. In proposing timing requirements for the resumption of annual privacy notices where a revised [[Page 63455]] notice is required under Sec. 160.8, the Commission is proposing to clarify the effect of such a revised notice on the requirement that a Covered Person provide an annual privacy notice and on the eligibility for the proposed exception to this requirement. Specifically, the Commission is clarifying that a Covered Person should provide the notice currently required by Sec. 160.8 and treat such notice as an initial privacy notice. --------------------------------------------------------------------------- \28\ In addition, as discussed above, the Commission notes that a Covered Person's obligation to resume providing annual privacy notices may be effectively a one-time burden absent additional changes to their policies and practices. --------------------------------------------------------------------------- 3. Section 15(a) Considerations In light of the foregoing, the CFTC has evaluated the costs and benefits of the Proposal pursuant to the five considerations identified in section 15(a) of the CEA as follows: (1) Protection of Market Participants and the Public The requirements of Sec. 160.5 protect market participants by ensuring that customers of Covered Persons are informed about such Covered Persons' practices and policies with respect to nonpublic personal information and certain other information described in Sec. 160.6. As discussed above, the Commission recognizes that, as a result of the Proposal, some customers of Covered Persons may no longer receive privacy notices annually and therefore would not be made aware of the Covered Persons' policies and procedures as frequently. However, the scope of the exception is tailored such that customers of Covered Persons could only not receive an annual privacy notice to the extent that the Covered Person: (1) Provides nonpublic personal information to nonaffiliated third parties only in accordance with the provisions of Sec. Sec. 160.13, 160.14, 160.15 and any other exceptions adopted by the Commission pursuant to section 504(b) of the GLB Act; and (2) has not changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed to the customer under Sec. 160.6(a)(2) through (5) and Sec. 160.6(a)(9) in the most recent privacy notice provided to such customer pursuant to part 160 of the Commission's regulations. Further, as discussed above, the Proposal may reduce confusion among customers by providing them with disclosures when they would be most relevant. In addition, the Commission preliminarily believes that the proposed requirements for the resumption of annual privacy notices following the loss of the exception in the Proposal will allow customers of Covered Persons to receive annual privacy notices in a timely manner while not causing Covered Persons to incur any additional costs. (2) Efficiency, Competitiveness, and Financial Integrity of Markets The Commission believes that the Proposal may improve competition by reducing costs for Covered Persons that meet the requirements of the exception in proposed Sec. 160.5(d) to not deliver an annual privacy notice and elect to not deliver such notices. Specifically, the Commission expects that the Proposal would likely result in fewer substantially similar annual privacy notices being delivered, which would reduce costs associated with producing and delivering such privacy notices. Further, to the extent that a Covered Person is no longer able to take advantage of the exception to providing annual privacy notices and is required to resume providing them, the Commission preliminary believes that a Covered Person will not incur any additional costs in doing so, as the Covered Person would simply need to resume sending annual privacy notices as currently required. (3) Price Discovery The Commission has not identified an impact on price discovery as a result of the Proposal. (4) Sound Risk Management The Commission has not identified an impact on sound risk management as a result of the Proposal. (5) Other Public Interest Considerations The Commission has not identified an impact on other public interest considerations as a result of the Proposal. 4. Request for Comments on Cost-Benefit Considerations The Commission invites public comment on its cost-benefit considerations, including the section 15(a) factors described above. Commenters are also invited to submit any data or other information that they may have quantifying or qualifying the costs and benefits of the Proposal with their comment letters. D. Antitrust Considerations Section 15(b) of the CEA requires the Commission to take into consideration the public interest to be protected by the antitrust laws and endeavor to take the least anticompetitive means of achieving the purposes of the CEA, in issuing any order or adopting any Commission rule or regulation (including any exemption under section 4(c) or 4c(b)), or in requiring or approving any bylaw, rule, or regulation of a contract market or registered futures association established pursuant to section 17 of the CEA.\29\ --------------------------------------------------------------------------- \29\ 7 U.S.C. 19(b). --------------------------------------------------------------------------- The Commission believes that the public interest to be protected by the antitrust laws is generally to protect competition. The Commission requests comment on whether the Proposal implicates any other specific public interest to be protected by the antitrust laws. The Commission has considered the Proposal to determine whether it is anticompetitive and has preliminarily identified no anticompetitive effects. The Commission requests comment on whether the Proposal is anticompetitive and, if it is, what the anticompetitive effects are. Because the Commission has preliminarily determined that the Proposal is not anticompetitive and has no anticompetitive effects, the Commission has not identified any less anticompetitive means of achieving the purposes of the CEA. The Commission requests comment on whether there are less anticompetitive means of achieving the relevant purposes of the CEA that would otherwise be served by adopting the Proposal. List of Subjects in 17 CFR Part 160 Brokers, Consumer protection, Privacy, Reporting and recordkeeping requirements. For the reasons stated in the preamble, the Commodity Futures Trading Commission proposes to amend 17 CFR chapter I as follows: PART 160--PRIVACY OF CONSUMER FINANCIAL INFORMATION UNDER TITLE V OF THE GRAMM-LEACH-BLILEY ACT 0 1. The authority citation for part 160 continues to read as follows: Authority: 7 U.S.C. 7b-2 and 12a(5); 15 U.S.C. 6801, et seq., and sec. 1093, Pub. L. 111-203, 124 Stat. 1376. 0 2. In Sec. 160.5, revise the first sentence of paragraph (a)(1) and add paragraph (d) to read as follows: Sec. 160.5 Annual privacy notice to customers required. (a)(1) * * * Except as provided by paragraph (d) of this section, you must provide a clear and conspicuous notice to customers that accurately reflects your privacy policies and practices not less than annually during the life of the customer relationship. * * * * * * * * [[Page 63456]] (d) Exception to annual privacy notice requirement. (1) You are not required to deliver an annual privacy notice if you: (i) Provide nonpublic personal information to nonaffiliated third parties only in accordance with the provisions of Sec. Sec. 160.13 through 160.15 and any other exceptions adopted by the Commission pursuant to section 504(b) of the GLB Act; and (ii) Have not changed your policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed to the customer under Sec. 160.6(a)(2) through (5) and Sec. 160.6(a)(9) in the most recent privacy notice sent to the customer pursuant to this part. (2) Delivery of annual privacy notice after you no longer meet requirements for exception. If you have been excepted from delivering an annual privacy notice pursuant to paragraph (d)(1) of this section and change your policies or practices in such a way that you no longer meet the requirements for that exception, you must comply with paragraph (d)(2)(i) or (ii) of this section, as applicable. (i) Changes preceded by a revised privacy notice. If you no longer meet the requirements of paragraph (d)(1) of this section because you change your policies or practices in such a way that Sec. 160.8 requires you to provide a revised privacy notice, you must provide an annual privacy notice in accordance with the timing requirements in paragraph (a) of this section, treating the revised privacy notice as an initial privacy notice. (ii) Changes not preceded by a revised privacy notice. If you no longer meet the requirements of paragraph (d)(1) of this section because you change your policies or practices in such a way that Sec. 160.8 does not require you to provide a revised privacy notice, you must provide an annual privacy notice within 100 days of the change in your policies or practices that causes you to no longer meet the requirements of paragraph (d)(1) of this section. Issued in Washington, DC, on November 30, 2018, by the Commission. Christopher Kirkpatrick, Secretary of the Commission. Note: The following appendices will not appear in the Code of Federal Regulations. Appendices to Privacy of Consumer Financial Information--Amendment To Conform Regulations to the Fixing America's Surface Transportation Act--Commission Voting Summary and Chairman's Statement Appendix 1--Commission Voting Summary On this matter, Chairman Giancarlo and Commissioners Quintenz, Behnam, Stump, and Berkovitz voted in the affirmative. No Commissioner voted in the negative. Appendix 2--Statement of Chairman J. Christopher Giancarlo This proposal will revise Commission regulation 160.5's privacy notice requirements to implement the Fixing America's Surface Transportation (FAST) Act's December 2015 statutory amendment to the Gramm-Leach-Bliley Act (GLBA). In proposing to implement what is now almost a three-year-old statutory requirement, this proposal is a good demonstration of this Commission's commitment to supporting good governance. [FR Doc. 2018-26523 Filed 12-7-18; 8:45 am] BILLING CODE 6351-01-P
![63450 Federal Register / Vol. 83, No. 236 / Monday, December 10, 2018 / Proposed Rules
are specifically invited on the overall Designations and Reporting Points, Lists of Subjects in 14 CFR Part 71
regulatory, aeronautical, economic, dated August 13, 2018, and effective Airspace, Incorporation by reference,
environmental, and energy-related September 15, 2018. FAA Order Navigation (air).
aspects of the proposal. 7400.11C is publicly available as listed
Communications should identify both in the ADDRESSES section of this The Proposed Amendment
docket numbers (Docket No. FAA– document. FAA Order 7400.11C lists In consideration of the foregoing, the
2018–0998 and Airspace Docket No. 18– Class A, B, C, D, and E airspace areas, Federal Aviation Administration
AEA–19) and be submitted in triplicate air traffic service routes, and reporting proposes to amend 14 CFR part 71 as
to DOT Docket Operations (see points. follows:
ADDRESSES section for the address and
phone number). You may also submit The Proposal
PART 71—DESIGNATION OF CLASS A,
comments through the internet at http:// The FAA proposes an amendment to B, C, D, AND E AIRSPACE AREAS; AIR
www.regulations.gov. Title 14 Code of Federal Regulations (14 TRAFFIC SERVICE ROUTES; AND
Persons wishing the FAA to CFR) part 71 to modify Class E airspace REPORTING POINTS
acknowledge receipt of their comments extending upward from 700 feet or more
on this action must submit with those above the surface within a 7.4-mile ■ 1. The authority citation for part 71
comments a self-addressed stamped radius (increased from a 6.3-mile continues to read as follows:
postcard on which the following radius), with a southeast extension from Authority: 49 U.S.C. 106(f), 106(g); 40103,
statement is made: ‘‘Comments to FAA the 7.4-mile radius to 11-miles of Corry- 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR,
Docket No. FAA–2018–0998; Airspace Lawrence Airport, Corry, PA, due to the 1959–1963 Comp., p. 389.
Docket No. 18–AEA–19.’’ The postcard decommissioning of the Corry NDB, and
will be date/time stamped and returned § 71.1 [Amended]
cancellation of the NDB approach. The
to the commenter. airspace redesign would enhance the ■ 2. The incorporation by reference in
All communications received before safety and management of IFR 14 CFR 71.1 of Federal Aviation
the specified closing date for comments operations at the airport. The geographic Administration Order 7400.11C,
will be considered before taking action coordinates of the airport also would be Airspace Designations and Reporting
on the proposed rule. The proposal adjusted to coincide with the FAA’s Points, dated August 13, 2018, and
contained in this document may be aeronautical database. effective September 15, 2018, is
changed in light of the comments amended as follows:
Class E airspace designations are
received. All comments submitted will Paragraph 6005 Class E Airspace Areas
published in Paragraph 6005 of FAA
be available for examination in the Extending Upward From 700 Feet or More
Order 7400.11C, dated August 13, 2018,
public docket both before and after the Above the Surface of the Earth.
and effective September 15, 2018, which
comment closing date. A report * * * * *
is incorporated by reference in 14 CFR
summarizing each substantive public
71.1. The Class E airspace designation AEA PA E5 Corry, PA [Amended]
contact with FAA personnel concerned
listed in this document will be
with this rulemaking will be filed in the Corry-Lawrence Airport, PA
published subsequently in the Order. (Lat. 41°54′27″ N, long. 79°38′28″ W)
docket.
Regulatory Notices and Analyses That airspace extending upward from 700
Availability of NPRMs feet above the surface within a 7.4-mile
An electronic copy of this document The FAA has determined that this radius of Corry-Lawrence Airport, and within
may be downloaded through the proposed regulation only involves an 4-miles each side of the 140° bearing from the
internet at http://www.regulations.gov. established body of technical airport, extending from the 7.4-mile radius to
Recently published rulemaking regulations for which frequent and 11 miles southeast of the airport.
documents can also be accessed through routine amendments are necessary to Issued in College Park, Georgia, on
the FAA’s web page at http:// keep them operationally current. It, November 29, 2018.
www.faa.gov/air_traffic/publications/ therefore: (1) Is not a ‘‘significant Ryan W. Almasy,
airspace_amendments/. regulatory action’’ under Executive Manager, Operations Support Group, Eastern
You may review the public docket Order 12866; (2) is not a ‘‘significant Service Center, Air Traffic Organization.
containing the proposal, any comments rule’’ under DOT Regulatory Policies [FR Doc. 2018–26569 Filed 12–7–18; 8:45 am]
received and any final disposition in and Procedures (44 FR 11034; February
BILLING CODE 4910–13–P
person in the Dockets Office (see the 26, 1979); and (3) does not warrant
ADDRESSES section for address and preparation of a Regulatory Evaluation
phone number) between 9:00 a.m. and as the anticipated impact is so minimal.
Since this is a routine matter that will COMMODITY FUTURES TRADING
5:00 p.m., Monday through Friday, COMMISSION
except federal holidays. An informal only affect air traffic procedures and air
docket may also be examined between navigation, it is certified that this 17 CFR Part 160
8:00 a.m. and 4:30 p.m., Monday proposed rule, when promulgated, will
not have a significant economic impact RIN 3038–AE80
through Friday, except federal holidays
at the office of the Eastern Service on a substantial number of small entities
under the criteria of the Regulatory Privacy of Consumer Financial
Center, Federal Aviation Information—Amendment To Conform
Administration, Room 350, 1701 Flexibility Act.
Regulations to the Fixing America’s
Columbia Avenue, College Park, GA Environmental Review Surface Transportation Act
30337.
This proposal will be subject to an AGENCY: Commodity Futures Trading
Availability and Summary of environmental analysis in accordance Commission.
Documents for Incorporation by with FAA Order 1050.1F, ACTION: Proposed rule.
Reference ‘‘Environmental Impacts: Policies and
This document proposes to amend Procedures’’ prior to any FAA final SUMMARY: The Commodity Futures
FAA Order 7400.11C, Airspace regulatory action. Trading Commission (‘‘CFTC’’ or
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![63456 Federal Register / Vol. 83, No. 236 / Monday, December 10, 2018 / Proposed Rules
(d) Exception to annual privacy notice Appendices to Privacy of Consumer 0002 or Regulatory Information Number
requirement. (1) You are not required to Financial Information—Amendment To (RIN) 1205–AB90, by any of the
deliver an annual privacy notice if you: Conform Regulations to the Fixing following methods:
(i) Provide nonpublic personal America’s Surface Transportation —Federal e-Rulemaking Portal: http://
information to nonaffiliated third Act—Commission Voting Summary and www.regulations.gov. Follow the
Chairman’s Statement website instructions for submitting
parties only in accordance with the
provisions of §§ 160.13 through 160.15 Appendix 1—Commission Voting comments (under ‘‘Help’’ > ‘‘How to
and any other exceptions adopted by the Summary use Regulations.gov’’).
—Mail and Hand Delivery/Courier:
Commission pursuant to section 504(b)
On this matter, Chairman Giancarlo and Submit written comments and any
of the GLB Act; and
Commissioners Quintenz, Behnam, Stump, additional material to Adele
(ii) Have not changed your policies and Berkovitz voted in the affirmative. No Gagliardi, Administrator, Office of
and practices with regard to disclosing Commissioner voted in the negative. Policy Development and Research,
nonpublic personal information from Appendix 2—Statement of Chairman J. U.S. Department of Labor, 200
the policies and practices that were Christopher Giancarlo Constitution Avenue NW, Room N–
disclosed to the customer under 5641, Washington, DC 20210.
§ 160.6(a)(2) through (5) and This proposal will revise Commission
regulation 160.5’s privacy notice
Instructions: Label all submissions
§ 160.6(a)(9) in the most recent privacy requirements to implement the Fixing with DOL RIN 1205–AB90. Please
notice sent to the customer pursuant to America’s Surface Transportation (FAST) submit your comments by only one
this part. Act’s December 2015 statutory amendment to method. Please be advised that the
(2) Delivery of annual privacy notice the Gramm-Leach-Bliley Act (GLBA). In Department will post all comments
proposing to implement what is now almost received that relate to this notice of
after you no longer meet requirements
a three-year-old statutory requirement, this proposed rulemaking (NPRM) on http://
for exception. If you have been excepted proposal is a good demonstration of this
from delivering an annual privacy www.regulations.gov without making
Commission’s commitment to supporting any change to the comments or
notice pursuant to paragraph (d)(1) of good governance.
redacting any information.
this section and change your policies or [FR Doc. 2018–26523 Filed 12–7–18; 8:45 am] The http://www.regulations.gov
practices in such a way that you no BILLING CODE 6351–01–P website is the Federal e-rulemaking
longer meet the requirements for that portal, and all comments posted there
exception, you must comply with are available and accessible to the
paragraph (d)(2)(i) or (ii) of this section, DEPARTMENT OF LABOR public. Therefore, the Department
as applicable. recommends that commenters remove
(i) Changes preceded by a revised Employment and Training personal information (either about
privacy notice. If you no longer meet the Administration themselves or others) such as Social
requirements of paragraph (d)(1) of this Security Numbers, personal addresses,
section because you change your 20 CFR Part 655 telephone numbers, and email addresses
policies or practices in such a way that RIN 1205–AB90 included in their comments, as such
§ 160.8 requires you to provide a revised information may become easily
privacy notice, you must provide an Modernizing Recruitment available to the public via the http://
annual privacy notice in accordance Requirements for the Temporary www.regulations.gov website. It is the
with the timing requirements in Employment of H–2A Foreign Workers responsibility of the commenter to
in the United States; Extension of safeguard personal information.
paragraph (a) of this section, treating the
Comment Period Also, please note that, due to security
revised privacy notice as an initial
concerns, postal mail delivery in
privacy notice. ACTION: Notice of proposed rulemaking; Washington, DC may be delayed.
(ii) Changes not preceded by a revised extension of comment period. Therefore, the Department encourages
privacy notice. If you no longer meet the the public to submit comments on
requirements of paragraph (d)(1) of this SUMMARY: This document extends the http://www.regulations.gov. Docket: To
section because you change your period for submitting written comments read or download comments or other
on the Notice of Proposed Rulemaking material in the electronic docket, go to
policies or practices in such a way that
(NPRM) entitled Modernizing http://www.regulations.gov website
§ 160.8 does not require you to provide
Recruitment Requirements for the (search using RIN 1205–AB90 or Docket
a revised privacy notice, you must
Temporary Employment of H–2A No. ETA–2018–0002). The Department
provide an annual privacy notice within Foreign Workers in the United States.
100 days of the change in your policies also will make all the comments it
The comment period ends on December receives available for public inspection
or practices that causes you to no longer 10, 2018. The Department of Labor
meet the requirements of paragraph by appointment during normal business
(Department) is taking this action to hours at the above address. If you need
(d)(1) of this section. provide interested parties additional assistance to review the comments, the
Issued in Washington, DC, on November time to submit comments in response to Department will provide appropriate
30, 2018, by the Commission. requests for an extension of the aids, such as readers or print magnifiers.
Christopher Kirkpatrick, commenting period. The Department will make copies of this
Secretary of the Commission. DATES: The comment period for the proposed rule available, upon request,
proposed rule published on November in large print and electronic file on
Note: The following appendices will not 9, 2018, at 83 FR 55985, is extended. computer disk. To schedule an
appear in the Code of Federal Regulations. Comments should be received on or appointment to review the comments
before December 28, 2018. and/or obtain the proposed rule in an
ADDRESSES: You may send comments, alternative format, contact the Office of
identified by Docket No. ETA–2018– Policy Development and Research at
VerDate Sep<11>2014 16:39 Dec 07, 2018 Jkt 247001 PO 00000 Frm 00027 Fmt 4702 Sfmt 4702 E:\FR\FM\10DEP1.SGM 10DEP1](https://thefederalregister.org/doc/83_FR_63686/page/7.svg)
Document Created: 2018-12-08 00:21:14
Document Modified: 2018-12-08 00:21:14
| 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 | Proposed rule. | |
| Dates | Comments must be received on or before February 8, 2019. | |
| Contact | Matthew Kulkin, Director, (202) 418- 5213, [email protected]; Frank Fisanich, Chief Counsel, (202) 418-5949, [email protected]; or Jacob Chachkin, Special Counsel, (202) 418-5496, [email protected], Division of Swap Dealer and Intermediary Oversight, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581. | |
| FR Citation | 83 FR 63450 | |
| RIN Number | 3038-AE80 | |
| CFR Associated | Brokers; Consumer Protection; Privacy and Reporting and Recordkeeping Requirements |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR