Performance of Certain Functions by the National Futures Association With Respect to the Receipt and Processing of Exchange Disciplinary and Access Denial Action Information, 1548-1550 [2018-00468]
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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations
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§ 9.12 Effective date of disciplinary or
access denial action.
(a) Effective date. Any disciplinary or
access denial action taken by an
exchange will not become effective until
at least fifteen days after the written
notice prescribed by § 9.11 is delivered
to the person disciplined or denied
access; Provided, however, That the
exchange may cause a disciplinary
action to become effective prior to that
time if:
(1) As permitted by part 37, appendix
B, Core Principle 2, paragraph (a)(14) of
this chapter or part 38, appendix B, Core
Principle 13, paragraph (a)(7) of this
chapter (emergency disciplinary
actions), the exchange reasonably
believes, and so states in its written
decision, that immediate action is
necessary to protect the best interests of
the marketplace; or
(2) As permitted by part 37, appendix
B, Core Principle 2, paragraph (a)(10)(vi)
of this chapter or part 38, appendix B,
Core Principle 13, paragraph (a)(4) of
this chapter (hearings), the exchange
determines, and so states in its written
decision, that the actions of a person
who is within the exchange’s
jurisdiction has impeded the progress of
a disciplinary hearing; or
(3) As permitted by part 37, appendix
B, Core Principle 2, paragraph (a)(13) of
this chapter (summary fines for
violations of rules regarding timely
submission of records) or part 38,
appendix B, Core Principle 13,
paragraph (a)(6) of this chapter
(summary fines for violations of rules
regarding timely submission of records,
decorum, or other similar activities), the
exchange determines that a person has
violated exchange rules relating to
decorum or attire, or timely submission
of accurate records required for clearing
or verifying each day’s transactions or
other similar activities; or
(4) The person against whom the
action is taken has consented to the
penalty to be imposed and to the timing
of its effectiveness.
(b) Notice of early effective date. If the
exchange determines in accordance
with paragraph (a)(1) of this section that
a disciplinary action will become
effective prior to the expiration of
fifteen days after written notice thereof,
it must notify the person disciplined in
writing, either personally or by email to
the person’s last known email address,
stating the reasons for the
determination. The exchange must also
immediately notify the Commission by
email to secretary@cftc.gov. Where
notice is delivered by email, the time
within which the person so notified
may file a petition for stay pursuant to
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15:52 Jan 11, 2018
Jkt 244001
§ 9.24(a)(2) will be increased by one
day.
■ 13. Revise § 9.13 to read as follows:
§ 9.13
Publication of notice.
Whenever an exchange suspends,
expels or otherwise disciplines, or
denies any person access to the
exchange, it must make public its
findings by disclosing at least the
information contained in the notice
required by § 9.11(b). An exchange must
make such findings public as soon as
the disciplinary action or access denial
action becomes effective in accordance
with the provisions of § 9.12 by posting
a notice on its website to which its
members and the public regularly have
access. Such notice must be maintained
and readily available on the exchange’s
website.
■ 14. In § 9.24, revise paragraph (a)(2) to
read as follows:
§ 9.24
Petition for stay pending review.
(a) * * *
(2) Within ten days after a notice of
summary action has been delivered in
accordance with § 9.12(b) to a person
who is the subject of a summary action
permitted by part 37, appendix B, Core
Principle 2, paragraph (a)(14) of this
chapter or part 38, appendix B, Core
Principle 13, paragraph (a)(7) of this
chapter (emergency disciplinary
actions), that person may petition the
Commission to stay the effectiveness of
the summary action pending completion
of the exchange proceeding.
*
*
*
*
*
■ 15. Revise § 9.31 to read as follows:
§ 9.31 Commission review of disciplinary
or access denial action on its own motion.
(a) Request for additional information.
Where a person disciplined or denied
access has not appealed the exchange
decision to the Commission, upon
review of the notice specified in § 9.11,
the Division of Market Oversight or the
Division of Swap Dealer and
Intermediary Oversight may request that
the exchange file with the Division the
record of the exchange proceeding, or
designated portions of the record, a brief
statement of the evidence and testimony
adduced to support the exchange’s
findings that a rule or rules of the
exchange were violated and such
recordings, transcripts and other
documents applicable to the particular
exchange proceeding as the Division
may specify. The exchange must
promptly advise the person who is the
subject of the disciplinary or access
denial action of the Division’s request.
Within thirty days after service of the
Division’s request, the exchange must
file the information requested with the
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Division in the manner requested by the
Division and, upon request, deliver that
information to the person who is the
subject of the disciplinary or access
denial action. Delivery to the person
who is the subject of the disciplinary or
access denial action must be in the
manner prescribed by § 9.11(c). A
person subject to the disciplinary action
or access denial action requesting a
copy of the information furnished to the
Division must, if the exchange rules so
provide, agree to pay the exchange
reasonable fees for printing the copy.
(b) Review on motion of the
Commission. The Commission may
institute review of an exchange
disciplinary or access denial action on
its own motion. Other than in
extraordinary circumstances, such
review will be initiated within 180 days
after the NFA has received the notice of
exchange action provided for in § 9.11.
If the Commission should institute
review on its own motion, it will issue
an order permitting the person who is
the subject of the disciplinary or access
denial action an opportunity to file an
appropriate submission, and the
exchange an opportunity to file a reply
thereto.
Issued in Washington, DC, on January 9,
2018, by the Commission.
Christopher J. Kirkpatrick,
Secretary of the Commission.
Note: The following appendix will not
appear in the Code of Federal Regulations.
Appendix to Technical Amendments to
Rules on Registration and Review of
Exchange Disciplinary, Access Denial
or Other Adverse Actions—Commission
Voting Summary
On this matter, Chairman Giancarlo and
Commissioners Quintenz and Behnam voted
in the affirmative. No Commissioner voted in
the negative.
[FR Doc. 2018–00467 Filed 1–11–18; 8:45 am]
BILLING CODE 6351–01–P
COMMODITY FUTURES TRADING
COMMISSION
17 CFR Part 9
Performance of Certain Functions by
the National Futures Association With
Respect to the Receipt and Processing
of Exchange Disciplinary and Access
Denial Action Information
Commodity Futures Trading
Commission.
ACTION: Notice and order; delegation of
authority.
AGENCY:
The Commodity Futures
Trading Commission (‘‘Commission’’ or
SUMMARY:
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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations
‘‘CFTC’’) is updating the delegation it
issued in 1999 to the National Futures
Association (‘‘NFA’’) regarding the duty
to receive and to process exchange
disciplinary and access denial action
information. The delegation is being
updated to clarify, among other things,
that designated contract market
(‘‘DCM’’) and swap execution facility
(‘‘SEF’’) disciplinary and access denial
notices must be filed with the NFA
instead of the Commission. The NFA
will continue to serve as the official
custodian of records for exchange
disciplinary filings.
DATES: This notice and order takes effect
on March 13, 2018.
FOR FURTHER INFORMATION CONTACT:
Rachel Berdansky, Deputy Director,
202–418–5429 or rberdansky@cftc.gov;
David Steinberg, Associate Director,
202–418–5102 or dsteinberg@cftc.gov;
Division of Market Oversight,
Commodity Futures Trading
Commission, Three Lafayette Centre,
1151 21st Street NW, Washington, DC
20581.
sradovich on DSK3GMQ082PROD with RULES
SUPPLEMENTARY INFORMATION:
I. Introduction
In a separate document published
elsewhere in this issue of the Federal
Register, the Commission issued final
rules that update its 17 CFR part 9 rules
(‘‘Final Part 9 Rules’’), including § 9.11,
that sets forth the notice requirements
for an exchange regarding disciplinary
and access denial actions. Section 9.11
was first established in 1978 to carry out
certain mandates of section 8c of the
Commodity Exchange Act (‘‘Act’’ or
‘‘CEA’’).1 Section 8c of the Act
generally: (i) Requires exchanges to
discipline members and to notify the
disciplined individuals, the
Commission, and the public of
disciplinary actions; and (ii) grants the
Commission the authority to review
exchange disciplinary actions. Section
9.11 sets forth the manner in which an
exchange is to provide that notice.
In 1999, the Commission delegated
authority to the NFA to receive and to
process exchange disciplinary and
access denial information (‘‘Part 9
Delegation’’).2 Consequently, the NFA
currently serves as the official custodian
of records for exchange disciplinary
filings. In 1999, concurrent with the Part
9 Delegation, the Commission published
an advisory permitting exchanges to file
9.11 notices with the Commission or the
NFA (‘‘Part 9 Advisory’’).3 While
permitting filing with the Commission,
1 43
FR 59343 (Dec. 20, 1978).
FR 39913 (July 23, 1999).
3 Id. at 39915.
2 64
VerDate Sep<11>2014
15:52 Jan 11, 2018
Jkt 244001
the Part 9 Advisory encourages
exchanges to file the required notice
with the NFA. The Final Part 9 Rules,
among other things, codify the Part 9
Advisory and replace the § 9.11
requirement that written notice be
provided to the Commission with a
requirement that notice be provided to
the NFA via the NFA’s Background
Affiliation Status Information Center
(‘‘BASIC’’) system.4 Moreover, because
SEFs did not exist when the
Commission issued the initial
delegation in 1999, this Notice and
Order is being updated to reflect that the
NFA will receive disciplinary and
access denial action notices from SEFs
in addition to DCMs.5 For purposes of
this Notice and Order, the term
‘‘exchange’’ includes DCMs and SEFs.
II. Delegation of Duties to the NFA
A. Processing Regulation 9.11 Filings
The NFA must process exchange
§ 9.11 notices in a manner consistent
with § 9.11. For purposes of this Notice
and Order, the term ‘‘process’’ generally
refers to receipt of filings and review of
filings for compliance with applicable
requirements. Section 9.11(a) requires
that whenever an exchange decision,
pursuant to which a disciplinary or
access denial action to be imposed has
become final, the exchange must
provide written notice of such action to
the NFA within 30 days. In addition,
§ 9.11 notices filed with the NFA must
satisfy all of the content requirements
set forth in § 9.11(b). Toward that end,
notices filed with the NFA will be
deemed certified when an authorized
exchange employee verifies the
accuracy of the information entered into
BASIC.
B. Commission Access to BASIC and
Reports
The NFA must provide the
Commission with access to the BASIC
system so that the Commission can
diligently carry out its legislative
mandate. This includes access to a
Management Report that includes the
following for each disciplinary or access
denial action:
• Name of Contributor (i.e., an
exchange, the NFA, or the Commission);
• Name of Respondent;
4 The NFA’s BASIC system allows the public to
access disciplinary information contributed by the
NFA, CFTC, DCMs, and SEFs pertaining to the
types of violations committed, penalties imposed,
the effective date of the action, and summary of the
disciplinary action. The BASIC system enables the
public to conduct a search by NFA identification
number, individual name, or firm name.
5 The Final Part 9 Rules amend the definition of
‘‘exchange’’ in § 9.2 to include SEFs in addition to
DCMs.
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1549
• Contributor Reference Number (i.e.,
disciplinary case number generated by
contributor);
• Date of Decision or Order;
• Date of Notification of NFA;
• Total Number of Days for Data to be
Released into BASIC (i.e., number of
days from the date of an exchange final
action until the date of exchange
verification/certification); and
• Name of Staff Person Entering Data
(i.e., initials).
The Commission currently has access
to the BASIC system and the ability to
generate 26 standardized reports that are
customizable with respect to the
timeframe selected (e.g., January 1, 2017
to May 31, 2017), including the
Management Report. Among other
things, the Commission is able to
analyze the data maintained in BASIC
by: Disciplinary actions against firms or
individuals resulting in fines,
suspensions, or expulsions; disciplinary
actions issued by each exchange; and
the type of rule violations across all
exchanges. The Commission generates
these reports on an as needed basis. As
the Commission needs these reports for
effective oversight of the exchanges, the
NFA must continue to provide the
Commission with the capability to
generate each of these reports from
BASIC. The NFA shall continue
working with the Commission to
develop additional query capabilities as
the Commission deems necessary to
fulfill its regulatory and oversight
responsibilities.
C. BASIC Maintenance
The NFA shall maintain, and serve as
the official custodian of, records for
exchange § 9.11 filings. The NFA shall
fulfill this obligation by continuing to
maintain the BASIC system and further
developing it as necessary to comply
with the terms of this Notice and Order.
The NFA shall also implement such
additional procedures (or modify
existing procedures) as are necessary to
reasonably ensure the security and
integrity of these records.
III. Authority
Pursuant to section 8a(10) of the Act,
the Commission has issued numerous
orders authorizing the NFA to perform
various portions of the Commission’s
registration functions and
responsibilities under the Act.6 In this
connection, the Commission has
previously issued orders authorizing the
6 7 U.S.C. 12a(10) (2014). Further, CEA section
17(o) provides that the Commission may require a
registered futures association (‘‘RFA’’) to perform
Commission registration functions in accordance
with the Act and the RFA’s rules. 7 U.S.C. 21(o)
(2014).
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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations
NFA to perform the full range of
registration processing functions with
respect to applicants for and persons
registered as a: futures commission
merchant, commodity pool operator, or
commodity trading advisor; 7
introducing broker; 8 leverage
transaction merchant; 9 floor broker; 10
floor trader; 11 retail foreign exchange
dealer; 12 and swap dealer or major swap
participant (collectively, registrants).13
Additionally, the NFA has adopted, and
the Commission has approved, rules
that govern the performance of the
registration functions. For example,
NFA Rule 501 pertains to the NFA’s
authority to deny, condition, suspend,
and revoke registration for registrants.
NFA Rule 504 sets forth the procedures
governing applicants and registrants
disqualified from registration under
sections 8a(2), 8a(3), or 8a(4) of the Act.
In light of NFA’s experience in
processing and maintaining exchange
disciplinary and access denial actions
on behalf of the Commission, the
Commission has determined that it will
continue to delegate these functions to
the NFA. This Notice and Order is in
accord with the Commission’s previous
delegations to the NFA to perform
registration processing functions with
respect to applicants and registrants, in
that, an individual’s or firm’s
disciplinary history clearly is a factor
that must be considered in any fitness
determination. Deeming the NFA as the
custodian of all exchange § 9.11 filings,
and delegating to the NFA the
responsibility for processing such filings
and generating reports with the
information amassed, should ensure
that the NFA has the necessary
information to continue to make
appropriate registration determinations.
Further, the Commission believes that
this delegation order will enhance
efficiency by permitting the
Commission to carry out its statutory
responsibilities under the CEA, while
also freeing up Commission resources to
be directed to other parts of its
regulatory mandate.
sradovich on DSK3GMQ082PROD with RULES
IV. Conclusion and Order
7 See
49 FR 39593 (Oct. 9, 1984).
48 FR 35158 (Aug. 3, 1983).
9 See 54 FR 19556 (May 8, 1989).
10 See 51 FR 34490 (Sep. 29, 1986).
11 See 58 FR 19657 (Apr. 15, 1993).
12 See 75 FR 55310 (Sep. 10, 2010).
13 See 77 FR 2708 (Jan. 19, 2012).
8 See
15:52 Jan 11, 2018
Issued in Washington, DC, on January 9,
2018, by the Commission.
Christopher J. Kirkpatrick,
Secretary of the Commission.
Appendix to Performance of Certain
Functions by the National Futures
Association With Respect to Regulation
9.11—Commission Voting Summary
On this matter, Chairman Giancarlo and
Commissioners Quintenz and Behnam voted
in the affirmative. No Commissioner voted in
the negative.
[FR Doc. 2018–00468 Filed 1–11–18; 8:45 am]
BILLING CODE 6351–01–P
DEPARTMENT OF ENERGY
The Commission has determined, in
accordance with section 8a(10) of the
Act, to delegate to the NFA the authority
to perform the following functions:
(1) To process exchange disciplinary
information filed with it by an exchange
VerDate Sep<11>2014
or the Commission for inclusion in the
BASIC system;
(2) To provide the Commission with
access to a Management Report
summarizing all recent exchange
disciplinary information and to provide
the Commission with the capability to
generate standardized reports on the
BASIC system;
(3) To assist the Commission in
enforcing exchange compliance with
regulation 9.11 filing requirements; and
(4) To serve as the official custodian
of a database containing records of all
exchange disciplinary and access denial
actions filed with the NFA for inclusion
in the BASIC system.
The NFA is authorized to perform all
functions specified herein until such
time as the Commission orders
otherwise. Nothing in this Notice and
Order shall affect the Commission’s
oversight authority of exchange
disciplinary programs. The Commission
is retaining all of its oversight authority,
including its authority to review and to
modify exchange disciplinary actions
and to take enforcement or other
remedial action against exchanges for
noncompliance with § 9.11. The NFA
may submit to the Commission for
clarification any specific matters that
have been delegated to it, and
Commission staff will be available to
discuss with NFA staff issues relating to
implementation of this Notice and
Order.
Jkt 244001
Federal Energy Regulatory
Commission
The Federal Energy
Regulatory Commission (Commission) is
issuing a final rule to amend its
regulations governing the maximum
civil monetary penalties assessable for
violations of statutes, rules, and orders
within the Commission’s jurisdiction.
The Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended
most recently by the Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015, requires the
Commission to issue this final rule.
DATES: This final rule is effective
January 12, 2018.
FOR FURTHER INFORMATION CONTACT:
Todd Hettenbach, Attorney, Office of
Enforcement, Federal Energy Regulatory
Commission, 888 First Street NE,
Washington, DC 20426, (202) 502–8794
Todd.Hettenbach@ferc.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Order No. 839
Final Rule
1. In this final rule, the Federal
Energy Regulatory Commission
(Commission) is complying with its
statutory obligation to amend the civil
monetary penalties provided by law for
matters within the agency’s jurisdiction.
Background
2. The Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015 (2015 Adjustment Act),1
which further amended the Federal
Civil Penalties Inflation Adjustment Act
of 1990 (1990 Adjustment Act),2
required the head of each federal agency
to issue a rule by July 2016 adjusting for
inflation each ‘‘civil monetary penalty’’
provided by law within the agency’s
jurisdiction and to make further
inflation adjustments on an annual basis
every January 15 thereafter.3
II. Discussion
3. The 2015 Adjustment Act defines a
civil monetary penalty as any penalty,
fine, or other sanction that: (A)(i) Is for
a specific monetary amount as provided
by federal law; or (ii) has a maximum
amount provided for by federal law; (B)
is assessed or enforced by an agency
pursuant to federal law; and (C) is
assessed or enforced pursuant to an
administrative proceeding or a civil
action in the federal courts.4 This
18 CFR Parts 250 and 385
[Docket No. RM18–4–000; Order No. 839]
Civil Monetary Penalty Inflation
Adjustments
Federal Energy Regulatory
Commission.
ACTION: Final rule.
AGENCY:
PO 00000
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Fmt 4700
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1 Sec.
701, Public Law 114–74, 129 Stat. 584, 599.
Law 101–410, 104 Stat. 890 (codified as
amended at 28 U.S.C. 2461 note).
3 28 U.S.C. 2461 note, at (4). The Commission
made its January 2017 adjustment on January 9,
2017, in Docket No. RM17–9–000. See Civil
Monetary Penalty Inflation Adjustments, Order No.
834, 82 FR 8137 (Jan. 24, 2017), FERC Stats. & Regs.
¶ 31,390 (2017).
4 Id. (3).
2 Public
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]]>Agencies
[Federal Register Volume 83, Number 9 (Friday, January 12, 2018)]
[Rules and Regulations]
[Pages 1548-1550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-00468]
-----------------------------------------------------------------------
COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 9
Performance of Certain Functions by the National Futures
Association With Respect to the Receipt and Processing of Exchange
Disciplinary and Access Denial Action Information
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice and order; delegation of authority.
-----------------------------------------------------------------------
SUMMARY: The Commodity Futures Trading Commission (``Commission'' or
[[Page 1549]]
``CFTC'') is updating the delegation it issued in 1999 to the National
Futures Association (``NFA'') regarding the duty to receive and to
process exchange disciplinary and access denial action information. The
delegation is being updated to clarify, among other things, that
designated contract market (``DCM'') and swap execution facility
(``SEF'') disciplinary and access denial notices must be filed with the
NFA instead of the Commission. The NFA will continue to serve as the
official custodian of records for exchange disciplinary filings.
DATES: This notice and order takes effect on March 13, 2018.
FOR FURTHER INFORMATION CONTACT: Rachel Berdansky, Deputy Director,
202-418-5429 or [email protected]; David Steinberg, Associate
Director, 202-418-5102 or [email protected]; Division of Market
Oversight, Commodity Futures Trading Commission, Three Lafayette
Centre, 1151 21st Street NW, Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
I. Introduction
In a separate document published elsewhere in this issue of the
Federal Register, the Commission issued final rules that update its 17
CFR part 9 rules (``Final Part 9 Rules''), including Sec. 9.11, that
sets forth the notice requirements for an exchange regarding
disciplinary and access denial actions. Section 9.11 was first
established in 1978 to carry out certain mandates of section 8c of the
Commodity Exchange Act (``Act'' or ``CEA'').\1\ Section 8c of the Act
generally: (i) Requires exchanges to discipline members and to notify
the disciplined individuals, the Commission, and the public of
disciplinary actions; and (ii) grants the Commission the authority to
review exchange disciplinary actions. Section 9.11 sets forth the
manner in which an exchange is to provide that notice.
---------------------------------------------------------------------------
\1\ 43 FR 59343 (Dec. 20, 1978).
---------------------------------------------------------------------------
In 1999, the Commission delegated authority to the NFA to receive
and to process exchange disciplinary and access denial information
(``Part 9 Delegation'').\2\ Consequently, the NFA currently serves as
the official custodian of records for exchange disciplinary filings. In
1999, concurrent with the Part 9 Delegation, the Commission published
an advisory permitting exchanges to file 9.11 notices with the
Commission or the NFA (``Part 9 Advisory'').\3\ While permitting filing
with the Commission, the Part 9 Advisory encourages exchanges to file
the required notice with the NFA. The Final Part 9 Rules, among other
things, codify the Part 9 Advisory and replace the Sec. 9.11
requirement that written notice be provided to the Commission with a
requirement that notice be provided to the NFA via the NFA's Background
Affiliation Status Information Center (``BASIC'') system.\4\ Moreover,
because SEFs did not exist when the Commission issued the initial
delegation in 1999, this Notice and Order is being updated to reflect
that the NFA will receive disciplinary and access denial action notices
from SEFs in addition to DCMs.\5\ For purposes of this Notice and
Order, the term ``exchange'' includes DCMs and SEFs.
---------------------------------------------------------------------------
\2\ 64 FR 39913 (July 23, 1999).
\3\ Id. at 39915.
\4\ The NFA's BASIC system allows the public to access
disciplinary information contributed by the NFA, CFTC, DCMs, and
SEFs pertaining to the types of violations committed, penalties
imposed, the effective date of the action, and summary of the
disciplinary action. The BASIC system enables the public to conduct
a search by NFA identification number, individual name, or firm
name.
\5\ The Final Part 9 Rules amend the definition of ``exchange''
in Sec. 9.2 to include SEFs in addition to DCMs.
---------------------------------------------------------------------------
II. Delegation of Duties to the NFA
A. Processing Regulation 9.11 Filings
The NFA must process exchange Sec. 9.11 notices in a manner
consistent with Sec. 9.11. For purposes of this Notice and Order, the
term ``process'' generally refers to receipt of filings and review of
filings for compliance with applicable requirements. Section 9.11(a)
requires that whenever an exchange decision, pursuant to which a
disciplinary or access denial action to be imposed has become final,
the exchange must provide written notice of such action to the NFA
within 30 days. In addition, Sec. 9.11 notices filed with the NFA must
satisfy all of the content requirements set forth in Sec. 9.11(b).
Toward that end, notices filed with the NFA will be deemed certified
when an authorized exchange employee verifies the accuracy of the
information entered into BASIC.
B. Commission Access to BASIC and Reports
The NFA must provide the Commission with access to the BASIC system
so that the Commission can diligently carry out its legislative
mandate. This includes access to a Management Report that includes the
following for each disciplinary or access denial action:
Name of Contributor (i.e., an exchange, the NFA, or the
Commission);
Name of Respondent;
Contributor Reference Number (i.e., disciplinary case
number generated by contributor);
Date of Decision or Order;
Date of Notification of NFA;
Total Number of Days for Data to be Released into BASIC
(i.e., number of days from the date of an exchange final action until
the date of exchange verification/certification); and
Name of Staff Person Entering Data (i.e., initials).
The Commission currently has access to the BASIC system and the
ability to generate 26 standardized reports that are customizable with
respect to the timeframe selected (e.g., January 1, 2017 to May 31,
2017), including the Management Report. Among other things, the
Commission is able to analyze the data maintained in BASIC by:
Disciplinary actions against firms or individuals resulting in fines,
suspensions, or expulsions; disciplinary actions issued by each
exchange; and the type of rule violations across all exchanges. The
Commission generates these reports on an as needed basis. As the
Commission needs these reports for effective oversight of the
exchanges, the NFA must continue to provide the Commission with the
capability to generate each of these reports from BASIC. The NFA shall
continue working with the Commission to develop additional query
capabilities as the Commission deems necessary to fulfill its
regulatory and oversight responsibilities.
C. BASIC Maintenance
The NFA shall maintain, and serve as the official custodian of,
records for exchange Sec. 9.11 filings. The NFA shall fulfill this
obligation by continuing to maintain the BASIC system and further
developing it as necessary to comply with the terms of this Notice and
Order. The NFA shall also implement such additional procedures (or
modify existing procedures) as are necessary to reasonably ensure the
security and integrity of these records.
III. Authority
Pursuant to section 8a(10) of the Act, the Commission has issued
numerous orders authorizing the NFA to perform various portions of the
Commission's registration functions and responsibilities under the
Act.\6\ In this connection, the Commission has previously issued orders
authorizing the
[[Page 1550]]
NFA to perform the full range of registration processing functions with
respect to applicants for and persons registered as a: futures
commission merchant, commodity pool operator, or commodity trading
advisor; \7\ introducing broker; \8\ leverage transaction merchant; \9\
floor broker; \10\ floor trader; \11\ retail foreign exchange dealer;
\12\ and swap dealer or major swap participant (collectively,
registrants).\13\ Additionally, the NFA has adopted, and the Commission
has approved, rules that govern the performance of the registration
functions. For example, NFA Rule 501 pertains to the NFA's authority to
deny, condition, suspend, and revoke registration for registrants. NFA
Rule 504 sets forth the procedures governing applicants and registrants
disqualified from registration under sections 8a(2), 8a(3), or 8a(4) of
the Act.
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\6\ 7 U.S.C. 12a(10) (2014). Further, CEA section 17(o) provides
that the Commission may require a registered futures association
(``RFA'') to perform Commission registration functions in accordance
with the Act and the RFA's rules. 7 U.S.C. 21(o) (2014).
\7\ See 49 FR 39593 (Oct. 9, 1984).
\8\ See 48 FR 35158 (Aug. 3, 1983).
\9\ See 54 FR 19556 (May 8, 1989).
\10\ See 51 FR 34490 (Sep. 29, 1986).
\11\ See 58 FR 19657 (Apr. 15, 1993).
\12\ See 75 FR 55310 (Sep. 10, 2010).
\13\ See 77 FR 2708 (Jan. 19, 2012).
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In light of NFA's experience in processing and maintaining exchange
disciplinary and access denial actions on behalf of the Commission, the
Commission has determined that it will continue to delegate these
functions to the NFA. This Notice and Order is in accord with the
Commission's previous delegations to the NFA to perform registration
processing functions with respect to applicants and registrants, in
that, an individual's or firm's disciplinary history clearly is a
factor that must be considered in any fitness determination. Deeming
the NFA as the custodian of all exchange Sec. 9.11 filings, and
delegating to the NFA the responsibility for processing such filings
and generating reports with the information amassed, should ensure that
the NFA has the necessary information to continue to make appropriate
registration determinations. Further, the Commission believes that this
delegation order will enhance efficiency by permitting the Commission
to carry out its statutory responsibilities under the CEA, while also
freeing up Commission resources to be directed to other parts of its
regulatory mandate.
IV. Conclusion and Order
The Commission has determined, in accordance with section 8a(10) of
the Act, to delegate to the NFA the authority to perform the following
functions:
(1) To process exchange disciplinary information filed with it by
an exchange or the Commission for inclusion in the BASIC system;
(2) To provide the Commission with access to a Management Report
summarizing all recent exchange disciplinary information and to provide
the Commission with the capability to generate standardized reports on
the BASIC system;
(3) To assist the Commission in enforcing exchange compliance with
regulation 9.11 filing requirements; and
(4) To serve as the official custodian of a database containing
records of all exchange disciplinary and access denial actions filed
with the NFA for inclusion in the BASIC system.
The NFA is authorized to perform all functions specified herein
until such time as the Commission orders otherwise. Nothing in this
Notice and Order shall affect the Commission's oversight authority of
exchange disciplinary programs. The Commission is retaining all of its
oversight authority, including its authority to review and to modify
exchange disciplinary actions and to take enforcement or other remedial
action against exchanges for noncompliance with Sec. 9.11. The NFA may
submit to the Commission for clarification any specific matters that
have been delegated to it, and
Commission staff will be available to discuss with NFA staff issues
relating to implementation of this Notice and Order.
Issued in Washington, DC, on January 9, 2018, by the Commission.
Christopher J. Kirkpatrick,
Secretary of the Commission.
Appendix to Performance of Certain Functions by the National Futures
Association With Respect to Regulation 9.11--Commission Voting Summary
On this matter, Chairman Giancarlo and Commissioners Quintenz
and Behnam voted in the affirmative. No Commissioner voted in the
negative.
[FR Doc. 2018-00468 Filed 1-11-18; 8:45 am]
BILLING CODE 6351-01-P
