Enhancing Protections Afforded Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations; Correction, 26831-26834 [2014-10650]
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Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations
less potent or toxic may be excluded
from the requirements of this part based
upon a determination by the
Administrator that the attenuated strain
or modified toxin does not pose a severe
threat to public health and safety,
animal health, or animal products.
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§ 121.5
[Amended]
10. In § 121.5, paragraph (a)(3)(i) is
amended by removing the words ‘‘and
swine’’ and adding the words ‘‘or
swine’’ in their place.
■ 11. Section 121.6 is amended as
follows:
■ a. In paragraph (a)(3)(i), by removing
the second occurrence of the word
‘‘and’’ and adding the word ‘‘or’’ in its
place.
■ b. By revising paragraphs (e) and (f).
The revisions read as follows:
■
§ 121.6 Exemptions for overlap select
agents and toxins.
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*
(e) If it is necessary to respond to a
domestic or foreign agricultural
emergency involving an overlap select
agent or toxin, the Administrator may
exempt an individual or entity from the
requirements, in whole or in part, of this
part for up to 30 calendar days. The
Administrator may extend the
exemption once for an additional 30
days.
(f) Upon request of the Secretary of
Health and Human Services, the
Administrator may exempt an
individual or entity from the
requirements, in whole or in part, of this
part for up to 30 calendar days if the
Secretary of Health and Human Services
has granted an exemption for a public
health emergency involving an overlap
select agent or toxin. The Administrator
may extend the exemption once for an
additional 30 days.
§ 121.9
[Amended]
12. In § 121.9, paragraph (c)(1) is
amended by removing the words ‘‘and
swine’’ and adding the words ‘‘or
swine’’ in their place.
■
§ 121.11
[Amended]
13. Section 121.11 is amended as
follows:
■ a. In paragraph (c)(2), by adding the
words ‘‘(including arthropods)’’ after the
word ‘‘animals’’.
■ b. In paragraph (d)(2), by adding the
words ‘‘if the potential to access to
select agents or toxins exists’’ after the
words ‘‘approved individual’’.
■ c. In paragraph (g), by removing the
word ‘‘Internet’’ and adding the words
‘‘National Select Agent Registry’’ in its
place.
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■
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14. Section 121.13 is amended as
follows:
■ a. By revising paragraph (a).
■ b. By removing paragraph (b).
■ c. By redesignating paragraphs (c) and
(d) as paragraphs (b) and (c),
respectively.
■ d. In newly redesignated paragraph
(b), by removing the words ‘‘paragraph
(b)’’ and adding the words ‘‘paragraph
(a)’’ in their place.
■ e. In newly redesignated paragraph
(c), by removing the words ‘‘paragraph
(b)’’ and adding the words ‘‘paragraph
(a)’’ in their place.
The revision reads as follows:
■
26831
November 14, 2013 (78 FR 68506).
Those rules, 17 CFR Parts 1, 3, 22, 30,
and 140, took effect on January 13, 2014.
This correction amends Appendix B to
17 CFR 1.20 and Appendix B to 17 CFR
1.26 by removing a phrase from both
appendices.
DATES:
Effective on May 12, 2014.
FOR FURTHER INFORMATION CONTACT:
AGENCY:
Parisa Abadi, Attorney-Advisor, 202–
418–6620, pabadi@cftc.gov, Division of
Clearing and Risk, Commodity Futures
Trading Commission, Three Lafayette
Centre, 1155 21st Street NW.,
Washington, DC 20581.
SUPPLEMENTARY INFORMATION: In the
Federal Register of November 14, 2013
(78 FR 68506), the Commission
published final rules adopting new
regulations and amending existing
regulations to require enhanced
customer protections, risk management
programs, internal monitoring and
controls, capital and liquidity standards,
customer disclosures, and auditing and
examination programs for futures
commission merchants (‘‘FCMs’’). The
final rules also address certain related
issues concerning derivatives clearing
organizations (‘‘DCOs’’), including the
requirement that a DCO obtain a written
acknowledgment from each depository
or money market mutual fund with
which the DCO holds or invests
customer funds, in the form of a
standard template letter set forth in
Appendix B to 17 CFR 1.20—
Derivatives Clearing Organization
Acknowledgment Letter for CFTC
Regulation 1.20 Customer Segregated
Account, and in Appendix B to 17 CFR
1.26—Derivatives Clearing Organization
Acknowledgment Letter for CFTC
Regulation 1.26 Customer Segregated
Money Market Mutual Fund Account,
respectively (each an ‘‘Acknowledgment
Letter’’).
The sixth full paragraph 1 of the body
of the Acknowledgment Letter set forth
in Appendix B to 17 CFR 1.20 and the
seventh full paragraph of the body of the
Acknowledgment Letter set forth in
Appendix B to 17 CFR 1.26 address the
depository’s or money market mutual
fund’s obligations in the event of the
bankruptcy of the DCO account holder.
The provisions are intended to relate
exclusively to the bankruptcy of the
account holder and should not
additionally refer to the bankruptcy of
The Commodity Futures
Trading Commission (‘‘Commission’’ or
‘‘CFTC’’) is correcting final rules
published in the Federal Register of
1 This paragraph, as revised, will become the
seventh full paragraph of the body of the
Acknowledgment Letter set forth in Appendix B to
17 CFR 1.20, after the format of that
Acknowledgment Letter is conformed to the format
of the Acknowledgment Letter set forth in
Appendix B to 17 CFR 1.26.
§ 121.13
Restricted experiments.
(a) An individual or entity may not
conduct, or possess products resulting
from, the following experiments unless
approved by and conducted in
accordance with the conditions
prescribed by the Administrator:
(1) Experiments that involve the
deliberate transfer of, or selection for, a
drug resistance trait to select agents that
are not known to acquire the trait
naturally, if such acquisition could
compromise the control of disease
agents in humans, veterinary medicine,
or agriculture.
(2) Experiments involving the
deliberate formation of synthetic or
recombinant DNA containing genes for
the biosynthesis of select toxins lethal
for vertebrates at an LD[50] <100 ng/kg
body weight.
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Done in Washington, DC, this 1st day of
May 2014.
Kevin Shea,
Administrator, Animal and Plant Health
Inspection Service.
[FR Doc. 2014–10741 Filed 5–9–14; 8:45 am]
BILLING CODE 3410–34–P
COMMODITY FUTURES TRADING
COMMISSION
17 CFR Part 1
RIN 3038–AD88
Enhancing Protections Afforded
Customers and Customer Funds Held
by Futures Commission Merchants
and Derivatives Clearing
Organizations; Correction
Commodity Futures Trading
Commission.
ACTION: Correcting amendments.
SUMMARY:
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26832
Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations
‘‘any of our futures commission
merchant clearing members.’’
To correct this error, the Commission
is making a correcting amendment to
remove the reference to ‘‘futures
commission merchant clearing
members’’ found in the text of
Appendix B to 17 CFR 1.20 and
Appendix B to 17 CFR 1.26. The
Commission is also adopting
conforming changes in grammar,
punctuation, and formatting.
List of Subjects in 17 CFR Part 1
Brokers, Commodity futures,
Consumer protection, Reporting and
recordkeeping requirements.
Accordingly, 17 CFR part 1 is
corrected by making the following
correcting amendments:
PART 1—GENERAL REGULATIONS
UNDER THE COMMODITY EXCHANGE
ACT
1. The authority citation for part 1
continues to read as follows:
■
Authority: 7 U.S.C. 1a, 2, 5, 6, 6a, 6b, 6c,
6d, 6e, 6f, 6g, 6h, 6i, 6k, 6l, 6m, 6n, 6o, 6p,
6r, 6s, 7, 7a–1, 7a–2, 7b, 7b–3, 8, 9, 10a, 12,
12a, 12c, 13a, 13a–1, 16, 16a, 19, 21, 23, and
24, as amended by Title VII of the DoddFrank Wall Street Reform and Consumer
Protection Act, Pub. L. 111–203, 124 Stat.
1376 (2010).
2. Revise Appendix B to § 1.20 to read
as follows:
■
§ 1.20 Futures customer funds to be
segregated and separately accounted for.
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Appendix B to § 1.20—Derivatives
Clearing Organization
Acknowledgment Letter for CFTC
Regulation 1.20 Customer Segregated
Account
[Date]
[Name and Address of Bank or Trust
Company]
We refer to the Segregated Account(s)
which [Name of Derivatives Clearing
Organization] (‘‘we’’ or ‘‘our’’) have opened
or will open with [Name of Bank or Trust
Company] (‘‘you’’ or ‘‘your’’) entitled:
[Name of Derivatives Clearing Organization]
Futures Customer Omnibus Account, CFTC
Regulation 1.20 Customer Segregated
Account under Sections 4d(a) and 4d(b) of
the Commodity Exchange Act [and, if
applicable, ‘‘, Abbreviated as [short title
reflected in the depository’s electronic
system]’’]
Account Number(s): [ ]
(collectively, the ‘‘Account(s)’’).
You acknowledge that we have opened or
will open the above-referenced Account(s)
for the purpose of depositing, as applicable,
money, securities and other property
(collectively the ‘‘Funds’’) of customers who
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trade commodities, options, swaps, and other
products, as required by Commodity Futures
Trading Commission (‘‘CFTC’’) Regulations,
including Regulation 1.20, as amended; that
the Funds held by you, hereafter deposited
in the Account(s) or accruing to the credit of
the Account(s), will be separately accounted
for and segregated on your books from our
own funds and from any other funds or
accounts held by us in accordance with the
provisions of the Commodity Exchange Act,
as amended (the ‘‘Act’’), and Part 1 of the
CFTC’s regulations, as amended; and that the
Funds must otherwise be treated in
accordance with the provisions of Section 4d
of the Act and CFTC regulations thereunder.
Furthermore, you acknowledge and agree
that such Funds may not be used by you or
by us to secure or guarantee any obligations
that we might owe to you, and they may not
be used by us to secure or obtain credit from
you. You further acknowledge and agree that
the Funds in the Account(s) shall not be
subject to any right of offset or lien for or on
account of any indebtedness, obligations or
liabilities we may now or in the future have
owing to you. This prohibition does not
affect your right to recover funds advanced
in the form of cash transfers, lines of credit,
repurchase agreements or other similar
liquidity arrangements you make in lieu of
liquidating non-cash assets held in the
Account(s) or in lieu of converting cash held
in the Account(s) to cash in a different
currency.
You agree to reply promptly and directly
to any request for confirmation of account
balances or provision of any other
information regarding or related to the
Account(s) from the director of the Division
of Clearing and Risk of the CFTC or the
director of the Division of Swap Dealer and
Intermediary Oversight of the CFTC, or any
successor divisions, or such directors’
designees, and this letter constitutes the
authorization and direction of the
undersigned on our behalf to release the
requested information without further notice
to or consent from us.
The parties agree that all actions on your
part to respond to the above information
requests will be made in accordance with,
and subject to, such usual and customary
authorization verification and authentication
policies and procedures as may be employed
by you to verify the authority of, and
authenticate the identity of, the individual
making any such information request, in
order to provide for the secure transmission
and delivery of the requested information to
the appropriate recipient(s).
We will not hold you responsible for acting
pursuant to any information request from the
director of the Division of Clearing and Risk
of the CFTC or the director of the Division
of Swap Dealer and Intermediary Oversight
of the CFTC, or any successor divisions, or
such directors’ designees, upon which you
have relied after having taken measures in
accordance with your applicable policies and
procedures to assure that such request was
provided to you by an individual authorized
to make such a request.
In the event that we become subject to
either a voluntary or involuntary petition for
relief under the U.S. Bankruptcy Code, we
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acknowledge that you will have no obligation
to release the Funds held in the Account(s),
except upon instruction of the Trustee in
Bankruptcy or pursuant to the Order of the
respective U.S. Bankruptcy Court.
Notwithstanding anything in the foregoing
to the contrary, nothing contained herein
shall be construed as limiting your right to
assert any right of offset or lien on assets that
are not Funds maintained in the Account(s),
or to impose such charges against us or any
proprietary account maintained by us with
you. Further, it is understood that amounts
represented by checks, drafts or other items
shall not be considered to be part of the
Account(s) until finally collected.
Accordingly, checks, drafts and other items
credited to the Account(s) and subsequently
dishonored or otherwise returned to you or
reversed, for any reason, and any claims
relating thereto, including but not limited to
claims of alteration or forgery, may be
charged back to the Account(s), and we shall
be responsible to you as a general endorser
of all such items whether or not actually so
endorsed.
You may conclusively presume that any
withdrawal from the Account(s) and the
balances maintained therein are in
conformity with the Act and CFTC
regulations without any further inquiry,
provided that, in the ordinary course of your
business as a depository, you have no notice
of or actual knowledge of a potential
violation by us of any provision of the Act
or the CFTC regulations that relates to the
segregation of customer funds; and you shall
not in any manner not expressly agreed to
herein be responsible to us for ensuring
compliance by us with such provisions of the
Act and CFTC regulations; however, the
aforementioned presumption does not affect
any obligation you may otherwise have under
the Act or CFTC regulations.
You may, and are hereby authorized to,
obey the order, judgment, decree or levy of
any court of competent jurisdiction or any
governmental agency with jurisdiction,
which order, judgment, decree or levy relates
in whole or in part to the Account(s). In any
event, you shall not be liable by reason of any
action or omission to act pursuant to any
such order, judgment, decree or levy, to us
or to any other person, firm, association or
corporation even if thereafter any such order,
decree, judgment or levy shall be reversed,
modified, set aside or vacated.
The terms of this letter agreement shall
remain binding upon the parties, their
successors and assigns and, for the avoidance
of doubt, regardless of a change in the name
of either party. This letter agreement
supersedes and replaces any prior agreement
between the parties in connection with the
Account(s), including but not limited to any
prior acknowledgment letter agreement, to
the extent that such prior agreement is
inconsistent with the terms hereof. In the
event of any conflict between this letter
agreement and any other agreement between
the parties in connection with the
Account(s), this letter agreement shall govern
with respect to matters specific to Section 4d
of the Act and the CFTC’s regulations
thereunder, as amended.
This letter agreement shall be governed by
and construed in accordance with the laws
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Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations
of [Insert governing law] without regard to
the principles of choice of law.
Please acknowledge that you agree to abide
by the requirements and conditions set forth
above by signing and returning to us the
enclosed copy of this letter agreement, and
that you further agree to provide a copy of
this fully executed letter agreement directly
to the CFTC (via electronic means in a format
and manner determined by the CFTC). We
hereby authorize and direct you to provide
such copy without further notice to or
consent from us, no later than three business
days after opening the Account(s) or revising
this letter agreement, as applicable.
[Name of Derivatives Clearing Organization]
By:
Print Name:
Title:
ACKNOWLEDGED AND AGREED:
[Name of Bank or Trust Company]
By:
Print Name:
Title:
Contact Information: [Insert phone number
and email address]
DATE:
3. Revise Appendix B to § 1.26 to read
as follows:
■
§ 1.26 Deposit of instruments purchased
with futures customer funds.
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Appendix B to § 1.26—Derivatives
Clearing Organization
Acknowledgment Letter for CFTC
Regulation 1.26 Customer Segregated
Money Market Mutual Fund Account
[Date]
[Name and Address of Money Market Mutual
Fund]
We propose to invest funds held by [Name
of Derivatives Clearing Organization] (‘‘we’’
or ‘‘our’’) on behalf of customers in shares of
[Name of Money Market Mutual Fund]
(‘‘you’’ or ‘‘your’’) under account(s) entitled
(or shares issued to):
[Name of Derivatives Clearing Organization]
Futures Customer Omnibus Account, CFTC
Regulation 1.26 Customer Segregated
Money Market Mutual Fund Account
under Sections 4d(a) and 4d(b) of the
Commodity Exchange Act [and, if
applicable, ‘‘, Abbreviated as [short title
reflected in the depository’s electronic
system]’’]
Account Number(s): [
]
(collectively, the ‘‘Account(s)’’).
You acknowledge that we are holding these
funds, including any shares issued and
amounts accruing in connection therewith
(collectively, the ‘‘Shares’’), for the benefit of
customers who trade commodities, options,
swaps and other products, as required by
Commodity Futures Trading Commission
(‘‘CFTC’’) Regulation 1.26, as amended; that
the Shares held by you, hereafter deposited
in the Account(s) or accruing to the credit of
the Account(s), will be separately accounted
for and segregated on your books from our
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own funds and from any other funds or
accounts held by us in accordance with the
provisions of the Commodity Exchange Act,
as amended (the ‘‘Act’’), and Part 1 of the
CFTC’s regulations, as amended; and that the
Shares must otherwise be treated in
accordance with the provisions of Section 4d
of the Act and CFTC regulations thereunder.
Furthermore, you acknowledge and agree
that such Shares may not be used by you or
by us to secure or guarantee any obligations
that we might owe to you, and they may not
be used by us to secure or obtain credit from
you. You further acknowledge and agree that
the Shares in the Account(s) shall not be
subject to any right of offset or lien for or on
account of any indebtedness, obligations or
liabilities we may now or in the future have
owing to you.
You agree to reply promptly and directly
to any request for confirmation of account
balances or provision of any other
information regarding or related to the
Account(s) from the director of the Division
of Clearing and Risk of the CFTC or the
director of the Division of Swap Dealer and
Intermediary Oversight of the CFTC, or any
successor divisions, or such directors’
designees, and this letter constitutes the
authorization and direction of the
undersigned on our behalf to release the
requested information without further notice
to or consent from us.
The parties agree that all actions on your
part to respond to the above information
requests will be made in accordance with,
and subject to, such usual and customary
authorization verification and authentication
policies and procedures as may be employed
by you to verify the authority of, and
authenticate the identity of, the individual
making any such information request, in
order to provide for the secure transmission
and delivery of the requested information to
the appropriate recipient(s).
We will not hold you responsible for acting
pursuant to any information request from the
director of the Division of Clearing and Risk
of the CFTC or the director of the Division
of Swap Dealer and Intermediary Oversight
of the CFTC, or any successor divisions, or
such directors’ designees, upon which you
have relied after having taken measures in
accordance with your applicable policies and
procedures to assure that such request was
provided to you by an individual authorized
to make such a request.
In the event that we become subject to
either a voluntary or involuntary petition for
relief under the U.S. Bankruptcy Code, we
acknowledge that you will have no obligation
to release the Shares held in the Account(s),
except upon instruction of the Trustee in
Bankruptcy or pursuant to the Order of the
respective U.S. Bankruptcy Court.
Notwithstanding anything in the foregoing
to the contrary, nothing contained herein
shall be construed as limiting your right to
assert any right of offset or lien on assets that
are not Shares maintained in the Account(s),
or to impose such charges against us or any
proprietary account maintained by us with
you. Further, it is understood that amounts
represented by checks, drafts or other items
shall not be considered to be part of the
Account(s) until finally collected.
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26833
Accordingly, checks, drafts and other items
credited to the Account(s) and subsequently
dishonored or otherwise returned to you or
reversed, for any reason, and any claims
relating thereto, including but not limited to
claims of alteration or forgery, may be
charged back to the Account(s), and we shall
be responsible to you as a general endorser
of all such items whether or not actually so
endorsed.
You may conclusively presume that any
withdrawal from the Account(s) and the
balances maintained therein are in
conformity with the Act and CFTC
regulations without any further inquiry,
provided that, in the ordinary course of your
business as a depository, you have no notice
of or actual knowledge of a potential
violation by us of any provision of the Act
or the CFTC regulations that relates to the
segregation of customer funds; and you shall
not in any manner not expressly agreed to
herein be responsible to us for ensuring
compliance by us with such provisions of the
Act and CFTC regulations; however, the
aforementioned presumption does not affect
any obligation you may otherwise have under
the Act or CFTC regulations.
You may, and are hereby authorized to,
obey the order, judgment, decree or levy of
any court of competent jurisdiction or any
governmental agency with jurisdiction,
which order, judgment, decree or levy relates
in whole or in part to the Account(s). In any
event, you shall not be liable by reason of any
action or omission to act pursuant to any
such order, judgment, decree or levy, to us
or to any other person, firm, association or
corporation even if thereafter any such order,
decree, judgment or levy shall be reversed,
modified, set aside or vacated.
We are permitted to invest customers’
funds in money market mutual funds
pursuant to CFTC Regulation 1.25. That rule
sets forth the following conditions, among
others, with respect to any investment in a
money market mutual fund:
(1) The net asset value of the fund must be
computed by 9:00 a.m. of the business day
following each business day and be made
available to us by that time;
(2) The fund must be legally obligated to
redeem an interest in the fund and make
payment in satisfaction thereof by the close
of the business day following the day on
which we make a redemption request except
as otherwise specified in CFTC Regulation
1.25(c)(5)(ii); and,
(3) The agreement under which we invest
customers’ funds must not contain any
provision that would prevent us from
pledging or transferring fund shares.
The terms of this letter agreement shall
remain binding upon the parties, their
successors and assigns and, for the avoidance
of doubt, regardless of a change in the name
of either party. This letter agreement
supersedes and replaces any prior agreement
between the parties in connection with the
Account(s), including but not limited to any
prior acknowledgment letter agreement, to
the extent that such prior agreement is
inconsistent with the terms hereof. In the
event of any conflict between this letter
agreement and any other agreement between
the parties in connection with the
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Account(s), this letter agreement shall govern
with respect to matters specific to Section 4d
of the Act and the CFTC’s regulations
thereunder, as amended.
This letter agreement shall be governed by
and construed in accordance with the laws
of [Insert governing law] without regard to
the principles of choice of law.
Please acknowledge that you agree to abide
by the requirements and conditions set forth
above by signing and returning to us the
enclosed copy of this letter agreement, and
that you further agree to provide a copy of
this fully executed letter agreement directly
to the CFTC (via electronic means in a format
and manner determined by the CFTC) in
accordance with CFTC Regulation 1.20. We
hereby authorize and direct you to provide
such copy without further notice to or
consent from us, no later than three business
days after opening the Account(s) or revising
this letter agreement, as applicable.
[Name of Derivatives Clearing Organization]
By:
Print Name:
Title:
ACKNOWLEDGED AND AGREED:
[Name of Money Market Mutual Fund]
By:
Print Name:
Title:
Contact Information: [Insert phone number
and email address]
DATE:
Issued in Washington, DC, on May 5, 2014,
by the Commission.
Christopher J. Kirkpatrick,
Deputy Secretary of the Commission.
[FR Doc. 2014–10650 Filed 5–9–14; 8:45 am]
BILLING CODE 6351–01–P
AGENCY FOR INTERNATIONAL
DEVELOPMENT
22 CFR Part 234
Ukraine Guarantees Issued Under the
Support for the Sovereignty, Integrity,
Democracy, and Economic Stability of
Ukraine Act of 2014—Standard Terms
and Conditions
Agency for International
Development (USAID).
ACTION: Final rule.
AGENCY:
This regulation prescribes the
procedures and standard terms and
conditions applicable to loan guarantees
to be issued for the benefit of Ukraine
pursuant to the Support for the
Sovereignty, Integrity, Democracy, and
Economic Stability of Ukraine Act of
2014.
DATES: Effective May 9, 2014.
FOR FURTHER INFORMATION CONTACT: D.
Bruce McPherson, Office of General
Counsel, U.S. Agency for International
Development, Washington, DC 20523–
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SUMMARY:
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16:04 May 09, 2014
Jkt 232001
6601; tel. 202–712–1611, fax 202–216–
3055.
SUPPLEMENTARY INFORMATION: Pursuant
to the Support for the Sovereignty,
Integrity, Democracy, and Economic
Stability of Ukraine Act of 2014 (Pub. L.
113–95), the United States of America,
acting through the U.S. Agency for
International Development, may issue
certain loan guarantees applicable to
sums borrowed by Ukraine (the
‘‘Borrower’’), not exceeding an aggregate
total of U.S. $1 billion in principal
amount. Upon issuance, the loan
guarantees shall ensure the Borrower’s
repayment of 100% of principal and
interest due under such borrowings 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 234
Foreign aid, Foreign relations,
Guaranteed loans, Loan programs—
foreign relations.
Authority and Issuance
Accordingly, a new part 234 is added
to Title 22, Chapter II, of the Code of
Federal Regulations, as follows:
PART 234—UKRAINE LOAN
GUARANTEES ISSUED UNDER THE
SUPPORT FOR THE SOVEREIGNTY,
INTEGRITY, DEMOCRACY, AND
ECONOMIC STABILITY OF UKRAINE
ACT OF 2014, PUB. L. 113–95—
STANDARD TERMS AND CONDITIONS
Sec.
234.1 Purpose.
234.2 Definitions.
234.3 The Guarantee.
234.4 Guarantee eligibility.
234.5 Non-impairment of the Guarantee.
234.6 Transferability of Guarantee; Note
Register.
234.7 Fiscal Agent obligations.
234.8 Event of Default; Application for
Compensation; payment.
234.9 No acceleration of Eligible Notes.
234.10 Payment to USAID of excess
amounts received by a Noteholder.
234.11 Subrogation of USAID.
234.12 Prosecution of claims.
234.13 Change in agreements.
234.14 Arbitration.
234.15 Notice.
234.16 Governing Law.
Appendix A to Part 234—Application for
Compensation
Authority: Pub. L. 113–95, 128 Stat. 1088.
PO 00000
Frm 00006
Fmt 4700
Sfmt 4700
§ 234.1
Purpose.
The purpose of the regulations in this
part is to prescribe the procedures and
standard terms and conditions
applicable to loan guarantees issued for
the benefit of the Borrower, pursuant to
the Support for the Sovereignty,
Integrity, Democracy, and Economic
Stability of Ukraine Act of 2014 (Pub. L.
113–95). The loan guarantees will be
issued as provided herein pursuant to
the Loan Guarantee Agreement, dated
April 14, 2014, between the United
States of America and Ukraine (the
‘‘Loan Guarantee Agreement’’). The loan
guarantee will apply to sums borrowed
during a period beginning on the date
that the Loan Guarantee Agreement
enters into force and ending thirty days
after such date, not exceeding an
aggregate total of one billion United
States Dollars ($1,000,000,000) in
principal amount. The loan guarantees
shall ensure the Borrower’s repayment
of 100% of principal and interest due
under such borrowings. The full faith
and credit of the United States of
America is pledged for the full payment
and performance of such guarantee
obligations.
§ 234.2
Definitions.
Wherever used in the standard terms
and conditions set out in this part:
Applicant means a Noteholder who
files an Application for Compensation
with USAID, either directly or through
the Fiscal Agent acting on behalf of a
Noteholder.
Application for Compensation means
an executed application in the form of
Appendix A to this part which a
Noteholder, or the Fiscal Agent on
behalf of a Noteholder, files with USAID
pursuant to § 234.8.
Borrower means Ukraine.
Business Day means any day other
than a day on which banks in New
York, NY are closed or authorized to be
closed or a day which is observed as a
federal holiday in Washington, DC, by
the United States Government.
Date of Application means the date on
which an Application for Compensation
is actually received by USAID pursuant
to § 234.15.
Defaulted Payment means, as of any
date and in respect of any Eligible Note,
any Interest Amount and/or Principal
Amount not paid when due.
Eligible Note(s) means [a] Note[s]
meeting the eligibility criteria set out in
§ 234.4.
Fiscal Agency Agreement means the
agreement among USAID, the Borrower
and the Fiscal Agent pursuant to which
the Fiscal Agent agrees to provide fiscal
agency and trust services in respect of
the Note[s], a copy of which Fiscal
E:\FR\FM\12MYR1.SGM
12MYR1
]]>Agencies
[Federal Register Volume 79, Number 91 (Monday, May 12, 2014)]
[Rules and Regulations]
[Pages 26831-26834]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10650]
=======================================================================
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 1
RIN 3038-AD88
Enhancing Protections Afforded Customers and Customer Funds Held
by Futures Commission Merchants and Derivatives Clearing Organizations;
Correction
AGENCY: Commodity Futures Trading Commission.
ACTION: Correcting amendments.
-----------------------------------------------------------------------
SUMMARY: The Commodity Futures Trading Commission (``Commission'' or
``CFTC'') is correcting final rules published in the Federal Register
of November 14, 2013 (78 FR 68506). Those rules, 17 CFR Parts 1, 3, 22,
30, and 140, took effect on January 13, 2014. This correction amends
Appendix B to 17 CFR 1.20 and Appendix B to 17 CFR 1.26 by removing a
phrase from both appendices.
DATES: Effective on May 12, 2014.
FOR FURTHER INFORMATION CONTACT: Parisa Abadi, Attorney-Advisor, 202-
418-6620, pabadi@cftc.gov, Division of Clearing and Risk, Commodity
Futures Trading Commission, Three Lafayette Centre, 1155 21st Street
NW., Washington, DC 20581.
SUPPLEMENTARY INFORMATION: In the Federal Register of November 14, 2013
(78 FR 68506), the Commission published final rules adopting new
regulations and amending existing regulations to require enhanced
customer protections, risk management programs, internal monitoring and
controls, capital and liquidity standards, customer disclosures, and
auditing and examination programs for futures commission merchants
(``FCMs''). The final rules also address certain related issues
concerning derivatives clearing organizations (``DCOs''), including the
requirement that a DCO obtain a written acknowledgment from each
depository or money market mutual fund with which the DCO holds or
invests customer funds, in the form of a standard template letter set
forth in Appendix B to 17 CFR 1.20--Derivatives Clearing Organization
Acknowledgment Letter for CFTC Regulation 1.20 Customer Segregated
Account, and in Appendix B to 17 CFR 1.26--Derivatives Clearing
Organization Acknowledgment Letter for CFTC Regulation 1.26 Customer
Segregated Money Market Mutual Fund Account, respectively (each an
``Acknowledgment Letter'').
The sixth full paragraph \1\ of the body of the Acknowledgment
Letter set forth in Appendix B to 17 CFR 1.20 and the seventh full
paragraph of the body of the Acknowledgment Letter set forth in
Appendix B to 17 CFR 1.26 address the depository's or money market
mutual fund's obligations in the event of the bankruptcy of the DCO
account holder. The provisions are intended to relate exclusively to
the bankruptcy of the account holder and should not additionally refer
to the bankruptcy of
[[Page 26832]]
``any of our futures commission merchant clearing members.''
---------------------------------------------------------------------------
\1\ This paragraph, as revised, will become the seventh full
paragraph of the body of the Acknowledgment Letter set forth in
Appendix B to 17 CFR 1.20, after the format of that Acknowledgment
Letter is conformed to the format of the Acknowledgment Letter set
forth in Appendix B to 17 CFR 1.26.
---------------------------------------------------------------------------
To correct this error, the Commission is making a correcting
amendment to remove the reference to ``futures commission merchant
clearing members'' found in the text of Appendix B to 17 CFR 1.20 and
Appendix B to 17 CFR 1.26. The Commission is also adopting conforming
changes in grammar, punctuation, and formatting.
List of Subjects in 17 CFR Part 1
Brokers, Commodity futures, Consumer protection, Reporting and
recordkeeping requirements.
Accordingly, 17 CFR part 1 is corrected by making the following
correcting amendments:
PART 1--GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT
0
1. The authority citation for part 1 continues to read as follows:
Authority: 7 U.S.C. 1a, 2, 5, 6, 6a, 6b, 6c, 6d, 6e, 6f, 6g,
6h, 6i, 6k, 6l, 6m, 6n, 6o, 6p, 6r, 6s, 7, 7a-1, 7a-2, 7b, 7b-3, 8,
9, 10a, 12, 12a, 12c, 13a, 13a-1, 16, 16a, 19, 21, 23, and 24, as
amended by Title VII of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010).
0
2. Revise Appendix B to Sec. 1.20 to read as follows:
Sec. 1.20 Futures customer funds to be segregated and separately
accounted for.
* * * * *
Appendix B to Sec. 1.20--Derivatives Clearing Organization
Acknowledgment Letter for CFTC Regulation 1.20 Customer Segregated
Account
[Date]
[Name and Address of Bank or Trust Company]
We refer to the Segregated Account(s) which [Name of Derivatives
Clearing Organization] (``we'' or ``our'') have opened or will open
with [Name of Bank or Trust Company] (``you'' or ``your'') entitled:
[Name of Derivatives Clearing Organization] Futures Customer Omnibus
Account, CFTC Regulation 1.20 Customer Segregated Account under
Sections 4d(a) and 4d(b) of the Commodity Exchange Act [and, if
applicable, ``, Abbreviated as [short title reflected in the
depository's electronic system]'']
Account Number(s): [ ]
(collectively, the ``Account(s)'').
You acknowledge that we have opened or will open the above-
referenced Account(s) for the purpose of depositing, as applicable,
money, securities and other property (collectively the ``Funds'') of
customers who trade commodities, options, swaps, and other products,
as required by Commodity Futures Trading Commission (``CFTC'')
Regulations, including Regulation 1.20, as amended; that the Funds
held by you, hereafter deposited in the Account(s) or accruing to
the credit of the Account(s), will be separately accounted for and
segregated on your books from our own funds and from any other funds
or accounts held by us in accordance with the provisions of the
Commodity Exchange Act, as amended (the ``Act''), and Part 1 of the
CFTC's regulations, as amended; and that the Funds must otherwise be
treated in accordance with the provisions of Section 4d of the Act
and CFTC regulations thereunder.
Furthermore, you acknowledge and agree that such Funds may not
be used by you or by us to secure or guarantee any obligations that
we might owe to you, and they may not be used by us to secure or
obtain credit from you. You further acknowledge and agree that the
Funds in the Account(s) shall not be subject to any right of offset
or lien for or on account of any indebtedness, obligations or
liabilities we may now or in the future have owing to you. This
prohibition does not affect your right to recover funds advanced in
the form of cash transfers, lines of credit, repurchase agreements
or other similar liquidity arrangements you make in lieu of
liquidating non-cash assets held in the Account(s) or in lieu of
converting cash held in the Account(s) to cash in a different
currency.
You agree to reply promptly and directly to any request for
confirmation of account balances or provision of any other
information regarding or related to the Account(s) from the director
of the Division of Clearing and Risk of the CFTC or the director of
the Division of Swap Dealer and Intermediary Oversight of the CFTC,
or any successor divisions, or such directors' designees, and this
letter constitutes the authorization and direction of the
undersigned on our behalf to release the requested information
without further notice to or consent from us.
The parties agree that all actions on your part to respond to
the above information requests will be made in accordance with, and
subject to, such usual and customary authorization verification and
authentication policies and procedures as may be employed by you to
verify the authority of, and authenticate the identity of, the
individual making any such information request, in order to provide
for the secure transmission and delivery of the requested
information to the appropriate recipient(s).
We will not hold you responsible for acting pursuant to any
information request from the director of the Division of Clearing
and Risk of the CFTC or the director of the Division of Swap Dealer
and Intermediary Oversight of the CFTC, or any successor divisions,
or such directors' designees, upon which you have relied after
having taken measures in accordance with your applicable policies
and procedures to assure that such request was provided to you by an
individual authorized to make such a request.
In the event that we become subject to either a voluntary or
involuntary petition for relief under the U.S. Bankruptcy Code, we
acknowledge that you will have no obligation to release the Funds
held in the Account(s), except upon instruction of the Trustee in
Bankruptcy or pursuant to the Order of the respective U.S.
Bankruptcy Court.
Notwithstanding anything in the foregoing to the contrary,
nothing contained herein shall be construed as limiting your right
to assert any right of offset or lien on assets that are not Funds
maintained in the Account(s), or to impose such charges against us
or any proprietary account maintained by us with you. Further, it is
understood that amounts represented by checks, drafts or other items
shall not be considered to be part of the Account(s) until finally
collected. Accordingly, checks, drafts and other items credited to
the Account(s) and subsequently dishonored or otherwise returned to
you or reversed, for any reason, and any claims relating thereto,
including but not limited to claims of alteration or forgery, may be
charged back to the Account(s), and we shall be responsible to you
as a general endorser of all such items whether or not actually so
endorsed.
You may conclusively presume that any withdrawal from the
Account(s) and the balances maintained therein are in conformity
with the Act and CFTC regulations without any further inquiry,
provided that, in the ordinary course of your business as a
depository, you have no notice of or actual knowledge of a potential
violation by us of any provision of the Act or the CFTC regulations
that relates to the segregation of customer funds; and you shall not
in any manner not expressly agreed to herein be responsible to us
for ensuring compliance by us with such provisions of the Act and
CFTC regulations; however, the aforementioned presumption does not
affect any obligation you may otherwise have under the Act or CFTC
regulations.
You may, and are hereby authorized to, obey the order, judgment,
decree or levy of any court of competent jurisdiction or any
governmental agency with jurisdiction, which order, judgment, decree
or levy relates in whole or in part to the Account(s). In any event,
you shall not be liable by reason of any action or omission to act
pursuant to any such order, judgment, decree or levy, to us or to
any other person, firm, association or corporation even if
thereafter any such order, decree, judgment or levy shall be
reversed, modified, set aside or vacated.
The terms of this letter agreement shall remain binding upon the
parties, their successors and assigns and, for the avoidance of
doubt, regardless of a change in the name of either party. This
letter agreement supersedes and replaces any prior agreement between
the parties in connection with the Account(s), including but not
limited to any prior acknowledgment letter agreement, to the extent
that such prior agreement is inconsistent with the terms hereof. In
the event of any conflict between this letter agreement and any
other agreement between the parties in connection with the
Account(s), this letter agreement shall govern with respect to
matters specific to Section 4d of the Act and the CFTC's regulations
thereunder, as amended.
This letter agreement shall be governed by and construed in
accordance with the laws
[[Page 26833]]
of [Insert governing law] without regard to the principles of choice
of law.
Please acknowledge that you agree to abide by the requirements
and conditions set forth above by signing and returning to us the
enclosed copy of this letter agreement, and that you further agree
to provide a copy of this fully executed letter agreement directly
to the CFTC (via electronic means in a format and manner determined
by the CFTC). We hereby authorize and direct you to provide such
copy without further notice to or consent from us, no later than
three business days after opening the Account(s) or revising this
letter agreement, as applicable.
[Name of Derivatives Clearing Organization]
By:
Print Name:
Title:
ACKNOWLEDGED AND AGREED:
[Name of Bank or Trust Company]
By:
Print Name:
Title:
Contact Information: [Insert phone number and email address]
DATE:
0
3. Revise Appendix B to Sec. 1.26 to read as follows:
Sec. 1.26 Deposit of instruments purchased with futures customer
funds.
* * * * *
Appendix B to Sec. 1.26--Derivatives Clearing Organization
Acknowledgment Letter for CFTC Regulation 1.26 Customer Segregated
Money Market Mutual Fund Account
[Date]
[Name and Address of Money Market Mutual Fund]
We propose to invest funds held by [Name of Derivatives Clearing
Organization] (``we'' or ``our'') on behalf of customers in shares
of [Name of Money Market Mutual Fund] (``you'' or ``your'') under
account(s) entitled (or shares issued to):
[Name of Derivatives Clearing Organization] Futures Customer Omnibus
Account, CFTC Regulation 1.26 Customer Segregated Money Market
Mutual Fund Account under Sections 4d(a) and 4d(b) of the Commodity
Exchange Act [and, if applicable, ``, Abbreviated as [short title
reflected in the depository's electronic system]'']
Account Number(s): [ ]
(collectively, the ``Account(s)'').
You acknowledge that we are holding these funds, including any
shares issued and amounts accruing in connection therewith
(collectively, the ``Shares''), for the benefit of customers who
trade commodities, options, swaps and other products, as required by
Commodity Futures Trading Commission (``CFTC'') Regulation 1.26, as
amended; that the Shares held by you, hereafter deposited in the
Account(s) or accruing to the credit of the Account(s), will be
separately accounted for and segregated on your books from our own
funds and from any other funds or accounts held by us in accordance
with the provisions of the Commodity Exchange Act, as amended (the
``Act''), and Part 1 of the CFTC's regulations, as amended; and that
the Shares must otherwise be treated in accordance with the
provisions of Section 4d of the Act and CFTC regulations thereunder.
Furthermore, you acknowledge and agree that such Shares may not
be used by you or by us to secure or guarantee any obligations that
we might owe to you, and they may not be used by us to secure or
obtain credit from you. You further acknowledge and agree that the
Shares in the Account(s) shall not be subject to any right of offset
or lien for or on account of any indebtedness, obligations or
liabilities we may now or in the future have owing to you.
You agree to reply promptly and directly to any request for
confirmation of account balances or provision of any other
information regarding or related to the Account(s) from the director
of the Division of Clearing and Risk of the CFTC or the director of
the Division of Swap Dealer and Intermediary Oversight of the CFTC,
or any successor divisions, or such directors' designees, and this
letter constitutes the authorization and direction of the
undersigned on our behalf to release the requested information
without further notice to or consent from us.
The parties agree that all actions on your part to respond to
the above information requests will be made in accordance with, and
subject to, such usual and customary authorization verification and
authentication policies and procedures as may be employed by you to
verify the authority of, and authenticate the identity of, the
individual making any such information request, in order to provide
for the secure transmission and delivery of the requested
information to the appropriate recipient(s).
We will not hold you responsible for acting pursuant to any
information request from the director of the Division of Clearing
and Risk of the CFTC or the director of the Division of Swap Dealer
and Intermediary Oversight of the CFTC, or any successor divisions,
or such directors' designees, upon which you have relied after
having taken measures in accordance with your applicable policies
and procedures to assure that such request was provided to you by an
individual authorized to make such a request.
In the event that we become subject to either a voluntary or
involuntary petition for relief under the U.S. Bankruptcy Code, we
acknowledge that you will have no obligation to release the Shares
held in the Account(s), except upon instruction of the Trustee in
Bankruptcy or pursuant to the Order of the respective U.S.
Bankruptcy Court.
Notwithstanding anything in the foregoing to the contrary,
nothing contained herein shall be construed as limiting your right
to assert any right of offset or lien on assets that are not Shares
maintained in the Account(s), or to impose such charges against us
or any proprietary account maintained by us with you. Further, it is
understood that amounts represented by checks, drafts or other items
shall not be considered to be part of the Account(s) until finally
collected. Accordingly, checks, drafts and other items credited to
the Account(s) and subsequently dishonored or otherwise returned to
you or reversed, for any reason, and any claims relating thereto,
including but not limited to claims of alteration or forgery, may be
charged back to the Account(s), and we shall be responsible to you
as a general endorser of all such items whether or not actually so
endorsed.
You may conclusively presume that any withdrawal from the
Account(s) and the balances maintained therein are in conformity
with the Act and CFTC regulations without any further inquiry,
provided that, in the ordinary course of your business as a
depository, you have no notice of or actual knowledge of a potential
violation by us of any provision of the Act or the CFTC regulations
that relates to the segregation of customer funds; and you shall not
in any manner not expressly agreed to herein be responsible to us
for ensuring compliance by us with such provisions of the Act and
CFTC regulations; however, the aforementioned presumption does not
affect any obligation you may otherwise have under the Act or CFTC
regulations.
You may, and are hereby authorized to, obey the order, judgment,
decree or levy of any court of competent jurisdiction or any
governmental agency with jurisdiction, which order, judgment, decree
or levy relates in whole or in part to the Account(s). In any event,
you shall not be liable by reason of any action or omission to act
pursuant to any such order, judgment, decree or levy, to us or to
any other person, firm, association or corporation even if
thereafter any such order, decree, judgment or levy shall be
reversed, modified, set aside or vacated.
We are permitted to invest customers' funds in money market
mutual funds pursuant to CFTC Regulation 1.25. That rule sets forth
the following conditions, among others, with respect to any
investment in a money market mutual fund:
(1) The net asset value of the fund must be computed by 9:00
a.m. of the business day following each business day and be made
available to us by that time;
(2) The fund must be legally obligated to redeem an interest in
the fund and make payment in satisfaction thereof by the close of
the business day following the day on which we make a redemption
request except as otherwise specified in CFTC Regulation
1.25(c)(5)(ii); and,
(3) The agreement under which we invest customers' funds must
not contain any provision that would prevent us from pledging or
transferring fund shares.
The terms of this letter agreement shall remain binding upon the
parties, their successors and assigns and, for the avoidance of
doubt, regardless of a change in the name of either party. This
letter agreement supersedes and replaces any prior agreement between
the parties in connection with the Account(s), including but not
limited to any prior acknowledgment letter agreement, to the extent
that such prior agreement is inconsistent with the terms hereof. In
the event of any conflict between this letter agreement and any
other agreement between the parties in connection with the
[[Page 26834]]
Account(s), this letter agreement shall govern with respect to
matters specific to Section 4d of the Act and the CFTC's regulations
thereunder, as amended.
This letter agreement shall be governed by and construed in
accordance with the laws of [Insert governing law] without regard to
the principles of choice of law.
Please acknowledge that you agree to abide by the requirements
and conditions set forth above by signing and returning to us the
enclosed copy of this letter agreement, and that you further agree
to provide a copy of this fully executed letter agreement directly
to the CFTC (via electronic means in a format and manner determined
by the CFTC) in accordance with CFTC Regulation 1.20. We hereby
authorize and direct you to provide such copy without further notice
to or consent from us, no later than three business days after
opening the Account(s) or revising this letter agreement, as
applicable.
[Name of Derivatives Clearing Organization]
By:
Print Name:
Title:
ACKNOWLEDGED AND AGREED:
[Name of Money Market Mutual Fund]
By:
Print Name:
Title:
Contact Information: [Insert phone number and email address]
DATE:
Issued in Washington, DC, on May 5, 2014, by the Commission.
Christopher J. Kirkpatrick,
Deputy Secretary of the Commission.
[FR Doc. 2014-10650 Filed 5-9-14; 8:45 am]
BILLING CODE 6351-01-P
