Swap Dealers and Major Swap Participants; Clerical or Ministerial Employees, 64173-64175 [2013-25279]
Download as PDF
Federal Register / Vol. 78, No. 208 / Monday, October 28, 2013 / Rules and Regulations
Further, the SIAPs and Takeoff
Minimums and ODPS contained in this
amendment are based on the criteria
contained in the U.S. Standard for
Terminal Instrument Procedures
(TERPS). In developing these SIAPS and
Takeoff Minimums and ODPs, the
TERPS criteria were applied to the
conditions existing or anticipated at the
affected airports. Because of the close
and immediate relationship between
these SIAPs, Takeoff Minimums and
ODPs, and safety in air commerce, I find
that notice and public procedures before
adopting these SIAPS, Takeoff
Minimums and ODPs are impracticable
and contrary to the public interest and,
where applicable, that good cause exists
for making some SIAPs effective in less
than 30 days.
Conclusion
The FAA has determined that this
regulation only involves an established
body of technical regulations for which
frequent and routine amendments are
necessary to keep them operationally
current. It, therefore—(1) Is not a
‘‘significant regulatory action’’ under
Executive Order 12866; (2) is not a
‘‘significant rule’’ under DOT
Regulatory Policies and Procedures (44
FR 11034; February 26,1979); and (3)
does not warrant preparation of a
regulatory evaluation as the anticipated
impact is so minimal. For the same
reason, the FAA certifies that this
amendment will not have a significant
economic impact on a substantial
number of small entities under the
criteria of the Regulatory Flexibility Act.
List of Subjects in 14 CFR part 97
Air Traffic Control, Airports,
Incorporation by reference, and
Navigation (Air).
Issued in Washington, DC, on October 11,
2013.
John Duncan
Director, Flight Standards Service.
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Adoption of the Amendment
Accordingly, pursuant to the
authority delegated to me, Title 14,
Code of Federal Regulations, Part 97 (14
CFR part 97) is amended by
establishing, amending, suspending, or
revoking Standard Instrument Approach
Procedures and/or Takeoff Minimums
and/or Obstacle Departure Procedures
effective at 0902 UTC on the dates
specified, as follows:
PART 97—STANDARD INSTRUMENT
APPROACH PROCEDURES
1. The authority citation for part 97
continues to read as follows:
■
VerDate Mar<15>2010
12:59 Oct 25, 2013
Jkt 232001
Authority: 49 U.S.C. 106(g), 40103, 40106,
40113, 40114, 40120, 44502, 44514, 44701,
44719, 44721–44722.
2. Part 97 is amended to read as
follows:
■
Effective 14 NOVEMBER 2013
Indianapolis, IN, Indianapolis
Executive, VOR/DME RWY 36, Amdt
9A
Cape Girardeau, MO, Cape Girardeau
Rgnl, VOR RWY 10, AMDT 3A
Fayetteville, NC, Fayetteville Rgnl/
Grannis Field, RNAV (GPS) RWY 4,
Amdt 3
Fayetteville, NC, Fayetteville Rgnl/
Grannis Field, RNAV (GPS) RWY 22,
Amdt 5
Effective 12 DECEMBER 2013
Red Bluff, CA, Red Bluff Muni, RNAV
(GPS) RWY 15, Amdt 1
Red Bluff, CA, Red Bluff Muni, VOR/
DME RWY 15, Amdt 8
Savanna, IL, Tri-Township, RNAV
(GPS) RWY 13, Orig-A
Rocky Mount, NC, Rocky Mount-Wilson
Rgnl, RNAV (GPS) RWY 4, Amdt 2
Rocky Mount, NC, Rocky Mount-Wilson
Rgnl, RNAV (GPS) RWY 22, Amdt 2
Fremont, NE., Fremont Muni, RNAV
(GPS) RWY 14, Amdt 2
Fremont, NE., Fremont Muni, RNAV
(GPS) RWY 32, Orig
Fremont, NE., Fremont Muni, Takeoff
Minimums and Obstacle DP, Amdt 6A
Fremont, NE., Fremont Muni, VOR/
DME RWY 14, Amdt 3
Norwich, NY, Lt Warren Eaton, VOR/
DME-A, Amdt 4, CANCELED
Oneonta, NY, Oneonta Muni, LOC RWY
24, Amdt 2B
Columbus, OH, Port Columbus Intl, ILS
OR LOC RWY 10R, ILS RWY 10R (SA
CAT I), ILS RWY 10R (SA CAT II),
Amdt 9A
Memphis, TN, Memphis Intl, ILS OR
LOC RWY 27, Amdt 4
Memphis, TN, Memphis Intl, RNAV
(GPS) RWY 27, Amdt 2
Memphis, TN, Memphis Intl, Takeoff
Minimums and Obstacle DP, Amdt 4
Coleman, TX, Coleman Muni, RNAV
(GPS) RWY 33, Orig
[FR Doc. 2013–25190 Filed 10–25–13; 8:45 am]
BILLING CODE 4910–13–P
COMMODITY FUTURES TRADING
COMMISSION
17 CFR Part 23
RIN 3038–AE00
Swap Dealers and Major Swap
Participants; Clerical or Ministerial
Employees
Commodity Futures Trading
Commission.
AGENCY:
PO 00000
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Fmt 4700
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ACTION:
64173
Final rule.
The Commodity Futures
Trading Commission is adopting an
amendment to its regulations to clarify
certain responsibilities of a swap dealer
or major swap participant regarding its
employees who solicit, accept or effect
swaps in a clerical or ministerial
capacity.
DATES: Effective November 27, 2013.
FOR FURTHER INFORMATION CONTACT:
Christopher W. Cummings, Special
Counsel, or Barbara S. Gold, Associate
Director, Division of Swap Dealer and
Intermediary Oversight, Commodity
Futures Trading Commission, 1155 21st
Street NW., Washington, DC 20581.
Telephone number: (202) 418–6700 and
electronic mail: ccummings@cftc.gov or
bgold@cftc.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Introduction
A. Background
The Dodd-Frank Wall Street Reform
and Consumer Protection Act (DoddFrank Act) 1 was signed into law July 21,
2010. The Dodd-Frank Act amended the
Commodity Exchange Act (CEA or Act) 2
to require the registration of swap
dealers (SDs) and major swap
participants (MSPs), and to establish a
comprehensive new regulatory
framework for swaps. One such
amendment was new CEA section
4s(b)(6), which states that except to the
extent otherwise specifically provided
by rule, regulation, or order, it shall be
unlawful for a swap dealer or a major
swap participant to permit any person
associated with a swap dealer or a major
swap participant who is subject to a
statutory disqualification to effect or be
involved in effecting swaps on behalf of
the swap dealer or major swap
participant, if the swap dealer or major
swap participant knew, or in the
exercise of reasonable care should have
known, of the statutory disqualification
(‘‘Prohibition’’).
A related amendment that the DoddFrank Act made was to add a definition
of ‘‘associated person of a swap dealer
or major swap participant’’ in new CEA
section 1a(4), which provides that the
term ‘‘associated person of a swap
dealer or major swap participant’’
means a person who is associated with
a swap dealer or major swap participant
as a partner, officer, employee, or agent
1 See Dodd-Frank Wall Street Reform and
Consumer Protection Act, Public Law 111–203, 124
Stat. 1376 (2010). The text of the Dodd-Frank Act
can be accessed through the Commission’s Web
site, https://www.cftc.gov.
2 7 U.S.C. 1 et seq. The CEA also can be accessed
through the Commission’s Web site.
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64174
Federal Register / Vol. 78, No. 208 / Monday, October 28, 2013 / Rules and Regulations
(or any person occupying a similar
status or performing similar functions),
in any capacity that involves: (i) The
solicitation or acceptance of swaps; or
(ii) the supervision of any person or
persons so engaged. The definition
contains an exclusion, however, stating
that other than for purposes of CEA
section 4s(b)(6), the term ‘‘associated
person of a swap dealer or major swap
participant’’ does not include any
person associated with a swap dealer or
major swap participant the functions of
which are solely clerical or ministerial.
Thus, except to the extent that the
Commodity Futures Trading
Commission (Commission or CFTC)
specifically provided by rule,
regulation, or order, an SD or MSP
would be subject to the prohibition
against permitting a person associated
with the SD or MSP (including a person
employed in a clerical or ministerial
capacity) to effect or be involved in
effecting swaps if the associated person
were subject to a statutory
disqualification.
On January 19, 2012, the Commission
published in the Federal Register
regulations that provide for the
registration of SDs and MSPs.3 Among
these new regulations were Regulation
1.3(aa)(6),4 which amended the existing
definition of ‘‘associated person’’ in the
Commission’s regulations to include
associated persons of SDs and MSPs,
and Regulation 23.22, which
incorporated the prohibition set forth in
CEA section 4s(b)(6). With respect to
SDs or MSPs, Regulation 1.3(aa)(6)
provides that the term ‘‘associated
person’’ means any natural person who
is associated with an SD or MSP as a
partner, officer, employee, agent (or any
natural person occupying a similar
status or performing similar functions),
in any capacity that involves the
solicitation or acceptance of swaps
(other than in a clerical or ministerial
capacity); or the supervision of any
person or persons so engaged. The
exclusion in Regulation 1.3(aa)(6) from
the definition of associated person of an
SD or MSP for persons who act in a
clerical or ministerial capacity is
consistent with the definition (and
exclusion for clerical or ministerial
activity) in the other provisions in
Regulation 1.3(aa) that define the term
‘‘associated person’’ in the context of
other Commission registrants.5
3 See
77 FR 2613 (Jan. 19, 2012).
CFR 1.3(aa)(6). The Commission’s regulations
also can be accessed through the Commission’s Web
site.
5 See also CEA Section 4k(1), which excludes
from associated person registration a person who,
in a clerical or ministerial capacity, solicits or
4 17
VerDate Mar<15>2010
12:59 Oct 25, 2013
Jkt 232001
B. The Proposal
Regulation 23.22, by its terms, applies
to an associated person of an SD or MSP
as defined in section 1a(4) of the Act
and Regulation 1.3(aa). Because
Regulation 1.3(aa)(6) contains a general
exclusion from the associated person
definition for a person employed in a
clerical or ministerial capacity, and the
exclusion in CEA section 1a(4) must be
read in conjunction with CEA section
4s(b)(6), in November 2012 the National
Futures Association (NFA) 6
recommended that the Commission
clarify that the prohibition in CEA
section 4s(b)(6) does not bar association
with an SD or MSP by employees who
are employed in a clerical or ministerial
capacity.
In light of NFA’s recommendation,
and in accordance with the language in
CEA section 4s(b)(6) that qualifies the
Prohibition (‘‘Except to the extent
otherwise specifically provided by rule,
regulation, or order’’), the Commission
proposed to amend paragraph (a) of
Regulation 23.22 (‘‘Proposal’’) 7 to
clarify that the Prohibition does not
apply to an individual employed by an
SD or MSP in a clerical or ministerial
capacity.8
II. Comments on the Proposal
The Commission received one
comment letter on the Proposal. It stated
that adoption of the Proposal would
‘‘reduce regulatory burden and reduce
the costs of determining whether a
clerical or ministerial employee is
statutorily disqualified’’ and, further,
that ‘‘[t]he Proposed rule is reasonable
and will improve regulatory
efficiency.’’ 9
III. The Final Regulation
In light of the foregoing, the
Commission is adopting as proposed an
amendment to paragraph (a) of
Regulation 23.22 to clarify that the
Prohibition does not apply to an
individual employed by an SD or MSP
in a clerical or ministerial capacity.
accept customer orders for a futures commission
merchant or an introducing broker.
6 Letter from Thomas W. Sexton, Senior Vice
President and General Counsel, NFA, to Gary
Barnett, Director of the Division of Swap Dealer and
Intermediary Oversight, dated November 12, 2012.
NFA is a registered futures association (and the sole
association so registered) under CEA Section 17.
7 78 FR 20848 (Apr. 8, 2013).
8 In this regard, the Commission noted in the
Proposal that pursuant to the authority granted it
in CEA section 4s(b)(6), it had previously adopted
an exception from the Prohibition for a person
already listed as a principal of, or already registered
as an associated person of, another Commission
registrant, notwithstanding a statutory
disqualification. See Regulation 23.22(b), proviso.
9 Comment letter from Chris Barnard at page 1
(June 3, 2013).
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Fmt 4700
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IV. Related Matters
A. Regulatory Flexibility Act
The Regulatory Flexibility Act
(RFA) 10 requires federal agencies, in
promulgating regulations, to consider
whether those regulations will have a
significant economic impact on small
entities and, if so, to provide a
regulatory flexibility analysis respecting
the impact.11 The Commission
previously has determined that SDs and
MSPs are not ‘‘small entities’’ for RFA
purposes.12 Moreover, adoption of the
amendment to Regulation 23.22(a) as
proposed will not have a significant
economic impact on any person who
will be affected thereby, because it will
not impose any additional operational
requirements or otherwise direct or
confine the activities of affected
persons.
The Commission did not receive any
comments regarding its RFA analysis in
the Proposal. Accordingly, pursuant to 5
U.S.C. 605(b), the Chairman, on behalf
of the Commission, hereby certifies that
the regulation being published in this
Federal Register release will not have a
significant economic impact on a
substantial number of small entities.
B. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(PRA) 13 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 regulation being published in this
Federal Register release clarifies that
the Prohibition does not apply where
the person in question is employed in
a clerical or ministerial capacity. As
discussed in the Proposal, the
amendment will not impose a ‘‘burden’’
or ‘‘collection of information’’ as those
terms are defined in the PRA.14
The Commission did not receive any
comments regarding its PRA analysis in
the Proposal. Accordingly, for purposes
of the PRA, the Chairman, on behalf of
the Commission, certifies that the
regulation being published in this
Federal Register release will not impose
any new reporting or recordkeeping
requirements.
C. Cost-Benefit Considerations
CEA section 15(a) requires the
Commission to consider the costs and
benefits of its actions before issuing a
10 5
U.S.C. 601 et seq. (2006).
its terms, the RFA does not apply to
‘‘individuals.’’ See 48 FR 14933, 14954 n. 115 (Apr.
6, 1983).
12 See 77 FR 2613, 2620 (Jan. 19, 2012).
13 44 U.S.C. 3501 et seq.
14 78 FR 20848, 20849 (Apr. 8, 2013).
11 By
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Federal Register / Vol. 78, No. 208 / Monday, October 28, 2013 / Rules and Regulations
rulemaking under the CEA. CEA section
15(a) further specifies that the costs and
benefits shall be evaluated in light of
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) factors.
As is explained above, the
amendment to Regulation 23.22(a)
makes a clarifying change to the text of
one of the Commission’s regulations
adopted to reflect changes made to the
CEA by the Dodd-Frank Act, by
specifying that the prohibition against
an SD or MSP permitting a statutorily
disqualified person to associate with it
does not include a person employed in
a clerical or ministerial capacity.
Costs. With respect to costs, the
Commission believes that adoption of
the amendment to Regulation 23.22(a)
will not impose any costs. This is
because the amendment clarifies that an
SD or MSP need not consider whether
CEA section 4s(b)(6) applies to
employees performing clerical or
ministerial duties. Thus the
Commission does not believe that any
new costs will be imposed.
Benefits. With respect to benefits, as
discussed in the Proposal, the
Commission believes that the
amendment to Regulation 23.22(a) will
benefit SDs and MSPs by reducing the
search costs associated with
determining whether a clerical or
ministerial employee is statutorily
disqualified. This, in turn, mitigates the
existing cost of compliance with CEA
section 4s(b)(6). As such, it is an ‘‘other
public interest consideration’’ under
CEA section 15(a), referred to above.
Public Comment. The Commission
invited public comment on its costbenefit considerations, but no such
comments were received.
wreier-aviles on DSK5TPTVN1PROD with RULES
Associated persons, Commodity
futures, Major swap participants,
Ministerial or clerical employees,
Registration, Statutory disqualification,
Swap dealers, Swaps.
For the reasons presented above, the
Commodity Futures Trading
Commission hereby amends 17 CFR part
23 as follows:
12:59 Oct 25, 2013
Jkt 232001
1. The authority citation for part 23
continues to read as follows:
■
Authority: 7 U.S.C. 1a, 2, 6, 6a, 6b, 6b–1,
6c, 6p, 6r, 6s, 6t, 9, 9a, 12, 12a, 13b, 13c, 16a,
18, 19, and 21.
2. Amend § 23.22 by revising the
section heading and paragraph (a) to
read as follows:
■
§ 23.22 Prohibition against statutory
disqualification in the case of an associated
person of a swap dealer or major swap
participant.
(a) Definition. For purposes of this
section, the term ‘‘person’’ means an
‘‘associated person of a swap dealer or
major swap participant’’ as defined in
section 1a(4) of the Act and § 1.3(aa)(6)
of this chapter, but does not include an
individual employed in a clerical or
ministerial capacity.
*
*
*
*
*
Issued in Washington, DC, on October 22,
2013, by the Commission.
Christopher J. Kirkpatrick,
Deputy Secretary of the Commission.
Appendix to Swap Dealers and Major
Swap Participants; Clerical or
Ministerial Employees—Commission
Voting Summary
Note: The following appendix will not
appear in the Code of Federal Regulations.
Commission Voting Summary
On this matter, Chairman Gensler and
Commissioners Chilton, O’Malia, and Wetjen
voted in the affirmative; no Commissioner
voted in the negative.
[FR Doc. 2013–25279 Filed 10–25–13; 8:45 am]
BILLING CODE 6351–01–P
funding by the Further Continuing
Appropriations Act, 2013.
DATES: Effective October 25, 2013.
FOR FURTHER INFORMATION CONTACT:
James P. Kelleher, Office of General
Counsel, U.S. Agency for International
Development, Washington, DC 20523–
6601; tel. 202–712–1594, fax 202–216–
3055.
SUPPLEMENTARY INFORMATION: Pursuant
to the State, Foreign Operations, and
Related Programs Appropriations Act of
2012 (Pub. L. 112–74) as applied to
fiscal year 2013 funding by the Further
Continuing Appropriations Act, 2013
(Pub. L. 113–6), the United States of
America, acting through the U.S.
Agency for International Development,
may issue certain loan guarantees
applicable to sums borrowed by the
Hashemite Kingdom of Jordan (the
‘‘Borrower’’), not exceeding an aggregate
total of U.S. $1.25 billion in principal
amount. Upon issuance, the loan
guarantees shall insure the Borrower’s
repayment of 100% of principal and
interest due under such loans and the
full faith and credit of the United States
of America shall be pledged for the full
payment and performance of such
guarantee obligations.
This rulemaking document is not
subject to rulemaking under 5 U.S.C.
553 or to regulatory review under
Executive Order 12866 because it
involves a foreign affairs function of the
United States. The provisions of the
Paperwork Reduction Act (44 U.S.C.
3501 et seq.) do not apply.
List of Subjects in 22 CFR Part 233
Foreign aid, Foreign relations,
Guaranteed loans, Loan programsforeign relations.
Authority and Issuance
AGENCY FOR INTERNATIONAL
DEVELOPMENT
22 CFR Part 233
Hashemite Kingdom of Jordan Loan
Guarantees Issued Under the Further
Continuing Appropriations Act, 2013—
Standard Terms and Conditions
Agency for International
Development (USAID).
ACTION: Final rule.
AGENCY:
List of Subjects in 17 CFR Part 23
VerDate Mar<15>2010
PART 23—SWAP DEALERS AND
MAJOR SWAP PARTICIPANTS
64175
This regulation prescribes the
procedures and standard terms and
conditions applicable to loan guarantees
to be issued for the benefit of the
Hashemite Kingdom of Jordan pursuant
to the State, Foreign Operations, and
Related Programs Appropriations Act of
2012 as applied to fiscal year 2013
SUMMARY:
PO 00000
Frm 00023
Fmt 4700
Sfmt 4700
Accordingly, a new Part 233 is added
to Title 22, Chapter II, of the Code of
Federal Regulations, as follows:
PART 233—HASHEMITE KINGDOM OF
JORDAN LOAN GUARANTEES ISSUED
UNDER THE FURTHER CONTINUING
APPROPRIATIONS ACT, 2013, DIV. F,
PUB. L. 113–6—STANDARD TERMS
AND CONDITIONS
Sec.
233.01 Purpose.
233.02 Definitions.
233.03 The Guarantee.
233.04 Guarantee eligibility.
233.05 Non-impairment of the Guarantee.
233.06 Transferability of Guarantee; Note
Register.
233.07 Fiscal Agent obligations.
233.08 Event of Default; Application for
Compensation; payment.
233.09 No acceleration of Eligible Notes.
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Agencies
[Federal Register Volume 78, Number 208 (Monday, October 28, 2013)]
[Rules and Regulations]
[Pages 64173-64175]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-25279]
=======================================================================
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 23
RIN 3038-AE00
Swap Dealers and Major Swap Participants; Clerical or Ministerial
Employees
AGENCY: Commodity Futures Trading Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Commodity Futures Trading Commission is adopting an
amendment to its regulations to clarify certain responsibilities of a
swap dealer or major swap participant regarding its employees who
solicit, accept or effect swaps in a clerical or ministerial capacity.
DATES: Effective November 27, 2013.
FOR FURTHER INFORMATION CONTACT: Christopher W. Cummings, Special
Counsel, or Barbara S. Gold, Associate Director, Division of Swap
Dealer and Intermediary Oversight, Commodity Futures Trading
Commission, 1155 21st Street NW., Washington, DC 20581. Telephone
number: (202) 418-6700 and electronic mail: ccummings@cftc.gov or
bgold@cftc.gov.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Background
The Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act) \1\ was signed into law July 21, 2010. The Dodd-Frank
Act amended the Commodity Exchange Act (CEA or Act) \2\ to require the
registration of swap dealers (SDs) and major swap participants (MSPs),
and to establish a comprehensive new regulatory framework for swaps.
One such amendment was new CEA section 4s(b)(6), which states that
except to the extent otherwise specifically provided by rule,
regulation, or order, it shall be unlawful for a swap dealer or a major
swap participant to permit any person associated with a swap dealer or
a major swap participant who is subject to a statutory disqualification
to effect or be involved in effecting swaps on behalf of the swap
dealer or major swap participant, if the swap dealer or major swap
participant knew, or in the exercise of reasonable care should have
known, of the statutory disqualification (``Prohibition'').
---------------------------------------------------------------------------
\1\ See Dodd-Frank Wall Street Reform and Consumer Protection
Act, Public Law 111-203, 124 Stat. 1376 (2010). The text of the
Dodd-Frank Act can be accessed through the Commission's Web site,
https://www.cftc.gov.
\2\ 7 U.S.C. 1 et seq. The CEA also can be accessed through the
Commission's Web site.
---------------------------------------------------------------------------
A related amendment that the Dodd-Frank Act made was to add a
definition of ``associated person of a swap dealer or major swap
participant'' in new CEA section 1a(4), which provides that the term
``associated person of a swap dealer or major swap participant'' means
a person who is associated with a swap dealer or major swap participant
as a partner, officer, employee, or agent
[[Page 64174]]
(or any person occupying a similar status or performing similar
functions), in any capacity that involves: (i) The solicitation or
acceptance of swaps; or (ii) the supervision of any person or persons
so engaged. The definition contains an exclusion, however, stating that
other than for purposes of CEA section 4s(b)(6), the term ``associated
person of a swap dealer or major swap participant'' does not include
any person associated with a swap dealer or major swap participant the
functions of which are solely clerical or ministerial.
Thus, except to the extent that the Commodity Futures Trading
Commission (Commission or CFTC) specifically provided by rule,
regulation, or order, an SD or MSP would be subject to the prohibition
against permitting a person associated with the SD or MSP (including a
person employed in a clerical or ministerial capacity) to effect or be
involved in effecting swaps if the associated person were subject to a
statutory disqualification.
On January 19, 2012, the Commission published in the Federal
Register regulations that provide for the registration of SDs and
MSPs.\3\ Among these new regulations were Regulation 1.3(aa)(6),\4\
which amended the existing definition of ``associated person'' in the
Commission's regulations to include associated persons of SDs and MSPs,
and Regulation 23.22, which incorporated the prohibition set forth in
CEA section 4s(b)(6). With respect to SDs or MSPs, Regulation
1.3(aa)(6) provides that the term ``associated person'' means any
natural person who is associated with an SD or MSP as a partner,
officer, employee, agent (or any natural person occupying a similar
status or performing similar functions), in any capacity that involves
the solicitation or acceptance of swaps (other than in a clerical or
ministerial capacity); or the supervision of any person or persons so
engaged. The exclusion in Regulation 1.3(aa)(6) from the definition of
associated person of an SD or MSP for persons who act in a clerical or
ministerial capacity is consistent with the definition (and exclusion
for clerical or ministerial activity) in the other provisions in
Regulation 1.3(aa) that define the term ``associated person'' in the
context of other Commission registrants.\5\
---------------------------------------------------------------------------
\3\ See 77 FR 2613 (Jan. 19, 2012).
\4\ 17 CFR 1.3(aa)(6). The Commission's regulations also can be
accessed through the Commission's Web site.
\5\ See also CEA Section 4k(1), which excludes from associated
person registration a person who, in a clerical or ministerial
capacity, solicits or accept customer orders for a futures
commission merchant or an introducing broker.
---------------------------------------------------------------------------
B. The Proposal
Regulation 23.22, by its terms, applies to an associated person of
an SD or MSP as defined in section 1a(4) of the Act and Regulation
1.3(aa). Because Regulation 1.3(aa)(6) contains a general exclusion
from the associated person definition for a person employed in a
clerical or ministerial capacity, and the exclusion in CEA section
1a(4) must be read in conjunction with CEA section 4s(b)(6), in
November 2012 the National Futures Association (NFA) \6\ recommended
that the Commission clarify that the prohibition in CEA section
4s(b)(6) does not bar association with an SD or MSP by employees who
are employed in a clerical or ministerial capacity.
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\6\ Letter from Thomas W. Sexton, Senior Vice President and
General Counsel, NFA, to Gary Barnett, Director of the Division of
Swap Dealer and Intermediary Oversight, dated November 12, 2012. NFA
is a registered futures association (and the sole association so
registered) under CEA Section 17.
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In light of NFA's recommendation, and in accordance with the
language in CEA section 4s(b)(6) that qualifies the Prohibition
(``Except to the extent otherwise specifically provided by rule,
regulation, or order''), the Commission proposed to amend paragraph (a)
of Regulation 23.22 (``Proposal'') \7\ to clarify that the Prohibition
does not apply to an individual employed by an SD or MSP in a clerical
or ministerial capacity.\8\
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\7\ 78 FR 20848 (Apr. 8, 2013).
\8\ In this regard, the Commission noted in the Proposal that
pursuant to the authority granted it in CEA section 4s(b)(6), it had
previously adopted an exception from the Prohibition for a person
already listed as a principal of, or already registered as an
associated person of, another Commission registrant, notwithstanding
a statutory disqualification. See Regulation 23.22(b), proviso.
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II. Comments on the Proposal
The Commission received one comment letter on the Proposal. It
stated that adoption of the Proposal would ``reduce regulatory burden
and reduce the costs of determining whether a clerical or ministerial
employee is statutorily disqualified'' and, further, that ``[t]he
Proposed rule is reasonable and will improve regulatory efficiency.''
\9\
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\9\ Comment letter from Chris Barnard at page 1 (June 3, 2013).
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III. The Final Regulation
In light of the foregoing, the Commission is adopting as proposed
an amendment to paragraph (a) of Regulation 23.22 to clarify that the
Prohibition does not apply to an individual employed by an SD or MSP in
a clerical or ministerial capacity.
IV. Related Matters
A. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) \10\ requires federal
agencies, in promulgating regulations, to consider whether those
regulations will have a significant economic impact on small entities
and, if so, to provide a regulatory flexibility analysis respecting the
impact.\11\ The Commission previously has determined that SDs and MSPs
are not ``small entities'' for RFA purposes.\12\ Moreover, adoption of
the amendment to Regulation 23.22(a) as proposed will not have a
significant economic impact on any person who will be affected thereby,
because it will not impose any additional operational requirements or
otherwise direct or confine the activities of affected persons.
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\10\ 5 U.S.C. 601 et seq. (2006).
\11\ By its terms, the RFA does not apply to ``individuals.''
See 48 FR 14933, 14954 n. 115 (Apr. 6, 1983).
\12\ See 77 FR 2613, 2620 (Jan. 19, 2012).
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The Commission did not receive any comments regarding its RFA
analysis in the Proposal. Accordingly, pursuant to 5 U.S.C. 605(b), the
Chairman, on behalf of the Commission, hereby certifies that the
regulation being published in this Federal Register release will not
have a significant economic impact on a substantial number of small
entities.
B. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) \13\ 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 regulation being published in
this Federal Register release clarifies that the Prohibition does not
apply where the person in question is employed in a clerical or
ministerial capacity. As discussed in the Proposal, the amendment will
not impose a ``burden'' or ``collection of information'' as those terms
are defined in the PRA.\14\
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\13\ 44 U.S.C. 3501 et seq.
\14\ 78 FR 20848, 20849 (Apr. 8, 2013).
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The Commission did not receive any comments regarding its PRA
analysis in the Proposal. Accordingly, for purposes of the PRA, the
Chairman, on behalf of the Commission, certifies that the regulation
being published in this Federal Register release will not impose any
new reporting or recordkeeping requirements.
C. Cost-Benefit Considerations
CEA section 15(a) requires the Commission to consider the costs and
benefits of its actions before issuing a
[[Page 64175]]
rulemaking under the CEA. CEA section 15(a) further specifies that the
costs and benefits shall be evaluated in light of 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) factors.
As is explained above, the amendment to Regulation 23.22(a) makes a
clarifying change to the text of one of the Commission's regulations
adopted to reflect changes made to the CEA by the Dodd-Frank Act, by
specifying that the prohibition against an SD or MSP permitting a
statutorily disqualified person to associate with it does not include a
person employed in a clerical or ministerial capacity.
Costs. With respect to costs, the Commission believes that adoption
of the amendment to Regulation 23.22(a) will not impose any costs. This
is because the amendment clarifies that an SD or MSP need not consider
whether CEA section 4s(b)(6) applies to employees performing clerical
or ministerial duties. Thus the Commission does not believe that any
new costs will be imposed.
Benefits. With respect to benefits, as discussed in the Proposal,
the Commission believes that the amendment to Regulation 23.22(a) will
benefit SDs and MSPs by reducing the search costs associated with
determining whether a clerical or ministerial employee is statutorily
disqualified. This, in turn, mitigates the existing cost of compliance
with CEA section 4s(b)(6). As such, it is an ``other public interest
consideration'' under CEA section 15(a), referred to above.
Public Comment. The Commission invited public comment on its cost-
benefit considerations, but no such comments were received.
List of Subjects in 17 CFR Part 23
Associated persons, Commodity futures, Major swap participants,
Ministerial or clerical employees, Registration, Statutory
disqualification, Swap dealers, Swaps.
For the reasons presented above, the Commodity Futures Trading
Commission hereby amends 17 CFR part 23 as follows:
PART 23--SWAP DEALERS AND MAJOR SWAP PARTICIPANTS
0
1. The authority citation for part 23 continues to read as follows:
Authority: 7 U.S.C. 1a, 2, 6, 6a, 6b, 6b-1, 6c, 6p, 6r, 6s, 6t,
9, 9a, 12, 12a, 13b, 13c, 16a, 18, 19, and 21.
0
2. Amend Sec. 23.22 by revising the section heading and paragraph (a)
to read as follows:
Sec. 23.22 Prohibition against statutory disqualification in the case
of an associated person of a swap dealer or major swap participant.
(a) Definition. For purposes of this section, the term ``person''
means an ``associated person of a swap dealer or major swap
participant'' as defined in section 1a(4) of the Act and Sec.
1.3(aa)(6) of this chapter, but does not include an individual employed
in a clerical or ministerial capacity.
* * * * *
Issued in Washington, DC, on October 22, 2013, by the
Commission.
Christopher J. Kirkpatrick,
Deputy Secretary of the Commission.
Appendix to Swap Dealers and Major Swap Participants; Clerical or
Ministerial Employees--Commission Voting Summary
Note: The following appendix will not appear in the Code of
Federal Regulations.
Commission Voting Summary
On this matter, Chairman Gensler and Commissioners Chilton,
O'Malia, and Wetjen voted in the affirmative; no Commissioner voted
in the negative.
[FR Doc. 2013-25279 Filed 10-25-13; 8:45 am]
BILLING CODE 6351-01-P