Availability of a Legal Entity Identifier Meeting the Requirements of the Regulations of the Commodity Futures Trading Commission and Designation of Provider of Legal Entity Identifiers To Be Used in the Recordkeeping and Swap Data Reporting, 53870-53873 [2012-21612]
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53870
Federal Register / Vol. 77, No. 171 / Tuesday, September 4, 2012 / Notices
Notice of SEDAR 31 Gulf of
Mexico Red Snapper Post-Data
Workshop Webinar.
ACTION:
The SEDAR 31 assessment of
the Gulf of Mexico Red Snapper fishery
will consist of a series of workshops and
supplemental webinars. This notice is
for a webinar associated with the Data
Workshop of the SEDAR process. See
SUPPLEMENTARY INFORMATION.
DATES: The SEDAR 31 Post-Data
Workshop Webinar will be held on
September 20, 2012, from 1 p.m. to 5
p.m. EDT. The established time may be
adjusted as necessary to accommodate
the timely completion of discussion
relevant to the stock assessment process.
Such adjustments may result in the
meeting being extended from, or
completed prior to the times established
by this notice.
ADDRESSES: The webinar will be held
via a GoToMeeting Webinar Conference.
The webinar is open to members of the
public. Those interested in participating
should contact Ryan Rindone at SEDAR
(see FOR FURTHER INFORMATION CONTACT)
to request an invitation providing
webinar access information. Please
request meeting information at least 24
hours in advance.
FOR FURTHER INFORMATION CONTACT:
Ryan Rindone, SEDAR Coordinator,
2203 N. Lois Ave., Suite 1100, Tampa
FL 33607; telephone: (813) 348–1630;
email: ryan.rindone@gulfcouncil.org
SUPPLEMENTARY INFORMATION: The Gulf
of Mexico Fishery Management Council,
in conjunction with NOAA Fisheries,
has implemented the Southeast Data,
Assessment and Review (SEDAR)
process, a multi-step method for
determining the status of fish stocks in
the Southeast Region. SEDAR is a threestep process including: (1) Data
Workshop, (2) Assessment Process
including a workshop and webinars, (3)
Review Workshop. The product of the
Data Workshop is a data report which
compiles and evaluates potential
datasets and recommends which
datasets are appropriate for assessment
analyses. The product of the Assessment
Process is a stock assessment report
which describes the fisheries, evaluates
the status of the stock, estimates
biological benchmarks, projects future
population conditions, and recommends
research and monitoring needs. The
assessment is independently peer
reviewed at the Review Workshop. The
product of the Review Workshop is a
Summary documenting Panel opinions
regarding the strengths and weaknesses
of the stock assessment and input data.
Participants for SEDAR Workshops are
appointed by the Gulf of Mexico Fishery
tkelley on DSK3SPTVN1PROD with NOTICES
SUMMARY:
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Management Council, NOAA Fisheries
Southeast Regional Office, and NOAA
Southeast Fisheries Science Center.
Participants include data collectors and
database managers; stock assessment
scientists, biologists, and researchers;
constituency representatives including
fishermen, environmentalists, and
NGOs; International experts; and staff of
Councils, Commissions, and state and
federal agencies.
SEDAR 31 Post-Data Workshop
Webinar
Panelists will continue deliberations
and discussions regarding data
evaluation methodologies for the Gulf of
Mexico Red Snapper prior to the
completion of the Data Workshop
Report.
Special Accommodations
This meeting is accessible to people
with disabilities. Requests for auxiliary
aids should be directed to the Council
office (see FOR FURTHER INFORMATION
CONTACT) at least 10 business days prior
to the meeting.
Dated: August 29, 2012.
Tracey L. Thompson,
Acting Deputy Director, Office of Sustainable
Fisheries, National Marine Fisheries Service.
[FR Doc. 2012–21689 Filed 8–31–12; 8:45 am]
BILLING CODE 3510–22–P
COMMODITY FUTURES TRADING
COMMISSION
Availability of a Legal Entity Identifier
Meeting the Requirements of the
Regulations of the Commodity Futures
Trading Commission and Designation
of Provider of Legal Entity Identifiers
To Be Used in the Recordkeeping and
Swap Data Reporting
Commodity Futures Trading
Commission.
ACTION: Order.
AGENCY:
On July 23, 2012, the
Commodity Futures Trading
Commission issued an order designating
DTCC–SWIFT as the provider of the
legal entity identifiers (LEIs) which will
be used by registered entities and swap
counterparties in complying with the
CFTC’s swap data reporting regulations.
These identifiers will be known as
CFTC Interim Compliant Identifiers
(CICIs) until establishment of a global
LEI system, and will transition into the
global LEI system when it is established.
The order included findings of fact by
the Commission that the CICI provided
by DTCC–SWIFT is the only available
identifier that satisfies all requirements
of the Commission’s swap data
SUMMARY:
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reporting rules, and can be provided to
market participants sufficiently in
advance of the initial compliance date
for swap data reporting to enable
compliance with the rules. The
designation is made for a limited term
of two years, and is subject to four
conditions specified in the order.
FOR FURTHER INFORMATION CONTACT:
David Taylor, Associate Director,
Division of Market Oversight, 202–418–
5488, dtaylor@cftc.gov; or Srini
Bangarbale, Chief Data Officer, Office of
Data and Technology, 202–418–5315,
sbangarbale@cftc.gov; Commodity
Futures Trading Commission, Three
Lafayette Centre, 1155 21st Street NW.,
Washington, DC 20851.
SUPPLEMENTARY INFORMATION: Section
21(b) of the Commodity Exchange Act,
(‘‘CEA’’), added to the CEA by Section
728 of the Dodd-Frank Act, directs the
Commission to prescribe standards that
specify the data elements for each swap
that shall be reported to, and collected
and maintained by, swap data
repositories. Pursuant to this authority,
part 45 of the Commission’s regulations
establishes recordkeeping and data
reporting requirements for swaps
subject to the jurisdiction of the
Commission.1 Section 45.6, Legal entity
identifiers, includes a legal entity
identifier (‘‘LEI’’) for each swap
counterparty among the data elements
required to be reported for each swap.
That section provides that:
Each counterparty to any swap subject to
the jurisdiction of the Commission shall be
identified in all recordkeeping and all swap
data reporting pursuant to this part by means
of a single legal entity identifier as specified
in this section.2
As noted in part 45, and stated in the
CPSS–IOSCO Report on OTC
Derivatives Data Reporting and
Aggregation Requirements, ‘‘a standard
system of LEIs is an essential tool for
aggregation of OTC derivatives data.’’ 3
In order to enable compliance with
this requirement by registered entities
and swap counterparties subject to the
Commission’s jurisdiction, part 45
provides that:
The Commission shall determine, as
provided in paragraphs (e)(1)(i) through (iii)
of this section, whether a legal entity
identifier system that satisfies the
requirements set forth in this section is
1 17 CFR part 45, Swap Data Recordkeeping and
Reporting Requirements, 77 FR 2136 (Jan. 13, 2012),
https://www.cftc.gov/ucm/groups/public/
@lrfederalregister/documents/file/2011-33199a.pdf.
2 § 45.6.
3 Committee on Payment and Settlement Systems
and Technical Committee of the International
Organization of Securities Commissions, Report on
OTC Derivatives Data Reporting and Aggregation
Requirements (Dec. 2011).
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available to provide legal entity identifiers
for registered entities and swap
counterparties required to comply with this
part.4
Section 45.6(e)(1)(i) specifies five factors
that the Commission shall consider in
making this determination.
Section 45.6 emphasizes that making
this determination and having LEIs
available for identification of swap
counterparties when swap data
reporting commences as of the
compliance dates set forth in part 45 is
highly important to achieving the
systemic risk mitigation, transparency,
and market abuse prevention purposes
of the Dodd-Frank Act. For this reason,
§ 45.6(e)(1)(ii) provides that:
In making this determination, the
Commission shall consider all candidates
meeting the criteria set forth in paragraph
(e)(1)(i) of this section, but shall not consider
any candidate that does not demonstrate that
it in fact can provide LEIs for identification
of swap counterparties in swap data
reporting commencing as of the compliance
dates set forth in this part.
In addition, § 45.6(e)(1)(iii) provides
that:
The Commission shall make this
determination at a time it believes is
sufficiently prior to the compliance dates set
forth in this part to enable issuance of LEIs
far enough in advance of those compliance
dates to enable compliance with this part.
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If the Commission determines that a
provider whose LEI system provides
LEIs meeting the requirements of part 45
is available, the rule calls for the
Commission to inform registered
entities and swap counterparties subject
to the Commission’s jurisdiction of
where they can obtain the LEIs needed
for compliance with part 45, by issuing
an order designating the provider of the
LEIs to be used for that purpose. Section
45.6(e)(2) provides that:
If the Commission determines pursuant to
paragraph (e)(1) of this section that such a
legal entity identifier system is available, the
Commission shall designate the legal entity
identifier system as the provider of legal
entity identifiers to be used in recordkeeping
and swap data reporting pursuant to this
part, by means of a Commission order that is
published in the Federal Register and on the
Web site of the Commission, as soon as
practicable after such determination is made.
The order shall include notice of this
designation, the contact information of the
LEI utility, and information concerning the
procedure and requirements for obtaining
legal entity identifiers.
Once the Commission has determined
that an LEI meeting the requirements of
part 45 is available, and has designated
its provider as set forth in § 45.6(e)(2),
4 § 45.6(e)(1).
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registered entities and swap
counterparties subject to the
Commission’s jurisdiction are required
to use the LEIs furnished by that
provider in recordkeeping and swap
data reporting. Section 45.6(f)(1)
provides that:
When a legal entity identifier system has
been designated by the Commission pursuant
to paragraph (e) of this section, each
registered entity and swap counterparty shall
use the legal entity identifier provided by
that system in all recordkeeping and swap
data reporting pursuant to this part.
II. Determination and Designation
Process
A. Request for Submissions
Pursuant to these provisions of part
45, on March 9, 2012, the Commission
issued a public request for submissions
from industry participants that wished
to be considered for designation by the
Commission as the provider of LEIs to
be used in complying with the rule.5
The Commission’s request for
submissions included provisions
relating to international aspects of LEIs.
It reiterated that part 45 calls for
issuance of the identifier used in
recordkeeping and swap data reporting
under CFTC jurisdiction, and for any
utility formed to issue such identifiers,
to be subject to international
supervision by a governance structure
that includes the Commission and other
financial regulators in any jurisdiction
requiring use of the legal entity
identifier pursuant to applicable law. It
noted the Commission’s ongoing
participation in an international
process, coordinated by the Financial
Stability Board (‘‘FSB’’), to establish
governance principles and reference
data requirements for a global legal
entity identifier, to be contained in
recommendations by an international
regulatory LEI Expert Group (including
the Commission) for consideration by
the FSB in May 2012. In light of that
process, and as requested by other
international financial regulators, the
request for submissions stated that the
Commission would refer to the
identifier to be used in reporting under
part 45 as the CFTC Interim Compliant
Identifier (‘‘CICI’’) until after the FSB
Plenary meeting in May 2012, and
would defer its designation of the
provider of CICIs until after that
meeting. The request also reiterated
that, as provided in part 45, the
Commission plans to adopt the
governance principles and LEI reference
5 Commodity Futures Trading Commission Press
Release, CFTC announces process to designate the
provider of CFTC Interim Compliant Identifiers,
March 9, 2012.
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data requirements endorsed by the FSB,
making them applicable to
identification of swap counterparties
under CFTC jurisdiction. The request
further stated that, once these steps are
completed, the Commission anticipates
that the identifier then called the CICI
will transition into the global LEI, and
be referred to as the LEI.
In its request for submissions, the
Commission stated that submitters must
be prepared to demonstrate that they
meet all of the requirements set forth in
part 45. It further notified submitters
that: (1) The Commission’s
determination and designation process
would include an on-site, live
demonstration for Commission staff of
the process to be used for issuance of
CICIs; (2) the Commission’s designation
will be for a limited term of two years,
and be terminable on six months’ notice
if a different central utility for the global
LEI is chosen later through the FSB
process and becomes operational; and
(3) subject to applicable confidentiality
laws, the Commission’s designation will
require that the designated LEI utility
must make public all CICI data,
operations, identity validation processes
and audit trail, and to pass to any
successor LEI utility, free of charge, all
CICI data and all CICI intellectual
property rights.
B. Requirements for Designation as the
LEI Utility
Four parties expressed an interest in
becoming the LEI provider. To assess
their suitability, the Commission
required the submitters to provide both
(1) a written demonstration of their
ability to meet the Commission’s part 45
requirements, and (2) an on-site, live
demonstration of their process for
issuing CICIs.
1. Written Demonstration of Ability To
Meet Commission Requirements
Detailed requirements for the written
demonstration were provided to each
submitter. The requirements document
stated that, as provided in § 45.6(e)(1)(i)
of the Commission’s regulations, in
determining whether a CICI meeting the
requirements of part 45 is available, and
if so designating its provider as the
utility that will provide the CICI, the
Commission would consider, without
limitation, the following five factors:
• Whether the CICI provided by the
utility is issued under, and conforms to,
ISO Standard 17442, Legal Entity
Identifier (LEI).
• Whether the CICI provided by the
utility complies with all of the technical
principles set forth in part 45.
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• Whether the CICI utility complies
with all of the governance principles set
forth in part 45.
• Whether the CICI utility has
demonstrated that it in fact can provide
CICIs for identification of swap
counterparties in swap data reporting
commencing as of the compliance dates
set forth in part 45.
• The acceptability of the CICI utility
to industry participants required to use
the LEI in complying with part 45.
The requirements document also
described the functions to be performed
by the CICI system, including, but not
limited to, the following:
• Utility Administration (e.g.,
accounting; audit; CICI fee collection;
billing and payment; communications,
human resources; and legal
department).
• Data Management (e.g., receive
registrant data; establish and maintain
registrant data record; apply validation
and data quality assurance processes to
registrant data; issue unique CICI;
transmit CICI to registrant; maintain and
update data record history; maintain
and update required metadata; maintain
complete audit trail of all records, data,
and messages; and maintain appropriate
system safeguards).
• Verification of Entity Identification
(e.g., cleanse and validate identification
data submitted through both selfregistration and third-party registration;
connect to and communicate with
national business registers in
jurisdictions world-wide; provide
identification data challenge services;
verify uniqueness of submitted
identification information; provide local
verification in countries world-wide;
visit provided addresses to verify entity
presence; process entity messages
regarding identification data, for
example concerning corporate actions;
perform periodic re-verification; and
identify the verification level at which
each record has been verified).
• Public Database (e.g., establish and
maintain free public database of all
CICIs; provide 24/7 internet query
facility; provide near-real time response
to queries; provide complete, current
CICI directory; and provide help desk
and assistance services for the public).
• CICI Registration Services (e.g.,
provide local language services worldwide; respond to market participant
queries; receive and process both
electronic and paper registration
requests; and provide timely processing
of CICI requests and timely assignment
of CICIs).
• Compliance (e.g., monitor and
ensure adherence to technical and
governance principles, to operational
and technical standards and protocols,
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to regulatory policies concerning access
to hierarchical data; and to applicable
laws; regulatory oversight reporting;
compliance with directives of
international Regulatory Oversight
Committee, when established; and
maintain capability to transfer all CICI
data to international central utility
when established).
In addition, the requirements
document provided that each submitter
was required to provide detailed
information concerning its relevant
background and experience. This
information was required to include
details of the submitter’s corporate and
organization background and ownership
and legal structure; its financial status;
and its plan for financing establishment
and operation of the CICI utility on a
non-profit, cost-recovery basis, without
charging market participants any fees
that could reasonably be construed to
constitute a barrier to participation in
financial markets. Each submitter was
also required to include a detailed
description of its experience in
assigning, maintaining, and managing
validated corporate or legal entity
identifiers, and its experience with
gathering, cleansing, maintaining, and
using reference data associated with
identifying corporate or legal entities.
Each submitter provided a document
to the Commission in response to the
requirement for a written
demonstration, as set forth above.
2. On-site, Live Demonstration of
Complete CICI Issuance Process
Each submitter was also required to
provide an on-site, live demonstration
of its systems, operations, and processes
for obtaining, cleansing, and using
reference data to validate the identity of
a legal entity and for issuing a CICI to
such an entity. Submitters were asked to
provide examples of preliminary
identifiers and test files or test
identifiers already prepared for or
provided to swap counterparties for use
in automated system preparation and
testing in preparation for swap data
reporting beginning on the applicable
compliance date established in part 45.
The demonstration was required to
include live presentation of the
submitter’s web portal, file transmission
facilities, and test processes that would
be available to registered entities and
swap counterparties for use in the CICI
issuance process. The demonstration
was also required to include live
presentation of the submitter’s
procedures and staffing for obtaining
entity reference data, entity challenge
with respect to reference data, deduplication of preliminary identifiers,
and assignment of unique identifiers to
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all swap counterparties subject to the
Commission’s jurisdiction.
All four submitters provided some
form of on-site, live demonstration to
Commission staff.
D. Evaluation Criteria
The requirements document set forth
criteria the Commission would use in
evaluating the submitters and the CICIs
they provide, for the purpose of
determining whether a CICI meeting the
requirements of part 45 is available, and
if so, designating its provider as the
source of CICIs to be used in compliance
with part 45. Among other things, the
four submissions were evaluated based
on the following criteria:
1. Evidence that the submitter can in
fact provide all CICIs required by market
participants for the purpose of
complying with part 45 of the
Commission’s regulations, and can do
so sufficiently in advance of July 16,
2012, to enable market participants to be
ready to comply as of that date. As
provided in § 45.6 of the Commission’s
regulations, submitters that do not
demonstrate this will not be considered
further.
2. Whether the written demonstration
completely and satisfactorily addresses
all of the Commission’s requirements
addressed in the requirements
document. Incomplete submissions will
not be considered further.
3. Evidence of the submitter’s
satisfactory understanding of the
Commission’s requirements with
respect to the CICI utility, as set forth in
the requirements document.
4. Evidence satisfying the
Commission that the submitter has
commenced setting up, will fully set up
before June 1, 2012, and can
satisfactorily manage and maintain, a
CICI utility meeting all of the
Commission’s requirements, as set forth
in the requirements document and in
part 45 of the Commission’s regulations.
Submissions not providing such
evidence will not be considered further.
5. A successful, onsite, live, complete
demonstration for Commission staff of
the submitter’s systems, operations, and
processes for obtaining, cleansing, and
using level one reference data to
validate the identity of a legal entity and
issuing a CICI to such an entity.
Submitters who do not provide such a
successful demonstration will not be
considered further.
6. The submitter’s relevant
experience, as described in the
requirements document, in assigning,
maintaining, and managing validated
corporate or legal entity identifiers, and
the submitter’s experience with
gathering, cleansing, maintaining, and
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using reference data associated with
identifying corporate or legal entities.
7. A workable plan for financing the
non-profit, cost-recovery-based
establishment and operation of the CICI
utility, without charging market
participants any fee reasonably deemed
to constitute a barrier to market
participation.
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III. Findings and Order
Now, therefore, based on the statutory
provisions and Commission regulations
cited above, and on the written
submissions and on-site, live
demonstrations provided by the
submitters, the Commission makes the
following findings and rulings:
The Commission FINDS that:
1. An LEI is available that: satisfies
the requirements set forth in § 45.6 of
the Commission’s regulations; is
provided by a utility fully set up by June
1, 2012; and can be provided to market
participants sufficiently in advance of
the initial compliance date for swap
data reporting to enable compliance
with the Commission’s regulations. That
LEI is the LEI provided by DTCC–
SWIFT. DTCC–SWIFT met all of the
Commission’s requirements and
evaluation criteria set forth in part 45 of
the Commission’s regulations and the
requirements document.
2. The LEI provided by DTCC–SWIFT
is the only available LEI that: satisfies
the requirements set forth in § 45.6 of
the Commission’s regulations; is
provided by a utility fully set up by June
1, 2012; and can be provided to market
participants sufficiently in advance of
the initial compliance date for swap
data reporting to enable compliance
with the Commission’s regulations.
Therefore:
It is hereby ordered that:
1. DTCC–SWIFT is designated as the
provider of legal entity identifiers
(‘‘LEIs’’), to be known as CFTC
Compliant Interim Identifiers (‘‘CICIs’’)
until establishment of the global LEI
system or further action by the
Commission, to be used in
recordkeeping and swap data reporting
pursuant to parts 45 and 46 of the
Commission’s regulations.
a. This designation is conditioned on
modification of the DTCC–SWIFT Web
site and other facilities and documents
used to provide identifiers for use in
complying with parts 45 and 46, to refer
to the CICI and not to refer to the LEI,
the preliminary LEI, or other similar
terms including the term LEI. This shall
include, without limitation, references
to the CICI rather than the LEI on the
utility logo, documentation, instructions
and field labels used by DTCC–SWIFT.
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b. This designation is conditioned on
DTCC–SWIFT’s continuing compliance,
for as long as it is authorized to provide
LEIs (to be known as CICIs until
establishment of the global LEI system),
by this order or any future order of the
Commission, with all of the legal entity
identifier requirements of Part 45 of the
Commission’s regulations, and any
related requirements as set forth in this
order or in the requirements document
provided to DTCC–SWIFT during the
determination and designation process;
including, without limitation, the
requirement to be subject to supervision
by a governance structure that includes
the Commission and other financial
regulators in any jurisdiction requiring
use of legal entity identifiers pursuant to
applicable law, for the purpose of
ensuring that issuance and maintenance
of CICIs and of associated reference data
adheres on an ongoing basis to the
Commission’s requirements set forth in
part 45.
c. This designation is further
conditioned on the requirement that,
subject to applicable confidentiality
laws and other applicable law, (1)
DTCC–SWIFT shall make public all CICI
identifiers and associated reference
data, utility operations, and identity
validation processes, and (2) following
establishment of the global LEI system
by means of a charter acceded to by the
Commission, or following designation
by the Commission of a successor CICI
utility, DTCC–SWIFT shall pass to any
successor CICI utility, or to the global
LEI system, free of charge, all CICI
identifiers and associated reference data
and all CICI intellectual property rights.
d. This designation is made for a
limited term of two years from the date
of this Order, and may be terminated by
the Commission on six months’ notice
in connection with the establishment of
a global LEI system. At the conclusion
of the term of this designation, if the
global LEI system is not yet operational,
the Commission may consider the
feasibility of having multiple CICI
providers and the feasibility of
coordination among them to avoid
duplicative LEIs, and if it believes this
is feasible, may consider submissions
from DTCC–SWIFT as well as from
other parties that seek to become CICI
providers.
2. Registered entities and swap
counterparties subject to the
Commission’s jurisdiction shall use
CICIs provided by DTCC–SWIFT to
comply with the legal entity identifier
requirements of parts 45 and 46 of the
Commission’s regulations. For this
purpose, registered entities and swap
counterparties may contact DTCC–
SWIFT at: The Depository Trust &
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53873
Clearing Corporation, 55 Water Street,
New York, NY 10041, 212–855–1000.
Issued in Washington, DC, this 23rd day of
July, 2012.
By the Commission.
Sauntia S. Warfield,
Assistant Secretary of the Commission.
[FR Doc. 2012–21612 Filed 8–31–12; 8:45 am]
BILLING CODE 6351–01–P
DEPARTMENT OF DEFENSE
Office of the Secretary
[Docket ID: DOD–2012–OS–0097]
Defense Transportation Regulation,
Part IV
United States Transportation
Command (USTRANSCOM), DoD.
ACTION: Notice.
AGENCY:
The Department of Defense
has published draft Direct Procurement
Method (DPM) business rules for the
Defense Personal Property Program
(DP3) in the Defense Transportation
Regulation (DTR) Part IV (DTR 4500.9R).
These business rules will encompass
Transportation Service Providers (TSP)
participation and procedures for
Personal Property Shipping Offices
(PPSO) as we transition to Phase III of
the Defense Personal Property Program
(DP3). The DPM business rules will
replace the currently approved
Domestic Small Shipment (dS2)
business rules and will appear under
DTR Part IV, Appendix V, to include
operational business rules maintained
on the Surface Deployment and
Distribution Command (SCCD) Web site.
The below listed draft business rules are
available for review on the
USTRANSCOM Web site at https://
www.transcom.mil/dtr/coord/
coordpartiv.cfm.
SUMMARY:
Comments must be received on
or before October 4, 2012. Do not submit
comments directly to the point of
contact or mail your comments to any
address other that what is shown below.
Doing so will delay the posting of the
submission. You may submit comments,
identified by docket number and title,
by any of the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Mail: Federal Docket Management
System Office, 4800 Mark Center Drive,
Suite 02G09, Alexandria VA 22350–
3100.
Instructions: All submissions received
must include the agency name and
docket number for this Federal Register
document. The general policy for
DATES:
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Agencies
[Federal Register Volume 77, Number 171 (Tuesday, September 4, 2012)]
[Notices]
[Pages 53870-53873]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-21612]
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COMMODITY FUTURES TRADING COMMISSION
Availability of a Legal Entity Identifier Meeting the
Requirements of the Regulations of the Commodity Futures Trading
Commission and Designation of Provider of Legal Entity Identifiers To
Be Used in the Recordkeeping and Swap Data Reporting
AGENCY: Commodity Futures Trading Commission.
ACTION: Order.
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SUMMARY: On July 23, 2012, the Commodity Futures Trading Commission
issued an order designating DTCC-SWIFT as the provider of the legal
entity identifiers (LEIs) which will be used by registered entities and
swap counterparties in complying with the CFTC's swap data reporting
regulations. These identifiers will be known as CFTC Interim Compliant
Identifiers (CICIs) until establishment of a global LEI system, and
will transition into the global LEI system when it is established. The
order included findings of fact by the Commission that the CICI
provided by DTCC-SWIFT is the only available identifier that satisfies
all requirements of the Commission's swap data reporting rules, and can
be provided to market participants sufficiently in advance of the
initial compliance date for swap data reporting to enable compliance
with the rules. The designation is made for a limited term of two
years, and is subject to four conditions specified in the order.
FOR FURTHER INFORMATION CONTACT: David Taylor, Associate Director,
Division of Market Oversight, 202-418-5488, dtaylor@cftc.gov; or Srini
Bangarbale, Chief Data Officer, Office of Data and Technology, 202-418-
5315, sbangarbale@cftc.gov; Commodity Futures Trading Commission, Three
Lafayette Centre, 1155 21st Street NW., Washington, DC 20851.
SUPPLEMENTARY INFORMATION: Section 21(b) of the Commodity Exchange Act,
(``CEA''), added to the CEA by Section 728 of the Dodd-Frank Act,
directs the Commission to prescribe standards that specify the data
elements for each swap that shall be reported to, and collected and
maintained by, swap data repositories. Pursuant to this authority, part
45 of the Commission's regulations establishes recordkeeping and data
reporting requirements for swaps subject to the jurisdiction of the
Commission.\1\ Section 45.6, Legal entity identifiers, includes a legal
entity identifier (``LEI'') for each swap counterparty among the data
elements required to be reported for each swap. That section provides
that:
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\1\ 17 CFR part 45, Swap Data Recordkeeping and Reporting
Requirements, 77 FR 2136 (Jan. 13, 2012), https://www.cftc.gov/ucm/groups/public/@lrfederalregister/documents/file/2011-33199a.pdf.
Each counterparty to any swap subject to the jurisdiction of the
Commission shall be identified in all recordkeeping and all swap
data reporting pursuant to this part by means of a single legal
entity identifier as specified in this section.\2\
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\2\ Sec. 45.6.
As noted in part 45, and stated in the CPSS-IOSCO Report on OTC
Derivatives Data Reporting and Aggregation Requirements, ``a standard
system of LEIs is an essential tool for aggregation of OTC derivatives
data.'' \3\
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\3\ Committee on Payment and Settlement Systems and Technical
Committee of the International Organization of Securities
Commissions, Report on OTC Derivatives Data Reporting and
Aggregation Requirements (Dec. 2011).
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In order to enable compliance with this requirement by registered
entities and swap counterparties subject to the Commission's
jurisdiction, part 45 provides that:
The Commission shall determine, as provided in paragraphs
(e)(1)(i) through (iii) of this section, whether a legal entity
identifier system that satisfies the requirements set forth in this
section is
[[Page 53871]]
available to provide legal entity identifiers for registered
entities and swap counterparties required to comply with this
part.\4\
\4\ Sec. 45.6(e)(1).
Section 45.6(e)(1)(i) specifies five factors that the Commission shall
consider in making this determination.
Section 45.6 emphasizes that making this determination and having
LEIs available for identification of swap counterparties when swap data
reporting commences as of the compliance dates set forth in part 45 is
highly important to achieving the systemic risk mitigation,
transparency, and market abuse prevention purposes of the Dodd-Frank
Act. For this reason, Sec. 45.6(e)(1)(ii) provides that:
In making this determination, the Commission shall consider all
candidates meeting the criteria set forth in paragraph (e)(1)(i) of
this section, but shall not consider any candidate that does not
demonstrate that it in fact can provide LEIs for identification of
swap counterparties in swap data reporting commencing as of the
compliance dates set forth in this part.
In addition, Sec. 45.6(e)(1)(iii) provides that:
The Commission shall make this determination at a time it
believes is sufficiently prior to the compliance dates set forth in
this part to enable issuance of LEIs far enough in advance of those
compliance dates to enable compliance with this part.
If the Commission determines that a provider whose LEI system
provides LEIs meeting the requirements of part 45 is available, the
rule calls for the Commission to inform registered entities and swap
counterparties subject to the Commission's jurisdiction of where they
can obtain the LEIs needed for compliance with part 45, by issuing an
order designating the provider of the LEIs to be used for that purpose.
Section 45.6(e)(2) provides that:
If the Commission determines pursuant to paragraph (e)(1) of
this section that such a legal entity identifier system is
available, the Commission shall designate the legal entity
identifier system as the provider of legal entity identifiers to be
used in recordkeeping and swap data reporting pursuant to this part,
by means of a Commission order that is published in the Federal
Register and on the Web site of the Commission, as soon as
practicable after such determination is made. The order shall
include notice of this designation, the contact information of the
LEI utility, and information concerning the procedure and
requirements for obtaining legal entity identifiers.
Once the Commission has determined that an LEI meeting the
requirements of part 45 is available, and has designated its provider
as set forth in Sec. 45.6(e)(2), registered entities and swap
counterparties subject to the Commission's jurisdiction are required to
use the LEIs furnished by that provider in recordkeeping and swap data
reporting. Section 45.6(f)(1) provides that:
When a legal entity identifier system has been designated by the
Commission pursuant to paragraph (e) of this section, each
registered entity and swap counterparty shall use the legal entity
identifier provided by that system in all recordkeeping and swap
data reporting pursuant to this part.
II. Determination and Designation Process
A. Request for Submissions
Pursuant to these provisions of part 45, on March 9, 2012, the
Commission issued a public request for submissions from industry
participants that wished to be considered for designation by the
Commission as the provider of LEIs to be used in complying with the
rule.\5\
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\5\ Commodity Futures Trading Commission Press Release, CFTC
announces process to designate the provider of CFTC Interim
Compliant Identifiers, March 9, 2012.
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The Commission's request for submissions included provisions
relating to international aspects of LEIs. It reiterated that part 45
calls for issuance of the identifier used in recordkeeping and swap
data reporting under CFTC jurisdiction, and for any utility formed to
issue such identifiers, to be subject to international supervision by a
governance structure that includes the Commission and other financial
regulators in any jurisdiction requiring use of the legal entity
identifier pursuant to applicable law. It noted the Commission's
ongoing participation in an international process, coordinated by the
Financial Stability Board (``FSB''), to establish governance principles
and reference data requirements for a global legal entity identifier,
to be contained in recommendations by an international regulatory LEI
Expert Group (including the Commission) for consideration by the FSB in
May 2012. In light of that process, and as requested by other
international financial regulators, the request for submissions stated
that the Commission would refer to the identifier to be used in
reporting under part 45 as the CFTC Interim Compliant Identifier
(``CICI'') until after the FSB Plenary meeting in May 2012, and would
defer its designation of the provider of CICIs until after that
meeting. The request also reiterated that, as provided in part 45, the
Commission plans to adopt the governance principles and LEI reference
data requirements endorsed by the FSB, making them applicable to
identification of swap counterparties under CFTC jurisdiction. The
request further stated that, once these steps are completed, the
Commission anticipates that the identifier then called the CICI will
transition into the global LEI, and be referred to as the LEI.
In its request for submissions, the Commission stated that
submitters must be prepared to demonstrate that they meet all of the
requirements set forth in part 45. It further notified submitters that:
(1) The Commission's determination and designation process would
include an on-site, live demonstration for Commission staff of the
process to be used for issuance of CICIs; (2) the Commission's
designation will be for a limited term of two years, and be terminable
on six months' notice if a different central utility for the global LEI
is chosen later through the FSB process and becomes operational; and
(3) subject to applicable confidentiality laws, the Commission's
designation will require that the designated LEI utility must make
public all CICI data, operations, identity validation processes and
audit trail, and to pass to any successor LEI utility, free of charge,
all CICI data and all CICI intellectual property rights.
B. Requirements for Designation as the LEI Utility
Four parties expressed an interest in becoming the LEI provider. To
assess their suitability, the Commission required the submitters to
provide both (1) a written demonstration of their ability to meet the
Commission's part 45 requirements, and (2) an on-site, live
demonstration of their process for issuing CICIs.
1. Written Demonstration of Ability To Meet Commission Requirements
Detailed requirements for the written demonstration were provided
to each submitter. The requirements document stated that, as provided
in Sec. 45.6(e)(1)(i) of the Commission's regulations, in determining
whether a CICI meeting the requirements of part 45 is available, and if
so designating its provider as the utility that will provide the CICI,
the Commission would consider, without limitation, the following five
factors:
Whether the CICI provided by the utility is issued under,
and conforms to, ISO Standard 17442, Legal Entity Identifier (LEI).
Whether the CICI provided by the utility complies with all
of the technical principles set forth in part 45.
[[Page 53872]]
Whether the CICI utility complies with all of the
governance principles set forth in part 45.
Whether the CICI utility has demonstrated that it in fact
can provide CICIs for identification of swap counterparties in swap
data reporting commencing as of the compliance dates set forth in part
45.
The acceptability of the CICI utility to industry
participants required to use the LEI in complying with part 45.
The requirements document also described the functions to be
performed by the CICI system, including, but not limited to, the
following:
Utility Administration (e.g., accounting; audit; CICI fee
collection; billing and payment; communications, human resources; and
legal department).
Data Management (e.g., receive registrant data; establish
and maintain registrant data record; apply validation and data quality
assurance processes to registrant data; issue unique CICI; transmit
CICI to registrant; maintain and update data record history; maintain
and update required metadata; maintain complete audit trail of all
records, data, and messages; and maintain appropriate system
safeguards).
Verification of Entity Identification (e.g., cleanse and
validate identification data submitted through both self-registration
and third-party registration; connect to and communicate with national
business registers in jurisdictions world-wide; provide identification
data challenge services; verify uniqueness of submitted identification
information; provide local verification in countries world-wide; visit
provided addresses to verify entity presence; process entity messages
regarding identification data, for example concerning corporate
actions; perform periodic re-verification; and identify the
verification level at which each record has been verified).
Public Database (e.g., establish and maintain free public
database of all CICIs; provide 24/7 internet query facility; provide
near-real time response to queries; provide complete, current CICI
directory; and provide help desk and assistance services for the
public).
CICI Registration Services (e.g., provide local language
services world-wide; respond to market participant queries; receive and
process both electronic and paper registration requests; and provide
timely processing of CICI requests and timely assignment of CICIs).
Compliance (e.g., monitor and ensure adherence to
technical and governance principles, to operational and technical
standards and protocols, to regulatory policies concerning access to
hierarchical data; and to applicable laws; regulatory oversight
reporting; compliance with directives of international Regulatory
Oversight Committee, when established; and maintain capability to
transfer all CICI data to international central utility when
established).
In addition, the requirements document provided that each submitter
was required to provide detailed information concerning its relevant
background and experience. This information was required to include
details of the submitter's corporate and organization background and
ownership and legal structure; its financial status; and its plan for
financing establishment and operation of the CICI utility on a non-
profit, cost-recovery basis, without charging market participants any
fees that could reasonably be construed to constitute a barrier to
participation in financial markets. Each submitter was also required to
include a detailed description of its experience in assigning,
maintaining, and managing validated corporate or legal entity
identifiers, and its experience with gathering, cleansing, maintaining,
and using reference data associated with identifying corporate or legal
entities.
Each submitter provided a document to the Commission in response to
the requirement for a written demonstration, as set forth above.
2. On-site, Live Demonstration of Complete CICI Issuance Process
Each submitter was also required to provide an on-site, live
demonstration of its systems, operations, and processes for obtaining,
cleansing, and using reference data to validate the identity of a legal
entity and for issuing a CICI to such an entity. Submitters were asked
to provide examples of preliminary identifiers and test files or test
identifiers already prepared for or provided to swap counterparties for
use in automated system preparation and testing in preparation for swap
data reporting beginning on the applicable compliance date established
in part 45. The demonstration was required to include live presentation
of the submitter's web portal, file transmission facilities, and test
processes that would be available to registered entities and swap
counterparties for use in the CICI issuance process. The demonstration
was also required to include live presentation of the submitter's
procedures and staffing for obtaining entity reference data, entity
challenge with respect to reference data, de-duplication of preliminary
identifiers, and assignment of unique identifiers to all swap
counterparties subject to the Commission's jurisdiction.
All four submitters provided some form of on-site, live
demonstration to Commission staff.
D. Evaluation Criteria
The requirements document set forth criteria the Commission would
use in evaluating the submitters and the CICIs they provide, for the
purpose of determining whether a CICI meeting the requirements of part
45 is available, and if so, designating its provider as the source of
CICIs to be used in compliance with part 45. Among other things, the
four submissions were evaluated based on the following criteria:
1. Evidence that the submitter can in fact provide all CICIs
required by market participants for the purpose of complying with part
45 of the Commission's regulations, and can do so sufficiently in
advance of July 16, 2012, to enable market participants to be ready to
comply as of that date. As provided in Sec. 45.6 of the Commission's
regulations, submitters that do not demonstrate this will not be
considered further.
2. Whether the written demonstration completely and satisfactorily
addresses all of the Commission's requirements addressed in the
requirements document. Incomplete submissions will not be considered
further.
3. Evidence of the submitter's satisfactory understanding of the
Commission's requirements with respect to the CICI utility, as set
forth in the requirements document.
4. Evidence satisfying the Commission that the submitter has
commenced setting up, will fully set up before June 1, 2012, and can
satisfactorily manage and maintain, a CICI utility meeting all of the
Commission's requirements, as set forth in the requirements document
and in part 45 of the Commission's regulations. Submissions not
providing such evidence will not be considered further.
5. A successful, onsite, live, complete demonstration for
Commission staff of the submitter's systems, operations, and processes
for obtaining, cleansing, and using level one reference data to
validate the identity of a legal entity and issuing a CICI to such an
entity. Submitters who do not provide such a successful demonstration
will not be considered further.
6. The submitter's relevant experience, as described in the
requirements document, in assigning, maintaining, and managing
validated corporate or legal entity identifiers, and the submitter's
experience with gathering, cleansing, maintaining, and
[[Page 53873]]
using reference data associated with identifying corporate or legal
entities.
7. A workable plan for financing the non-profit, cost-recovery-
based establishment and operation of the CICI utility, without charging
market participants any fee reasonably deemed to constitute a barrier
to market participation.
III. Findings and Order
Now, therefore, based on the statutory provisions and Commission
regulations cited above, and on the written submissions and on-site,
live demonstrations provided by the submitters, the Commission makes
the following findings and rulings:
The Commission FINDS that:
1. An LEI is available that: satisfies the requirements set forth
in Sec. 45.6 of the Commission's regulations; is provided by a utility
fully set up by June 1, 2012; and can be provided to market
participants sufficiently in advance of the initial compliance date for
swap data reporting to enable compliance with the Commission's
regulations. That LEI is the LEI provided by DTCC-SWIFT. DTCC-SWIFT met
all of the Commission's requirements and evaluation criteria set forth
in part 45 of the Commission's regulations and the requirements
document.
2. The LEI provided by DTCC-SWIFT is the only available LEI that:
satisfies the requirements set forth in Sec. 45.6 of the Commission's
regulations; is provided by a utility fully set up by June 1, 2012; and
can be provided to market participants sufficiently in advance of the
initial compliance date for swap data reporting to enable compliance
with the Commission's regulations.
Therefore:
It is hereby ordered that:
1. DTCC-SWIFT is designated as the provider of legal entity
identifiers (``LEIs''), to be known as CFTC Compliant Interim
Identifiers (``CICIs'') until establishment of the global LEI system or
further action by the Commission, to be used in recordkeeping and swap
data reporting pursuant to parts 45 and 46 of the Commission's
regulations.
a. This designation is conditioned on modification of the DTCC-
SWIFT Web site and other facilities and documents used to provide
identifiers for use in complying with parts 45 and 46, to refer to the
CICI and not to refer to the LEI, the preliminary LEI, or other similar
terms including the term LEI. This shall include, without limitation,
references to the CICI rather than the LEI on the utility logo,
documentation, instructions and field labels used by DTCC-SWIFT.
b. This designation is conditioned on DTCC-SWIFT's continuing
compliance, for as long as it is authorized to provide LEIs (to be
known as CICIs until establishment of the global LEI system), by this
order or any future order of the Commission, with all of the legal
entity identifier requirements of Part 45 of the Commission's
regulations, and any related requirements as set forth in this order or
in the requirements document provided to DTCC-SWIFT during the
determination and designation process; including, without limitation,
the requirement to be subject to supervision by a governance structure
that includes the Commission and other financial regulators in any
jurisdiction requiring use of legal entity identifiers pursuant to
applicable law, for the purpose of ensuring that issuance and
maintenance of CICIs and of associated reference data adheres on an
ongoing basis to the Commission's requirements set forth in part 45.
c. This designation is further conditioned on the requirement that,
subject to applicable confidentiality laws and other applicable law,
(1) DTCC-SWIFT shall make public all CICI identifiers and associated
reference data, utility operations, and identity validation processes,
and (2) following establishment of the global LEI system by means of a
charter acceded to by the Commission, or following designation by the
Commission of a successor CICI utility, DTCC-SWIFT shall pass to any
successor CICI utility, or to the global LEI system, free of charge,
all CICI identifiers and associated reference data and all CICI
intellectual property rights.
d. This designation is made for a limited term of two years from
the date of this Order, and may be terminated by the Commission on six
months' notice in connection with the establishment of a global LEI
system. At the conclusion of the term of this designation, if the
global LEI system is not yet operational, the Commission may consider
the feasibility of having multiple CICI providers and the feasibility
of coordination among them to avoid duplicative LEIs, and if it
believes this is feasible, may consider submissions from DTCC-SWIFT as
well as from other parties that seek to become CICI providers.
2. Registered entities and swap counterparties subject to the
Commission's jurisdiction shall use CICIs provided by DTCC-SWIFT to
comply with the legal entity identifier requirements of parts 45 and 46
of the Commission's regulations. For this purpose, registered entities
and swap counterparties may contact DTCC-SWIFT at: The Depository Trust
& Clearing Corporation, 55 Water Street, New York, NY 10041, 212-855-
1000.
Issued in Washington, DC, this 23rd day of July, 2012.
By the Commission.
Sauntia S. Warfield,
Assistant Secretary of the Commission.
[FR Doc. 2012-21612 Filed 8-31-12; 8:45 am]
BILLING CODE 6351-01-P