Agency Information Collection Activities: Revised Collection, Comment Request: Amendments To Swap Data Recordkeeping and Reporting Requirements for Cleared Swaps, Final Rule, 47362-47365 [2016-17208]

Download as PDF 47362 Federal Register / Vol. 81, No. 140 / Thursday, July 21, 2016 / Notices COMMODITY FUTURES TRADING COMMISSION Agency Information Collection Activities: Revised Collection, Comment Request: Amendments To Swap Data Recordkeeping and Reporting Requirements for Cleared Swaps, Final Rule Commodity Futures Trading Commission. ACTION: Notice. AGENCY: The Commodity Futures Trading Commission (‘‘Commission’’ or ‘‘CFTC’’) is announcing an opportunity for public comment on the proposed amendment to an existing collection of certain information by the agency. Under the Paperwork Reduction Act (‘‘PRA’’), Federal agencies are required to publish notice in the Federal Register concerning each proposed collection of information, including any renewal or revision of such collection, and to allow 60 days for public comment. The Commission recently adopted a final rule regarding the reporting of cleared swap transactions (the ‘‘Cleared Swap Reporting Release’’), which will require entities reporting swaps to report certain additional data elements. This Cleared Swap Reporting Release will also require registered derivatives clearing organizations (‘‘DCOs’’) to terminate ‘‘original swaps’’ (as defined in that final rule), which may require DCOs to connect to multiple registered swap data repositories (‘‘SDRs’’). This notice solicits comments on the proposed revisions to existing PRA collections implicated by the requirements of the Cleared Swap Reporting Release. DATES: Comments must be submitted on or before September 19, 2016. ADDRESSES: You may submit comments, regarding the burden estimated or any other aspect of the information collection, including suggestions for reducing the burden. Please refer to ‘‘Cleared Swap Reporting Release’’ in any correspondence. Comments, identified by ‘‘OMB Collection Number 3038–0096,’’ may be submitted by any of the following methods: • The Agency’s Web site, at http:// comments.cftc.gov/. Follow the instructions for submitting comments through the Web site. • Mail: Christopher Kirkpatrick, Secretary of the Commission, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581. • Hand Delivery/Courier: Same as Mail above. asabaliauskas on DSK3SPTVN1PROD with NOTICES SUMMARY: VerDate Sep<11>2014 17:15 Jul 20, 2016 Jkt 238001 • Federal eRulemaking Portal: http:// www.regulations.gov. Please submit your comments using only one method. All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to http:// www.cftc.gov. If you wish the Commission to consider information that you believe is exempt from disclosure under the Freedom of Information Act, a petition for confidential treatment of the exempt information may be submitted according to the procedures established in § 145.9 of the Commission’s regulations.1 FOR FURTHER INFORMATION CONTACT: Andrew Ridenour, Special Counsel, (202) 418–5438, aridenour@cftc.gov, or Owen Kopon, Attorney-Advisor, (202) 418–5360, okopon@cftc.gov, Division of Market Oversight, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581 SUPPLEMENTARY INFORMATION: Under the PRA, Federal agencies must obtain approval from the Office of Management and Budget (‘‘OMB’’) for each collection of information they conduct or sponsor. ‘‘Collection of Information’’ is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3 and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA, 44 U.S.C. 3506(c)(2)(A), requires Federal agencies to provide a 60-day notice in the Federal Register concerning each proposed collection of information before submitting the collection to OMB for approval. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. To comply with this requirement, the CFTC is publishing the notice of the proposed collection of information listed below. 1. Background a. Statutory and Regulatory History To enhance transparency, promote standardization, and reduce systemic risk, section 727 of the Dodd-Frank Act 2 added to the Commodity Exchange Act (‘‘CEA’’) section 2(a)(13)(G),3 which requires all swaps, whether cleared or CFR 145.9. Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111–203, 124 Stat. 1376 (2010). The text of the Dodd-Frank Act may be accessed at http://www.cftc.gov/ LawRegulation/DoddFrankAct/index.htm. 3 7 U.S.C. 2(a)(13)(G). PO 00000 1 17 2 See Frm 00019 Fmt 4703 Sfmt 4703 uncleared, to be reported to SDRs.4 SDRs are registered entities created by section 728 of the Dodd-Frank Act to collect and maintain data related to swap transactions as prescribed by the Commission, and to make such data available to the Commission and other regulators. Section 21(b) of the CEA,5 added by section 728 of the Dodd-Frank Act, directs the Commission to prescribe standards for swap data recordkeeping and reporting, which are to apply to both registered entities and counterparties involved with swaps,6 and which are to be comparable to standards for clearing organizations in connection with their clearing of swaps.7 On December 20, 2011, the Commission adopted part 45 of the Commission’s regulations (‘‘Final Part 45 Rulemaking’’).8 Part 45 implements the requirements of section 21 of the CEA by setting forth the manner and content of reporting to SDRs, and requires electronic reporting both when a swap is initially executed, referred to as ‘‘creation’’ data,9 and over the course of the swap’s existence, referred to as ‘‘continuation’’ data.10 Additionally, part 45 sets forth varying reporting timeframes depending on the type of reporting, counterparty, execution, or product.11 As part of the Commission’s ongoing efforts to improve swap transaction data quality and to improve the Commission’s ability to utilize the data for regulatory purposes, Commission staff has continued to evaluate issues in connection with reporting under part 4 See also 7 U.S.C. 1a(40)(E), 1a(48). U.S.C. 24a(b). 6 7 U.S.C. 24a(b)(1)(A). 7 7 U.S.C. 24a(b)(3). 8 See Swap Data Recordkeeping and Reporting Requirements, Final Rule, 77 FR 2136 (Jan. 13, 2012). 9 See 17 CFR 45.1 (defining ‘‘required swap creation data’’ as all primary economic terms data for a swap in the swap asset class in question, and all confirmation data for the swap.). ‘‘Primary economic terms data’’ is defined as all of the data elements necessary to fully report all of the primary economic terms of a swap in the swap asset class of the swap in question, while ‘‘confirmation data’’ is defined as all of the terms of a swap matched and agreed upon by the counterparties in confirming the swap. Id. For cleared swaps, confirmation data also includes the internal identifiers assigned by the automated systems of the DCO to the two transactions resulting from novation to the clearing house. Id. See also 17 CFR 45.3. 10 See 17 CFR 45.1 (defining ‘‘required swap continuation data’’ as all of the data elements that must be reported during the existence of a swap to ensure that all data concerning the swap in the swap data repository remains current and accurate, and includes all changes to the primary economic terms of the swap occurring during the existence of the swap’’). See also 17 CFR 45.4. 11 See 17 CFR 45.3(a), 45.3(b), 45.3(c), and 45.3(d). 57 E:\FR\FM\21JYN1.SGM 21JYN1 Federal Register / Vol. 81, No. 140 / Thursday, July 21, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES 45, including those related to cleared swaps in particular. To this end, the Commission published a request for comment on a variety of swap data reporting and recordkeeping provisions to help determine how such provisions were being applied, and to determine whether or what clarifications or enhancements to these provisions may be appropriate (the ‘‘IDWG Request for Comment’’).12 One of the subjects of the IDWG Request for Comment was the reporting of cleared swaps, and, in particular, the manner in which the swap data reporting rules should address cleared swaps.13 After considering the comments submitted in response to the IDWG Request for Comment relating to the reporting of cleared swaps,14 the Commission issued a Notice of Proposed Rulemaking (the ‘‘NPRM’’) in which it proposed changes to part 45 as they relate to the reporting 12 See Review of Swap Data Recordkeeping and Reporting Requirements, Request for Comment, 79 FR 16689 (Mar. 26, 2014). The IDWG Request for Comment was referred to simply as the ‘‘Request for Comment’’ in the NPRM. 13 79 FR 16689, 16694. 14 The comment file for responses to the IDWG Request for Comment is available at http:// comments.cftc.gov/PublicComments/ CommentList.aspx?id=1484. Commenters responding to the IDWG Request for Comment included: The American Gas Association, May 27, 2014; American Petroleum Institute, May 27, 2014; Americans for Financial Reform, May 27, 2014 (‘‘AFR’’); Australian Bankers’ Association, May 27, 2014 (‘‘ABA’’); Better Markets, Inc., May 27, 2014, (‘‘Better Markets’’); B&F Capital Markets, Inc., May 27, 2014; CME Group, May 27, 2014 (‘‘CME’’); Coalition for Derivatives End-Users, May 27, 2014 (‘‘CDEU’’); Coalition of Physical Energy Companies, May 27, 2014; Commercial Energy Working Group, May 27, 2014 (‘‘CEWG’’); Commodity Markets Council, May 27, 2014 (‘‘CMC’’); The Depository Trust & Clearing Corporation, May 27, 2014 (‘‘DTCC’’); EDF Trading North America, LLC, May 27, 2014; Edison Electric Institute, May 27, 2014 (‘‘EEI’’); Financial InterGroup Holdings Ltd, May 27, 2014; Financial Services Roundtable (‘‘FSR’’), May 27, 2014; Fix Trading Community, May 27, 2014; The Global Foreign Exchange Division of the Global Financial Markets Association, May 27, 2014 (‘‘GFMA’’); HSBC, May 27, 2014; Interactive Data Corporation, May 27, 2014; ICE Trade Vault, LLC, May 27, 2014 (‘‘ITV’’); International Energy Credit Association, May 27, 2014; International Swaps and Derivatives Association, Inc., May 23, 2014 (‘‘ISDA’’); Japanese Bankers Association, May 27, 2014 (‘‘JBA’’); Just Energy Group Inc., May 27, 2014; LCH.Clearnet Group Limited, May 29, 2014 (‘‘LCH’’); Managed Funds Association, May 27, 2014 (‘‘MFA’’); Markit, May 27, 2014; Natural Gas Supply Association, May 27, 2014 (‘‘NGSA’’); NFP Electric Associations (National Rural Electric Cooperative Association, American Public Power Association, and Large Public Power Council), May 27, 2014 (‘‘NFPEA’’); OTC Clearing Hong Kong Limited, May 27, 2014 (‘‘OTC Hong Kong’’); Securities Industry and Financial Markets Association Asset Management Group, May 27, 2014 (‘‘SIFMA’’); SWIFT, May 27, 2014; Swiss Re, May 27, 2014; Thomson Reuters (SEF) LLC, May 27, 2014 (‘‘TR SEF’’); and TriOptima, May 27, 2014. Discussions of comments on reporting of cleared swaps received in response to the IDWG Request for Comment are included in the preamble to the NPRM. VerDate Sep<11>2014 17:15 Jul 20, 2016 Jkt 238001 of cleared swaps transactions.15 In response to the NPRM, the Commission received 17 comments letters addressing its proposed revisions to part 45.16 On June 27, 2016, the Commission adopted the Cleared Swap Reporting Release,17 which amended certain provisions of existing part 45 as they relate to the reporting of cleared swap transactions. In the Cleared Swap Reporting Release, the Commission noted that the changes being adopted would require some revisions to the existing information collection covering obligations on reporting entities and SDRs found in part 45.18 b. Existing PRA Collection Relating to Part 45 Reporting The OMB control number for the information collection associated with part 45 swaps reporting is 3038–0096. The Commission proposes to amend existing collection 3038–0096 to account for adjustments to reporting entities’ swaps data reporting systems necessitated by the Cleared Swap Reporting Release. Information collection 3038–0096 19 includes an estimate of burden hours and costs associated with various requirements of part 45 swaps reporting and recordkeeping,20 including the reporting of creation data under § 45.3 and continuation data under § 45.4,21 the 15 See Amendments to Swap Data Recordkeeping and Reporting Requirements for Cleared Swaps, Notice of Proposed Rulemaking, 80 FR 52544 (Aug. 31, 2015). 16 The comment file for responses to the NPRM is available at http://comments.cftc.gov/ PublicComments/CommentList.aspx?id=1614. Commenters to the NPRM included: Better Markets, October 30, 2015; CME, October 30, 2015; COPE, October 30, 2015; CEWG, October 30, 2015; CMC, October 30, 2015; DTCC, October 30, 2015; EEI/ EPSA, October 30, 2015; Eurex Clearing AG (‘‘Eurex’’); FSR, October 30, 2015; ITV, October 30, 2015; ISDA, October 30, 2015; JBA, October 30, 2015; LCH, October 30, 2015; MFA and Alternative Investment Management Association (‘‘AIMA’’), October 30, 2015; Markit, October 30, 2015; and North American Derivatives Exchange, Inc., October 30, 2015 (‘‘Nadex’’). 17 See Amendments to Swap Data Recordkeeping and Reporting Requirements for Cleared Swaps, Final Rule, 81 FR 41736 (June 27, 2016). 18 See Cleared Swap Reporting Release, 81 FR, at 41758. 19 The Commission issued a notice of intent to renew information collection 3038–0096 on August 7, 2015. See Notice of Intent to Renew Collection 3038–0096, 80 FR 47477 (Aug. 7, 2015). The Commission received no comments on this notice of intent to renew. The comment file is available at http://comments.cftc.gov/PublicComments/ CommentList.aspx?id=1608. The Office of Management and Budget approved without change the renewal of this information collection on December 21, 2015. 20 Supporting documentation for the renewal of information collection 3038–0096 is available at http://www.reginfo.gov/public/do/ PRAViewDocument?ref_nbr=201508-3038-002. 21 ‘‘Creation data’’ under § 45.3 includes all primary economic terms (‘‘PET’’) data fields listed PO 00000 Frm 00020 Fmt 4703 Sfmt 4703 47363 maintenance of an internal order management system (‘‘OMS’’), and personnel needed to maintain a compliance program in support of an OMS system. As a result of changes to §§ 45.3 and 45.4 and to the PET fields identified in appendix A to part 45 in the Cleared Swap Reporting Release, the Commission proposes to revise collection 3038–0096. The proposed revision to the collection will add an estimate for the burden associated (a) with changing reporting systems to comply with changes to the required data to be reported under § 45.3 and § 45.4, and (b) with requirements that DCOs potentially connect to all registered SDRs. In response to the NPRM,22 the Commission received several comments on the costs associated with part 45 swaps reporting that could implicate PRA burdens, summarized below. 2. PRA Burden and Benefits Associated With Cleared Swap Reporting Release 23 a. Additional and Amended PET fields Regarding the addition of PET fields applicable to all swaps, ISDA commented that the PET field for ‘‘clearing exception or exemption type’’ would be ‘‘very challenging and costly’’ to implement.24 However, neither ISDA nor any other commenter provided information quantifying the cost to update reporting systems to account for the modified and additional PET fields. As discussed more extensively in Section III.C.9 of the NPRM,25 the information required to be reported in the modified ‘‘clearing exception or exemption type’’ is also already in the in appendix 1 to part 45, as well as all ‘‘confirmation data,’’ which includes all terms of the swap matched and agreed upon by the parties. ‘‘Continuation data’’ reporting under § 45.4 requires a reporting entity to ensure that all data on a swap is kept current and accurate, including any changes to primary economic terms. 22 See NPRM, 80 FR 52544 (Aug. 31, 2015). 23 While not connected to the Cleared Swap Reporting Release, the Commission also proposes to reduce the number of SDRs in collection 3038–0096 from 15 to 4. When submitting the original OMB information collection for part 45 reporting, the Commission had assumed that up to 15 entities would register as SDRs. Currently, there are four SDRs provisionally registered with the Commission. Three other entities had submitted SDR applications. Two withdrew applications in 2012 and 2014. One (GTR) withdrew its application and resubmitted under the corporate entity DTCC Data Repository (US) LLC, which currently operates as a provisionally registered SDR. As the Commission has not received any SDR applications since 2012, the Commission believes that four is a reasonable number of SDRs for calculating PRA burdens. 24 ISDA Oct. 30, 2015 Letter, at 9. 25 See Cleared Swap Reporting Release, 81 FR, at 41767. E:\FR\FM\21JYN1.SGM 21JYN1 47364 Federal Register / Vol. 81, No. 140 / Thursday, July 21, 2016 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES possession of the reporting entity; changes to reporting systems required to report this field would involve adding a known piece of information to the message reported to an SDR. Regarding new PET fields for clearing swaps, Eurex commented that DCOs would need to collect data from the original swap counterparties or trading venue to be able to report these fields.26 However, as the Commission noted in the Cleared Swap Reporting Release, the information required to report these PET fields is either generated by the DCO itself (such as clearing swap unique swap identifier (‘‘USI’’), clearing member LEI, clearing member internal identifier, house/customer account flag, and receipt and clearing timestamps) or should be included in the clearing member’s submission of a swap to the DCO for clearing (such as the original swap USI and original swap SDR). While the Commission believes that reporting entities already possess information required to report the added and amended PET fields, the Commission proposes to amend collection 3038–0096 to account for changes that reporting entities must make to their reporting systems to comply with these new and amended fields. The Commission estimates that each reporting entity—including DCOs, swap execution facilities (‘‘SEFs’’), designated contract markets (‘‘DCMs’’), swap dealers (‘‘SDs’’), major swap participants (‘‘MSPs’’), and non-SD/ MSPs with reporting obligations— would incur a burden of 200 hours to bring reporting systems in compliance with the added and amendment PET fields. The Commission also believes that SDRs would incur a burden of 200 hours to update their swap data acceptance systems to account for the added and amended PET fields. However, the Commission also anticipates that reporting entities and SDRs will need to make periodic changes to reporting systems to account for future changes to reporting obligations under part 45 and changes to reporting brought about by the evolution of products offered in the swaps market. Therefore, the Commission proposes revising collection 3038–0096 to include a recurring burden of 200 hours to cover such periodic changes. The 26 See Eurex Oct. 30, 2015 Letter, at 5. e.g., Eurex Oct. 30, 2015 Letter, at 5, 9; LedgerX Oct. 30, 2015 Letter, at 2; LCH Oct. 30, 2015 Letter, at 3. The Commission notes that another commenter stated that ‘‘DCOs have already made connections with the major CFTC-registered SDRs.’’ (DTCC Oct. 30, 2015, Letter at 5). 27 See VerDate Sep<11>2014 17:15 Jul 20, 2016 Jkt 238001 recurring 200 burden hours would cover changes to PET fields under the Cleared Swap Reporting Release and any future changes described above. The Commission does not believe that reporting entities or SDRs would need to incur additional costs aside from these burden hours to bring reporting systems into compliance. b. DCO Termination of Original Swaps Regarding the requirement that DCOs terminate original swaps once the DCO has accepted them for clearing, some commenters raised concerns that requiring DCOs to report continuation data for original swaps to the SDR to which the original swap was reported could increase costs for DCOs as they may need to connect to SDRs to which they do not currently have a connection.27 The Commission understands that DCOs already may report terminations to the original SDR, and to the extent these reporting systems are already implemented the new rules will not introduce additional costs for these DCOs. However, the Commission recognizes that requiring DCOs to potentially connect to more than one SDR in order to report continuation data for original swaps may require an update to the existing information collection 3038–0096. In response to the NPRM, the Commission received three comments concerning the costs and benefits of the proposed amendments to § 45.4 in two different contexts. LCH and Eurex expressed concerns with the infrastructure required to have the DCO connected to every SDR chosen by the SD/MSP for which the DCO clears and report terminations according to the technical requirements of each SDR.28 Eurex specifically indicated that the cost of implementing the required infrastructure would have significant time and financial costs. In commenting on the IDWG Request for Comment, one foreign central counterparty now acting pursuant to a DCO Exemptive Order cited a specific cost for connecting to a new SDR as involving at least 150 working days.29 Assuming an 8-hour work day, this would be the equivalent of 1,200 hours for a connection to an SDR. 28 See Eurex Oct. 30, 2015 Letter, at 4–5; LCH Oct. 30, 2015 Letter, at 3. 29 See OTC Hong Kong May 27, 2014 Letter, at 2– 3 (contending that setup, application development, and testing to interface with each SDR is likely to require at least 150 man-days, and that a more costeffective framework would be to require the original counterparty to report termination of the alpha once PO 00000 Frm 00021 Fmt 4703 Sfmt 4703 The Commission estimates the cost and hours burden associated with connecting DCOs to all SDRs according to the OTC Hong Kong comment letter. Considering that there are only four registered SDRs, each DCO could at most be required to connect to four SDRs. However, the number of connections likely would be less than four as not every DCO clears swaps for every asset class, and not every SDR accepts data for every asset class. Further, the number of connections could be limited to the extent that the DCO clears swaps for clearing members that choose to report original swaps to a limited number of SDRs. Additionally, the Commission assumes economies of scale when DCOs connect to more than one SDR. While connections to different SDRs could present different technological challenges, the DCO would be able to use the same programmers, analysts, and other personnel when implementing connections to all required SDRs. Therefore, the Commission estimates a one-time hours burden of 3,000 hours per DCO to comply with the Cleared Swap Reporting Release, beyond the existing burden in collection 3038– 0096. The Commission also intends to amend collection 3038–0096 to include recurring costs for DCOs associated with SDR connections. Existing collection 3038–0070 (relating to real-time reporting) estimates an annual cost of $100,000 to maintain an SDR connection for SEFs, DCMs, SDs, MSPs, and non-SD/MSP reporting entities, but does not specifically cover DCOs. The Commission proposes to include the same recurring SDR connectivity burdens for DCOs within collection 3038–0096, scaled to account for connections to multiple SDRs and resulting economies of scale. The Commission estimates that DCOs would incur annual costs of $250,000 to maintain connections to multiple SDRs, to allow the DCO to terminate all original swaps accepted for clearing. 3. Burden Statement The Commission estimates the average increase in the burden of this collection of information as follows: Additional and amended PET fields: it receives confirmation that the alpha has been accepted for clearing, and that the original counterparty would already have in place technical and operational interfaces with the SDR of its choice. The commenter also contended that the burden on DCOs of additional reporting outweighs the benefits to the CFTC). E:\FR\FM\21JYN1.SGM 21JYN1 47365 Federal Register / Vol. 81, No. 140 / Thursday, July 21, 2016 / Notices Affected entities SDRs, SEFs, DCMs, DCOs, SD/MSPs, non-SD/MSP reporting entities Burden type Burden per respondent Number of respondents One-time hours burden ...................................... One-time costs ................................................... Recurring hours burden ..................................... Recurring costs .................................................. 0 hours ............................................................... $0 ....................................................................... 200 hours ........................................................... $0 ....................................................................... 449 449 449 449 Total burden 0 hours. $0. 89,900 hours. $0. Termination of original swaps: Affected entities DCOs Burden type Burden per respondent One-time hours burden ...................................... One-time costs ................................................... Recurring hours burden ..................................... Recurring costs .................................................. 3,000 hours ........................................................ $0 ....................................................................... 0 hours ............................................................... $250,000 ............................................................ asabaliauskas on DSK3SPTVN1PROD with NOTICES 4. Request for Comment The NPRM on cleared swap reporting requested comments on the burden associated with the added and amended PET fields, and on DCOs reporting original swap terminations.30 Those comments may be found on the Commission’s Web site, http:// www.cftc.gov, at http:// comments.cftc.gov/PublicComments/ CommentList.aspx?id=1614. All comments received in response to the NPRM will be considered, along with the comments received in response to this notice, in determining the Commission’s submission to OMB regarding revisions to existing information collections to account for changes adopted in the Cleared Swap Reporting Release. The Commission invites comments on: • Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have a practical use; • The accuracy of the Commission’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; • Ways to enhance the quality, usefulness, and clarity of the information to be collected; and • Ways to minimize the burden of collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology; e.g., permitting electronic submission of responses. 30 See 77 FR 25320 at 25328. VerDate Sep<11>2014 17:15 Jul 20, 2016 Jkt 238001 Number of respondents Specifically, the Commission invites comments on the following questions: 1. The Commission has proposed including a 200 hour recurring burden in the collection to account for periodic changes to reporting systems brought about by changes to PET terms (such as those under the Cleared Swap Reporting Release) as well as other periodic changes. Does this estimate accurately estimate the burden associated with the periodic updating of reporting systems to ensure continued compliance with part 45 reporting obligations? 2. Given that not every DCO clears swaps in every asset class, and that not every SDR accepts data for every asset class, to how many SDRs must DCOs typically connect to properly report original swap terminations? 3. Can DCOs take advantage of economies of scale in terms of personnel and/or equipment when connecting to more than one SDR? 4. Given that original swap termination messages under revised § 45.4 would need to be submitted daily—not, as with creation data, as soon as technologically practicable—are DCOs able to submit original swap terminations through methods less expensive than full connections to SDRs that are used for reporting creation data and real-time reporting? If so, what are the costs associated with such connections? 5. In the Cleared Swap Reporting Release, the Commission encouraged DCOs and SDRs to standardize original swap termination messages. Are DCOs and SDRs working towards such a standardized message? What cost savings could be associated with such standardized messages? 6. Would a standardized termination message allow DCOs to use connection PO 00000 Frm 00022 Fmt 4703 Sfmt 4703 12 12 12 12 Total burden 36,000 hours. $0. 0 hours. $3,000,000. methods less expensive than full connections to SDRs that are used for reporting creation data and real-time reporting? 7. As noted in footnote 23, the Commission is proposing to reduce the number of SDRs used for PRA burden calculations from 15 to four. Would this change accurately reflect the current state of the data reporting industry? 8. The Commission received comments on the hours burden associated with establishing a DCO connection to an SDR, but not a cost estimate. Do the proposed revisions to the PRA, which include an hours burden for establishing a connection, and a cost burden for maintaining a connection, accurately reflect the PRA burden on DCOs? (Authority: 44 U.S.C. 3501 et seq.) Dated: July 15, 2016. Robert N. Sidman, Deputy Secretary of the Commission. [FR Doc. 2016–17208 Filed 7–20–16; 8:45 am] BILLING CODE 6351–01–P CONSUMER PRODUCT SAFETY COMMISSION [Docket No. CPSC–2009–0073] Agency Information Collection Activities; Submission for OMB Review; Comment Request—Virginia Graeme Baker Pool and Spa Safety Act; Compliance Form Consumer Product Safety Commission. ACTION: Notice. AGENCY: In accordance with the requirements of the Paperwork Reduction Act (‘‘PRA’’) of 1995 (44 SUMMARY: E:\FR\FM\21JYN1.SGM 21JYN1

Agencies

[Federal Register Volume 81, Number 140 (Thursday, July 21, 2016)]
[Notices]
[Pages 47362-47365]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17208]



[[Page 47362]]

-----------------------------------------------------------------------

COMMODITY FUTURES TRADING COMMISSION


Agency Information Collection Activities: Revised Collection, 
Comment Request: Amendments To Swap Data Recordkeeping and Reporting 
Requirements for Cleared Swaps, Final Rule

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Commodity Futures Trading Commission (``Commission'' or 
``CFTC'') is announcing an opportunity for public comment on the 
proposed amendment to an existing collection of certain information by 
the agency. Under the Paperwork Reduction Act (``PRA''), Federal 
agencies are required to publish notice in the Federal Register 
concerning each proposed collection of information, including any 
renewal or revision of such collection, and to allow 60 days for public 
comment. The Commission recently adopted a final rule regarding the 
reporting of cleared swap transactions (the ``Cleared Swap Reporting 
Release''), which will require entities reporting swaps to report 
certain additional data elements. This Cleared Swap Reporting Release 
will also require registered derivatives clearing organizations 
(``DCOs'') to terminate ``original swaps'' (as defined in that final 
rule), which may require DCOs to connect to multiple registered swap 
data repositories (``SDRs''). This notice solicits comments on the 
proposed revisions to existing PRA collections implicated by the 
requirements of the Cleared Swap Reporting Release.

DATES: Comments must be submitted on or before September 19, 2016.

ADDRESSES: You may submit comments, regarding the burden estimated or 
any other aspect of the information collection, including suggestions 
for reducing the burden. Please refer to ``Cleared Swap Reporting 
Release'' in any correspondence. Comments, identified by ``OMB 
Collection Number 3038-0096,'' may be submitted by any of the following 
methods:
     The Agency's Web site, at http://comments.cftc.gov/. 
Follow the instructions for submitting comments through the Web site.
     Mail: Christopher Kirkpatrick, Secretary of the 
Commission, Commodity Futures Trading Commission, Three Lafayette 
Centre, 1155 21st Street NW., Washington, DC 20581.
     Hand Delivery/Courier: Same as Mail above.
     Federal eRulemaking Portal: http://www.regulations.gov.
    Please submit your comments using only one method.
    All comments must be submitted in English, or if not, accompanied 
by an English translation. Comments will be posted as received to 
http://www.cftc.gov. If you wish the Commission to consider information 
that you believe is exempt from disclosure under the Freedom of 
Information Act, a petition for confidential treatment of the exempt 
information may be submitted according to the procedures established in 
Sec.  145.9 of the Commission's regulations.\1\
---------------------------------------------------------------------------

    \1\ 17 CFR 145.9.

FOR FURTHER INFORMATION CONTACT: Andrew Ridenour, Special Counsel, 
(202) 418-5438, aridenour@cftc.gov, or Owen Kopon, Attorney-Advisor, 
(202) 418-5360, okopon@cftc.gov, Division of Market Oversight, 
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st 
---------------------------------------------------------------------------
Street NW., Washington, DC 20581

SUPPLEMENTARY INFORMATION: Under the PRA, Federal agencies must obtain 
approval from the Office of Management and Budget (``OMB'') for each 
collection of information they conduct or sponsor. ``Collection of 
Information'' is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3 and 
includes agency requests or requirements that members of the public 
submit reports, keep records, or provide information to a third party. 
Section 3506(c)(2)(A) of the PRA, 44 U.S.C. 3506(c)(2)(A), requires 
Federal agencies to provide a 60-day notice in the Federal Register 
concerning each proposed collection of information before submitting 
the collection to OMB for approval. An agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid control number. To 
comply with this requirement, the CFTC is publishing the notice of the 
proposed collection of information listed below.

1. Background

a. Statutory and Regulatory History

    To enhance transparency, promote standardization, and reduce 
systemic risk, section 727 of the Dodd-Frank Act \2\ added to the 
Commodity Exchange Act (``CEA'') section 2(a)(13)(G),\3\ which requires 
all swaps, whether cleared or uncleared, to be reported to SDRs.\4\ 
SDRs are registered entities created by section 728 of the Dodd-Frank 
Act to collect and maintain data related to swap transactions as 
prescribed by the Commission, and to make such data available to the 
Commission and other regulators. Section 21(b) of the CEA,\5\ added by 
section 728 of the Dodd-Frank Act, directs the Commission to prescribe 
standards for swap data recordkeeping and reporting, which are to apply 
to both registered entities and counterparties involved with swaps,\6\ 
and which are to be comparable to standards for clearing organizations 
in connection with their clearing of swaps.\7\
---------------------------------------------------------------------------

    \2\ See Dodd-Frank Wall Street Reform and Consumer Protection 
Act, Public Law 111-203, 124 Stat. 1376 (2010). The text of the 
Dodd-Frank Act may be accessed at http://www.cftc.gov/LawRegulation/DoddFrankAct/index.htm.
    \3\ 7 U.S.C. 2(a)(13)(G).
    \4\ See also 7 U.S.C. 1a(40)(E), 1a(48).
    \5\ 7 U.S.C. 24a(b).
    \6\ 7 U.S.C. 24a(b)(1)(A).
    \7\ 7 U.S.C. 24a(b)(3).
---------------------------------------------------------------------------

    On December 20, 2011, the Commission adopted part 45 of the 
Commission's regulations (``Final Part 45 Rulemaking'').\8\ Part 45 
implements the requirements of section 21 of the CEA by setting forth 
the manner and content of reporting to SDRs, and requires electronic 
reporting both when a swap is initially executed, referred to as 
``creation'' data,\9\ and over the course of the swap's existence, 
referred to as ``continuation'' data.\10\ Additionally, part 45 sets 
forth varying reporting timeframes depending on the type of reporting, 
counterparty, execution, or product.\11\
---------------------------------------------------------------------------

    \8\ See Swap Data Recordkeeping and Reporting Requirements, 
Final Rule, 77 FR 2136 (Jan. 13, 2012).
    \9\ See 17 CFR 45.1 (defining ``required swap creation data'' as 
all primary economic terms data for a swap in the swap asset class 
in question, and all confirmation data for the swap.). ``Primary 
economic terms data'' is defined as all of the data elements 
necessary to fully report all of the primary economic terms of a 
swap in the swap asset class of the swap in question, while 
``confirmation data'' is defined as all of the terms of a swap 
matched and agreed upon by the counterparties in confirming the 
swap. Id. For cleared swaps, confirmation data also includes the 
internal identifiers assigned by the automated systems of the DCO to 
the two transactions resulting from novation to the clearing house. 
Id. See also 17 CFR 45.3.
    \10\ See 17 CFR 45.1 (defining ``required swap continuation 
data'' as all of the data elements that must be reported during the 
existence of a swap to ensure that all data concerning the swap in 
the swap data repository remains current and accurate, and includes 
all changes to the primary economic terms of the swap occurring 
during the existence of the swap''). See also 17 CFR 45.4.
    \11\ See 17 CFR 45.3(a), 45.3(b), 45.3(c), and 45.3(d).
---------------------------------------------------------------------------

    As part of the Commission's ongoing efforts to improve swap 
transaction data quality and to improve the Commission's ability to 
utilize the data for regulatory purposes, Commission staff has 
continued to evaluate issues in connection with reporting under part

[[Page 47363]]

45, including those related to cleared swaps in particular. To this 
end, the Commission published a request for comment on a variety of 
swap data reporting and recordkeeping provisions to help determine how 
such provisions were being applied, and to determine whether or what 
clarifications or enhancements to these provisions may be appropriate 
(the ``IDWG Request for Comment'').\12\ One of the subjects of the IDWG 
Request for Comment was the reporting of cleared swaps, and, in 
particular, the manner in which the swap data reporting rules should 
address cleared swaps.\13\ After considering the comments submitted in 
response to the IDWG Request for Comment relating to the reporting of 
cleared swaps,\14\ the Commission issued a Notice of Proposed 
Rulemaking (the ``NPRM'') in which it proposed changes to part 45 as 
they relate to the reporting of cleared swaps transactions.\15\ In 
response to the NPRM, the Commission received 17 comments letters 
addressing its proposed revisions to part 45.\16\
---------------------------------------------------------------------------

    \12\ See Review of Swap Data Recordkeeping and Reporting 
Requirements, Request for Comment, 79 FR 16689 (Mar. 26, 2014). The 
IDWG Request for Comment was referred to simply as the ``Request for 
Comment'' in the NPRM.
    \13\ 79 FR 16689, 16694.
    \14\ The comment file for responses to the IDWG Request for 
Comment is available at http://comments.cftc.gov/PublicComments/CommentList.aspx?id=1484. Commenters responding to the IDWG Request 
for Comment included: The American Gas Association, May 27, 2014; 
American Petroleum Institute, May 27, 2014; Americans for Financial 
Reform, May 27, 2014 (``AFR''); Australian Bankers' Association, May 
27, 2014 (``ABA''); Better Markets, Inc., May 27, 2014, (``Better 
Markets''); B&F Capital Markets, Inc., May 27, 2014; CME Group, May 
27, 2014 (``CME''); Coalition for Derivatives End-Users, May 27, 
2014 (``CDEU''); Coalition of Physical Energy Companies, May 27, 
2014; Commercial Energy Working Group, May 27, 2014 (``CEWG''); 
Commodity Markets Council, May 27, 2014 (``CMC''); The Depository 
Trust & Clearing Corporation, May 27, 2014 (``DTCC''); EDF Trading 
North America, LLC, May 27, 2014; Edison Electric Institute, May 27, 
2014 (``EEI''); Financial InterGroup Holdings Ltd, May 27, 2014; 
Financial Services Roundtable (``FSR''), May 27, 2014; Fix Trading 
Community, May 27, 2014; The Global Foreign Exchange Division of the 
Global Financial Markets Association, May 27, 2014 (``GFMA''); HSBC, 
May 27, 2014; Interactive Data Corporation, May 27, 2014; ICE Trade 
Vault, LLC, May 27, 2014 (``ITV''); International Energy Credit 
Association, May 27, 2014; International Swaps and Derivatives 
Association, Inc., May 23, 2014 (``ISDA''); Japanese Bankers 
Association, May 27, 2014 (``JBA''); Just Energy Group Inc., May 27, 
2014; LCH.Clearnet Group Limited, May 29, 2014 (``LCH''); Managed 
Funds Association, May 27, 2014 (``MFA''); Markit, May 27, 2014; 
Natural Gas Supply Association, May 27, 2014 (``NGSA''); NFP 
Electric Associations (National Rural Electric Cooperative 
Association, American Public Power Association, and Large Public 
Power Council), May 27, 2014 (``NFPEA''); OTC Clearing Hong Kong 
Limited, May 27, 2014 (``OTC Hong Kong''); Securities Industry and 
Financial Markets Association Asset Management Group, May 27, 2014 
(``SIFMA''); SWIFT, May 27, 2014; Swiss Re, May 27, 2014; Thomson 
Reuters (SEF) LLC, May 27, 2014 (``TR SEF''); and TriOptima, May 27, 
2014. Discussions of comments on reporting of cleared swaps received 
in response to the IDWG Request for Comment are included in the 
preamble to the NPRM.
    \15\ See Amendments to Swap Data Recordkeeping and Reporting 
Requirements for Cleared Swaps, Notice of Proposed Rulemaking, 80 FR 
52544 (Aug. 31, 2015).
    \16\ The comment file for responses to the NPRM is available at 
http://comments.cftc.gov/PublicComments/CommentList.aspx?id=1614. 
Commenters to the NPRM included: Better Markets, October 30, 2015; 
CME, October 30, 2015; COPE, October 30, 2015; CEWG, October 30, 
2015; CMC, October 30, 2015; DTCC, October 30, 2015; EEI/EPSA, 
October 30, 2015; Eurex Clearing AG (``Eurex''); FSR, October 30, 
2015; ITV, October 30, 2015; ISDA, October 30, 2015; JBA, October 
30, 2015; LCH, October 30, 2015; MFA and Alternative Investment 
Management Association (``AIMA''), October 30, 2015; Markit, October 
30, 2015; and North American Derivatives Exchange, Inc., October 30, 
2015 (``Nadex'').
---------------------------------------------------------------------------

    On June 27, 2016, the Commission adopted the Cleared Swap Reporting 
Release,\17\ which amended certain provisions of existing part 45 as 
they relate to the reporting of cleared swap transactions. In the 
Cleared Swap Reporting Release, the Commission noted that the changes 
being adopted would require some revisions to the existing information 
collection covering obligations on reporting entities and SDRs found in 
part 45.\18\
---------------------------------------------------------------------------

    \17\ See Amendments to Swap Data Recordkeeping and Reporting 
Requirements for Cleared Swaps, Final Rule, 81 FR 41736 (June 27, 
2016).
    \18\ See Cleared Swap Reporting Release, 81 FR, at 41758.
---------------------------------------------------------------------------

b. Existing PRA Collection Relating to Part 45 Reporting

    The OMB control number for the information collection associated 
with part 45 swaps reporting is 3038-0096. The Commission proposes to 
amend existing collection 3038-0096 to account for adjustments to 
reporting entities' swaps data reporting systems necessitated by the 
Cleared Swap Reporting Release. Information collection 3038-0096 \19\ 
includes an estimate of burden hours and costs associated with various 
requirements of part 45 swaps reporting and recordkeeping,\20\ 
including the reporting of creation data under Sec.  45.3 and 
continuation data under Sec.  45.4,\21\ the maintenance of an internal 
order management system (``OMS''), and personnel needed to maintain a 
compliance program in support of an OMS system.
---------------------------------------------------------------------------

    \19\ The Commission issued a notice of intent to renew 
information collection 3038-0096 on August 7, 2015. See Notice of 
Intent to Renew Collection 3038-0096, 80 FR 47477 (Aug. 7, 2015). 
The Commission received no comments on this notice of intent to 
renew. The comment file is available at http://comments.cftc.gov/PublicComments/CommentList.aspx?id=1608. The Office of Management 
and Budget approved without change the renewal of this information 
collection on December 21, 2015.
    \20\ Supporting documentation for the renewal of information 
collection 3038-0096 is available at http://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201508-3038-002.
    \21\ ``Creation data'' under Sec.  45.3 includes all primary 
economic terms (``PET'') data fields listed in appendix 1 to part 
45, as well as all ``confirmation data,'' which includes all terms 
of the swap matched and agreed upon by the parties. ``Continuation 
data'' reporting under Sec.  45.4 requires a reporting entity to 
ensure that all data on a swap is kept current and accurate, 
including any changes to primary economic terms.
---------------------------------------------------------------------------

    As a result of changes to Sec. Sec.  45.3 and 45.4 and to the PET 
fields identified in appendix A to part 45 in the Cleared Swap 
Reporting Release, the Commission proposes to revise collection 3038-
0096. The proposed revision to the collection will add an estimate for 
the burden associated (a) with changing reporting systems to comply 
with changes to the required data to be reported under Sec.  45.3 and 
Sec.  45.4, and (b) with requirements that DCOs potentially connect to 
all registered SDRs. In response to the NPRM,\22\ the Commission 
received several comments on the costs associated with part 45 swaps 
reporting that could implicate PRA burdens, summarized below.
---------------------------------------------------------------------------

    \22\ See NPRM, 80 FR 52544 (Aug. 31, 2015).
---------------------------------------------------------------------------

2. PRA Burden and Benefits Associated With Cleared Swap Reporting 
Release \23\
---------------------------------------------------------------------------

    \23\ While not connected to the Cleared Swap Reporting Release, 
the Commission also proposes to reduce the number of SDRs in 
collection 3038-0096 from 15 to 4. When submitting the original OMB 
information collection for part 45 reporting, the Commission had 
assumed that up to 15 entities would register as SDRs. Currently, 
there are four SDRs provisionally registered with the Commission. 
Three other entities had submitted SDR applications. Two withdrew 
applications in 2012 and 2014. One (GTR) withdrew its application 
and resubmitted under the corporate entity DTCC Data Repository (US) 
LLC, which currently operates as a provisionally registered SDR. As 
the Commission has not received any SDR applications since 2012, the 
Commission believes that four is a reasonable number of SDRs for 
calculating PRA burdens.
---------------------------------------------------------------------------

a. Additional and Amended PET fields

    Regarding the addition of PET fields applicable to all swaps, ISDA 
commented that the PET field for ``clearing exception or exemption 
type'' would be ``very challenging and costly'' to implement.\24\ 
However, neither ISDA nor any other commenter provided information 
quantifying the cost to update reporting systems to account for the 
modified and additional PET fields. As discussed more extensively in 
Section III.C.9 of the NPRM,\25\ the information required to be 
reported in the modified ``clearing exception or exemption type'' is 
also already in the

[[Page 47364]]

possession of the reporting entity; changes to reporting systems 
required to report this field would involve adding a known piece of 
information to the message reported to an SDR.
---------------------------------------------------------------------------

    \24\ ISDA Oct. 30, 2015 Letter, at 9.
    \25\ See Cleared Swap Reporting Release, 81 FR, at 41767.
---------------------------------------------------------------------------

    Regarding new PET fields for clearing swaps, Eurex commented that 
DCOs would need to collect data from the original swap counterparties 
or trading venue to be able to report these fields.\26\ However, as the 
Commission noted in the Cleared Swap Reporting Release, the information 
required to report these PET fields is either generated by the DCO 
itself (such as clearing swap unique swap identifier (``USI''), 
clearing member LEI, clearing member internal identifier, house/
customer account flag, and receipt and clearing timestamps) or should 
be included in the clearing member's submission of a swap to the DCO 
for clearing (such as the original swap USI and original swap SDR).
---------------------------------------------------------------------------

    \26\ See Eurex Oct. 30, 2015 Letter, at 5.
---------------------------------------------------------------------------

    While the Commission believes that reporting entities already 
possess information required to report the added and amended PET 
fields, the Commission proposes to amend collection 3038-0096 to 
account for changes that reporting entities must make to their 
reporting systems to comply with these new and amended fields. The 
Commission estimates that each reporting entity--including DCOs, swap 
execution facilities (``SEFs''), designated contract markets 
(``DCMs''), swap dealers (``SDs''), major swap participants (``MSPs''), 
and non-SD/MSPs with reporting obligations--would incur a burden of 200 
hours to bring reporting systems in compliance with the added and 
amendment PET fields. The Commission also believes that SDRs would 
incur a burden of 200 hours to update their swap data acceptance 
systems to account for the added and amended PET fields. However, the 
Commission also anticipates that reporting entities and SDRs will need 
to make periodic changes to reporting systems to account for future 
changes to reporting obligations under part 45 and changes to reporting 
brought about by the evolution of products offered in the swaps market. 
Therefore, the Commission proposes revising collection 3038-0096 to 
include a recurring burden of 200 hours to cover such periodic changes. 
The recurring 200 burden hours would cover changes to PET fields under 
the Cleared Swap Reporting Release and any future changes described 
above. The Commission does not believe that reporting entities or SDRs 
would need to incur additional costs aside from these burden hours to 
bring reporting systems into compliance.

b. DCO Termination of Original Swaps

    Regarding the requirement that DCOs terminate original swaps once 
the DCO has accepted them for clearing, some commenters raised concerns 
that requiring DCOs to report continuation data for original swaps to 
the SDR to which the original swap was reported could increase costs 
for DCOs as they may need to connect to SDRs to which they do not 
currently have a connection.\27\ The Commission understands that DCOs 
already may report terminations to the original SDR, and to the extent 
these reporting systems are already implemented the new rules will not 
introduce additional costs for these DCOs. However, the Commission 
recognizes that requiring DCOs to potentially connect to more than one 
SDR in order to report continuation data for original swaps may require 
an update to the existing information collection 3038-0096.
---------------------------------------------------------------------------

    \27\ See e.g., Eurex Oct. 30, 2015 Letter, at 5, 9; LedgerX Oct. 
30, 2015 Letter, at 2; LCH Oct. 30, 2015 Letter, at 3. The 
Commission notes that another commenter stated that ``DCOs have 
already made connections with the major CFTC-registered SDRs.'' 
(DTCC Oct. 30, 2015, Letter at 5).
---------------------------------------------------------------------------

    In response to the NPRM, the Commission received three comments 
concerning the costs and benefits of the proposed amendments to Sec.  
45.4 in two different contexts. LCH and Eurex expressed concerns with 
the infrastructure required to have the DCO connected to every SDR 
chosen by the SD/MSP for which the DCO clears and report terminations 
according to the technical requirements of each SDR.\28\ Eurex 
specifically indicated that the cost of implementing the required 
infrastructure would have significant time and financial costs. In 
commenting on the IDWG Request for Comment, one foreign central 
counterparty now acting pursuant to a DCO Exemptive Order cited a 
specific cost for connecting to a new SDR as involving at least 150 
working days.\29\ Assuming an 8-hour work day, this would be the 
equivalent of 1,200 hours for a connection to an SDR.
---------------------------------------------------------------------------

    \28\ See Eurex Oct. 30, 2015 Letter, at 4-5; LCH Oct. 30, 2015 
Letter, at 3.
    \29\ See OTC Hong Kong May 27, 2014 Letter, at 2-3 (contending 
that setup, application development, and testing to interface with 
each SDR is likely to require at least 150 man-days, and that a more 
cost-effective framework would be to require the original 
counterparty to report termination of the alpha once it receives 
confirmation that the alpha has been accepted for clearing, and that 
the original counterparty would already have in place technical and 
operational interfaces with the SDR of its choice. The commenter 
also contended that the burden on DCOs of additional reporting 
outweighs the benefits to the CFTC).
---------------------------------------------------------------------------

    The Commission estimates the cost and hours burden associated with 
connecting DCOs to all SDRs according to the OTC Hong Kong comment 
letter. Considering that there are only four registered SDRs, each DCO 
could at most be required to connect to four SDRs. However, the number 
of connections likely would be less than four as not every DCO clears 
swaps for every asset class, and not every SDR accepts data for every 
asset class. Further, the number of connections could be limited to the 
extent that the DCO clears swaps for clearing members that choose to 
report original swaps to a limited number of SDRs. Additionally, the 
Commission assumes economies of scale when DCOs connect to more than 
one SDR. While connections to different SDRs could present different 
technological challenges, the DCO would be able to use the same 
programmers, analysts, and other personnel when implementing 
connections to all required SDRs. Therefore, the Commission estimates a 
one-time hours burden of 3,000 hours per DCO to comply with the Cleared 
Swap Reporting Release, beyond the existing burden in collection 3038-
0096.
    The Commission also intends to amend collection 3038-0096 to 
include recurring costs for DCOs associated with SDR connections. 
Existing collection 3038-0070 (relating to real-time reporting) 
estimates an annual cost of $100,000 to maintain an SDR connection for 
SEFs, DCMs, SDs, MSPs, and non-SD/MSP reporting entities, but does not 
specifically cover DCOs. The Commission proposes to include the same 
recurring SDR connectivity burdens for DCOs within collection 3038-
0096, scaled to account for connections to multiple SDRs and resulting 
economies of scale. The Commission estimates that DCOs would incur 
annual costs of $250,000 to maintain connections to multiple SDRs, to 
allow the DCO to terminate all original swaps accepted for clearing.

3. Burden Statement

    The Commission estimates the average increase in the burden of this 
collection of information as follows:
    Additional and amended PET fields:

[[Page 47365]]



----------------------------------------------------------------------------------------------------------------
         Affected entities                 SDRs, SEFs, DCMs, DCOs, SD/MSPs, non-SD/MSP reporting entities
----------------------------------------------------------------------------------------------------------------
                                         Burden per          Number of
            Burden type                  respondent         respondents                Total burden
----------------------------------------------------------------------------------------------------------------
One-time hours burden.............  0 hours.............             449  0 hours.
One-time costs....................  $0..................             449  $0.
Recurring hours burden............  200 hours...........             449  89,900 hours.
Recurring costs...................  $0..................             449  $0.
----------------------------------------------------------------------------------------------------------------

    Termination of original swaps:

----------------------------------------------------------------------------------------------------------------
         Affected entities                                              DCOs
----------------------------------------------------------------------------------------------------------------
                                         Burden per          Number of
            Burden type                  respondent         respondents                Total burden
----------------------------------------------------------------------------------------------------------------
One-time hours burden.............  3,000 hours.........              12  36,000 hours.
One-time costs....................  $0..................              12  $0.
Recurring hours burden............  0 hours.............              12  0 hours.
Recurring costs...................  $250,000............              12  $3,000,000.
----------------------------------------------------------------------------------------------------------------

4. Request for Comment

    The NPRM on cleared swap reporting requested comments on the burden 
associated with the added and amended PET fields, and on DCOs reporting 
original swap terminations.\30\ Those comments may be found on the 
Commission's Web site, http://www.cftc.gov, at http://comments.cftc.gov/PublicComments/CommentList.aspx?id=1614. All comments 
received in response to the NPRM will be considered, along with the 
comments received in response to this notice, in determining the 
Commission's submission to OMB regarding revisions to existing 
information collections to account for changes adopted in the Cleared 
Swap Reporting Release.
---------------------------------------------------------------------------

    \30\ See 77 FR 25320 at 25328.
---------------------------------------------------------------------------

    The Commission invites comments on:
     Whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information will have a practical 
use;
     The accuracy of the Commission's estimate of the burden of 
the proposed collection of information, including the validity of the 
methodology and assumptions used;
     Ways to enhance the quality, usefulness, and clarity of 
the information to be collected; and
     Ways to minimize the burden of collection of information 
on those who are to respond, including through the use of appropriate 
automated electronic, mechanical, or other technological collection 
techniques or other forms of information technology; e.g., permitting 
electronic submission of responses.
    Specifically, the Commission invites comments on the following 
questions:
    1. The Commission has proposed including a 200 hour recurring 
burden in the collection to account for periodic changes to reporting 
systems brought about by changes to PET terms (such as those under the 
Cleared Swap Reporting Release) as well as other periodic changes. Does 
this estimate accurately estimate the burden associated with the 
periodic updating of reporting systems to ensure continued compliance 
with part 45 reporting obligations?
    2. Given that not every DCO clears swaps in every asset class, and 
that not every SDR accepts data for every asset class, to how many SDRs 
must DCOs typically connect to properly report original swap 
terminations?
    3. Can DCOs take advantage of economies of scale in terms of 
personnel and/or equipment when connecting to more than one SDR?
    4. Given that original swap termination messages under revised 
Sec.  45.4 would need to be submitted daily--not, as with creation 
data, as soon as technologically practicable--are DCOs able to submit 
original swap terminations through methods less expensive than full 
connections to SDRs that are used for reporting creation data and real-
time reporting? If so, what are the costs associated with such 
connections?
    5. In the Cleared Swap Reporting Release, the Commission encouraged 
DCOs and SDRs to standardize original swap termination messages. Are 
DCOs and SDRs working towards such a standardized message? What cost 
savings could be associated with such standardized messages?
    6. Would a standardized termination message allow DCOs to use 
connection methods less expensive than full connections to SDRs that 
are used for reporting creation data and real-time reporting?
    7. As noted in footnote 23, the Commission is proposing to reduce 
the number of SDRs used for PRA burden calculations from 15 to four. 
Would this change accurately reflect the current state of the data 
reporting industry?
    8. The Commission received comments on the hours burden associated 
with establishing a DCO connection to an SDR, but not a cost estimate. 
Do the proposed revisions to the PRA, which include an hours burden for 
establishing a connection, and a cost burden for maintaining a 
connection, accurately reflect the PRA burden on DCOs?

(Authority: 44 U.S.C. 3501 et seq.)

    Dated: July 15, 2016.
Robert N. Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2016-17208 Filed 7-20-16; 8:45 am]
 BILLING CODE 6351-01-P