Swap Transaction Compliance and Implementation Schedule: Clearing Requirement Under Section 2(h) of the CEA
The Commodity Futures Trading Commission (Commission or CFTC) is adopting regulations to establish a schedule to phase in compliance with the clearing requirement under new section 2(h)(1)(A) of the Commodity Exchange Act (CEA or Act), enacted under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The schedule will provide additional time for compliance with this requirement. This additional time is intended to facilitate the transition to the new regulatory regime established by the Dodd-Frank Act in an orderly manner that does not unduly disrupt markets and transactions.
Ownership and Control Reports, Forms 102/102S, 40/40S, and 71
The Commodity Futures Trading Commission (``Commission'' or ``CFTC'') is proposing new rules and related forms to enhance its identification of futures and swap market participants. The proposed rules would leverage the Commission's existing position and transaction reporting programs by requiring the electronic submission of trader identification and market participant data on amended Forms 102 and 40, and on new Form 71. The proposed rules also incorporate a revised approach to the Commission's previous initiative to collect ownership and control information, through a dedicated ownership and control report (``OCR''), for trading accounts active on reporting markets that are designated contract markets or swap execution facilities. The Commission welcomes public comment on all aspects of its proposal.
Account Ownership and Control Report; Withdrawal
On July 19, 2010, the Commission published for public comment a Notice of Proposed Rulemaking that proposed to collect certain account ownership and control information for all trading accounts active on U.S. futures exchanges and other reporting entities (``OCR NPRM''). After considering all comments received in response to the OCR NPRM, the Commission is withdrawing the OCR NPRM and instead pursuing the collection of account ownership and control information through a separate proposed rulemaking published today elsewhere in the notice section of the Federal Register.
Agency Information Collection Activities: Submission for OMB Emergency Review; Comment Request: Exemptive Order Regarding Compliance With Certain Swap Regulations
The Commodity Futures Trading Commission (``Commission'' or ``CFTC'') has submitted a request for review and approval of an information collection request (``ICR'') titled ``Exemptive Order Regarding Compliance with Certain Swap Regulations,'' utilizing emergency review procedures in accordance with the Paperwork Reduction Act of 1995 (``PRA''), 44 U.S.C. 3501 et seq., and Office of Management and Budget (``OMB'') regulation 5 CFR 1320.13. The Commission is requesting that this information collection be approved by August 8, 2012. The Commission is initially requesting a six-month approval for this collection. The Commission plans to follow this emergency request with a request for a 3-year approval, through OMB's normal clearance procedures of OMB regulation 5 CFR 1320.10.
Meeting; Technology Advisory Committee
The CFTC announces that on Thursday, July 26, 2012, the CFTC's Technology Advisory Committee (``TAC'') will hold an emergency public meeting at the CFTC's Washington, DC headquarters, from 10:00 a.m. to 4:00 p.m. The TAC will focus on possible technology solutions to, among other things, enable futures commission merchant customers, self- regulatory organizations and the CFTC to verify in near real-time the accuracy of the amount of funds held in customer segregated accounts.
End-User Exception to the Clearing Requirement for Swaps
The Commodity Futures Trading Commission (Commission or CFTC) is adopting final regulations to implement certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). These regulations govern the exception to the clearing requirement available to swap counterparties meeting certain conditions under the Commodity Exchange Act (CEA), as amended by the Dodd-Frank Act.
Clearing Exemption for Certain Swaps Entered Into by Cooperatives
The Commodity Futures Trading Commission (``CFTC'' or ``Commission'') is proposing a rule pursuant to its authority under Section 4(c) of the Commodity Exchange Act (CEA) allowing cooperatives meeting certain conditions to elect not to submit for clearing certain swaps that such cooperatives would otherwise be required to clear in accordance with Section 2(h)(1) of the CEA.
Privacy Act of 1974 System of Records Notice
The Commodity Futures Trading Commission (Commission) is revising one system of records under the Privacy Act of 1974: CFTC-44, Personnel Security Files, to be renamed CFTC-44, Personnel Clearance System. The Commission also is establishing two new systems of records: CFTC-48, Personal Property Claims, and CFTC-49, Whistleblower Records (Exempted). Revisions to CFTC-44 incorporate enhancements to the system of records with a new streamlined process of capturing personal information, minimizing paper records and eliminating manual entry into a legacy application when an individual applies for a security clearance. New CFTC-48 addresses information collected through a new process for employees to file and have adjudicated claims for damage or loss of certain personal property, as stated in Commission policies and applicable law. New CFTC-49 addresses information collected for the Commission's whistleblower program, which is described and defined in Section 23 of the Commodity Exchange Act, 7 U.S.C. 26, and the rules promulgated thereunder, 17 CFR part 165.
Second Amendment to July 14, 2011 Order for Swap Regulation
On May 16, 2012, the Commodity Futures Trading Commission (``CFTC'' or the ``Commission'') published in the Federal Register a Notice of Proposed Amendment (``Notice'') to extend the temporary exemptive relief the Commission granted on July 14, 2011 (``July 14 Order'') from certain provisions of the Commodity Exchange Act (``CEA'') that otherwise would have taken effect on the general effective date of title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (``the Dodd-Frank Act'')July 16, 2011. This final order extends the July 14 Order with certain modifications. Specifically, it removes references to the entities terms, including ``swap dealer,'' ``major swap participant,'' and ``eligible contract participant'' in light of the final joint rulemaking of the CFTC and Securities and Exchange Commission (``SEC'') further defining those terms issued on April 18, 2012; extends the potential latest expiration date of the July 14 Order to December 31, 2012, or, depending on the nature of the relief, such other compliance date as may be determined by the Commission; allows the clearing of agricultural swaps, as described herein; and removes any reference to the exempt commercial market (``ECM'') and exempt board of trade (``EBOT'') grandfather relief previously issued by the Commission.
Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants
On April 28, 2011, the Commodity Futures Trading Commission (``Commission'' or ``CFTC'') published in the Federal Register a notice of proposed rulemaking that would establish initial and variation margin requirements on uncleared swaps for swap dealers (``SDs'') and major swap participants (``MSPs'').\1\ In October 2011, the Basel Commission on Banking Supervision (``BCBS'') and the International Organization of Securities Commissions (``IOSCO'') established a Working Group on Margin Requirements (``WGMR'') to develop harmonized international standards for uncleared swaps. BCBS and IOSCO recently published a consultative paper prepared by the WGMR that outlines possible margin requirements for non-centrally cleared derivatives (``consultative paper'').\2\ The Commission is extending the comment period for its proposed margin rules for uncleared swaps for swap dealers and major swap participants in order to give interested parties the opportunity to comment on the consultative paper and the CFTC's proposed rules concurrently.
Exemptive Order Regarding Compliance With Certain Swap Regulations
The Commodity Futures Trading Commission (``Commission'') is proposing to grant, pursuant to section 4(c) of the Commodity Exchange Act (``CEA''), temporary exemptive relief in order to allow non-U.S. swap dealers and non-U.S. major swap participants to delay compliance with certain entity-level requirements of the CEA (and Commission regulations promulgated thereunder), subject to specified conditions. Additionally, with respect to transaction-level requirements of the CEA (and Commission regulations promulgated thereunder), the relief would allow non-U.S. swap dealers and non-U.S. major swap participants, as well as foreign branches of U.S. swap dealers and major swap participants, to comply only with those requirements as may be required in the home jurisdiction of such non-U.S. swap dealers and non-U.S. major swap participants (or in the case of foreign branches of a U.S. swap dealer or U.S. major swap participant, the foreign location of the branch) for swaps with non-U.S. counterparties. This relief would become effective concurrently with the date upon which swap dealers and major swap participants must first apply for registration and expire 12 months following the publication of this proposed order in the Federal Register. Finally, U.S. swap dealers and U.S. major swap participants may delay compliance with certain entity-level requirements of the CEA (and Commission regulations promulgated thereunder) from the date upon which swap dealers and major swap participants must apply for registration until January 1, 2013.
Cross-Border Application of Certain Swaps Provisions of the Commodity Exchange Act
The Commodity Futures Trading Commission (``Commission'' or ``CFTC) is publishing for public comment this proposed interpretive guidance and policy statement regarding the cross-border application of the swaps provisions of the Commodity Exchange Act (``CEA'') that were enacted by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the Commission's regulations promulgated thereunder. Specifically, this proposed interpretive guidance and policy statement describes the following: The general manner in which the Commission will consider whether a person's swap dealing activities or swap positions may require registration as a swap dealer or major swap participant, respectively, and the application of the related requirements under the CEA to swaps involving such persons; and the application of the clearing, trade execution, and certain reporting and recordkeeping provisions under the CEA, to cross-border swaps involving one or more counterparties that are not swap dealers or major swap participants. This proposed interpretive guidance and policy statement also generally describes the policy and procedural framework under which the Commission may permit compliance with a comparable regulatory requirement of a foreign jurisdiction to substitute for compliance with the requirements of the CEA.
Further Definition of “Swap Dealer,” “Security-Based Swap Dealer,” “Major Swap Participant,” “Major Security-Based Swap Participant” and “Eligible Contract Participant”; Correction
The Commodity Futures Trading Commission and Securities and Exchange Commission are correcting final rules that appeared in the Federal Register of May 23, 2012 (77 FR 30596). The rules further defined the terms ``swap dealer,'' ``security-based swap dealer,'' ``major swap participant,'' ``major security-based swap participant'' and ``eligible contract participant.'' Only the rules of the Commodity Futures Trading Commission are subject to this correction. This document also corrects a footnote in the Supplementary Information accompanying the final rules.