Privacy of Consumer Financial Information, 29611-29614 [2020-08552]
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Federal Register / Vol. 85, No. 96 / Monday, May 18, 2020 / Rules and Regulations
Iran, North Korea, Sudan, and Syria) or
foreign nationals.
Extension of Validity
At this time, the U.S. Government has
decided to extend the temporary general
license until August 13, 2020. In order
to implement this U.S. Government
decision, this final rule revises the
temporary general license to remove the
date of May 15, 2020 and substitutes the
date of August 13, 2020 in three places
in Supplement No. 7 to part 744: The
introductory text; paragraph (b)(1); and
paragraph (c).
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Export Control Reform Act of 2018
On August 13, 2018, the President
signed into law the John S. McCain
National Defense Authorization Act for
Fiscal Year 2019, which included the
Export Control Reform Act of 2018
(ECRA) (50 U.S.C. 4801–4852). ECRA
provides the legal basis for BIS’s
principal authorities and serves as the
authority under which BIS issues this
rule. As set forth in Section 1768 of
ECRA, all delegations, rules,
regulations, orders, determinations,
licenses, or other forms of
administrative action that were made,
issued, conducted, or allowed to
become effective under the Export
Administration Act of 1979 (previously,
50 U.S.C. 4601 et seq.) (as in effect prior
to August 13, 2018 and as continued in
effect pursuant to the International
Emergency Economic Powers Act (50
U.S.C. 1701 et seq.)) or the Export
Administration Regulations, and were
in effect as of August 13, 2018, shall
continue in effect according to their
terms until modified, superseded, set
aside, or revoked under the authority of
ECRA.
Rulemaking Requirements
1. Executive Orders 13563 and 12866
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility. This rule
has been determined to be not
significant for purposes of Executive
Order 12866. This rule is not an
Executive Order 13771 regulatory action
because this rule is not significant under
Executive Order 12866.
2. Notwithstanding any other
provision of law, no person is required
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to respond to or be subject to a penalty
for failure to comply with a collection
of information, subject to the
requirements of the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501
et seq.) (PRA), unless that collection of
information displays a currently valid
Office of Management and Budget
(OMB) Control Number. This regulation
involves collections previously
approved by OMB under control
number 0694–0088, Simplified Network
Application Processing System, which
includes, among other things, license
applications, and carries a burden
estimate of 42.5 minutes for a manual or
electronic submission. Total burden
hours associated with the PRA and
OMB control number 0694–0088 are not
expected to increase as a result of this
rule. You may send comments regarding
the collection of information associated
with this rule, including suggestions for
reducing the burden, to Jasmeet K.
Seehra, Office of Management and
Budget (OMB), by email to Jasmeet_K._
Seehra@omb.eop.gov, or by fax to (202)
395–7285.
3. This rule does not contain policies
with federalism implications as that
term is defined in Executive Order
13132.
4. Pursuant to section 1762 of ECRA,
this action is exempt from the
Administrative Procedure Act (5 U.S.C.
553) requirements for notice of
proposed rulemaking, opportunity for
public participation, and delay in
effective date.
5. Because a notice of proposed
rulemaking and an opportunity for
public comment are not required to be
given for this rule by 5 U.S.C. 553, or
by any other law, the analytical
requirements of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., are
not applicable. Accordingly, no
regulatory flexibility analysis is
required, and none has been prepared.
15 CFR Part 744
Exports, Reporting and recordkeeping
requirements, Terrorism.
15 CFR Part 762
Administrative practice and
procedure, Business and industry,
Confidential business information,
Exports, Reporting and recordkeeping
requirements.
Accordingly, part 744 of the Export
Administration Regulations (15 CFR
parts 730 through 774) is amended as
follows:
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Fmt 4700
PART 744—[AMENDED]
1. The authority citation for 15 CFR
part 744 continues to read as follows:
■
Authority: 50 U.S.C. 4801–4852; 50 U.S.C.
4601 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C.
3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201
et seq.; 22 U.S.C. 7210; E.O. 12058, 43 FR
20947, 3 CFR, 1978 Comp., p. 179; E.O.
12851, 58 FR 33181, 3 CFR, 1993 Comp., p.
608; E.O. 12938, 59 FR 59099, 3 CFR, 1994
Comp., p. 950; E.O. 13026, 61 FR 58767, 3
CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR
45167, 3 CFR, 1998 Comp., p. 208; E.O.
13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783; E.O. 13224, 66 FR 49079, 3 CFR, 2001
Comp., p. 786; Notice of September 19, 2019,
83 FR 49633 (September 20, 2019); Notice of
November 12, 2019, 84 FR 61817 (November
13, 2019).
2. Supplement No. 7 to part 744 is
amended by revising the first sentence
of the introductory text, paragraph
(b)(1), and paragraph (c) introductory
text to read as follows:
■
Supplement No. 7 to Part 744—Temporary
General License
Notwithstanding the requirements and
other provisions of Supplement No. 4 to this
part, which became effective as to Huawei
Technologies Co., Ltd. (Huawei), Shenzhen,
Guangdong, China on May 16, 2019, and its
non-U.S. affiliates listed in Supplement No.
4 to this part on, as applicable, May 16, 2019
or August 19, 2019, the licensing and other
requirements in the EAR as of May 15, 2019,
are restored in part as of May 20, 2019, and
through August 13, 2020, pertaining to
exports, reexports, and transfers (in-country)
of items subject to the EAR to any of the
listed Huawei entities. * * *
*
*
*
*
*
(b) * * *
(1) This temporary general license is
effective from May 20, 2019, through August
13, 2020.
*
*
*
*
*
(c) Authorized transactions. This
temporary general license allows, from May
20, 2019, through August 13, 2020, the
following:
*
*
*
*
*
Richard E. Ashooh,
Assistant Secretary for Export
Administration.
List of Subjects
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[FR Doc. 2020–10614 Filed 5–15–20; 8:45 am]
BILLING CODE 3510–33–P
COMMODITY FUTURES TRADING
COMMISSION
17 CFR Part 160
RIN 3038–AE91
Privacy of Consumer Financial
Information
Commodity Futures Trading
Commission.
AGENCY:
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ACTION:
Federal Register / Vol. 85, No. 96 / Monday, May 18, 2020 / Rules and Regulations
Final rule.
The Commodity Futures
Trading Commission (‘‘CFTC’’ or
‘‘Commission’’) is making a correction
to one of the Commission’s regulations
to restore text that was inadvertently
deleted in a 2011 amendment to that
regulation.
DATES: Effective June 17, 2020.
FOR FURTHER INFORMATION CONTACT:
Joshua Sterling, Director, (202) 418–
6056, jsterling@cftc.gov; Frank Fisanich,
Chief Counsel, (202) 418–5949,
ffisanich@cftc.gov; or Jacob Chachkin,
Special Counsel, (202) 418–5496,
jchachkin@cftc.gov, Division of Swap
Dealer and Intermediary Oversight,
Commodity Futures Trading
Commission, Three Lafayette Centre,
1155 21st Street NW, Washington, DC
20581.
SUPPLEMENTARY INFORMATION:
SUMMARY:
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I. Background
Section 501 of Title V of the GrammLeach-Bliley Act (‘‘Title V’’) mandates
that certain agencies covered by Title V
establish appropriate standards for the
financial institutions subject to their
jurisdiction relating to administrative,
technical and physical safeguards—(1)
to insure the security and
confidentiality of customer records and
information; (2) to protect against any
anticipated threats or hazards to the
security or integrity of such records; and
(3) to protect against unauthorized
access to or use of such records or
information which could result in
substantial harm or inconvenience to
any customer.1 The Commission and
entities subject to its jurisdiction were
originally excluded from Title V’s
coverage.2 However, section 124 of the
Commodity Futures Modernization Act
of 2000 3 amended the Commodity
Exchange Act (‘‘CEA’’) to add section
5g,4 providing that futures commission
merchants (‘‘FCMs’’), commodity
trading advisors (‘‘CTAs’’), commodity
pool operators (‘‘CPOs’’), and
introducing brokers (‘‘IBs’’) 5 fall under
the requirements of Title V and
requiring the Commission to prescribe
regulations in furtherance of Title V.
Thus, in 2001, the Commission
1 Section 501, Subtitle A, Title V, Public Law
106–102, 113 Stat. 1338 (1999), as codified at 15
U.S.C. 6801.
2 15 U.S.C. 6809(3)(B).
3 Section 124, Appendix E of Public Law 106–
554, 114 Stat. 2763 (2000).
4 7 U.S.C. 7b–2.
5 For the definitions of these intermediary
categories, see section 1a of the CEA and § 1.3 of
the Commission’s regulations. 7 U.S.C. 1a and 17
CFR 1.3. Commission regulations referred to herein
are found at 17 CFR chapter I.
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promulgated part 160 of its regulations
to establish standards relating to Title V,
and, specifically, § 160.30 in relation to
section 501’s mandate.6
Commission regulation 160.30
implements this mandate by requiring
every FCM, RFED, CTA, CPO, IB, MSP,
or SD that is subject to the jurisdiction
of the Commission (‘‘Covered
Persons’’) 7 to adopt policies and
procedures to address administrative,
technical and physical safeguards for
the protection of customer records and
information (the ‘‘General
Requirement’’).8 In addition, mirroring
section 501 of the GLB Act, the 2001
Rulemaking further required (the
‘‘Detailed Requirements’’) that the
policies and procedures be reasonably
designed to: (i) Insure the security and
confidentiality of customer records and
information; (ii) protect against any
anticipated threats or hazards to the
security or integrity of customer records
and information; and (iii) protect against
unauthorized access to or use of
customer records or information that
could result in substantial harm or
inconvenience to any customer.9
However, when the 2011 Amendment
revised § 160.30 to add SDs and MSPs
to the list of entities in § 160.30’s
introductory sentence (and, thus,
subject to it), the Detailed Requirements
were inadvertently deleted.10
6 Privacy of Customer Information, 66 FR 21235
(April 27, 2001) (‘‘2001 Rulemaking’’). The
Commission later modified its part 160 regulations
to apply them to retail foreign exchange dealers
(‘‘RFEDs’’), swap dealers (‘‘SDs’’), and major swap
participants (‘‘MSPs’’). Regulation of Off-Exchange
Retail Foreign Exchange Transactions and
Intermediaries, 75 FR 55409 (Sept. 10, 2010) for
RFEDs, and Privacy of Consumer Financial
Information; Conforming Amendments Under
Dodd-Frank Act, 76 FR 43874 (July 22, 2011) for
SDs and MSPs (‘‘2011 Amendment’’). For the
definition of RFED, see § 5.1(h). 17 CFR 5.1(h). For
the definitions of SD and MSP, see section 1a of the
CEA and § 1.3 of the Commission’s regulations. 7
U.S.C. 1a and 17 CFR 1.3.
7 17 CFR 160.30. Part 160 does not apply to
foreign (non-resident) FCMs, RFEDs, CTAs, CPOs,
IBs, MSPs, and SDs that are not registered with the
Commission. 17 CFR 160.1. Therefore, they are not
‘‘Covered Persons’’ as defined in this release.
8 17 CFR 160.30.
9 See 2001 Rulemaking at 21250.
10 See 2011 Amendment at 43879. With respect to
§ 160.30, the preamble to the 2011 Amendment
only discusses amending the introductory sentence
of § 160.30 to add SDs and MSPs to the list of CFTC
registrants that must comply with that regulation.
See id. at 43876. Further, the Commission notes that
the Detailed Requirements continued to be included
in Commission staff guidance on compliance with
§ 160.30 after the 2011 Amendment. See CFTC Staff
Advisory No. 14–21 (Feb. 26, 2014) (‘‘§ 160.30
Guidance’’). In addition, the Commission notes that
restoring the Detailed Requirements will make
§ 160.30 more consistent with similar rules adopted
by the Securities and Exchange Commission
(‘‘SEC’’) and the Federal Trade Commission
(‘‘FTC’’) under the GLB Act. See 17 CFR 248.30 and
16 CFR 314.3, respectively.
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II. Proposal
On November 12, 2019, the
Commission published a Notice of
Proposed Rulemaking 11 to amend
§ 160.30 of the Commission’s
regulations (the ‘‘Proposal’’).
Specifically, the Commission proposed
to restore the inadvertently deleted
Detailed Requirements in § 160.30. As
discussed above and in the Proposal, the
Detailed Requirements mirror the
requirements of section 501 of the GLB
Act, pursuant to which part 160 of the
Commission’s regulations was adopted.
The Commission requested comments
on the Proposal. The comment period
for the Proposal ended on December 12,
2019.
III. Summary of Comments and Final
Rule
The Commission received two
relevant comments on the Proposal,12
both of which were from individuals
and supportive of the Proposal. The
Commission did not receive any
comments on the Proposal from Covered
Persons.
The Commission is adopting this
Final Rule (‘‘Final Rule’’) as proposed.
Accordingly, the Commission is
adopting the amendments to
Commission regulation 160.30 as shown
in the rule text in this document and for
the reasons discussed in the Proposal
and reiterated above.
IV. Related Matters
A. Regulatory Flexibility Act
The Regulatory Flexibility Act 13
(‘‘RFA’’) requires federal agencies to
consider whether the rules they propose
will have a significant economic impact
on a substantial number of small entities
and, if so, to provide a regulatory
flexibility analysis regarding the
economic impact on those entities. In
the Proposal, the Commission certified
that the Proposal would not have a
significant economic impact on a
substantial number of small entities.
The Commission requested comments
with respect to the RFA and received no
such comments.
As discussed in the Proposal, this
Final Rule will restore the inadvertently
deleted Detailed Requirements in
§ 160.30. To the extent that the Final
Rule will impact Covered Persons that
may be small entities for purposes of the
11 Privacy of Consumer Financial Information, 84
FR 60963 (Nov. 12, 2019).
12 The Commission also received one comment
that was not relevant to the Proposal. All of the
comments are available at https://
comments.cftc.gov/PublicComments/
CommentList.aspx?id=3047.
13 5 U.S.C. 601 et seq.
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RFA,14 the Commission considered
whether the Final Rule will have a
significant economic impact on such
Covered Persons.
In restoring the inadvertently deleted
Detailed Requirements the Final Rule
will simply set forth, consistent with the
§ 160.30 Guidance and the GLB Act,
what is necessary to satisfy the General
Requirement that already applies to
Covered Persons. Therefore, the
Commission believes that the Final Rule
will not have a significant economic
impact on a substantial number of small
entities, as defined in the RFA.
Accordingly, the Chairman, on behalf
of the Commission, hereby certifies
pursuant to 5 U.S.C. 605(b) that the
Final Rule will not have a significant
economic impact on a substantial
number of small entities.
B. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(‘‘PRA’’) 15 imposes certain
requirements on Federal agencies,
including the Commission, in
connection with their conducting or
sponsoring any collection of
information, as defined by the PRA. The
Commission may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
Office of Management and Budget
(‘‘OMB’’) control number.
The Commission has previously
received a control number from OMB
that includes the collection of
information associated with the General
Requirement. The title for this
collection of information is ‘‘Privacy of
Consumer Financial Information, OMB
control number 3038–0055’’.16
Collection 3038–0055 is currently in
force with its control number having
been provided by OMB. Because in
restoring the inadvertently deleted
Detailed Requirements, the Final Rule
simply sets forth, consistent with the
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14 The
Commission has previously determined
that certain entities are not ‘‘small entities’’ for
purposes of the RFA. See, e.g., 47 FR 18618, 18619
(Apr. 30, 1982) (registered FCMs); 75 FR 55410,
55416 (Sept. 10, 2010) (RFEDs); 77 FR 2613, 2620
(Jan. 19, 2012) (SDs and MSPs). However, the
Commission has determined that CPOs exempt
pursuant to 17 CFR 4.13(a) are small entities. See
46 FR 26004 (May 8, 1981); 47 FR at 18619. The
definitions of IB and CTA are also broad enough to
potentially encompass ‘‘small entities.’’ See 48 FR
35248, 35276 (Aug. 3, 1983) (recognizing that the
IB definition ‘‘undoubtedly encompasses many
business enterprises of variable size’’); 47 FR at
18620 (the category of CTAs is ‘‘too broad’’ for a
general determination regarding their small entity
status).
15 44 U.S.C. 3501 et seq.
16 See OMB Control No. 3038–0055, https://
www.reginfo.gov/public/do/
PRAOMBHistory?ombControlNumber=3038-0055#
(last visited Jan. 6, 2020).
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§ 160.30 Guidance and the GLB Act,
what is necessary to satisfy the General
Requirement that already applies to
Covered Persons, the Commission
believes that the Final Rule does not
impose any new recordkeeping or
information collection requirements, or
other collections of information that
require approval of OMB under the
PRA.
In the Proposal, the Commission
invited the public and other Federal
agencies to comment on any aspect of
the information collection requirements
discussed therein. The Commission did
not receive any such comments.
C. Cost-Benefit Considerations
Section 15(a) of the CEA requires the
Commission to consider the costs and
benefits of its actions before
promulgating a regulation under the
CEA. Section 15(a) further specifies that
the costs and benefits shall be evaluated
in light of the following five broad areas
of market and public concern: (1)
Protection of market participants and
the public; (2) efficiency,
competitiveness, and financial integrity
of futures markets; (3) price discovery;
(4) sound risk management practices;
and (5) other public interest
considerations. The Commission
considers the costs and benefits
resulting from its discretionary
determinations with respect to the
section 15(a) considerations.
As discussed above, in the Final Rule,
the Commission is restoring the
inadvertently deleted Detailed
Requirements in § 160.30. Below, the
Commission discusses the costs and
benefits of the Final Rule.17 The
baseline against which the costs and
benefits are considered is the current
status quo for Covered Persons with
respect to their obligation to satisfy the
General Requirement under § 160.30.18
17 The Commission endeavors to assess the
expected costs and benefits of its proposed rules in
quantitative terms where possible. Where
estimation or quantification is not feasible, the
Commission provides its discussion in qualitative
terms. Given a general lack of relevant data, the
Commission’s assessment is generally provided in
qualitative terms.
18 The Commission notes that the consideration of
costs and benefits below is based on the
understanding that the markets function
internationally, with many transactions involving
United States firms taking place across international
boundaries; with some Commission registrants
being organized outside of the United States; with
some leading industry members typically
conducting operations both within and outside the
United States; and with industry members
commonly following substantially similar business
practices wherever located. Where the Commission
does not specifically refer to matters of location, the
discussion of costs and benefits below refers to the
effects of this Final Rule on all activity subject to
the amended regulations, whether by virtue of the
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29613
The Commission recognizes that there
are inherent costs and benefits to
Covered Persons in providing
requirements for specific customer
privacy policies and procedures, which
Congress took into account in codifying
the GLB Act.
The inadvertent deletion of the
Detailed Requirements in § 160.30
affected entities that were required to
comply with the Detailed Requirements
prior to the 2011 Amendment as well as
the two types of entities (SDs and MSPs)
the rule was being revised to include.
Due to the inadvertent nature of the
deletion of the Detailed Requirements,
and that they applied prior to the 2011
Amendment, the Commission expects
the number of entities affected by the
Final Rule to be negligible, if any.
Consequently, the Commission believes
that the restoration of the Detailed
Requirements in § 160.30, consistent
with the § 160.30 Guidance and the GLB
Act, does not alter existing benefits and
costs. The Commission, however,
recognizes that this Final Rule may
benefit certain Covered Persons by,
consistent with the GLB Act, specifying
what types of policies and procedures
are necessary to satisfy the General
Requirement. In doing so, this Final
Rule may reduce any potential
confusion and allow Covered Persons to
design and maintain their policies and
procedures to focus on the specified
areas mandated by the GLB Act. In this
regard, this Final Rule may allow
Covered Persons to more efficiently
utilize their resources in developing
policies and procedures in compliance
with § 160.30. This Final Rule also will,
consistent with the GLB Act,19 result in
§ 160.30 being more similar to
regulations adopted by the SEC and FTC
pursuant to the GLB Act and to which
certain Covered Persons may be
subject.20
The Commission recognizes that, as a
result of this Final Rule, certain Covered
Persons may become subject to more
specific requirements under § 160.30
than they are currently. However, given
that the General Requirement currently
applies to Covered Persons, and the
§ 160.30 Guidance that remains in effect
takes into account the substance of the
Detailed Requirements, the Commission
believes that the burden of this Final
Rule on Covered Persons will not be
significant.
activity’s physical location in the United States or
by virtue of the activity’s connection with activities
in, or effect on, United States commerce under CEA
section 2(i), 7 U.S.C. 2(i). In particular, the
Commission notes that some Covered Persons are
located outside of the United States.
19 See 15 U.S.C. 6804(a)(2).
20 See n.10, supra.
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1. Section 15(a) Considerations
In light of the foregoing, the CFTC has
evaluated the costs and benefits of this
Final Rule pursuant to the five
considerations identified in section
15(a) of the CEA as follows:
(1) Protection of Market Participants and
the Public
This Final Rule’s restoration of the
Detailed Requirements may protect
market participants and the public by
ensuring that the policies and
procedures required under § 160.30 are
reasonably designed to address the
specific areas mandated by Congress in
the GLB Act.
(2) Efficiency, Competitiveness, and
Financial Integrity of Markets
This Final Rule may reduce confusion
and allow Covered Persons to design
and maintain their policies and
procedures to focus on the specified
areas mandated by the GLB Act. This
may allow Covered Persons to more
efficiently utilize their resources in
developing policies and procedures in
compliance with § 160.30. In addition,
consistent with the GLB Act, this Final
Rule will further align the consumer
privacy regulations of the Commission,
FTC, and SEC, which may lower costs
for certain Covered Persons.
(3) Price Discovery
The Commission has not identified an
impact on price discovery as a result of
this Final Rule.
(4) Sound Risk Management
The Commission has not identified an
impact on sound risk management as a
result of this Final Rule.
(5) Other Public Interest Considerations
Consistent with the GLB Act, this
Final Rule will further align the
consumer privacy regulations of the
Commission, FTC, and SEC.
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2. Comments on Cost-Benefit
Considerations
The Commission invited public
comment on its cost-benefit
considerations in the Proposal,
including the Section 15(a) factors
described above. The Commission
received no such comments.
U.S.C. 19(b).
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List of Subjects in 17 CFR Part 160
Brokers, Consumer protection,
Privacy, Reporting and recordkeeping
requirements.
For the reasons stated in the
preamble, the Commodity Futures
Trading Commission amends 17 CFR
part 160 as follows:
PART 160—PRIVACY OF CONSUMER
FINANCIAL INFORMATION UNDER
TITLE V OF THE GRAMM-LEACHBLILEY ACT
1. The authority citation for part 160
continues to read as follows:
■
Authority: 7 U.S.C. 7b–2 and 12a(5); 15
U.S.C 6801, et seq., and sec. 1093, Pub. L.
111–203, 124 Stat. 1376.
■
2. Revise § 160.30 to read as follows:
§ 160.30 Procedures to safeguard
customer records and information.
D. Antitrust Considerations
Section 15(b) of the CEA 21 requires
the Commission to take into
consideration the public interest to be
protected by the antitrust laws and
endeavor to take the least
anticompetitive means of achieving the
21 7
objectives of the CEA, as well as the
policies and purposes of the CEA, in
issuing any order or adopting any
Commission rule or regulation
(including any exemption under section
4(c) or 4c(b)), or in requiring or
approving any bylaw, rule, or regulation
of a contract market or registered futures
association established pursuant to
section 17 of the CEA.
The Commission believes that the
public interest to be protected by the
antitrust laws is generally to protect
competition. The Commission requested
and did not receive any comments on
whether the Proposal implicated any
other specific public interest to be
protected by the antitrust laws.
The Commission has considered this
Final Rule to determine whether it is
anticompetitive and has identified no
anticompetitive effects. The
Commission requested and did not
receive any comments on whether the
Proposal was anticompetitive and, if it
is, what the anticompetitive effects are.
Because the Commission has
determined that this Final Rule is not
anticompetitive and has no
anticompetitive effects and received no
comments on its determination, the
Commission has not identified any less
anticompetitive means of achieving the
purposes of the CEA.
Every futures commission merchant,
retail foreign exchange dealer,
commodity trading advisor, commodity
pool operator, introducing broker, major
swap participant, and swap dealer
subject to the jurisdiction of the
Commission must adopt policies and
procedures that address administrative,
technical and physical safeguards for
the protection of customer records and
information. These policies and
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procedures must be reasonably designed
to:
(a) Insure the security and
confidentiality of customer records and
information;
(b) Protect against any anticipated
threats or hazards to the security or
integrity of customer records and
information; and
(c) Protect against unauthorized
access to or use of customer records or
information that could result in
substantial harm or inconvenience to
any customer.
Issued in Washington, DC, on April 17,
2020, by the Commission.
Robert Sidman,
Deputy Secretary of the Commission.
Note: The following appendix will not
appear in the Code of Federal Regulations.
Appendix to Privacy of Consumer
Financial Information—Commission
Voting Summary
On this matter, Chairman Tarbert and
Commissioners Quintenz, Behnam, Stump,
and Berkovitz voted in the affirmative. No
Commissioner voted in the negative.
[FR Doc. 2020–08552 Filed 5–15–20; 8:45 am]
BILLING CODE 6351–01–P
SECURITIES AND EXCHANGE
COMMISSION
17 CFR Parts 200, 230, 232, 239, 240,
270, and 274
[Release Nos. 33–10765; 34–88358; IC–
33814; File No. S7–23–18]
RIN 3235–AK60
Updated Disclosure Requirements and
Summary Prospectus for Variable
Annuity and Variable Life Insurance
Contracts
Correction
In rule document 2020–05526,
beginning on page 26954 in the issue of
Friday, May 1, 2020, make the following
correction:
§ 274.11
[Corrected]
On page 26256, in § 274.11, after the
photo material, insert the following
amendatory instructions:
■ 48. Effective January 1, 2022, Form N–
4 (referenced in §§ 239.17b and 274.11c)
is further amended by removing
paragraph (a)(9) of Item 1.
■ 49. Revise Form N–6 (referenced in
§§ 239.17c and 274.11d) to read as
follows:
■
Note: The text of Form N–6 will not appear
in the Code of Federal Regulations.
[FR Doc. C2–2020–05526 Filed 5–15–20; 8:45 am]
BILLING CODE 1301–00–D
E:\FR\FM\18MYR1.SGM
18MYR1
]]>Agencies
[Federal Register Volume 85, Number 96 (Monday, May 18, 2020)]
[Rules and Regulations]
[Pages 29611-29614]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08552]
=======================================================================
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 160
RIN 3038-AE91
Privacy of Consumer Financial Information
AGENCY: Commodity Futures Trading Commission.
[[Page 29612]]
ACTION: Final rule.
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SUMMARY: The Commodity Futures Trading Commission (``CFTC'' or
``Commission'') is making a correction to one of the Commission's
regulations to restore text that was inadvertently deleted in a 2011
amendment to that regulation.
DATES: Effective June 17, 2020.
FOR FURTHER INFORMATION CONTACT: Joshua Sterling, Director, (202) 418-
6056, [email protected]; Frank Fisanich, Chief Counsel, (202) 418-
5949, [email protected]; or Jacob Chachkin, Special Counsel, (202)
418-5496, [email protected], Division of Swap Dealer and Intermediary
Oversight, Commodity Futures Trading Commission, Three Lafayette
Centre, 1155 21st Street NW, Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
I. Background
Section 501 of Title V of the Gramm-Leach-Bliley Act (``Title V'')
mandates that certain agencies covered by Title V establish appropriate
standards for the financial institutions subject to their jurisdiction
relating to administrative, technical and physical safeguards--(1) to
insure the security and confidentiality of customer records and
information; (2) to protect against any anticipated threats or hazards
to the security or integrity of such records; and (3) to protect
against unauthorized access to or use of such records or information
which could result in substantial harm or inconvenience to any
customer.\1\ The Commission and entities subject to its jurisdiction
were originally excluded from Title V's coverage.\2\ However, section
124 of the Commodity Futures Modernization Act of 2000 \3\ amended the
Commodity Exchange Act (``CEA'') to add section 5g,\4\ providing that
futures commission merchants (``FCMs''), commodity trading advisors
(``CTAs''), commodity pool operators (``CPOs''), and introducing
brokers (``IBs'') \5\ fall under the requirements of Title V and
requiring the Commission to prescribe regulations in furtherance of
Title V. Thus, in 2001, the Commission promulgated part 160 of its
regulations to establish standards relating to Title V, and,
specifically, Sec. 160.30 in relation to section 501's mandate.\6\
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\1\ Section 501, Subtitle A, Title V, Public Law 106-102, 113
Stat. 1338 (1999), as codified at 15 U.S.C. 6801.
\2\ 15 U.S.C. 6809(3)(B).
\3\ Section 124, Appendix E of Public Law 106-554, 114 Stat.
2763 (2000).
\4\ 7 U.S.C. 7b-2.
\5\ For the definitions of these intermediary categories, see
section 1a of the CEA and Sec. 1.3 of the Commission's regulations.
7 U.S.C. 1a and 17 CFR 1.3. Commission regulations referred to
herein are found at 17 CFR chapter I.
\6\ Privacy of Customer Information, 66 FR 21235 (April 27,
2001) (``2001 Rulemaking''). The Commission later modified its part
160 regulations to apply them to retail foreign exchange dealers
(``RFEDs''), swap dealers (``SDs''), and major swap participants
(``MSPs''). Regulation of Off-Exchange Retail Foreign Exchange
Transactions and Intermediaries, 75 FR 55409 (Sept. 10, 2010) for
RFEDs, and Privacy of Consumer Financial Information; Conforming
Amendments Under Dodd-Frank Act, 76 FR 43874 (July 22, 2011) for SDs
and MSPs (``2011 Amendment''). For the definition of RFED, see Sec.
5.1(h). 17 CFR 5.1(h). For the definitions of SD and MSP, see
section 1a of the CEA and Sec. 1.3 of the Commission's regulations.
7 U.S.C. 1a and 17 CFR 1.3.
---------------------------------------------------------------------------
Commission regulation 160.30 implements this mandate by requiring
every FCM, RFED, CTA, CPO, IB, MSP, or SD that is subject to the
jurisdiction of the Commission (``Covered Persons'') \7\ to adopt
policies and procedures to address administrative, technical and
physical safeguards for the protection of customer records and
information (the ``General Requirement'').\8\ In addition, mirroring
section 501 of the GLB Act, the 2001 Rulemaking further required (the
``Detailed Requirements'') that the policies and procedures be
reasonably designed to: (i) Insure the security and confidentiality of
customer records and information; (ii) protect against any anticipated
threats or hazards to the security or integrity of customer records and
information; and (iii) protect against unauthorized access to or use of
customer records or information that could result in substantial harm
or inconvenience to any customer.\9\ However, when the 2011 Amendment
revised Sec. 160.30 to add SDs and MSPs to the list of entities in
Sec. 160.30's introductory sentence (and, thus, subject to it), the
Detailed Requirements were inadvertently deleted.\10\
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\7\ 17 CFR 160.30. Part 160 does not apply to foreign (non-
resident) FCMs, RFEDs, CTAs, CPOs, IBs, MSPs, and SDs that are not
registered with the Commission. 17 CFR 160.1. Therefore, they are
not ``Covered Persons'' as defined in this release.
\8\ 17 CFR 160.30.
\9\ See 2001 Rulemaking at 21250.
\10\ See 2011 Amendment at 43879. With respect to Sec. 160.30,
the preamble to the 2011 Amendment only discusses amending the
introductory sentence of Sec. 160.30 to add SDs and MSPs to the
list of CFTC registrants that must comply with that regulation. See
id. at 43876. Further, the Commission notes that the Detailed
Requirements continued to be included in Commission staff guidance
on compliance with Sec. 160.30 after the 2011 Amendment. See CFTC
Staff Advisory No. 14-21 (Feb. 26, 2014) (``Sec. 160.30
Guidance''). In addition, the Commission notes that restoring the
Detailed Requirements will make Sec. 160.30 more consistent with
similar rules adopted by the Securities and Exchange Commission
(``SEC'') and the Federal Trade Commission (``FTC'') under the GLB
Act. See 17 CFR 248.30 and 16 CFR 314.3, respectively.
---------------------------------------------------------------------------
II. Proposal
On November 12, 2019, the Commission published a Notice of Proposed
Rulemaking \11\ to amend Sec. 160.30 of the Commission's regulations
(the ``Proposal''). Specifically, the Commission proposed to restore
the inadvertently deleted Detailed Requirements in Sec. 160.30. As
discussed above and in the Proposal, the Detailed Requirements mirror
the requirements of section 501 of the GLB Act, pursuant to which part
160 of the Commission's regulations was adopted.
---------------------------------------------------------------------------
\11\ Privacy of Consumer Financial Information, 84 FR 60963
(Nov. 12, 2019).
---------------------------------------------------------------------------
The Commission requested comments on the Proposal. The comment
period for the Proposal ended on December 12, 2019.
III. Summary of Comments and Final Rule
The Commission received two relevant comments on the Proposal,\12\
both of which were from individuals and supportive of the Proposal. The
Commission did not receive any comments on the Proposal from Covered
Persons.
---------------------------------------------------------------------------
\12\ The Commission also received one comment that was not
relevant to the Proposal. All of the comments are available at
https://comments.cftc.gov/PublicComments/CommentList.aspx?id=3047.
---------------------------------------------------------------------------
The Commission is adopting this Final Rule (``Final Rule'') as
proposed. Accordingly, the Commission is adopting the amendments to
Commission regulation 160.30 as shown in the rule text in this document
and for the reasons discussed in the Proposal and reiterated above.
IV. Related Matters
A. Regulatory Flexibility Act
The Regulatory Flexibility Act \13\ (``RFA'') requires federal
agencies to consider whether the rules they propose will have a
significant economic impact on a substantial number of small entities
and, if so, to provide a regulatory flexibility analysis regarding the
economic impact on those entities. In the Proposal, the Commission
certified that the Proposal would not have a significant economic
impact on a substantial number of small entities. The Commission
requested comments with respect to the RFA and received no such
comments.
---------------------------------------------------------------------------
\13\ 5 U.S.C. 601 et seq.
---------------------------------------------------------------------------
As discussed in the Proposal, this Final Rule will restore the
inadvertently deleted Detailed Requirements in Sec. 160.30. To the
extent that the Final Rule will impact Covered Persons that may be
small entities for purposes of the
[[Page 29613]]
RFA,\14\ the Commission considered whether the Final Rule will have a
significant economic impact on such Covered Persons.
---------------------------------------------------------------------------
\14\ The Commission has previously determined that certain
entities are not ``small entities'' for purposes of the RFA. See,
e.g., 47 FR 18618, 18619 (Apr. 30, 1982) (registered FCMs); 75 FR
55410, 55416 (Sept. 10, 2010) (RFEDs); 77 FR 2613, 2620 (Jan. 19,
2012) (SDs and MSPs). However, the Commission has determined that
CPOs exempt pursuant to 17 CFR 4.13(a) are small entities. See 46 FR
26004 (May 8, 1981); 47 FR at 18619. The definitions of IB and CTA
are also broad enough to potentially encompass ``small entities.''
See 48 FR 35248, 35276 (Aug. 3, 1983) (recognizing that the IB
definition ``undoubtedly encompasses many business enterprises of
variable size''); 47 FR at 18620 (the category of CTAs is ``too
broad'' for a general determination regarding their small entity
status).
---------------------------------------------------------------------------
In restoring the inadvertently deleted Detailed Requirements the
Final Rule will simply set forth, consistent with the Sec. 160.30
Guidance and the GLB Act, what is necessary to satisfy the General
Requirement that already applies to Covered Persons. Therefore, the
Commission believes that the Final Rule will not have a significant
economic impact on a substantial number of small entities, as defined
in the RFA.
Accordingly, the Chairman, on behalf of the Commission, hereby
certifies pursuant to 5 U.S.C. 605(b) that the Final Rule will not have
a significant economic impact on a substantial number of small
entities.
B. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (``PRA'') \15\ imposes certain
requirements on Federal agencies, including the Commission, in
connection with their conducting or sponsoring any collection of
information, as defined by the PRA. The Commission may not conduct or
sponsor, and a person is not required to respond to, a collection of
information unless it displays a currently valid Office of Management
and Budget (``OMB'') control number.
---------------------------------------------------------------------------
\15\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------
The Commission has previously received a control number from OMB
that includes the collection of information associated with the General
Requirement. The title for this collection of information is ``Privacy
of Consumer Financial Information, OMB control number 3038-0055''.\16\
Collection 3038-0055 is currently in force with its control number
having been provided by OMB. Because in restoring the inadvertently
deleted Detailed Requirements, the Final Rule simply sets forth,
consistent with the Sec. 160.30 Guidance and the GLB Act, what is
necessary to satisfy the General Requirement that already applies to
Covered Persons, the Commission believes that the Final Rule does not
impose any new recordkeeping or information collection requirements, or
other collections of information that require approval of OMB under the
PRA.
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\16\ See OMB Control No. 3038-0055, https://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=3038-0055# (last visited
Jan. 6, 2020).
---------------------------------------------------------------------------
In the Proposal, the Commission invited the public and other
Federal agencies to comment on any aspect of the information collection
requirements discussed therein. The Commission did not receive any such
comments.
C. Cost-Benefit Considerations
Section 15(a) of the CEA requires the Commission to consider the
costs and benefits of its actions before promulgating a regulation
under the CEA. Section 15(a) further specifies that the costs and
benefits shall be evaluated in light of the following five broad areas
of market and public concern: (1) Protection of market participants and
the public; (2) efficiency, competitiveness, and financial integrity of
futures markets; (3) price discovery; (4) sound risk management
practices; and (5) other public interest considerations. The Commission
considers the costs and benefits resulting from its discretionary
determinations with respect to the section 15(a) considerations.
As discussed above, in the Final Rule, the Commission is restoring
the inadvertently deleted Detailed Requirements in Sec. 160.30. Below,
the Commission discusses the costs and benefits of the Final Rule.\17\
The baseline against which the costs and benefits are considered is the
current status quo for Covered Persons with respect to their obligation
to satisfy the General Requirement under Sec. 160.30.\18\ The
Commission recognizes that there are inherent costs and benefits to
Covered Persons in providing requirements for specific customer privacy
policies and procedures, which Congress took into account in codifying
the GLB Act.
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\17\ The Commission endeavors to assess the expected costs and
benefits of its proposed rules in quantitative terms where possible.
Where estimation or quantification is not feasible, the Commission
provides its discussion in qualitative terms. Given a general lack
of relevant data, the Commission's assessment is generally provided
in qualitative terms.
\18\ The Commission notes that the consideration of costs and
benefits below is based on the understanding that the markets
function internationally, with many transactions involving United
States firms taking place across international boundaries; with some
Commission registrants being organized outside of the United States;
with some leading industry members typically conducting operations
both within and outside the United States; and with industry members
commonly following substantially similar business practices wherever
located. Where the Commission does not specifically refer to matters
of location, the discussion of costs and benefits below refers to
the effects of this Final Rule on all activity subject to the
amended regulations, whether by virtue of the activity's physical
location in the United States or by virtue of the activity's
connection with activities in, or effect on, United States commerce
under CEA section 2(i), 7 U.S.C. 2(i). In particular, the Commission
notes that some Covered Persons are located outside of the United
States.
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The inadvertent deletion of the Detailed Requirements in Sec.
160.30 affected entities that were required to comply with the Detailed
Requirements prior to the 2011 Amendment as well as the two types of
entities (SDs and MSPs) the rule was being revised to include. Due to
the inadvertent nature of the deletion of the Detailed Requirements,
and that they applied prior to the 2011 Amendment, the Commission
expects the number of entities affected by the Final Rule to be
negligible, if any. Consequently, the Commission believes that the
restoration of the Detailed Requirements in Sec. 160.30, consistent
with the Sec. 160.30 Guidance and the GLB Act, does not alter existing
benefits and costs. The Commission, however, recognizes that this Final
Rule may benefit certain Covered Persons by, consistent with the GLB
Act, specifying what types of policies and procedures are necessary to
satisfy the General Requirement. In doing so, this Final Rule may
reduce any potential confusion and allow Covered Persons to design and
maintain their policies and procedures to focus on the specified areas
mandated by the GLB Act. In this regard, this Final Rule may allow
Covered Persons to more efficiently utilize their resources in
developing policies and procedures in compliance with Sec. 160.30.
This Final Rule also will, consistent with the GLB Act,\19\ result in
Sec. 160.30 being more similar to regulations adopted by the SEC and
FTC pursuant to the GLB Act and to which certain Covered Persons may be
subject.\20\
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\19\ See 15 U.S.C. 6804(a)(2).
\20\ See n.10, supra.
---------------------------------------------------------------------------
The Commission recognizes that, as a result of this Final Rule,
certain Covered Persons may become subject to more specific
requirements under Sec. 160.30 than they are currently. However, given
that the General Requirement currently applies to Covered Persons, and
the Sec. 160.30 Guidance that remains in effect takes into account the
substance of the Detailed Requirements, the Commission believes that
the burden of this Final Rule on Covered Persons will not be
significant.
[[Page 29614]]
1. Section 15(a) Considerations
In light of the foregoing, the CFTC has evaluated the costs and
benefits of this Final Rule pursuant to the five considerations
identified in section 15(a) of the CEA as follows:
(1) Protection of Market Participants and the Public
This Final Rule's restoration of the Detailed Requirements may
protect market participants and the public by ensuring that the
policies and procedures required under Sec. 160.30 are reasonably
designed to address the specific areas mandated by Congress in the GLB
Act.
(2) Efficiency, Competitiveness, and Financial Integrity of Markets
This Final Rule may reduce confusion and allow Covered Persons to
design and maintain their policies and procedures to focus on the
specified areas mandated by the GLB Act. This may allow Covered Persons
to more efficiently utilize their resources in developing policies and
procedures in compliance with Sec. 160.30. In addition, consistent
with the GLB Act, this Final Rule will further align the consumer
privacy regulations of the Commission, FTC, and SEC, which may lower
costs for certain Covered Persons.
(3) Price Discovery
The Commission has not identified an impact on price discovery as a
result of this Final Rule.
(4) Sound Risk Management
The Commission has not identified an impact on sound risk
management as a result of this Final Rule.
(5) Other Public Interest Considerations
Consistent with the GLB Act, this Final Rule will further align the
consumer privacy regulations of the Commission, FTC, and SEC.
2. Comments on Cost-Benefit Considerations
The Commission invited public comment on its cost-benefit
considerations in the Proposal, including the Section 15(a) factors
described above. The Commission received no such comments.
D. Antitrust Considerations
Section 15(b) of the CEA \21\ requires the Commission to take into
consideration the public interest to be protected by the antitrust laws
and endeavor to take the least anticompetitive means of achieving the
objectives of the CEA, as well as the policies and purposes of the CEA,
in issuing any order or adopting any Commission rule or regulation
(including any exemption under section 4(c) or 4c(b)), or in requiring
or approving any bylaw, rule, or regulation of a contract market or
registered futures association established pursuant to section 17 of
the CEA.
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\21\ 7 U.S.C. 19(b).
---------------------------------------------------------------------------
The Commission believes that the public interest to be protected by
the antitrust laws is generally to protect competition. The Commission
requested and did not receive any comments on whether the Proposal
implicated any other specific public interest to be protected by the
antitrust laws.
The Commission has considered this Final Rule to determine whether
it is anticompetitive and has identified no anticompetitive effects.
The Commission requested and did not receive any comments on whether
the Proposal was anticompetitive and, if it is, what the
anticompetitive effects are.
Because the Commission has determined that this Final Rule is not
anticompetitive and has no anticompetitive effects and received no
comments on its determination, the Commission has not identified any
less anticompetitive means of achieving the purposes of the CEA.
List of Subjects in 17 CFR Part 160
Brokers, Consumer protection, Privacy, Reporting and recordkeeping
requirements.
For the reasons stated in the preamble, the Commodity Futures
Trading Commission amends 17 CFR part 160 as follows:
PART 160--PRIVACY OF CONSUMER FINANCIAL INFORMATION UNDER TITLE V
OF THE GRAMM-LEACH-BLILEY ACT
0
1. The authority citation for part 160 continues to read as follows:
Authority: 7 U.S.C. 7b-2 and 12a(5); 15 U.S.C 6801, et seq.,
and sec. 1093, Pub. L. 111-203, 124 Stat. 1376.
0
2. Revise Sec. 160.30 to read as follows:
Sec. 160.30 Procedures to safeguard customer records and information.
Every futures commission merchant, retail foreign exchange dealer,
commodity trading advisor, commodity pool operator, introducing broker,
major swap participant, and swap dealer subject to the jurisdiction of
the Commission must adopt policies and procedures that address
administrative, technical and physical safeguards for the protection of
customer records and information. These policies and procedures must be
reasonably designed to:
(a) Insure the security and confidentiality of customer records and
information;
(b) Protect against any anticipated threats or hazards to the
security or integrity of customer records and information; and
(c) Protect against unauthorized access to or use of customer
records or information that could result in substantial harm or
inconvenience to any customer.
Issued in Washington, DC, on April 17, 2020, by the Commission.
Robert Sidman,
Deputy Secretary of the Commission.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Appendix to Privacy of Consumer Financial Information--Commission
Voting Summary
On this matter, Chairman Tarbert and Commissioners Quintenz,
Behnam, Stump, and Berkovitz voted in the affirmative. No
Commissioner voted in the negative.
[FR Doc. 2020-08552 Filed 5-15-20; 8:45 am]
BILLING CODE 6351-01-P
