Joint Audit Committee Operating Agreement, 52832-52833 [E8-21114]
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Federal Register / Vol. 73, No. 177 / Thursday, September 11, 2008 / Notices
management, including current research
on market squid, Pacific sardine, and
the California Current Ecosystem,
planning the 2009 review of Pacific
sardine allocation, and implementation
of the reauthorized Magnuson-Stevens
Fishery Conservation and Management
Act. No management actions will be
decided by the CPSMT, the SSC CPS
Subcommittee, or the CPSAS.
Although non-emergency issues not
contained in the meeting agendas may
be discussed, those issues may not be
the subject of formal action during these
meetings. Advisory body action will be
restricted to those issues specifically
listed in this notice and any issues
arising after publication of this notice
that require emergency action under
Section 305(c) of the Magnuson-Stevens
Fishery Conservation and Management
Act, provided the public has been
notified of the intent to take final action
to address the emergency.
Special Accommodations
These meetings are physically
accessible to people with disabilities.
Requests for sign language
interpretation or other auxiliary aids
should be directed to Ms. Carolyn Porter
at (503) 820–2280 at least 5 days prior
to the meeting date.
Dated: September 8, 2008.
Tracey L. Thompson,
Acting Director, Office of Sustainable
Fisheries, National Marine Fisheries Service.
[FR Doc. E8–21096 Filed 9–10–08; 8:45 am]
BILLING CODE 3510–22–S
COMMODITY FUTURES TRADING
COMMISSION
Joint Audit Committee Operating
Agreement
Commodity Futures Trading
Commission.
ACTION: Request for comment.
AGENCY:
The Commodity Futures
Trading Commission (‘‘Commission’’ or
‘‘CFTC’’) is publishing for public
comment an agreement submitted by the
Joint Audit Committee (‘‘JAC’’) for
approval pursuant to Commission
Regulation 1.52.1 The JAC is a
voluntary, cooperative organization
comprised of representatives of the
financial surveillance staff of designated
contract markets (‘‘DCMs’’) and the
National Futures Association (‘‘NFA’’)
and was formed for the purpose of
coordinating the monitoring and
examination of common futures
rmajette on PRODPC74 with NOTICES
SUMMARY:
1 Commission regulations may be found at 17 CFR
Ch. 1 (2008).
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14:21 Sep 10, 2008
Jkt 214001
commission merchant (‘‘FCM’’)
members of such entities. The
agreement governs the operation of the
JAC and the manner by which the JAC
will coordinate and cooperate in
examining and monitoring FCMs for
compliance with Commission and selfregulatory organization (‘‘SRO’’)
minimum financial and related
reporting requirements. The JAC is
submitting the agreement to replace the
current operating agreement, which has
been in effect since 1984.
DATE: Comments must be received on or
before October 14, 2008.
ADDRESSES: Interested persons should
submit their views and comments to
David Stawick, Secretary, Commodity
Futures Trading Commission, Three
Lafayette Centre, 1155 21st Street, NW.,
Washington, DC 20581. In addition,
comments may be sent by facsimile
transmission to (202) 418–5521, or by
electronic mail to secretary@cftc.gov.
Reference should be made to ‘‘Joint
Audit Committee’’. This document also
will be available for comment at
https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT:
Thomas J. Smith, Deputy Director and
Chief Accountant, or Jennifer Bauer,
Special Counsel, Division of Clearing
and Intermediary Oversight, Commodity
Futures Trading Commission,
jbauer@cftc.gov, Three Lafayette Centre,
1155 21st Street, NW., Washington, DC
20581. Telephone (202) 418–5472.
SUPPLEMENTARY INFORMATION:
The Commodity Exchange Act 2
(‘‘Act’’) authorizes the Commission to
adopt regulations imposing minimum
financial and related reporting
requirements upon FCMs. In this regard,
Section 4f(b) of the Act authorizes the
Commission to adopt regulations
imposing minimum capital
requirements upon FCMs. In addition,
Section 4d of the Act requires FCMs to
segregate from their own assets all
money, securities, and property
deposited by customers to margin,
guarantee, or secure futures positions,
and Section 4f(a)(1) of the Act
authorizes the Commission to establish
financial reporting requirements upon
FCMs. Consistent with this authority,
the Commission has adopted regulations
addressing minimum financial and
related reporting requirements for
FCMs.3
27
U.S.C. 1 et seq.
example, see Commission Regulation 1.17
for the minimum financial requirements for FCMs
and introducing brokers (‘‘IBs’’) adopted by the
Commission, and Commission Regulations 1.10 and
1.12 for monthly and annual financial reporting
requirements and notice requirements, respectively.
3 For
PO 00000
Frm 00024
Fmt 4703
Sfmt 4703
The Act further imposes obligations
upon DCMs and NFA to monitor FCMs
for compliance with the minimum
financial and related reporting
requirements. Specifically, DCM Core
Principle 11 requires a board of trade to
establish and to enforce rules addressing
the financial integrity of FCMs.4 In
addition, Section 17(p)(2) of the Act
requires NFA to establish minimum
capital, segregation, and other financial
requirements for member FCMs and to
implement a program to audit and to
enforce compliance with such
requirements. Minimum standards for
an effective financial surveillance
program are further set forth in
interpretations issued by the
Commission’s Division of Trading and
Markets.5
In 1984, a number of futures
exchanges (now, DCMs) and NFA
(collectively referred to as SROs)
entered into a Joint Audit Agreement
(‘‘1984 Agreement’’). The 1984
Agreement generally provides that an
FCM that is a member of more than one
SRO would have a single designated
SRO (‘‘DSRO’’). The DSRO is primarily
responsible for conducting periodic
financial examinations, the results of
which are shared with the other SROs
of which the FCM is a member. The
DSRO process is intended to enhance
the effectiveness and efficiency of the
SROs’ financial surveillance function by
avoiding unnecessary duplicative
financial examinations of FCMs that are
members of more than one SRO. This
regulatory approach was endorsed by
the Commission when it adopted
Regulation 1.52, which permits DSROs
to enter into cooperative agreements
sharing financial surveillance oversight
responsibilities for FCMs that are
members of more than one SRO,
provided that the oversight agreement is
approved by the Commission after
public notice and comment.6
47
U.S.C. 7(d)(11).
Division of Trading and Markets Financial
and Segregation Interpretation No. 4–1—Advisory
Interpretation for Self-Regulatory Organization
Surveillance over Members’ Compliance with
Minimum Financial, Segregation, Reporting, and
Related Recordkeeping Requirements, Comm. Fut.
L. Rep. (CCH) ¶ 7114A (Jul. 29, 1985); and Division
of Trading and Markets Financial and Segregation
Interpretation No. 4–2—Risk-Based Auditing, Com.
Fut. L. Rep. (CCH) ¶ 7114E (August 20, 1999).
6 Regulation 1.52(g) states:
‘‘After appropriate notice and opportunity for
comment, the Commission may, by written notice,
approve such a plan, or any part of the plan, if it
finds that the plan, or any part of it: (1) Is necessary
or appropriate to serve the public interest; (2) Is for
the protection and in the interest of customers; (3)
Reduces multiple monitoring and auditing for
compliance with the minimum financial rules of
the [SROs] submitting the plan for any [FCM or IB
that] is a member of more than one [SRO]; (4)
Reduces multiple reporting of the financial
5 See
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Federal Register / Vol. 73, No. 177 / Thursday, September 11, 2008 / Notices
rmajette on PRODPC74 with NOTICES
In 2004, the SROs, through the JAC,
submitted proposed amendments to the
1984 agreement to the Commission for
approval. The Commission published
the proposed amendments for public
comment on April 12, 2004. The
proposal, however, became linked to the
Commission’s study on the SRO
process, which encompassed the topic
of the general governance of SROs and
the role of industry self-regulation.7 The
Commission completed its SRO
governance study in 2007 with the
adoption of a regulation providing
acceptable practices under core
principles for the composition of boards
of directors of SROs.8 However, the
effectiveness of this regulation has been
stayed,9 and no final action was taken
by the Commission with respect to the
amendments proposed in 2004. The
1984 Agreement has remained in effect,
and the JAC has continued its role of
enabling the cooperative examination of
member firms in the intervening time
period.
The Commission has now received
from the JAC a revised series of
proposed amendments to the 1984
Agreement (‘‘Proposed Agreement’’) for
which approval has been requested. In
accordance with Regulation 1.52(g), the
Commission is publishing this notice to
request public comment on the
Proposed Agreement before taking
action to approve or to deny approval of
the Proposed Agreement.
The Proposed Agreement includes
provisions addressing JAC governance
procedures and voting rights,
membership criteria, information
sharing arrangements, and DSRO
designation criteria. The Proposed
Agreement differs in several material
respects from the revisions published
for comment in 2004, and many
comments received in 2004 were related
to provisions which are no longer
applicable in the Proposed Agreement.
In addition, in the intervening period of
four years commenters may have
changed their positions from those
previously communicated. Therefore,
information necessitated by such minimum
financial and related reporting requirements by any
[FCM or IB that] is a member of more than one
[SRO]; (5) Fosters cooperation and coordination
among the contract markets; and (6) Does not
hinder the development of a registered futures
association under [S]ection 17 of the Act.’’
7 One of the comments received with respect to
the proposed amendments published in 2004 was
from the Futures Industry Association (‘‘FIA’’),
dated June 18, 2004, which stated that the FIA’s
comments may change based on the results of the
Commission’s SRO study and that any action taken
with respect to the proposed amendments to the
JAC agreement should be deferred until the
completion of the SRO study.
8 72 FR 6936 (February 14, 2007).
9 See 72 FR 65658 (November 23, 2007).
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14:21 Sep 10, 2008
Jkt 214001
the Commission will not consider the
comments submitted in response to the
2004 request for comments in assessing
whether the Proposed Agreement
satisfies the requirements of Regulation
1.52(g). Accordingly, any person
wishing to comment on the Proposed
Agreement should submit a comment
letter.
The Commission invites comment on
the Proposed Agreement, particularly
with respect to the ability of the DSRO
system to continue to serve the public
interest, reduce duplicative reporting
and examination burdens on FCMs,
strengthen customer protections, and
foster cooperation and coordination
among DCMs.
The 1984 Agreement, Commission
letter approving the 1984 Agreement,
and the Proposed Agreement are
available on the Commission’s Web site
at https://www.cftc.gov upon the
issuance of this notice by the
Commission. Copies of these documents
also may be obtained from the Office of
the Secretariat, Commodity Futures
Trading Commission, 1155 21st Street,
NW., Washington, DC 20581.
Issued in Washington, DC on September 8,
2008, by the Commission.
David Stawick,
Secretary of the Commission.
[FR Doc. E8–21114 Filed 9–10–08; 8:45 am]
BILLING CODE 6351–01–P
COMMODITY FUTURES TRADING
COMMISSION
Privacy Act of 1974; System of
Records
Commodity Futures Trading
Commission (CFTC).
ACTION: Proposed routine use; request
for public comment.
AGENCY:
SUMMARY: The CFTC proposes to adopt
a new routine use that would permit
disclosure of CFTC records governed by
the Privacy Act when reasonably
necessary to respond and prevent,
minimize, or remedy harm that may
result from an agency data breach or
compromise.
The deadline for public
comments is October 14, 2008.
Comments received after that date will
be considered at the CFTC’s discretion.
ADDRESSES: Interested parties are
invited to submit written comments.
Reference should be made to ‘‘Privacy
Act of 1974; System of Records.’’
Comments should be mailed or
delivered to: Commodity Futures
Trading Commission, 1155 21st Street,
NW., Washington, DC 20581, Attention:
DATES:
PO 00000
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Sfmt 4703
52833
Office of the Secretariat. Comments may
be sent by facsimile to 202.418.5521, or
by e-mail to secretary@cftc.gov.
FOR FURTHER INFORMATION CONTACT: Gail
Scott, Attorney, CFTC, Office of General
Counsel, 1155 21st Street, NW.,
Washington, DC 20581, 202–418–5139,
gscott@cftc.gov.
SUPPLEMENTARY INFORMATION: In
accordance with the Privacy Act of
1974, 5 U.S.C. 552a, and as
recommended in the Office of
Management and Budget Memorandum
M–07–16 (Attachment 2), this document
provides public notice that the CFTC is
proposing to adopt a new ‘‘routine use’’
that will apply to all CFTC records
systems covered by the Privacy Act of
1974. The Act applies to agency systems
of records about individuals that the
agency maintains and retrieves by name
or other personal identifier, such as its
personnel and payroll systems and
certain other CFTC records systems. A
list of the agency’s current Privacy Act
systems of records can be viewed on the
CFTC’s Web site at: https://www.cftc.gov/
lawandregulation/federalregister/
systemsofrecords/index.htm. The new
routine use would be added to the
section General Statement of Routine
Uses, which describes routine uses that
apply globally to all CFTC Privacy Act
records systems.
This new routine use is needed in
order to allow for disclosure of records
to appropriate persons and entities for
purposes of response and remedial
efforts in the event of a breach of data
contained in the protected systems. This
routine use will facilitate an effective
response to a confirmed or suspected
breach by allowing for disclosure to
individuals affected by the breach, in
cases, if any, where such disclosure is
not otherwise authorized under the Act.
This routine use will also authorize
disclosures to others who are in a
position to assist in response efforts,
either by assisting in notification to
affected individuals or otherwise
playing a role in preventing,
minimizing, or remedying harms from
the breach.
The Privacy Act authorizes the agency
to adopt routine uses that are consistent
with the purpose for which information
is collected and subject to that Act. 5
U.S.C. 552a(b)(3); see also 5 U.S.C.
552a(a)(7). The CFTC believes that it is
consistent with the collection of
information pertaining to such
individuals to disclose Privacy Act
records when, in doing so, it will help
prevent, minimize or remedy a data
breach or compromise that may affect
such individuals. By contrast, the CFTC
believes that failure to take reasonable
E:\FR\FM\11SEN1.SGM
11SEN1
Agencies
[Federal Register Volume 73, Number 177 (Thursday, September 11, 2008)]
[Notices]
[Pages 52832-52833]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-21114]
=======================================================================
-----------------------------------------------------------------------
COMMODITY FUTURES TRADING COMMISSION
Joint Audit Committee Operating Agreement
AGENCY: Commodity Futures Trading Commission.
ACTION: Request for comment.
-----------------------------------------------------------------------
SUMMARY: The Commodity Futures Trading Commission (``Commission'' or
``CFTC'') is publishing for public comment an agreement submitted by
the Joint Audit Committee (``JAC'') for approval pursuant to Commission
Regulation 1.52.\1\ The JAC is a voluntary, cooperative organization
comprised of representatives of the financial surveillance staff of
designated contract markets (``DCMs'') and the National Futures
Association (``NFA'') and was formed for the purpose of coordinating
the monitoring and examination of common futures commission merchant
(``FCM'') members of such entities. The agreement governs the operation
of the JAC and the manner by which the JAC will coordinate and
cooperate in examining and monitoring FCMs for compliance with
Commission and self-regulatory organization (``SRO'') minimum financial
and related reporting requirements. The JAC is submitting the agreement
to replace the current operating agreement, which has been in effect
since 1984.
---------------------------------------------------------------------------
\1\ Commission regulations may be found at 17 CFR Ch. 1 (2008).
---------------------------------------------------------------------------
DATE: Comments must be received on or before October 14, 2008.
ADDRESSES: Interested persons should submit their views and comments to
David Stawick, Secretary, Commodity Futures Trading Commission, Three
Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581. In
addition, comments may be sent by facsimile transmission to (202) 418-
5521, or by electronic mail to secretary@cftc.gov. Reference should be
made to ``Joint Audit Committee''. This document also will be available
for comment at https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Thomas J. Smith, Deputy Director and
Chief Accountant, or Jennifer Bauer, Special Counsel, Division of
Clearing and Intermediary Oversight, Commodity Futures Trading
Commission, jbauer@cftc.gov, Three Lafayette Centre, 1155 21st Street,
NW., Washington, DC 20581. Telephone (202) 418-5472.
SUPPLEMENTARY INFORMATION:
The Commodity Exchange Act \2\ (``Act'') authorizes the Commission
to adopt regulations imposing minimum financial and related reporting
requirements upon FCMs. In this regard, Section 4f(b) of the Act
authorizes the Commission to adopt regulations imposing minimum capital
requirements upon FCMs. In addition, Section 4d of the Act requires
FCMs to segregate from their own assets all money, securities, and
property deposited by customers to margin, guarantee, or secure futures
positions, and Section 4f(a)(1) of the Act authorizes the Commission to
establish financial reporting requirements upon FCMs. Consistent with
this authority, the Commission has adopted regulations addressing
minimum financial and related reporting requirements for FCMs.\3\
---------------------------------------------------------------------------
\2\ 7 U.S.C. 1 et seq.
\3\ For example, see Commission Regulation 1.17 for the minimum
financial requirements for FCMs and introducing brokers (``IBs'')
adopted by the Commission, and Commission Regulations 1.10 and 1.12
for monthly and annual financial reporting requirements and notice
requirements, respectively.
---------------------------------------------------------------------------
The Act further imposes obligations upon DCMs and NFA to monitor
FCMs for compliance with the minimum financial and related reporting
requirements. Specifically, DCM Core Principle 11 requires a board of
trade to establish and to enforce rules addressing the financial
integrity of FCMs.\4\ In addition, Section 17(p)(2) of the Act requires
NFA to establish minimum capital, segregation, and other financial
requirements for member FCMs and to implement a program to audit and to
enforce compliance with such requirements. Minimum standards for an
effective financial surveillance program are further set forth in
interpretations issued by the Commission's Division of Trading and
Markets.\5\
---------------------------------------------------------------------------
\4\ 7 U.S.C. 7(d)(11).
\5\ See Division of Trading and Markets Financial and
Segregation Interpretation No. 4-1--Advisory Interpretation for
Self-Regulatory Organization Surveillance over Members' Compliance
with Minimum Financial, Segregation, Reporting, and Related
Recordkeeping Requirements, Comm. Fut. L. Rep. (CCH) ] 7114A (Jul.
29, 1985); and Division of Trading and Markets Financial and
Segregation Interpretation No. 4-2--Risk-Based Auditing, Com. Fut.
L. Rep. (CCH) ] 7114E (August 20, 1999).
---------------------------------------------------------------------------
In 1984, a number of futures exchanges (now, DCMs) and NFA
(collectively referred to as SROs) entered into a Joint Audit Agreement
(``1984 Agreement''). The 1984 Agreement generally provides that an FCM
that is a member of more than one SRO would have a single designated
SRO (``DSRO''). The DSRO is primarily responsible for conducting
periodic financial examinations, the results of which are shared with
the other SROs of which the FCM is a member. The DSRO process is
intended to enhance the effectiveness and efficiency of the SROs'
financial surveillance function by avoiding unnecessary duplicative
financial examinations of FCMs that are members of more than one SRO.
This regulatory approach was endorsed by the Commission when it adopted
Regulation 1.52, which permits DSROs to enter into cooperative
agreements sharing financial surveillance oversight responsibilities
for FCMs that are members of more than one SRO, provided that the
oversight agreement is approved by the Commission after public notice
and comment.\6\
---------------------------------------------------------------------------
\6\ Regulation 1.52(g) states:
``After appropriate notice and opportunity for comment, the
Commission may, by written notice, approve such a plan, or any part
of the plan, if it finds that the plan, or any part of it: (1) Is
necessary or appropriate to serve the public interest; (2) Is for
the protection and in the interest of customers; (3) Reduces
multiple monitoring and auditing for compliance with the minimum
financial rules of the [SROs] submitting the plan for any [FCM or IB
that] is a member of more than one [SRO]; (4) Reduces multiple
reporting of the financial information necessitated by such minimum
financial and related reporting requirements by any [FCM or IB that]
is a member of more than one [SRO]; (5) Fosters cooperation and
coordination among the contract markets; and (6) Does not hinder the
development of a registered futures association under [S]ection 17
of the Act.''
---------------------------------------------------------------------------
[[Page 52833]]
In 2004, the SROs, through the JAC, submitted proposed amendments
to the 1984 agreement to the Commission for approval. The Commission
published the proposed amendments for public comment on April 12, 2004.
The proposal, however, became linked to the Commission's study on the
SRO process, which encompassed the topic of the general governance of
SROs and the role of industry self-regulation.\7\ The Commission
completed its SRO governance study in 2007 with the adoption of a
regulation providing acceptable practices under core principles for the
composition of boards of directors of SROs.\8\ However, the
effectiveness of this regulation has been stayed,\9\ and no final
action was taken by the Commission with respect to the amendments
proposed in 2004. The 1984 Agreement has remained in effect, and the
JAC has continued its role of enabling the cooperative examination of
member firms in the intervening time period.
---------------------------------------------------------------------------
\7\ One of the comments received with respect to the proposed
amendments published in 2004 was from the Futures Industry
Association (``FIA''), dated June 18, 2004, which stated that the
FIA's comments may change based on the results of the Commission's
SRO study and that any action taken with respect to the proposed
amendments to the JAC agreement should be deferred until the
completion of the SRO study.
\8\ 72 FR 6936 (February 14, 2007).
\9\ See 72 FR 65658 (November 23, 2007).
---------------------------------------------------------------------------
The Commission has now received from the JAC a revised series of
proposed amendments to the 1984 Agreement (``Proposed Agreement'') for
which approval has been requested. In accordance with Regulation
1.52(g), the Commission is publishing this notice to request public
comment on the Proposed Agreement before taking action to approve or to
deny approval of the Proposed Agreement.
The Proposed Agreement includes provisions addressing JAC
governance procedures and voting rights, membership criteria,
information sharing arrangements, and DSRO designation criteria. The
Proposed Agreement differs in several material respects from the
revisions published for comment in 2004, and many comments received in
2004 were related to provisions which are no longer applicable in the
Proposed Agreement. In addition, in the intervening period of four
years commenters may have changed their positions from those previously
communicated. Therefore, the Commission will not consider the comments
submitted in response to the 2004 request for comments in assessing
whether the Proposed Agreement satisfies the requirements of Regulation
1.52(g). Accordingly, any person wishing to comment on the Proposed
Agreement should submit a comment letter.
The Commission invites comment on the Proposed Agreement,
particularly with respect to the ability of the DSRO system to continue
to serve the public interest, reduce duplicative reporting and
examination burdens on FCMs, strengthen customer protections, and
foster cooperation and coordination among DCMs.
The 1984 Agreement, Commission letter approving the 1984 Agreement,
and the Proposed Agreement are available on the Commission's Web site
at https://www.cftc.gov upon the issuance of this notice by the
Commission. Copies of these documents also may be obtained from the
Office of the Secretariat, Commodity Futures Trading Commission, 1155
21st Street, NW., Washington, DC 20581.
Issued in Washington, DC on September 8, 2008, by the
Commission.
David Stawick,
Secretary of the Commission.
[FR Doc. E8-21114 Filed 9-10-08; 8:45 am]
BILLING CODE 6351-01-P