Amended and Restated Order Designating the Provider of Legal Entity Identifiers To Be Used in Recordkeeping and Swap Data Reporting Pursuant to the Commission's Regulations, 43718-43722 [2014-17643]
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Federal Register / Vol. 79, No. 144 / Monday, July 28, 2014 / Notices
responsible fishery within the
applicable management unit. NCDMF
will issue proclamations implementing
additional restrictions if necessary to
provide increased protection of Atlantic
sturgeon and other ESA-listed species or
lifting gillnet or area restrictions if
supported by NCDMF or NMFS
biological data. Restrictions may
include additional measures to reduce
fishing effort, reduced yardage,
seasonal/area closures, attendance
requirements, other gear limitations or
modifications, extensive outreach, and
an adaptive Observer Program. NCDMF
will also identify and adaptively
respond to areas of high potential for
Atlantic sturgeon bycatch. These
‘‘hotspots’’ will be defined as any area,
determined by geographically
enforceable boundaries, where Atlantic
sturgeon observations are unusually
high within a management unit or
subunit, such that the NCDMF Director
determines that closure and evaluation
is necessary to (1) avoid violation of a
take limit, or (2) provide adequate
protection or the Atlantic sturgeon, or
(3) to allow Atlantic sturgeon to
complete a seasonal migration and
minimize interactions. Temporary
‘‘hotspot’’ closures may be implemented
while data are gathered and analyzed.
‘‘Hotspot’’ areas will be identified and
handled proactively and reactively. For
any given management unit or subunit
during a season that shows high
Atlantic sturgeon abundance, NCDMF
may close the management unit or
subunit for the duration of the defined
season. If an area is closed as a
‘‘hotspot’’ multiple times throughout the
year or over a two-year period, NCDMF
will take proactive measures to close the
area for longer than a defined season. If
a particular area within a management
unit or subunit can be defined within
the unit as the ‘‘hotspot’’ that area can
be defined geographically and closed
within the unit temporarily or
permanently.
The amount of annual incidental take
of Atlantic sturgeon DPSs authorized is
expressed as either interaction or
mortality. Each year for ten years, for
both large and small mesh combined,
2,927 (169 of which could be
mortalities) Atlantic sturgeon could be
taken. These numbers are further broken
down by DPS and by large and small
mesh. Annual large mesh takes of
Carolina DPS fish could be up to 1655
(80 of which could be mortalities).
Annual large mesh takes of all other
DPS fish could be up to 548 (21 of
which could be mortalities). Annual
small mesh takes of Carolina DPS fish
could be up to 607 (58 of which could
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be mortalities). Annual small mesh
takes of all other DPS fish could be up
to 117 (10 of which could be
mortalities). Because reaching the level
of take for any Atlantic sturgeon would
end the incidental take authorization, it
is highly unlikely that all DPSs would
be impacted at these full levels.
Additionally, these levels could change
in years 4–10 of the permit due to
monitoring population trend data that
will come from the year 1–3 monitoring
period depicted in the Implementing
Agreement.
Issuance of this permit, as required by
the ESA, was based on a finding that
such permit (1) was applied for in good
faith, (2) will not operate to the
disadvantage of such endangered or
threatened species, and (3) is consistent
with the purposes and policies set forth
in section 2 of the ESA.
Dated: July 22, 2014.
Angela Somma,
Chief, Endangered Species Conservation
Division, Office of Protected Resources,
National Marine Fisheries Service.
[FR Doc. 2014–17645 Filed 7–25–14; 8:45 am]
BILLING CODE 3510–22–P
Table of Contents:
COMMODITY FUTURES TRADING
COMMISSION
Amended and Restated Order
Designating the Provider of Legal
Entity Identifiers To Be Used in
Recordkeeping and Swap Data
Reporting Pursuant to the
Commission’s Regulations
Commodity Futures Trading
Commission.
ACTION: Order.
AGENCY:
The Commodity Futures
Trading Commission (‘‘Commission’’)
has issued an Amended and Restated
Order to extend the Commission’s
designation of the Depository Trust and
Clearing Corporation (‘‘DTCC’’) and
Society for Worldwide Interbank
Financial Telecommunication
(‘‘SWIFT’’) joint venture (‘‘DTCC–
SWIFT’’) as the provider of legal entity
identifiers, or ‘‘LEIs,’’ pursuant to the
Commodity Exchange Act and the
Commission’s regulations. DTCC–
SWIFT’s designation was made by
Commission order issued on July 23,
2012. The designation was made for a
term of two years. The Amended and
Restated Order amends the
Commission’s order of July 23, 2012, as
previously amended on June 7, 2013, to
extend DTCC–SWIFT’s designation for
an additional one year, while the terms
of transition to a fully operational global
LEI system are finalized and
SUMMARY:
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implemented. Consistent with the terms
of the Commission’s order of July 23,
2012, as amended on June 7, 2013, the
Amended and Restated Order permits
registered entities and swap
counterparties subject to the
Commission’s jurisdiction to comply
with the specified legal entity identifier
requirements of the Commission’s
regulations by using identifiers issued
by DTCC–SWIFT, or any other pre-Local
Operating Unit (‘‘pre-LOU’’) that has
been endorsed by the Regulatory
Oversight Committee of the global LEI
system as being globally acceptable and
as issuing globally acceptable legal
entity identifiers.
FOR FURTHER INFORMATION CONTACT:
Srinivas Bangarbale, Chief Data Officer,
Office of Data and Technology, (202)
418–5315, sbangarbale@cftc.gov, or
Nora Flood, Attorney Advisor, Division
of Market Oversight, (202) 418–5354,
nflood@cftc.gov, Commodity Futures
Trading Commission, Three Lafayette
Centre, 1155 21st Street NW.,
Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
Sfmt 4703
I. Background
A. Legal Entity Identifiers: CEA Section
21(b) and Section 45.6 of the
Commission’s Regulations
B. Designation of the DTCC–SWIFT Utility
C. Amendment of Designation Order To
Account for Developments in the
Establishment of a Global LEI System
II. Extension of Designation of the DTCC–
SWIFT Utility
III. Amended and Restated Order
I. Background
A. Legal Entity Identifiers: CEA Section
21(b) and Section 45.6 of the
Commission’s Regulations
Title VII of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act (‘‘Dodd-Frank Act’’) 1 amended the
Commodity Exchange Act (‘‘CEA’’) 2 to
establish a comprehensive new
regulatory framework for swaps.
Amendments to the CEA included the
addition of provisions requiring the
retention, and the reporting to
Commission-registered swap data
repositories (‘‘SDRs’’), of data regarding
swap transactions, in order to enhance
transparency, promote standardization
and reduce systemic risk.3 Pursuant to
1 Public
Law 111–203, 124 Stat. 1376 (2010).
U.S.C. 1 et seq.
3 See, e.g., new Section 2(a)(13)(G) of the CEA,
which requires all swaps, whether cleared or
uncleared, to be reported to a registered SDR; new
Section 21(b) of the CEA, which directs the
Commission to prescribe standards for swap data
reporting and attendant recordkeeping; and new
Sections 4r and 2(h)(5) of the CEA, which, among
27
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these newly added provisions, the
Commission added to its regulations
part 45,4 which sets forth recordkeeping
rules, and rules for the reporting of
swap transaction data to a registered
SDR, and part 46,5 which sets forth
recordkeeping and swap data reporting
rules for historical swaps.
Under the authority granted by new
section 21(b) of the CEA, which, among
other things, directs the Commission ‘‘to
prescribe standards that specify the data
elements for each swap that shall be
collected and maintained’’ by a
registered SDR,6 the Commission, in its
part 45 regulations, prescribed the use
of a legal entity identifier, or ‘‘LEI,’’ in
required recordkeeping and swap data
reporting. Section 45.6 provides that
‘‘[e]ach counterparty to any swap
subject to the jurisdiction of the
Commission shall be identified in all
recordkeeping and all swap data
reporting pursuant to [part 45] by means
of a single legal entity identifier as
specified in this section.’’ 7 In adopting
this requirement, the Commission
highlighted the LEI as a crucial
regulatory tool to facilitate data
aggregation by regulators, in furtherance
of the systemic risk mitigation and other
important purposes of the Dodd-Frank
Act.8
Section 45.6 sets forth requirements
that the legal entity identifier to be used
to comply with the Commission’s
recordkeeping and swap data reporting
rules must meet, including satisfaction
of specified technical and governance
principles. In adopting these
requirements, the Commission took into
consideration work that had
commenced at the international level to
establish a global LEI system.9 The
Commission expressed its agreement
that ‘‘optimum effectiveness of [the LEI]
as a tool for achieving the systemic risk
other things, establish reporting requirements for
swaps in effect as of the enactment of the DoddFrank Act (‘‘pre-enactment swaps’’), as well as
swaps in effect after such enactment but prior to the
effective date for compliance with the
Commission’s final recordkeeping and swap data
reporting rules (‘‘transition swaps’’ and, collectively
with pre-enactments swaps, ‘‘historical swaps’’).
4 Swap Data Recordkeeping and Reporting
Requirements, 77 FR 2136 (January 13, 2012).
5 Swap Data Recordkeeping and Reporting
Requirements: Pre-Enactment and Transition
Swaps, 77 FR 35200 (June 12, 2012).
6 CEA Section 21(b).
7 77 FR at 2204. In addition, in part 46 of the
Commission’s regulations, Section 46.4 provides
that each counterparty to a historical swap in
existence on or after April 25, 2011, for which an
initial data report is required pursuant to part 46,
must obtain a legal entity identifier, which must be
used for purposes of recordkeeping and swap data
reporting under part 46 as prescribed in Section
46.4. 77 FR at 35228–9.
8 See 77 FR at 2138.
9 See 77 FR at 2163.
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mitigation, transparency and market
protection goals of the Dodd-Frank
Act—goals shared by financial
regulators world-wide—would come
from creation of [an LEI] . . . that is
capable of becoming the single
international standard for unique
identification of legal entities across the
world financial sector.’’ 10 The
Commission cited its involvement in an
international initiative, coordinated by
the Financial Stability Board (‘‘FSB’’),11
to establish standards, and a governance
framework, for a global LEI system—
including the Commission’s
participation in an ad hoc, expert group
of regulatory authorities convened by
the FSB to develop recommendations
regarding the implementation of such a
system.12
B. Designation of the DTCC–SWIFT
Utility
Pursuant to Section 21(b) of the CEA
and Section 45.6 of the Commission’s
regulations, on July 23, 2012, the
Commission issued an order
(‘‘Order’’) 13 designating the utility
operated by DTCC–SWIFT as the
provider of the legal entity identifier to
be used in recordkeeping and swap data
reporting pursuant to parts 45 and 46 of
the Commission’s regulations, and
directing registered entities and swap
counterparties subject to the
Commission’s jurisdiction to use
identifiers provided by DTCC–SWIFT to
comply with the Commission’s
recordkeeping and swap data reporting
requirements. DTCC–SWIFT’s
designation was subject to specified
conditions, including DTCC–SWIFT’s
continuing compliance with all of the
legal entity identifier requirements set
forth in part 45 of the Commission’s
regulations.14
In the preamble to the Order, the
Commission highlighted its ongoing
participation in the international
process, coordinated by the FSB, to
FR at 2163.
FSB is an international body that develops
and promotes the implementation of effective
regulatory, supervisory and other policies in the
interest of financial stability. Established in 2009 as
a successor to the Financial Stability Forum, the
FSB coordinates the work of national financial
authorities, international standards setting bodies
and international financial institutions. Its
membership includes G–20 members, the
International Monetary Fund and the World Bank.
The FSB Secretariat is located in Basel,
Switzerland. The FSB’s Web site can be accessed
at https://www.financialstabilityboard.org.
12 See 77 FR at 2162.
13 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, 77 FR 53870 (September 4, 2012).
14 See 77 FR at 53873.
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10 77
11 The
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develop standards and a governance
framework for a global LEI system, as
well as its expectation that, after
recommendations regarding the global
system were endorsed by the FSB and
implemented, the identifier to be used
to comply with the Commission’s
recordkeeping and swap data reporting
rules would transition into the global
LEI.15 The Commission noted that, in
light of the work being undertaken at
the international level to establish a
global LEI system, and as requested by
other regulatory authorities
participating in that work, the
Commission would, on a transitional
basis, refer to the legal entity identifier
to be used to comply with the
Commission’s recordkeeping and swap
data reporting rules as the CFTC Interim
Compliant Identifier (‘‘CICI’’), rather
than the ‘‘LEI.’’ 16 The Order provided
that such identifier would be known as
the CICI ‘‘until the establishment of the
global LEI system or further action by
the Commission.’’ 17
C. Amendment of Designation Order To
Account for Developments in the
Establishment of a Global LEI System
On June 7, 2013, the Commission
issued an amendment to the Order
(‘‘Amendment’’),18 to take into account
the significant progress that had been
made in establishing the global LEI
system. In the preamble to the
Amendment, the Commission
summarized the developments that had
taken place at the international level
since the Order was issued. It noted that
the process to establish the global LEI
system was now being led by an
international Regulatory Oversight
Committee (‘‘ROC’’), of which the
Commission was a member, and that the
ROC had determined that the global LEI
system would be federated in nature—
comprised of a private sector Central
Operating Unit (‘‘COU’’), and multiple
Local Operating Units (‘‘LOUs’’) that
would issue LEIs. The Commission
noted that under the auspices of the
ROC, a foundation (‘‘Global LEI
Foundation’’) was being established in
Switzerland to provide the COU, and
that the COU would, within the global
15 See 77 FR at 53871, citing Commission Press
Release, CFTC Announces Process to Designate the
Provider of CFTC Interim Compliant Identifiers,
March 9, 2012, available at https://www.cftc.gov/
PressRoom/PressReleases/pr6200–12.
16 Id.
17 77 FR at 53873.
18 Amended Order Designating the Provider of
Legal Entity Identifiers to Be Used in
Recordkeeping and Swap Data Reporting Pursuant
to the Commission’s Regulations, 78 FR 38954 (June
28, 2013).
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LEI system, coordinate the system’s
multiple LOUs.19
The Commission further noted that, as
a step in the establishment of the global
LEI system, each of seven identifierissuing utilities—including the
Commission-designated utility operated
by DTCC–SWIFT—had been sponsored
to the ROC by the ROC member
exercising oversight over such utility,
and had been provided with a distinct
prefix for use when issuing identifiers,
in order to ensure the uniqueness of
identifier codes across utilities. The
Commission expressed its expectation
that the number of ROC membersponsored ‘‘pre-LOUs’’ would increase
in the coming months. The Commission
also expressed its expectation that the
Commission-designated ‘‘pre-LOU’’
operated by DTCC–SWIFT would
become a LOU, and that the identifiers
issued by it would become LEIs, within
the global LEI system.20
In the preamble to the Amendment,
the Commission emphasized the
importance, during the transitional
period before the global LEI system
became fully operational, of preserving
the uniqueness of the identifier issued
to any particular legal entity. The
Commission stated that, once
requirements mandating the use of LEIs
were in effect in more than one
jurisdiction, the only way to ensure that
a single legal entity was not issued more
than one identifier, pursuant to the
requirements of more than one
jurisdiction, was through regulatory
cooperation—namely, the acceptance,
by ROC member authorities mandating
the use of LEIs, of identifiers issued by
any ROC-recognized pre-LOU.21
The Amendment modified the Order
to provide for such mutual regulatory
acceptance. The Commission noted in
the preamble to the Order the ROC’s
forthcoming finalization of ‘‘a
framework for global acceptance of
[identifiers] assigned by a pre-LOU that
is sponsored by a ROC member who
assures the ROC that the pre-LOU meets
specified principles regarding
compliance with the [global] LEI
standard, technical capacity, and
agreement to adhere to ROC high-level
principles.’’ 22 The Amendment
modified the Order to provide that, after
the ROC had adopted such a framework,
and had also approved the DTCC–
SWIFT utility and the identifiers issued
by it as globally acceptable, registered
entities and swap counterparties subject
to the Commission’s jurisdiction could
19 See
78 FR at 38955.
20 Id.
21 Id.
22 78
FR at 38955.
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use identifiers issued by DTCC–SWIFT,
or any other pre-LOU approved by the
ROC as globally acceptable and as
issuing globally acceptable identifiers,
to comply with the Commission’s
recordkeeping and swap data reporting
rules.23
The preamble to the Amendment
stated that it was the Commission’s
understanding that, once the ROC had
adopted standards for the approval of
pre-LOUs and the identifiers issued by
them as globally acceptable, any
identifiers approved by the ROC as
meeting such standards would be
referred to as ‘‘LEIs.’’ Accordingly, the
Amendment further modified the Order
to provide that, effective immediately
upon ROC approval of the identifiers
issued by DTCC–SWIFT as globally
acceptable, ‘‘the [identifiers] issued by
DTCC–SWIFT shall be known as LEIs
and not as CICIs.’’ 24
On October 30, 2013, the
Commission’s Chief Information Officer
published on the Commission’s Web
site a notice 25 stating that the ROC had
adopted standards for the approval of
pre-LOUs and the identifiers issued by
them as globally acceptable, and had
approved DTCC–SWIFT and the
identifiers issued by it as meeting such
standards (such approval being known,
at the international level, as ROC
‘‘endorsement’’). Accordingly, the
notice stated that from October 30, 2013,
onward, registered entities and swap
counterparties subject to the
Commission’s jurisdiction could comply
with the legal entity identifier
requirements of the Commission’s
recordkeeping and swap data reporting
rules ‘‘by using any [identifier] endorsed
by the ROC as globally acceptable.’’ 26
Since its endorsement by the ROC as
a globally acceptable pre-LOU, the
DTCC–SWIFT utility—which had
initially been referred to, on the utility’s
Web site and in educational and other
materials, as the ‘‘CFTC Interim
Compliant Identifier (CICI) utility’’ 27
23 See 78 FR at 38956. The Amendment also
modified the Order to provide that the use of
identifiers issued by approved pre-LOUs other than
DTCC–SWIFT or WM Datenservice (a pre-LOU
sponsored to the ROC by BaFin, Germany’s Federal
Financial Supervisory Authority) could commence
only after the Commission’s Chief Information
Officer published a notice on the Commission’s
Web site stating that such identifiers and such preLOUs had been approved by the ROC as globally
acceptable. Id.
24 78 FR at 38956.
25 Notice Regarding LEIs That May Be Used to
Comply With CFTC LEI Requirements, October 30,
2013, available at https://www.cftc.gov/ucm/groups/
public/@newsroom/documents/file/noticero
camendedorder.pdf.
26 Id.
27 In the Order, the Commission provided that the
legal entity identifier to be used to comply with the
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has commenced referring to itself as the
‘‘Global Markets Entity Identifier (GMEI)
utility.’’ It is the Commission’s
understanding that this transition in
terminology is intended to clarify for
market participants that the identifiers
issued by the DTCC–SWIFT utility may
be used not only to comply with the
Commission’s recordkeeping and swap
data reporting rules, but also to comply
with the requirements of other
regulatory authorities that recognize
legal entity identifiers issued by ROCendorsed pre-LOUs.
The transition in the terminology
used by DTCC–SWIFT to refer to its
utility also reflects the transition—
anticipated by the Commission in the
Amendment—away from the use of the
term ‘‘CICI’’ to refer to the legal entity
identifier to be used to comply with the
Commission’s recordkeeping and swap
data reporting rules. As discussed
above, at the time of issuing the
Amendment, it was the Commission’s
understanding that, after the ROC
commenced endorsing pre-LOUs and
the identifiers issued by them as
globally acceptable, any such globally
acceptable identifiers would be referred
to as ‘‘LEIs’’. Accordingly, the
Amendment modified the Order to
provide for the identifiers issued by
DTCC–SWIFT to be known as LEIs
rather than CICIs, once such identifiers
were endorsed as globally acceptable by
the ROC. While, subsequent to the
issuance of the Amendment, the ROC
did commence endorsing pre-LOUs and
the identifiers issued by them as
globally acceptable, the ROC also
deferred from referring to endorsed
identifiers as ‘‘LEIs’’ until the process of
establishing the global LEI system had
progressed further. Thus, for an interim
period, identifiers endorsed by the ROC
as globally acceptable and issued by a
globally acceptable pre-LOU—including
the identifiers issued by DTCC–
SWIFT—have been referred to at the
international level as ‘‘pre-LEIs.’’
Commission’s recordkeeping and swap data
reporting rules would be known as the CICI ‘‘until
the establishment of the global LEI system or further
action by the Commission.’’ 77 FR at 53873. The
Commission’s designation of the DTCC–SWIFT
utility as the provider of such identifier was
conditioned on the utility’s Web site, ‘‘and other
facilities and documents used to provide identifiers
for use in complying with parts 45 and 46,’’
referring to the CICI and not to the ‘‘LEI, the
preliminary LEI, or other similar terms including
the term LEI.’’ Id.
See the discussion, infra, of the action taken by
the Commission, through its issuance of the
Amendment, to provide for the transition away
from the use of the term ‘‘CICI’’ to refer to the legal
entity identifier to be used to comply with parts 45
and 46, prior to the conclusion of the process of
establishing the global LEI system.
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II. Extension of Designation of the
DTCC–SWIFT Utility
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In the Order, the Commission
designated DTCC–SWIFT as the
provider of legal entity identifiers to be
used to comply with parts 45 and 46 of
the Commission’s regulations for a term
of two years, running from the date of
issuance of the Order on July 23, 2012.28
The Order provided that if, at the
conclusion of the term of DTCC–
SWIFT’s designation, the global LEI
system was 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.’’ 29
The process to establish the global LEI
system has continued to move forward
since the issuance of the Amendment on
June 7, 2013. As discussed above, in the
second half of 2013, the ROC adopted
endorsement standards for pre-LOUs
and the identifiers issued by them, and
has since endorsed sixteen membersponsored pre-LOUs—including DTCC–
SWIFT—as globally acceptable.30 The
Global LEI Foundation that will provide
the COU, managing the central
operations of the global LEI system, has
also been formally established under
Swiss law. The ROC and the Global LEI
Foundation are currently in the process
of developing a framework for the
transition of full operational
management of the global LEI system to
the COU, with supervisory oversight by
the ROC in the public interest. On June
30, 2014, the ROC issued a press release
stating that, with the establishment of
the Global LEI Foundation and the
commencement of the transition to full
operational management by the COU,
legal entity identifiers issued by preLOUs that have been endorsed by the
ROC as globally acceptable, would
henceforth be referred to as ‘‘LEIs’’
rather than ‘‘pre-LEIs.’’ 31 The
Commission notes that previously
issued pre-LEIs (including CICIs issued
by DTCC–SWIFT) do not now need to
28 See 77 FR at 53873. The Order also permitted
the Commission’s earlier termination of such
designation ‘‘in connection with the establishment
of a global LEI system.’’ Id.
29 Id.
30 To date, the sixteen endorsed pre-LOUs have,
collectively, issued nearly 300,000 legal entity
identifiers. See ROC Press Release, Regulatory
Oversight Committee Welcomes First Meeting of
Global LEI Foundation, June 30, 2014, available at
https://www.leiroc.org/publications/gls/gleif_
20140629_1.pdf.
31 Id.
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be reissued; they will, going forward, be
referred to as ‘‘LEIs’’ rather than ‘‘preLEIs’’ (or ‘‘CICIs’’), but will otherwise
remain unchanged.
While progress continues to be made
in the establishment of the global LEI
system, the system will not be fully
operational before the expiration of
DTCC–SWIFT’s two-year term of
designation under the Order. Taking
into consideration the significant
progress that has been made in
establishing the global LEI system to
date—including the ROC’s endorsement
of the DTCC–SWIFT utility as a globally
acceptable pre-LOU—and in
anticipation that the DTCC–SWIFT
utility will become a LOU within the
global system, the Commission believes
that it is appropriate, in order to further
the smooth transition to a fully
operational global LEI system, to extend
its designation of the DTCC–SWIFT
utility.
The Order contemplated that, if the
global LEI system was not yet
operational before the term of DTCC–
SWIFT’s designation expired, the
Commission could consider the
feasibility of having multiple providers
of legal entity identifiers, and the
feasibility of coordination among them
to avoid the issuance of duplicative
identifiers. The Order was issued before
the governance framework for the global
LEI system had been determined—and,
in particular, before it was determined
that the system would be federated in
nature, comprised both of a central
COU, and of multiple LOUs issuing
LEIs. Consistent with this federated
framework, during the current,
transitional period before the global LEI
system becomes fully operational, the
ROC has established standards for the
global acceptance of pre-LOUs that
satisfy specified principles and
requirements, and has endorsed a
number of pre-LOUs as meeting those
standards. In addition, the ROC has
carried forward its practice, described in
the Amendment, of providing each preLOU with a distinct prefix for use when
issuing identifiers, in order to ensure
the uniqueness of identifier codes across
pre-LOUs. During the transitional
period, the ROC has also played an
important role in promoting the mutual
acceptance, by ROC member authorities
mandating the use of LEIs, of identifiers
issued by any pre-LOU endorsed by the
ROC as globally acceptable.32
Thus, while the global LEI system is
not yet fully operational, its
implementation has progressed to the
point where the system can
accommodate multiple pre-LOUs,
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32 See,
e.g., 78 FR at 38955.
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Sfmt 4703
43721
operating in accordance with standards
that are designed to promote
consistency, and to avoid duplication,
in the issuance of legal entity
identifiers. Accordingly, the
Commission believes that the feasibility
of having multiple providers of legal
entity identifiers, and the feasibility of
coordination among them to avoid the
issuance of duplicative identifiers, has
already been addressed in connection
with the establishment of the global LEI
system—into which the identifiers to be
used to comply with the Commission’s
recordkeeping and swap data reporting
rules, and any provider thereof, are
expected to transition.33 The
Commission’s modification of the
Order, by way of the Amendment, to
permit the use of identifiers issued by
any pre-LOU endorsed by the ROC as
globally acceptable, and as issuing
globally acceptable identifiers, reflects
the Commission’s support for the
feasibility of such a multiple provider
system.
For the reasons described above, the
Commission is amending the Order, as
modified by the Amendment, to extend
its designation of the DTCC–SWIFT
utility while the terms of transition to a
fully operational global LEI system are
finalized and implemented. The
Commission is also updating the Order
to align the legal entity identifier
terminology used therein with the
terminology that is currently used at the
international level, and to remove from
the Order certain provisions that, given
the current state of implementation of
the global LEI system, are no longer
applicable.
III. Amended and Restated Order
It is ordered, pursuant to Section
21(b) of the CEA and Section 45.6 of the
Commission’s regulations, that the
Order, as modified by the Amendment,
is amended and restated in its entirety
to read as follows:
It is hereby ordered that:
1. Subject to Section 2(a), below, the
Depository Trust and Clearing
Corporation (‘‘DTCC’’) and Society for
Worldwide Interbank Financial
Telecommunications (‘‘SWIFT’’) joint
venture (‘‘DTCC–SWIFT’’) is designated
as the provider of legal entity identifiers
(‘‘LEIs’’), to be used in recordkeeping
33 This does not preclude the Commission from
considering a submission from another existing or
prospective provider of legal entity identifiers that
wishes also to be designated by the Commission,
along with DTCC–SWIFT, but the Commission
notes that its consideration of any such submission
would take into account not only the relevant
requirements of Section 45.6 of the Commission’s
regulations, but also, for the reasons set forth
herein, the principles, standards and current state
of implementation of the global LEI system.
E:\FR\FM\28JYN1.SGM
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mstockstill on DSK4VPTVN1PROD with NOTICES
43722
Federal Register / Vol. 79, No. 144 / Monday, July 28, 2014 / Notices
and swap data reporting pursuant to
parts 45 and 46 of the Commission’s
regulations.
a. This designation is conditioned on
DTCC–SWIFT’s continuing compliance,
for as long as it is authorized to provide
LEIs 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 LEIs and of associated
reference data adheres on an ongoing
basis to the Commission’s requirements
set forth in part 45.
b. 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 LEIs
and associated reference data, utility
operations, and identity validation
processes, and (2) if DTCC–SWIFT fails
to satisfy the conditions of this
designation, or upon any termination of
this designation pursuant to Section
2(c)(2) below, DTCC–SWIFT shall, as
instructed by the Commission, pass to a
successor LEI utility specified by the
Commission, or to the global LEI
system, free of charge, all LEIs issued by
DTCC–SWIFT and associated reference
data and all LEI intellectual property
rights.
c. This designation is made for a
limited term of one year from the date
of this Amended and Restated Order,
and may be terminated by the
Commission on three months’ notice in
connection with (1) the establishment of
the global LEI system, or (2) DTCC–
SWIFT’s exit from the global LEI
system.
2. To comply with the legal entity
identifier requirements of parts 45 and
46 of the Commission’s regulations:
a. Registered entities and swap
counterparties subject to the
Commission’s jurisdiction may use LEIs
provided by DTCC–SWIFT, or any other
pre-Local Operating Unit (‘‘pre-LOU’’)
approved by the Regulatory Oversight
Committee of the global LEI system
(‘‘ROC’’) as globally acceptable and as
issuing globally acceptable LEIs. The list
of pre-LOUs that are currently approved
by the ROC as globally acceptable and
as issuing globally acceptable LEIs,
VerDate Mar<15>2010
17:53 Jul 25, 2014
Jkt 232001
including the Web site address via
which registered entities and swap
counterparties may contact each such
pre-LOU, is available at https://
www.leiroc.org/publications/gls/lou_
20131003_2.pdf.
b. As provided in section 45.6(b)(1) of
the Commission’s regulations, registered
entities and swap counterparties subject
to the Commission’s jurisdiction shall
be identified in all swap recordkeeping
and swap data reporting by a single LEI.
Issued in Washington, DC, on July 22,
2014, by the Commission.
Christopher J. Kirkpatrick,
Acting Secretary of the Commission.
Appendix to Amended and Restated
Order Designating the Provider of Legal
Entity Identifiers To Be Used in
Recordkeeping and Swap Data
Reporting Pursuant to the
Commission’s Regulations—
Commission Voting Summary
On this matter, Chairman Massad and
Commissioners Wetjen, Bowen, and
Giancarlo voted in the affirmative. No
Commissioner voted in the negative.
Commissioner O’Malia did not participate in
this matter.
[FR Doc. 2014–17643 Filed 7–25–14; 8:45 am]
BILLING CODE 6351–01–P
DEPARTMENT OF DEFENSE
Office of the Secretary
Department of Defense Science and
Technology Reinvention Laboratory
(STRL) Personnel Management
Demonstration Project Program
Deputy Assistant Secretary of
Defense for Civilian Personnel Policy,
(DASD (CPP)), Department of Defense
(DoD).
ACTION: This notice amends existing
STRL Personnel Management
Demonstration Project Programs.
AGENCY:
STRLs will implement Senior
Scientific Technical Manager (SSTM)
positions, which are defined as senior
professional scientific and technical
positions classified above the GS–15
level of the General Schedule (GS). The
primary functions of these positions
shall be (1) to engage in research and
development in the physical, biological,
medical, or engineering sciences, or
another field closely related to the
mission of such STRL; and (2) to carry
out technical supervisory
responsibilities. These positions may
only be established at authorized STRLs
with personnel demonstration projects.
STRLs will also implement two new
direct-hire authorities to appoint
SUMMARY:
PO 00000
Frm 00017
Fmt 4703
Sfmt 4703
bachelor’s degree candidates into
scientific and engineering positions and
veteran candidates into scientific,
technical, engineering, and mathematics
positions. The current direct-hire
authority to appoint candidates with an
advanced degree into scientific and
engineering positions is also being
included in this notice so that all STRL
direct-hire authorities are documented
in one location.
This notice may be implemented
beginning on the date of publication in
the Federal Register.
DATES:
FOR FURTHER INFORMATION CONTACT:
Department of the Army
• ARL: Mr. Tom Bock, Program
Manager, ARL Personnel Demonstration
Project, AMSRD–ARL–O–HR, 2800
Powder Mill Road, Adelphi MD 20783–
1197;
• AMRDEC: Mr. Chad Marshall,
Demonstration Project Manager,
AMRDEC, 5400 Fowler Road, Redstone
Arsenal, AL 35898–5000;
• CERDEC: Ms. Desiree Roe, CERDEC
Personnel Demonstration Project
Administrator, Myer Center, Building
2700, Room 2C204, ATTN: AMSRD–
CER–HRO, Fort Monmouth, NJ 07703–
5209;
• ECBC: Ms. Patricia Milwicz,
Management and Program Analyst,
ECBC, Directorate of Program
Integration, Workforce Management
Office, Department of the Army, ATTN:
RDCB–DPC–W, 5183 Blackhawk Road,
Building 3330, Aberdeen Proving
Ground, MD 21010–5424;
• ERDC: Ms. Patricia Sullivan,
Personnel Demonstration Project
Manager, U.S. Army ERDC, 3909 Halls
Ferry Road, Vicksburg, MS 39180–6199;
• MRMC: Ms. Linda Krout, Personnel
Demonstration Project Manager, 505
Scott St., Fort Detrick, MD 21702–5000;
• NSRDEC: Ms. Joelle Montecalvo,
Demonstration Project Manager,
NSRDEC, Kansas Street, (AMSRD–NSR–
BO–W), Natick, MA 01760;
• TARDEC: Ms. Jennifer Davis,
TARDEC, ATTN: RDTA–CS/MS 204,
Warren, MI 48397–5000; and
• ARDEC: Mr. Mike Nicotra, U.S.
Army ARDEC, Human Capital
Management Office, Building 1, 3rd
Floor, RDAR–EIH, Picatinny Arsenal, NJ
07806–5000.
Department of the Air Force:
• AFRL: Ms. Michelle Williams,
Personnel Demonstration Project
Manager, AFRL, 1864 4th Street,
Wright-Patterson Air Force Base, OH
45433–5209.
E:\FR\FM\28JYN1.SGM
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Agencies
[Federal Register Volume 79, Number 144 (Monday, July 28, 2014)]
[Notices]
[Pages 43718-43722]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-17643]
=======================================================================
-----------------------------------------------------------------------
COMMODITY FUTURES TRADING COMMISSION
Amended and Restated Order Designating the Provider of Legal
Entity Identifiers To Be Used in Recordkeeping and Swap Data Reporting
Pursuant to the Commission's Regulations
AGENCY: Commodity Futures Trading Commission.
ACTION: Order.
-----------------------------------------------------------------------
SUMMARY: The Commodity Futures Trading Commission (``Commission'') has
issued an Amended and Restated Order to extend the Commission's
designation of the Depository Trust and Clearing Corporation (``DTCC'')
and Society for Worldwide Interbank Financial Telecommunication
(``SWIFT'') joint venture (``DTCC-SWIFT'') as the provider of legal
entity identifiers, or ``LEIs,'' pursuant to the Commodity Exchange Act
and the Commission's regulations. DTCC-SWIFT's designation was made by
Commission order issued on July 23, 2012. The designation was made for
a term of two years. The Amended and Restated Order amends the
Commission's order of July 23, 2012, as previously amended on June 7,
2013, to extend DTCC-SWIFT's designation for an additional one year,
while the terms of transition to a fully operational global LEI system
are finalized and implemented. Consistent with the terms of the
Commission's order of July 23, 2012, as amended on June 7, 2013, the
Amended and Restated Order permits registered entities and swap
counterparties subject to the Commission's jurisdiction to comply with
the specified legal entity identifier requirements of the Commission's
regulations by using identifiers issued by DTCC-SWIFT, or any other
pre-Local Operating Unit (``pre-LOU'') that has been endorsed by the
Regulatory Oversight Committee of the global LEI system as being
globally acceptable and as issuing globally acceptable legal entity
identifiers.
FOR FURTHER INFORMATION CONTACT: Srinivas Bangarbale, Chief Data
Officer, Office of Data and Technology, (202) 418-5315,
sbangarbale@cftc.gov, or Nora Flood, Attorney Advisor, Division of
Market Oversight, (202) 418-5354, nflood@cftc.gov, Commodity Futures
Trading Commission, Three Lafayette Centre, 1155 21st Street NW.,
Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
Table of Contents:
I. Background
A. Legal Entity Identifiers: CEA Section 21(b) and Section 45.6
of the Commission's Regulations
B. Designation of the DTCC-SWIFT Utility
C. Amendment of Designation Order To Account for Developments in
the Establishment of a Global LEI System
II. Extension of Designation of the DTCC-SWIFT Utility
III. Amended and Restated Order
I. Background
A. Legal Entity Identifiers: CEA Section 21(b) and Section 45.6 of the
Commission's Regulations
Title VII of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (``Dodd-Frank Act'') \1\ amended the Commodity Exchange
Act (``CEA'') \2\ to establish a comprehensive new regulatory framework
for swaps. Amendments to the CEA included the addition of provisions
requiring the retention, and the reporting to Commission-registered
swap data repositories (``SDRs''), of data regarding swap transactions,
in order to enhance transparency, promote standardization and reduce
systemic risk.\3\ Pursuant to
[[Page 43719]]
these newly added provisions, the Commission added to its regulations
part 45,\4\ which sets forth recordkeeping rules, and rules for the
reporting of swap transaction data to a registered SDR, and part 46,\5\
which sets forth recordkeeping and swap data reporting rules for
historical swaps.
---------------------------------------------------------------------------
\1\ Public Law 111-203, 124 Stat. 1376 (2010).
\2\ 7 U.S.C. 1 et seq.
\3\ See, e.g., new Section 2(a)(13)(G) of the CEA, which
requires all swaps, whether cleared or uncleared, to be reported to
a registered SDR; new Section 21(b) of the CEA, which directs the
Commission to prescribe standards for swap data reporting and
attendant recordkeeping; and new Sections 4r and 2(h)(5) of the CEA,
which, among other things, establish reporting requirements for
swaps in effect as of the enactment of the Dodd-Frank Act (``pre-
enactment swaps''), as well as swaps in effect after such enactment
but prior to the effective date for compliance with the Commission's
final recordkeeping and swap data reporting rules (``transition
swaps'' and, collectively with pre-enactments swaps, ``historical
swaps'').
\4\ Swap Data Recordkeeping and Reporting Requirements, 77 FR
2136 (January 13, 2012).
\5\ Swap Data Recordkeeping and Reporting Requirements: Pre-
Enactment and Transition Swaps, 77 FR 35200 (June 12, 2012).
---------------------------------------------------------------------------
Under the authority granted by new section 21(b) of the CEA, which,
among other things, directs the Commission ``to prescribe standards
that specify the data elements for each swap that shall be collected
and maintained'' by a registered SDR,\6\ the Commission, in its part 45
regulations, prescribed the use of a legal entity identifier, or
``LEI,'' in required recordkeeping and swap data reporting. Section
45.6 provides that ``[e]ach counterparty to any swap subject to the
jurisdiction of the Commission shall be identified in all recordkeeping
and all swap data reporting pursuant to [part 45] by means of a single
legal entity identifier as specified in this section.'' \7\ In adopting
this requirement, the Commission highlighted the LEI as a crucial
regulatory tool to facilitate data aggregation by regulators, in
furtherance of the systemic risk mitigation and other important
purposes of the Dodd-Frank Act.\8\
---------------------------------------------------------------------------
\6\ CEA Section 21(b).
\7\ 77 FR at 2204. In addition, in part 46 of the Commission's
regulations, Section 46.4 provides that each counterparty to a
historical swap in existence on or after April 25, 2011, for which
an initial data report is required pursuant to part 46, must obtain
a legal entity identifier, which must be used for purposes of
recordkeeping and swap data reporting under part 46 as prescribed in
Section 46.4. 77 FR at 35228-9.
\8\ See 77 FR at 2138.
---------------------------------------------------------------------------
Section 45.6 sets forth requirements that the legal entity
identifier to be used to comply with the Commission's recordkeeping and
swap data reporting rules must meet, including satisfaction of
specified technical and governance principles. In adopting these
requirements, the Commission took into consideration work that had
commenced at the international level to establish a global LEI
system.\9\ The Commission expressed its agreement that ``optimum
effectiveness of [the LEI] as a tool for achieving the systemic risk
mitigation, transparency and market protection goals of the Dodd-Frank
Act--goals shared by financial regulators world-wide--would come from
creation of [an LEI] . . . that is capable of becoming the single
international standard for unique identification of legal entities
across the world financial sector.'' \10\ The Commission cited its
involvement in an international initiative, coordinated by the
Financial Stability Board (``FSB''),\11\ to establish standards, and a
governance framework, for a global LEI system--including the
Commission's participation in an ad hoc, expert group of regulatory
authorities convened by the FSB to develop recommendations regarding
the implementation of such a system.\12\
---------------------------------------------------------------------------
\9\ See 77 FR at 2163.
\10\ 77 FR at 2163.
\11\ The FSB is an international body that develops and promotes
the implementation of effective regulatory, supervisory and other
policies in the interest of financial stability. Established in 2009
as a successor to the Financial Stability Forum, the FSB coordinates
the work of national financial authorities, international standards
setting bodies and international financial institutions. Its
membership includes G-20 members, the International Monetary Fund
and the World Bank. The FSB Secretariat is located in Basel,
Switzerland. The FSB's Web site can be accessed at https://www.financialstabilityboard.org.
\12\ See 77 FR at 2162.
---------------------------------------------------------------------------
B. Designation of the DTCC-SWIFT Utility
Pursuant to Section 21(b) of the CEA and Section 45.6 of the
Commission's regulations, on July 23, 2012, the Commission issued an
order (``Order'') \13\ designating the utility operated by DTCC-SWIFT
as the provider of the legal entity identifier to be used in
recordkeeping and swap data reporting pursuant to parts 45 and 46 of
the Commission's regulations, and directing registered entities and
swap counterparties subject to the Commission's jurisdiction to use
identifiers provided by DTCC-SWIFT to comply with the Commission's
recordkeeping and swap data reporting requirements. DTCC-SWIFT's
designation was subject to specified conditions, including DTCC-SWIFT's
continuing compliance with all of the legal entity identifier
requirements set forth in part 45 of the Commission's regulations.\14\
---------------------------------------------------------------------------
\13\ 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, 77 FR 53870
(September 4, 2012).
\14\ See 77 FR at 53873.
---------------------------------------------------------------------------
In the preamble to the Order, the Commission highlighted its
ongoing participation in the international process, coordinated by the
FSB, to develop standards and a governance framework for a global LEI
system, as well as its expectation that, after recommendations
regarding the global system were endorsed by the FSB and implemented,
the identifier to be used to comply with the Commission's recordkeeping
and swap data reporting rules would transition into the global LEI.\15\
The Commission noted that, in light of the work being undertaken at the
international level to establish a global LEI system, and as requested
by other regulatory authorities participating in that work, the
Commission would, on a transitional basis, refer to the legal entity
identifier to be used to comply with the Commission's recordkeeping and
swap data reporting rules as the CFTC Interim Compliant Identifier
(``CICI''), rather than the ``LEI.'' \16\ The Order provided that such
identifier would be known as the CICI ``until the establishment of the
global LEI system or further action by the Commission.'' \17\
---------------------------------------------------------------------------
\15\ See 77 FR at 53871, citing Commission Press Release, CFTC
Announces Process to Designate the Provider of CFTC Interim
Compliant Identifiers, March 9, 2012, available at https://www.cftc.gov/PressRoom/PressReleases/pr6200-12.
\16\ Id.
\17\ 77 FR at 53873.
---------------------------------------------------------------------------
C. Amendment of Designation Order To Account for Developments in the
Establishment of a Global LEI System
On June 7, 2013, the Commission issued an amendment to the Order
(``Amendment''),\18\ to take into account the significant progress that
had been made in establishing the global LEI system. In the preamble to
the Amendment, the Commission summarized the developments that had
taken place at the international level since the Order was issued. It
noted that the process to establish the global LEI system was now being
led by an international Regulatory Oversight Committee (``ROC''), of
which the Commission was a member, and that the ROC had determined that
the global LEI system would be federated in nature--comprised of a
private sector Central Operating Unit (``COU''), and multiple Local
Operating Units (``LOUs'') that would issue LEIs. The Commission noted
that under the auspices of the ROC, a foundation (``Global LEI
Foundation'') was being established in Switzerland to provide the COU,
and that the COU would, within the global
[[Page 43720]]
LEI system, coordinate the system's multiple LOUs.\19\
---------------------------------------------------------------------------
\18\ Amended Order Designating the Provider of Legal Entity
Identifiers to Be Used in Recordkeeping and Swap Data Reporting
Pursuant to the Commission's Regulations, 78 FR 38954 (June 28,
2013).
\19\ See 78 FR at 38955.
---------------------------------------------------------------------------
The Commission further noted that, as a step in the establishment
of the global LEI system, each of seven identifier-issuing utilities--
including the Commission-designated utility operated by DTCC-SWIFT--had
been sponsored to the ROC by the ROC member exercising oversight over
such utility, and had been provided with a distinct prefix for use when
issuing identifiers, in order to ensure the uniqueness of identifier
codes across utilities. The Commission expressed its expectation that
the number of ROC member-sponsored ``pre-LOUs'' would increase in the
coming months. The Commission also expressed its expectation that the
Commission-designated ``pre-LOU'' operated by DTCC-SWIFT would become a
LOU, and that the identifiers issued by it would become LEIs, within
the global LEI system.\20\
---------------------------------------------------------------------------
\20\ Id.
---------------------------------------------------------------------------
In the preamble to the Amendment, the Commission emphasized the
importance, during the transitional period before the global LEI system
became fully operational, of preserving the uniqueness of the
identifier issued to any particular legal entity. The Commission stated
that, once requirements mandating the use of LEIs were in effect in
more than one jurisdiction, the only way to ensure that a single legal
entity was not issued more than one identifier, pursuant to the
requirements of more than one jurisdiction, was through regulatory
cooperation--namely, the acceptance, by ROC member authorities
mandating the use of LEIs, of identifiers issued by any ROC-recognized
pre-LOU.\21\
---------------------------------------------------------------------------
\21\ Id.
---------------------------------------------------------------------------
The Amendment modified the Order to provide for such mutual
regulatory acceptance. The Commission noted in the preamble to the
Order the ROC's forthcoming finalization of ``a framework for global
acceptance of [identifiers] assigned by a pre-LOU that is sponsored by
a ROC member who assures the ROC that the pre-LOU meets specified
principles regarding compliance with the [global] LEI standard,
technical capacity, and agreement to adhere to ROC high-level
principles.'' \22\ The Amendment modified the Order to provide that,
after the ROC had adopted such a framework, and had also approved the
DTCC-SWIFT utility and the identifiers issued by it as globally
acceptable, registered entities and swap counterparties subject to the
Commission's jurisdiction could use identifiers issued by DTCC-SWIFT,
or any other pre-LOU approved by the ROC as globally acceptable and as
issuing globally acceptable identifiers, to comply with the
Commission's recordkeeping and swap data reporting rules.\23\
---------------------------------------------------------------------------
\22\ 78 FR at 38955.
\23\ See 78 FR at 38956. The Amendment also modified the Order
to provide that the use of identifiers issued by approved pre-LOUs
other than DTCC-SWIFT or WM Datenservice (a pre-LOU sponsored to the
ROC by BaFin, Germany's Federal Financial Supervisory Authority)
could commence only after the Commission's Chief Information Officer
published a notice on the Commission's Web site stating that such
identifiers and such pre-LOUs had been approved by the ROC as
globally acceptable. Id.
---------------------------------------------------------------------------
The preamble to the Amendment stated that it was the Commission's
understanding that, once the ROC had adopted standards for the approval
of pre-LOUs and the identifiers issued by them as globally acceptable,
any identifiers approved by the ROC as meeting such standards would be
referred to as ``LEIs.'' Accordingly, the Amendment further modified
the Order to provide that, effective immediately upon ROC approval of
the identifiers issued by DTCC-SWIFT as globally acceptable, ``the
[identifiers] issued by DTCC-SWIFT shall be known as LEIs and not as
CICIs.'' \24\
---------------------------------------------------------------------------
\24\ 78 FR at 38956.
---------------------------------------------------------------------------
On October 30, 2013, the Commission's Chief Information Officer
published on the Commission's Web site a notice \25\ stating that the
ROC had adopted standards for the approval of pre-LOUs and the
identifiers issued by them as globally acceptable, and had approved
DTCC-SWIFT and the identifiers issued by it as meeting such standards
(such approval being known, at the international level, as ROC
``endorsement''). Accordingly, the notice stated that from October 30,
2013, onward, registered entities and swap counterparties subject to
the Commission's jurisdiction could comply with the legal entity
identifier requirements of the Commission's recordkeeping and swap data
reporting rules ``by using any [identifier] endorsed by the ROC as
globally acceptable.'' \26\
---------------------------------------------------------------------------
\25\ Notice Regarding LEIs That May Be Used to Comply With CFTC
LEI Requirements, October 30, 2013, available at https://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/noticerocamendedorder.pdf.
\26\ Id.
---------------------------------------------------------------------------
Since its endorsement by the ROC as a globally acceptable pre-LOU,
the DTCC-SWIFT utility--which had initially been referred to, on the
utility's Web site and in educational and other materials, as the
``CFTC Interim Compliant Identifier (CICI) utility'' \27\ has commenced
referring to itself as the ``Global Markets Entity Identifier (GMEI)
utility.'' It is the Commission's understanding that this transition in
terminology is intended to clarify for market participants that the
identifiers issued by the DTCC-SWIFT utility may be used not only to
comply with the Commission's recordkeeping and swap data reporting
rules, but also to comply with the requirements of other regulatory
authorities that recognize legal entity identifiers issued by ROC-
endorsed pre-LOUs.
---------------------------------------------------------------------------
\27\ In the Order, the Commission provided that the legal entity
identifier to be used to comply with the Commission's recordkeeping
and swap data reporting rules would be known as the CICI ``until the
establishment of the global LEI system or further action by the
Commission.'' 77 FR at 53873. The Commission's designation of the
DTCC-SWIFT utility as the provider of such identifier was
conditioned on the utility's Web site, ``and other facilities and
documents used to provide identifiers for use in complying with
parts 45 and 46,'' referring to the CICI and not to the ``LEI, the
preliminary LEI, or other similar terms including the term LEI.''
Id.
See the discussion, infra, of the action taken by the
Commission, through its issuance of the Amendment, to provide for
the transition away from the use of the term ``CICI'' to refer to
the legal entity identifier to be used to comply with parts 45 and
46, prior to the conclusion of the process of establishing the
global LEI system.
---------------------------------------------------------------------------
The transition in the terminology used by DTCC-SWIFT to refer to
its utility also reflects the transition--anticipated by the Commission
in the Amendment--away from the use of the term ``CICI'' to refer to
the legal entity identifier to be used to comply with the Commission's
recordkeeping and swap data reporting rules. As discussed above, at the
time of issuing the Amendment, it was the Commission's understanding
that, after the ROC commenced endorsing pre-LOUs and the identifiers
issued by them as globally acceptable, any such globally acceptable
identifiers would be referred to as ``LEIs''. Accordingly, the
Amendment modified the Order to provide for the identifiers issued by
DTCC-SWIFT to be known as LEIs rather than CICIs, once such identifiers
were endorsed as globally acceptable by the ROC. While, subsequent to
the issuance of the Amendment, the ROC did commence endorsing pre-LOUs
and the identifiers issued by them as globally acceptable, the ROC also
deferred from referring to endorsed identifiers as ``LEIs'' until the
process of establishing the global LEI system had progressed further.
Thus, for an interim period, identifiers endorsed by the ROC as
globally acceptable and issued by a globally acceptable pre-LOU--
including the identifiers issued by DTCC-SWIFT--have been referred to
at the international level as ``pre-LEIs.''
[[Page 43721]]
II. Extension of Designation of the DTCC-SWIFT Utility
In the Order, the Commission designated DTCC-SWIFT as the provider
of legal entity identifiers to be used to comply with parts 45 and 46
of the Commission's regulations for a term of two years, running from
the date of issuance of the Order on July 23, 2012.\28\ The Order
provided that if, at the conclusion of the term of DTCC-SWIFT's
designation, the global LEI system was 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.'' \29\
---------------------------------------------------------------------------
\28\ See 77 FR at 53873. The Order also permitted the
Commission's earlier termination of such designation ``in connection
with the establishment of a global LEI system.'' Id.
\29\ Id.
---------------------------------------------------------------------------
The process to establish the global LEI system has continued to
move forward since the issuance of the Amendment on June 7, 2013. As
discussed above, in the second half of 2013, the ROC adopted
endorsement standards for pre-LOUs and the identifiers issued by them,
and has since endorsed sixteen member-sponsored pre-LOUs--including
DTCC-SWIFT--as globally acceptable.\30\ The Global LEI Foundation that
will provide the COU, managing the central operations of the global LEI
system, has also been formally established under Swiss law. The ROC and
the Global LEI Foundation are currently in the process of developing a
framework for the transition of full operational management of the
global LEI system to the COU, with supervisory oversight by the ROC in
the public interest. On June 30, 2014, the ROC issued a press release
stating that, with the establishment of the Global LEI Foundation and
the commencement of the transition to full operational management by
the COU, legal entity identifiers issued by pre-LOUs that have been
endorsed by the ROC as globally acceptable, would henceforth be
referred to as ``LEIs'' rather than ``pre-LEIs.'' \31\ The Commission
notes that previously issued pre-LEIs (including CICIs issued by DTCC-
SWIFT) do not now need to be reissued; they will, going forward, be
referred to as ``LEIs'' rather than ``pre-LEIs'' (or ``CICIs''), but
will otherwise remain unchanged.
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\30\ To date, the sixteen endorsed pre-LOUs have, collectively,
issued nearly 300,000 legal entity identifiers. See ROC Press
Release, Regulatory Oversight Committee Welcomes First Meeting of
Global LEI Foundation, June 30, 2014, available at https://www.leiroc.org/publications/gls/gleif_20140629_1.pdf.
\31\ Id.
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While progress continues to be made in the establishment of the
global LEI system, the system will not be fully operational before the
expiration of DTCC-SWIFT's two-year term of designation under the
Order. Taking into consideration the significant progress that has been
made in establishing the global LEI system to date--including the ROC's
endorsement of the DTCC-SWIFT utility as a globally acceptable pre-
LOU--and in anticipation that the DTCC-SWIFT utility will become a LOU
within the global system, the Commission believes that it is
appropriate, in order to further the smooth transition to a fully
operational global LEI system, to extend its designation of the DTCC-
SWIFT utility.
The Order contemplated that, if the global LEI system was not yet
operational before the term of DTCC-SWIFT's designation expired, the
Commission could consider the feasibility of having multiple providers
of legal entity identifiers, and the feasibility of coordination among
them to avoid the issuance of duplicative identifiers. The Order was
issued before the governance framework for the global LEI system had
been determined--and, in particular, before it was determined that the
system would be federated in nature, comprised both of a central COU,
and of multiple LOUs issuing LEIs. Consistent with this federated
framework, during the current, transitional period before the global
LEI system becomes fully operational, the ROC has established standards
for the global acceptance of pre-LOUs that satisfy specified principles
and requirements, and has endorsed a number of pre-LOUs as meeting
those standards. In addition, the ROC has carried forward its practice,
described in the Amendment, of providing each pre-LOU with a distinct
prefix for use when issuing identifiers, in order to ensure the
uniqueness of identifier codes across pre-LOUs. During the transitional
period, the ROC has also played an important role in promoting the
mutual acceptance, by ROC member authorities mandating the use of LEIs,
of identifiers issued by any pre-LOU endorsed by the ROC as globally
acceptable.\32\
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\32\ See, e.g., 78 FR at 38955.
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Thus, while the global LEI system is not yet fully operational, its
implementation has progressed to the point where the system can
accommodate multiple pre-LOUs, operating in accordance with standards
that are designed to promote consistency, and to avoid duplication, in
the issuance of legal entity identifiers. Accordingly, the Commission
believes that the feasibility of having multiple providers of legal
entity identifiers, and the feasibility of coordination among them to
avoid the issuance of duplicative identifiers, has already been
addressed in connection with the establishment of the global LEI
system--into which the identifiers to be used to comply with the
Commission's recordkeeping and swap data reporting rules, and any
provider thereof, are expected to transition.\33\ The Commission's
modification of the Order, by way of the Amendment, to permit the use
of identifiers issued by any pre-LOU endorsed by the ROC as globally
acceptable, and as issuing globally acceptable identifiers, reflects
the Commission's support for the feasibility of such a multiple
provider system.
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\33\ This does not preclude the Commission from considering a
submission from another existing or prospective provider of legal
entity identifiers that wishes also to be designated by the
Commission, along with DTCC-SWIFT, but the Commission notes that its
consideration of any such submission would take into account not
only the relevant requirements of Section 45.6 of the Commission's
regulations, but also, for the reasons set forth herein, the
principles, standards and current state of implementation of the
global LEI system.
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For the reasons described above, the Commission is amending the
Order, as modified by the Amendment, to extend its designation of the
DTCC-SWIFT utility while the terms of transition to a fully operational
global LEI system are finalized and implemented. The Commission is also
updating the Order to align the legal entity identifier terminology
used therein with the terminology that is currently used at the
international level, and to remove from the Order certain provisions
that, given the current state of implementation of the global LEI
system, are no longer applicable.
III. Amended and Restated Order
It is ordered, pursuant to Section 21(b) of the CEA and Section
45.6 of the Commission's regulations, that the Order, as modified by
the Amendment, is amended and restated in its entirety to read as
follows:
It is hereby ordered that:
1. Subject to Section 2(a), below, the Depository Trust and
Clearing Corporation (``DTCC'') and Society for Worldwide Interbank
Financial Telecommunications (``SWIFT'') joint venture (``DTCC-SWIFT'')
is designated as the provider of legal entity identifiers (``LEIs''),
to be used in recordkeeping
[[Page 43722]]
and swap data reporting pursuant to parts 45 and 46 of the Commission's
regulations.
a. This designation is conditioned on DTCC-SWIFT's continuing
compliance, for as long as it is authorized to provide LEIs 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 LEIs and of associated reference data adheres on an
ongoing basis to the Commission's requirements set forth in part 45.
b. 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 LEIs and associated reference
data, utility operations, and identity validation processes, and (2) if
DTCC-SWIFT fails to satisfy the conditions of this designation, or upon
any termination of this designation pursuant to Section 2(c)(2) below,
DTCC-SWIFT shall, as instructed by the Commission, pass to a successor
LEI utility specified by the Commission, or to the global LEI system,
free of charge, all LEIs issued by DTCC-SWIFT and associated reference
data and all LEI intellectual property rights.
c. This designation is made for a limited term of one year from the
date of this Amended and Restated Order, and may be terminated by the
Commission on three months' notice in connection with (1) the
establishment of the global LEI system, or (2) DTCC-SWIFT's exit from
the global LEI system.
2. To comply with the legal entity identifier requirements of parts
45 and 46 of the Commission's regulations:
a. Registered entities and swap counterparties subject to the
Commission's jurisdiction may use LEIs provided by DTCC-SWIFT, or any
other pre-Local Operating Unit (``pre-LOU'') approved by the Regulatory
Oversight Committee of the global LEI system (``ROC'') as globally
acceptable and as issuing globally acceptable LEIs. The list of pre-
LOUs that are currently approved by the ROC as globally acceptable and
as issuing globally acceptable LEIs, including the Web site address via
which registered entities and swap counterparties may contact each such
pre-LOU, is available at https://www.leiroc.org/publications/gls/lou_20131003_2.pdf.
b. As provided in section 45.6(b)(1) of the Commission's
regulations, registered entities and swap counterparties subject to the
Commission's jurisdiction shall be identified in all swap recordkeeping
and swap data reporting by a single LEI.
Issued in Washington, DC, on July 22, 2014, by the Commission.
Christopher J. Kirkpatrick,
Acting Secretary of the Commission.
Appendix to Amended and Restated Order Designating the Provider of
Legal Entity Identifiers To Be Used in Recordkeeping and Swap Data
Reporting Pursuant to the Commission's Regulations--Commission Voting
Summary
On this matter, Chairman Massad and Commissioners Wetjen, Bowen,
and Giancarlo voted in the affirmative. No Commissioner voted in the
negative. Commissioner O'Malia did not participate in this matter.
[FR Doc. 2014-17643 Filed 7-25-14; 8:45 am]
BILLING CODE 6351-01-P