[Title 17 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2020 Edition]
[From the U.S. Government Publishing Office]



[[Page i]]

          

          Title 17

Commodity and Securities Exchanges


________________________

Parts 41 to 199

                         Revised as of April 1, 2020

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2020
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as a 
                    Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 17:
          Chapter I--Commodity Futures Trading Commission 
          (Continued)                                                3
  Finding Aids:
      Table of CFR Titles and Chapters........................     559
      Alphabetical List of Agencies Appearing in the CFR......     579
      List of CFR Sections Affected...........................     589

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

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 17 CFR 41.1 refers 
                       to title 17, part 41, 
                       section 1.

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

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
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name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

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HOW TO USE THE CODE OF FEDERAL REGULATIONS

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OMB CONTROL NUMBERS

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collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
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[[Page vii]]

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    Oliver A. Potts,
    Director,
    Office of the Federal Register.
    April 1, 2020.







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                               THIS TITLE

    Title 17--Commodity and Securities Exchanges is composed of four 
volumes. The first two volumes containing parts 1--40, and 41--199 
comprise Chapter I--Commodity Futures Trading Commission. The third 
volume contains Chapter II--Securities and Exchange Commission, parts 
200--239. The fourth volume, comprising part 240 to end, contains the 
remaining regulations of the Securities and Exchange Commission, and 
Chapter IV--Department of the Treasury. The contents of these volumes 
represent all current regulations issued by the Commodity Futures 
Trading Commission, the Securities and Exchange Commission, and the 
Department of the Treasury as of April 1, 2020.

    The OMB control numbers for the Securities and Exchange Commission 
appear in Sec.  200.800 of chapter II. For the convenience of the user, 
Sec.  200.800 is reprinted in the Finding Aids section of the volume 
containing part 240 to end.

    For this volume, Ann Worley was Chief Editor. The Code of Federal 
Regulations publication program is under the direction of John Hyrum 
Martinez, assisted by Stephen J. Frattini.

[[Page 1]]



              TITLE 17--COMMODITY AND SECURITIES EXCHANGES




                  (This book contains parts 41 to 199)

  --------------------------------------------------------------------
                                                                    Part

chapter i--Commodity Futures Trading Commission (Continued).          41

[[Page 3]]



       CHAPTER I--COMMODITY FUTURES TRADING COMMISSION (CONTINUED)




  --------------------------------------------------------------------
Part                                                                Page
41              Security futures products...................           5
42              Anti-money laundering, terrorist financing..          31
43              Real-time public reporting..................          31
44              Interim final rule for pre-enactment swap 
                    transactions............................          70
45              Swap data recordkeeping and reporting 
                    requirements............................          72
46              Swap data recordkeeping and reporting 
                    requirements: pre-enactment and 
                    transition swaps........................         104
48              Registration of foreign boards of trade.....         121
49              Swap data repositories......................         154
50              Clearing requirement and related rules......         193
75              Proprietary trading and certain interests in 
                    and relationships with covered funds....         203
100             Delivery period required....................         280
140             Organization, functions, and procedures of 
                    the Commission..........................         280
141             Salary offset...............................         307
142             Indemnification of CFTC employees...........         310
143             Collection of claims owed the United States 
                    arising from activities under the 
                    Commission's jurisdiction...............         311
144             Procedures regarding the disclosure of 
                    information and the testimony of present 
                    or former officers and employees in 
                    response to subpoenas or other demands 
                    of a court..............................         315
145             Commission records and information..........         317
146             Records maintained on individuals...........         331
147             Open Commission meetings....................         341
148             Implementation of the Equal Access to 
                    Justice Act in covered adjudicatory 
                    proceedings before the Commission.......         348
149             Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by the Commodity 
                    Futures Trading Commission..............         354

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150             Limits on positions.........................         360
151             Position limits for futures and swaps.......         368
155             Trading standards...........................         392
156             Broker Associations.........................         396
160             Privacy of consumer financial information 
                    under Title V of the Gramm-Leach-Bliley 
                    Act.....................................         397
162             Protection of consumer information under the 
                    Fair Credit Reporting Act...............         426
165             Whistleblower rules.........................         443
166             Customer protection rules...................         483
170             Registered futures associations.............         487
171             Rules relating to review of National Futures 
                    Association decisions in disciplinary, 
                    membership denial, registration and 
                    member responsibility actions...........         490
180             Prohibition against manipulation............         505
190             Bankruptcy..................................         506
191-199

[Reserved]

[[Page 5]]



PART 41_SECURITY FUTURES PRODUCTS--Table of Contents



                      Subpart A_General Provisions

Sec.
41.1 Definitions.
41.2 Required records.
41.3 Application for an exemptive order pursuant to section 4f(a)(4)(B) 
          of the Act.
41.4-41.9 [Reserved]

                 Subpart B_Narrow-Based Security Indexes

41.11 Method for determining market capitalization and dollar value of 
          average daily trading volume; application of the definition of 
          narrow-based security index.
41.12 Indexes underlying futures contracts trading for fewer than 30 
          days.
41.13 Futures contracts on security indexes trading on or subject to the 
          rules of a foreign board of trade.
41.14 Transition period for indexes that cease being narrow-based 
          security indexes.
41.15 Exclusion from definition of narrow-based security index for 
          indexes composed of debt securities.

   Subpart C_Requirements and Standards for Listing Security Futures 
                                Products

41.21 Requirements for underlying securities.
41.22 Required certifications.
41.23 Listing of security futures products for trading.
41.24 Rule amendments to security futures products.
41.25 Additional conditions for trading for security futures products.
41.27 Prohibition of dual trading in security futures products by floor 
          brokers.

Appendix A to Subpart C of Part 41--Guidance on and Acceptable Practices 
          for Position Limits and Position Accountability for Security 
          Futures Products

    Subpart D_Notice_Designated Contract Markets in Security Futures 
                                Products

41.31 Notice-designation requirements.
41.32 Continuing obligations.
41.33 Applications for exemptive orders.
41.34 Exempt provisions.

           Subpart E_Customer Accounts and Margin Requirements

41.41 Security futures products accounts.
41.42 Customer margin requirements for security futures--authority, 
          purpose, interpretation, and scope.
41.43 Definitions.
41.44 General provisions.
41.45 Required margin.
41.46 Type, form and use of margin.
41.47 Withdrawal of margin.
41.48 Undermargined accounts.
41.49 Filing proposed margin rule changes with the Commission.

    Authority: Sections 206, 251 and 252, Pub. L. 106-554, 114 Stat. 
2763, 7 U.S.C. 1a, 2, 6f, 6j, 7a-2, 12a; 15 U.S.C. 78g(c)(2).

    Source: 66 FR 44511, Aug. 23, 2001, unless otherwise noted.



                      Subpart A_General Provisions



Sec.  41.1  Definitions.

    For purposes of this part:
    (a) Alternative trading system shall have the meaning set forth in 
section 1a(1) of the Act.
    (b) Board of trade shall have the meaning set forth in section 1a(2) 
of the Act.
    (c) Broad-based security index means a group or index of securities 
that does not constitute a narrow-based security index.
    (d) Foreign board of trade means a board of trade located outside of 
the United States, its territories or possessions, whether incorporated 
or unincorporated, where foreign futures or foreign options are entered 
into.
    (e) Narrow-based security index has the same meaning as in section 
1a(35) of the Commodity Exchange Act.
    (f) National securities association means a board of trade 
registered with the Securities and Exchange Commission pursuant to 
section 15A(a) of the Securities Exchange Act of 1934.
    (g) National securities exchange means a board of trade registered 
with the Securities and Exchange Commission pursuant to section 6(a) of 
the Securities Exchange Act of 1934.
    (h) Rule shall have the meaning set forth in Commission regulation 
40.1.
    (i) Security futures product shall have the meaning set forth in 
section 1a(32) of the Act.
    (j) Opening price means the price at which a security opened for 
trading, or a price that fairly reflects the price at which a security 
opened for trading, during the regular trading session of the national 
securities exchange or national securities association that lists the 
security. If the security is not listed on a national securities 
exchange or

[[Page 6]]

a national securities association, then opening price shall mean the 
price at which a security opened for trading, or a price that fairly 
reflects the price at which a security opened for trading, on the 
primary market for the security.
    (k) Regular trading session of a security means the normal hours for 
business of a national securities exchange or national securities 
association that lists the security.
    (l) Regulatory halt means a delay, halt, or suspension in the 
trading of a security, that is instituted by the national securities 
exchange or national securities association that lists the security, as 
a result of:
    (1) A determination that there are matters relating to the security 
or issuer that have not been adequately disclosed to the public, or that 
there are regulatory problems relating to the security which should be 
clarified before trading is permitted to continue; or
    (2) The operation of circuit breaker procedures to halt or suspend 
trading in all equity securities trading on that national securities 
exchange or national securities association.

[66 FR 44511, Aug. 23, 2001, as amended at 66 FR 44965, Aug. 27, 2001; 
67 FR 36761, May 24, 2002; 77 FR 66344, Nov. 2, 2012]



Sec.  41.2  Required records.

    A designated contract market that trades a security index or 
security futures product shall maintain in accordance with the 
requirements of Sec.  1.31 of this chapter books and records of all 
activities related to the trading of such products, including: Records 
related to any determination under subpart B of this part whether or not 
a futures contract on a security index is a narrow-based security index 
or a broad-based security index.

[77 FR 66344, Nov. 2, 2012]



Sec.  41.3  Application for an exemptive order pursuant to 
section 4f(a)(4)(B) of the Act.

    (a) Any futures commission merchant or introducing broker registered 
in accordance with the notice registration provisions of Sec.  3.10 of 
this chapter, or any broker or dealer exempt from floor broker or floor 
trader registration pursuant to section 4f(a)(3) of the Act, may apply 
to the Commission for an order pursuant to section 4f(a)(4)(B) of the 
Act granting exemption to such person from any provision of the Act or 
the Commission's regulations other than sections 4c(b), 4c(d), 4c(e), 
4c(g), 4d, 4e, 4h, 4f(b), 4f(c), 4j, 4k(1), 4p, 6d, 8(d), 8(g), and 16 
of the Act and the rules thereunder.
    (b) An application pursuant to this section must set forth in 
writing or in an electronic mail message the following information:
    (1) The name, main business address and main business telephone 
number of the person applying for an order;
    (2) The capacity in which the person is registered with the 
Securities and Exchange Commission and the person's CRD number (if a 
member of the National Association of Securities Dealers, Inc.) or 
equivalent self-regulatory organization identification, together with a 
certification, if true, that the person's registration is not suspended 
pursuant to an order of the Securities and Exchange Commission;
    (3) The particular section(s) of the Act and/or provision(s) of the 
Commission's regulations with respect to which the person seeks 
exemption;
    (4) Any provision(s) of the securities laws or rules, or of the 
rules of a securities self-regulatory organization analogous to the 
provision(s);
    (5) A clear explanation of the facts and circumstances under which 
the person believes that the requested exemptive relief is necessary or 
appropriate in the public interest; and
    (6) A clear explanation of the extent to which the requested 
exemptive relief is consistent with the protection of investors.
    (c) A national securities exchange or other securities industry 
self-regulatory organization may submit an application for an order 
pursuant to this section on behalf of its members.
    (d) An application for an order must be submitted to the Director of 
the Division of Swap Dealer and Intermediary Oversight, Commodity 
Futures Trading Commission, 1155 21st Street, NW., Washington, DC 20581, 
if in paper form, or to [email protected] if submitted via electronic mail.
    (e) The Commission may, in its sole discretion, grant the 
application, deny

[[Page 7]]

the application, decline to entertain the application, or grant the 
application subject to one or more conditions.

[66 FR 43086, Aug. 17, 2001. Redesignated at 67 FR 53171, Aug. 14, 2002, 
as amended at 67 FR 62352, Oct. 7, 2002; 78 FR 22419, Apr. 16, 2013]



Sec. Sec.  41.4-41.9  [Reserved]



                 Subpart B_Narrow-Based Security Indexes



Sec.  41.11  Method for determining market capitalization and dollar
value of average daily trading volume; application of the definition
of narrow-based security index.

    (a) Market capitalization. For purposes of section 1a(35)(B) of the 
Act (7 U.S.C. 1a(35)(B)):
    (1) On a particular day, a security shall be 1 of 750 securities 
with the largest market capitalization as of the preceding 6 full 
calendar months when it is included on a list of such securities 
designated by the Commission and the SEC as applicable for that day.
    (2) In the event that the Commission and the SEC have not designated 
a list under paragraph (a)(1) of this section:
    (i) The method to be used to determine market capitalization of a 
security as of the preceding 6 full calendar months is to sum the values 
of the market capitalization of such security for each U.S. trading day 
of the preceding 6 full calendar months, and to divide this sum by the 
total number of such trading days.
    (ii) The 750 securities with the largest market capitalization shall 
be identified from the universe of all NMS securities as defined in 
Sec.  242.600 that are common stock or depositary shares.
    (b) Dollar value of ADTV. (1) For purposes of section 1a(35)(A) and 
(B) of the Act (7 U.S.C. 1a(35)(A) and (B)):
    (i)(A) The method to be used to determine the dollar value of ADTV 
of a security is to sum the dollar value of ADTV of all reported 
transactions in such security in each jurisdiction as calculated 
pursuant to paragraphs (b)(1)(ii) and (iii) of this section.
    (B) The dollar value of ADTV of a security shall include the value 
of all reported transactions for such security and for any depositary 
share that represents such security.
    (C) The dollar value of ADTV of a depositary share shall include the 
value of all reported transactions for such depositary share and for the 
security that is represented by such depositary share.
    (ii) For trading in a security in the United States, the method to 
be used to determine the dollar value of ADTV as of the preceding 6 full 
calendar months is to sum the value of all reported transactions in such 
security for each U.S. trading day during the preceding 6 full calendar 
months, and to divide this sum by the total number of such trading days.
    (iii)(A) For trading in a security in a jurisdiction other than the 
United States, the method to be used to determine the dollar value of 
ADTV as of the preceding 6 full calendar months is to sum the value in 
U.S. dollars of all reported transactions in such security in such 
jurisdiction for each trading day during the preceding 6 full calendar 
months, and to divide this sum by the total number of trading days in 
such jurisdiction during the preceding 6 full calendar months.
    (B) If the value of reported transactions used in calculating the 
ADTV of securities under paragraph (b)(1)(iii)(A) is reported in a 
currency other than U.S. dollars, the total value of each day's 
transactions in such currency shall be converted into U.S. dollars on 
the basis of a spot rate of exchange for that day obtained from at least 
one independent entity that provides or disseminates foreign exchange 
quotations in the ordinary course of its business.
    (iv) The dollar value of ADTV of the lowest weighted 25% of an index 
is the sum of the dollar value of ADTV of each of the component 
securities comprising the lowest weighted 25% of such index.
    (2) For purposes of section 1a(35)(B)(III)(cc) of the Act (7 U.S.C. 
1a(35)(B)(III)(cc)):
    (i) On a particular day, a security shall be 1 of 675 securities 
with the largest dollar value of ADTV as of the preceding 6 full 
calendar months when it is included on a list of such securities 
designated by the Commission and the SEC as applicable for that day.

[[Page 8]]

    (ii) In the event that the Commission and the SEC have not 
designated a list under paragraph (b)(2)(i) of this section:
    (A) The method to be used to determine the dollar value of ADTV of a 
security as of the preceding 6 full calendar months is to sum the value 
of all reported transactions in such security in the United States for 
each U.S. trading day during the preceding 6 full calendar months, and 
to divide this sum by the total number of such trading days.
    (B) The 675 securities with the largest dollar value of ADTV shall 
be identified from the universe of all NMS securities as defined in 
Sec.  242.600 that are common stock or depositary shares.
    (c) Depositary Shares and Section 12 Registration. For purposes of 
section 1a(35)(B)(III)(aa) of the Act (7 U.S.C. 1a(35)(B)(III)(aa)), the 
requirement that each component security of an index be registered 
pursuant to section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 
78l) shall be satisfied with respect to any security that is a 
depositary share if the deposited securities underlying the depositary 
share are registered pursuant to section 12 of the Securities Exchange 
Act of 1934 and the depositary share is registered under the Securities 
Act of 1933 (15 U.S.C. 77a et seq.) on Form F-6 (17 CFR 239.36).
    (d) Definitions. For purposes of this section:
    (1) SEC means the Securities and Exchange Commission.
    (2) Closing price of a security means:
    (i) If reported transactions in the security have taken place in the 
United States, the price at which the last transaction in such security 
took place in the regular trading session of the principal market for 
the security in the United States.
    (ii) If no reported transactions in a security have taken place in 
the United States, the closing price of such security shall be the 
closing price of any depositary share representing such security divided 
by the number of shares represented by such depositary share.
    (iii) If no reported transactions in a security or in a depositary 
share representing such security have taken place in the United States, 
the closing price of such security shall be the price at which the last 
transaction in such security took place in the regular trading session 
of the principal market for the security. If such price is reported in a 
currency other than U.S. dollars, such price shall be converted into 
U.S. dollars on the basis of a spot rate of exchange relevant for the 
time of the transaction obtained from at least one independent entity 
that provides or disseminates foreign exchange quotations in the 
ordinary course of its business.
    (3) Depositary share has the same meaning as in Sec.  240.12b-2.
    (4) Foreign financial regulatory authority has the same meaning as 
in Section 3(a)(52) of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)(52)).
    (5) Lowest weighted 25% of an index. With respect to any particular 
day, the lowest weighted component securities comprising, in the 
aggregate, 25% of an index's weighting for purposes of section 
1a(35)(A)(iv) of the Act (7 U.S.C. 1a(35)(A)(iv)) (``lowest weighted 25% 
of an index'') means those securities:
    (i) That are the lowest weighted securities when all the securities 
in such index are ranked from lowest to highest based on the index's 
weighting methodology; and
    (ii) For which the sum of the weight of such securities is equal to, 
or less than, 25% of the index's total weighting.
    (6) Market capitalization of a security on a particular day:
    (i) If the security is not a depositary share, is the product of:
    (A) The closing price of such security on that same day; and
    (B) The number of outstanding shares of such security on that same 
day.
    (ii) If the security is a depositary share, is the product of:
    (A) The closing price of the depositary share on that same day 
divided by the number of deposited securities represented by such 
depositary share; and
    (B) The number of outstanding shares of the security represented by 
the depositary share on that same day.
    (7) Outstanding shares of a security means the number of outstanding 
shares of such security as reported on the most recent Form 10-K, Form 
10-Q, Form 10-KSB, Form 10-QSB, or Form 20-F (17 CFR 249.310, 249.308a, 
249.310b,

[[Page 9]]

249.308b, or 249.220f) filed with the Securities and Exchange Commission 
by the issuer of such security, including any change to such number of 
outstanding shares subsequently reported by the issuer on a Form 8-K (17 
CFR 249.308).
    (8) Preceding 6 full calendar months means, with respect to a 
particular day, the period of time beginning on the same day of the 
month 6 months before and ending on the day prior to such day.
    (9) Principal market for a security means the single securities 
market with the largest reported trading volume for the security during 
the preceding 6 full calendar months.
    (10) Reported transaction means:
    (i) With respect to securities transactions in the United States, 
any transaction for which a transaction report is collected, processed, 
and made available pursuant to an effective transaction reporting plan, 
or for which a transaction report, last sale data, or quotation 
information is disseminated through an automated quotation system as 
described in Section 3(a)(51)(A)(ii) of the Securities Exchange Act of 
1934 (15 U.S.C. 78c(a)(51)(A)(ii)); and
    (ii) With respect to securities transactions outside the United 
States, any transaction that has been reported to a foreign financial 
regulatory authority in the jurisdiction where such transaction has 
taken place.
    (11) U.S. trading day means any day on which a national securities 
exchange is open for trading.
    (12) Weighting of a component security of an index means the 
percentage of such index's value represented, or accounted for, by such 
component security.

[66 FR 44511, Aug. 23, 2001, as amended at 70 FR 43750, July 29, 2005; 
77 FR 66344, Nov. 2, 2012]



Sec.  41.12  Indexes underlying futures contracts trading for fewer
than 30 days.

    (a) An index on which a contract of sale for future delivery is 
trading on a designated contract market or foreign board of trade is not 
a narrow-based security index under section 1a(35) of the Act (7 U.S.C. 
1a(35)) for the first 30 days of trading, if:
    (1) Such index would not have been a narrow-based security index on 
each trading day of the preceding 6 full calendar months with respect to 
a date no earlier than 30 days prior to the commencement of trading of 
such contract;
    (2) On each trading day of the preceding 6 full calendar months with 
respect to a date no earlier than 30 days prior to the commencement of 
trading such contract:
    (i) Such index had more than 9 component securities;
    (ii) No component security in such index comprised more than 30 
percent of the index's weighting;
    (iii) The 5 highest weighted component securities in such index did 
not comprise, in the aggregate, more than 60 percent of the index's 
weighting; and
    (iv) The dollar value of the trading volume of the lowest weighted 
25% of such index was not less than $50 million (or in the case of an 
index with 15 or more component securities, $30 million); or
    (3) On each trading day of the 6 full calendar months preceding a 
date no earlier than 30 days prior to the commencement of trading such 
contract:
    (i) Such index had at least 9 component securities;
    (ii) No component security in such index comprised more than 30 
percent of the index's weighting; and
    (iii) Each component security in such index was:
    (A) Registered pursuant to Section 12 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78) or was a depositary share representing a security 
registered pursuant to Section 12 of the Securities Exchange Act of 
1934;
    (B) 1 of 750 securities with the largest market capitalization that 
day; and
    (C) 1 of 675 securities with the largest dollar value of trading 
volume that day.
    (b) An index that is not a narrow-based security index for the first 
30 days of trading pursuant to paragraph (a) of this section, shall 
become a narrow-based security index if such index has been a narrow-
based security index for more than 45 business days over 3 consecutive 
calendar months.
    (c) An index that becomes a narrow-based security index solely 
because it was a narrow-based security index for

[[Page 10]]

more than 45 business days over 3 consecutive calendar months pursuant 
to paragraph (b) of this section shall not be a narrow-based security 
index for the following 3 calendar months.
    (d) Definitions. For purposes of this section:
    (1) Market capitalization has the same meaning as in Sec.  
41.11(d)(6) of this chapter.
    (2) Dollar value of trading volume of a security on a particular day 
is the value in U.S. dollars of all reported transactions in such 
security on that day. If the value of reported transactions used in 
calculating dollar value of trading volume is reported in a currency 
other than U.S. dollars, the total value of each day's transactions 
shall be converted into U.S. dollars on the basis of a spot rate of 
exchange for that day obtained from at least one independent entity that 
provides or disseminates foreign exchange quotations in the ordinary 
course of its business.
    (3) Lowest weighted 25% of an index has the same meaning as in Sec.  
41.11(d)(5) of this chapter.
    (4) Preceding 6 full calendar months has the same meaning as in 
Sec.  41.11(d)(8) of this chapter.
    (5) Reported transaction has the same meaning as in Sec.  
41.11(d)(10) of this chapter.

[66 FR 44511, Aug. 23, 2001, as amended at 77 FR 66344, Nov. 2, 2012]



Sec.  41.13  Futures contracts on security indexes trading on or
subject to the rules of a foreign board of trade.

    When a contract of sale for future delivery on a security index is 
traded on or subject to the rules of a foreign board of trade, such 
index shall not be a narrow-based security index if it would not be a 
narrow-based security index if a futures contract on such index were 
traded on a designated contract market.

[77 FR 66344, Nov. 2, 2012]



Sec.  41.14  Transition period for indexes that cease being 
narrow-based security indexes.

    (a) Forty-five day tolerance provision. An index that is a narrow-
based security index that becomes a broad-based security index for no 
more than 45 business days over 3 consecutive calendar months shall be a 
narrow-based security index.
    (b) Transition period for indexes that cease being narrow-based 
security indexes for more than forty-five days. An index that is a 
narrow-based security index that becomes a broad-based security index 
for more than 45 business days over 3 consecutive calendar months shall 
continue to be a narrow-based security index for the following 3 
calendar months.
    (c) Trading in months with open interest following transition 
period. After the transition period provided for in paragraph (b) of 
this section ends, a national securities exchange may continue to trade 
only in those months in the security futures product that had open 
interest on the date the transition period ended.
    (d) Definition of calendar month. Calendar month means, with respect 
to a particular day, the period of time beginning on a calendar date and 
ending during another month on a day prior to such date.



Sec.  41.15  Exclusion from definition of narrow-based security index
for indexes composed of debt securities.

    (a) An index is not a narrow-based security index if:
    (1)(i) Each of the securities of an issuer included in the index is 
a security, as defined in section 2(a)(1) of the Securities Act of 1933 
and section 3 (a)(10) of the Securities Exchange Act of 1934 and the 
respective rules promulgated thereunder, that is a note, bond, 
debenture, or evidence of indebtedness;
    (ii) None of the securities of an issuer included in the index is an 
equity security, as defined in section 3(a)(11) of the Securities 
Exchange Act of 1934 and the rules promulgated thereunder;
    (iii) The index is comprised of more than nine securities that are 
issued by more than nine non-affiliated issuers;
    (iv) The securities of any issuer included in the index do not 
comprise more than 30 percent of the index's weighting;
    (v) The securities of any five non-affiliated issuers included in 
the index do not comprise more than 60 percent of the index's weighting;

[[Page 11]]

    (vi) Except as provided in paragraph (a)(1)(viii) of this section, 
for each security of an issuer included in the index one of the 
following criteria is satisfied:
    (A) The issuer of the security is required to file reports pursuant 
to section 13 or section 15(d) of the Securities Exchange Act of 1934;
    (B) The issuer of the security has a worldwide market value of its 
outstanding common equity held by non-affiliates of $700 million or 
more;
    (C) The issuer of the security has outstanding securities that are 
notes, bonds, debentures, or evidences of indebtedness having a total 
remaining principal amount of at least $1 billion;
    (D) The security is an exempted security as defined in section 
3(a)(12) of the Securities Exchange Act of 1934 and the rules 
promulgated thereunder; or
    (E) The issuer of the security is a government of a foreign country 
or a political subdivision of a foreign country; and
    (vii) Except as provided in paragraph (a)(1)(viii) of this section, 
for each security of an issuer included in the index one of the 
following criteria is satisfied:
    (A) The security has a total remaining principal amount of at least 
$250,000,000; or
    (B) The security is a municipal security (as defined in section 
3(a)(29) of the Securities Exchange Act of 1934 and the rules 
promulgated thereunder) that has a total remaining principal amount of 
at least $200,000,000 and the issuer of such municipal security has 
outstanding securities that are notes, bonds, debentures, or evidences 
of indebtedness having a total remaining principal amount of at least $1 
billion; and
    (viii) Paragraphs (a)(1)(vi) and (a)(1)(vii) of this section will 
not apply to securities of an issuer included in the index if:
    (A) All securities of such issuer included in the index represent 
less than five percent of the index's weighting; and
    (B) Securities comprising at least 80 percent of the index's 
weighting satisfy the provisions of paragraphs (a)(1)(vi) and 
(a)(1)(vii) of this section.
    (2)(i) The index includes exempted securities, other than municipal 
securities as defined in section 3(a)(29) of the Securities Exchange Act 
of 1934 and the rules promulgated thereunder, that are:
    (A) Notes, bonds, debentures, or evidences of indebtedness; and
    (B) Not equity securities, as defined in section 3(a)(11) of the 
Securities Exchange Act of 1934 and the rules promulgated thereunder; 
and
    (ii) Without taking into account any portion of the index composed 
of such exempted securities, other than municipal securities, the 
remaining portion of the index would not be a narrow-based security 
index meeting all the conditions under paragraph (a)(1) of this section.
    (b) For purposes of this section:
    (1) An issuer is affiliated with another issuer if it controls, is 
controlled by, or is under common control with, that issuer.
    (2) For purposes of this section, ``control'' means ownership of 20 
percent or more of an issuer's equity, or the ability to direct the 
voting of 20 percent or more of the issuer's voting equity.
    (3) The term ``issuer'' includes a single issuer or group of 
affiliated issuers.

[71 FR 39541, July 13, 2006]



   Subpart C_Requirements and Standards for Listing Security Futures 
                                Products

    Source: 66 FR 55083, Nov. 1, 2001, unless otherwise noted.



Sec.  41.21  Requirements for underlying securities.

    (a) Security futures products based on a single security. A futures 
contract on a single security is eligible to be traded as a security 
futures product only if:
    (1) The underlying security is registered pursuant to section 12 of 
the Securities Exchange Act of 1934;
    (2) The underlying security is:
    (i) Common stock,
    (ii) Such other equity security as the Commission and the SEC 
jointly deem appropriate, or
    (iii) A note, bond, debenture, or evidence of indebtedness; and

[[Page 12]]

    (3) The underlying security conforms with the listing standards for 
the security futures product that the designated contract market has 
filed with the SEC under section 19(b) of the Securities Exchange Act of 
1934.
    (b) Security futures product based on two or more securities. A 
futures contract on an index of two or more securities is eligible to be 
traded as a security futures product only if:
    (1) The index is a narrow-based security index as defined in section 
1a(35) of the Act;
    (2) The securities in the index are registered pursuant to section 
12 of the Securities Exchange Act of 1934;
    (3) The securities in the index are:
    (i) Common stock,
    (ii) Such other equity securities as the Commission and the SEC 
jointly deem appropriate, or
    (iii) A note, bond, debenture, or evidence of indebtedness; and
    (4) The index conforms with the listing standards for the security 
futures product that the designated contract market has filed with the 
SEC under section 19(b) of the Securities Exchange Act of 1934.

[66 FR 55083, Nov. 1, 2001, as amended at 71 FR 39542, July 13, 2006; 77 
FR 66344, Nov. 2, 2012]



Sec.  41.22  Required certifications.

    It shall be unlawful for a designated contract market to list for 
trading or execution a security futures product unless the designated 
contract market has provided the Commission with a certification that 
the specific security futures product or products and the designated 
contract market meet, as applicable, the following criteria:
    (a) The underlying security or securities satisfy the requirements 
of Sec.  41.21;
    (b) If the security futures product is not cash settled, 
arrangements are in place with a clearing agency registered pursuant to 
section 17A of the Securities Exchange Act of 1934 for the payment and 
delivery of the securities underlying the security futures product;
    (c) Common clearing. [Reserved]
    (d) Only futures commission merchants, introducing brokers, 
commodity trading advisors, commodity pool operators or associated 
persons subject to suitability rules comparable to those of a national 
securities association registered pursuant to section 15A(a) of the 
Securities Exchange Act of 1934 and the rules and regulations 
thereunder, except to the extent otherwise permitted under the 
Securities Exchange Act of 1934 and the rules and regulations 
thereunder, may solicit, accept any order for, or otherwise deal in any 
transaction in or in connection with security futures products;
    (e) If the board of trade is a designated contract market pursuant 
to section 5 of the Act, dual trading in these security futures products 
is restricted in accordance with Sec.  41.27;
    (f) Trading in the security futures products is not readily 
susceptible to manipulation of the price of such security futures 
product, nor to causing or being used in the manipulation of the price 
of any underlying security, option on such security, or option on a 
group or index including such securities, consistent with the conditions 
for trading of Sec.  41.25;
    (g) Procedures are in place for coordinated surveillance among the 
board of trade, any market on which any security underlying a security 
futures product is traded, and other markets on which any related 
security is traded to detect manipulation and insider trading. A board 
of trade that is an alternative trading system does not need to make 
this certification, provided that:
    (1) The alternative trading system is a member of a national 
securities association registered pursuant to section 15A(a) of the 
Securities Exchange Act of 1934 or national securities exchange 
registered pursuant to section 6(a) of the Securities Exchange Act of 
1934; and
    (2) The national securities association or national securities 
exchange of which the alternative trading system is a member has in 
place such procedures;
    (h) An audit trail is in place to facilitate coordinated 
surveillance among the board of trade, any market on which any security 
underlying a security futures product is traded, and any market on which 
any related security is traded. A board of trade that is an alternative 
trading system does not need to make this certification, provided that:

[[Page 13]]

    (1) The alternative trading system is a member of a national 
securities association registered pursuant to section 15A(a) of the 
Securities Exchange Act of 1934 or national securities exchange 
registered pursuant to section 6(a) of the Securities Exchange Act of 
1934; and
    (2) The national securities association or national securities 
exchange of which the alternative trading system is a member has in 
place such procedures;
    (i) Procedures are in place to coordinate regulatory trading halts 
between the board of trade and markets on which any security underlying 
the security futures product is traded and other markets on which any 
related security is traded. A board of trade that is an alternative 
trading system does not need to make this certification, provided that:
    (1) The alternative trading system is a member of a national 
securities association registered pursuant to section 15A(a) of the 
Securities Exchange Act of 1934 or national securities exchange 
registered pursuant to section 6(a) of the Securities Exchange Act of 
1934; and
    (2) The national securities association or national securities 
exchange of which the alternative trading system is a member has in 
place such procedures; and
    (j) The margin requirements for the security futures product will 
comply with the provisions specified in Sec.  41.43 through Sec.  41.48.

[66 FR 44511, Aug. 23, 2001, as amended at 77 FR 66344, Nov. 2, 2012]



Sec.  41.23  Listing of security futures products for trading.

    (a) Initial listing of products for trading. To list new security 
futures products for trading, a designated contract market shall submit 
to the Commission at its Washington, DC headquarters, either in 
electronic or hard-copy form, to be received by the Commission no later 
than the day prior to the initiation of trading, a filing that:
    (1) Is labeled ``Listing of Security Futures Product;''
    (2) Includes a copy of the product's rules, including its terms and 
conditions;
    (3) Includes the certifications required by Sec.  41.22;
    (4) Includes a certification that the terms and conditions of the 
contract comply with the additional conditions for trading of Sec.  
41.25;
    (5) If the board of trade is a designated contract market pursuant 
to section 5 of the Act, it includes a certification that the security 
futures product complies with the Act and rules thereunder; and
    (6) Includes a copy of the submission cover sheet in accordance with 
the instructions in appendix D of part 40.
    (7) Includes a request for confidential treatment as permitted under 
the procedures of Sec.  40.8.
    (b) Voluntary submission of security futures products for Commission 
approval. A designated contract market may request that the Commission 
approve any security futures product under the procedures of Sec.  40.5 
of this chapter, provided however, that the registered entity shall 
include the certification required by Sec.  41.22 with its submission 
under Sec.  40.5 of this chapter. Notice designated contract markets may 
not request Commission approval of security futures products.

[66 FR 55083, Nov. 1, 2001, as amended at 69 FR 67507, Nov. 18, 2004; 74 
FR 17394, Apr. 15, 2009; 77 FR 66344, Nov. 2, 2012]



Sec.  41.24  Rule amendments to security futures products.

    (a) Self-certification of rules and rule amendments by designated 
contract markets and registered derivatives clearing organizations. A 
designated contract market or registered derivatives clearing 
organization may implement any new rule or rule amendment relating to a 
security futures product by submitting to the Commission at its 
Washington, DC headquarters, either in electronic or hard-copy form, to 
be received by the Commission no later than the day prior to the 
implementation of the rule or rule amendment, a filing that:
    (1) Is labeled ``Security Futures Product Rule Submission;'
    (2) Includes a copy of the new rule or rule amendment;

[[Page 14]]

    (3) Includes a certification that the designated contract market or 
registered derivatives clearing organization has filed the rule or rule 
amendment with the Securities and Exchange Commission, if such a filing 
is required;
    (4) If the board of trade is a designated contract market pursuant 
to section 5 of the Act or is a registered derivatives clearing 
organization pursuant to section 5b of the Act, it includes the 
documents and certifications required to be filed with the Commission 
pursuant to Sec.  40.6 of this chapter, including a certification that 
the security futures product complies with the Act and rules thereunder; 
and
    (5) Includes a copy of the submission cover sheet in accordance with 
the instructions in appendix D of part 40.
    (6) Includes a request for confidential treatment as permitted under 
the procedures of Sec.  40.8.
    (b) Voluntary submission of rules for Commission review and 
approval. A designated contract market or a registered derivatives 
clearing organization clearing security futures products may request 
that the Commission approve any rule or proposed rule or rule amendment 
relating to a security futures product under the procedures of Sec.  
40.5 of this chapter, provided however, that the registered entity shall 
include the certifications required by Sec.  41.22 with its submission 
under Sec.  40.5 of this chapter. Notice designated contract markets may 
not request Commission approval of rules.

[66 FR 55083, Nov. 1, 2001, as amended at 69 FR 67507, Nov. 18, 2004; 74 
FR 17394, Apr. 15, 2009; 77 FR 66344, Nov. 2, 2012]



Sec.  41.25  Additional conditions for trading for security futures
products.

    (a) Definitions. For purposes of this section:
    Estimated deliverable supply means the quantity of the security 
underlying a security futures product that reasonably can be expected to 
be readily available to short traders and salable by long traders at its 
market value in normal cash marketing channels during the specified 
delivery period. For guidance on estimating deliverable supply, 
designated contract markets may refer to appendix A of this subpart.
    Same side of the market means the aggregate of long positions in 
physically-delivered security futures products and cash-settled security 
futures products, in the same security, and, separately, the aggregate 
of short positions in physically-delivered security futures products and 
cash-settled security futures products, in the same security.
    (b) Common provisions--(1) Reporting of data. The designated 
contract market shall comply with part 16 of this chapter requiring the 
daily reporting of market data.
    (2) Regulatory trading halts. The rules of a designated contract 
market that lists or trades one or more security futures products must 
include the following provisions:
    (i) Trading of a security futures product based on a single security 
shall be halted at all times that a regulatory halt has been instituted 
for the underlying security; and
    (ii) Trading of a security futures product based on a narrow-based 
security index shall be halted at all times that a regulatory halt has 
been instituted for one or more underlying securities that constitute 50 
percent or more of the market capitalization of the narrow-based 
security index.
    (3) Speculative position limits. A designated contract market shall 
have rules in place establishing position limits or position 
accountability procedures for the expiring futures contract month as 
specified in this paragraph (b)(3).
    (i) Limits for equity security futures products. For a security 
futures product on a single equity security, including a security 
futures product on an underlying security that represents ownership in a 
group of securities, e.g., an exchange traded fund, a designated 
contract market shall adopt a position limit no greater than 25,000 100-
share contracts (or the equivalent if the contract size is different 
than 100 shares), either net or on the same side of the market, 
applicable to positions held during the last three trading days of an 
expiring contract month; except where:

[[Page 15]]

    (A) For a security futures product on a single equity security where 
the estimated deliverable supply of the underlying security exceeds 20 
million shares, a designated contract market may adopt, if appropriate 
in light of the liquidity of trading in the underlying security, a 
position limit no greater than the equivalent of 12.5 percent of the 
estimated deliverable supply of the underlying security, either net or 
on the same side of the market, applicable to positions held during the 
last three trading days of an expiring contract month; or
    (B) For a security futures product on a single equity security where 
the six-month total trading volume in the underlying security exceeds 
2.5 billion shares and there are more than 40 million shares of 
estimated deliverable supply, a designated contract market may adopt a 
position accountability rule in lieu of a position limit, either net or 
on the same side of the market, applicable to positions held during the 
last three trading days of an expiring contract month. Upon request by a 
designated contract market, traders who hold positions greater than 
25,000 100-share contracts (or the equivalent if the contract size is 
different than 100 shares), or such lower level specified pursuant to 
the rules of the designated contract market, must provide information to 
the designated contract market and consent to halt increasing their 
positions when so ordered by the designated contract market.
    (ii) Limits for physically-delivered basket equity security futures 
products. For a physically-delivered security futures product on more 
than one equity security, e.g., a basket of deliverable securities, a 
designated contract market shall adopt a position limit, either net or 
on the same side of the market, applicable to positions held during the 
last three trading days of an expiring contract month and the criteria 
in paragraph (b)(3)(i) of this section must apply to the underlying 
security with the lowest estimated deliverable supply. For a physically-
delivered security futures product on more than one equity security with 
a contract size different than 100 shares per underlying security, an 
appropriate adjustment to the limit must be made. If each of the 
underlying equity securities in the basket of deliverable securities is 
eligible for a position accountability level under paragraph 
(b)(3)(i)(B) of this section, then the security futures product is 
eligible for a position accountability level in lieu of position limits.
    (iii) Limits for cash-settled equity index security futures 
products. For a security futures product cash settled to a narrow-based 
security index of equity securities, a designated contract market shall 
adopt a position limit, either net or on the same side of the market, 
applicable to positions held during the last three trading days of an 
expiring contract month. For guidance on setting limits for a cash-
settled equity index security futures product, designated contract 
markets may refer to paragraph (b) of appendix A to this subpart.
    (iv) Limits for debt security futures products. For a security 
futures product on one or more debt securities, a designated contract 
market shall adopt a position limit, either net or on the same side of 
the market, applicable to positions held during the last three trading 
days of an expiring contract month. For guidance on setting limits for a 
debt security futures product, designated contract markets may refer to 
paragraph (c) of appendix A to this subpart.
    (v) Required minimum position limit time period. For position limits 
required under this section where the security futures product permits 
delivery before the termination of trading, a designated contract market 
shall apply such position limits for a period beginning no later than 
the first day that long position holders may be assigned delivery 
notices, if such period is longer than the last three trading days of an 
expiring contract month.
    (vi) Requirements for resetting levels of position limits. A 
designated contract market shall calculate estimated deliverable supply 
and six-month total trading volume no less frequently than semi-
annually.
    (A) If the estimated deliverable supply data supports a lower 
speculative limit for a security futures product, then the designated 
contract market shall lower the position limit for that security futures 
product pursuant to

[[Page 16]]

the submission requirements of Sec.  41.24. If the data require 
imposition of a reduced position limit for a security futures product, 
the designated contract market may permit any trader holding a position 
in compliance with the previous position limit, but in excess of the 
reduced limit, to maintain such position through the expiration of the 
security futures contract; provided, that the designated contract market 
does not find that the position poses a threat to the orderly expiration 
of such contract.
    (B) If the estimated deliverable supply or six-month total trading 
volume data no longer supports a position accountability rule in lieu of 
a position limit for a security futures product, then the designated 
contract market shall establish a position limit for that security 
futures product pursuant to the submission requirements of Sec.  41.24.
    (C) If the estimated deliverable supply data supports a higher 
speculative limit for a security futures product, as provided under 
paragraph (b)(3)(i)(A) of this section, then the designated contract 
market may raise the position limit for that security futures product 
pursuant to the submission requirements of Sec.  41.24.
    (vii) Restriction on netting of positions. If the designated 
contract market lists both physically-delivered contracts and cash-
settled contracts in the same security, it shall not permit netting of 
positions in the physically-delivered contract with that of the cash-
settled contract for purposes of determining applicability of position 
limits.
    (c) Final settlement prices for security futures products. (1) The 
final settlement price of a cash-settled security futures product must 
fairly reflect the opening price of the underlying security or 
securities;
    (2) Notwithstanding paragraph (c)(1) of this section, if an opening 
price for one or more securities underlying a security futures product 
is not readily available, the final settlement price of the security 
futures product shall fairly reflect:
    (i) The price of the underlying security or securities during the 
most recent regular trading session for such security or securities; or
    (ii) The next available opening price of the underlying security or 
securities.
    (3) Notwithstanding paragraph (c)(1) or (2) of this section, if a 
derivatives clearing organization registered under section 5b of the Act 
or a clearing agency exempt from registration pursuant to section 
5b(a)(2) of the Act, to which the final settlement price of a security 
futures product is or would be reported determines, pursuant to its 
rules, that such final settlement price is not consistent with the 
protection of customers and the public interest, taking into account 
such factors as fairness to buyers and sellers of the affected security 
futures product, the maintenance of a fair and orderly market in such 
security futures product, and consistency of interpretation and 
practice, the clearing organization shall have the authority to 
determine, under its rules, a final settlement price for such security 
futures product.
    (d) Special requirements for physical delivery contracts. For 
security futures products settled by actual delivery of the underlying 
security or securities, payment and delivery of the underlying security 
or securities must be effected through a clearing agency that is 
registered pursuant to section 17A of the Securities Exchange Act of 
1934.
    (e) Exemptions. The Commission may exempt a designated contract 
market from the provisions of paragraphs (b)(2) and (c) of this section, 
either unconditionally or on specified terms and conditions, if the 
Commission determines that such exemption is consistent with the public 
interest and the protection of customers. An exemption granted pursuant 
to this paragraph (e) shall not operate as an exemption from any 
Securities and Exchange Commission rule. Any exemption that may be 
required from such rules must be obtained separately from the Securities 
and Exchange Commission.

[66 FR 55083, Nov. 1, 2001, as amended at 67 FR 36761, May 24, 2002; 77 
FR 66345, Nov. 2, 2012; 84 FR 51021, Sept. 27, 2019]



Sec.  41.27  Prohibition of dual trading in security futures products
by floor brokers.

    (a) Definitions. For purposes of this section:

[[Page 17]]

    (1) Trading session means hours during which a designated contract 
market is scheduled to trade continuously during a trading day, as set 
forth in its rules, including any related post settlement trading 
session. A designated contract market may have more than one trading 
session during a trading day.
    (2) Member shall have the meaning set forth in section 1a(24) of the 
Act.
    (3) Broker association includes two or more designated contract 
market members with floor trading privileges of whom at least one is 
acting as a floor broker who:
    (i) Engage in floor brokerage activity on behalf of the same 
employer;
    (ii) Have an employer and employee relationship which relates to 
floor brokerage activity;
    (iii) Share profits and losses associated with their brokerage or 
trading activity; or
    (iv) Regularly share a deck of orders.
    (4) Customer means an account owner for which a trade is executed 
other than:
    (i) An account in which such floor broker has any interest;
    (ii) An account for which a floor broker has discretion;
    (iii) An account controlled by a person with whom a floor broker has 
a relationship through membership in a broker association;
    (iv) A house account of the floor broker's clearing member; or
    (v) An account for another member present on the floor of a 
designated contract market or an account controlled by such other 
member.
    (5) Dual trading means the execution of customer orders by a floor 
broker through open outcry during the same trading session in which the 
floor broker executes directly or by initiating and passing to another 
member, either through open outcry or through a trading system that 
electronically matches bids and offers pursuant to a predetermined 
algorithm, a transaction for the same security futures product on the 
same designated contract market for an account described in paragraphs 
(a)(4)(i) through (v) of this section.
    (b) Dual trading prohibition. (1) No floor broker shall engage in 
dual trading in a security futures product on a designated contract 
market, except as otherwise provided under paragraphs (d), (e), and (f) 
of this section.
    (2) A designated contract market operating an electronic market or 
electronic trading system that provides market participants with a time 
or place advantage or the ability to override a predetermined algorithm 
must submit an appropriate rule proposal to the Commission consistent 
with the procedures set forth in Sec.  40.5. The proposed rule must 
prohibit electronic market participants with a time or place advantage 
or the ability to override a predetermined algorithm from trading a 
security futures product for accounts in which these same participants 
have any interest during the same trading session that they also trade 
the same security futures product for other accounts. This paragraph, 
however, is not applicable with respect to execution priorities or 
quantity guarantees granted to market makers who perform that function, 
or to market participants who receive execution priorities based on 
price improvement activity, in accordance with the rules governing the 
designated contract market.
    (c) Rules prohibiting dual trading--(1) Designated contract markets. 
Prior to listing a security futures product for trading on a trading 
floor where bids and offers are executed through open outcry, a 
designated contract market:
    (i) Must submit to the Commission in accordance with Sec.  40.6, a 
rule prohibiting dual trading, together with a written certification 
that the rule complies with the Act and the regulations thereunder, 
including this section; or
    (ii) Must obtain Commission approval of such rule pursuant to Sec.  
40.5.
    (2) [Reserved]
    (d) Specific permitted exceptions. Notwithstanding the applicability 
of a dual trading prohibition under paragraph (b) of this section, dual 
trading may be permitted on a designated contract market pursuant to one 
or more of the following specific exceptions:
    (1) Correction of errors. To offset trading errors resulting from 
the execution of customer orders, provided, that the

[[Page 18]]

floor broker must liquidate the position in his or her personal error 
account resulting from that error through open outcry or through a 
trading system that electronically matches bids and offers as soon as 
practicable, but, except as provided herein, not later than the close of 
business on the business day following the discovery of error. In the 
event that a floor broker is unable to offset the error trade because 
the daily price fluctuation limit is reached, a trading halt is imposed 
by the designated contract market, or an emergency is declared pursuant 
to the rules of the designated contract market, the floor broker must 
liquidate the position in his or her personal error account resulting 
from that error as soon as practicable thereafter.
    (2) Customer consent. To permit a customer to designate in writing 
not less than once annually a specifically identified floor broker to 
dual trade while executing orders for such customer's account. An 
account controller acting pursuant to a power of attorney may designate 
a dual trading broker on behalf of its customer, provided, that the 
customer explicitly grants in writing to the individual account 
controller the authority to select a dual trading broker.
    (3) Spread transactions. To permit a broker who unsuccessfully 
attempts to leg into a spread transaction for a customer to take the 
executed leg into his or her personal account and to offset such 
position, provided, that a record is prepared and maintained to 
demonstrate that the customer order was for a spread.
    (4) Market emergencies. To address emergency market conditions 
resulting in a temporary emergency action as determined by a designated 
contract market.
    (e) Rules permitting specific exceptions--(1) Designated contract 
markets. Prior to permitting dual trading under any of the exceptions 
provided in paragraphs (d)(1)-(4) of this section, a designated contract 
market:
    (i) Must submit to the Commission in accordance with Sec.  40.6, a 
rule permitting the exception(s), together with a written certification 
that the rule complies with the Act and the regulations thereunder, 
including this section; or
    (ii) Must obtain Commission approval of such rule pursuant to Sec.  
40.5.
    (2) [Reserved]
    (f) Unique or special characteristics of agreements, contracts or 
transactions, or of designated contract markets. Notwithstanding the 
applicability of a dual trading prohibition under paragraph (b) of this 
section, dual trading may be permitted on a designated contract market 
to address unique or special characteristics of agreements, contracts, 
or transactions, or of the designated contract market as provided 
herein. Any rule of a designated contract market that would permit dual 
trading when it would otherwise be prohibited, based on a unique or 
special characteristic of agreements, contracts, or transactions, or of 
the designated contract market must be submitted to the Commission for 
prior approval under the procedures set forth in Sec.  40.5. The rule 
submission must include a detailed demonstration of why an exception is 
warranted.

[67 FR 11227, Mar. 13, 2002, as amended at 77 FR 66345, Nov. 2, 2012]



  Sec. Appendix A to Subpart C of Part 41--Guidance on and Acceptable 
 Practices for Position Limits and Position Accountability for Security 
                            Futures Products

    (a) Guidance for estimating deliverable supply. (1) For an equity 
security, deliverable supply should be no greater than the free float of 
the security.
    (2) For a debt security, deliverable supply should not include 
securities that are committed for long-term agreements (e.g., closed-end 
investment companies, structured products, or similar securities).
    (3) Further guidance on estimating deliverable supply, including 
consideration of whether the underlying security is readily available, 
is found in appendix C to part 38 of this chapter.
    (b) Guidance and acceptable practices for setting limits on cash-
settled equity index security futures products--(1) Guidance for setting 
limits on cash-settled equity index security futures products. For a 
security futures product cash settled to a narrow-based security index 
of equity securities, a designated contract market:
    (i) May set the level of a position limit to that of a similar 
narrow-based equity index option listed on a national security exchange 
or association; or
    (ii) Should consider the deliverable supply of equity securities 
underlying the index,

[[Page 19]]

and should consider the index weighting and contract multiplier.
    (2) Acceptable practices for setting limits on cash-settled equity 
index security futures products. For a security futures product cash 
settled to a narrow-based security index of equity securities weighted 
by the number of shares outstanding, a designated contract market may 
set a position limit as follows: First, determine the limit on a 
security futures product on each underlying equity security pursuant to 
Sec.  41.25(b)(3)(i); second, multiply each such limit by the ratio of 
the 100-share contract size and the shares of the equity securities in 
the index; and third, determine the minimum level from step two and set 
the limit to that level, given a contract size of one U.S. dollar times 
the index, or for a larger contract size, reduce the level 
proportionately. If under these procedures each of the equity securities 
underlying the index is determined to be eligible for position 
accountability levels, the security futures product on the index itself 
is eligible for a position accountability level.
    (c) Guidance and acceptable practices for setting limits on debt 
security futures products--(1) Guidance for setting limits on debt 
security futures products. A designated contract market should set the 
level of a position limit to no greater than the equivalent of 12.5 
percent of the par value of the estimated deliverable supply of the 
underlying debt security. For a security futures product on more than 
one debt security, the limit should be based on the underlying debt 
security with the lowest estimated deliverable supply.
    (2) Acceptable practices for setting limits on debt security futures 
products. [Reserved]
    (d) Guidance on position accountability. A designated contract 
market may adopt a position accountability rule for any security futures 
product, in addition to a position limit rule required or adopted under 
Sec.  41.25. Upon request by the designated contract market, traders who 
hold positions, either net or on the same side of the market, greater 
than such level specified pursuant to the rules of the designated 
contract market must provide information to the designated contract 
market and consent to halt increasing their positions when so ordered by 
the designated contract market.
    (e) Guidance on exemptions from position limits. A designated 
contract market may approve exemptions from these position limits 
pursuant to rules that are consistent with Sec.  150.5 of this chapter, 
or to rules that are consistent with rules of a national securities 
exchange or association regarding exemptions to securities option 
position limits or exercise limits.

[84 FR 51022, Sept. 27, 2019]



    Subpart D_Notice-Designated Contract Markets in Security Futures 
                                Products

    Source: 66 FR 44965, Aug. 27, 2001, unless otherwise noted.



Sec.  41.31  Notice-designation requirements.

    (a) Any board of trade that is a national securities exchange, a 
national securities association, or an alternative trading system, and 
that seeks to operate as a designated contract market in security 
futures products under section 5f of the Act, shall so notify the 
Commission. Such notification shall be filed with the Secretary of the 
Commission at its Washington, D.C. headquarters, in either electronic or 
hard copy form, shall be labeled as ``Notice of Designation as a 
Contract Market in Security Futures Products,'' and shall include:
    (1) The name and address of the board of trade;
    (2) The name and telephone number of a contact person designated to 
receive communications from the Commission on behalf of the board of 
trade;
    (3) A description of the security futures products that the board of 
trade intends to make available for trading, including an identification 
of all facilities that would clear transactions in security futures 
products on behalf of the board of trade;
    (4) A copy of the current rules of the board of trade; and
    (5) A certification that the board of trade--
    (i) Will not list or trade any contracts of sale for future 
delivery, except for security futures products;
    (ii) Is registered with the Securities and Exchange Commission as a 
national securities exchange, national securities association, or 
alternative trading system, and such registration is not suspended 
pursuant to an order by the Securities and Exchange Commission;
    (iii) Will meet the criteria specified in subclauses (I) through 
(XI) of section 2(a)(1)(D)(i) of the Act, except as otherwise provided 
in section 2(a)(1)(D)(vi) of the Act, for each specific security futures 
product that the board of trade intends to make available for trading;

[[Page 20]]

    (iv) Will comply with the conditions for designation under this 
section and section 5f of the Act, including a specific representation 
by any alternative trading system that it is a member of a futures 
association registered under section 17 of the Act; and
    (v) Will comply with the continuing obligations of regulation 41.32.
    (b) A board of trade which files notice with the Commission under 
this section shall be deemed a designated contract market in security 
futures products upon the Commission's receipt of such notice. 
Accordingly, the Commission shall send prompt acknowledgment of receipt 
to the filer.
    (c) Designation as a contract market in security futures products 
pursuant to this section shall be deemed suspended if the board of 
trade:
    (1) Lists or trades any contracts of sale for future delivery, 
except for security futures products; or
    (2) Has its registration as a national securities exchange, national 
securities association, or alternative trading system suspended pursuant 
to an order by the Securities and Exchange Commission.



Sec.  41.32  Continuing obligations.

    (a)(1) A board of trade designated as a contract market in security 
futures products pursuant to Sec.  41.31 of this chapter shall:
    (i) Notify the Commission of any change in its regulatory status 
with the Securities and Exchange Commission or with a futures 
association registered under section 17 of the Act;
    (ii) Comply with the filing requirements of section 2(a)(1)(D)(vii) 
of the Act each time the board of trade lists a security futures product 
for trading;
    (iii) Provide the Commission with any new rules or rule amendments 
that relate to the trading of security futures products, including both 
operational rules and the terms and conditions of products listed for 
trading on the facility, promptly after final implementation of such 
rules or rule amendments; and
    (iv) Upon request, file promptly with the Commission--
    (A) Such information related to its business as a designated 
contract market in security futures products as the Commission may 
request; and
    (B) A written demonstration, containing such supporting data and 
other information and documents as the Commission may specify, that the 
board of trade is in compliance with one or more applicable provisions 
of the Act or regulations thereunder as specified in the request.
    (2) Any information filed pursuant to paragraph (a) of this section 
shall be addressed to the Secretary of the Commission at its Washington, 
D.C. headquarters, shall be labeled ``SFPCM Continuing Obligations,'' 
and may be transmitted in either electronic or hard copy form.
    (b) Except as exempted under section 5f(b) of the Act or under 
Sec. Sec.  41.33 and 41.34 of this chapter, any board of trade 
designated as a contract market in security futures products pursuant to 
Sec.  41.31 of this chapter shall be subject to all applicable 
requirements of the Act and regulations thereunder. Failure to comply 
shall subject the board of trade to Commission action under, among other 
provisions, sections 5e and 6(b) of the Act.



Sec.  41.33  Applications for exemptive orders.

    (a) Any board of trade designated as a contract market in security 
futures products pursuant to Sec.  41.31 of this chapter may apply to 
the Commission for an exemption from any provision of the Act or 
regulations thereunder. Except as provided in sections 5f(b)(1) and 
5f(b)(2) of the Act, the Commission shall have sole discretion to exempt 
a board of trade, conditionally or unconditionally, from any provision 
of the Act or regulations thereunder pursuant to this section. The 
Commission may issue such an exemptive order in response to an 
application only to the extent it finds, after review, that the issuance 
of an exemptive order is necessary or appropriate in the public interest 
and is consistent with the protection of investors.
    (b) Each application for exemptive relief must comply with the 
requirements of this section. The Commission may, in its sole 
discretion, decline to

[[Page 21]]

entertain any application for an exemptive order under this section 
without explanation; provided, however, that the Commission shall notify 
the board of trade of such a decision in writing.
    (c) Application requirements. (1) Each application for an exemptive 
order made pursuant to this section must include:
    (i) The name and address of the board of trade requesting relief, 
and the name and telephone number of a person whom Commission staff may 
contact to obtain additional information regarding the request;
    (ii) A certification that the registration of the board of trade is 
not suspended pursuant to an order of the Securities and Exchange 
Commission;
    (iii) The provision(s) of the Act or regulations thereunder from 
which the board of trade seeks relief and, if applicable, whether the 
board of trade is otherwise subject to similar provisions as a result of 
Securities and Exchange Commission jurisdiction; and
    (iv) The type of relief requested and the order sought; an 
explanation of the need for relief, including all material facts and 
circumstances giving rise to the request; and the extent to which such 
relief is necessary or appropriate in the public interest and consistent 
with the protection of investors.
    (2) Each application must be filed with the Secretary of the 
Commission at its Washington, D.C. headquarters, in either electronic or 
hard copy form, signed by an authorized representative of the board of 
trade, and labeled ``Application for an Exemptive Order pursuant to 
Commission regulation 41.33.''
    (d) Review Period. (1) The Commission shall have 90 days upon 
receipt of an application for an exemptive order in which to make a 
determination as to whether such relief should be granted or denied.
    (2) The Commission may request additional information from the 
applicant at any time prior to the end of the review period.
    (3) The Commission may stay the review period if it determines that 
an application is materially incomplete; provided, however, that this 
paragraph (d) does not limit the Commission's authority, under paragraph 
(b) of this section, to decline to entertain an application.
    (e) Upon conclusion of the review period, the Commission shall issue 
an order granting or denying relief, or granting relief subject to 
conditions; provided, however, that the Commission's obligations under 
this paragraph shall not limit its authority, under paragraph (b) of 
this section, to decline to entertain an application. The Commission 
shall notify the board of trade in writing of its decision to grant or 
deny relief under this paragraph.
    (f) An application for an exemptive order may be withdrawn by the 
applicant at any time, without explanation, by filing with the Secretary 
of the Commission a written request for withdrawal, signed by an 
authorized representative of the board of trade.
    (g) The Commission hereby delegates, until it orders otherwise, to 
the Director of the Division of Division of Market Oversight, with the 
concurrence of the General Counsel, authority to make determinations on 
applications for exemptive orders pursuant to this section; provided, 
however, that:
    (1) The Director of the Division of Market Oversight may submit to 
the Commission for its consideration any matter which has been delegated 
pursuant to paragraph (g) of this section; and
    (2) Nothing in this section shall be deemed to prohibit the 
Commission, at its election, from exercising the authority delegated to 
the Director of the Division of Market Oversight under paragraph (g) of 
this section.

[66 FR 44511, Aug. 23, 2001, as amended at 67 FR 62352, Oct. 7, 2002]



Sec.  41.34  Exempt Provisions.

    Any board of trade notice-designated as a contract market in 
security futures products pursuant to Sec.  41.31 also shall be exempt 
from:
    (a) The following provisions of the Act, pursuant to section 
5f(b)(1) of the Act:
    (1) Section 4(c)(c);
    (2) Section 4(c)(e);
    (3) Section 4(c)(g);
    (4) Section 4j;
    (5) Section 5;
    (6) Section 5c;
    (7) Section 6a;

[[Page 22]]

    (8) Section 8(d);
    (9) Section 9(f);
    (10) Section 16 and;
    (b) The following provisions, pursuant to section 5f(b)(4) of the 
Act:
    (1) Section 6(a);
    (2) Part 38 of this chapter;
    (3) Part 40 of this chapter; and
    (4) Section 41.27.

[67 FR 11229, Mar. 13, 2002]



           Subpart E_Customer Accounts and Margin Requirements

    Source: 67 FR 53171, Aug. 14, 2002, unless otherwise noted.



Sec.  41.41  Security futures products accounts.

    (a) Where security futures products may be held. (1) A person 
registered with the Commission as a futures commission merchant pursuant 
to section 4f(a)(1) of the Commodity Exchange Act (``CEA'') and 
registered with the Securities and Exchange Commission (``SEC'') as a 
broker or dealer pursuant to section 15(b)(1) of the Securities Exchange 
Act of 1934 (``Securities Exchange Act'') (``Full FCM/Full BD'') may 
hold all of a customer's security futures products in a futures account, 
all of a customer's security futures products in a securities account, 
or some of a customer's security futures products in a futures account 
and other security futures products of the same customer in a securities 
account. A person registered with the Commission as a futures commission 
merchant pursuant to section 4f(a)(2) of the CEA (a notice-registered 
FCM) may hold a customer's security futures products only in a 
securities account. A person registered with the SEC as a broker or 
dealer pursuant to section 15(b)(11) of the Securities Exchange Act (a 
notice-registered broker-dealer) may hold a customer's security futures 
products only in a futures account.
    (2) A Full FCM/Full BD shall establish written policies or 
procedures for determining whether customer security futures products 
will be placed in a futures account and/or a securities account and, if 
applicable, the process by which a customer may elect the type or types 
of account in which security futures products will be held (including 
the procedure to be followed if a customer fails to make an election of 
account type).
    (b) Disclosure requirements. (1) Except as provided in paragraph 
(b)(2), before a futures commission merchant accepts the first order for 
a security futures product from or on behalf of a customer, the firm 
shall furnish the customer with a disclosure document containing the 
following information:
    (i) A description of the protections provided by the requirements 
set forth under section 4d of the CEA applicable to a futures account;
    (ii) A description of the protections provided by the requirements 
set forth under Securities Exchange Act Rule 15c3-3 and the Securities 
Investor Protection Act of 1970 applicable to a securities account;
    (iii) A statement indicating whether the customer's security futures 
products will be held in a futures account and/or a securities account, 
or whether the firm permits customers to make or change an election of 
account type; and
    (iv) A statement that, with respect to holding the customer's 
security futures products in a securities account or a futures account, 
the alternative regulatory scheme is not available to the customer in 
connection with that account.
    (2) Where a customer account containing an open security futures 
product position is transferred to a futures commission merchant, that 
futures commission merchant may instead provide the statements described 
in paragraphs (b)(1)(iii) and (b)(1)(iv) above no later than ten 
business days after the date the account is transferred.
    (c) Changes in account type. A Full FCM/Full BD may change the type 
of account in which a customer's security futures products will be held; 
provided, that:
    (1) The firm creates a record of each change in account type, 
including the name of the customer, the account number, the date the 
firm received the customer's request to change the account type, if 
applicable, and the date the change in account type became effective; 
and

[[Page 23]]

    (2) The firm, at least ten business days before the customer's 
account type is changed:
    (i) Notifies the customer in writing of the date that the change 
will become effective; and
    (ii) Provides the customer with the disclosures described in 
paragraph (b)(1) above.
    (d) Recordkeeping requirements. The Commission's recordkeeping rules 
set forth in Sec. Sec.  1.31, 1.32, 1.35, 1.36, 1.37, 4.23, 4.33, 18.05 
and 190.06 of this chapter shall apply to security futures product 
transactions and positions in a futures account (as that term is defined 
in Sec.  1.3 of this chapter). These rules shall not apply to security 
futures product transactions and positions in a securities account (as 
that term is defined in Sec.  1.3 of this chapter); provided, that the 
SEC's recordkeeping rules apply to those transactions and positions.
    (e) Reports to customers. The Commission's reporting requirements 
set forth in Sec. Sec.  1.33 and 1.46 of this chapter shall apply to 
security futures product transactions and positions in a futures account 
(as that term is defined in Sec.  1.3 of this chapter). These rules 
shall not apply to security futures product transactions and positions 
in a securities account (as that term is defined in Sec.  1.3 of this 
chapter); provided, that the SEC's rules set forth in Sec. Sec.  
240.10b-10 and 240.15c3-2 of this chapter regarding delivery of 
confirmations and account statements apply to those transactions and 
positions.
    (f) Segregation of customer funds. All money, securities, or 
property held to margin, guarantee or secure security futures products 
held in a futures account, or accruing to customers as a result of such 
products, are subject to the segregation requirements of section 4d of 
the CEA and the rules thereunder.

[67 FR 58297, Sept. 13, 2002, as amended at 83 FR 7997, Feb. 23, 2018]



Sec.  41.42  Customer margin requirements for security futures-
-authority, purpose, interpretation, and scope.

    (a) Authority and purpose. Subpart E, Sec. Sec.  41.42 through 
41.49, and 17 CFR 242.400 through 242.406 (``this Regulation'') are 
issued by the Commodity Futures Trading Commission (``Commission'') 
jointly with the Securities and Exchange Commission (``SEC''), pursuant 
to authority delegated by the Board of Governors of the Federal Reserve 
System under section 7(c)(2)(A) of the Securities Exchange Act of 1934 
(``Exchange Act''). The principal purpose of this Regulation (Subpart E, 
Sec. Sec.  41.42 through 41.49) is to regulate customer margin collected 
by brokers, dealers, and members of national securities exchanges, 
including futures commission merchants required to register as brokers 
or dealers under section 15(b)(11) of the Exchange Act, relating to 
security futures.
    (b) Interpretation. This Regulation (Subpart E, Sec. Sec.  41.42 
through 41.49) shall be jointly interpreted by the SEC and the 
Commission, consistent with the criteria set forth in clauses (i) 
through (iv) of section 7(c)(2)(B) of the Exchange Act and the 
provisions of Regulation T (12 CFR part 220).
    (c) Scope. (1) This Regulation (Subpart E, Sec. Sec.  41.42 through 
41.49) does not preclude a self-regulatory authority, under rules that 
are effective in accordance with section 19(b)(2) of the Exchange Act or 
section 19(b)(7) of the Exchange Act and, as applicable, section 5c(c) 
of the Commodity Exchange Act (``Act''), or a security futures 
intermediary from imposing additional margin requirements on security 
futures, including higher initial or maintenance margin levels, 
consistent with this Regulation (Subpart E, Sec. Sec.  41.42 through 
41.49), or from taking appropriate action to preserve its financial 
integrity.
    (2) This Regulation (Subpart E, Sec. Sec.  41.42 through 41.49) does 
not apply to:
    (i) Financial relations between a customer and a security futures 
intermediary to the extent that they comply with a portfolio margining 
system under rules that meet the criteria set forth in section 
7(c)(2)(B) of the Exchange Act and that are effective in accordance with 
section 19(b)(2) of the Exchange Act and, as applicable, section 5c(c) 
of the Act;
    (ii) Financial relations between a security futures intermediary and 
a foreign person involving security futures traded on or subject to the 
rules of a foreign board of trade;

[[Page 24]]

    (iii) Margin requirements that clearing agencies registered under 
section 17A of the Exchange Act or derivatives clearing organizations 
registered under section 5b of the Act impose on their members;
    (iv) Financial relations between a security futures intermediary and 
a person based on a good faith determination by the security futures 
intermediary that such person is an exempted person; and
    (v) Financial relations between a security futures intermediary and, 
or arranged by a security futures intermediary for, a person relating to 
trading in security futures by such person for its own account, if such 
person:
    (A) Is a member of a national securities exchange or national 
securities association registered pursuant to section 15A(a) of the 
Exchange Act; and
    (B) Is registered with such exchange or such association as a 
security futures dealer pursuant to rules that are effective in 
accordance with section 19(b)(2) of the Exchange Act and, as applicable, 
section 5c(c) of the Act, that:
    (1) Require such member to be registered as a floor trader or a 
floor broker with the Commission under section 4f(a)(1) of the Act, or 
as a dealer with the SEC under section 15(b) of the Exchange Act;
    (2) Require such member to maintain records sufficient to prove 
compliance with this paragraph (c)(2)(v) and the rules of the exchange 
or association of which it is a member;
    (3) Require such member to hold itself out as being willing to buy 
and sell security futures for its own account on a regular or continuous 
basis; and
    (4) Provide for disciplinary action, including revocation of such 
member's registration as a security futures dealer, for such member's 
failure to comply with this Regulation (Subpart E, Sec. Sec.  41.42 
through 41.49) or the rules of the exchange or association.
    (d) Exemption. The Commission may exempt, either unconditionally or 
on specified terms and conditions, financial relations involving any 
security futures intermediary, customer, position, or transaction, or 
any class of security futures intermediaries, customers, positions, or 
transactions, from one or more requirements of this Regulation (Subpart 
E, Sec. Sec.  41.42 through 41.49), if the Commission determines that 
such exemption is necessary or appropriate in the public interest and 
consistent with the protection of customers. An exemption granted 
pursuant to this paragraph shall not operate as an exemption from any 
SEC rules. Any exemption that may be required from such rules must be 
obtained separately from the SEC.



Sec.  41.43  Definitions.

    (a) For purposes of this Regulation (Subpart E, Sec. Sec.  41.42 
through 41.49) only, the following terms shall have the meanings set 
forth in this section.
    (1) Applicable margin rules and margin rules applicable to an 
account mean the rules and regulations applicable to financial relations 
between a security futures intermediary and a customer with respect to 
security futures and related positions carried in a securities account 
or futures account as provided in Sec.  41.44(a) of this subpart.
    (2) Broker shall have the meaning provided in section 3(a)(4) of the 
Exchange Act.
    (3) Contract multiplier means the number of units of a narrow-based 
security index expressed as a dollar amount, in accordance with the 
terms of the security future contract.
    (4) Current market value means, on any day:
    (i) With respect to a security future:
    (A) If the instrument underlying such security future is a stock, 
the product of the daily settlement price of such security future as 
shown by any regularly published reporting or quotation service, and the 
applicable number of shares per contract; or
    (B) If the instrument underlying such security future is a narrow-
based security index, as defined in section 1a(35)(A) of the Act, the 
product of the daily settlement price of such security future as shown 
by any regularly published reporting or quotation service, and the 
applicable contract multiplier.
    (ii) With respect to a security other than a security future, the 
most recent closing sale price of the security, as shown by any 
regularly published reporting or quotation service. If there is

[[Page 25]]

no recent closing sale price, the security futures intermediary may use 
any reasonable estimate of the market value of the security as of the 
most recent close of business.
    (5) Customer excludes an exempted person and includes:
    (i) Any person or persons acting jointly:
    (A) On whose behalf a security futures intermediary effects a 
security futures transaction or carries a security futures position; or
    (B) Who would be considered a customer of the security futures 
intermediary according to the ordinary usage of the trade;
    (ii) Any partner in a security futures intermediary that is 
organized as a partnership who would be considered a customer of the 
security futures intermediary absent the partnership relationship; and
    (iii) Any joint venture in which a security futures intermediary 
participates and which would be considered a customer of the security 
futures intermediary if the security futures intermediary were not a 
participant.
    (6) Daily settlement price means, with respect to a security future, 
the settlement price of such security future determined at the close of 
trading each day, under the rules of the applicable exchange, clearing 
agency, or derivatives clearing organization.
    (7) Dealer shall have the meaning provided in section 3(a)(5) of the 
Exchange Act.
    (8) Equity means the equity or margin equity in a securities or 
futures account, as computed in accordance with the margin rules 
applicable to the account and subject to adjustment under Sec.  
41.46(c), (d) and (e) of this subpart.
    (9) Exempted person means:
    (i) A member of a national securities exchange, a registered broker 
or dealer, or a registered futures commission merchant, a substantial 
portion of whose business consists of transactions in securities, 
commodity futures, or commodity options with persons other than brokers, 
dealers, futures commission merchants, floor brokers, or floor traders, 
and includes a person who:
    (A) Maintains at least 1000 active accounts on an annual basis for 
persons other than brokers, dealers, persons associated with a broker or 
dealer, futures commission merchants, floor brokers, floor traders, and 
persons affiliated with a futures commission merchant, floor broker, or 
floor trader that are effecting transactions in securities, commodity 
futures, or commodity options;
    (B) Earns at least $10 million in gross revenues on an annual basis 
from transactions in securities, commodity futures, or commodity options 
with persons other than brokers, dealers, persons associated with a 
broker or dealer, futures commission merchants, floor brokers, floor 
traders, and persons affiliated with a futures commission merchant, 
floor broker, or floor trader; or
    (C) Earns at least 10 percent of its gross revenues on an annual 
basis from transactions in securities, commodity futures, or commodity 
options with persons other than brokers, dealers, persons associated 
with a broker or dealer, futures commission merchants, floor brokers, 
floor traders, and persons affiliated with a futures commission 
merchant, floor broker, or floor trader.
    (ii) For purposes of paragraph (a)(9)(i) of this section only, 
persons affiliated with a futures commission merchant, floor broker, or 
floor trader means any partner, officer, director, or branch manager of 
such futures commission merchant, floor broker, or floor trader (or any 
person occupying a similar status or performing similar functions), any 
person directly or indirectly controlling, controlled by, or under 
common control with such futures commission merchant, floor broker, or 
floor trader, or any employee of such a futures commission merchant, 
floor broker, or floor trader.
    (iii) A member of a national securities exchange, a registered 
broker or dealer, or a registered futures commission merchant that has 
been in existence for less than one year may meet the definition of 
exempted person based on a six-month period.
    (10) Exempted security shall have the meaning provided in section 
3(a)(12) of the Exchange Act.
    (11) Floor broker shall have the meaning provided in section 1a(16) 
of the Act.

[[Page 26]]

    (12) Floor trader shall have the meaning provided in section 1a(17) 
of the Act.
    (13) Futures account shall have the meaning provided in Sec.  1.3 of 
this chapter.
    (14) Futures commission merchant shall have the meaning provided in 
section 1a(20) of the Act.
    (15) Good faith, with respect to making a determination or accepting 
a statement concerning financial relations with a person, means that the 
security futures intermediary is alert to the circumstances surrounding 
such financial relations, and if in possession of information that would 
cause a prudent person not to make the determination or accept the 
notice or certification without inquiry, investigates and is satisfied 
that it is correct.
    (16) Listed option means a put or call option that is:
    (i) Issued by a clearing agency that is registered under section 17A 
of the Exchange Act or cleared and guaranteed by a derivatives clearing 
organization that is registered under section 5b of the Act; and
    (ii) Traded on or subject to the rules of a self-regulatory 
authority.
    (17) Margin call means a demand by a security futures intermediary 
to a customer for a deposit of cash, securities or other assets to 
satisfy the required margin for security futures or related positions or 
a special margin requirement.
    (18) Margin deficiency means the amount by which the required margin 
in an account is not satisfied by the equity in the account, as computed 
in accordance with Sec.  41.46 of this subpart.
    (19) Margin equity security shall have the meaning provided in 
Regulation T.
    (20) Margin security shall have the meaning provided in Regulation 
T.
    (21) Member shall have the meaning provided in section 3(a)(3) of 
the Exchange Act, and shall include persons registered under section 
15(b)(11) of the Exchange Act that are permitted to effect transactions 
on a national securities exchange without the services of another person 
acting as executing broker.
    (22) Money market mutual fund means any security issued by an 
investment company registered under section 8 of the Investment Company 
Act of 1940 that is considered a money market fund under Sec.  270.2a-7 
of this title.
    (23) Persons associated with a broker or dealer shall have the 
meaning provided in section 3(a)(18) of the Exchange Act.
    (24) Regulation T means Regulation T promulgated by the Board of 
Governors of the Federal Reserve System, 12 CFR part 220, as amended 
from time to time.
    (25) Regulation T collateral value, with respect to a security, 
means the current market value of the security reduced by the percentage 
of required margin for a position in the security held in a margin 
account under Regulation T.
    (26) Related position, with respect to a security future, means any 
position in an account that is combined with the security future to 
create an offsetting position as provided in Sec.  41.45(b)(2) of this 
subpart.
    (27) Related transaction, with respect to a position or transaction 
in a security future, means:
    (i) Any transaction that creates, eliminates, increases or reduces 
an offsetting position involving a security future and a related 
position, as provided in Sec.  41.45(b)(2) of this subpart; or
    (ii) Any deposit or withdrawal of margin for the security future or 
a related position, except as provided in Sec.  41.47(b) of this 
subpart.
    (28) Securities account shall have the meaning provided in Sec.  1.3 
of this chapter.
    (29) Security futures intermediary means any creditor as defined in 
Regulation T with respect to its financial relations with any person 
involving security futures, including:
    (i) Any futures commission merchant;
    (ii) Any partner, officer, director, or branch manager (or person 
occupying a similar status or performing similar functions) of a futures 
commission merchant;
    (iii) Any person directly or indirectly controlling, controlled by, 
or under common control with (except for business entities controlling 
or under common control with) a futures commission merchant; and
    (iv) Any employee of a futures commission merchant (except an 
employee

[[Page 27]]

whose functions are solely clerical or ministerial).
    (30) Self-regulatory authority means a national securities exchange 
registered under section 6 of the Exchange Act, a national securities 
association registered under section 15A of the Exchange Act, or a 
contract market registered under section 5 of the Act or section 5f of 
the Act.
    (31) Special margin requirement shall have the meaning provided in 
Sec.  41.46(e)(1)(ii) of this subpart.
    (32) Variation settlement means any credit or debit to a customer 
account, made on a daily or intraday basis, for the purpose of marking 
to market a security future or any other contract that is:
    (i) Issued by a clearing agency that is registered under section 17A 
of the Exchange Act or cleared and guaranteed by a derivatives clearing 
organization that is registered under section 5b of the Act; and
    (ii) Traded on or subject to the rules of a self-regulatory 
authority.
    (b) Terms used in this Regulation (Subpart E, Sec. Sec.  41.42 
through 41.49) and not otherwise defined in this section shall have the 
meaning set forth in the margin rules applicable to the account.
    (c) Terms used in this Regulation (Subpart E, Sec. Sec.  41.42 
through 41.49) and not otherwise defined in this section or in the 
margin rules applicable to the account shall have the meaning set forth 
in the Exchange Act and the Act; if the definitions of a term in the 
Exchange Act and the Act are inconsistent as applied in particular 
circumstances, such term shall have the meaning set forth in rules, 
regulations, or interpretations jointly promulgated by the SEC and the 
Commission.

[67 FR 53171, Aug. 14, 2002, as amended at 77 FR 66346, Nov. 2, 2012; 83 
FR 7997, Feb. 23, 2018]



Sec.  41.44  General provisions.

    (a) Applicable margin rules. Except to the extent inconsistent with 
this Regulation (Subpart E, Sec. Sec.  41.42 through 41.49):
    (1) A security futures intermediary that carries a security future 
on behalf of a customer in a securities account shall record and conduct 
all financial relations with respect to such security future and related 
positions in accordance with Regulation T and the margin rules of the 
self-regulatory authorities of which the security futures intermediary 
is a member.
    (2) A security futures intermediary that carries a security future 
on behalf of a customer in a futures account shall record and conduct 
all financial relations with respect to such security future and related 
positions in accordance with the margin rules of the self-regulatory 
authorities of which the security futures intermediary is a member.
    (b) Separation and consolidation of accounts. (1) The requirements 
for security futures and related positions in one account may not be met 
by considering items in any other account, except as permitted or 
required under paragraph (b)(2) of this section or applicable margin 
rules. If withdrawals of cash, securities or other assets deposited as 
margin are permitted under this Regulation (Subpart E, Sec. Sec.  41.42 
through 41.49), bookkeeping entries shall be made when such cash, 
securities, or assets are used for purposes of meeting requirements in 
another account.
    (2) Notwithstanding paragraph (b)(1) of this section, the security 
futures intermediary shall consider all futures accounts in which 
security futures and related positions are held that are within the same 
regulatory classification or account type and are owned by the same 
customer to be a single account for purposes of this Regulation (Subpart 
E, Sec. Sec.  41.42 through 41.49). The security futures intermediary 
may combine such accounts with other futures accounts that are within 
the same regulatory classification or account type and are owned by the 
same customer for purposes of computing a customer's overall margin 
requirement, as permitted or required by applicable margin rules.
    (c) Accounts of partners. If a partner of the security futures 
intermediary has an account with the security futures intermediary in 
which security futures or related positions are held, the security 
futures intermediary shall disregard the partner's financial relations 
with the firm (as shown in the partner's capital and ordinary drawing

[[Page 28]]

accounts) in calculating the margin or equity of any such account.
    (d) Contribution to joint venture. If an account in which security 
futures or related positions are held is the account of a joint venture 
in which the security futures intermediary participates, any interest of 
the security futures intermediary in the joint account in excess of the 
interest which the security futures intermediary would have on the basis 
of its right to share in the profits shall be margined in accordance 
with this Regulation (Subpart E, Sec. Sec.  41.42 through 41.49).
    (e) Extensions of credit. (1) No security futures intermediary may 
extend or maintain credit to or for any customer for the purpose of 
evading or circumventing any requirement under this Regulation (Subpart 
E, Sec. Sec.  41.42 through 41.49).
    (2) A security futures intermediary may arrange for the extension or 
maintenance of credit to or for any customer by any person, provided 
that the security futures intermediary does not willfully arrange credit 
that would constitute a violation of Regulation T, U or X of the Board 
of Governors of the Federal Reserve System (12 CFR parts 220, 221, and 
224) by such person.
    (f) Change in exempted person status. Once a person ceases to 
qualify as an exempted person, it shall notify the security futures 
intermediary of this fact before entering into any new security futures 
transaction or related transaction that would require additional margin 
to be deposited under this Regulation (Subpart E, Sec. Sec.  41.42 
through 41.49). Financial relations with respect to any such 
transactions shall be subject to the provisions of this Regulation 
(Subpart E, Sec. Sec.  41.42 through 41.49).



Sec.  41.45  Required margin.

    (a) Applicability. Each security futures intermediary shall 
determine the required margin for the security futures and related 
positions held on behalf of a customer in a securities account or 
futures account as set forth in this section.
    (b) Required margin--(1) General rule. The required margin for each 
long or short position in a security future shall be twenty (20) percent 
of the current market value of such security future.
    (2) Offsetting positions. Notwithstanding the margin levels 
specified in paragraph (b)(1) of this section, a self-regulatory 
authority may set the required initial or maintenance margin level for 
an offsetting position involving security futures and related positions 
at a level lower than the level that would be required under paragraph 
(b)(1) of this section if such positions were margined separately, 
pursuant to rules that meet the criteria set forth in section 7(c)(2)(B) 
of the Exchange Act and are effective in accordance with section 
19(b)(2) of the Exchange Act and, as applicable, section 5c(c) of the 
Act.
    (c) Procedures for certain margin level adjustments. An exchange 
registered under section 6(g) of the Exchange Act, or a national 
securities association registered under section 15A(k) of the Exchange 
Act, may raise or lower the required margin level for a security future 
to a level not lower than that specified in this section, in accordance 
with section 19(b)(7) of the Exchange Act.



Sec.  41.46  Type, form and use of margin.

    (a) When margin is required. Margin is required to be deposited 
whenever the required margin for security futures and related positions 
in an account is not satisfied by the equity in the account, subject to 
adjustment under paragraph (c) of this section.
    (b) Acceptable margin deposits. (1) The required margin may be 
satisfied by a deposit of cash, margin securities (subject to paragraph 
(b)(2) of this section), exempted securities, any other asset permitted 
under Regulation T to satisfy a margin deficiency in a securities margin 
account, or any combination thereof, each as valued in accordance with 
paragraph (c) of this section.
    (2) Shares of a money market mutual fund may be accepted as a margin 
deposit for purposes of this Regulation (Subpart E, Sec. Sec.  41.42 
through 41.49), Provided that:
    (i) The customer waives any right to redeem the shares without the 
consent of the security futures intermediary and instructs the fund or 
its transfer agent accordingly;

[[Page 29]]

    (ii) The security futures intermediary (or clearing agency or 
derivatives clearing organization with which the shares are deposited as 
margin) obtains the right to redeem the shares in cash, promptly upon 
request; and
    (iii) The fund agrees to satisfy any conditions necessary or 
appropriate to ensure that the shares may be redeemed in cash, promptly 
upon request.
    (c) Adjustments--(1) Futures accounts. For purposes of this section, 
the equity in a futures account shall be computed in accordance with the 
margin rules applicable to the account, subject to the following:
    (i) A security future shall have no value;
    (ii) Each net long or short position in a listed option on a 
contract for future delivery shall be valued in accordance with the 
margin rules applicable to the account;
    (iii) Except as permitted in paragraph (e) of this section, each 
margin equity security shall be valued at an amount no greater than its 
Regulation T collateral value;
    (iv) Each other security shall be valued at an amount no greater 
than its current market value reduced by the percentage specified for 
such security in Sec.  240.15c3-1(c)(2)(vi) of this title;
    (v) Freely convertible foreign currency may be valued at an amount 
no greater than its daily marked-to-market U.S. dollar equivalent;
    (vi) Variation settlement receivable (or payable) by an account at 
the close of trading on any day shall be treated as a credit (or debit) 
to the account on that day; and
    (vii) Each other acceptable margin deposit or component of equity 
shall be valued at an amount no greater than its value under Regulation 
T.
    (2) Securities accounts. For purposes of this section, the equity in 
a securities account shall be computed in accordance with the margin 
rules applicable to the account, subject to the following:
    (i) A security future shall have no value;
    (ii) Freely convertible foreign currency may be valued at an amount 
no greater than its daily mark-to-market U.S. dollar equivalent; and
    (iii) Variation settlement receivable (or payable) by an account at 
the close of trading on any day shall be treated as a credit (or debit) 
to the account on that day.
    (d) Satisfaction restriction. Any transaction, position or deposit 
that is used to satisfy the required margin for security futures or 
related positions under this Regulation (Subpart E, Sec. Sec.  41.42 
through 41.49), including a related position, shall be unavailable to 
satisfy the required margin for any other position or transaction or any 
other requirement.
    (e) Alternative collateral valuation for margin equity securities in 
a futures account. (1) Notwithstanding paragraph (c)(1)(iii) of this 
section, a security futures intermediary need not value a margin equity 
security at its Regulation T collateral value when determining whether 
the required margin for the security futures and related positions in a 
futures account is satisfied, provided that:
    (i) The margin equity security is valued at an amount no greater 
than the current market value of the security reduced by the lowest 
percentage level of margin required for a long position in the security 
held in a margin account under the rules of a national securities 
exchange registered pursuant to section 6(a) of the Exchange Act;
    (ii) Additional margin is required to be deposited on any day when 
the day's security futures transactions and related transactions would 
create or increase a margin deficiency in the account if the margin 
equity securities were valued at their Regulation T collateral value, 
and shall be for the amount of the margin deficiency so created or 
increased (a ``special margin requirement''); and
    (iii) Cash, securities, or other assets deposited as margin for the 
positions in an account are not permitted to be withdrawn from the 
account at any time that:
    (A) Additional cash, securities, or other assets are required to be 
deposited as margin under this section for a transaction in the account 
on the same or a previous day; or
    (B) The withdrawal, together with other transactions, deposits, and 
withdrawals on the same day, would create

[[Page 30]]

or increase a margin deficiency if the margin equity securities were 
valued at their Regulation T collateral value.
    (2) All security futures transactions and related transactions on 
any day shall be combined to determine the amount of a special margin 
requirement. Additional margin deposited to satisfy a special margin 
requirement shall be valued at an amount no greater than its Regulation 
T collateral value.
    (3) If the alternative collateral valuation method set forth in 
paragraph (e) of this section is used with respect to an account in 
which security futures or related positions are carried:
    (i) An account that is transferred from one security futures 
intermediary to another may be treated as if it had been maintained by 
the transferee from the date of its origin, if the transferee accepts, 
in good faith, a signed statement of the transferor (or, if that is not 
practicable, of the customer), that any margin call issued under this 
Regulation (Subpart E, Sec. Sec.  41.42 through 41.49) has been 
satisfied; and
    (ii) An account that is transferred from one customer to another as 
part of a transaction, not undertaken to avoid the requirements of this 
Regulation (Subpart E, Sec. Sec.  41.42 through 41.49), may be treated 
as if it had been maintained for the transferee from the date of its 
origin, if the security futures intermediary accepts in good faith and 
keeps with the transferee account a signed statement of the transferor 
describing the circumstances for the transfer.
    (f) Guarantee of accounts. No guarantee of a customer's account 
shall be given any effect for purposes of determining whether the 
required margin in an account is satisfied, except as permitted under 
applicable margin rules.



Sec.  41.47  Withdrawal of margin.

    (a) By the customer. Except as otherwise provided in Sec.  
41.46(e)(1)(ii) of this subpart, cash, securities, or other assets 
deposited as margin for positions in an account may be withdrawn, 
provided that the equity in the account after such withdrawal is 
sufficient to satisfy the required margin for the security futures and 
related positions in the account under this Regulation (Subpart E, 
Sec. Sec.  41.42 through 41.49).
    (b) By the security futures intermediary. Notwithstanding paragraph 
(a) of this section, the security futures intermediary, in its usual 
practice, may deduct the following items from an account in which 
security futures or related positions are held if they are considered in 
computing the balance of such account:
    (1) Variation settlement payable, directly or indirectly, to a 
clearing agency that is registered under section 17A of the Exchange Act 
or a derivatives clearing organization that is registered under section 
5b of the Act;
    (2) Interest charged on credit maintained in the account;
    (3) Communication or shipping charges with respect to transactions 
in the account;
    (4) Payment of commissions, brokerage, taxes, storage and other 
charges lawfully accruing in connection with the positions and 
transactions in the account;
    (5) Any service charges that the security futures intermediary may 
impose; or
    (6) Any other withdrawals that are permitted from a securities 
margin account under Regulation T, to the extent permitted under 
applicable margin rules.



Sec.  41.48  Undermargined accounts.

    (a) Failure to satisfy margin call. If any margin call required by 
this Regulation (Subpart E, Sec. Sec.  41.42 through 41.49) is not met 
in full, the security futures intermediary shall take the deduction 
required with respect to an undermargined account in computing its net 
capital under SEC or Commission rules.
    (b) Accounts that liquidate to a deficit. If at any time there is a 
liquidating deficit in an account in which security futures are held, 
the security futures intermediary shall take steps to liquidate 
positions in the account promptly and in an orderly manner.
    (c) Liquidation of undermargined accounts not required. 
Notwithstanding Sec.  41.44(a)(1) of this subpart, Sec.  220.4(d) of 
Regulation T (12 CFR 220.4(d)) respecting liquidation of positions in 
lieu of deposit shall not apply with respect to

[[Page 31]]

security futures carried in a securities account.



Sec.  41.49  Filing proposed margin rule changes with the Commission.

    (a) Notification requirement for notice-designated contract markets. 
Any self-regulatory authority that is registered with the Commission as 
a designated contract market under section 5f of the Act shall, when 
filing a proposed rule change regarding customer margin for security 
futures with the SEC for approval in accordance with section 19(b)(2) of 
the Exchange Act, concurrently provide to the Commission a copy of such 
proposed rule change and any accompanying documentation filed with the 
SEC.
    (b) Filing requirements under the Act. Any self-regulatory authority 
that is registered with the Commission as a designated contract market 
under section 5 of the Act shall, when filing a proposed rule change 
regarding customer margin for security futures with the SEC for approval 
in accordance with section 19(b)(2) of the Exchange Act, submit such 
proposed rule change to the Commission as follows:
    (1) If the self-regulatory authority elects to request the 
Commission's prior approval for the proposed rule change pursuant to 
section 5c(c)(2) of the Act, it shall concurrently file the proposed 
rule change with the Commission in accordance with Sec.  40.5 of this 
chapter.
    (2) If the self-regulatory authority elects to implement a proposed 
rule change by written certification pursuant to section 5c(c)(1) of the 
Act, it shall concurrently provide to the Commission a copy of the 
proposed rule change and any accompanying documentation filed with the 
SEC. Promptly after obtaining SEC approval for the proposed rule change, 
such self-regulatory authority shall file its written certification with 
the Commission in accordance with Sec.  40.6 of this chapter.

[67 FR 53171, Aug. 14, 2002, as amended at 77 FR 66346, Nov. 2, 2012]



PART 42_ANTI-MONEY LAUNDERING, TERRORIST FINANCING--Table of Contents



                      Subpart A_General Provisions

Sec.
42.1 [Reserved]
42.2 Compliance with Bank Secrecy Act

    Authority: 7 U.S.C. 1a, 2, 5, 6, 6b, 6d, 6f, 6g, 7, 7a, 7a-1, 7a-2, 
7b, 7b-1, 7b-2, 9, 12, 12a, 12c, 13a, 13a-1, 13c, 16 and 21; 12 U.S.C. 
1786(q), 1818, 1829b and 1951-1959; 31 U.S.C. 5311-5314 and 5316-5332; 
title III, secs. 312-314, 319, 321, 326, 352, Pub. L. 107-56, 115 Stat. 
307.

    Source: 68 FR 25159, May 9, 2003, unless otherwise noted.



                      Subpart A_General Provisions



Sec.  42.1  [Reserved]



Sec.  42.2  Compliance with Bank Secrecy Act.

    Every futures commission merchant and introducing broker shall 
comply with the applicable provisions of the Bank Secrecy Act and the 
regulations promulgated by the Department of the Treasury under that Act 
at 31 CFR chapter X, and with the requirements of 31 U.S.C. 5318(l) and 
the implementing regulation jointly promulgated by the Commission and 
the Department of the Treasury at 31 CFR 1026.220, which require that a 
customer identification program be adopted as part of the firm's Bank 
Secrecy Act compliance program.

[79 FR 2371, Jan. 14, 2014]



PART 43_REAL-TIME PUBLIC REPORTING--Table of Contents



Sec.
43.1 Purpose, scope, and rules of construction.
43.2 Definitions.
43.3 Method and timing for real-time public reporting.
43.4 Swap transaction and pricing data to be publicly disseminated in 
          real-time.
43.5 Time delays for public dissemination of swap transaction and 
          pricing data.
43.6 Block trades and large notional off-facility swaps.
43.7 Delegation of authority.

Appendix A to Part 43--Data Fields for Public Dissemination
Appendix B to Part 43--Enumerated Physical Commodity Contracts and Other 
          Contracts

[[Page 32]]

Appendix C to Part 43--Time Delays for Public Dissemination
Appendix D to Part 43--Other Commodity Swap Categories
Appendix E to Part 43--Other Commodity Geographic Identification for 
          Public Dissemination Pursuant to Sec.  43.4(d)(4)(iii)
Appendix F to Part 43--Initial Appropriate Minimum Block Sizes by Asset 
          Class for Block Trades and Large Notional Off-Facility Swaps

    Authority: 7 U.S.C. 2(a), 12a(5) and 24a, as amended by Pub. L. 111-
203, 124 Stat. 1376 (2010).

    Source: 76 FR 1243, Jan. 9, 2012, unless otherwise noted.



Sec.  43.1  Purpose, scope, and rules of construction.

    (a) Purpose. This part implements rules relating to the reporting 
and public dissemination of certain swap transaction and pricing data to 
enhance transparency and price discovery pursuant to the Dodd-Frank Wall 
Street Reform and Consumer Protection Act of 2010, Pub. L. 111-203, 124 
Stat. 1376 (2010).
    (b)(1) Scope. The provisions of this part shall apply to all swaps 
as defined in Section 1a(47) of the Act and any implementing regulations 
thereunder, including:
    (i) Swaps subject to the mandatory clearing requirement described in 
Section 2(h)(1) of the Act, including those swaps that are excepted from 
the requirement pursuant to Section 2(h)(7) of the Act;
    (ii) Swaps that are not subject to the mandatory clearing 
requirement described in Section 2(h)(1) of the Act, but are cleared at 
a registered derivatives clearing organization;
    (iii) Swaps that are not cleared at a registered derivatives 
clearing organization and are reported to a registered swap data 
repository that accepts and publicly disseminates swap transaction and 
pricing data in real-time; and
    (iv) Swaps that are required to be cleared under Section 2(h)(2) of 
the Act, but are not cleared.
    (2) This part also shall apply to registered entities as defined in 
the Act, as well as to parties to a swap including swap dealers, major 
swap participants and U.S.-based market participants in a manner as the 
Commission may determine.
    (c) Rules of construction. The examples in this part and in appendix 
A to this part are not exclusive. Compliance with a particular example 
or application of a sample clause, to the extent applicable, shall 
constitute compliance with the particular portion of the rule to which 
the example relates.
    (d) Severability. If any provision of this part, or the application 
thereof to any person or circumstance, is held invalid, such invalidity 
shall not affect other provisions or application of such provision to 
other persons or circumstances which can be given effect without the 
invalid provision or application.



Sec.  43.2  Definitions.

    As used in this part:
    Act means the Commodity Exchange Act, as amended, 7 U.S.C. 1 et seq.
    Affirmation means the process by which parties to a swap verify 
(orally, in writing, electronically or otherwise) that they agree on the 
primary economic terms of a swap (but not necessarily all terms of the 
swap). Affirmation may constitute ``execution'' of the swap or may 
provide evidence of execution of the swap, but does not constitute 
confirmation (or confirmation by affirmation) of the swap.
    Appropriate minimum block size means the minimum notional or 
principal amount for a category of swaps that qualifies a swap within 
such category as a block trade or large notional off-facility swap.
    As soon as technologically practicable means as soon as possible, 
taking into consideration the prevalence, implementation and use of 
technology by comparable market participants.
    Asset class means a broad category of commodities including, without 
limitation, any ``excluded commodity'' as defined in Section 1a(19) of 
the Act, with common characteristics underlying a swap. The asset 
classes include interest rate, foreign exchange, credit, equity, other 
commodity and such other asset classes as may be determined by the 
Commission.
    Block trade means a publicly reportable swap transaction that:

[[Page 33]]

    (1) Involves a swap that is listed on a registered swap execution 
facility or designated contract market;
    (2) Occurs away from the registered swap execution facility's or 
designated contract market's trading system or platform and is executed 
pursuant to the registered swap execution facility's or designated 
contract market's rules and procedures;
    (3) Has a notional or principal amount at or above the appropriate 
minimum block size applicable to such swap; and
    (4) Is reported subject to the rules and procedures of the 
registered swap execution facility or designated contract market and the 
rules described in this part, including the appropriate time delay 
requirements set forth in Sec.  43.5 of this part.
    Business day means the twenty-four hour day, on all days except 
Saturdays, Sundays and legal holidays, in the location of the reporting 
party or registered entity reporting data for the swap.
    Business hours means the consecutive hours of one or more 
consecutive business days.
    Cap size means, for each swap category, the maximum notional or 
principal amount of a publicly reportable swap transaction that is 
publicly disseminated.
    Confirmation means the consummation (electronic or otherwise) of 
legally binding documentation (electronic or otherwise) that 
memorializes the agreement of the parties to all terms of a swap. A 
confirmation shall be in writing (electronic or otherwise) and shall 
legally supersede any previous agreement (electronic or otherwise) 
relating to the swap.
    Confirmation by affirmation means the process by which one party to 
a swap acknowledges its assent to the complete swap terms submitted by 
the other party to the swap. If the parties to a swap are using a 
confirmation service vendor, complete swap terms may be submitted 
electronically by a party to such vendor's platform and the other party 
may affirm such terms on such platform.
    Economically related means a direct or indirect reference to the 
same commodity at the same delivery location or locations, or with the 
same or a substantially similar cash market price series.
    Embedded option means any right, but not an obligation, provided to 
one party of a swap by the other party to the swap that provides the 
party holding the option with the ability to change any one or more of 
the economic terms of the swap as those terms previously were 
established at confirmation (or were in effect on the start date).
    Executed means the completion of the execution process.
    Execution means an agreement by the parties (whether orally, in 
writing, electronically, or otherwise) to the terms of a swap that 
legally binds the parties to such swap terms under applicable law. 
Execution occurs simultaneous with or immediately following the 
affirmation of the swap.
    Futures-related swap means a swap (as defined in section 1a(47) of 
the Act and as further defined by the Commission in implementing 
regulations) that is economically related to a futures contract.
    Large notional off-facility swap means an off-facility swap that has 
a notional or principal amount at or above the appropriate minimum block 
size applicable to such publicly reportable swap transaction and is not 
a block trade as defined in Sec.  43.2 of the Commission's regulations.
    Major currencies means the currencies, and the cross-rates between 
the currencies, of Australia, Canada, Denmark, New Zealand, Norway, 
South Africa, South Korea, Sweden, and Switzerland.
    Non-major currencies means all other currencies that are not super-
major currencies or major currencies.
    Novation means the process by which a party to a swap transfers all 
of its rights, liabilities, duties and obligations under the swap to a 
new legal party other than the counterparty to the swap. The transferee 
accepts all of the transferor's rights, liabilities, duties and 
obligations under the swap. A novation is valid as long as the 
transferor and the remaining party to the swap are given notice, and the 
transferor, transferee and remaining party to the swap consent to the 
transfer.

[[Page 34]]

    Off-facility swap means any publicly reportable swap transaction 
that is not executed on or pursuant to the rules of a registered swap 
execution facility or designated contract market.
    Other commodity means any commodity that is not categorized in the 
other asset classes as may be determined by the Commission.
    Physical commodity swap means a swap in the other commodity asset 
class that is based on a tangible commodity.
    Public dissemination and publicly disseminate means to publish and 
make available swap transaction and pricing data in a non-discriminatory 
manner, through the Internet or other electronic data feed that is 
widely published and in machine-readable electronic format.
    Publicly reportable swap transaction means:
    (1) Unless otherwise provided in this part--
    (i) Any executed swap that is an arm's-length transaction between 
two parties that results in a corresponding change in the market risk 
position between the two parties; or
    (ii) Any termination, assignment, novation, exchange, transfer, 
amendment, conveyance, or extinguishing of rights or obligations of a 
swap that changes the pricing of the swap.
    (2) Examples of executed swaps that do not fall within the 
definition of publicly reportable swap may include:
    (i) Internal swaps between one-hundred percent owned subsidiaries of 
the same parent entity; and
    (ii) Portfolio compression exercises.
    (3) These examples represent swaps that are not at arm's length and 
thus are not publicly reportable swap transactions, notwithstanding that 
they do result in a corresponding change in the market risk position 
between two parties.
    Real-time public reporting means the reporting of data relating to a 
swap transaction, including price and volume, as soon as technologically 
practicable after the time at which the swap transaction has been 
executed.
    Reference price means a floating price series (including derivatives 
contract prices and cash market prices or price indices) used by the 
parties to a swap or swaption to determine payments made, exchanged or 
accrued under the terms of a swap contract.
    Remaining party means a party to a swap that consents to a 
transferor's transfer by novation of all of the transferor's rights, 
liabilities, duties and obligations under such swap to a transferee.
    Reporting party means the party to a swap with the duty to report a 
publicly reportable swap transaction in accordance with this part and 
section 2(a)(13)(F) of the Act.
    Super-major currencies means the currencies of the European Monetary 
Union, Japan, the United Kingdom, and United States.
    Swaps with composite reference prices means swaps based on reference 
prices that are composed of more than one reference price from more than 
one swap category.
    Transferee means a party to a swap that accepts, by way of novation, 
all of a transferor's rights, liabilities, duties and obligations under 
such swap with respect to a remaining party.
    Transferor means a party to a swap that transfers, by way of 
novation, all of its rights, liabilities, duties and obligations under 
such swap, with respect to a remaining party, to a transferee.
    Trimmed data set means a data set that has had extraordinarily large 
notional transactions removed by transforming the data into a logarithm 
with a base of 10, computing the mean, and excluding transactions that 
are beyond four standard deviations above the mean.
    Unique product identifier means a unique identification of a 
particular level of the taxonomy of the product in an asset class or 
sub-asset class in question, as further described in Sec.  43.4(f) and 
appendix A to this part. Such unique product identifier may combine the 
information from one or more of the data fields described in appendix A.
    Widely published means to publish and make available through 
electronic means in a manner that is freely available and readily 
accessible to the public.

[76 FR 1243, Jan. 9, 2012, as amended at 78 FR 32937, May 31, 2013]

[[Page 35]]



Sec.  43.3  Method and timing for real-time public reporting.

    (a) Responsibilities of parties to a swap to report swap transaction 
and pricing data in real-time--(1) In general. A reporting party shall 
report any publicly reportable swap transaction to a registered swap 
data repository as soon as technologically practicable after such 
publicly reportable swap transaction is executed. For purposes of this 
part, a registered swap data repository includes any swap data 
repository provisionally registered with the Commission pursuant to part 
49 of this chapter.
    (2) Swaps executed on or pursuant to the rules of a registered swap 
execution facility or designated contract market. A party to a publicly 
reportable swap transaction shall satisfy its reporting requirement 
under this section by executing a publicly reportable swap transaction 
on or pursuant to the rules of a registered swap execution facility or 
designated contract market.
    (3) Off-facility swaps. All off-facility swaps shall be reported by 
the reporting party as soon as technologically practicable following 
execution, to a registered swap data repository for the appropriate 
asset class in accordance with the rules set forth in this part. Unless 
otherwise agreed to by the parties prior to the execution of the 
publicly reportable swap transaction, the following persons shall be 
reporting parties for off-facility swaps:
    (i) If only one party is a swap dealer or major swap participant, 
then the swap dealer or major swap participant shall be the reporting 
party;
    (ii) If one party is a swap dealer and the other party is a major 
swap participant, then the swap dealer shall be the reporting party;
    (iii) If both parties are swap dealers, then the swap dealers shall 
designate which party shall be the reporting party;
    (iv) If both parties are major swap participants, then the major 
swap participants shall designate which party shall be the reporting 
party;
    (v) If neither party is a swap dealer or a major swap participant, 
then the parties shall designate which party (or its agent) shall be the 
reporting party.
    (b) Public dissemination of swap transaction and pricing data--(1) 
Publicly reportable swap transactions executed on or pursuant to the 
rules of a registered swap execution facility or designated contract 
market. A registered swap execution facility or designated contract 
market shall satisfy the requirements of this subparagraph by 
transmitting swap transaction and pricing data to a registered swap data 
repository, as soon as technologically practicable after the publicly 
reportable swap transaction has been executed on or pursuant to the 
rules of such trading platform or facility.
    (2) Public dissemination of swap transaction and pricing data by 
registered swap data repositories. A registered swap data repository 
shall ensure that swap transaction and pricing data is publicly 
disseminated, as soon as technologically practicable after such data is 
received from a registered swap execution facility, designated contract 
market or reporting party, unless such publicly reportable swap 
transaction is subject to a time delay described in Sec.  43.5 of this 
part, in which case the publicly reportable swap transaction shall be 
publicly disseminated in the manner described in Sec.  43.5.
    (3) Prohibitions on disclosure of data. (i) If there is a registered 
swap data repository for an asset class, a registered swap execution 
facility or designated contract market shall not disclose swap 
transaction and pricing data relating to publicly reportable swap 
transactions in such asset class, prior to the public dissemination of 
such data by a registered swap data repository unless:
    (A) Such disclosure is made no earlier than the transmittal of such 
data to a registered swap data repository for public dissemination;
    (B) Such disclosure is only made to market participants on such 
registered swap execution facility or designated contract market;
    (C) Market participants are provided advance notice of such 
disclosure; and
    (D) Any such disclosure by the registered swap execution facility or 
designated contract market is non-discriminatory.
    (ii) If there is a registered swap data repository for an asset 
class, a swap dealer or major swap participant shall

[[Page 36]]

not disclose swap transaction and pricing data relating to publicly 
reportable swap transactions in such asset class, prior to the public 
dissemination of such data by a registered swap data repository unless:
    (A) Such disclosure is made no earlier than the transmittal of such 
data to a registered swap data repository for public dissemination;
    (B) Such disclosure is only made to the customer base of such swap 
dealer or major swap participant, including parties who maintain 
accounts with or have been swap counterparties with such swap dealer or 
major swap participant;
    (C) Swap counterparties are provided advance notice of such 
disclosure; and
    (D) Any such disclosure by the swap dealer or major swap participant 
is non-discriminatory.
    (c) Requirements for registered swap data repositories in providing 
the public dissemination of swap transaction and pricing data in real-
time--(1) Compliance with 17 CFR part 49. Any registered swap data 
repository that accepts and publicly disseminates swap transaction and 
pricing data in real-time shall comply with part 49 of this chapter and 
shall publicly disseminate swap transaction and pricing data in 
accordance with this part as soon as technologically practicable upon 
receipt of such data, except as otherwise provided in this part.
    (2) Acceptance and public dissemination of all swaps in an asset 
class. Any registered swap data repository that accepts and publicly 
disseminates swap transaction and pricing data in real-time for swaps in 
its selected asset class shall accept and publicly disseminate swap 
transaction and pricing data in real-time for all publicly reportable 
swap transactions within such asset class, unless otherwise prescribed 
by the Commission.
    (3) Annual independent review. Any registered swap data repository 
that accepts and publicly disseminates swap transaction and pricing data 
in real-time shall perform, on an annual basis, an independent review in 
accordance with established audit procedures and standards of the 
registered swap data repository's security and other system controls for 
the purposes of ensuring compliance with the requirements in this part.
    (d) Availability of swap transaction and pricing data to the public. 
(1) Registered swap data repositories shall publicly disseminate swap 
transaction and pricing data in a consistent, usable and machine-
readable electronic format that allows the data to be downloaded, saved 
and analyzed.
    (2) Data that is publicly disseminated pursuant to this part shall 
be available from an Internet Web site in a format that is freely 
available and readily accessible to the public.
    (3) Registered swap data repositories shall provide to the 
Commission a hyperlink to the Internet Web site where publicly 
disseminated swap transaction and pricing data can be accessed by the 
public.
    (e) Errors or omissions--(1) In general. Any errors or omissions in 
swap transaction and pricing data that were publicly disseminated in 
real-time shall be corrected or cancelled in the following manner:
    (i) If a party to the swap becomes aware of an error or omission in 
the swap transaction and pricing data reported with respect to such 
swap, such party shall promptly notify the other party of the error and/
or correction.
    (ii) If a reporting party to a swap becomes aware of an error or 
omission in the swap transaction or pricing data which it reported to a 
registered swap data repository or which was reported by a registered 
swap execution facility or designated contract market with respect to 
such swap, either through its own initiative or through notice by the 
other party to the swap, the reporting party shall promptly submit 
corrected data to the same registered swap execution facility, 
designated contract market or registered swap data repository.
    (iii) If the registered swap execution facility or designated 
contract market becomes aware of an error or omission in the swap 
transaction or pricing data reported with respect to such swap, or 
receives notification from the reporting party, the registered swap 
execution facility or designated contract market shall promptly submit 
corrected data to the same registered swap data repository.

[[Page 37]]

    (iv) Any registered swap data repository that accepts and publicly 
disseminates swap transaction and pricing data in real-time shall 
publicly disseminate any cancellations or corrections to such data, as 
soon as technologically practicable after receipt or discovery of any 
such cancellation or correction.
    (2) Improper cancellation or correction. Reporting parties, 
registered swap execution facilities, designated contract markets and 
registered swap data repositories shall not submit or agree to submit a 
cancellation or correction for the purpose of re-reporting swap 
transaction and pricing data in order to gain or extend a delay in 
public dissemination of accurate swap transaction or pricing data or to 
otherwise evade the reporting requirements in this part.
    (3) Cancellation. A registered swap data repository shall cancel any 
incorrect data that had been publicly disseminated by publicly 
disseminating a cancellation of such data, as soon as technologically 
practicable, in the manner described in appendix A to this part.
    (4) Correction. A registered swap data repository shall correct any 
incorrect data that had been publicly disseminated by publicly 
disseminating a cancellation of the incorrect swap transaction and 
pricing data and then publicly disseminating the correct data, as soon 
as technologically practicable, in the manner described in appendix A to 
this part.
    (f) Hours of operation of registered swap data repositories. Unless 
otherwise provided in this subsection, a registered swap data repository 
shall have systems in place to continuously receive and publicly 
disseminate swap transaction and pricing data in real-time pursuant to 
this part.
    (1) A registered swap data repository may declare closing hours to 
perform system maintenance.
    (2) A registered swap data repository shall, to the extent 
reasonably possible, avoid scheduling closing hours when, in its 
estimation, the U.S. market and major foreign markets are most active.
    (3) A registered swap data repository shall comply with the 
requirements under part 40 of this chapter in setting closing hours and 
shall provide advance notice of its closing hours to market participants 
and the public.
    (g) Acceptance of data during closing hours. During closing hours, a 
registered swap data repository shall have the capability to receive and 
hold in queue any data regarding publicly reportable swap transactions 
pursuant to this part.
    (1) Upon any reopening after closing hours, a registered swap data 
repository shall promptly and publicly disseminate the swap transaction 
and pricing data of swaps held in queue, in accordance with the 
requirements of this part.
    (2) If at any time during closing hours a registered swap data 
repository is unable to receive and hold in queue swap transaction and 
pricing data pursuant to this part, then the registered swap data 
repository shall immediately upon reopening issue notice that it has 
resumed normal operations. Any registered swap execution facility, 
designated contract market or reporting party that is obligated under 
this section to report data to the registered swap data repository shall 
report the data to the registered swap data repository immediately after 
receiving such notice.
    (h) Timestamp requirements. In addition to the execution timestamp 
described in appendix A to this part, registered entities, swap dealers 
and major swap participants shall have the following timestamp 
requirements with respect to real-time public reporting of swap 
transaction and pricing data for all publicly reportable swap 
transactions:
    (1) A registered swap execution facility or designated contract 
market shall timestamp swap transaction and pricing data relating to a 
publicly reportable swap transaction with the date and time, to the 
nearest second of when such registered swap execution facility or 
designated contract market:
    (i) Receives data from a swap counterparty (if applicable); and
    (ii) Transmits such data to a registered swap data repository for 
public dissemination.
    (2) A registered swap data repository shall timestamp swap 
transaction and

[[Page 38]]

pricing data relating to a publicly reportable swap transaction with the 
date and time, to the nearest second when such registered swap data 
repository:
    (i) Receives data from a registered swap execution facility, 
designated contract market or reporting party; and
    (ii) Publicly disseminates such data.
    (3) A swap dealer or major swap participant shall timestamp swap 
transaction and pricing data relating to an off-facility swap with the 
date and time, to the nearest second when such swap dealer or major swap 
participant transmits such data to a registered swap data repository for 
public dissemination.
    (4) Records of all timestamps required by this subsection shall be 
maintained for a period of at least five years from the execution of the 
publicly reportable swap transaction.
    (i) Fees. Any fees or charges assessed on a reporting party, 
registered swap execution facility or designated contract market by a 
registered swap data repository that accepts and publicly disseminates 
swap transaction and pricing data in real-time for the collection of 
such data shall be equitable and non-discriminatory. If such registered 
swap data repository allows a fee discount based on the volume of data 
reported to it for public dissemination, then such discount shall be 
made available to all reporting parties, registered swap execution 
facilities and designated contract markets in an equitable and non-
discriminatory manner.



Sec.  43.4  Swap transaction and pricing data to be publicly
disseminated in real-time.

    (a) In general. Swap transaction and pricing information shall be 
reported to a registered swap data repository so that the registered 
swap data repository can publicly disseminate swap transaction and 
pricing data in real-time in accordance with this part, including the 
manner described in this section and appendix A to this part.
    (b) Public dissemination of data fields. Any registered swap data 
repository that accepts and publicly disseminates swap transaction and 
pricing data in real-time shall publicly disseminate the information 
described in appendix A to this part, as applicable, for any publicly 
reportable swap transaction.
    (c) Additional swap information. A registered swap data repository 
that accepts and publicly disseminates swap transaction and pricing data 
in real-time may require reporting parties, registered swap execution 
facilities and designated contract markets to report to such registered 
swap data repository, such information that is necessary to compare the 
swap transaction and pricing data that was publicly disseminated in 
real-time to the data reported to a registered swap data repository 
pursuant to Section 2(a)(13)(G) of the Act or to confirm that parties to 
a swap have reported in a timely manner pursuant to Sec.  43.3 of this 
part. Such additional information shall not be publicly disseminated by 
the registered swap data repository.
    (d) Anonymity of the parties to a publicly reportable swap 
transaction--(1) In general. Swap transaction and pricing data that is 
publicly disseminated in real-time shall not disclose the identities of 
the parties to the swap or otherwise facilitate the identification of a 
party to a swap. A registered swap data repository that accepts and 
publicly disseminates swap transaction and pricing data in real-time 
shall not publicly disseminate such data in a manner that discloses or 
otherwise facilitates the identification of a party to a swap.
    (2) Actual product description reported to registered swap data 
repository. Reporting parties, registered swap execution facilities and 
designated contract markets shall provide a registered swap data 
repository with swap transaction and pricing data that includes an 
actual description of the underlying asset(s). This requirement is 
separate from the requirement that a reporting party, registered swap 
execution facility or designated contract market shall report swap data 
to a registered swap data repository pursuant to Section 2(a)(13)(G) of 
the Act and the Commission's regulations.
    (3) Public dissemination of the actual description of underlying 
asset(s). Notwithstanding the anonymity protection for certain swaps in 
the other commodity asset class in Sec.  43.4(d)(4)(ii),

[[Page 39]]

a registered swap data repository shall publicly disseminate the actual 
underlying asset(s) of all publicly reportable swap transactions in the 
interest rate, credit, equity and foreign exchange asset classes.
    (4) Public dissemination of the underlying asset(s) for certain 
swaps in the other commodity asset class. A registered swap data 
repository shall publicly disseminate swap transaction and pricing data 
in the other commodity asset class as described in this subsection.
    (i) A registered swap data repository shall publicly disseminate 
swap transaction and pricing data for publicly reportable swap 
transactions in the other commodity asset class in the manner described 
in paragraphs (d)(4)(ii) and (d)(4)(iii) of this section.
    (ii) The actual underlying asset(s) shall be publicly disseminated 
for the following publicly reportable swap transactions in the other 
commodity asset class:
    (A) Any publicly reportable swap transaction that references one of 
the contracts described in appendix B to this part;
    (B) Any publicly reportable swap transaction that is economically 
related to one of the contracts described in appendix B of this part; or
    (iii) The underlying assets of swaps in the other commodity asset 
class that are not described in paragraph (d)(4)(ii) of this section 
shall be publicly disseminated by limiting the geographic detail of the 
underlying assets. The identification of any specific delivery point or 
pricing point associated with the underlying asset of such other 
commodity swap shall be publicly disseminated pursuant to appendix E of 
this part.
    (C) Any publicly reportable swap transaction executed on or pursuant 
to the rules of a registered swap execution facility or designated 
contract market.
    (e) Unique product identifier. If a unique product identifier is 
developed that sufficiently describes one or more of the swap 
transaction and pricing data fields for real-time reporting described in 
appendix A to this part, then such unique product identifier may be 
publicly disseminated in lieu of the data fields that it describes.
    (f) Reporting of notional or principal amounts to a registered swap 
data repository--(1) Off-facility swaps. The reporting party shall 
report the actual notional or principal amount of any off-facility swap 
to a registered swap data repository that accepts and publicly 
disseminates such data pursuant to part 43.
    (2) Swaps executed on or pursuant to the rules of a registered swap 
execution facility or designated contract market. (i) A registered swap 
execution facility or designated contract market shall transmit the 
actual notional or principal amount for all swaps executed on or 
pursuant to the rules of such registered swap execution facility or 
designated contract market, to a registered swap data repository that 
accepts swaps in the asset class.
    (ii) The actual notional or principal amount for any block trade 
executed pursuant to the rules of a registered swap execution facility 
or designated contract market shall be reported to the registered swap 
execution facility or designated contract market pursuant to the rules 
of the registered swap execution facility or designated contract market.
    (g) Public dissemination of rounded notional or principal amounts. 
The notional or principal amount of a publicly reportable swap 
transaction, as described in appendix A to this part, shall be rounded 
and publicly disseminated by a registered swap data repository as 
follows:
    (1) If the notional or principal amount is less than one thousand, 
round to nearest five, but in no case shall a publicly disseminated 
notional or principal amount be less than five;
    (2) If the notional or principal amount is less than ten thousand 
but equal to or greater than one thousand, round to nearest one hundred;
    (3) If the notional or principal amount is less than 100 thousand 
but equal to or greater than ten thousand, round to nearest one 
thousand;
    (4) If the notional or principal amount is less than one million but 
equal to or greater than 100 thousand, round to nearest ten thousand;
    (5) If the notional or principal amount is less than 100 million but

[[Page 40]]

equal to or greater than one million, round to the nearest one million;
    (6) If the notional or principal amount is less than 500 million but 
equal to or greater than 100 million, round to the nearest ten million;
    (7) If the notional or principal amount is less than one billion but 
equal to or greater than 500 million, round to the nearest 50 million;
    (8) If the notional or principal amount is less than 100 billion but 
equal to or greater than one billion, round to the nearest one billion;
    (9) If the notional or principal amount is greater than 100 billion, 
round to the nearest 50 billion.
    (h) Cap sizes--(1) Initial cap sizes. Prior to the effective date of 
a Commission determination to establish an applicable post-initial cap 
size for a swap category as determined pursuant to paragraph (h)(2) of 
this section, the initial cap sizes for each swap category shall be 
equal to the greater of the initial appropriate minimum block size for 
the respective swap category in appendix F of this part or the 
respective cap sizes in paragraphs (h)(1)(i) through (h)(1)(v) of this 
section. If appendix F of this part does not provide an initial 
appropriate minimum block size for a particular swap category, the 
initial cap size for such swap category shall be equal to the 
appropriate cap size as set forth in paragraphs (h)(1)(i) through 
(h)(1)(v) of this section.
    (i) For swaps in the interest rate asset class, the publicly 
disseminated notional or principal amount for a swap subject to the 
rules in this part shall be:
    (A) USD 250 million for swaps with a tenor greater than zero up to 
and including two years;
    (B) USD 100 million for swaps with a tenor greater than two years up 
to and including ten years; and
    (C) USD 75 million for swaps with a tenor greater than ten years.
    (ii) For swaps in the credit asset class, the publicly disseminated 
notional or principal amount for a swap subject to the rules in this 
part shall be USD 100 million.
    (iii) For swaps in the equity asset class, the publicly disseminated 
notional or principal amount for a swap subject to the rules in this 
part shall be USD 250 million.
    (iv) For swaps in the foreign exchange asset class, the publicly 
disseminated notional or principal amount for a swap subject to the 
rules in this part shall be USD 250 million.
    (v) For swaps in the other commodity asset class, the publicly 
disseminated notional or principal amount for a swap subject to the 
rules in this part shall be USD 25 million.
    (2) Post-initial cap sizes. Pursuant to the process described in 
Sec.  43.6(f)(1), the Commission shall establish post-initial cap sizes 
using reliable data collected by registered swap data repositories, as 
determined by the Commission, based on the following:
    (i) A one-year window of swap transaction and pricing data 
corresponding to each relevant swap category recalculated no less than 
once each calendar year; and
    (ii) The 75-percent notional amount calculation described in Sec.  
43.6(c)(3) applied to the swap transaction and pricing data described in 
paragraph (h)(2)(i) of this section.
    (3) Commission publication of post-initial cap sizes. The Commission 
shall publish post-initial cap sizes on its Web site at http://
www.cftc.gov.
    (4) Effective date of post-initial cap sizes. Unless otherwise 
indicated on the Commission's Web site, the post-initial cap sizes shall 
be effective on the first day of the second month following the date of 
publication.

[76 FR 1243, Jan. 9, 2012, as amended at 78 FR 32937, May 31, 2013]



Sec.  43.5  Time delays for public dissemination of swap transaction 
and pricing data.

    (a) In general. The time delay for the real-time public reporting of 
a block trade or large notional off-facility swap begins upon execution, 
as defined in Sec.  43.2 of this part. It is the responsibility of the 
registered swap data repository that accepts and publicly disseminates 
swap transaction and pricing data in real-time to ensure that the block 
trade or large notional off-facility swap transaction and pricing data 
is publicly disseminated pursuant to

[[Page 41]]

this part upon the expiration of the appropriate time delay described in 
Sec.  43.5(d) through (h).
    (b) Public dissemination of publicly reportable swap transactions 
subject to a time delay. A registered swap data repository shall 
publicly disseminate swap transaction and pricing data that is subject 
to a time delay pursuant to this paragraph, as follows:
    (1) No later than the prescribed time delay period described in this 
paragraph;
    (2) No sooner than the prescribed time delay period described in 
this paragraph; and
    (3) Precisely upon the expiration of the time delay period described 
in this paragraph.
    (c) Interim time delay--(1) In general. The public dissemination of 
swap transaction and pricing data relating to any publicly reportable 
swap transaction shall receive the same time delays for block trades and 
large notional off-facility swaps, as described in this subsection, 
until such time as an appropriate minimum block size is established with 
respect to such publicly reportable swap transaction.
    (2) Swaps executed on or pursuant to the rules of a registered swap 
execution facility or designated contract market. Any publicly 
reportable swap transaction that does not have an appropriate minimum 
block size and that is executed on or pursuant to the rules of a 
registered swap execution facility or designated contract market shall 
follow the time delays set forth in Sec.  43.5(d) until such time that 
an appropriate minimum block size is established for such publicly 
reportable swap transaction.
    (3) Off-facility swaps subject to the mandatory clearing 
requirement. Any off-facility swap that does not have an appropriate 
minimum block size and that is subject to the mandatory clearing 
requirement described in Section 2(h)(1) of the Act and Commission 
regulations, with the exception of those off-facility swaps that are 
either excepted from the mandatory clearing requirement pursuant to 
Section 2(h)(7) of the Act and Commission regulations or that are 
required to be cleared under Section 2(h)(2) of the Act and Commission 
regulations but are not cleared, shall follow the time delays set forth 
in Sec.  43.5(e) until such time that an appropriate minimum block size 
is established for such off-facility swap.
    (4) Off-facility swaps in the interest rate, credit, foreign 
exchange and equity asset classes not subject to the mandatory clearing 
requirement with at least one swap dealer or major swap participant 
counterparty. Any off-facility swap in the interest rate, credit, 
foreign exchange or equity asset classes, where at least one party is a 
swap dealer or major swap participant, that is not subject to the 
mandatory clearing requirement or is excepted from such mandatory 
clearing requirement and that does not have an appropriate minimum block 
size shall follow the time delays set forth in Sec.  43.5(f) until such 
time that an appropriate minimum block size is established for such off-
facility swap.
    (5) Off-facility swaps in the other commodity asset class not 
subject to the mandatory clearing requirement with at least one swap 
dealer or major swap participant counterparty. Any off-facility swap in 
the other commodity asset class, where at least one party is a swap 
dealer or major swap participant, that is not subject to the mandatory 
clearing requirement or is excepted from such mandatory clearing 
requirement and that does not have an appropriate minimum block size 
shall follow the time delays set forth in Sec.  43.5(g) until such time 
that an appropriate minimum block size is established for such off-
facility swap.
    (6) Off-facility swaps in all asset classes not subject to the 
mandatory clearing requirement in which neither counterparty is a swap 
dealer or major swap participant. Any off-facility swap, in all asset 
classes, where neither party is a swap dealer or major swap participant, 
that is not subject to the mandatory clearing requirement or is excepted 
from such mandatory clearing requirement and that does not have an 
appropriate minimum block size shall follow the time delays set forth in 
Sec.  43.5(h) until such time that an appropriate minimum block size is 
established for such off-facility swap.
    (7) Time delays for public dissemination upon establishment of an 
appropriate

[[Page 42]]

minimum block size. After an appropriate minimum block size is 
established for a particular swap or category of swaps, all publicly 
reportable swap transactions that are below the appropriate minimum 
block size shall be publicly disseminated as soon as technologically 
practicable after execution pursuant to Sec.  43.3 of this part.
    (d) Time delay for block trades executed pursuant to the rules of a 
registered swap execution facility or designated contract market. Any 
block trade that is executed pursuant to the rules of a registered swap 
execution facility or designated contract market shall receive a time 
delay in the public dissemination of swap transaction and pricing data 
as follows:
    (1) Time delay during Year 1. For one year beginning on the 
compliance date of this part, the time delay for public dissemination of 
swap transaction and pricing data for all publicly reportable swap 
transactions described in Sec.  43.5(d) shall be 30 minutes immediately 
after execution of such publicly reportable swap transaction.
    (2) Time delay after Year 1. Beginning on the first anniversary of 
the compliance date of this part, the time delay for public 
dissemination of swap transaction and pricing data for all publicly 
reportable swap transactions described in Sec.  43.5(d) shall be 15 
minutes immediately after execution of such publicly reportable swap 
transaction.
    (e) Time delay for large notional off-facility swaps subject to the 
mandatory clearing requirement--(1) In general. This subsection shall 
not apply to off-facility swaps that are excepted from the mandatory 
clearing requirement pursuant to Section 2(h)(7) of the Act and 
Commission regulations, and this subsection shall not apply to those 
swaps that are required to be cleared under Section 2(h)(2) of the Act 
and Commission regulations but are not cleared.
    (2) Swaps subject to the mandatory clearing requirement where at 
least one party is a swap dealer or major swap participant. Any large 
notional off-facility swap that is subject to the mandatory clearing 
requirement described in Section 2(h)(1) of the Act and Commission 
regulations, in which at least one party is a swap dealer or major swap 
participant, shall receive a time delay as follows:
    (i) Time delay during Year 1. For one year beginning on the 
compliance date of this part, the time delay for public dissemination of 
swap transaction and pricing data for all swaps described in Sec.  
43.5(e)(2) shall be 30 minutes immediately after execution of such swap.
    (ii) Time delay after Year 1. Beginning on the first anniversary of 
the compliance date of this part, the time delay for public 
dissemination of swap transaction and pricing data for all swaps 
described in Sec.  43.5(e)(2) shall be 15 minutes immediately after 
execution of such swap.
    (3) Swaps subject to the mandatory clearing requirement where 
neither party is a swap dealer or major swap participant. Any large 
notional off-facility swap that is subject to the mandatory clearing 
requirement described in Section 2(h)(1) of the Act and Commission 
regulations, in which neither party is a swap dealer or major swap 
participant, shall receive a time delay as follows:
    (i) Time delay during Year 1. For one year beginning on the 
compliance date of this part, the time delay for public dissemination of 
swap transaction and pricing data for all swaps described in Sec.  
43.5(e)(3) shall be four hours immediately after execution of such swap.
    (ii) Time delay during Year 2. For one year beginning on the first 
anniversary of the compliance date of this part, the time delay for 
public dissemination of swap transaction and pricing data for all swaps 
described in Sec.  43.5(e)(3) shall be two hours immediately after 
execution of such swap.
    (iii) Time delay after Year 2. Beginning on the second anniversary 
of the compliance date of this part, the time delay for public 
dissemination of swap transaction and pricing data for all swaps 
described in Sec.  43.5(e)(3) shall be one hour immediately after 
execution of such swap.
    (f) Time delay for large notional off-facility swaps in the interest 
rate, credit, foreign exchange or equity asset classes not subject to 
the mandatory clearing requirement with at least one swap dealer or 
major swap participant counterparty. Any large notional off-facility 
swap in the interest rate, credit, foreign exchange or equity asset 
classes where at

[[Page 43]]

least one party is a swap dealer or major swap participant, that is not 
subject to the mandatory clearing requirement or is excepted from such 
mandatory clearing requirement, shall receive a time delay in the public 
dissemination of swap transaction and pricing data as follows:
    (1) Time delay during Year 1. For one year beginning on the 
compliance date of this part, the time delay for public dissemination of 
swap transaction and pricing data for all swaps described in Sec.  
43.5(f) shall be one hour immediately after execution of such swap; 
however, any large notional off-facility swap in the interest rate, 
credit, foreign exchange or equity asset classes in which one party is 
not a swap dealer or major swap participant and such party is not a 
financial entity as defined in Section 2(h)(7)(C) of the Act and 
Commission regulations, shall receive a time delay of one hour 
immediately after execution of such swap; or if such swap transaction or 
pricing data is received by the registered swap data repository later 
than one hour immediately after execution, the registered swap data 
repository shall publicly disseminate such data as soon as 
technologically practicable after the data is received.
    (2) Time delay during Year 2. For one year beginning on the first 
anniversary of the compliance date of this part, the time delay for 
public dissemination of swap transaction and pricing data for all swaps 
described in Sec.  43.5(f) shall be 30 minutes immediately after 
execution of such swap; however, any large notional off-facility swap in 
the interest rate, credit, foreign exchange or equity asset classes in 
which one party is not a swap dealer or major swap participant and such 
party is not a financial entity as defined in Section 2(h)(7)(C) of the 
Act and Commission regulations, shall receive a time delay of 30 minutes 
immediately after execution of such swap; or if such swap transaction or 
pricing data is received by the registered swap data repository later 
than 30 minutes immediately after execution, the registered swap data 
repository shall publicly disseminate such data as soon as 
technologically practicable after the data is received.
    (3) Time delay after Year 2. Beginning on the second anniversary of 
the compliance date of this part, the time delay for public 
dissemination of swap transaction and pricing data for all swaps 
described in Sec.  43.5(f) shall be 30 minutes immediately after 
execution of such swap.
    (g) Time delay for large notional off-facility swaps in the other 
commodity asset class not subject to the mandatory clearing requirement 
with at least one swap dealer or major swap participant counterparty. 
Any large notional off-facility swap in the other commodity asset class 
where at least one party is a swap dealer or major swap participant, 
that is not subject to the mandatory clearing requirement or is exempt 
from such mandatory clearing requirement, shall receive a time delay in 
the public dissemination of swap transaction and pricing data as 
follows:
    (1) Time delay during Year 1. For one year beginning on the 
compliance date of this part, the time delay for public dissemination of 
swap transaction and pricing data for all swaps described in Sec.  
43.5(g) shall be four hours immediately after execution of such swap; 
however, any large notional off-facility swap in the other commodity 
asset class in which only one party is not a swap dealer or major swap 
participant and such party is not a financial entity as defined in 
Section 2(h)(7)(C) of the Act and Commission regulations, shall receive 
a time delay of four hours immediately after execution of such swap, or 
if such swap transaction or pricing data is received by the registered 
swap data repository later than four hours immediately after execution 
of such swap, the registered swap data repository shall publicly 
disseminate such data as soon as technologically practicable after the 
data is received.
    (2) Time delay during Year 2. For one year beginning on the first 
anniversary of the compliance date of this part, the time delay for 
public dissemination of swap transaction and pricing data for all swaps 
described in Sec.  43.5(g) shall be two hours immediately after 
execution of such swap; however, any large notional off-facility swap in 
the other commodity asset class in which only one party is not a swap 
dealer or major swap participant and such party is not a financial 
entity as defined in Section 2(h)(7)(C) of the Act and Commission

[[Page 44]]

regulations, shall receive a time delay of two hours immediately after 
execution of such swap, or if such swap transaction or pricing data is 
received by the registered swap data repository later than two hours 
immediately after execution, the registered swap data repository shall 
publicly disseminate such data as soon as technologically practicable 
after the data is received.
    (3) Time delay after Year 2. Beginning on the second anniversary of 
the compliance date of this part, the time delay for public 
dissemination of swap transaction and pricing data for all swaps 
described in Sec.  43.5(g) shall be two hours after the execution of 
such swap.
    (h) Time delay for large notional off-facility swaps in all asset 
classes not subject to the mandatory clearing requirement in which 
neither counterparty is a swap dealer or a major swap participant. Any 
large notional off-facility swap in which neither party is a swap dealer 
or a major swap participant, which is not subject to the mandatory 
clearing requirement or is exempt from such mandatory clearing 
requirement, shall receive a time delay in the public dissemination of 
swap transaction and pricing data as follows:
    (1) Time delay during Year 1. For one year beginning on the 
compliance date of this part, the time delay for public dissemination of 
swap transaction and pricing data for all swaps described in Sec.  
43.5(h) shall be 48 business hours immediately after execution of such 
swap.
    (2) Time delay during Year 2. For one year beginning on the first 
anniversary of the compliance date of this part, the time delay for 
public dissemination of swap transaction and pricing data for all swaps 
described in Sec.  43.5(h) shall be 36 business hours immediately after 
the execution of such swap.
    (3) Time delay after Year 2. Beginning on the second anniversary of 
the compliance date of this part, the time delay for public 
dissemination transaction and pricing data for all swaps described in 
Sec.  43.5(h) shall be 24 business hours immediately after the execution 
of such swap.



Sec.  43.6  Block trades and large notional off-facility swaps.

    (a) Commission determination. The Commission shall establish the 
appropriate minimum block size for publicly reportable swap transactions 
based on the swap categories set forth in paragraph (b) of this section 
in accordance with the provisions set forth in paragraphs (c), (d), (e), 
(f) or (h) of this section, as applicable.
    (b) Swap categories. Swap categories shall be established for all 
swaps, by asset class, in the following manner:
    (1) Interest rates asset class. Interest rate asset class swap 
categories shall be based on unique combinations of the following:
    (i) Currency by:
    (A) Super-major currency;
    (B) Major currency; or
    (C) Non-major currency; and
    (ii) Tenor of swap as follows:
    (A) Zero to 46 days;
    (B) Greater than 46 days to three months (47 to 107 days);
    (C) Greater than three months to six months (108 to 198 days);
    (D) Greater than six months to one year (199 to 381 days);
    (E) Greater than one to two years (382 to 746 days);
    (F) Greater than two to five years (747 to 1,842 days);
    (G) Greater than five to ten years (1,843 to 3,668 days);
    (H) Greater than ten to 30 years (3,669 to 10,973 days); or
    (I) Greater than 30 years (10,974 days and above).
    (2) Credit asset class. Credit asset class swap categories shall be 
based on unique combinations of the following:
    (i) Traded Spread rounded to the nearest basis point (0.01) as 
follows:
    (A) 0 to 175 points;
    (B) 176 to 350 points; or
    (C) 351 points and above;
    (ii) Tenor of swap as follows:
    (A) Zero to two years (0-746 days);
    (B) Greater than two to four years (747-1,476 days);
    (C) Greater than four to six years (1,477-2,207 days);
    (D) Greater than six to eight-and-a-half years (2,208-3,120 days);
    (E) Greater than eight-and-a-half to 12.5 years (3,121-4,581 days); 
and
    (F) Greater than 12.5 years (4,582 days and above).
    (3) Equity asset class. There shall be one swap category consisting 
of all swaps in the equity asset class.

[[Page 45]]

    (4) Foreign exchange asset class. Swap categories in the foreign 
exchange asset class shall be grouped as follows:
    (i) By the unique currency combinations of one super-major currency 
paired with one of the following:
    (A) Another super major currency;
    (B) A major currency; or
    (C) A currency of Brazil, China, Czech Republic, Hungary, Israel, 
Mexico, Poland, Russia, and Turkey; or
    (ii) By unique currency combinations not included in paragraph 
(b)(4)(i) of this section.
    (5) Other commodity asset class. Swap contracts in the other 
commodity asset class shall be grouped into swap categories as follows:
    (i) For swaps that are economically related to contracts in appendix 
B of this part, by the relevant contract as referenced in appendix B of 
this part; or
    (ii) For swaps that are not economically related to contracts in 
appendix B of this part, by the following futures-related swaps--
    (A) CME Cheese;
    (B) CBOT Distillers' Dried Grain;
    (C) CBOT Dow Jones-UBS Commodity Index;
    (D) CBOT Ethanol;
    (E) CME Frost Index;
    (F) CME Goldman Sachs Commodity Index (GSCI), (GSCI Excess Return 
Index);
    (G) NYMEX Gulf Coast Sour Crude Oil;
    (H) CME Hurricane Index;
    (I) CME Rainfall Index;
    (J) CME Snowfall Index;
    (K) CME Temperature Index;
    (L) CME U.S. Dollar Cash Settled Crude Palm Oil; or
    (iii) For swaps that are not covered in paragraphs (b)(5)(i) and 
(b)(5)(ii) of this section, the relevant product type as referenced in 
appendix D of this part.
    (c) Methodologies to determine appropriate minimum block sizes and 
cap sizes. In determining appropriate minimum block sizes and cap sizes 
for publicly reportable swap transactions, the Commission shall utilize 
the following statistical calculations--
    (1) 50-percent notional amount calculation. The Commission shall use 
the following procedure in determining the 50-percent notional amount 
calculation:
    (i) Select all of the publicly reportable swap transactions within a 
specific swap category using a one-year window of data beginning with a 
minimum of one year's worth of data;
    (ii) Convert to the same currency or units and use a trimmed data 
set;
    (iii) Determine the sum of the notional amounts of swaps in the 
trimmed data set;
    (iv) Multiply the sum of the notional amount by 50 percent;
    (v) Rank order the observations by notional amount from least to 
greatest;
    (vi) Calculate the cumulative sum of the observations until the 
cumulative sum is equal to or greater than the 50-percent notional 
amount calculated in paragraph (c)(1)(iv) of this section;
    (vii) Select the notional amount associated with that observation;
    (viii) Round the notional amount of that observation to two 
significant digits, or if the notional amount associated with that 
observation is already significant to two digits, increase that notional 
amount to the next highest rounding point of two significant digits; and
    (ix) Set the appropriate minimum block size at the amount calculated 
in paragraph (c)(1)(viii) of this section.
    (2) 67-percent notional amount calculation. The Commission shall use 
the following procedure in determining the 67-percent notional amount 
calculation:
    (i) Select all of the publicly reportable swap transactions within a 
specific swap category using a one-year window of data beginning with a 
minimum of one year's worth of data;
    (ii) Convert to the same currency or units and use a trimmed data 
set;
    (iii) Determine the sum of the notional amounts of swaps in the 
trimmed data set;
    (iv) Multiply the sum of the notional amount by 67 percent;
    (v) Rank order the observations by notional amount from least to 
greatest;
    (vi) Calculate the cumulative sum of the observations until the 
cumulative sum is equal to or greater than the 67-

[[Page 46]]

percent notional amount calculated in paragraph (c)(2)(iv) of this 
section;
    (vii) Select the notional amount associated with that observation;
    (viii) Round the notional amount of that observation to two 
significant digits, or if the notional amount associated with that 
observation is already significant to two digits, increase that notional 
amount to the next highest rounding point of two significant digits; and
    (ix) Set the appropriate minimum block size at the amount calculated 
in paragraph (c)(2)(viii) of this section.
    (3) 75-percent notional amount calculation. The Commission shall use 
the following procedure in determining the 75-percent notional amount 
calculation:
    (i) Select all of the publicly reportable swap transactions within a 
specific swap category using a one-year window of data beginning with a 
minimum of one year's worth of data;
    (ii) Convert to the same currency or units and use a trimmed data 
set;
    (iii) Determine the sum of the notional amounts of swaps in the 
trimmed data set;
    (iv) Multiply the sum of the notional amount by 75 percent;
    (v) Rank order the observations by notional amount from least to 
greatest;
    (vi) Calculate the cumulative sum of the observations until the 
cumulative sum is equal to or greater than the 75-percent notional 
amount calculated in paragraph (c)(3)(iv) of this section;
    (vii) Select the notional amount associated with that observation;
    (viii) Round the notional amount of that observation to two 
significant digits, or if the notional amount associated with that 
observation is already significant to two digits, increase that notional 
amount to the next highest rounding point of two significant digits; and
    (ix) Set the appropriate minimum block size at the amount calculated 
in paragraph (c)(3)(viii) of this section.
    (d) No appropriate minimum block sizes for swaps in the equity asset 
class. Publicly reportable swap transactions in the equity asset class 
shall not be treated as block trades or large notional off-facility 
swaps.
    (e) Initial appropriate minimum block sizes. Prior to the Commission 
making a determination as described in paragraph (f)(1) of this section, 
the following initial appropriate minimum block sizes shall apply:
    (1) Prescribed appropriate minimum block sizes. Except as otherwise 
provided in paragraph (e)(1) of this section, for any publicly 
reportable swap transaction that falls within the swap categories 
described in paragraphs (b)(1), (b)(2), (b)(4)(i), (b)(5)(i) or 
(b)(5)(ii) of this section, the initial appropriate minimum block size 
for such publicly reportable swap transaction shall be the appropriate 
minimum block size that is in appendix F of this part.
    (2) Certain swaps in the foreign exchange and other commodity asset 
classes. All swaps or instruments in the swap categories described in 
paragraphs (b)(4)(ii) and (b)(5)(iii) of this section shall be eligible 
to be treated as a block trade or large notional off-facility swap, as 
applicable.
    (3) Exception. Publicly reportable swap transactions described in 
paragraph (b)(5)(i) of this section that are economically related to a 
futures contract in appendix B of this part shall not qualify to be 
treated as block trades or large notional off-facility swaps (as 
applicable), if such futures contract is not subject to a designated 
contract market's block trading rules.
    (f) Post-initial process to determine appropriate minimum block 
sizes--(1) Post-initial period. After a registered swap data repository 
has collected at least one year of reliable data for a particular asset 
class, the Commission shall establish, by swap categories, the post-
initial appropriate minimum block sizes as described in paragraphs 
(f)(2) through (f)(5) of this section. No less than once each calendar 
year thereafter, the Commission shall update the post-initial 
appropriate minimum block sizes.
    (2) Post-initial appropriate minimum block sizes for certain swaps. 
The Commission shall determine post-initial appropriate minimum block 
sizes for the swap categories described in paragraphs (b)(1), (b)(2), 
(b)(4)(i) and (b)(5) of this section by utilizing a one-year window of 
swap transaction and pricing

[[Page 47]]

data corresponding to each relevant swap category reviewed no less than 
once each calendar year, and by applying the 67-percent notional amount 
calculation to such data.
    (3) Certain swaps in the foreign exchange asset class. All swaps or 
instruments in the swap category described in paragraph (b)(4)(ii) of 
this section shall be eligible to be treated as a block trade or large 
notional off-facility swap, as applicable.
    (4) Commission publication of post-initial appropriate minimum block 
sizes. The Commission shall publish the appropriate minimum block sizes 
determined pursuant to paragraph (f)(1) of this section on its Web site 
at http://www.cftc.gov.
    (5) Effective date of post-initial appropriate minimum block sizes. 
Unless otherwise indicated on the Commission's Web site, the post-
initial appropriate minimum block sizes described in paragraph (f)(1) of 
this section shall be effective on the first day of the second month 
following the date of publication.
    (g) Required notification--(1) Block trade election. (i) The parties 
to a publicly reportable swap transaction that has a notional amount at 
or above the appropriate minimum block size shall notify the registered 
swap execution facility or designated contract market, as applicable, 
pursuant to the rules of such registered swap execution facility or 
designated contract market, of its election to have the publicly 
reportable swap transaction treated as a block trade.
    (ii) The registered swap execution facility or designated contract 
market, as applicable, pursuant to the rules of which a block trade is 
executed shall notify the registered swap data repository of such a 
block trade election when transmitting swap transaction and pricing data 
to such swap data repository in accordance with Sec.  43.3(b)(1).
    (2) Large notional off-facility swap election. A reporting party who 
executes an off-facility swap that has a notional amount at or above the 
appropriate minimum block size shall notify the applicable registered 
swap data repository that such swap transaction qualifies as a large 
notional off-facility swap concurrent with the transmission of swap 
transaction and pricing data in accordance with this part.
    (h) Special provisions relating to appropriate minimum block sizes 
and cap sizes. The following special rules shall apply to the 
determination of appropriate minimum block sizes and cap sizes--
    (1) Swaps with optionality. The notional amount of a swap with 
optionality shall equal the notional amount of the component of the swap 
that does not include the option component.
    (2) Swaps with composite reference prices. The parties to a swap 
transaction with composite reference prices may elect to apply the 
lowest appropriate minimum block size or cap size applicable to one 
component reference price's swap category of such publicly reportable 
swap transaction.
    (3) Notional amounts for physical commodity swaps. Unless otherwise 
specified in this part, the notional amount for a physical commodity 
swap shall be based on the notional unit measure utilized in the related 
futures contract market or the predominant notional unit measure used to 
determine notional quantities in the cash market for the relevant, 
underlying physical commodity.
    (4) Currency conversion. Unless otherwise specified in this part, 
when the appropriate minimum block size or cap size for a publicly 
reportable swap transaction is denominated in a currency other than U.S. 
dollars, parties to a swap and registered entities may use a currency 
exchange rate that is widely published within the preceding two business 
days from the date of execution of the swap transaction in order to 
determine such qualification.
    (5) Successor currencies. For currencies that succeed a super-major 
currency, the appropriate currency classification for such currency 
shall be based on the corresponding nominal gross domestic product 
classification (in U.S. dollars) as determined in the most recent World 
Bank, World Development Indicator at the time of succession. If the 
gross domestic product of the country or nation utilizing the successor 
currency is:
    (i) Greater than $2 trillion, then the successor currency shall be 
included among the super-major currencies;

[[Page 48]]

    (ii) Greater than $500 billion but less than $2 trillion, then the 
successor currency shall be included among the major currencies; or
    (iii) Less than $500 billion, then the successor currency shall be 
included among the non-major currencies.
    (6) Aggregation. Except as otherwise stated in this paragraph, the 
aggregation of orders for different accounts in order to satisfy the 
minimum block trade size or the cap size requirement is prohibited. 
Aggregation is permissible on a designated contract market or swap 
execution facility if done by a person who:
    (i)(A) Is a commodity trading advisor registered pursuant to Section 
4n of the Act, or exempt from registration under the Act, or a principal 
thereof, who has discretionary trading authority or directs client 
accounts,
    (B) Is an investment adviser who has discretionary trading authority 
or directs client accounts and satisfies the criteria of Sec.  
4.7(a)(2)(v) of this chapter, or
    (C) Is a foreign person who performs a similar role or function as 
the persons described in paragraphs (h)(6)(i)(A) or (h)(6)(i)(B) of this 
section and is subject as such to foreign regulation; and,
    (ii) Has more than $25,000,000 in total assets under management.
    (i) Eligible Block Trade Parties. (1) Parties to a block trade must 
be ``eligible contract participants,'' as defined in Section 1a(18) of 
the Act and the Commission's regulations. However, a designated contract 
market may allow:
    (i) A commodity trading advisor registered pursuant to Section 4n of 
the Act, or exempt from registration under the Act, or a principal 
thereof, who has discretionary trading authority or directs client 
accounts,
    (ii) An investment adviser who has discretionary trading authority 
or directs client accounts and satisfies the criteria of Sec.  
4.7(a)(2)(v) of this chapter, or
    (iii) a foreign person who performs a similar role or function as 
the persons described in paragraphs (i)(1)(i) or (ii) of this section 
and is subject as such to foreign regulation, to transact block trades 
for customers who are not eligible contract participants if such 
commodity trading advisor, investment adviser or foreign person has more 
than $25,000,000 in total assets under management.
    (2) A person transacting a block trade on behalf of a customer must 
receive prior written instruction or consent from the customer to do so. 
Such instruction or consent may be provided in the power of attorney or 
similar document by which the customer provides the person with 
discretionary trading authority or the authority to direct the trading 
in its account.

[78 FR 32938, May 31, 2013]



Sec.  43.7  Delegation of authority.

    (a) Authority. The Commission hereby delegates, until it orders 
otherwise, to the Director of the Division of Market Oversight or such 
other employee or employees as the Director may designate from time to 
time, the authority:
    (1) To determine whether swaps fall within specific swap categories 
as described in Sec.  43.6(b);
    (2) To determine and publish post-initial, appropriate minimum block 
sizes as described in Sec.  43.6(f); and
    (3) To determine post-initial cap sizes as described in Sec.  
43.4(h).
    (b) Submission for Commission consideration. The Director of the 
Division of Market Oversight may submit to the Commission for its 
consideration any matter that has been delegated pursuant to this 
section.
    (c) Commission reserves authority. Nothing in this section prohibits 
the Commission, at its election, from exercising the authority delegated 
in this section.

[78 FR 32940, May 31, 2013]





    Sec. Appendix A to Part 43--Data Fields for Public Dissemination

    The data fields described in Table A1 and Table A2, to the extent 
applicable for a particular publicly reportable swap transaction, shall 
be publicly disseminated pursuant to part 43. Table A1 and Table A2 
provide guidance for compliance with the reporting and public 
dissemination of each data field. Reporting parties, registered swap 
execution facilities and designated contract markets shall report swap 
transaction and pricing

[[Page 49]]

data necessary to publicly disseminate such data, pursuant to part 43 
and this appendix A to part 43, to a registered swap data repository as 
soon as technologically practicable after execution of the publicly 
reportable swap transaction. A registered swap data repository shall 
publicly disseminate the information in Table A1 and A2 in a consistent 
form and manner for swaps within the same asset class.

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Sec. Appendix B to Part 43--Enumerated Physical Commodity Contracts and 
                             Other Contracts

                 Enumerated Physical Commodity Contracts

                               Agriculture

ICE Futures U.S. Cocoa
ICE Futures U.S. Coffee C
Chicago Board of Trade Corn
ICE Futures U.S. Cotton No. 2
ICE Futures U.S. FCOJ-A
Chicago Mercantile Exchange Live Cattle
Chicago Board of Trade Oats
Chicago Board of Trade Rough Rice
Chicago Board of Trade Soybeans
Chicago Board of Trade Soybean Meal
Chicago Board of Trade Soybean Oil
ICE Futures U.S. Sugar No. 11
ICE Futures U.S. Sugar No. 16
Chicago Board of Trade Wheat
Minneapolis Grain Exchange Hard Red Spring Wheat
Kansas City Board of Trade Hard Winter Wheat
Chicago Mercantile Exchange Class III Milk
Chicago Mercantile Exchange Feeder Cattle
Chicago Mercantile Exchange Lean Hogs

[[Page 64]]

                                 Metals

Commodity Exchange, Inc. Copper
New York Mercantile Exchange Palladium
New York Mercantile Exchange Platinum
Commodity Exchange, Inc. Gold
Commodity Exchange, Inc. Silver

                                 Energy

New York Mercantile Exchange Light Sweet Crude Oil
New York Mercantile Exchange New York Harbor Gasoline Blendstock
New York Mercantile Exchange Henry Hub Natural Gas
New York Mercantile Exchange New York Harbor Heating Oil
ICE Futures SP-15 Day-Ahead Peak Fixed Price
ICE Futures SP-15 Day-Ahead Off-Peak Fixed Price
ICE Futures PJM Western Hub Real Time Peak Fixed Price
ICE Futures PJM Western Hub Real Time Off-Peak Fixed Price
ICE Futures Mid-Columbia Day-Ahead Peak Fixed Price
ICE Futures Mid-Columbia Day-Ahead Off-Peak Fixed Price
Chicago Basis
HSC Basis
Socal Border Basis
Waha Basis
ICE Futures AB NIT Basis
NWP Rockies Basis
PG&E Citygate Basis

                             Other Contracts

Brent Crude Oil (ICE)

[76 FR 1243, Jan. 9, 2012, as amended at 78 FR 32940, May 31, 2013]



    Sec. Appendix C to Part 43--Time Delays for Public Dissemination

    The tables below provide clarification of the time delays for public 
dissemination set forth in Sec.  43.5. The first row of each table 
describes the asset classes to which each chart applies. The column 
entitled ``Yearly Phase-In'' indicates the periods beginning on the 
compliance date of this part and beginning on the anniversary of the 
compliance date thereafter. The column entitled ``Time Delay for Public 
Dissemination'' indicates the precise length of time delay, starting 
upon execution, for the public dissemination of such swap transaction 
and pricing data by a registered swap data repository.

    Table C1. Block Trades Executed on or Pursuant to the Rules of a 
    Registered Swap Execution Facility or Designated Contract Market 
             (Illustrating Sec. Sec.  43.5(d)(1) and (d)(2))

    Table C1 also designates the interim time delays for swaps described 
in Sec.  43.5(c)(2).

                                                All Asset Classes
----------------------------------------------------------------------------------------------------------------
                         Yearly phase-in                                Time delay for public dissemination
----------------------------------------------------------------------------------------------------------------
Year 1...........................................................  30 minutes.
After Year 1.....................................................  15 minutes.
----------------------------------------------------------------------------------------------------------------

  Table C2. Large Notional Off-Facility Swaps Subject to the Mandatory 
    Clearing Requirement With at Least One Swap Dealer or Major Swap 
  Participant Counterparty (Illustrating Sec. Sec.  43.5(e)(2)(A) and 
                               (e)(2)(B))

    Table C2 excludes off-facility swaps that are excepted from the 
mandatory clearing requirement pursuant to Section 2(h)(7) of the Act 
and Commission regulations and those off-facility swaps that are 
required to be cleared under Section 2(h)(2) of the Act and Commission 
regulations but are not cleared.
    Table C2 also designates the interim time delays for swaps described 
in Sec.  43.5(c)(3).

                                                All Asset Classes
----------------------------------------------------------------------------------------------------------------
                         Yearly phase-in                                Time delay for public dissemination
----------------------------------------------------------------------------------------------------------------
Year 1...........................................................  30 minutes.
After Year 1.....................................................  15 minutes.
----------------------------------------------------------------------------------------------------------------


[[Page 65]]

  Table C3. Large Notional Off-Facility Swaps Subject to the Mandatory 
 Clearing Requirement in Which Neither Counterparty Is a Swap Dealer or 
     Major Swap Participant (Illustrating Sec. Sec.  43.5(e)(3)(A), 
                        (e)(3)(B), and (e)(3)(C))

    Table C3 excludes off-facility swaps that are excepted from the 
mandatory clearing requirement pursuant to Section 2(h)(7) of the Act 
and Commission regulations and those swaps that are required to be 
cleared under Section 2(h)(2) of the Act and Commission regulations but 
are not cleared.
    Table C3 also designates the interim time delays for swaps described 
in Sec.  43.5(c)(3).

                                                All Asset Classes
----------------------------------------------------------------------------------------------------------------
                         Yearly phase-in                                Time delay for public dissemination
----------------------------------------------------------------------------------------------------------------
Year 1...........................................................  4 hours.
Year 2...........................................................  2 hours.
After Year 2.....................................................  1 hour.
----------------------------------------------------------------------------------------------------------------

Table C4. Large Notional Off-Facility Swaps Not Subject to the Mandatory 
    Clearing Requirement With at Least One Swap Dealer or Major Swap 
Participant Counterparty (Illustrating Sec. Sec.  43.5(f)(1), (f)(2) and 
                                 (f)(3))

    Table C4 includes large notional off-facility swaps that are not 
subject to the mandatory clearing requirement or are exempt from such 
mandatory clearing requirement pursuant to Section 2(h)(7) of the Act 
and Commission regulations.
    Table C4 also designates the interim time delays for swaps described 
in Sec.  43.5(c)(4).

                         Interest Rates, Credit, Foreign Exchange, Equity Asset Classes
----------------------------------------------------------------------------------------------------------------
                         Yearly phase-in                                Time delay for public dissemination
----------------------------------------------------------------------------------------------------------------
Year 1...........................................................  1 hour.
                                                                   However, if such swap includes a non-swap
                                                                    dealer/non-major swap participant
                                                                    counterparty that is not a financial entity
                                                                    as defined in Section 2(h)(7)(C) of the Act
                                                                    and Commission regulations, then one hour
                                                                    immediately after execution; or if received
                                                                    later than one hour by the registered swap
                                                                    data repository, then public dissemination
                                                                    shall occur as soon as technologically
                                                                    practicable after the data is received.
Year 2...........................................................  30 minutes.
                                                                   However, if such swap includes a non-swap
                                                                    dealer/non-major swap participant
                                                                    counterparty that is not a financial entity
                                                                    as defined in Section 2(h)(7)(C) of the Act
                                                                    and Commission regulations, then 30 minutes
                                                                    immediately after execution; or if received
                                                                    later than 30 minutes by the registered swap
                                                                    data repository, then public dissemination
                                                                    shall occur as soon as technologically
                                                                    practicable after the data is received.
After Year 2.....................................................  30 minutes.
----------------------------------------------------------------------------------------------------------------

Table C5. Large Notional Off-Facility Swaps Not Subject to the Mandatory 
    Clearing Requirement With at Least One Swap Dealer or Major Swap 
 Participant Counterparty (Illustrating Sec. Sec.  43.5(g)(1), (g)(2), 
                               and (g)(3))

    Table C5 includes large notional off-facility swaps that are not 
subject to the mandatory clearing requirement or are excepted from such 
mandatory clearing requirement pursuant to Section 2(h)(7) of the Act 
and Commission regulations.
    Table C5 also designates the interim time delays for swaps described 
in Sec.  43.5(c)(5).

                                           Other Commodity Asset Class
----------------------------------------------------------------------------------------------------------------
                         Yearly phase-in                                Time delay for public dissemination
----------------------------------------------------------------------------------------------------------------
Year 1...........................................................  4 hours.
                                                                   However, if such swap includes a non-swap
                                                                    dealer/non-major swap participant
                                                                    counterparty that is not a financial entity
                                                                    as defined in Section 2(h)(7)(C) of the Act
                                                                    and Commission regulations, then four hours
                                                                    immediately after execution; or if received
                                                                    later than four hours by the registered swap
                                                                    data repository, then public dissemination
                                                                    shall occur as soon as technologically
                                                                    practicable after the data is received.

[[Page 66]]

 
Year 2...........................................................  2 hours.
                                                                   However, if such swap includes a non-swap
                                                                    dealer/non-major swap participant
                                                                    counterparty that is not a financial entity
                                                                    as defined in Section 2(h)(7)(C) of the Act
                                                                    and Commission regulations, then two hours
                                                                    immediately after execution; or if received
                                                                    later than two hours by the registered swap
                                                                    data repository, then public dissemination
                                                                    shall occur as soon as technologically
                                                                    practicable after the data is received.
After Year 2.....................................................  2 hours.
----------------------------------------------------------------------------------------------------------------

Table C6. Large Notional Off-Facility Swaps Not Subject to the Mandatory 
 Clearing Requirement in Which Neither Counterparty Is a Swap Dealer or 
 Major Swap Participant (Illustrating Sec. Sec.  43.5(h)(1), (h)(2) and 
                                 (h)(3))

    Table C6 includes large notional off-facility swaps that are not 
subject to the mandatory clearing requirement or are exempt from such 
mandatory clearing requirement pursuant to Section 2(h)(7) of the Act 
and Commission regulations.
    Table C6 also designates the interim time delays for swaps described 
in Sec.  43.5(c)(6).

                            All Asset Classes
------------------------------------------------------------------------
                                                       Time delay for
                  Yearly phase-in                   public dissemination
------------------------------------------------------------------------
Year 1............................................  48 business hours.
Year 2............................................  36 business hours.
After Year 2......................................  24 business hours.
------------------------------------------------------------------------



       Sec. Appendix D to Part 43--Other Commodity Swap Categories

                          Other Commodity Group

                       Individual Other Commodity

Grains
    Oats
    Wheat
    Corn
    Rice
    Grains--Other
Livestock/Meat Products
    Live Cattle
    Pork Bellies
    Feeder Cattle
    Lean Hogs
    Livestock/Meat Products--Other
Dairy Products
    Milk
    Butter
    Cheese
    Dairy Products--Other
Oilseed and Products
    Soybean Oil
    Soybean Meal
    Soybeans
    Oilseed and Products--Other
Fiber
    Cotton
    Fiber--Other
Foodstuffs/Softs
    Coffee
    Frozen Concentrated Orange Juice
    Sugar
    Cocoa
    Foodstuffs/Softs--Other
Petroleum and Products
    Jet Fuel
    Ethanol
    Biodiesel
    Fuel Oil
    Heating Oil
    Gasoline
    Naphtha
    Crude Oil
    Diesel
    Petroleum and Products--Other
Natural Gas and Related Products
    Natural Gas Liquids
    Natural Gas
    Natural Gas and Related Products--Other
Electricity and Sources
    Coal
    Electricity
    Uranium
    Electricity and Sources--Other
Precious Metals
    Palladium
    Platinum
    Silver
    Gold
    Precious Metals--Other
Base Metals
    Steel
    Copper
    Base Metals--Other
Wood Products
    Lumber
    Pulp

[[Page 67]]

    Wood Products--Other
Real Estate
    Real Estate
Chemicals
    Chemicals
Plastics
    Plastics
Emissions
    Emissions
Weather
    Weather
Multiple Commodity Index
    Multiple Commodity Index
Other Agricultural
    Other Agricultural
Other Non-Agricultural
    Other Non-Agricultural

[78 FR 32941, May 31, 2013]



 Sec. Appendix E to Part 43--Other Commodity Geographic Identification 
       for Public Dissemination Pursuant to Sec.  43.4(d)(4)(iii)

    Registered swap data repositories are required by Sec.  
43.4(d)(4)(iii) to publicly disseminate any specific delivery point or 
pricing point associated with publicly reportable swap transactions in 
the ``other commodity'' asset class pursuant to Tables E1 and E2 in this 
appendix. If the underlying asset of a publicly reportable swap 
transaction described in Sec.  43.4(d)(4)(iii) has a delivery or pricing 
point that is located in the United States, such information shall be 
publicly disseminated pursuant to the regions described in Table E1 in 
this appendix. If the underlying asset of a publicly reportable swap 
transaction described in Sec.  43.4(d)(4)(iii) has a delivery or pricing 
point that is not located in the United States, such information shall 
be publicly disseminated pursuant to the countries or sub-regions, or if 
no country or sub-region, by the other commodity region, described in 
Table E2 in this appendix.

                Table E1. U.S. Delivery or Pricing Points

Other Commodity Group
    Region
Natural Gas and Related Products
    Midwest
    Northeast
    Gulf
    Southeast
    Western
    Other--U.S.
Petroleum and Products
    New England (PADD 1A)
    Central Atlantic (PADD 1B)
    Lower Atlantic (PADD 1C)
    Midwest (PADD 2)
    Gulf Coast (PADD 3)
    Rocky Mountains (PADD 4)
    West Coast (PADD 5)
    Other--U.S.
Electricity and Sources
    Florida Reliability Coordinating Council (FRCC)
    Midwest Reliability Organization (MRO)
    Northeast Power Coordinating Council (NPCC)
    Reliability First Corporation (RFC)
    SERC Reliability Corporation (SERC)
    Southwest Power Pool, RE (SPP)
    Texas Regional Entity (TRE)
    Western Electricity Coordinating Council (WECC)
    Other--U.S.
All Remaining Other Commodities (Publicly disseminate the region. If 
pricing or delivery point is not region-specific, indicate ``U.S.'')
    Region 1--(Includes Connecticut, Maine, Massachusetts, New 
Hampshire, Rhode Island, Vermont)
    Region 2--(Includes New Jersey, New York)
    Region 3--(Includes Delaware, District of Columbia, Maryland, 
Pennsylvania, Virginia, West Virginia)
    Region 4--(Includes Alabama, Florida, Georgia, Kentucky, 
Mississippi, North Carolina, South Carolina, Tennessee)
    Region 5--(Includes Illinois, Indiana, Michigan, Minnesota, Ohio, 
Wisconsin)
    Region 6--(Includes Arkansas, Louisiana, New Mexico, Oklahoma, 
Texas)
    Region 7--(Includes Iowa, Kansas, Missouri, Nebraska)
    Region 8--(Includes Colorado, Montana, North Dakota, South Dakota, 
Utah, Wyoming)
    Region 9--(Includes Arizona, California, Hawaii, Nevada)
    Region 10--(Includes Alaska, Idaho, Oregon, Washington)

              Table E2. Non-U.S. Delivery or Pricing Points

Other Commodity Regions
    Country or Sub-Region
North America (Other than U.S.)
    Canada
    Mexico
Central America
South America
    Brazil
    Other South America
Europe
    Western Europe
    Northern Europe
    Southern Europe
    Eastern Europe (excluding Russia)
Russia
Africa
    Northern Africa
    Western Africa
    Eastern Africa
    Central Africa
    Southern Africa
Asia-Pacific
    Northern Asia (excluding Russia)
    Central Asia
    Eastern Asia
    Western Asia
    Southeast Asia

[[Page 68]]

    Australia/New Zealand/Pacific Islands

[78 FR 32941, May 31, 2013]



 Sec. Appendix F to Part 43--Initial Appropriate Minimum Block Sizes by 
   Asset Class for Block Trades and Large Notional Off-Facility Swaps

------------------------------------------------------------------------
                 Currency group                         Currencies
------------------------------------------------------------------------
Super-Major Currencies..........................  United States dollar
                                                   (USD), European Union
                                                   Euro Area euro (EUR),
                                                   United Kingdom pound
                                                   sterling (GBP), and
                                                   Japan yen (JPY).
Major Currencies................................  Australia dollar
                                                   (AUD), Switzerland
                                                   franc (CHF), Canada
                                                   dollar (CAD),
                                                   Republic of South
                                                   Africa rand (ZAR),
                                                   Republic of Korea won
                                                   (KRW), Kingdom of
                                                   Sweden krona (SEK),
                                                   New Zealand dollar
                                                   (NZD), Kingdom of
                                                   Norway krone (NOK),
                                                   and Denmark krone
                                                   (DKK).
Non-Major Currencies............................  All other currencies.
------------------------------------------------------------------------


                                               Interest Rate Swaps
----------------------------------------------------------------------------------------------------------------
                                                                           Tenor less than or   50% Notional (in
                 Currency group                    Tenor greater than           equal to            millions)
----------------------------------------------------------------------------------------------------------------
Super-Major....................................  ......................  46 days..............             6,400
Super-Major....................................  46 days...............  Three months (107                 2,100
                                                                          days).
Super-Major....................................  Three months (107       Six months (198 days)             1,200
                                                  days).
Super-Major....................................  Six months (198 days).  One year (381 days)..             1,100
Super-Major....................................  One year (381 days)...  Two years (746 days).               460
Super-Major....................................  Two years (746 days)..  Five years (1,842                   240
                                                                          days).
Super-Major....................................  Five years (1,842       Ten years (3,668                    170
                                                  days).                  days).
Super-Major....................................  Ten years (3,668 days)  30 years (10,973                    120
                                                                          days).
Super-Major....................................  30 years (10,973 days)  .....................                67
Major..........................................  ......................  46 days..............             2,200
Major..........................................  46 days...............  Three months (107                   580
                                                                          days).
Major..........................................  Three months (107       Six months (198 days)               440
                                                  days).
Major..........................................  Six months (198 days).  One year (381 days)..               220
Major..........................................  One year (381 days)...  Two years (746 days).               130
Major..........................................  Two years (746 days)..  Five years (1,842                    88
                                                                          days).
Major..........................................  Five years (1,842       Ten years (3,668                     49
                                                  days).                  days).
Major..........................................  Ten years (3,668 days)  30 years (10,973                     37
                                                                          days).
Major..........................................  30 years (10,973 days)  .....................                15
Non-Major......................................  ......................  46 days..............               230
Non-Major......................................  46 days...............  Three months (107                   230
                                                                          days).
Non-Major......................................  Three months (107       Six months (198 days)               150
                                                  days).
Non-Major......................................  Six months (198 days).  One year (381 days)..               110
Non-Major......................................  One year (381 days)...  Two years (746 days).                54
Non-Major......................................  Two years (746 days)..  Five years (1,842                    27
                                                                          days).
Non-Major......................................  Five years (1,842       Ten years (3,668                     15
                                                  days).                  days).
Non-Major......................................  Ten years (3,668 days)  30 years (10,973                     16
                                                                          days).
Non-Major......................................  30 years (10,973 days)  .....................                15
----------------------------------------------------------------------------------------------------------------


                                                  Credit Swaps
----------------------------------------------------------------------------------------------------------------
                                                                     Traded tenor less than or  50% Notional (in
      Spread group (basis points)         Traded tenor greater than           equal to              millions)
----------------------------------------------------------------------------------------------------------------
Less than or equal to 175..............  ..........................  Two years (746 days).....               320
Less than or equal to 175..............  Two years (746 days)......  Four years (1,477 days)..               200
Less than or equal to 175..............  Four years (1,477 days)...  Six years (2,207 days)...               110
Less than or equal to 175..............  Six years (2,207 days)....  Eight years and six                     110
                                                                      months (3,120 days).
Less than or equal to 175..............  Eight years and six months  Twelve years and six                    130
                                          (3,120 days).               months (4,581 days).
Less than or equal to 175..............  Twelve years and six        .........................                46
                                          months (4,581 days).
Greater than 175 and less than or equal  ..........................  Two years (746 days).....               140
 to 350.
Greater than 175 and less than or equal  Two years (746 days)......  Four years (1,477 days)..                82
 to 350.
Greater than 175 and less than or equal  Four years (1,477 days)...  Six years (2,207 days)...                32
 to 350.
Greater than 175 and less than or equal  Six years (2,207 days)....  Eight years and six                      20
 to 350.                                                              months (3,120 days).

[[Page 69]]

 
Greater than 175 and less than or equal  Eight years and six months  Twelve years and six                     26
 to 350.                                  (3,120 days).               months (4,581 days).
Greater than 175 and less than or equal  Twelve years and six        .........................                63
 to 350.                                  months (4,581 days).
Greater than 350.......................  ..........................  Two years (746 days).....                66
Greater than 350.......................  Two years (746 days)......  Four years (1,477 days)..                41
Greater than 350.......................  Four years (1,477 days)...  Six years (2,207 days)...                26
Greater than 350.......................  Six years (2,207 days)....  Eight years and six                      13
                                                                      months (3,120 days).
Greater than 350.......................  Eight years and six months  Twelve years and six                     13
                                          (3,120 days.                months (4,581 days).
Greater than 350.......................  Twelve years and six        .........................                41
                                          months (4,581 days).
----------------------------------------------------------------------------------------------------------------


                                             Foreign Exchange Swaps
----------------------------------------------------------------------------------------------------------------
                                                                  Super-major currencies
                                         -----------------------------------------------------------------------
                                                              GBP (British      JPY (Japanese       USD (U.S.
                                             EUR (Euro)          pound)             yen)             dollar)
----------------------------------------------------------------------------------------------------------------
Super-major currencies......  EUR.......  ................         6,250,000         6,250,000        18,750,000
                              GBP.......       * 6,250,000  ................         6,250,000         6,250,000
                              JPY.......       * 6,250,000       * 6,250,000  ................     1,875,000,000
                              USD.......      * 18,750,000       * 6,250,000   * 1,875,000,000  ................
Major currencies............  AUD.......       * 6,250,000                 0        10,000,000        10,000,000
                              CAD.......       * 6,250,000                 0        10,000,000        10,000,000
                              CHF.......       * 6,250,000       * 6,250,000        12,500,000        12,500,000
                              DKK.......                 0                 0                 0                 0
                              KRW.......                 0                 0                 0     6,250,000,000
                              SEK.......       * 6,250,000                 0                 0       100,000,000
                              NOK.......       * 6,250,000                 0                 0       100,000,000
                              NZD.......                 0                 0                 0         5,000,000
                              ZAR.......                 0                 0                 0        25,000,000
Non-major currencies........  BRL.......                 0                 0                 0         5,000,000
                              CZK.......       200,000,000                 0                 0       200,000,000
                              HUF.......     1,500,000,000                 0                 0     1,500,000,000
                              ILSec......                 0                 0                 0        50,000,000
                              MXN.......                 0                 0                 0        50,000,000
                              PLN.......        25,000,000                 0                 0        25,000,000
                              RMB.......        50,000,000                 0        50,000,000        50,000,000
                              RUB.......                 0                 0                 0       125,000,000
                              TRY.......       * 6,250,000                 0                 0      * 10,000,000
----------------------------------------------------------------------------------------------------------------
All values that do not have an asterisk are denominated in the currency of the left hand side.
All values that have an asterisk (*) are denominated in the currency indicated on the top of the table.


                          Other Commodity Swaps
------------------------------------------------------------------------
                                    Initial
                                  appropriate
   Related futures contract      minimum block            Units
                                     size
------------------------------------------------------------------------
AB NIT Basis (ICE)...........  62,500..........  MMBtu.
Brent Crude (ICE and NYMEX)..  25,000..........  bbl.
Cheese (CME).................  400,000.........  lbs.
Class III Milk (CME).........  NO BLOCKS.        .......................
Cocoa (ICE and NYSE LIFFE and  1,000...........  metric tons.
 NYMEX).
Coffee (ICE and NYMEX).......  3,750,000.......  lbs.
Copper (COMEX)...............  625,000.........  lbs.
Corn (CBOT)..................  NO BLOCKSec......  bushels.
Cotton No. 2 (ICE and NYMEX).  5,000,000.......  lbs.
Distillers' Dried Grain        1,000...........  short tons.
 (CBOT).
Dow Jones-UBS Commodity Index  30,000 times      dollars.
 (CBOT).                        index.
Ethanol (CBOT)...............  290,000.........  gallons.
Feeder Cattle (CME)..........  NO BLOCKS.        .......................
Frost Index (CME)............  200,000 times     euros.
                                index.
Frozen Concentrated Orange     NO BLOCKS.        .......................
 Juice (ICE).
Gold (COMEX and NYSE Liffe)..  2,500...........  troy oz.

[[Page 70]]

 
Goldman Sachs Commodity Index  5,000 times       dollars.
 (GSCI), GSCI Excess Return     index.
 Index (CME).
Gulf Coast Sour Crude Oil      5,000...........  bbl.
 (NYMEX).
Hard Red Spring Wheat (MGEX).  NO BLOCKS.        .......................
Hard Winter Wheat (KCBT).....  NO BLOCKS.        .......................
Henry Hub Natural Gas (NYMEX)  500,000.........  MMBtu.
HSC Basis (ICE and NYMEX)....  62,500..........  MMBtu.
Hurricane Index (CME)........  20,000 times      dollars.
                                index.
Chicago Basis (ICE and NYMEX)  62,500..........  MMBtu.
Lean Hogs (CME)..............  NO BLOCKS.        .......................
Light Sweet Crude Oil (NYMEX)  50,000..........  bbl.
Live Cattle (CME)............  NO BLOCKS.        .......................
Mid-Columbia Day-Ahead Off-    625.............  Mwh.
 Peak Fixed Price (ICE).
Mid-Columbia Day-Ahead Peak    4,000...........  Mwh.
 Fixed Price (ICE).
New York Harbor RBOB           1,050,000.......  gallons.
 (Blendstock) Gasoline
 (NYMEX).
New York Harbor No. 2 Heating  1,050,000.......  gallons.
 Oil (NYMEX).
NWP Rockies Basis (ICE and     62,500..........  MMBtu.
 NYMEX).
Oats (CBOT)..................  NO BLOCKS.        .......................
Palladium (NYMEX)............  1,000...........  troy oz.
PG&E Citygate Basis (ICE and   62,500..........  MMBtu.
 NYMEX).
PJM Western Hub Real Time Off- 3,900...........  Mwh.
 Peak Fixed Price (ICE).
PJM Western Hub Real Time      8,000...........  Mwh.
 Peak Fixed Price (ICE).
Platinum (NYMEX).............  500.............  troy oz.
Rainfall Index (CME).........  10,000 times      dollars.
                                index.
Rough Rice (CBOT)............  NO BLOCKS.        .......................
Silver (COMEX and NYSE Liffe)  125,000.........  troy oz.
Snowfall Index (CME).........  10,000 times      dollars.
                                index.
Socal Border Basis (ICE and    62,500..........  MMBtu.
 NYMEX).
Soybean (CBOT)...............  NO BLOCKS.        .......................
Soybean Meal (CBOT)..........  NO BLOCKS.        .......................
Soybean Oil (CBOT)...........  NO BLOCKS.        .......................
SP-15 Day-Ahead Peak Fixed     4,000...........  Mwh.
 Price (ICE).
SP-15 Day-Ahead Off-Peak       625.............  Mwh.
 Fixed Price (ICE).
Sugar 11 (ICE and NYMEX)....  5,000...........  metric tons.
Sugar 16 (ICE)..............  NO BLOCKS.        .......................
Temperature Index (CME)......  400 times index.  currency units.
U.S. Dollar Cash Settled       250.............  metric tons.
 Crude Palm Oil (CME).
Waha Basis (ICE and NYMEX)...  62,500..........  MMBtu.
Wheat (CBOT).................  NO BLOCKS.        .......................
------------------------------------------------------------------------


[78 FR 32942, May 31, 2013; 78 FR 42436, July 16, 2013]



PART 44_INTERIM FINAL RULE FOR PRE-ENACTMENT SWAP TRANSACTIONS--Table of Contents



Sec.
44.00 Definition of terms used in part 44 of this chapter.
44.01 Effective date.
44.02 Reporting pre-enactment swaps to a swap data repository or the 
          Commission.
44.03 Reporting transition swaps to a swap data repository or to the 
          Commission.

    Authority: 7 U.S.C. 2(h)(5), 4r, and 12a(5), as amended by Title VII 
of the Wall Street Reform and Consumer Protection Act (Dodd-Frank Act of 
2010), Pub. L. 111-203, 124 Stat. 1376 (2010).

    Source: 75 FR 63084, Oct. 14, 2010, unless otherwise noted.



Sec.  44.00  Definition of terms used in part 44 of this chapter.

    (a) Major swap participant shall have the meaning provided in 
Section 1a(33) of the Commodity Exchange Act, as

[[Page 71]]

amended, and any rules or regulations thereunder.
    (b) Pre-enactment unexpired swap means any swap entered into prior 
to the enactment of the Dodd-Frank Act of 2010 (July 21, 2010) the terms 
of which had not expired as of the date of enactment of that Act;
    (c) Transition swap means any swap entered into after the enactment 
of the Dodd-Frank Act of 2010 (July 21, 2010) and prior to the effective 
date of the swap data reporting and recordkeeping rule implemented under 
Section 2(h)(5)(B) of the CEA.
    (d) Reporting entity, when used in this part, means any counterparty 
referenced or identified in Section 4r(a)(3)(A)-(C) of the Commodity 
Exchange Act, as amended;
    (e) Swap Data Repository shall have the meaning provided in Section 
1a(48) of the Commodity Exchange Act, as amended, and any rules or 
regulations thereunder;
    (f) Swap Dealer shall have the meaning provided in Section 1(a)(49) 
of the Commodity Exchange Act, as amended, and any rules or regulations 
thereunder;

[75 FR 63084, Oct. 14, 2010, as amended at 75 FR 78896, Dec. 17, 2010]



Sec.  44.01  Effective date.

    The provisions of this part are effective immediately on publication 
in the Federal Register.



Sec.  44.02  Reporting pre-enactment swaps to a swap data repository
or the Commission.

    (a) A counterparty to a pre-enactment unexpired swap transaction 
shall:
    (1) Report to a registered swap data repository or the Commission by 
the compliance date established in the reporting rules required under 
Section 2(h)(5) of the Commodity Exchange Act, or within 60 days after a 
swap data repository becomes registered with the Commission and 
commences operations to receive and maintain data related to such swap, 
whichever occurs first, the following information with respect to the 
swap transaction:
    (i) A copy of the transaction confirmation, in electronic form if 
available, or in written form if there is no electronic copy; and
    (ii) The time, if available, that the transaction was executed; and
    (2) Report to the Commission on request, in a form and manner 
prescribed by the Commission, any information relating to the swap 
transaction.

    Note to paragraphs (a)(1) and (a)(2): In order to comply with the 
reporting requirements contained in paragraph (a)(1) and (a)(2) of this 
section, each counterparty to a pre-enactment unexpired swap transaction 
that may be required to report such transaction should retain, in its 
existing format, all information and documents, to the extent and in 
such form as they presently exist, relating to the terms of a swap 
transaction, including but not limited to any information necessary to 
identify and value the transaction; the date and time of execution of 
the transaction; information relevant to the price of the transaction; 
whether the transaction was accepted for clearing and, if so, the 
identity of such clearing organization; any modification(s) to the terms 
of the transaction; and the final confirmation of the transaction.

    (b) Reporting party. The counterparties to a swap transaction shall 
report the information required under paragraph (a) of this section as 
follows:
    (1) Where only one counterparty to a swap transaction is a swap 
dealer or a major swap participant, the swap dealer or major swap 
participant shall report the transaction;
    (2) Where one counterparty to a swap transaction is a swap dealer 
and the other counterparty is a major swap participant, the swap dealer 
shall report the transaction; and
    (3) Where neither counterparty to a swap transaction is a swap 
dealer or a major swap participant, the counterparties to the 
transaction shall select the counterparty who will report the 
transaction.



Sec.  44.03  Reporting transition swaps to a swap data repository or
to the Commission.

    (a) A counterparty to a post-enactment pre-effective swap 
transaction shall:
    (1) As required by the reporting rules required to be adopted 
pursuant to Section 2(h)(5)(B) of the Commodity Exchange Act, report 
data related to a transition swap to a registered swap data repository 
or the Commission by the compliance date established in such reporting 
rules or within 60 days

[[Page 72]]

after an appropriate swap data repository becomes registered with the 
Commission and commences operations to receive and maintain data related 
to such swap, whichever occurs first, the following information with 
respect to the swap transaction:
    (i) A copy of the transaction confirmation, in electronic form if 
available, or in written form if there is no electronic copy;
    (ii) The time, if available, that the transaction was executed; and
    (2) Report to the Commission on request, in the form and manner 
prescribed by the Commission, any information relating to the swap 
transaction.

    Note to paragraph (a). In order to comply with the reporting 
requirements contained in paragraphs (a)(1) and (a)(2) of this section, 
each counterparty to a post-enactment pre-effective swap transaction 
that may be required to report such transaction should retain, in its 
existing format, all information and documents, to the extent and in 
such form as they exist on the effective date of this section, relating 
to: the terms of a swap transaction, including but not limited to any 
information necessary to identify and value the transaction (e.g., 
underlying asset and tenor); the date and time of execution of the 
transaction; volume (e.g., notional or principal amount); information 
relevant to the price and payment for the transaction until the swap is 
terminated, reaches maturity or is novated; whether the transaction was 
accepted for clearing and, if so, the identity of such clearing 
organization; any modification(s) to the terms of the transaction; and 
the final confirmation of the transaction.

    (b) Reporting party. The counterparties to a swap transaction shall 
report the information required under paragraph (a) of this section as 
follows:
    (1) Where only one counterparty to a swap transaction is a swap 
dealer or a major swap participant, the swap dealer or major swap 
participant shall report the transaction;
    (2) Where one counterparty to a swap transaction is a swap dealer 
and the other counterparty is a major swap participant, the swap dealer 
shall report the transaction; and
    (3) Where neither counterparty to a swap transaction is a swap 
dealer or a major swap participant, the counterparties to the 
transaction shall select the counterparty who will report the 
transaction.

[75 FR 78896, Dec. 17, 2010]



PART 45_SWAP DATA RECORDKEEPING AND REPORTING REQUIREMENTS-
-Table of Contents



Sec.
45.1 Definitions.
45.2 Swap recordkeeping.
45.3 Swap data reporting: Creation data.
45.4 Swap data reporting: Continuation data.
45.5 Unique swap identifiers.
45.6 Legal entity identifiers.
48.7 Unique product identifiers.
45.8 Determination of which counterparty must report.
45.9 Third-party facilitation of data reporting.
45.10 Reporting to a single swap data repository.
45.11 Data reporting for swaps in a swap asset class not accepted by any 
          swap data repository.
45.12 Voluntary supplemental reporting.
45.13 Required data standards.
45.14 Reporting of errors and omissions in previously reported data.

Appendix 1 to Part 45--Tables of minimum primary economic terms data

    Authority: 7 U.S.C. 6r, 7, 7a-1, 7b-3, 12a, and 24a, as amended by 
Title VII of the Wall Street Reform and Consumer Protection Act of 2010, 
Pub. L. 111-203, 124 Stat. 1376 (2010), unless otherwise noted.

    Source: 77 FR 2197, Jan. 13, 2012, unless otherwise noted.



Sec.  45.1  Definitions.

    As used in this part:
    Asset class means the broad category of goods, services or 
commodities, including any ``excluded commodity'' as defined in CEA 
section 1a(19), with common characteristics underlying a swap. The asset 
classes include credit, equity, foreign exchange (excluding cross-
currency), interest rate (including cross-currency), other commodity, 
and such other asset classes as may be determined by the Commission.
    Business day means the twenty-four hour day, on all days except 
Saturdays, Sundays, and legal holidays, in the location of the reporting 
counterparty or registered entity reporting data for the swap.

[[Page 73]]

    Business hours means consecutive hours during one or more 
consecutive business days.
    Clearing swap means a swap created pursuant to the rules of a 
derivatives clearing organization that has a derivatives clearing 
organization as a counterparty, including any swap that replaces an 
original swap that was extinguished upon acceptance of such original 
swap by the derivatives clearing organization for clearing.
    Compliance date means the applicable date on which a registered 
entity or swap counterparty subject to the jurisdiction of the 
Commission is required to commence full compliance with all provisions 
of this part, as set forth in the preamble to this part.
    Confirmation (``confirming'') means the consummation (electronically 
or otherwise) of legally binding documentation (electronic or otherwise) 
that memorializes the agreement of the parties to all terms of a swap. A 
confirmation must be in writing (whether electronic or otherwise) and 
must legally supersede any previous agreement (electronically or 
otherwise).
    Confirmation data means all of the terms of a swap matched and 
agreed upon by the counterparties in confirming the swap. For cleared 
swaps, confirmation data also includes the internal identifiers assigned 
by the automated systems of the derivatives clearing organization to the 
two transactions resulting from novation to the clearing house.
    Credit swap means any swap that is primarily based on instruments of 
indebtedness, including, without limitation: Any swap primarily based on 
one or more broad-based indices related to instruments of indebtedness; 
and any swap that is an index credit swap or total return swap on one or 
more indices of debt instruments.
    Derivatives clearing organization means a derivatives clearing 
organization, as defined by Sec.  1.3(d) of this chapter, that is 
registered with the Commission.
    Designated contract market has the meaning set forth in CEA section 
5, and any Commission regulation implementing that Section.
    Electronic confirmation (confirmation ``occurs electronically'') 
means confirmation that is done by means of automated electronic 
systems.
    Electronic reporting (``report electronically'') means the reporting 
of data normalized in data fields as required by the data standard or 
standards used by the swap data repository to which the data is 
reported. Except where specifically otherwise provided in this chapter, 
electronic reporting does not include submission of an image of a 
document or text file.
    Electronic verification (verification ``occurs electronically'') 
means verification that is done by means of automated electronic 
systems.
    Financial entity has the meaning set forth in CEA section 
2(h)(7)(C).
    Foreign exchange forward has the meaning set forth in CEA section 
1a(24).
    Foreign exchange instrument means an instrument that is both defined 
as a swap in part 1 of this chapter and included in the foreign exchange 
asset class. Instruments in the foreign exchange asset class include: 
Any currency option, foreign currency option, foreign exchange option, 
or foreign exchange rate option; any foreign exchange forward as defined 
in CEA section 1a(24); any foreign exchange swap as defined in CEA 
section 1a(25); and any non-deliverable forward involving foreign 
exchange.
    Foreign exchange swap has the meaning set forth in CEA section 
1a(25). It does not include swaps primarily based on rates of exchange 
between different currencies, changes in such rates, or other aspects of 
such rates (sometimes known as ``cross-currency swaps'').
    Interest rate swap means any swap which is primarily based on one or 
more interest rates, such as swaps of payments determined by fixed and 
floating interest rates; or any swap which is primarily based on rates 
of exchange between different currencies, changes in such rates, or 
other aspects of such rates (sometimes known as ``cross-currency 
swaps'').
    International swap means a swap required by U.S. law and the law of 
another jurisdiction to be reported both

[[Page 74]]

to a swap data repository and to a different trade repository registered 
with the other jurisdiction.
    Life cycle event means any event that would result in either a 
change to a primary economic term of a swap or to any primary economic 
terms data previously reported to a swap data repository in connection 
with a swap. Examples of such events include, without limitation, a 
counterparty change resulting from an assignment or novation; a partial 
or full termination of the swap; a change to the end date for the swap; 
a change in the cash flows or rates originally reported; availability of 
a legal entity identifier for a swap counterparty previously identified 
by name or by some other identifier; or a corporate action affecting a 
security or securities on which the swap is based (e.g., a merger, 
dividend, stock split, or bankruptcy).
    Life cycle event data means all of the data elements necessary to 
fully report any life cycle event.
    Major swap participant has the meaning set forth in CEA section 
1a(33) and in part 1 of this chapter.
    Mixed swap has the meaning set forth in CEA section 1a(47)(D), and 
refers to an instrument that is in part a swap subject to the 
jurisdiction of the Commission, and in part a security-based swap 
subject to the jurisdiction of the SEC.
    Multi-asset swap means a swap that does not have one easily 
identifiable primary underlying notional item, but instead involves 
multiple underlying notional items within the Commission's jurisdiction 
that belong to different asset classes.
    Non-electronic confirmation (confirmation ``does not occur 
electronically'') means confirmation that is done manually rather than 
by means of automated electronic systems.
    Non-electronic verification (verification ``does not occur 
electronically'') means verification that is done manually rather than 
by means of automated electronic systems.
    Non-SD/MSP counterparty means a swap counterparty that is neither a 
swap dealer nor a major swap participant.
    Off-facility swap means a swap not executed on or pursuant to the 
rules of a swap execution facility or designated contract market.
    Original swap means a swap that has been accepted for clearing by a 
derivatives clearing organization.
    Other commodity swap means any swap not included in the credit, 
equity, foreign exchange, or interest rate asset classes, including, 
without limitation, any swap for which the primary underlying item is a 
physical commodity or the price or any other aspect of a physical 
commodity.
    Primary economic terms means all of the terms of a swap matched or 
affirmed by the counterparties in verifying the swap, including at a 
minimum each of the terms included in the most recent Federal Register 
release by the Commission listing minimum primary economic terms for 
swaps in the swap asset class in question. The Commission's current 
lists of minimum primary economic terms for swaps in each swap asset 
class are found in appendix 1 to part 45.
    Primary economic terms data means all of the data elements necessary 
to fully report all of the primary economic terms of a swap in the swap 
asset class of the swap in question.
    Quarterly reporting (``reported quarterly'') means reporting four 
times each fiscal year, following the end of each fiscal year quarter, 
making each quarterly report within 30 calendar days of the end of the 
fiscal year quarter.
    Reporting counterparty means the counterparty required to report 
swap data pursuant to this part, selected as provided in Sec.  45.8.
    Required swap continuation data means all of the data elements that 
must be reported during the existence of a swap to ensure that all data 
concerning the swap in the swap data repository remains current and 
accurate, and includes all changes to the primary economic terms of the 
swap occurring during the existence of the swap. For this purpose, 
required swap continuation data includes:
    (1) All life cycle event data for the swap if the swap is reported 
using the life cycle reporting method, or all state data for the swap if 
the swap is reported using the snapshot reporting method; and

[[Page 75]]

    (2) All valuation data for the swap.
    Required swap creation data means all primary economic terms data 
for a swap in the swap asset class in question, and all confirmation 
data for the swap.
    State data means all of the data elements necessary to provide a 
snapshot view, on a daily basis, of all of the primary economic terms of 
a swap in the swap asset class of the swap in question, including any 
change to any primary economic term or to any previously-reported 
primary economic terms data since the last snapshot. At a minimum, state 
data must include each of the terms included in the most recent Federal 
Register release by the Commission listing minimum primary economic 
terms for swaps in the swap asset class in question. The Commission's 
current lists of minimum primary economic terms for swaps in each swap 
asset class are found in appendix 1 to part 45.
    Swap data repository has the meaning set forth in CEA section 
1a(48), and in part 49 of this chapter.
    Swap dealer has the meaning set forth in CEA section 1a(49), and in 
part 1 of this chapter.
    Swap execution facility has the meaning set forth in CEA section 
1a(50) and in part 37 of this chapter.
    Valuation data means all of the data elements necessary to fully 
describe the daily mark of the transaction, pursuant to CEA section 
4s(h)(3)(B)(iii), and to Sec.  23.431 of this chapter if applicable.
    Verification (``verify,'' ``verified,'' or ``verifying'') means the 
matching by the counterparties to a swap of each of the primary economic 
terms of a swap, at or shortly after the time the swap is executed.

[77 FR 2197, Jan. 13, 2012, as amended at 81 FR 41772, June 27, 2016]



Sec.  45.2  Swap recordkeeping.

    (a) Recordkeeping by swap execution facilities, designated contract 
markets, derivatives clearing organizations, swap dealers, and major 
swap participants. Each swap execution facility, designated contract 
market, derivatives clearing organization, swap dealer, and major swap 
participant subject to the jurisdiction of the Commission shall keep 
full, complete, and systematic records, together with all pertinent data 
and memoranda, of all activities relating to the business of such entity 
or person with respect to swaps, as prescribed by the Commission. Such 
records shall include, without limitation, the following:
    (1) For swap execution facilities, all records required by part 37 
of this chapter.
    (2) For designated contract markets, all records required by part 38 
of this chapter.
    (3) For derivatives clearing organizations, all records required by 
part 39 of this chapter.
    (4) For swap dealers and major swap participants, all records 
required by part 23 of this chapter, and all records demonstrating that 
they are entitled, with respect to any swap, to elect the clearing 
requirement exception pursuant to CEA section 2(h)(7).
    (b) Recordkeeping by non-SD/MSP counterparties. All non-SD/MSP 
counterparties subject to the jurisdiction of the Commission shall keep 
full, complete, and systematic records, together with all pertinent data 
and memoranda, with respect to each swap in which they are a 
counterparty, including, without limitation, all records demonstrating 
that they are entitled, with respect to any swap, to elect the clearing 
requirement exception in CEA section 2(h)(7).
    (c) Record retention. All records required to be kept pursuant to 
this section shall be retained with respect to each swap throughout the 
life of the swap and for a period of at least five years following the 
final termination of the swap.
    (d) Retention form. Records required to be kept pursuant to this 
section must be kept as required by paragraph (d)(1) or (2) of this 
section, as applicable.
    (1) Records required to be kept by swap execution facilities, 
designated contract markets, derivatives clearing organizations, swap 
dealers, or major swap participants may be kept in electronic form, or 
kept in paper form if originally created and exclusively maintained in 
paper form, so long as they are retrievable, and information

[[Page 76]]

in them is reportable, as required by this section.
    (2) Records required to be kept by non-SD/MSP counterparties may be 
kept in either electronic or paper form, so long as they are 
retrievable, and information in them is reportable, as required by this 
section.
    (e) Record retrievability. Records required to be kept by swap 
execution facilities, designated contract markets, derivatives clearing 
organizations, or swap counterparties pursuant to this section shall be 
retrievable as provided in paragraphs (e)(1) and (2) of this section, as 
applicable.
    (1) Each record required by this section or any other section of the 
CEA to be kept by a swap execution facility, designated contract market, 
derivatives clearing organization, swap dealer, or major swap 
participant shall be readily accessible via real time electronic access 
by the registrant throughout the life of the swap and for two years 
following the final termination of the swap, and shall be retrievable by 
the registrant within three business days through the remainder of the 
period following final termination of the swap during which it is 
required to be kept.
    (2) Each record required by this section or any other section of the 
CEA to be kept by a non-SD/MSP counterparty shall be retrievable by that 
counterparty within five business days throughout the period during 
which it is required to be kept.
    (f) Recordkeeping by swap data repositories. Each swap data 
repository registered with the Commission shall keep full, complete, and 
systematic records, together with all pertinent data and memoranda, of 
all activities relating to the business of the swap data repository and 
all swap data reported to the swap data repository, as prescribed by the 
Commission. Such records shall include, without limitation, all records 
required by part 49 of this chapter.
    (g) Record retention and retrievability by swap data repositories. 
All records required to be kept by a swap data repository pursuant to 
this section must be kept by the swap data repository both:
    (1) Throughout the existence of the swap and for five years 
following final termination of the swap, during which time the records 
must be readily accessible by the swap data repository and available to 
the Commission via real time electronic access; and
    (2) Thereafter, for a period of at least ten additional years in 
archival storage from which they are retrievable by the swap data 
repository within three business days.
    (h) Record inspection. All records required to be kept pursuant to 
this section by any registrant or its affiliates or by any non-SD/MSP 
counterparty subject to the jurisdiction of the Commission shall be open 
to inspection upon request by any representative of the Commission, the 
United States Department of Justice, or the Securities and Exchange 
Commission, or by any representative of a prudential regulator as 
authorized by the Commission. Copies of all such records shall be 
provided, at the expense of the entity or person required to keep the 
record, to any representative of the Commission upon request. Copies of 
records required to be kept by any registrant shall be provided either 
by electronic means, in hard copy, or both, as requested by the 
Commission, with the sole exception that copies of records originally 
created and exclusively maintained in paper form may be provided in hard 
copy only. Copies of records required to be kept by any non-SD/MSP 
counterparty subject to the jurisdiction of the Commission that is not a 
Commission registrant shall be provided in the form, whether electronic 
or paper, in which the records are kept.



Sec.  45.3  Swap data reporting: Creation data.

    Registered entities and swap counterparties must report required 
swap creation data electronically to a swap data repository as set forth 
in this section and in the manner provided in Sec.  45.13(b). The rules 
governing acceptance and recording of such data by a swap data 
repository are set forth in Sec.  49.10 of this chapter. The reporting 
obligations of swap counterparties with respect to swaps executed prior 
to the applicable compliance date and in existence on or after July 21, 
2010, the date of enactment of the Dodd-Frank Act, are set forth in part 
46 of this

[[Page 77]]

chapter. This section and Sec.  45.4 establish the general swap data 
reporting obligations of swap dealers, major swap participants, non-SD/
MSP counterparties, swap execution facilities, designated contract 
markets, and derivatives clearing organizations to report swap data to a 
swap data repository. In addition to the reporting obligations set forth 
in this section and in Sec.  45.4, registered entities and swap 
counterparties are subject to other reporting obligations set forth in 
this chapter, including, without limitation, the following: Swap 
dealers, major swap participants, and non-SD/MSP counterparties are also 
subject to the reporting obligations with respect to corporate 
affiliations reporting set forth in Sec.  45.6; swap execution 
facilities, designated contract markets, swap dealers, major swap 
participants, and non-SD/MSP counterparties are subject to the reporting 
obligations with respect to real time reporting of swap data set forth 
in part 43 of this chapter; counterparties to a swap for which an 
exception to, or an exemption from, the clearing requirement has been 
elected under part 50 of this chapter are subject to the reporting 
obligations set forth in part 50 of this chapter; and, where applicable, 
swap dealers, major swap participants, and non-SD/MSP counterparties are 
subject to the reporting obligations with respect to large traders set 
forth in parts 17 and 18 of this chapter. Paragraphs (a) through (d) of 
this section apply to all swaps except clearing swaps, while paragraph 
(e) applies only to clearing swaps.
    (a) Swaps executed on or pursuant to the rules of a swap execution 
facility or designated contract market. For each swap executed on or 
pursuant to the rules of a swap execution facility or designated 
contract market, the swap execution facility or designated contract 
market must report all primary economic terms data for the swap, as 
defined in Sec.  45.1, as soon as technologically practicable after 
execution of the swap. If the swap is not intended to be submitted to a 
derivatives clearing organization for clearing at the time of execution, 
the swap execution facility or designated contract market must report 
all confirmation data for the swap, as defined in Sec.  45.1, as soon as 
technologically practicable after execution of the swap.
    (b) Off-facility swaps subject to the clearing requirement. For all 
off-facility swaps subject to the clearing requirement under part 50 of 
this chapter, except for those off-facility swaps for which an exception 
to, or exemption from, the clearing requirement has been elected under 
part 50 of this chapter, and those off-facility swaps covered by CEA 
section 2(a)(13)(C)(iv), required swap creation data must be reported as 
provided in paragraph (b) of this section.
    (1) The reporting counterparty, as determined pursuant to Sec.  
45.8, must report all primary economic terms data for the swap, within 
the applicable reporting deadline set forth in paragraph (b)(1)(i) or 
(ii) of this section.
    (i) If the reporting counterparty is a swap dealer or a major swap 
participant, the reporting counterparty must report all primary economic 
terms data for the swap as soon as technologically practicable after 
execution, but no later than 15 minutes after execution.
    (ii) If the reporting counterparty is a non-SD/MSP counterparty, the 
reporting counterparty must report all primary economic terms data for 
the swap as soon as technologically practicable after execution, but no 
later than one business hour after execution.
    (2) [Reserved]
    (c) Off-facility swaps not subject to the clearing requirement, with 
a swap dealer or major swap participant reporting counterparty. For all 
off-facility swaps not subject to the clearing requirement under part 50 
of this chapter, all off-facility swaps for which an exception to, or an 
exemption from, the clearing requirement has been elected under part 50 
of this chapter, and all off-facility swaps covered by CEA section 
2(a)(13)(C)(iv), for which a swap dealer or major swap participant is 
the reporting counterparty, required swap creation data must be reported 
as provided in paragraph (c) of this section.
    (1) Credit, equity, foreign exchange, and interest rate swaps. For 
each such credit swap, equity swap, foreign exchange instrument, or 
interest rate swap:

[[Page 78]]

    (i) The reporting counterparty, as determined pursuant to Sec.  
45.8, must report all primary economic terms data for the swap, within 
the applicable reporting deadline set forth in paragraph (c)(1)(i)(A) or 
(B) of this section.
    (A) If the non-reporting counterparty is a swap dealer, a major swap 
participant, or a non-SD/MSP counterparty that is a financial entity as 
defined in CEA section 2(h)(7)(C), or if the non-reporting counterparty 
is a non-SD/MSP counterparty that is not a financial entity as defined 
in CEA section 2(h)(7)(C) and verification of primary economic terms 
occurs electronically, then the reporting counterparty must report all 
primary economic terms data for the swap as soon as technologically 
practicable after execution, but no later than 30 minutes after 
execution.
    (B) If the non-reporting counterparty is a non-SD/MSP counterparty 
that is not a financial entity as defined in CEA section 2(h)(7)(C), and 
if verification of primary economic terms does not occur electronically, 
then the reporting counterparty must report all primary economic terms 
data for the swap as soon as technologically practicable after 
execution, but no later than 30 minutes after execution.
    (ii) If the swap is not intended to be submitted to a derivatives 
clearing organization for clearing at the time of execution, the 
reporting counterparty must report all confirmation data for the swap, 
as defined in Sec.  45.1, as soon as technologically practicable after 
confirmation, but no later than: 30 minutes after confirmation if 
confirmation occurs electronically; or 24 business hours after 
confirmation if confirmation does not occur electronically.
    (2) Other commodity swaps. For each such other commodity swap:
    (i) The reporting counterparty, as determined pursuant to Sec.  
45.8, must report all primary economic terms data for the swap, within 
the applicable reporting deadline set forth in paragraph (c)(2)(i)(A) or 
(B) of this section.
    (A) If the non-reporting counterparty is a swap dealer, a major swap 
participant, or a non-SD/MSP counterparty that is a financial entity as 
defined in CEA section 2(h)(7)(C), or if the non-reporting counterparty 
is a non-SD/MSP counterparty that is not a financial entity as defined 
in CEA section 2(h)(7)(C) and verification of primary economic terms 
occurs electronically, then the reporting counterparty must report all 
primary economic terms data for the swap as soon as technologically 
practicable after execution, but no later than two hours after 
execution.
    (B) If the non-reporting counterparty is a non-SD/MSP counterparty 
that is not a financial entity as defined in CEA section 2(h)(7)(C), and 
if verification of primary economic terms does not occur electronically, 
then the reporting counterparty must report all primary economic terms 
data for the swap as soon as technologically practicable after 
execution, but no later than two hours after execution.
    (ii) If the swap is not intended to be submitted to a derivatives 
clearing organization for clearing at the time of execution, the 
reporting counterparty must report all confirmation data for the swap, 
as defined in Sec.  45.1, as soon as technologically practicable after 
confirmation, but no later than: 30 Minutes after confirmation if 
confirmation occurs electronically; or 24 business hours after 
confirmation if confirmation does not occur electronically.
    (d) Off-facility swaps not subject to the clearing requirement, with 
a non-SD/MSP reporting counterparty. For all off-facility swaps not 
subject to the clearing requirement under part 50 of this chapter, all 
off-facility swaps for which an exception to, or an exemption from, the 
clearing requirement has been elected under part 50 of this chapter, and 
all off-facility swaps covered by CEA section 2(a)(13)(C)(iv), in all 
asset classes, for which a non-SD/MSP counterparty is the reporting 
counterparty, required swap creation data must be reported as provided 
in paragraph (d) of this section.
    (1) The reporting counterparty, as determined pursuant to Sec.  
45.8, must report all primary economic terms data for the swap, as soon 
as technologically practicable after execution, but no later than 24 
business hours after execution.
    (2) If the swap is not intended to be submitted to a derivatives 
clearing organization for clearing at the time of execution, the 
reporting counterparty must report all confirmation data for

[[Page 79]]

the swap, as defined in Sec.  45.1, as soon as technologically 
practicable after confirmation, but no later than 24 business hours 
after confirmation.
    (e) Clearing swaps. As soon as technologically practicable after 
acceptance of an original swap by a derivatives clearing organization 
for clearing, or as soon as technologically practicable after execution 
of a clearing swap that does not replace an original swap, the 
derivatives clearing organization, as reporting counterparty, must 
report all required swap creation data for the clearing swap. Required 
swap creation data for clearing swaps must include all confirmation data 
and all primary economic terms data, as those terms are defined in Sec.  
45.1 and as included in appendix 1 to this part.
    (f) Allocations. For swaps involving allocation, required swap 
creation data shall be reported to a single swap data repository as 
follows.
    (1) Initial swap between reporting counterparty and agent. The 
initial swap transaction between the reporting counterparty and the 
agent shall be reported as required by Sec.  45.3(a) through (d). A 
unique swap identifier for the initial swap transaction must be created 
as provided in Sec.  45.5.
    (2) Post-allocation swaps--(i) Duties of the agent. In accordance 
with this section, the agent shall inform the reporting counterparty of 
the identities of the reporting counterparty's actual counterparties 
resulting from allocation, as soon as technologically practicable after 
execution, but not later than eight business hours after execution.
    (ii) Duties of the reporting counterparty. The reporting 
counterparty must report all required swap creation data for each swap 
resulting from allocation to the same swap data repository to which the 
initial swap transaction is reported as soon as technologically 
practicable after it is informed by the agent of the identities of its 
actual counterparties. The reporting counterparty must create a unique 
swap identifier for each such swap as required in Sec.  45.5.
    (iii) Duties of the swap data repository. The swap data repository 
to which the initial swap transaction and the post-allocation swaps are 
reported must map together the unique swap identifiers of the initial 
swap transaction and of each of the post-allocation swaps.
    (g) Multi-asset swaps. For each multi-asset swap, required swap 
creation data and required swap continuation data shall be reported to a 
single swap data repository that accepts swaps in the asset class 
treated as the primary asset class involved in the swap by the swap 
execution facility, designated contract market, or reporting 
counterparty making the first report of required swap creation data 
pursuant to this section. The registered entity or reporting 
counterparty making the first report of required swap creation data 
pursuant to this section shall report all primary economic terms for 
each asset class involved in the swap.
    (h) Mixed swaps. (1) For each mixed swap, required swap creation 
data and required swap continuation data shall be reported to a swap 
data repository registered with the Commission and to a security-based 
swap data repository registered with the Securities and Exchange 
Commission. This requirement may be satisfied by reporting the mixed 
swap to a swap data repository or security-based swap data repository 
registered with both Commissions.
    (2) The registered entity or reporting counterparty making the first 
report of required swap creation data pursuant to this section shall 
ensure that the same unique swap identifier is recorded for the swap in 
both the swap data repository and the security-based swap data 
repository.
    (i) International swaps. For each international swap, the reporting 
counterparty shall report as soon as practicable to the swap data 
repository the identity of the non-U.S. trade repository not registered 
with the Commission to which the swap is also reported and the swap 
identifier used by the non-U.S. trade repository to identify the swap. 
If necessary, the reporting counterparty shall obtain this information 
from the non-reporting counterparty.
    (j) Choice of SDR. The entity with the obligation to choose the swap 
data repository to which all required swap creation data for the swap is 
reported shall be the entity that is required to

[[Page 80]]

make the first report of all data pursuant to this section, as follows:
    (1) For swaps executed on or pursuant to the rules of a swap 
execution facility or designated contract market, the swap execution 
facility or designated contract market shall choose the swap data 
repository;
    (2) For all other swaps, the reporting counterparty, as determined 
in Sec.  45.8, shall choose the swap data repository.

[81 FR 41772, June 27, 2016]



Sec.  45.4  Swap data reporting: Continuation data.

    Registered entities and swap counterparties must report required 
swap continuation data electronically to a swap data repository as set 
forth in this section and in the manner provided in Sec.  45.13(b). The 
rules governing acceptance and recording of such data by a swap data 
repository are set forth in Sec.  49.10 of this chapter. The reporting 
obligations of registered entities and swap counterparties with respect 
to swaps executed prior to the applicable compliance date and in 
existence on or after July 21, 2010, the date of enactment of the Dodd-
Frank Act, are set forth in part 46 of this chapter. This section and 
Sec.  45.3 establish the general swap data reporting obligations of swap 
dealers, major swap participants, non-SD/MSP counterparties, swap 
execution facilities, designated contract markets, and derivatives 
clearing organizations to report swap data to a swap data repository. In 
addition to the reporting obligations set forth in this section and in 
Sec.  45.3, registered entities and swap counterparties are subject to 
other reporting obligations set forth in this chapter, including, 
without limitation, the following: Swap dealers, major swap 
participants, and non-SD/MSP counterparties are also subject to the 
reporting obligations with respect to corporate affiliations reporting 
set forth in Sec.  45.6; swap execution facilities, designated contract 
markets, swap dealers, major swap participants, and non-SD/MSP 
counterparties are subject to the reporting obligations with respect to 
real time reporting of swap data set forth in part 43 of this chapter; 
and, where applicable, swap dealers, major swap participants, and non-
SD/MSP counterparties are subject to the reporting obligations with 
respect to large traders set forth in parts 17 and 18 of this chapter.
    (a) Continuation data reporting method generally. For each swap, 
regardless of asset class, reporting counterparties and derivatives 
clearing organizations required to report swap continuation data must do 
so in a manner sufficient to ensure that all data in the swap data 
repository concerning the swap remains current and accurate, and 
includes all changes to the primary economic terms of the swap occurring 
during the existence of the swap. Reporting entities and counterparties 
fulfill this obligation by reporting either life cycle event data or 
state data for the swap within the applicable deadlines set forth in 
this section. Reporting counterparties and derivatives clearing 
organizations required to report swap continuation data for a swap may 
fulfill their obligation to report either life cycle event data or state 
data by reporting:
    (1) Life cycle event data to a swap data repository that accepts 
only life cycle event data reporting;
    (2) State data to a swap data repository that accepts only state 
data reporting; or
    (3) Either life cycle event data or state data to a swap data 
repository that accepts both life cycle event data and state data 
reporting.
    (b) Continuation data reporting for clearing swaps. For all clearing 
swaps, required continuation data must be reported as provided in this 
section.
    (1) Life cycle event data or state data reporting. The derivatives 
clearing organization, as reporting counterparty, must report to the 
swap data repository either:
    (i) All life cycle event data for the swap, reported on the same day 
that any life cycle event occurs with respect to the swap; or
    (ii) All state data for the swap, reported daily.
    (2) Valuation data reporting. Valuation data for the swap must be 
reported by the derivatives clearing organization, as reporting 
counterparty, daily.
    (c) Continuation data reporting for original swaps. For all original 
swaps, required continuation data, including terminations, must be 
reported to the

[[Page 81]]

swap data repository to which the swap that was accepted for clearing 
was reported pursuant to Sec.  45.3(a) through (d) in the manner 
provided in Sec.  45.13(b) and in this section, and must be accepted and 
recorded by such swap data repository as provided in Sec.  49.10 of this 
chapter.
    (1) Life cycle event data or state data reporting. The derivatives 
clearing organization that accepted the swap for clearing must report to 
the swap data repository either:
    (i) All life cycle event data for the swap, reported on the same day 
that any life cycle event occurs with respect to the swap; or
    (ii) All state data for the swap, reported daily.
    (2) In addition to all other necessary continuation data fields, 
life cycle event data and state data must include all of the following:
    (i) The legal entity identifier of the swap data repository to which 
all required swap creation data for each clearing swap was reported by 
the derivatives clearing organization pursuant to Sec.  45.3(e);
    (ii) The unique swap identifier of the original swap that was 
replaced by the clearing swaps; and
    (iii) The unique swap identifier of each clearing swap that replaces 
a particular original swap.
    (d) Continuation data reporting for uncleared swaps. For all swaps 
that are not cleared by a derivatives clearing organization, including 
swaps executed on or pursuant to the rules of a swap execution facility 
or designated contract market, the reporting counterparty must report 
all required swap continuation data as provided in this section.
    (1) Life cycle event data or state data reporting. The reporting 
counterparty for the swap must report to the swap data repository either 
all life cycle event data for the swap or all state data for the swap, 
within the applicable deadline set forth in paragraphs (d)(1)(i) or (ii) 
of this section.
    (i) If the reporting counterparty is a swap dealer or major swap 
participant:
    (A) Life cycle event data must be reported on the same day that any 
life cycle event occurs, with the sole exception that life cycle event 
data relating to a corporate event of the non-reporting counterparty 
must be reported no later than the second business day after the day on 
which such event occurs.
    (B) State data must be reported daily.
    (ii) If the reporting counterparty is a non-SD/MSP counterparty:
    (A) Life cycle event data must be reported no later than the end of 
the first business day following the date of any life cycle event; with 
the sole exception that life cycle event data relating to a corporate 
event of the non-reporting counterparty must be reported no later than 
the end of the second business day following such event.
    (B) State data must be reported daily.
    (2) Valuation data reporting. Valuation data for the swap must be 
reported by the reporting counterparty for the swap as follows:
    (i) If the reporting counterparty is a swap dealer or major swap 
participant, the reporting counterparty must report all valuation data 
for the swap, daily.
    (ii) If the reporting counterparty is a non-SD/MSP counterparty, the 
reporting counterparty must report the current daily mark of the 
transaction as of the last day of each fiscal quarter. This report must 
be transmitted to the swap data repository within 30 calendar days of 
the end of each fiscal quarter. If a daily mark of the transaction is 
not available for the swap, the reporting counterparty satisfies this 
requirement by reporting the current valuation of the swap recorded on 
its books in accordance with applicable accounting standards.

[81 FR 41774, June 27, 2016]



Sec.  45.5  Unique swap identifiers.

    Each swap subject to the jurisdiction of the Commission shall be 
identified in all recordkeeping and all swap data reporting pursuant to 
this part by the use of a unique swap identifier, which shall be 
created, transmitted, and used for each swap as provided in paragraphs 
(a) through (f) of this section.
    (a) Swaps executed on or pursuant to the rules of a swap execution 
facility or designated contract market. For each swap executed on or 
pursuant to the rules of a swap execution facility or

[[Page 82]]

designated contract market, the swap execution facility or designated 
contract market shall create and transmit a unique swap identifier as 
provided in paragraphs (a)(1) and (2) of this section.
    (1) Creation. The swap execution facility or designated contract 
market shall generate and assign a unique swap identifier at, or as soon 
as technologically practicable following, the time of execution of the 
swap, and prior to the reporting of required swap creation data. The 
unique swap identifier shall consist of a single data field that 
contains two components:
    (i) The unique alphanumeric code assigned to the swap execution 
facility or designated contract market by the Commission for the purpose 
of identifying the swap execution facility or designated contract market 
with respect to unique swap identifier creation; and
    (ii) An alphanumeric code generated and assigned to that swap by the 
automated systems of the swap execution facility or designated contract 
market, which shall be unique with respect to all such codes generated 
and assigned by that swap execution facility or designated contract 
market.
    (2) Transmission. The swap execution facility or designated contract 
market shall transmit the unique swap identifier electronically as 
follows:
    (i) To the swap data repository to which the swap execution facility 
or designated contract market reports required swap creation data for 
the swap, as part of that report;
    (ii) To each counterparty to the swap, as soon as technologically 
practicable after execution of the swap;
    (iii) To the derivatives clearing organization, if any, to which the 
swap is submitted for clearing, as part of the required swap creation 
data transmitted to the derivatives clearing organization for clearing 
purposes.
    (b) Off-facility swaps with a swap dealer or major swap participant 
reporting counterparty. For each off-facility swap where the reporting 
counterparty is a swap dealer or major swap participant, the reporting 
counterparty shall create and transmit a unique swap identifier as 
provided in paragraphs (b)(1) and (2) of this section.
    (1) Creation. The reporting counterparty shall generate and assign a 
unique swap identifier as soon as technologically practicable after 
execution of the swap and prior to both the reporting of required swap 
creation data and the transmission of data to a derivatives clearing 
organization if the swap is to be cleared. The unique swap identifier 
shall consist of a single data field that contains two components:
    (i) The unique alphanumeric code assigned to the swap dealer or 
major swap participant by the Commission at the time of its registration 
as such, for the purpose of identifying the swap dealer or major swap 
participant with respect to unique swap identifier creation; and
    (ii) An alphanumeric code generated and assigned to that swap by the 
automated systems of the swap dealer or major swap participant, which 
shall be unique with respect to all such codes generated and assigned by 
that swap dealer or major swap participant.
    (2) Transmission. The reporting counterparty shall transmit the 
unique swap identifier electronically as follows:
    (i) To the swap data repository to which the reporting counterparty 
reports required swap creation data for the swap, as part of that 
report;
    (ii) To the non-reporting counterparty to the swap, as soon as 
technologically practicable after execution of the swap; and
    (iii) To the derivatives clearing organization, if any, to which the 
swap is submitted for clearing, as part of the required swap creation 
data transmitted to the derivatives clearing organization for clearing 
purposes.
    (c) Off-facility swaps with a non-SD/MSP reporting counterparty. For 
each off-facility swap for which the reporting counterparty is a non-SD/
MSP counterparty, the swap data repository to which primary economic 
terms data is reported shall create and transmit a unique swap 
identifier as provided in paragraphs (c)(1) and (2) of this section.
    (1) Creation. The swap data repository shall generate and assign a 
unique swap identifier as soon as technologically practicable following 
receipt of the first report of required swap creation data concerning 
the swap. The

[[Page 83]]

unique swap identifier shall consist of a single data field that 
contains two components:
    (i) The unique alphanumeric code assigned to the swap data 
repository by the Commission at the time of its registration as such, 
for the purpose of identifying the swap data repository with respect to 
unique swap identifier creation; and
    (ii) An alphanumeric code generated and assigned to that swap by the 
automated systems of the swap data repository, which shall be unique 
with respect to all such codes generated and assigned by that swap data 
repository.
    (2) Transmission. The swap data repository shall transmit the unique 
swap identifier electronically as follows:
    (i) To the counterparties to the swap, as soon as technologically 
practicable following creation of the unique swap identifier; and
    (ii) To the derivatives clearing organization, if any, to which the 
swap is submitted for clearing, as soon as technologically practicable 
following creation of the unique swap identifier.
    (d) Clearing swaps. For each clearing swap, the derivatives clearing 
organization that is a counterparty to such swap shall create and 
transmit a unique swap identifier as provided in paragraphs (d)(1) and 
(2) of this section.
    (1) Creation. The derivatives clearing organization shall generate 
and assign a unique swap identifier upon, or as soon as technologically 
practicable after, acceptance of an original swap by the derivatives 
clearing organization for clearing or execution of a clearing swap that 
does not replace an original swap, and prior to the reporting of 
required swap creation data for the clearing swap. The unique swap 
identifier shall consist of a single data field that contains two 
components:
    (i) The unique alphanumeric code assigned to the derivatives 
clearing organization by the Commission for the purpose of identifying 
the derivatives clearing organization with respect to unique swap 
identifier creation; and
    (ii) An alphanumeric code generated and assigned to that clearing 
swap by the automated systems of the derivatives clearing organization, 
which shall be unique with respect to all such codes generated and 
assigned by that derivatives clearing organization.
    (2) Transmission. The derivatives clearing organization shall 
transmit the unique swap identifier electronically as follows:
    (i) To the swap data repository to which the derivatives clearing 
organization reports required swap creation data for the clearing swap, 
as part of that report; and
    (ii) To its counterparty to the clearing swap, as soon as 
technologically practicable after acceptance of a swap by the 
derivatives clearing organization for clearing or execution of a 
clearing swap that does not replace an original swap.
    (e) Allocations. For swaps involving allocation, unique swap 
identifiers shall be created and transmitted as follows.
    (1) Initial swap between reporting counterparty and agent. The 
unique swap identifier for the initial swap transaction between the 
reporting counterparty and the agent shall be created as required by 
paragraphs (a) through (c) of this section, and shall be transmitted as 
follows:
    (i) If the unique swap identifier is created by a swap execution 
facility or designated contract market, the swap execution facility or 
designated contract market must include the unique swap identifier in 
its swap creation data report to the swap data repository, and must 
transmit the unique identifier to the reporting counterparty and to the 
agent.
    (ii) If the unique swap identifier is created by the reporting 
counterparty, the reporting counterparty must include the unique swap 
identifier in its swap creation data report to the swap data repository, 
and must transmit the unique identifier to the agent.
    (2) Post-allocation swaps. The reporting counterparty must create a 
unique swap identifier for each of the individual swaps resulting from 
allocation, as soon as technologically practicable after it is informed 
by the agent of the identities of its actual counterparties, and must 
transmit each such unique swap identifier to:
    (i) The non-reporting counterparty for the swap in question.
    (ii) The agent.

[[Page 84]]

    (iii) The derivatives clearing organization, if any, to which the 
swap is submitted for clearing, as part of the required swap creation 
data transmitted to the derivatives clearing organization for clearing 
purposes.
    (f) Use. Each registered entity or swap counterparty subject to the 
jurisdiction of the Commission shall include the unique swap identifier 
for a swap in all of its records and all of its swap data reporting 
concerning that swap, from the time it creates or receives the unique 
swap identifier as provided in this section, throughout the existence of 
the swap and for as long as any records are required by the CEA or 
Commission regulations to be kept by that registered entity or 
counterparty concerning the swap, regardless of any life cycle events or 
any changes to state data concerning the swap, including, without 
limitation, any changes with respect to the counterparties to or the 
ownership of the swap. This requirement shall not prohibit the use by a 
registered entity or swap counterparty in its own records of any 
additional identifier or identifiers internally generated by the 
automated systems of the registered entity or swap counterparty, or the 
reporting to a swap data repository, the Commission, or another 
regulator of such internally generated identifiers in addition to the 
reporting of the unique swap identifier.

[81 FR 41775, June 27, 2016]



Sec.  45.6  Legal entity identifiers

    Each counterparty to any swap subject to the jurisdiction of the 
Commission shall be identified in all recordkeeping and all swap data 
reporting pursuant to this part by means of a single legal entity 
identifier as specified in this section.
    (a) Definitions. As used in this section:
    Control (``controlling,'' ``controlled by,'' ``under common control 
with'') means, for the purposes of Sec.  45.6, the possession, direct or 
indirect, of the power to direct or cause the direction of the 
management and policies of a person, whether through the ownership of 
voting interest, by contract, or otherwise. A person is presumed to 
control another person if the person: is a director, general partner or 
officer exercising executive responsibility (or having similar status or 
functions); directly or indirectly has the right to vote 25 percent or 
more of a class of voting interest or has the power to sell or direct 
the sale of 25 percent or more of a class of voting interest; or, in the 
case of a partnership, has the right to receive upon dissolution, or has 
contributed, 25 percent or more of the capital.
    Legal identifier system means an LEI utility conforming with the 
requirements of this section that issues or is capable of issuing an LEI 
conforming with the requirements of this section, and is capable of 
maintaining LEI reference data as required by this section.
    Level one reference data means the minimum information needed to 
identify, on a verifiable basis, the legal entity to which a legal 
entity identifier is assigned. Level one reference data shall include, 
without limitation, all of the data elements included in ISO Standard 
17442. Examples of level one reference data include, without limitation, 
a legal entity's official legal name, its place of incorporation, and 
the address and contact information of its corporate headquarters.
    Level two reference data means information concerning the corporate 
affiliations or company hierarchy relationships of the legal entity to 
which a legal entity identifier is assigned. Examples of level two 
reference data include, without limitation, the identity of the legal 
entity's ultimate parent.
    Parent means, for the purposes of Sec.  45.6, a legal person that 
controls a counterparty to a swap required to be reported pursuant to 
this section, or that controls a legal entity identified or to be 
identified by a legal entity identifier provided by the legal identifier 
system designated by the Commission pursuant to this section.
    Self-registration means submission by a legal entity of its own 
level one or level two reference data, as applicable.
    Third-party registration means submission of level one or level two 
reference data, as applicable, for a legal entity that is or may become 
a swap counterparty, made by an entity or organization other than the 
legal entity identified by the submitted reference

[[Page 85]]

data. Examples of third-party registration include, without limitation, 
submission by a swap dealer or major swap participant of level one or 
level two reference data for its swap counterparties, and submission by 
a national numbering agency, national registration agency, or data 
service provider of level one or level two reference data concerning 
legal entities with respect to which the agency or service provider 
maintains information.
    Ultimate parent means, for the purposes of Sec.  45.6, a legal 
person that controls a counterparty to a swap required to be reported 
pursuant to this section, or that controls a legal entity identified or 
to be identified by a legal entity identifier provided by the legal 
identifier system designated by the Commission pursuant to this section, 
and that itself has no parent.
    (b) International standard for the legal entity identifier. The 
legal entity identifier used in all recordkeeping and all swap data 
reporting required by this part, following designation of the legal 
entity identifier system as provided in paragraph (c)(2) of this 
section, shall be issued under, and shall conform to, ISO Standard 
17442, Legal Entity Identifier (LEI), issued by the International 
Organisation for Standardisation.
    (b) Technical principles for the legal entity identifier. The legal 
entity identifier used in all recordkeeping and all swap data reporting 
required by this part shall conform to the technical principles set 
forth in paragraphs (b)(1) through (6) of this section.
    (1) Uniqueness. Only one legal entity identifier shall be assigned 
to any legal entity, and no legal entity identifier shall ever be 
reused. Each entity within a corporate organization or group structure 
that acts as a counterparty in any swap shall have its own legal entity 
identifier.
    (2) Neutrality. To ensure the persistence of the legal entity 
identifier, it shall have a format consisting of a single data field, 
and shall contain either no embedded intelligence or as little embedded 
intelligence as practicable. Entity characteristics of swap 
counterparties identified by legal entity identifiers shall constitute 
separate elements within a reference data system as set forth in 
paragraphs (a), (c)(2), (d), and (e) of this section.
    (3) Reliability. The legal entity identifier shall be supported by a 
trusted and auditable method of verifying the identity of the legal 
entity to which it is assigned, both initially and at appropriate 
intervals thereafter. The issuer of legal entity identifiers shall 
maintain minimum reference or identification data sufficient to verify 
that a user has been correctly identified. Issuance and maintenance of 
the legal entity identifier, and storage and maintenance of all 
associated data, shall involve robust quality assurance practices and 
system safeguards. At a minimum, such system safeguards shall include 
the system safeguards applied to swap data repositories by part 49 of 
this chapter.
    (4) Open Source. The schema for the legal entity identifier shall 
have an open standard that ensures to the greatest extent practicable 
that the legal entity identifier is compatible with existing automated 
systems of financial market infrastructures, market participants, and 
regulators.
    (5) Extensibility. The legal entity identifier shall be capable of 
becoming the single international standard for unique identification of 
legal entities across the financial sector on a global basis. Therefore, 
it shall be sufficiently extensible to cover all existing and potential 
future legal entities of all types that may be counterparties to swap, 
OTC derivative, or other financial transactions; that may be involved in 
any aspect of the financial issuance and transactions process; or that 
may be subject to required due diligence by financial sector entities.
    (6) Persistence. The legal entity identifier assigned to an entity 
shall persist despite all corporate events. When a corporate event 
results in a new entity, the new entity shall receive a new legal entity 
identifier, while the previous legal entity identifier or identifiers 
continue to identify the predecessor entity or entities in the record.
    (c) Governance principles for the legal entity identifier. The legal 
entity identifier used in all recordkeeping and all swap data reporting 
required by this part shall conform to the governance

[[Page 86]]

principles set forth in paragraphs (c)(1) through (4) of this section.
    (1) International governance. The issuance of the legal entity 
identifier used pursuant to this section, and any legal entity 
identifier utility formed for the purpose of issuing legal entity 
identifiers that are used pursuant to this section, shall be subject to 
international supervision as follows:
    (i) With respect to operations, by a governance structure that 
includes the Commission and other financial regulators in any 
jurisdiction requiring use of the legal entity identifier pursuant to 
applicable law. The governance structure shall have authority sufficient 
to ensure, and shall ensure, that issuance and maintenance of the legal 
entity identifier system adheres on an ongoing basis to the principles 
set forth in this section.
    (ii) With respect to adherence to ISO Standard 17442, by the 
International Organisation for Standardisation.
    (2) Reference data access. Access to reference data associated with 
the legal entity identifier shall enable use of the legal entity 
identifier as a public good, while respecting applicable law regarding 
data confidentiality. Accordingly:
    (i) Reference data associated with the legal entity identifier that 
is public under applicable law shall be available publicly and free of 
charge. Such data shall include, without limitation, level one reference 
data (i.e., the minimum reference data needed to verify the identity of 
the legal entity receiving each legal entity identifier), and a current 
directory of all issued legal entity identifiers.
    (ii) Collection and maintenance of, and access to, reference data 
associated with the legal entity identifier shall comply with applicable 
laws on data protection and confidentiality.
    (3) Non-profit operation and funding. Funding of both start-up and 
ongoing operation of the legal entity identifier system, including, 
without limitation, any legal entity identifier utility formed for the 
purpose of issuing legal entity identifiers that are used pursuant to 
this section, shall be conducted on a non-profit, reasonable cost-
recovery basis, and shall be subject to international governance as 
provided in paragraph (c)(1) of this section.
    (4) Unbundling and non-restricted use. Issuance of the legal entity 
identifier shall not be tied to other services, if any, offered by the 
issuer, and information concerning the issuance process for new legal 
entity identifiers must be available publicly and free of charge. 
Restrictions shall not be imposed on use of the legal entity identifier 
by any person in its own products and services, or on use of the legal 
entity identifier and associated reference data by any financial 
regulator. Any intellectual property created as part of the legal entity 
identifier system shall be treated in a manner consistent with open 
source principles.
    (5) Commercial advantage prohibition. The legal entity identifier 
utility providing legal entity identifiers for use in compliance with 
this part shall not make any commercial or business use (other than the 
operation of the utility) of any reference data associated with the 
legal entity identifier that is not available to the public free of 
charge. This restriction shall also apply to any entity or person that 
participates in the utility, that is legally or otherwise affiliated or 
associated with the utility, or that provides third-party services to 
the utility or to any component, partner, affiliate, or associate 
thereof.
    (e) Designation of the legal entity identifier system. (1) The 
Commission shall determine, as provided in paragraphs (e)(1)(i) through 
(iii) of this section, whether a legal entity identifier system that 
satisfies the requirements set forth in this section is available to 
provide legal entity identifiers for registered entities and swap 
counterparties required to comply with this part.
    (i) In making this determination, the Commission shall consider, 
without limitation, the following factors:
    (A) Whether the LEI provided by the LEI utility is issued under, and 
conforms to, ISO Standard 17442, Legal Entity Identifier (LEI).
    (B) Whether the LEI provided by the LEI utility complies with all of 
the technical principles set forth in this rule.

[[Page 87]]

    (C) Whether the LEI utility complies with all of the governance 
principles set forth in this rule.
    (D) Whether the LEI utility has demonstrated that it in fact can 
provide LEIs complying with this section for identification of swap 
counterparties in swap data reporting commencing as of the compliance 
dates set forth in Sec.  45.5.
    (E) The acceptability of the LEI utility to industry participants 
required to use the LEI in complying with this part.
    (ii) In making this determination, the Commission shall consider all 
candidates meeting the criteria set forth in paragraph (e)(1)(i) of this 
section, but shall not consider any candidate that does not demonstrate 
that it in fact can provide LEIs for identification of swap 
counterparties in swap data reporting commencing as of the compliance 
dates set forth in this part.
    (iii) The Commission shall make this determination at a time it 
believes is sufficiently prior to the compliance dates set forth this 
part to enable issuance of LEIs far enough in advance of those 
compliance dates to enable compliance with this part.
    (2) If the Commission determines pursuant to paragraph (e)(1) of 
this section that such a legal entity identifier system is available, 
the Commission shall designate the legal entity identifier system as the 
provider of legal entity identifiers to be used in recordkeeping and 
swap data reporting pursuant to this part, by means of a Commission 
order that is published in the Federal Register and on the Web site of 
the Commission, as soon as practicable after such determination is made. 
The order shall include notice of this designation, the contact 
information of the LEI utility, and information concerning the procedure 
and requirements for obtaining legal entity identifiers.
    (3) If the Commission determines pursuant to paragraph (e)(1) of 
this section that such a legal entity identifier system is not yet 
available, the Commission shall publish notice of the determination in 
the Federal Register and on the Web site of the Commission, as soon as 
practicable after the determination is made. If the Commission later 
determines, pursuant to paragraphs (e)(1)(i) and (ii) of this section, 
that such a legal entity identifier system has become available, the 
Commission shall designate the legal entity identifier system as the 
provider of legal entity identifiers to be used in recordkeeping and 
swap data reporting pursuant to this part, by means of a Commission 
order that is published in the Federal Register and on the Web site of 
the Commission, as soon as practicable after such determination is made. 
The order shall include notice of this designation, the contact 
information of the LEI utility, and information concerning the procedure 
and requirements for obtaining legal entity identifiers.
    (e) Reference data reporting--(1) Reporting of level one reference 
data. Level one reference data for each counterparty to any swap subject 
to the jurisdiction of the Commission shall be reported, by means of 
self-registration, third-party registration, or both, into a public 
level one reference database maintained by the issuer of the legal 
entity identifier designated by the Commission pursuant to paragraph (d) 
of this section. Such level one reference data shall be reported at a 
time sufficient to ensure that the counterparty's legal entity 
identifier is available for inclusion in recordkeeping and swap data 
reporting as required by this section. All subsequent changes and 
corrections to level one reference data previously reported shall be 
reported to the issuer, by means of self-registration, third-party 
registration, or both, as soon as technologically practicable following 
occurrence of any such change or discovery of the need for a correction.
    (2) Reporting of level two reference data. (i) Level two reference 
data for each counterparty to any swap subject to the jurisdiction of 
the Commission, consisting of the identity of the counterparty's 
ultimate parent, shall be reported, by means of self-registration, 
third-party registration, or both, into a level two reference database. 
Where applicable law forbids such reporting, that fact and the citation 
of the law in question shall be reported in place of the data to which 
such law applies.

[[Page 88]]

    (ii) All non-public level two reference data reported to the level 
two reference database shall be confidential, non-public, and available 
only to financial regulators in any jurisdiction requiring use of the 
legal entity identifier pursuant to applicable law.
    (iii) The Commission shall determine the location of the level two 
reference database by means of a Commission order that is published in 
the Federal Register and on the Web site of the Commission, as soon as 
practicable after such determination is made. The order shall include 
notice of the location of the level two reference database, and 
information concerning the procedure and requirements for reporting 
level two reference data to the database.
    (iv) The obligation to report level two reference data does not 
apply until the Commission has determined the location of the level two 
reference database as provided in paragraph (e)(2)(iii) of this section.
    (v) After the Commission determines the location of the level two 
reference database pursuant to paragraph (e)(2)(iii) of this section, 
required level two reference data shall be reported at a time sufficient 
to ensure that it is included in the database when the counterparty's 
legal entity identifier is included in recordkeeping and swap data 
reporting as required by this section.
    (vi) All subsequent changes and corrections to required level two 
reference data previously reported shall be reported into the level two 
reference database, by means of self-registration, third-party 
registration, or both, as soon as technologically practicable following 
occurrence of any such change or discovery of the need for a correction.
    (f) Use of the legal entity identifier system by registered entities 
and swap counterparties. (1) When a legal entity identifier system has 
been designated by the Commission pursuant to paragraph (e) of this 
section, each registered entity and swap counterparty shall use the 
legal entity identifier provided by that system in all recordkeeping and 
swap data reporting pursuant to this part.
    (2) Before a legal entity identifier system has been designated by 
the Commission, each registered entity and swap counterparty shall use a 
substitute counterparty identifier created and assigned by a swap data 
repository in all recordkeeping and swap data reporting pursuant to this 
part, as follows:
    (i) When a swap involving one or more counterparties for which no 
substitute counterparty identifier has yet been created and assigned is 
reported to a swap data repository, the swap data repository shall 
create a substitute counterparty identifier for each such counterparty 
as provided in paragraph (f)(2)(ii) of this section, and assign the 
substitute counterparty identifier to that counterparty, as soon as 
technologically practicable after that swap is first reported to the 
swap data repository. In lieu of creating a substitute identifier as 
provided in paragraph (f)(2)(ii), the swap data repository may assign a 
unique substitute identifier provided by a third party service provider, 
if such identifier complies with all of the principles for LEIs set 
forth in this part.
    (ii) Each such substitute counterparty identifier created by a swap 
data repository shall consist of a single data field that contains two 
components, including:
    (A) The unique alphanumeric code assigned to the swap data 
repository by the Commission for the purpose of identifying the swap 
data repository; and
    (B) An alphanumeric code generated and assigned to that counterparty 
by the automated systems of the swap data repository, which shall be 
unique with respect to all such substitute counterparty identifier codes 
generated and assigned by that swap data repository.
    (iii) The swap data repository shall transmit each substitute 
counterparty identifier thus created to each counterparty to the swap, 
to each other registered entity associated with the swap, to each 
registered entity or swap counterparty who has made any report of any 
swap data to the swap data repository, and to each swap data

[[Page 89]]

repository registered with the Commission, as soon as technologically 
practicable after creation and assignment of the substitute counterparty 
identifier.
    (iv) Once any swap data repository has created and assigned such a 
substitute counterparty identifier to a swap counterparty and has 
transmitted it as required by paragraph (f)(2)(iii) of this section, all 
registered entities and swap counterparties shall use that substitute 
counterparty identifier to identify that counterparty in all swap data 
recordkeeping and reporting, until such time as the Commission 
designates a legal entity identifier system pursuant to paragraph (e) of 
this section.
    (3) For swaps reported pursuant to this part prior to Commission 
designation of a legal entity identifier system, after such designation 
each swap data repository shall map the legal entity identifiers for the 
counterparties to the substitute counterparty identifiers in the record 
for each such swap.
    (4) Prior to October 15, 2012, if a legal entity identifier system 
has been designated by the Commission as provided in this section, but a 
reporting counterparty's automated systems are not yet prepared to 
include legal entity identifiers in recordkeeping and swap data 
reporting pursuant to this part, the counterparty shall be excused from 
complying with paragraph (f)(1) of this section, and shall instead 
comply with paragraph (f)(2) of this section, until its automated 
systems are prepared with respect to legal entity identifiers, at which 
time it must commence compliance with paragraph (f)(1) of this section. 
This paragraph shall have no effect on or after October 15, 2012.

    Editorial Note: At 77 FR 2197, Jan. 13, 2012, part 45 was added, 
with two paragraphs (b) in Sec.  45.6.



Sec.  45.7  Unique product identifiers.

    Each swap subject to the jurisdiction of the Commission shall be 
identified in all recordkeeping and all swap data reporting pursuant to 
this part by means of a unique product identifier and product 
classification system as specified in this section. Each swap 
sufficiently standardized to receive a unique product identifier shall 
be identified by a unique product identifier. Each swap not sufficiently 
standardized for this purpose shall be identified by its description 
using the product classification system.
    (a) Requirements for the unique product identifier and product 
classification system. The unique product identifier and product 
classification system shall identify and describe the swap asset class 
and the sub-type within that asset class to which the swap belongs, and 
the underlying product for the swap, with sufficient distinctiveness and 
specificity to enable the Commission and other financial regulators to 
fulfill their regulatory responsibilities and to assist in real time 
reporting of swaps as provided in the Act and part 43 of this chapter. 
The level of distinctiveness and specificity which the unique product 
identifier will provide shall be determined separately for each swap 
asset class.
    (b) Designation of the unique product identifier and product 
classification system. (1) The Commission shall determine when a unique 
product identifier and product classification system that is acceptable 
to the Commission and satisfies the requirements set forth in this 
section is available for use in compliance with this section.
    (2) When the Commission determines that such a unique product 
identifier and product classification system is available, the 
Commission shall designate the unique product identifier and product 
classification system to be used in recordkeeping and swap data 
reporting pursuant to this part, by means of a Commission order that is 
published in the Federal Register and on the Web site of the Commission, 
as soon as practicable after such determination is made. The order shall 
include notice of this designation, the contact information of the 
issuer of such unique product identifiers, and information concerning 
the procedure and requirements for obtaining unique product identifiers 
and using the product classification system.
    (c) Use of the unique product identifier and product classification 
system by registered entities and swap counterparties. (1) When a unique 
product identifier and product classification system has been designated 
by the Commission

[[Page 90]]

pursuant to paragraph (b) of this section, each registered entity and 
swap counterparty shall use the unique product identifier and product 
classification system in all recordkeeping and swap data reporting 
pursuant to this part.
    (2) Before a unique product identifier and product classification 
system has been designated by the Commission, each registered entity and 
swap counterparty shall use the internal product identifier or product 
description used by the swap data repository to which a swap is reported 
in all recordkeeping and swap data reporting pursuant to this part.



Sec.  45.8  Determination of which counterparty must report.

    The determination of which counterparty is the reporting 
counterparty for all swaps, except clearing swaps, shall be made as 
provided in paragraphs (a) through (h) of this section. The 
determination of which counterparty is the reporting counterparty for 
all clearing swaps shall be made as provided in paragraph (i) of this 
section.
    (a) If only one counterparty is a swap dealer, the swap dealer shall 
be the reporting counterparty.
    (b) If neither counterparty is a swap dealer, and only one 
counterparty is a major swap participant, the major swap participant 
shall be the reporting counterparty.
    (c) If both counterparties are non-SD/MSP counterparties, and only 
one counterparty is a financial entity as defined in CEA section 
2(h)(7)(C), the counterparty that is a financial entity shall be the 
reporting counterparty.
    (d) If both counterparties are swap dealers, or both counterparties 
are major swap participants, or both counterparties are non-SD/MSP 
counterparties that are financial entities as defined in CEA section 
2(h)(7)(C), or both counterparties are non-SD/MSP counterparties and 
neither counterparty is a financial entity as defined in CEA section 
2(h)(7)(C):
    (1) For a swap executed on or pursuant to the rules of a swap 
execution facility or designated contract market, the counterparties 
shall agree which counterparty shall be the reporting counterparty.
    (2) For an off-facility swap, the counterparties shall agree as one 
term of their swap which counterparty shall be the reporting 
counterparty.
    (e) Notwithstanding the provisions of paragraphs (a) through (d) of 
this section, if both counterparties to a swap are non-SD/MSP 
counterparties and only one counterparty is a U.S. person, that 
counterparty shall be the reporting counterparty.
    (f) Notwithstanding the provisions of paragraphs (a) through (e) of 
this section, if neither counterparty to a swap is a U.S. person, but 
the swap is executed on or pursuant to the rules of a swap execution 
facility or designated contract market or otherwise executed in the 
United States, or is cleared by a derivatives clearing organization:
    (1) For such a swap executed on or pursuant to the rules of a swap 
execution facility or designated contract market, the counterparties 
shall agree which counterparty shall be the reporting counterparty.
    (2) For an off-facility swap, the counterparties shall agree as one 
term of their swap which counterparty shall be the reporting 
counterparty.
    (g) If a reporting counterparty selected pursuant to paragraphs (a) 
through (f) of this section ceases to be a counterparty to a swap due to 
an assignment or novation, the reporting counterparty for reporting of 
required swap continuation data following the assignment or novation 
shall be selected from the two current counterparties as provided in 
paragraphs (g)(1) through (4) of this section.
    (1) If only one counterparty is a swap dealer, the swap dealer shall 
be the reporting counterparty and shall fulfill all counterparty 
reporting obligations.
    (2) If neither counterparty is a swap dealer, and only one 
counterparty is a major swap participant, the major swap participant 
shall be the reporting counterparty and shall fulfill all counterparty 
reporting obligations.
    (3) If both counterparties are non-SD/MSP counterparties, and only 
one counterparty is a U.S. person, that counterparty shall be the 
reporting counterparty and shall fulfill all counterparty reporting 
obligations.

[[Page 91]]

    (4) In all other cases, the counterparty that replaced the previous 
reporting counterparty by reason of the assignment or novation shall be 
the reporting counterparty, unless otherwise agreed by the 
counterparties.
    (h) For all swaps executed on or pursuant to the rules of a swap 
execution facility or designated contract market, the rules of the swap 
execution facility or designated contract market must require each swap 
counterparty to provide sufficient information to the swap execution 
facility or designated contract market to enable the swap execution 
facility or designated contract market to report all swap creation data 
as provided in this part.
    (1) To achieve this, the rules of the swap execution facility or 
designated contract market must require each market participant placing 
an order with respect to any swap traded on the swap execution facility 
or designated contract market to include in the order, without 
limitation:
    (i) The legal entity identifier of the market participant placing 
the order.
    (ii) A yes/no indication of whether the market participant is a swap 
dealer with respect to the product with respect to which the order is 
placed.
    (iii) A yes/no indication of whether the market participant is a 
major swap participant with respect to the product with respect to which 
the order is placed.
    (iv) A yes/no indication of whether the market participant is a 
financial entity as defined in CEA section 2(h)(7)(C).
    (v) A yes/no indication of whether the market participant is a U.S. 
person.
    (vi) If applicable, an indication that the market participant will 
elect an exception to, or an exemption from, the clearing requirement 
under part 50 of this chapter for any swap resulting from the order.
    (vii) If the swap will be allocated:
    (A) An indication that the swap will be allocated.
    (B) The legal entity identifier of the agent.
    (C) An indication of whether the swap is a post-allocation swap.
    (D) If the swap is a post-allocation swap, the unique swap 
identifier of the initial swap transaction between the reporting 
counterparty and the agent.
    (2) To achieve this, the swap execution facility or designated 
contract market must use the information obtained pursuant to paragraph 
(h)(1) of this section to identify the counterparty that is the 
reporting counterparty pursuant to the CEA and this section.
    (i) Clearing swaps. Notwithstanding the provisions of paragraphs (a) 
through (h) of this section, if the swap is a clearing swap, the 
derivatives clearing organization that is a counterparty to such swap 
shall be the reporting counterparty and shall fulfill all reporting 
counterparty obligations for such swap.

[81 FR 41777, June 27, 2016]



Sec.  45.9  Third-party facilitation of data reporting.

    Registered entities and swap counterparties required by this part to 
report required swap creation data or required swap continuation data, 
while remaining fully responsible for reporting as required by this 
part, may contract with third-party service providers to facilitate 
reporting.



Sec.  45.10  Reporting to a single swap data repository.

    All swap data for a given swap, which shall include all swap data 
required to be reported pursuant to parts 43 and 45 of this chapter, 
must be reported to a single swap data repository, which shall be the 
swap data repository to which the first report of required swap creation 
data is made pursuant to this part.
    (a) Swaps executed on or pursuant to the rules of a swap execution 
facility or designated contract market. To ensure that all swap data, 
including all swap data required to be reported pursuant to parts 43 and 
45 of this chapter, for a swap executed on or pursuant to the rules of a 
swap execution facility or designated contract market is reported to a 
single swap data repository:
    (1) The swap execution facility or designated contract market that 
reports required swap creation data as required by Sec.  45.3 shall 
report all such data to a single swap data repository. As soon as 
technologically practicable

[[Page 92]]

after execution, the swap execution facility or designated contract 
market shall transmit to both counterparties to the swap, and to the 
derivatives clearing organization, if any, that will clear the swap, 
both:
    (i) The identity of the swap data repository to which required swap 
creation data is reported by the swap execution facility or designated 
contract market; and
    (ii) The unique swap identifier for the swap, created pursuant to 
Sec.  45.5.
    (2) Thereafter, all required swap creation data and all required 
swap continuation data reported for the swap reported by any registered 
entity or counterparty shall be reported to that same swap data 
repository (or to its successor in the event that it ceases to operate, 
as provided in part 49 of this chapter).
    (b) Off-facility swaps with a swap dealer or major swap participant 
reporting counterparty. To ensure that all swap data, including all swap 
data required to be reported pursuant to parts 43 and 45 of this 
chapter, for off-facility swaps with a swap dealer or major swap 
participant reporting counterparty is reported to a single swap data 
repository:
    (1) If the reporting counterparty reports primary economic terms 
data to a swap data repository as required by Sec.  45.3:
    (i) The reporting counterparty shall report primary economic terms 
data to a single swap data repository.
    (ii) As soon as technologically practicable after execution, but no 
later than as required pursuant to Sec.  45.3, the reporting 
counterparty shall transmit to the other counterparty to the swap both 
the identity of the swap data repository to which primary economic terms 
data is reported by the reporting counterparty, and the unique swap 
identifier for the swap created pursuant to Sec.  45.5.
    (iii) If the swap will be cleared, the reporting counterparty shall 
transmit to the derivatives clearing organization at the time the swap 
is submitted for clearing both the identity of the swap data repository 
to which primary economic terms data is reported by the reporting 
counterparty, and the unique swap identifier for the swap created 
pursuant to Sec.  45.5.
    (2) Thereafter, all required swap creation data and all required 
swap continuation data reported for the swap, by any registered entity 
or counterparty, shall be reported to the swap data repository to which 
swap data has been reported pursuant to paragraph (b)(1) or (2) of this 
section (or to its successor in the event that it ceases to operate, as 
provided in part 49 of this chapter).
    (c) Off-facility swaps with a non-SD/MSP reporting counterparty. To 
ensure that all swap data, including all swap data required to be 
reported pursuant to parts 43 and 45 of this chapter, for such swaps is 
reported to a single swap data repository:
    (1) If the reporting counterparty reports primary economic terms 
data to a swap data repository as required by Sec.  45.3:
    (i) The reporting counterparty shall report primary economic terms 
data to a single swap data repository.
    (ii) As soon as technologically practicable after execution, but no 
later than as required pursuant to Sec.  45.3, the reporting 
counterparty shall transmit to the other counterparty to the swap the 
identity of the swap data repository to which primary economic terms 
data was reported by the reporting counterparty.
    (iii) If the swap will be cleared, the reporting counterparty shall 
transmit to the derivatives clearing organization at the time the swap 
is submitted for clearing the identity of the swap data repository to 
which primary economic terms data was reported by the reporting 
counterparty.
    (2) The swap data repository to which the swap is reported as 
provided in paragraph (c) of this section shall transmit the unique swap 
identifier created pursuant to Sec.  45.5 to both counterparties and to 
the derivatives clearing organization, if any, as soon as 
technologically practicable after creation of the unique swap 
identifier.
    (3) Thereafter, all required swap creation data and all required 
swap continuation data reported for the swap, by any registered entity 
or counterparty, shall be reported to the swap data repository to which 
swap data has been reported pursuant to paragraph (c)(1) of this section 
(or to

[[Page 93]]

its successor in the event that it ceases to operate, as provided in 
part 49 of this chapter).
    (d) Clearing swaps. To ensure that all swap data for a given 
clearing swap, and for clearing swaps that replace a particular original 
swap or that are created upon execution of the same transaction and that 
do not replace an original swap, is reported to a single swap data 
repository:
    (1) The derivatives clearing organization that is a counterparty to 
such clearing swap shall report all required swap creation data for that 
clearing swap to a single swap data repository. As soon as 
technologically practicable after acceptance of an original swap by a 
derivatives clearing organization for clearing or execution of a 
clearing swap that does not replace an original swap, the derivatives 
clearing organization shall transmit to the counterparty to each 
clearing swap the legal entity identifier of the swap data repository to 
which the derivatives clearing organization reported the required swap 
creation data for that clearing swap.
    (2) Thereafter, all required swap creation data and all required 
swap continuation data reported for that clearing swap shall be reported 
by the derivatives clearing organization to the swap data repository to 
which swap data has been reported pursuant to paragraph (d)(1) of this 
section (or to its successor in the event that it ceases to operate, as 
provided in part 49 of this chapter).
    (3) For clearing swaps that replace a particular original swap, and 
for equal and opposite clearing swaps that are created upon execution of 
the same transaction and that do not replace an original swap, the 
derivatives clearing organization shall report all required swap 
creation data and all required swap continuation data for such clearing 
swaps to a single swap data repository.

[81 FR 41778, June 27, 2016]



Sec.  45.11  Data reporting for swaps in a swap asset class not
accepted by any swap data repository.

    (a) Should there be a swap asset class for which no swap data 
repository registered with the Commission currently accepts swap data, 
each registered entity or counterparty required by this part to report 
any required swap creation data or required swap continuation data with 
respect to a swap in that asset class must report that same data to the 
Commission.
    (b) Data reported to the Commission pursuant to this section shall 
be reported at times announced by the Commission and in an electronic 
file in a format acceptable to the Commission.
    (c) Delegation of authority to the Chief Information Officer: The 
Commission hereby delegates to its Chief Information Officer, until the 
Commission orders otherwise, the authority set forth in paragraph (c) of 
this section, to be exercised by the Chief Information Officer or by 
such other employee or employees of the Commission as may be designated 
from time to time by the Chief Information Officer. The Chief 
Information Officer may submit to the Commission for its consideration 
any matter which has been delegated in this paragraph. Nothing in this 
paragraph prohibits the Commission, at its election, from exercising the 
authority delegated in this paragraph. The authority delegated to the 
Chief Information Officer by paragraph (c) of this section shall 
include:
    (1) The authority to determine the manner, format, coding structure, 
and electronic data transmission standards and procedures acceptable to 
the Commission for the purposes of paragraphs (a) and (b) of this 
section.
    (2) The authority to determine whether the Commission may permit or 
require use by reporting entities or counterparties in reporting 
pursuant to this section of one or more particular data standards (such 
as FIX, FpML, ISO 20022, or some other standard), in order to 
accommodate the needs of different communities of users.
    (3) The dates and times at which required swap creation data or 
required swap continuation data shall be reported pursuant to this 
section.
    (d) The Chief Information Officer shall publish from time to time in 
the Federal Register and on the Web site of the Commission the format, 
data schema, electronic data transmission methods and procedures, and 
dates and times for reporting acceptable to the

[[Page 94]]

Commission with respect to swap data reporting pursuant to this section.



Sec.  45.12  Voluntary supplemental reporting

    (a) For purposes of this section, the term voluntary, supplemental 
report means any report of swap data to a swap data repository that is 
not required to be made pursuant to this part or any other part in this 
chapter.
    (b) A voluntary, supplemental report may be made only by a 
counterparty to the swap in connection with which the voluntary, 
supplemental report is made, or by a third-party service provider acting 
on behalf of a counterparty to the swap.
    (c) A voluntary, supplemental report may be made either to the swap 
data repository to which all required swap creation data and all 
required swap continuation data is reported for the swap pursuant to 
Sec. Sec.  45.3 and 45.10, or to a different swap data repository.
    (d) A voluntary, supplemental report must contain:
    (1) An indication that the report is a voluntary, supplemental 
report.
    (2) The unique swap identifier created pursuant to Sec. Sec.  45.5 
and 45.9. Therefore, no voluntary, supplemental report may be made until 
after the unique swap identifier has been created pursuant to Sec. Sec.  
45.5 and 45.9 and has been transmitted to the counterparty making the 
voluntary, supplemental report.
    (3) The identity of the swap data repository to which all required 
swap creation data and all required swap continuation data is reported 
for the swap pursuant to Sec. Sec.  45.3 and 45.10, if the voluntary 
supplemental report is made to a different swap data repository.
    (4) The legal entity identifier (or substitute identifier) required 
by Sec.  45.6 for the counterparty making the voluntary, supplemental 
report.
    (5) If applicable, an indication that the voluntary, supplemental 
report is made pursuant to the laws or regulations of any jurisdiction 
outside the United States.
    (e) If a counterparty that has made a voluntary, supplemental report 
discovers any errors in the swap data included in the voluntary, 
supplemental report, the counterparty must report a correction of each 
such error to the swap data repository to which the voluntary, 
supplemental report was made, as soon as technologically practicable 
after discovery of any such error.



Sec.  45.13  Required data standards.

    (a) Data maintained and furnished to the commission by swap data 
repositories. A swap data repository shall maintain all swap data 
reported to it in a format acceptable to the Commission, and shall 
transmit all swap data requested by the Commission to the Commission in 
an electronic file in a format acceptable to the Commission.
    (b) Data reported to swap data repositories. In reporting swap data 
to a swap data repository as required by this part, each reporting 
entity or counterparty shall use the facilities, methods, or data 
standards provided or required by the swap data repository to which the 
entity or counterparty reports the data. A swap data repository may 
permit reporting entities and counterparties to use various facilities, 
methods, or data standards, provided that its requirements in this 
regard enable it to meet the requirements of paragraph (a) of this 
section with respect to maintenance and transmission of swap data.
    (c) Delegation of authority to the Chief Information Officer. The 
Commission hereby delegates to its Chief Information Officer, until the 
Commission orders otherwise, the authority set forth in this paragraph 
(c), to be exercised by the Chief Information Officer or by such other 
employee or employees of the Commission as may be designated from time 
to time by the Chief Information Officer. The Chief Information Officer 
may submit to the Commission for its consideration any matter which has 
been delegated in this paragraph (c). Nothing in this paragraph 
prohibits the Commission, at its election, from exercising the authority 
delegated in this paragraph. The authority delegated to the Chief 
Information Officer by this paragraph (c) shall include:
    (1) The authority to determine the manner, format, coding structure, 
and electronic data transmission standards and procedures acceptable to 
the Commission for the purposes of paragraph (a) of this section.

[[Page 95]]

    (2) The authority to determine whether the Commission may permit or 
require use by reporting entities or counterparties, or by swap data 
repositories, of one or more particular data standards (such as FIX, 
FpML, ISO 20022, or some other standard), in order to accommodate the 
needs of different communities of users, or to enable swap data 
repositories to comply with paragraph (a) of this section.
    (d) The Chief Information Officer shall publish from time to time in 
the Federal Register and on the Web site of the Commission the format, 
data schema, and electronic data transmission methods and procedures 
acceptable to the Commission.



Sec.  45.14  Reporting of errors and omissions in previously reported
data.

    (a) Each registered entity and swap counterparty required by this 
part to report swap data to a swap data repository, to any other 
registered entity or swap counterparty, or to the Commission shall 
report any errors and omissions in the data so reported. Corrections of 
errors or omissions shall be reported as soon as technologically 
practicable after discovery of any such error or omission. With respect 
to swaps for which required swap continuation data is reported using the 
snapshot reporting method, reporting counterparties fulfill the 
requirement to report errors or omissions in state data previously 
reported by making appropriate corrections in their next daily report of 
state data as required by this part.
    (b) Each counterparty to a swap that is not the reporting 
counterparty as determined pursuant to Sec.  45.8, and that discovers 
any error or omission with respect to any swap data reported to a swap 
data repository for that swap, shall promptly notify the reporting 
counterparty of each such error or omission. Upon receiving such notice, 
the reporting counterparty shall report a correction of each such error 
or omission to the swap data repository as provided in paragraph (a) of 
this section.
    (c) Unless otherwise approved by the Commission, or by the Chief 
Information Officer pursuant to Sec.  45.13, each registered entity or 
swap counterparty reporting corrections to errors or omissions in data 
previously reported as required by this section shall report such 
corrections in the same format as it reported the erroneous or omitted 
data. Unless otherwise approved by the Commission, or by the Chief 
Information Officer pursuant to Sec.  45.13, a swap data repository 
shall transmit corrections to errors or omission in data previously 
transmitted to the Commission in the same format as it transmitted the 
erroneous or omitted data.



  Sec. Appendix 1 to Part 45--Tables of Minimum Primary Economic Terms 
                                  Data

 Exhibit A--Minimum Primary Economic Terms Data--Credit Swaps and Equity
                                  Swaps
             [Enter N/A for fields that are not applicable]
------------------------------------------------------------------------
   Data categories and fields for all
                 swaps                               Comment
------------------------------------------------------------------------
Asset Class............................  Field values: Credit, equity,
                                          FX, interest rates, other
                                          commodities.
The Unique Swap Identifier for the swap  As provided in Sec.   45.5.
The Legal Entity Identifier of the       As provided in Sec.   45.6, or
 reporting counterparty.                  substitute identifier for a
                                          natural person.
An indication of whether the reporting   Yes/No.
 counterparty is a swap dealer with
 respect to the swap.
An indication of whether the reporting   Yes/No.
 counterparty is a major swap
 participant with respect to the swap.
If the reporting counterparty is not a   Yes/No.
 swap dealer or a major swap
 participant with respect to the swap,
 an indication of whether the reporting
 counterparty is a financial entity as
 defined in CEA section 2(h)(7)(C).
An indication of whether the reporting   Yes/No.
 counterparty is a derivatives clearing
 organization with respect to the swap.
An indication of whether the reporting   Yes/No.
 counterparty is a U.S. person.
An indication that the swap will be      Yes/No.
 allocated.
If the swap will be allocated, or is a   As provided in Sec.   45.6, or
 post-allocation swap, the Legal Entity   substitute identifier for a
 Identifier of the agent.                 natural person.

[[Page 96]]

 
An indication that the swap is a post-   Yes/No.
 allocation swap.
If the swap is a post-allocation swap,   As provided in Sec.   45.5.
 the unique swap identifier of the
 initial swap transaction between the
 reporting counterparty and the agent.
The Legal Entity Identifier of the non-  As provided in Sec.   45.6, or
 reporting party.                         substitute identifier for a
                                          natural person.
An indication of whether the non-        Yes/No.
 reporting counterparty is a swap
 dealer with respect to the swap.
An indication of whether the non-        Yes/No.
 reporting counterparty is a major swap
 participant with respect to the swap.
If the non-reporting counterparty is     Yes/No.
 not a swap dealer or a major swap
 participant with respect to the swap,
 an indication of whether the non-
 reporting counterparty is a financial
 entity as defined in CEA section
 2(h)(7)(C).
An indication of whether the non-        Yes/No.
 reporting counterparty is a U.S.
 person.
The Unique Product Identifier assigned   As provided in Sec.   45.7.
 to the swap.
If no Unique Product Identifier is
 available for the swap because the
 swap is not sufficiently standardized,
 the taxonomic description of the swap
 pursuant to the CFTC-approved product
 classification system.
If no CFTC-approved UPI and product
 classification system is yet
 available, the internal product
 identifier or product description used
 by the swap data repository.
An indication that the swap is a multi-  Field values: Yes, Not
 asset swap.                              applicable.
For a multi-asset class swap, an         Generally, the asset class
 indication of the primary asset class.   traded by the desk trading the
                                          swap for the reporting
                                          counterparty. Field values:
                                          Credit, equity, FX, interest
                                          rates, other commodities.
For a multi-asset class swap, an         Field values: Credit, equity,
 indication of the secondary asset        FX, interest rates, other
 class(es).                               commodities.
An indication that the swap is a mixed   Field values: Yes, Not
 swap.                                    applicable.
For a mixed swap reported to two non-    Field value: LEI of the other
 dually- registered swap data             SDR to which the swap is or
 repositories, the identity of the        will be reported.
 other swap data repository (if any) to
 which the swap is or will be reported.
An indication of the counterparty        Field values: LEI, or
 purchasing protection.                   substitute identifier for a
                                          natural person.
An indication of the counterparty        Field values: LEI, or
 selling protection.                      substitute identifier for a
                                          natural person.
Information identifying the reference    The entity that is the subject
 entity.                                  of the protection being
                                          purchased and sold in the
                                          swap. Field values: LEI, or
                                          substitute identifier for a
                                          natural person.
Contract type..........................  E.g., swap, swaption, forward,
                                          option, basis swap, index
                                          swap, basket swap.
Block trade indicator..................  Indication (Yes/No) of whether
                                          the swap qualifies as a block
                                          trade or large notional swap.
Execution timestamp....................  The date and time of the trade,
                                          expressed using Coordinated
                                          Universal Time (``UTC'').
Execution venue........................  The swap execution facility or
                                          designated contract market on
                                          or pursuant to the rules of
                                          which the swap was executed.
                                          Field values: LEI of the swap
                                          execution facility or
                                          designated contract market, or
                                          ``off-facility'' if not so
                                          executed.
Start date.............................  The date on which the swap
                                          starts or goes into effect.
Maturity, termination or end date......  The date on which the swap
                                          expires.
The price..............................  E.g., strike price, initial
                                          price, spread.
The notional amount, and the currency
 in which the notional amount is
 expressed.
The amount and currency (or currencies)
 of any up-front payment
Payment frequency of the reporting       A description of the payment
 counterparty.                            stream of the reporting
                                          counterparty, e.g., coupon.
Payment frequency of the non-reporting   A description of the payment
 counterparty.                            stream of the non-reporting
                                          counterparty, e.g., coupon.
Timestamp for submission to swap data    Time and date of submission to
 repository.                              the swap data repository,
                                          expressed using UTC, as
                                          recorded by an automated
                                          system where available, or as
                                          recorded manually where an
                                          automated system is not
                                          available.
Clearing indicator.....................  Yes/No indication of whether
                                          the swap will be submitted for
                                          clearing to a derivatives
                                          clearing organization.
Clearing venue.........................  LEI of the derivatives clearing
                                          organization.

[[Page 97]]

 
If the swap will not be cleared, an      Yes/No.
 indication of whether an exception to,
 or an exemption from, the clearing
 requirement has been elected with
 respect to the swap under part 50 of
 this chapter.
The identity of the counterparty         Field values: LEI, or
 electing an exception or exemption to    substitute identifier for
 the clearing requirement under part 50   natural person.
 of this chapter.
Clearing exception or exemption type...  The type of clearing exception
                                          or exemption being claimed.
                                          Field values: End user, Inter-
                                          affiliate or Cooperative.
Indication of collateralization........  Is the swap collateralized, and
                                          if so to what extent? Field
                                          values: Uncollateralized,
                                          partially collateralized, one-
                                          way collateralized, fully
                                          collateralized.
Any other term(s) of the swap matched    Use as many fields as required
 or affirmed by the counterparties in     to report each such term.
 verifying the swap.
------------------------------------------------------------------------


 Exhibit A--Minimum Primary Economic Terms Data--Credit Swaps and Equity
                                  Swaps
             [Enter N/A for fields that are not applicable]
------------------------------------------------------------------------
 Additional data categories and fields
           for clearing swaps                        Comment
------------------------------------------------------------------------
Clearing swap USIs.....................  The USIs of each clearing swap
                                          that replaces the original
                                          swap that was submitted for
                                          clearing to the DCO, other
                                          than the USI for which the PET
                                          data is currently being
                                          reported (as ``USI'' field
                                          above).
Original swap USI......................  The USI of the original swap
                                          submitted for clearing to the
                                          DCO that is replaced by
                                          clearing swaps.
Original swap SDR......................  LEI of SDR to which the
                                          original swap was reported.
Clearing member LEI....................  LEI of Clearing member.
Clearing member client account.........  Clearing member client account
                                          number.
Origin (house or customer).............  An indication whether the
                                          clearing member acted as
                                          principal for a house trade or
                                          agent for a customer trade.
Clearing receipt timestamp.............  The date and time at which the
                                          DCO received the original swap
                                          for clearing, expressed using
                                          UTC.
Clearing acceptance timestamp..........  The date and time at which the
                                          DCO accepted the original swap
                                          for clearing, expressed using
                                          UTC.
------------------------------------------------------------------------


    Exhibit B--Minimum Primary Economic Terms Data--Foreign Exchange
             Transactions (Other Than Cross-Currency Swaps)
             [Enter N/A for fields that are not applicable]
------------------------------------------------------------------------
       Data fields for all swaps                     Comment
------------------------------------------------------------------------
Asset Class............................  Field values: Credit, equity,
                                          FX, interest rates, other
                                          commodities.
The Unique Swap Identifier for the swap  As provided in Sec.   45.5.
The Legal Entity Identifier of the       As provided in Sec.   45.6, or
 reporting counterparty.                  substitute identifier for a
                                          natural person.
An indication of whether the reporting   Yes/No.
 counterparty is a swap dealer with
 respect to the swap.
An indication of whether the reporting   Yes/No.
 counterparty is a major swap
 participant with respect to the swap.
If the reporting counterparty is not a   Yes/No.
 swap dealer or a major swap
 participant with respect to the swap,
 an indication of whether the reporting
 counterparty is a financial entity as
 defined in CEA section 2(h)(7)(C).
An indication of whether the reporting   Yes/No.
 counterparty is a derivatives clearing
 organization with respect to the swap.
An indication of whether the reporting   Yes/No.
 counterparty is a U.S. person.
An indication that the swap will be      Yes/No.
 allocated.
If the swap will be allocated, or is a   As provided in Sec.   45.6, or
 post-allocation swap, the Legal Entity   substitute identifier for a
 Identifier of the agent.                 natural person.
An indication that the swap is a post-   Yes/No.
 allocation swap.
If the swap is a post-allocation swap,   As provided in Sec.   45.5.
 the unique swap identifier of the
 initial swap transaction between the
 reporting counterparty and the agent.

[[Page 98]]

 
The Legal Entity Identifier of the non-  As provided in Sec.   45.6, or
 reporting party.                         substitute identifier for a
                                          natural person.
An indication of whether the non-        Yes/No.
 reporting counterparty is a swap
 dealer with respect to the swap.
An indication of whether the non-        Yes/No.
 reporting counterparty is a major swap
 participant with respect to the swap.
If the non-reporting counterparty is     Yes/No.
 not a swap dealer or a major swap
 participant with respect to the swap,
 an indication of whether the non-
 reporting counterparty is a financial
 entity as defined in CEA section
 2(h)(7)(C).
An indication of whether the non-        Yes/No.
 reporting counterparty is a U.S.
 person.
The Unique Product Identifier assigned   As provided in Sec.   45.7.
 to the swap.
If no Unique Product Identifier is
 available for the swap because the
 swap is not sufficiently standardized,
 the taxonomic description of the swap
 pursuant to the CFTC-approved product
 classification system.
If no CFTC-approved UPI and product
 classification system is yet
 available, the internal product
 identifier or product description used
 by the swap data repository.
An indication that the swap is a multi-  Field values: Yes, Not
 asset swap.                              applicable.
For a multi-asset class swap, an         Generally, the asset class
 indication of the primary asset class.   traded by the desk trading the
                                          swap for the reporting
                                          counterparty. Field values:
                                          Credit, equity, FX, interest
                                          rates, other commodities.
For a multi-asset class swap, an         Field values: Credit, equity,
 indication of the secondary asset        FX, interest rates, other
 class(es).                               commodities.
An indication that the swap is a mixed   Field values: Yes, Not
 swap.                                    applicable.
For a mixed swap reported to two non-    Field value: LEI of the other
 dually-registered swap data              SDR to which the swap is or
 repositories, the identity of the        will be reported.
 other swap data repository (if any) to
 which the swap is or will be reported.
Contract type..........................  E.g., forward, non-deliverable
                                          forward (NDF), non-
                                          deliverable option (NDO),
                                          vanilla option, simple exotic
                                          option, complex exotic option.
Block trade indicator..................  Indication (Yes/No) of whether
                                          the swap qualifies as a block
                                          trade or large notional swap.
Execution timestamp....................  The date and time of the trade,
                                          expressed using Coordinated
                                          Universal Time (``UTC'').
Execution venue........................  The swap execution facility or
                                          designated contract market on
                                          or pursuant to the rules of
                                          which the swap was executed.
                                          Field values: LEI of the swap
                                          execution facility or
                                          designated contract market, or
                                          ``off-facility'' if not so
                                          executed.
Currency 1.............................  ISO code.
Currency 2.............................  ISO code.
Notional amount 1......................  For currency 1.
Notional amount 2......................  For currency 2.
Exchange rate..........................  Contractual rate of exchange of
                                          the currencies.
Delivery type..........................  Physical (deliverable) or cash
                                          (non-deliverable).
Settlement or expiration date..........  Settlement date, or for an
                                          option the contract expiration
                                          date.
Timestamp for submission to swap data    Time and date of submission to
 repository.                              the swap data repository,
                                          expressed using Coordinated
                                          Universal Time (``UTC''), as
                                          recorded by an automated
                                          system where available, or as
                                          recorded manually where an
                                          automated system is not
                                          available.
Clearing indicator.....................  Yes/No indication of whether
                                          the swap will be submitted for
                                          clearing to a derivatives
                                          clearing organization.
Clearing venue.........................  LEI of the derivatives clearing
                                          organization.
If the swap will not be cleared, an      Yes/No.
 exception to, or an exemption from,
 the clearing requirement has been
 elected with respect to the swap under
 part 50 of this chapter.
The identity of the counterparty         Field values: LEI, or
 electing an exception or exemption to    substitute identifier, for a
 the clearing requirement under part 50   natural person.
 of this chapter.
Clearing exception or exemption type...  The type of clearing exception
                                          or exemption being claimed.
                                          Field values: End user, Inter-
                                          affiliate or Cooperative.
Indication of collateralization........  Is the trade collateralized,
                                          and if so to what extent?
                                          Field values:
                                          Uncollateralized, partially
                                          collateralized, one-way
                                          collateralized, fully
                                          collateralized.

[[Page 99]]

 
Any other term(s) of the trade matched   E.g., for options, premium,
 or affirmed by the counterparties in     premium currency, premium
 verifying the trade.                     payment date; for non-
                                          deliverable trades, settlement
                                          currency, valuation (fixing)
                                          date; indication of the
                                          economic obligations of the
                                          counterparties. Use as many
                                          fields as required to report
                                          each such term.
------------------------------------------------------------------------


    Exhibit B--Minimum Primary Economic Terms Data--Foreign Exchange
             Transactions (Other Than Cross-Currency Swaps)
             [Enter N/A for fields that are not applicable]
------------------------------------------------------------------------
 Additional data categories and fields
           for clearing swaps                        Comment
------------------------------------------------------------------------
Clearing swap USIs.....................  The USIs of each clearing swap
                                          that replaces the original
                                          swap that was submitted for
                                          clearing to the DCO, other
                                          than the USI for which the PET
                                          data is currently being
                                          reported (as ``USI'' field
                                          above).
Original swap USI......................  The USI of the original swap
                                          submitted for clearing to the
                                          DCO that is replaced by
                                          clearing swaps.
Original swap SDR......................  LEI of SDR to which the
                                          original swap was reported.
Clearing member LEI....................  LEI of Clearing member.
Clearing member client account.........  Clearing member client account
                                          number.
Origin (house or customer).............  An indication whether the
                                          clearing member acted as
                                          principal for a house trade or
                                          agent for a customer trade.
Clearing receipt timestamp.............  The date and time at which the
                                          DCO received the original swap
                                          for clearing, expressed using
                                          UTC.
Clearing acceptance timestamp..........  The date and time at which the
                                          DCO accepted the original swap
                                          for clearing, expressed using
                                          UTC.
------------------------------------------------------------------------


   Exhibit C--Minimum Primary Economic Terms Data--Interest Rate Swaps
                    (Including Cross-Currency Swaps)
             [Enter N/A for fields that are not applicable]
------------------------------------------------------------------------
       Data fields for all swaps                     Comment
------------------------------------------------------------------------
Asset Class............................  Field values: Credit, equity,
                                          FX, interest rates, other
                                          commodities.
The Unique Swap Identifier for the swap  As provided in Sec.   45.5.
The Legal Entity Identifier of the       As provided in Sec.   45.6, or
 reporting counterparty.                  substitute identifier for a
                                          natural person.
An indication of whether the reporting   Yes/No.
 counterparty is a swap dealer with
 respect to the swap.
An indication of whether the reporting   Yes/No.
 counterparty is a major swap
 participant with respect to the swap.
If the reporting counterparty is not a   Yes/No.
 swap dealer or a major swap
 participant with respect to the swap,
 an indication of whether the reporting
 counterparty is a financial entity as
 defined in CEA section 2(h)(7)(C).
An indication of whether the reporting   Yes/No.
 counterparty is a derivatives clearing
 organization with respect to the swap.
An indication of whether the reporting   Yes/No.
 counterparty is a U.S. person.
An indication that the swap will be      Yes/No.
 allocated.
If the swap will be allocated, or is a   As provided in Sec.   45.6, or
 post-allocation swap, the Legal Entity   substitute identifier for a
 Identifier of the agent.                 natural person.
An indication that the swap is a post-   Yes/No.
 allocation swap.
If the swap is a post-allocation swap,   As provided in Sec.   45.5.
 the unique swap identifier of the
 initial swap transaction between the
 reporting counterparty and the agent.
The Legal Entity Identifier of the non-  As provided in Sec.   45.6, or
 reporting counterparty.                  substitute identifier for a
                                          natural person.
An indication of whether the non-        Yes/No.
 reporting counterparty is a swap
 dealer with respect to the swap.
An indication of whether the non-        Yes/No.
 reporting counterparty is a major swap
 participant with respect to the swap.

[[Page 100]]

 
If the non-reporting counterparty is     Yes/No.
 not a swap dealer or a major swap
 participant with respect to the swap,
 an indication of whether the non-
 reporting counterparty is a financial
 entity as defined in CEA section
 2(h)(7)(C).
An indication of whether the non-        Yes/No.
 reporting counterparty is a U.S.
 person.
The Unique Product Identifier assigned   As provided in Sec.   45.7.
 to the swap.
If no Unique Product Identifier is
 available for the swap because the
 swap is not sufficiently standardized,
 the taxonomic description of the swap
 pursuant to the CFTC-approved product
 classification system.
If no CFTC-approved UPI and product
 classification system is yet
 available, the internal product
 identifier or product description used
 by the swap data repository.
An indication that the swap is a multi-  Field values: Yes, Not
 asset swap.                              applicable.
For a multi-asset class swap, an         Generally, the asset class
 indication of the primary asset class.   traded by the desk trading the
                                          swap for the reporting
                                          counterparty. Field values:
                                          Credit, equity, FX, interest
                                          rates, other commodities.
For a multi-asset class swap, an         Field values: Credit, equity,
 indication of the secondary asset        FX, interest rates, other
 class(es).                               commodities.
An indication that the swap is a mixed   Field values: Yes, Not
 swap.                                    applicable.
For a mixed swap reported to two non-    Field value: LEI of the other
 dually-registered swap data              SDR to which the swap is or
 repositories, the identity of the        will be reported.
 other swap data repository (if any) to
 which the swap is or will be reported.
Contract type..........................  E.g., swap, swaption, option,
                                          basis swap, index swap.
Block trade indicator..................  Indication (Yes/No) of whether
                                          the swap qualifies as a block
                                          trade or large notional swap.
Execution timestamp....................  The date and time of the trade,
                                          expressed using Coordinated
                                          Universal Time (``UTC'').
Execution venue........................  The swap execution facility or
                                          designated contract market on
                                          or pursuant to the rules of
                                          which the swap was executed.
                                          Field values: LEI of the swap
                                          execution facility or
                                          designated contract market, or
                                          ``off-facility'' if not so
                                          executed.
Start date.............................  The date on which the swap
                                          starts or goes into effect.
Maturity, termination or end date......  The date on which the swap
                                          expires or ends.
Day count convention...................
Notional amount (leg 1)................  The current active notional
                                          amount.
Notional currency (leg 1)..............  ISO code.
Notional amount (leg 2)................  The current active notional
                                          amount.
Notional currency (leg 2)..............  ISO code.
Payer (fixed rate).....................  Is the reporting party a fixed
                                          rate payer? Yes/No/Not
                                          applicable.
Payer (floating rate leg 1)............  If two floating legs, the payer
                                          for leg 1.
Payer (floating rate leg 2)............  If two floating legs, the payer
                                          for leg 2.
Direction..............................  For swaps: Whether the
                                          principal is paying or
                                          receiving the fixed rate. For
                                          float-to-float and fixed-to-
                                          fixed swaps: Indicate N/A.
                                         For non-swap instruments and
                                          swaptions: Indicate the
                                          instrument that was bought or
                                          sold.
Option type............................  E.g., put, call, straddle.
Fixed rate.............................
Fixed rate day count fraction..........  E.g., actual 360.
Floating rate payment frequency........
Floating rate reset frequency..........
Floating rate index name/rate period...  E.g., USD-Libor-BBA.
Timestamp for submission to swap data    Time and date of submission to
 repository.                              the swap data repository,
                                          expressed using UTC, as
                                          recorded by an automated
                                          system where available, or as
                                          recorded manually where an
                                          automated system is not
                                          available.
Clearing indicator.....................  Yes/No indication of whether
                                          the swap will be submitted for
                                          clearing to a derivatives
                                          clearing organization.
Clearing venue.........................  LEI of the derivatives clearing
                                          organization.
If the swap will not be cleared, an      Yes/No.
 indication of whether an exception to,
 or an exemption from, the clearing
 requirement has been elected with
 respect to the swap under part 50 of
 this chapter.
The identity of the counterparty         Field values: LEI, or
 electing an exception or exemption to    substitute identifier, for a
 the clearing requirement under part 50   natural person.
 of this chapter.

[[Page 101]]

 
Clearing exception or exemption type...  The type of clearing exception
                                          or exemption being claimed.
                                          Field values: End user, Inter-
                                          affiliate or Cooperative.
Indication of collateralization........  Is the swap collateralized, and
                                          if so to what extent? Field
                                          values: Uncollateralized,
                                          partially collateralized, one-
                                          way collateralized, fully
                                          collateralized.
Any other term(s) of the swap matched    E.g., early termination option
 or affirmed by the counterparties in     clause. Use as many fields as
 verifying the swap.                      required to report each such
                                          term.
------------------------------------------------------------------------


   Exhibit C--Minimum Primary Economic Terms Data--Interest Rate Swaps
                    (Including Cross-Currency Swaps)
             [Enter N/A for fields that are not applicable]
------------------------------------------------------------------------
 Additional data categories and fields
           for clearing swaps                        Comment
------------------------------------------------------------------------
Clearing swap USIs.....................  The USIs of each clearing swap
                                          that replaces the original
                                          swap that was submitted for
                                          clearing to the DCO, other
                                          than the USI for which the PET
                                          data is currently being
                                          reported (as ``USI'' field
                                          above).
Original swap USI......................  The USI of the original swap
                                          submitted for clearing to the
                                          DCO that is replaced by
                                          clearing swaps.
Original swap SDR......................  LEI of SDR to which the
                                          original swap was reported.
Clearing member LEI....................  LEI of Clearing member.
Clearing member client account.........  Clearing member client account
                                          number.
Origin (house or customer).............  An indication whether the
                                          clearing member acted as
                                          principal for a house trade or
                                          agent for a customer trade.
Clearing receipt timestamp.............  The date and time at which the
                                          DCO received the original swap
                                          for clearing, expressed using
                                          UTC.
Clearing acceptance timestamp..........  The date and time at which the
                                          DCO accepted the original swap
                                          for clearing, expressed using
                                          UTC.
------------------------------------------------------------------------


  Exhibit D--Minimum Primary Economic Terms Data--Other Commodity Swaps
             [Enter N/A for fields that are not applicable]
------------------------------------------------------------------------
        Data field for all swaps                     Comment
------------------------------------------------------------------------
Asset Class............................  Field values: Credit, equity,
                                          FX, interest rates, other
                                          commodities.
The Unique Swap Identifier for the swap  As provided in Sec.   45.5.
The Legal Entity Identifier of the       As provided in Sec.   45.6, or
 reporting counterparty.                  substitute identifier for a
                                          natural person.
An indication of whether the reporting   Yes/No.
 counterparty is a swap dealer with
 respect to the swap.
An indication of whether the reporting   Yes/No.
 counterparty is a major swap
 participant with respect to the swap.
If the reporting counterparty is not a   Yes/No.
 swap dealer or a major swap
 participant with respect to the swap,
 an indication of whether the reporting
 counterparty is a financial entity as
 defined in CEA section 2(h)(7)(C).
An indication of whether the reporting   Yes/No.
 counterparty is a derivatives clearing
 organization with respect to the swap.
An indication of whether the reporting   Yes/No.
 counterparty is a U.S. person.
An indication that the swap will be      Yes/No.
 allocated.
If the swap will be allocated, or is a   As provided in Sec.   45.6, or
 post-allocation swap, the Legal Entity   substitute identifier for a
 Identifier of the agent.                 natural person.
An indication that the swap is a post-   Yes/No.
 allocation swap.
If the swap is a post-allocation swap,   As provided in Sec.   45.5.
 the unique swap identifier of the
 initial swap transaction between the
 reporting counterparty and the agent.
The Legal Entity Identifier of the non-  As provided in Sec.   45.6, or
 reporting party.                         substitute identifier for a
                                          natural person.
An indication of whether the non-        Yes/No.
 reporting counterparty is a swap
 dealer with respect to the swap.
An indication of whether the non-        Yes/No.
 reporting counterparty is a major swap
 participant with respect to the swap.

[[Page 102]]

 
If the non-reporting counterparty is     Yes/No.
 not a swap dealer or a major swap
 participant with respect to the swap,
 an indication of whether the non-
 reporting counterparty is a financial
 entity as defined in CEA section
 2(h)(7)(C).
An indication of whether the non-        Yes/No.
 reporting counterparty is a U.S.
 person.
The Unique Product Identifier assigned   As provided in Sec.   45.7.
 to the swap.
If no Unique Product Identifier is
 available for the swap because the
 swap is not sufficiently standardized,
 the taxonomic description of the swap
 pursuant to the CFTC-approved product
 classification system.
If no CFTC-approved UPI and product
 classification system is yet
 available, the internal product
 identifier or product description used
 by the swap data repository.
An indication that the swap is a multi-  Field values: Yes, Not
 asset swap.                              applicable.
For a multi-asset class swap, an         Generally, the asset class
 indication of the primary asset class.   traded by the desk trading the
                                          swap for the reporting
                                          counterparty. Field values:
                                          Credit, equity, FX, interest
                                          rates, other commodities.
For a multi-asset class swap, an         Field values: Credit, equity,
 indication of the secondary asset        FX, interest rates, other
 class(es).                               commodities.
An indication that the swap is a mixed   Field values: Yes, Not
 swap.                                    applicable.
For a mixed swap reported to two non-    Field value: LEI of the other
 dually- registered swap data             SDR to which the swap is or
 repositories, the identity of the        will be reported.
 other swap data repository (if any) to
 which the swap is or will be reported.
Contract type..........................  E.g., swap, swaption, option,
                                          basis swap, index swap.
Block trade indicator..................  Indication (Yes/No) of whether
                                          the swap qualifies as a
                                          ``block trade'' or ``large
                                          notional off-facility swap''
                                          as defined in part 43 of the
                                          CFTC's regulations.
Execution timestamp....................  The date and time of the trade,
                                          expressed using Coordinated
                                          Universal Time (``UTC''), as
                                          recorded by an automated
                                          system where available, or as
                                          recorded manually where an
                                          automated system is not
                                          available.
Execution venue........................  The swap execution facility or
                                          designated contract market on
                                          or pursuant to the rules of
                                          which the swap was executed.
                                          Field values: LEI of the swap
                                          execution facility or
                                          designated contract market, or
                                          ``off-facility'' if not so
                                          executed.
Timestamp for submission to swap data    Time and date of submission to
 repository.                              the swap data repository,
                                          expressed using UTC, as
                                          recorded by an automated
                                          system where available, or as
                                          recorded manually where an
                                          automated system is not
                                          available.
Start date.............................  The date on which the swap
                                          commences or goes into effect
                                          (e.g., in physical oil, the
                                          pricing start date).
Maturity, termination, or end date.....  The date on which the swap
                                          expires or ends (e.g., in
                                          physical oil, the pricing end
                                          date).
Buyer..................................  The counterparty purchasing the
                                          product: (E.g., the payer of
                                          the fixed price (for a swap),
                                          or the payer of the floating
                                          price on the underlying swap
                                          (for a put swaption), or the
                                          payer of the fixed price on
                                          the underlying swap (for a
                                          call swaption). Field values:
                                          LEI, if available, or
                                          substitute identifier, for a
                                          natural person.
Seller.................................  The counterparty offering the
                                          product: (E.g., the payer of
                                          the floating price (for a
                                          swap), the payer of the fixed
                                          price on the underlying swap
                                          (for a put swaption), or the
                                          payer of the floating price on
                                          the underlying swap (for a
                                          call swaption). Field values:
                                          LEI, or substitute identifier,
                                          for a natural person.
Quantity unit..........................  The unit of measure applicable
                                          for the quantity on the swap.
                                          E.g., barrels, bushels,
                                          gallons, pounds, tons.
Quantity...............................  The amount of the commodity
                                          (the number of quantity units)
                                          quoted on the swap.
Quantity frequency.....................  The rate at which the quantity
                                          is quoted on the swap. E.g.,
                                          hourly, daily, weekly,
                                          monthly.
Total quantity.........................  The quantity of the commodity
                                          for the entire term of the
                                          swap.
Settlement method......................  Physical delivery or cash.
Price..................................  The price of the swap. For
                                          options, the strike price.
Price unit.............................  The unit of measure applicable
                                          for the price of the swap.
Price currency.........................  ISO code.
Buyer pay index........................  The published price as paid by
                                          the buyer (if applicable). For
                                          swaptions, applies to the
                                          underlying swap.
Buyer pay averaging method.............  The averaging method used to
                                          calculate the index of the
                                          buyer pay index. For
                                          swaptions, applies to the
                                          underlying swap.

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Seller pay index.......................  The published price as paid by
                                          the seller (if applicable).
                                          For swaptions, applies to the
                                          underlying swap.
Seller pay averaging method............  The averaging method used to
                                          calculate the index of the
                                          seller pay index. For
                                          swaptions, applies to the
                                          underlying swap.
Grade..................................  If applicable, the grade of the
                                          commodity to be delivered,
                                          e.g., the grade of oil or
                                          refined product.
Option type............................  Descriptor for the type of
                                          option transaction. E.g., put,
                                          call, straddle.
Option style...........................  E.g., American, European,
                                          European Daily, European
                                          Monthly, Asian.
Option premium.........................  The total amount paid by the
                                          option buyer.
Hours from through.....................  For electric power, the hours
                                          of the day for which the swap
                                          is effective.
Hours from through time zone...........  For electric power, the time
                                          zone prevailing for the hours
                                          during which electricity is
                                          transmitted.
Days of week...........................  For electric power, the profile
                                          applicable for the delivery of
                                          power.
Load type..............................  For electric power, the load
                                          profile for the delivery of
                                          power.
Clearing indicator.....................  Yes/No indication of whether
                                          the swap will be submitted for
                                          clearing to a derivatives
                                          clearing organization.
Clearing venue.........................  LEI of the derivatives clearing
                                          organization.
If the swap will not be cleared, an      Yes/No.
 indication of whether an exception to,
 or an exemption from, the clearing
 requirement has been elected with
 respect to the swap under part 50 of
 this chapter.
The identity of the counterparty         Field values: LEI, or
 electing an exception or exemption to    substitute identifier, for a
 the clearing requirement under part 50   natural person.
 of this chapter.
Clearing exception or exemption type...  The type of clearing exception
                                          or exemption being claimed.
                                          Field values: End user, Inter-
                                          affiliate or Cooperative.
Indication of collateralization........  Is the swap collateralized, and
                                          if so to what extent? Field
                                          values: Uncollateralized,
                                          partially collateralized, one-
                                          way collateralized, fully
                                          collateralized.
Any other term(s) of the swap matched    Use as many fields as required
 or affirmed by the counterparties in     to report each such term.
 verifying the swap.
------------------------------------------------------------------------


  Exhibit D--Minimum Primary Economic Terms Data--Other Commodity Swaps
             [Enter N/A for fields that are not applicable]
------------------------------------------------------------------------
 Additional data categories and fields
           for clearing swaps                        Comment
------------------------------------------------------------------------
Clearing swap USIs.....................  The USIs of each clearing swap
                                          that replaces the original
                                          swap that was submitted for
                                          clearing to the DCO, other
                                          than the USI for which the PET
                                          data is currently being
                                          reported (as ``USI'' field
                                          above).
Original swap USI......................  The USI of the original swap
                                          submitted for clearing to the
                                          DCO that is replaced by
                                          clearing swaps.
Original swap SDR......................  LEI of SDR to which the
                                          original swap was reported.
Clearing member LEI....................  LEI of Clearing member.
Clearing member client account.........  Clearing member client account
                                          number.
Origin (house or customer).............  An indication whether the
                                          clearing member acted as
                                          principal for a house trade or
                                          agent for a customer trade.
Clearing receipt timestamp.............  The date and time at which the
                                          DCO received the original swap
                                          for clearing, expressed using
                                          UTC.
Clearing acceptance timestamp..........  The date and time at which the
                                          DCO accepted the original swap
                                          for clearing, expressed using
                                          UTC.
------------------------------------------------------------------------


[81 FR 41778, June 27, 2016]

[[Page 104]]



PART 46_SWAP DATA RECORDKEEPING AND REPORTING REQUIREMENTS:
PRE-ENACTMENT AND TRANSITION SWAPS--Table of Contents



Sec.
46.1 Definitions.
46.2 Recordkeeping for pre-enactment swaps and transition swaps.
46.3 Swap data reporting for pre-enactment swaps and transition swaps.
46.4 Unique identifiers.
46.5 Determination of which counterparty must report.
46.6 Third-party facilitation of data reporting.
46.7 Reporting to a single swap data repository.
46.8 Data reporting for swaps in a swap asset class not accepted by any 
          swap data repository.
46.9 Voluntary supplemental reporting
46.10 Required data standards.
46.11 Reporting of errors and omissions in previously reported data.

Appendix 1 to Part 46--Tables of Minimum Primary Economic Terms Data for 
          Pre-Enactment and Transition Swaps

    Authority: Title VII, sections 723 and 729, Pub. L. 111-203, 124 
Stat. 1738.

    Source: 77 FR 35226, June 12, 2012, unless otherwise noted.



Sec.  46.1  Definitions.

    Terms used in this part are defined as follows:
    Asset class means the broad category of goods, services or 
commodities, including any ``excluded commodity'' as defined in CEA 
section 1a(19), with common characteristics underlying a swap. The asset 
classes include credit, equity, foreign exchange (excluding cross-
currency), interest rate (including cross-currency), other commodity, 
and such other asset classes as may be determined by the Commission.
    Compliance date means the applicable date, as specified in part 45 
of this chapter, on which a registered entity or swap counterparty 
subject to the jurisdiction of the Commission is required to commence 
full compliance with all provisions of this part and with all applicable 
provisions of part 45 of this chapter, as set forth in the preamble to 
this part.
    Confirmation (confirming) means the consummation (electronically or 
otherwise) of legally binding documentation (electronic or otherwise) 
that memorializes the agreement of the parties to all terms of a swap. A 
confirmation must be in writing (whether electronic or otherwise) and 
must legally supersede any previous agreement (electronically or 
otherwise).
    Confirmation data means all of the terms of a swap matched and 
agreed upon by the counterparties in confirming the swap.
    Credit swap means any swap that is primarily based on instruments of 
indebtedness, including, without limitation: any swap primarily based on 
one or more broad-based indices related to instruments of indebtedness; 
and any swap that is an index credit swap or total return swap on one or 
more indices of debt instruments.
    Electronic reporting (``report electronically'') means the reporting 
of data normalized in data fields as required by the data standard or 
standards used by the swap data repository to which the data is 
reported. Except where specifically otherwise provided in this chapter, 
electronic reporting does not include submission of an image of a 
document or text file.
    Equity swap means any swap that is primarily based on equity 
securities, including, without limitation: any swap primarily based on 
one or more broad-based indices of equity securities; and any total 
return swap on one or more equity indices.
    Financial entity has the meaning set forth in CEA section 
2(h)(7)(C).
    Foreign exchange forward has the meaning set forth in CEA section 
1a(24).
    Foreign exchange instrument means an instrument that is both defined 
as a swap in part 1 of this chapter and included in the foreign exchange 
asset class. Instruments in the foreign exchange asset class include: 
any currency option, foreign currency option, foreign exchange option, 
or foreign exchange rate option; any foreign exchange forward as defined 
in CEA section 1a(24); any foreign exchange swap as defined in CEA 
section 1a(25); and any non-deliverable forward involving foreign 
exchange.
    Foreign exchange swap has the meaning set forth in CEA section 
1a(25). It does not include swaps primarily based

[[Page 105]]

on rates of exchange between different currencies, changes in such 
rates, or other aspects of such rates (sometimes known as ``cross-
currency swaps'').
    Interest rate swap means any swap which is primarily based on one or 
more interest rates, such as swaps of payments determined by fixed and 
floating interest rates; or any swap which is primarily based on rates 
of exchange between different currencies, changes in such rates, or 
other aspects of such rates (sometimes known as ``cross-currency 
swaps'').
    International swap means a swap required by U.S. law and the law of 
another jurisdiction to be reported both to a swap data repository and 
to a different trade repository registered with the other jurisdiction.
    Major swap participant has the meaning set forth in CEA section 
1a(33) and in part 1 of this chapter.
    Minimum primary economic terms means, with respect to a historical 
swap, the terms included in the list of minimum primary economic terms 
for swaps in each swap asset class found in appendix 1 to this part.
    Minimum primary economic terms data means all of the data elements 
necessary to fully report all of the minimum primary economic terms 
required by this part to be reported for a swap in the swap asset class 
of the swap in question.
    Mixed swap has the meaning set forth in CEA section 1a(47)(D), and 
refers to an instrument that is in part a swap subject to the 
jurisdiction of the Commission, and in part a security-based swap 
subject to the jurisdiction of the SEC.
    Multi-asset swap means a swap that does not have one easily 
identifiable primary underlying notional item, but instead involves 
multiple underlying notional items within the Commission's jurisdiction 
that belong to different asset classes.
    Non-SD/MSP counterparty means a swap counterparty that is neither a 
swap dealer nor a major swap participant.
    Other commodity swap means any swap not included in the credit, 
equity, foreign exchange, or interest rate asset classes, including, 
without limitation, any swap for which the primary underlying item is a 
physical commodity or the price or any other aspect of a physical 
commodity.
    Pre-enactment swap means any swap entered into prior to enactment of 
the Dodd-Frank Act of 2010 (July 21, 2010), the terms of which have not 
expired as of the date of enactment of that Act.
    Reporting counterparty means the counterparty required to report 
swap data pursuant to this part, selected as provided in Sec.  46.5.
    Required swap continuation data means all of the data elements that 
must be reported during the existence of a swap as required by part 45 
of this chapter.
    Swap data repository has the meaning set forth in CEA section 
1a(48), and in part 49 of this chapter.
    Swap dealer has the meaning set forth in CEA section 1a(49), and in 
part 1 of this chapter.
    Transition swap means any swap entered into on or after the 
enactment of the Dodd-Frank Act of 2010 (July 21, 2010) and prior to the 
applicable compliance date on which a registered entity or swap 
counterparty subject to the jurisdiction of the Commission is required 
to commence full compliance with all provisions of this part, as set 
forth in the preamble to this part.



Sec.  46.2  Recordkeeping for pre-enactment swaps and transition swaps.

    (a) Recordkeeping for pre-enactment and transition swaps in 
existence on or after April 25, 2011. Each counterparty subject to the 
jurisdiction of the Commission that is a counterparty to any pre-
enactment swap or transition swap that is in existence on or after April 
25, 2011 shall keep the following records concerning each such swap:
    (1) Minimum records required. Each counterparty shall keep records 
of all of the minimum primary economic terms data specified in appendix 
1 to this part.
    (2) Additional records required to be kept if possessed by a 
counterparty. In addition to the minimum records required pursuant to 
paragraph (a)(1) of this part, a counterparty that is in possession at 
any time on or after April 25, 2011 of any of the following 
documentation shall keep copies thereof:

[[Page 106]]

    (i) Any confirmation of the swap executed by the counterparties.
    (ii) Any master agreement governing the swap, and any modification 
or amendment thereof.
    (iii) Any credit support agreement, or other agreement between the 
counterparties having the same function as a credit support agreement, 
relating to the swap, and any modification or amendment thereof.
    (3) Records created or available after the compliance date. In 
addition to the records required to be kept pursuant to paragraphs 
(a)(1) and (2) of this section, each counterparty to any pre-enactment 
swap or transition swap that remains in existence on the compliance date 
shall keep for each such swap, from the compliance date forward, all of 
the records required to be kept by section 45.2 of this chapter, to the 
extent that any such records are created by or become available to the 
counterparty on or after the compliance date.
    (4) Retention form. Records required to be kept pursuant to this 
section with respect to historical swaps in existence on or after April 
25, 2011, must be kept as required by paragraph (a)(4)(i) or (ii) of 
this section, as applicable.
    (i) Records required to be kept by swap dealers or major swap 
participants may be kept in electronic form, or kept in paper form if 
originally created and exclusively maintained in paper form, so long as 
they are retrievable, and information in them is reportable as required 
by this part.
    (ii) Records required to be kept by non-SD/MSP counterparties may be 
kept in either electronic or paper form, so long as they are 
retrievable, and information in them is reportable, as required by this 
part.
    (b) Recordkeeping for pre-enactment and transition swaps expired or 
terminated prior to April 25, 2011. Each counterparty subject to the 
jurisdiction of the Commission that is a counterparty to any pre-
enactment swap or transition swap that is expired or terminated prior to 
April 25, 2011 shall keep the following records concerning each such 
swap:
    (1) Pre-enactment swaps expired prior to April 25, 2011. Each 
counterparty to any pre-enactment swap that expired or was terminated 
prior to April 25, 2011 shall retain the information and documents 
relating to the terms of the transaction that were possessed by the 
counterparty on or after October 14, 2010 (17 CFR 44.00 through 44.02). 
Such information may be retained in the format in which it existed on or 
after October 14, 2010, or in such other format as the counterparty 
chooses to retain it. This paragraph (b)(1) does not require the 
counterparty to create or retain records of information not in its 
possession on or after October 14, 2010, or to alter the format, i.e., 
the method by which the information is organized and stored.
    (2) Transition swaps expired prior to April 25, 2011. Each 
counterparty to any transition swap that expired or was terminated prior 
to April 25, 2011 shall retain the information and documents relating to 
the terms of the transaction that were possessed by the counterparty on 
or after December 17, 2010 (17 CFR 44.03). Such information may be 
retained in the format in which it existed on or after December 17, 
2010, or in such other format as the counterparty chooses to retain it. 
This paragraph (b)(2) does not require the counterparty to create or 
retain records of information not in its possession on or after December 
17, 2010, or to alter the format, i.e., the method by which the 
information is organized and stored.
    (c) Retention period. All records required to be kept by this 
section shall be kept from the applicable dates specified in paragraphs 
(a) or (b) of this section through the life of the swap, and for a 
period of at least five years from the final termination of the swap.
    (d) Retrieval. Records required to be kept pursuant to this section 
shall be retrievable as follows.
    (1) Retrieval for pre-enactment and transition swaps in existence on 
or after April 25, 2011. Records concerning pre-enactment and transition 
swaps in existence on or after April 25, 2011, shall be retrievable as 
follows:
    (i) Each record required to be kept by a counterparty that is a swap 
dealer or major swap participant shall be readily accessible via real 
time electronic access by the counterparty throughout

[[Page 107]]

the life of the swap and for two years following the final termination 
of the swap, and shall be retrievable by the registrant or its 
affiliates within three business days through the remainder of the 
period following final termination of the swap during which it is 
required to be kept.
    (ii) Each record required to be kept by a non-SD/MSP counterparty 
shall be retrievable by the counterparty within five business days 
throughout the period during which it is required to be kept.
    (2) Retrieval for pre-enactment and transition swaps expired or 
terminated prior to April 25, 2011. Records concerning pre-enactment and 
transition swaps expired or terminated prior to April 25, 2011, shall be 
retrievable by the counterparty within five business days throughout the 
period during which they are required to be kept.
    (e) Inspection. All records required to be kept pursuant to this 
section by any registrant or its affiliates or by any counterparty 
subject to the jurisdiction of the Commission shall be open to 
inspection upon request by any representative of the Commission, the 
United States Department of Justice, or the Securities and Exchange 
Commission, or by any representative of a prudential regulator as 
authorized by the Commission. Copies of all such records shall be 
provided, at the expense of the entity or person required to keep the 
record, to any representative of the Commission upon request. With 
respect to historical swaps in existence on or after April 25, 2011, 
copies of records required to be kept by any swap dealer or major swap 
participant shall be provided either by electronic means, in hard copy, 
or both, as requested by the Commission, with the sole exception that 
copies of records originally created and exclusively maintained in paper 
form may be provided in hard copy only; and copies of records required 
to be kept by any non-SD/MSP counterparty shall be provided in the form, 
whether electronic or paper, in which the records are kept. With respect 
to historical swaps expired or terminated prior to April 25, 2011, 
records shall be provided in the form, whether electronic or paper, in 
which the records are kept.



Sec.  46.3  Swap data reporting for pre-enactment swaps and transition swaps.

    (a) Reporting for pre-enactment and transition swaps in existence on 
or after April 25, 2011--(1) Initial data report. For each pre-enactment 
swap or transition swap in existence on or after April 25, 2011, the 
reporting counterparty shall report electronically to a swap data 
repository (or to the Commission if no swap data repository for swaps in 
the asset class in question is available), on the compliance date, the 
following:
    (i) All of the minimum primary economic terms data specified in 
appendix 1 to this part that were in the possession of the reporting 
counterparty on or after April 25, 2011;
    (ii) The legal entity identifier of the reporting counterparty 
required pursuant to Sec.  46.4; and
    (iii) The following additional identifiers:
    (A) The internal counterparty identifier or legal entity identifier 
used by the reporting counterparty to identify the non-reporting 
counterparty; and
    (B) The internal transaction identifier used by the reporting 
counterparty to identify the swap.
    (2) Reporting of required swap continuation data. (i) For each 
uncleared pre-enactment or transition swap in existence on or after 
April 25, 2011, throughout the existence of the swap following the 
compliance date, the reporting counterparty must report all required 
swap continuation data required to be reported pursuant to part 45 of 
this chapter, with the exception that when a reporting counterparty 
reports changes to minimum primary economic terms for a pre-enactment or 
transition swap, the reporting counterparty is required to report only 
changes to the minimum primary economic terms listed in appendix 1 to 
this part and reported in the initial data report made pursuant to 
paragraph (a)(1) of this section, rather than changes to all minimum 
primary economic terms listed in appendix 1 to part 45.
    (ii) Swap continuation data reporting is not required for a pre-
enactment or transition swap in existence on or after April 25, 2011, 
that has been cleared by a designated clearing organization.

[[Page 108]]

    (3) Data reporting for multi-asset swaps and mixed swaps. (i) For 
each pre-enactment or transition swap in existence on or after April 25, 
2011, that is a multi-asset swap, all data required to be reported by 
this part shall be reported to a single swap data repository that 
accepts swaps in the asset class treated as the primary asset class 
involved in the swap by the reporting counterparty making the first 
report of required swap creation data pursuant to this section.
    (ii) For each pre-enactment or transition swap in existence on or 
after April 25, 2011, that is a mixed swap, all data required to be 
reported pursuant to this part shall be reported to a swap data 
repository registered with the Commission and to a security-based swap 
data repository registered with the Securities and Exchange Commission. 
This requirement may be satisfied by reporting the mixed swap to a swap 
data repository or security-based swap data repository registered with 
both Commissions.
    (b) Reporting for pre-enactment and transition swaps expired or 
terminated prior to April 25, 2011--(1) Pre-enactment swaps expired or 
terminated prior to April 25, 2011. For each pre-enactment swap which 
expired or was terminated prior to April 25, 2011, the reporting 
counterparty shall report to a swap data repository (or to the 
Commission if no swap data repository for swaps in the asset class in 
question is available), on the compliance date, such information 
relating to the terms of the transaction as was in the reporting 
counterparty's possession on or after October 14, 2010 (17 CFR 44.00 
through 44.02). This information may be reported via any method selected 
by the reporting counterparty.
    (2) Transition swaps expired or terminated prior to April 25, 2011. 
For each transition swap which expired or was terminated prior to April 
25, 2011, the reporting counterparty shall report to a swap data 
repository (or to the Commission if no swap data repository for swaps in 
the asset class in question is available), on the compliance date, such 
information relating to the terms of the transaction as was in the 
reporting counterparty's possession on or after December 17, 2010 (17 
CFR 44.03). This information may be reported via any method selected by 
the reporting counterparty.
    (c) Voluntary early submission of initial data report. For all pre-
enactment and transition swaps required to be reported pursuant to this 
part, the reporting counterparty may make the initial data report 
required by paragraph (a)(1) of this section, or the data report 
required by paragraph (b) of this section, prior to the applicable 
compliance date, if a swap data repository accepting swaps in the asset 
class in question is prepared to accept the report. The obligation to 
report continuation data as required by paragraph (a)(2) of this section 
with respect to a swap for which a voluntary early submission is made 
commences on the applicable compliance date. However, the reporting 
counterparty may submit continuation data at any time after a voluntary 
early submission made pursuant to this paragraph, if the swap data 
repository is prepared to accept such continuation data, and if that 
repository has registered with the Commission as a swap data repository 
as of the applicable compliance date.
    (d) Non-duplication of previous reporting. If the reporting 
counterparty for a pre-enactment or transition swap has reported any of 
the information required as paragraphs (a) or (b) of this section to a 
trade repository prior to the compliance date, and if as of the 
compliance date that repository has registered with the Commission as a 
swap data repository, then:
    (1) The counterparty shall not be required to report such previously 
reported information to the swap data repository again;
    (2) The counterparty shall be required to report to the swap data 
repository on the compliance date any information required as part of 
the initial data report by paragraph (a) of this section that has not 
been reported prior to the compliance date: and
    (3) In the case of pre-enactment and transition swaps in existence 
on or after April 25, 2011, the initial data report required by 
paragraph (a) of this section and all subsequent data reporting 
concerning the swap shall be made to the same swap data repository to 
which data concerning the swap was

[[Page 109]]

first reported prior to the compliance date (or to its successor in the 
event that it ceases to operate, as provided in part 49 of this 
chapter).



Sec.  46.4  Unique identifiers.

    The unique identifier requirements for swap data reporting with 
respect to pre-enactment or transition swaps shall be as follows:
    (a) By the compliance date, the reporting counterparty (as defined 
by part 45 of this chapter) for each pre-enactment or transition swap in 
existence on or after April 25, 2011, for which an initial data report 
is required by this part 46, shall obtain for itself a legal entity 
identifier as provided in Sec.  45.6 of this chapter (or if the 
Commission has not yet designated a legal entity identifier system, a 
substitute counterparty identifier as provided in Sec.  45.6(f) of this 
chapter), and shall include its own legal entity identifier (or 
substitute counterparty identifier) in the initial data report 
concerning the swap. With respect to the legal entity identifier (or 
substitute counterparty identifier) of the reporting counterparty, the 
reporting counterparty and the swap data repository to which the swap is 
reported shall comply thereafter with all unique identifier requirements 
of Sec.  45.6 of this chapter.
    (b) Within 180 days after the compliance date, the non-reporting 
counterparty for each pre-enactment or transition swap in existence on 
or after April 25, 2011, for which an initial data report is required by 
this part 46, shall obtain a legal entity identifier as provided in 
Sec.  45.6 of this chapter (or if the Commission has not yet designated 
a legal entity identifier system, a substitute counterparty identifier 
as provided in Sec.  45.6(f) of this chapter), and shall provide its 
legal entity identifier (or substitute counterparty identifier) to the 
reporting counterparty. Upon receipt of the non-reporting counterparty's 
legal entity identifier (or substitute counterparty identifier), the 
reporting counterparty shall provide it to the swap data repository to 
which swap data for the swap was reported. Thereafter, with respect to 
the legal entity identifier (or substitute counterparty identifier) of 
the non-reporting counterparty, the counterparties to the swap and the 
swap data repository to which it is reported shall comply with all 
requirements of Sec.  45.6 of this chapter.
    (c) The legal entity identifier requirements of parts 46 and 45 of 
this chapter shall not apply to pre-enactment or transition swaps 
expired or terminated prior to April 25, 2011.
    (d) The unique swap identifier and unique product identifier 
requirements of part 45 of this chapter shall not apply to pre-enactment 
or transition swaps.



Sec.  46.5  Determination of which counterparty must report.

    (a) Determination of which counterparty must report swap data 
concerning each pre-enactment or transition swap shall be made as 
follows:
    (1) If only one counterparty is a swap dealer, the swap dealer shall 
fulfill all counterparty reporting obligations.
    (2) If neither party is an swap dealer, and only one counterparty is 
an major swap participant, the major swap participant shall fulfill all 
counterparty reporting obligations.
    (3) If both counterparties are non-SD/MSP counterparties, and only 
one counterparty is a financial entity as defined in CEA section 
2(h)(7)(C), the counterparty that is a financial entity shall be the 
reporting counterparty.
    (4) For each pre-enactment swap or transition swap for which both 
counterparties are swap dealers, or both counterparties are major swap 
participants, or both counterparties are non-SD/MSP counterparties that 
are financial entities as defined in CEA section 2(h)(7)(C), or both 
counterparties are non-SD/MSP counterparties and neither counterparty is 
a financial entity as defined in CEA section 2(h)(7)(C), the 
counterparties shall agree which counterparty shall fulfill reporting 
obligations with respect to that swap; and the counterparty so selected 
shall fulfill all counterparty reporting obligations.
    (5) Notwithstanding the provisions of paragraphs (a)(1) through (3) 
of this section, for pre-enactment or transition swaps for which both 
counterparties are non-SD/MSP counterparties, if

[[Page 110]]

only one counterparty is a U.S. person, that counterparty shall be the 
reporting counterparty and shall fulfill all counterparty reporting 
obligations.
    (b) For pre-enactment and transition swaps in existence as of the 
compliance date, determination of the reporting counterparty shall be 
made by applying the provisions of paragraph (a) of this section with 
respect to the current counterparties to the swap as of the compliance 
date, regardless of whether either or both were original counterparties 
to the swap when it was first executed.
    (c) For pre-enactment and transition swaps for which reporting is 
required, but which have expired or been terminated prior to the 
compliance date, determination of the reporting counterparty shall be 
made by applying the provisions of paragraph (a) of this section to the 
counterparties to the swap as of the date of its expiration or 
termination (except for determination of a counterparty's status as an 
SD or MSP, which shall be made as of the compliance date), regardless of 
whether either or both were original counterparties to the swap when it 
was first executed.
    (d) After the initial report required by Sec.  46.3 is made, if a 
reporting counterparty selected pursuant to this section ceases to be a 
counterparty to a swap due to an assignment or novation, the reporting 
counterparty for reporting of required swap continuation data following 
the assignment or novation shall be selected from the two current 
counterparties as provided in paragraphs (d)(1) through (4) of this 
section.
    (1) If only one counterparty is a swap dealer, the swap dealer shall 
be the reporting counterparty and shall fulfill all counterparty 
reporting obligations.
    (2) If neither counterparty is a swap dealer, and only one 
counterparty is a major swap participant, the major swap participant 
shall be the reporting counterparty and shall fulfill all counterparty 
reporting obligations.
    (3) If both counterparties are non-SD/MSP counterparties, and only 
one counterparty is a U.S. person, that counterparty shall be the 
reporting counterparty and shall fulfill all counterparty reporting 
obligations.
    (4) In all other cases, the counterparty that replaced the previous 
reporting counterparty by reason of the assignment or novation shall be 
the reporting counterparty, unless otherwise agreed by the 
counterparties.



Sec.  46.6  Third-party facilitation of data reporting.

    Counterparties required by this part 46 to report swap data for any 
pre-enactment or transition swap, while remaining fully responsible for 
reporting as required by this part 46, may contract with third-party 
service providers to facilitate reporting.



Sec.  46.7  Reporting to a single swap data repository.

    All data reported for each pre-enactment or transition swap pursuant 
to this part 46, and all corrections of errors and omissions in 
previously reported data for the swap, shall be reported to the same 
swap data repository to which the initial data report concerning the 
swap is made (or to its successor in the event that it ceases to 
operate, as provided in part 49 of this chapter).



Sec.  46.8  Data reporting for swaps in a swap asset class not 
accepted by any swap data repository.

    (a) Should there be a swap asset class for which no swap data 
repository registered with the Commission currently accepts swap data, 
each registered entity or counterparty required by this part to report 
any required swap creation data or required swap continuation data with 
respect to a swap in that asset class must report that same data to the 
Commission.
    (b) Data reported to the Commission pursuant to this section shall 
be reported at times announced by the Commission. Data reported to the 
Commission pursuant to this section with respect to pre-enactment and 
transition swaps in existence on or after April 25, 2011 shall be 
reported in an electronic format acceptable to the Commission.
    (c) Delegation of authority to the Chief Information Officer: The 
Commission hereby delegates to its Chief Information Officer, until the 
Commission orders otherwise, the authority

[[Page 111]]

set forth in paragraph (c) of this section, to be exercised by the Chief 
Information Officer or by such other employee or employees of the 
Commission as may be designated from time to time by the Chief 
Information Officer. The Chief Information Officer may submit to the 
Commission for its consideration any matter which has been delegated in 
this paragraph. Nothing in this paragraph prohibits the Commission, at 
its election, from exercising the authority delegated in this paragraph. 
The authority delegated to the Chief Information Officer by paragraph 
(c) of this section shall include:
    (1) With respect to all pre-enactment and transition swaps required 
to be reported by this part, the authority to determine the dates and 
times at which data concerning such swaps shall be reported pursuant to 
this part.
    (2) With respect to all pre-enactment swaps or transition swaps in 
existence on or after April 25, 2011:
    (i) The authority to determine the manner, format, coding structure, 
and electronic data transmission standards and procedures acceptable to 
the Commission for the purposes of paragraphs (a) and (b) of this 
section; and
    (ii) The authority to determine whether the Commission may permit or 
require use by reporting entities or counterparties in reporting pre-
enactment or transition swaps in existence on or after April 25, 2011, 
of one or more particular data standards (such as FIX, FpML, ISO 20022, 
or some other standard), in order to accommodate the needs of different 
communities of users.
    (d) The Chief Information Officer shall publish from time to time in 
the Federal Register and on the Web site of the Commission the dates and 
times, format, data schema, and electronic data transmission methods and 
procedures for reporting acceptable to the Commission with respect to 
swap data reporting pursuant to this section.



Sec.  46.9  Voluntary supplemental reporting.

    (a) For purposes of this section, the term voluntary, supplemental 
report means any report of swap data for a pre-enactment or transition 
swap to a swap data repository that is not required to be made pursuant 
to this part or any other part in this chapter.
    (b) A voluntary, supplemental report for a pre-enactment or 
transition swap may be made only by a counterparty to the swap in 
connection with which the voluntary, supplemental report is made, or by 
a third-party service provider acting on behalf of a counterparty to the 
swap.
    (c) A voluntary, supplemental report for a pre-enactment or 
transition swap may be made only after the initial data report for the 
swap required by section 46.3(a) or the report required by section 
46.3(b), as applicable, has been made.
    (d) A voluntary, supplemental report for a pre-enactment or 
transition swap may be made either to the swap data repository to which 
the initial data report for the swap required by section 46.3(a) or the 
report required by section 46.3(b), as applicable, has been made, or to 
a different swap data repository.
    (e) A voluntary, supplemental report for a pre-enactment or 
transition swap must contain:
    (1) An indication that the report is a voluntary, supplemental 
report.
    (2) The swap data repository identifier created for the swap by the 
automated systems of the swap data repository to which the initial data 
report required by section 46.3(a) or the report required by section 
46.3(b), as applicable, has been made.
    (3) An indication of the identity of the swap data repository to 
which the initial data report required by section 46.3(a) or the report 
required by section 46.3(b), as applicable, has been made, if the 
voluntary supplemental report is made to a different swap data 
repository.
    (4) If the pre-enactment or transition swap was in existence on or 
after April 25, 2011, the legal entity identifier (or substitute 
identifier) of the counterparty making the voluntary, supplemental 
report.
    (5) If applicable, an indication that the voluntary, supplemental 
report is made pursuant to the laws or regulations of any jurisdiction 
outside the United States.
    (f) If a counterparty that has made a voluntary, supplemental report 
discovers any errors in the swap data included in the voluntary, 
supplemental

[[Page 112]]

report, the counterparty must report a correction of each such error to 
the swap data repository to which the voluntary, supplemental report was 
made, as soon as technologically practicable after discovery of any such 
error.



Sec.  46.10  Required data standards.

    In reporting swap data to a swap data repository as required by this 
part 46, each reporting counterparty shall use the facilities, methods, 
or data standards provided or required by the swap data repository to 
which counterparty reports the data.



Sec.  46.11  Reporting of errors and omissions in previously reported data.

    (a) Each swap counterparty required by this part 46 to report swap 
data shall report any errors and omissions in the data so reported. 
Corrections of errors or omissions shall be reported as soon as 
technologically practicable after discovery of any such error or 
omission.
    (b) For pre-enactment or transition swaps for which this part 
requires reporting of continuation data, reporting counterparties 
reporting state data as provided in part 45 of this chapter may fulfill 
the requirement to report errors or omissions by making appropriate 
corrections in their next daily report of state data pursuant to part 45 
of this chapter.
    (c) Each counterparty to a pre-enactment or transition swap that is 
not the reporting counterparty as determined pursuant to Sec.  46.5, and 
that discovers any error or omission with respect to any swap data 
reported to a swap data repository for that swap, shall promptly notify 
the reporting counterparty of each such error or omission. As soon as 
technologically practicable after receiving such notice, the reporting 
counterparty shall report a correction of each such error or omission to 
the swap data repository.
    (d) Each swap counterparty reporting corrections to errors or 
omissions in data previously reported as required by this part shall 
report such corrections in the same format as it reported the erroneous 
or omitted data.

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  Sec. Appendix 1 to Part 46--Tables of Minimum Primary Economic Terms 
               Data For Pre-Enactment and Transition Swaps
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PART 48_REGISTRATION OF FOREIGN BOARDS OF TRADE--Table of Contents



Sec.
48.1 Scope.
48.2 Definitions.
48.3 Registration required.
48.4 Registration eligibility and scope.
48.5 Registration procedures.
48.6 Foreign boards of trade providing direct access pursuant to 
          existing no-action relief.
48.7 Requirements for registration.
48.8 Conditions of registration.
48.9 Revocation of registration.
48.10 Additional contracts.
48.11 Delegation of authority.

Appendix to Part 48--Form FBOT

    Authority: 7 U.S.C. 5, 6 and 12a, unless otherwise noted.

    Source: 76 FR 80698, Dec. 23, 2011, unless otherwise noted.



Sec.  48.1  Scope.

    The provisions of this part apply to any foreign board of trade that 
is registered, required to be registered, or applying to become 
registered with the Commission in order to provide its identified 
members or other participants located in the United States with direct 
access to its electronic trading and order matching system.



Sec.  48.2  Definitions.

    For purposes of this part:
    (a) Foreign board of trade. Foreign board of trade means any board 
of trade, exchange or market located outside the United States, its 
territories or possessions, whether incorporated or unincorporated.
    (b) Foreign board of trade eligible to be registered. A foreign 
board of trade eligible to be registered means a foreign

[[Page 122]]

board of trade that satisfies the requirements for registration 
specified in Sec.  48.7 and:
    (1) Possesses the attributes of an established, organized exchange,
    (2) Adheres to appropriate rules prohibiting abusive trading 
practices,
    (3) Enforces appropriate rules to maintain market and financial 
integrity,
    (4) Has been authorized by a regulatory process that examines 
customer and market protections, and
    (5) Is subject to continued oversight by a regulator that has power 
to intervene in the market and the authority to share information with 
the Commission.
    (c) Direct access. Direct access means an explicit grant of 
authority by a foreign board of trade to an identified member or other 
participant located in the United States to enter trades directly into 
the trade matching system of the foreign board of trade.
    (d) Linked contract. Linked contract means a futures, option or swap 
contract that is made available for trading by direct access by a 
registered foreign board of trade that settles against any price 
(including the daily or final settlement price) of one or more contracts 
listed for trading on a registered entity as defined in section 1a(40) 
of the Act.
    (e) Communications. Communications means any written or electronic 
documentation or correspondence issued by or on behalf of the 
Commission, the United States Department of Justice, or the National 
Futures Association.
    (f) Material change. Material change means a material change in the 
information provided to the Commission in support of an application for 
registration under this part. Subsequent to registration, material 
change also includes a material change in the operations of the foreign 
board of trade or its clearing organization and, without limitation, a 
change in any of the following: The membership or participant criteria 
of the foreign board of trade or its clearing organization; the location 
of the management, personnel or operations of the foreign board of trade 
or its clearing organization; the structure, nature, or operation of the 
trading or clearing systems; the regulatory or self-regulatory regime 
applicable to the foreign board of trade, its clearing organization, or 
their respective members and other participants; the authorization, 
licensure, registration or recognition of the foreign board of trade or 
clearing organization; and the ability of the clearing organization to 
observe the Recommendations for Central Counterparties.
    (g) Clearing organization. Clearing organization means the foreign 
board of trade, affiliate of the foreign board of trade or any third 
party clearing house, clearing association, clearing corporation or 
similar entity, facility or organization that, with respect to any 
agreement, contract or transaction executed on or through the foreign 
board of trade, would be:
    (1) Defined as a derivatives clearing organization under section 
1a(15) of the Act; or
    (2) Defined as a central counterparty by the Recommendations for 
Central Counterparties.
    (h) Existing no-action relief. Existing no-action relief means a no-
action letter issued by a division of the Commission to the foreign 
board of trade in which the division informs the foreign board of trade 
that it will not recommend that the Commission institute enforcement 
action against the foreign board of trade if the foreign board of trade 
does not seek designation as either a designated contract market 
pursuant to section 5 of the Act or a derivatives transaction execution 
facility pursuant to section 5a of the Act in connection with the 
granting of direct access.
    (i) Swap. Swap means a swap as defined in section 1a(47) of the Act 
and any Commission regulation further defining the term adopted 
thereunder.
    (j) Recommendations for Central Counterparties. Recommendations for 
Central Counterparties means:
    (1) The current Recommendations for Central Counterparties issued 
jointly by the Committee on Payment and Settlement Systems and the 
Technical Committee of the International Organization of Securities 
Commissions as updated, revised or otherwise amended; or
    (2) Successor standards, principles and guidance for central 
counterparties or financial market infrastructures

[[Page 123]]

adopted jointly by the Technical Committee of the International 
Organization of Securities Commissions and the Committee on Payment and 
Settlement Systems.
    (k) Affiliate. An affiliate of a registered foreign board of trade 
member or other participant means any person, as that term is defined in 
section 1a(38) of the Act, that:
    (1) Owns 50% or more of the member or other participant;
    (2) Is owned 50% or more by the member or other participant; or
    (3) Is owned 50% or more by a third person that also owns 50% or 
more of the member or other participant.
    (l) Member or other participant. Member or other participant means a 
member or other participant of a foreign board of trade that is 
registered under this part and any affiliate thereof that has been 
granted direct access by the foreign board of trade.



Sec.  48.3  Registration required.

    (a) Except as specified in this part, it shall be unlawful for a 
foreign board of trade to permit direct access to its electronic trading 
and order matching system unless and until the Commission has issued a 
valid and current Order of Registration to the foreign board of trade 
pursuant to the provisions of this part.
    (b) It shall be unlawful for a foreign board of trade or the 
clearing organization to make false or misleading statements in or in 
connection with any application for registration under this part.



Sec.  48.4  Registration eligibility and scope.

    (a) Only foreign boards of trade eligible to be registered, as 
defined in Sec.  48.2(b) of this part, are eligible for registration 
with the Commission pursuant to this part.
    (b) A foreign board of trade may apply for registration under this 
part in order to permit the members and other participants of the 
foreign board of trade that are located in the United States to enter 
trades directly into the trading and order matching system of the 
foreign board of trade, to the extent that such members or other 
participants are:
    (1) Entering orders for the member's or other participant's 
proprietary accounts;
    (2) Registered with the Commission as futures commission merchants 
and are submitting customer orders to the trading system for execution; 
or
    (3) Registered with the Commission as a commodity pool operator or 
commodity trading advisor, or are exempt from such registration pursuant 
to Sec.  4.13 or Sec.  4.14 of this chapter, and are submitting orders 
for execution on behalf of a United States pool that the member or other 
participant operates or an account of a United States customer for which 
the member or other participant has discretionary authority, 
respectively, provided that a futures commission merchant or a firm 
exempt from such registration pursuant to Sec.  30.10 of this chapter 
acts as clearing firm and guarantees, without limitation, all such 
trades of the commodity pool operator or commodity trading advisor 
effected through submission of orders to the trading system.



Sec.  48.5  Registration procedures.

    (a) A foreign board of trade seeking registration with the 
Commission pursuant to this part must electronically file an application 
for registration with the Secretary of the Commission at its Washington 
DC headquarters at [email protected].
    (b) A complete application for registration must include:
    (1) A completed Form FBOT and Form Supplement S-1, as set forth in 
the appendix to this part, or any successor forms, and all information 
and documentation described in such forms; and
    (2) Any additional information and documentation necessary, in the 
discretion of the Commission, to supplement the application including, 
but not limited to, documentation and information provided during the 
course of an on-site visit, as applicable, to the foreign board of 
trade, the clearing organization and the regulatory authority or 
authorities, to effectively demonstrate that the foreign board of trade 
and its clearing organization satisfy the registration requirements set 
forth in Sec.  48.7.

[[Page 124]]

    (c) An applicant for registration must identify with particularity 
any information in the application that will be subject to a request for 
confidential treatment and must provide support for any request for 
confidential treatment pursuant to the procedures set forth in Sec.  
145.9 of this chapter.
    (d) If, upon review, the Commission finds the application for 
registration to be complete, the Commission may approve or deny the 
application. In reviewing the application, the Commission will consider, 
among other things:
    (1) Whether the foreign board of trade is eligible to be registered 
as defined in Sec.  48.2(b) and;
    (2) Whether the foreign board of trade and its clearing organization 
are subject to comprehensive supervision and regulation by the 
appropriate governmental authorities in their home country or countries 
that is comparable to the comprehensive supervision and regulation to 
which designated contract markets and derivatives clearing organizations 
are respectively subject under the Act, Commission regulations, and 
other applicable United States laws and regulations, if any, and;
    (3) Any previous Commission findings that the foreign board of trade 
and its clearing organization are subject to comprehensive supervision 
and regulation by the appropriate government authorities in their home 
country or countries that is comparable to the comprehensive supervision 
and regulation to which designated contract markets and derivatives 
clearing organizations are subject under the Act, Commission 
regulations, and other applicable United States laws and regulations, if 
any; and
    (4) Whether the foreign board of trade and its clearing organization 
have adequately demonstrated that they meet the requirements for 
registration specified in Sec.  48.7.
    (5) The Commission's determination that the foreign board of trade 
and its clearing organization are subject to comprehensive supervision 
and regulation by the appropriate government authorities in their home 
country or countries that is comparable to the comprehensive supervision 
and regulation to which designated contract markets and derivatives 
clearing organizations are subject will be based upon a principles-based 
review conducted in a manner consistent with this part 48 pursuant to 
which the Commission will look to determine if the government 
authorities support and enforce regulatory objectives in the oversight 
of the foreign board of trade and the clearing organization that are 
substantially equivalent to the regulatory objectives supported and 
enforced by the Commission in its oversight of designated contract 
markets and derivatives clearing organizations.
    (e) If the Commission approves the application, the Commission will 
issue an Order of Registration. If the Commission does not approve the 
application, the Commission will, after appropriate notice and an 
opportunity to respond, issue a Notice of Action specifying that the 
application was not approved and setting forth the reasons therefor. The 
Commission, in its discretion, may impose conditions in the Order of 
Registration and may, after appropriate notice and an opportunity to 
respond, amend, suspend, or otherwise restrict the terms of an issued 
Order of Registration or issue an Order revoking registration.
    (f) A foreign board of trade whose application is not approved may 
reapply for registration 360 days after the issuance of the Notice of 
Action if the foreign board of trade has addressed any deficiencies in 
its original application or facts and circumstances relevant to the 
Commission's review of the application have changed.



Sec.  48.6  Foreign boards of trade providing direct access pursuant
to existing no-action relief.

    (a) A foreign board of trade operating pursuant to existing no-
action relief as of the effective date of this part 48 must register 
with the Commission pursuant to this part in order to continue to 
provide direct access to its electronic trading and order matching 
system from the United States.
    (b)(1) The application of a foreign board of trade operating 
pursuant to existing no-action relief must include a complete Form FBOT 
and Supplement S-1, as set forth in the appendix to this part. If the 
foreign board of trade, as

[[Page 125]]

part of its application for registration, wishes to rely on information 
and documentation previously submitted electronically in connection with 
its request for no-action relief in order to demonstrate that it 
satisfies the registration requirements set forth in Sec.  48.7, 
(limited application) the foreign board of trade must:
    (i) Specifically identify the information or documentation 
previously submitted;
    (ii) Identify the specific registration requirements set forth in 
Sec.  48.7 that are satisfied by such information or documentation; and
    (iii) Certify that the information remains accurate and current.
    (2) If the foreign board of trade wishes to rely on information and 
documentation previously submitted in hard copy in connection with its 
application for no-action relief, the foreign board of trade must also 
resubmit the identified information or documentation. A foreign board of 
trade that has submitted a complete application for no-action relief 
that is pending as of February 21, 2012 may also apply for registration 
pursuant to these limited application procedures.
    (c) A foreign board of trade operating pursuant to existing no-
action relief must submit a limited application for registration, 
determined in good faith by the applicant to be complete, within 180 
days of February 21, 2012. If, at any time after August 20, 2012 but 
before a limited application is approved or disapproved, the Commission 
determines that the application is materially incomplete, the Commission 
may, after providing the foreign board of trade with notice and an 
opportunity to respond to the determination of incompleteness, withdraw 
the existing no-action relief if the Commission determines that the 
application cannot be made complete in a timely manner. The foreign 
board of trade may continue to operate pursuant to the existing no-
action relief, subject to the terms and conditions contained therein, 
August 20, 2012, while the Commission is reviewing its application, and 
until the Commission approves or disapproves the application or 
otherwise withdraws the existing no-action relief. The no-action relief 
is automatically withdrawn upon issuance of an Order of Registration or 
upon disapproval.



Sec.  48.7  Requirements for registration.

    An applicant for registration must demonstrate that it and, where 
applicable, its clearing organization meet the following requirements. 
The registration requirements applicable to clearing organizations may 
alternatively be met by demonstrating that the clearing organization is 
registered and in good standing with the Commission as a derivatives 
clearing organization. The Commission, in its discretion, may request 
additional information and documentation in connection with an 
application for registration and an applicant for registration must 
provide promptly any such additional information or documentation. The 
Commission, in its discretion, also may impose additional registration 
requirements that the Commission deems necessary after appropriate 
notice and opportunity to respond.
    (a) Foreign Board of Trade and Clearing Membership:
    (1) The members and other participants of the foreign board of trade 
and its clearing organization are fit and proper and meet appropriate 
financial and professional standards;
    (2) The foreign board of trade and its clearing organization have 
and enforce provisions to minimize and resolve conflicts of interest; 
and
    (3) The foreign board of trade and its clearing organization have 
and enforce rules prohibiting the disclosure, both during and subsequent 
to service on a board or committee, of material non-public information 
obtained as a result of a member's or other participant's performance of 
duties as a member of their respective governing boards and significant 
committees.
    (b) The Automated Trading System:
    (1) The trading system complies with Principles for the Oversight of 
Screen-Based Trading Systems for Derivative Products developed by the 
Technical Committee of the International Organization of Securities 
Commissions,
    (2) The trade matching algorithm matches trades fairly and timely,
    (3) The audit trail captures all relevant data, including changes to 
orders, and audit trail data is securely

[[Page 126]]

maintained and available for an adequate time period,
    (4) Adequate and appropriate trade data is made available to users 
and the public,
    (5) The trading system has demonstrated reliability,
    (6) Access to the trading system is secure and protected,
    (7) There are adequate provisions for emergency operations and 
disaster recovery,
    (8) Trading data is backed up to prevent loss of data, and
    (9) Only those futures, option or swap contracts that have been 
identified to the Commission in the foreign board of trade's application 
for registration or permitted to be made available for trading by direct 
access pursuant to the procedures set forth in Sec.  48.10 of this part 
are made available for trading by direct access.
    (c) Terms and Conditions of Contracts to Be Made Available in the 
United States.
    (1) Contracts must meet the following standards:
    (i) Contracts must be futures, option or swap contracts that would 
be eligible to be traded on a designated contract market;
    (ii) Contracts must be cleared;
    (iii) Contracts must not be prohibited from being traded by United 
States persons; and
    (iv) Contracts must not be readily susceptible to manipulation.
    (2) Foreign futures and option contracts on non-narrow-based 
security indexes must have been certified by the Commission pursuant to 
the procedures set forth in Sec.  30.13 of this chapter.
    (3) Contracts that have the following characteristics must be 
specifically identified as having such characteristics:
    (i) Contracts that are linked to a contract listed for trading on a 
registered entity as defined in section 1a(40) of the Act, and
    (ii) Contracts that have any other relationship with a contract 
listed for trading on a registered entity (for example, if both the 
foreign board of trade's and the registered entity's contract settle to 
the price of the same third party-constructed index).
    (d) Settlement and Clearing:
    (1) The clearing organization observes the Recommendations for 
Central Counterparties or is registered with the Commission as a 
derivatives clearing organization, and
    (2) The clearing organization is in good regulatory standing in its 
home country jurisdiction.
    (e) The Regulatory Regimes Governing the Foreign Board of Trade and 
the Clearing Organization:
    (1) The regulatory authorities provide comprehensive supervision and 
regulation of the foreign board of trade, the clearing organization, and 
the type of contracts to be made available through direct access that is 
comparable to the comprehensive supervision and regulation provided by 
the Commission to designated contract markets, derivatives clearing 
organizations and such contracts. That is, the regulatory authorities 
support and enforce regulatory objectives in the oversight of the 
foreign board of trade, clearing organization and the type of contracts 
that the foreign board of trade wishes to make available through direct 
access that are substantially equivalent to the regulatory objectives 
supported and enforced by the Commission in its oversight of designated 
contract markets, derivatives clearing organizations, and such products.
    (2) The regulatory authorities engage in ongoing regulatory 
supervision and oversight of the foreign board of trade and its trading 
system, the clearing organization and its clearing system, and the 
members, intermediaries and other participants of the foreign board of 
trade and clearing organization, with respect to, among other things, 
market integrity, customer protection, clearing and settlement and the 
enforcement of the rules of the foreign board of trade and the clearing 
organization.
    (3) The regulatory authorities have the power to share information 
directly with the Commission, upon request, including information 
necessary to evaluate the continued eligibility of the foreign board of 
trade for registration and to audit for compliance with the terms and 
conditions of the registration.
    (4) The regulatory authorities have the power to intervene in the 
market.

[[Page 127]]

    (f) The Rules of the Foreign Board of Trade and the Clearing 
Organization and Enforcement Thereof:
    (1) The foreign board of trade and its clearing organization have 
implemented and enforce rules to ensure compliance with the requirements 
of registration contained in this part;
    (2) The foreign board of trade and its clearing organization have 
the capacity to detect, investigate, and sanction persons who violate 
their respective rules;
    (3) The foreign board of trade and the clearing organization (or 
their respective regulatory authorities) have implemented and enforce 
disciplinary procedures that empower them to recommend and prosecute 
disciplinary actions for suspected rule violations, impose adequate 
sanctions for such violations, and provide adequate protections to 
charged parties pursuant to fair and clear standards;
    (4) The foreign board of trade and its clearing organization are 
authorized by rule or by contractual agreement to obtain, from members 
and other participants, any information and cooperation necessary to 
conduct investigations, to effectively enforce their respective rules, 
and to ensure compliance with the conditions of registration;
    (5) The foreign board of trade and its clearing organization have 
sufficient compliance staff and resources, including by delegation and/
or outsourcing to a third party, to fulfill their respective regulatory 
responsibilities, including appropriate trade practice surveillance, 
real time market monitoring, market surveillance, financial 
surveillance, protection of customer funds, enforcement of clearing and 
settlement provisions and other compliance and regulatory 
responsibilities;
    (6) The foreign board of trade has implemented and enforces rules 
with respect to access to the trading system and the means by which the 
connection thereto is accomplished;
    (7) The foreign board of trade's audit trail captures and retains 
sufficient order and trade-related data to allow its compliance staff to 
detect trading and market abuses and to reconstruct all transactions 
within a reasonable period of time;
    (8) The foreign board of trade has implemented and enforces rules 
prohibiting fraud and abusive trading practices including, but not 
limited to, wash sales and trading ahead;
    (9) The foreign board of trade has the capacity to detect and deter, 
and has implemented and enforces rules relating to, market manipulation, 
attempted manipulation, price distortion, and other disruptions of the 
market; and
    (10) The foreign board of trade has and enforces rules and 
procedures that ensure a competitive, open and efficient market and 
mechanism for executing transactions.
    (g) Information Sharing:
    (1) The regulatory authorities governing the activities of the 
foreign board of trade and the clearing organization are signatories to 
the International Organization of Securities Commissions Multilateral 
Memorandum of Understanding, or otherwise ensure that substitute 
information sharing arrangements that are satisfactory to the Commission 
are in place;
    (2) The regulatory authorities governing the activities of the 
foreign board of trade and the clearing organization are signatories to 
the Declaration on Cooperation and Supervision of International Futures 
Exchanges and Clearing Organizations or otherwise commit, in writing, to 
share the types of information contemplated by the International 
Information Sharing Memorandum of Understanding and Agreement with the 
Commission;
    (3) The foreign board of trade has executed the International 
Information Sharing Memorandum of Understanding and Agreement; and
    (4) Pursuant to the conditions described in Sec.  48.8(a)(6), the 
foreign board of trade and clearing organization agree to provide 
directly to the Commission, upon request, any information necessary, in 
the discretion of the Commission, to evaluate the continued eligibility 
and appropriateness of the foreign board of trade and the clearing 
organization, or their respective members or other participants for 
registration, to audit for and enforce compliance with the requirements 
and conditions of the registration, or to enable the Commission to carry 
out its duties

[[Page 128]]

under the Act and Commission regulations.



Sec.  48.8  Conditions of registration.

    Upon registration under this part, and on an ongoing basis 
thereafter, the foreign board of trade and the clearing organization 
shall comply with the applicable conditions of registration set forth in 
this section and any additional conditions that the Commission deems 
necessary and may impose, in its discretion, and after appropriate 
notice and opportunity to respond. Such conditions could include, but 
are not limited to, additional conditions applicable to the listing of 
swap contracts. Continued registration is expressly conditioned upon 
satisfaction of these conditions.
    (a) Specified conditions for maintaining registration. (1) 
Registration Requirements: The foreign board of trade and its clearing 
organization shall continue to satisfy all of the requirements for 
registration set forth in Sec.  48.7.
    (2) Regulatory Regime:
    (i) The foreign board of trade will continue to satisfy the criteria 
for a regulated market or licensed exchange pursuant to the regulatory 
regime described in its application and will continue to be subject to 
oversight by the regulatory authorities described in its application.
    (ii) The clearing organization will continue to satisfy the criteria 
for a regulated clearing organization pursuant to the regulatory regime 
described in the application for registration and will continue to be in 
good standing with the relevant regulatory authority.
    (iii) The laws, systems, rules, and compliance mechanisms of the 
regulatory regime applicable to the foreign board of trade will continue 
to require the foreign board of trade to maintain fair and orderly 
markets; prohibit fraud, abuse, and market manipulation and other 
disruptions of the market; and provide that such requirements are 
subject to the oversight of appropriate regulatory authorities.
    (3) Satisfaction of International Standards:
    (i) The foreign board of trade will continue to comply with the 
Principles for the Oversight of Screen-Based Trading Systems for 
Derivative Products developed by the Technical Committee of the 
International Organization of Securities Commissions, as updated, 
revised, or otherwise amended, to the extent such principles do not 
contravene United States law.
    (ii) The clearing organization will continue to:
    (A) Be registered with the Commission as a derivatives clearing 
organization and be in compliance with the laws and regulations related 
thereto; or
    (B) Observe the Recommendations for Central Counterparties.
    (4) Restrictions on Direct Access:
    (i) Only the foreign board of trade's identified members or other 
participants will have direct access to the foreign board of trade's 
trading system from the United States and the foreign board of trade 
will not provide, and will take reasonable steps to prevent, third 
parties from providing direct access to persons other than the 
identified members or other participants.
    (ii) All orders that are transmitted to the foreign board of trade's 
trading system by a foreign board of trade's identified member or other 
participant that is operating pursuant to the foreign board of trade's 
registration will be solely for the member's or trading participant's 
own account unless such member or other participant is registered with 
the Commission as a futures commission merchant or such member or other 
participant is registered with the Commission as a commodity pool 
operator or commodity trading advisor, or is exempt from such 
registration pursuant to Sec.  4.13 or Sec.  4.14 of this chapter, 
provided that a futures commission merchant or a firm exempt from such 
registration pursuant to Sec.  30.10 of this chapter acts as clearing 
firm and guarantees, without limitation, all such trades of the 
commodity pool operator or commodity trading advisor effected through 
submission of orders on the trading system.
    (5) Submission to Commission Jurisdiction:
    (i) Prior to operating pursuant to registration under this part and 
on a continuing basis thereafter, a registered foreign board of trade 
will require that each current and prospective member or other 
participant that is

[[Page 129]]

granted direct access to the foreign board of trade's trading system and 
that is not registered with the Commission as a futures commission 
merchant, a commodity trading advisor or a commodity pool operator, file 
with the foreign board of trade a written representation, executed by a 
person with the authority to bind the member or other participant, 
stating that as long as the member or other participant is authorized to 
enter orders directly into the trade matching system of the foreign 
board of trade, the member or other participant agrees to and submits to 
the jurisdiction of the Commission with respect to activities conducted 
pursuant to the registration.
    (ii) The foreign board of trade and its clearing organization will 
file with the Commission a valid and binding appointment of an agent for 
service of process in the United States pursuant to which the agent is 
authorized to accept delivery and service of communications, as defined 
in Sec.  48.2(e) issued by or on behalf of the Commission, the United 
States Department of Justice, or the National Futures Association.
    (iii) The foreign board of trade, clearing organization, and each 
current and prospective member or other participant that is granted 
direct access to the foreign board of trade's trading system and that is 
not registered with the Commission as a futures commission merchant, a 
commodity trading advisor, or a commodity pool operator will maintain 
with the foreign board of trade written representations, executed by 
persons with the authority to bind the entity making them, stating that 
as long as the foreign board of trade is registered under this 
regulation, the foreign board of trade, the clearing organization or 
member of either or other participant granted direct access pursuant to 
this regulation will provide, upon the request of the Commission, the 
United States Department of Justice and, if appropriate, the National 
Futures Association, prompt access to the entity's, member's, or other 
participant's original books and records or, at the election of the 
requesting agency, a copy of specified information containing such books 
and records, as well as access to the premises where the trading system 
is available in the United States.
    (iv) The foreign board of trade will maintain all representations 
required pursuant to Sec.  48.8(a)(5) as part of its books and records 
and make them available to the Commission upon request.
    (6) Information Sharing:
    (i) Information-sharing arrangements satisfactory to the Commission, 
including but not limited to those set forth in Sec.  48.7(g), are in 
effect between the Commission and the regulatory authorities that govern 
the activities of both the foreign board of trade and the clearing 
organization.
    (ii) The Commission is, in fact, able to obtain sufficient 
information regarding the foreign board of trade, the clearing 
organization, their respective members and participants and the 
activities related to the foreign board of trade's registration.
    (iii) The foreign board of trade and its clearing organization, as 
applicable, will provide directly to the Commission any information 
necessary to evaluate the continued eligibility and appropriateness of 
the foreign board of trade for registration, the capability and 
determination to enforce compliance with the requirements and conditions 
of the registration, or to enable the Commission to carry out its duties 
under the Act and Commission regulations and to provide adequate 
protection to the public or United States registered entities.
    (iv) In the event that the foreign board of trade and the clearing 
organization are separate entities, the foreign board of trade will 
require the clearing organization to enter into a written agreement in 
which the clearing organization is contractually obligated to promptly 
provide any and all information and documentation that may be required 
of the clearing organization under this regulation and such agreement 
shall be made available to the Commission, upon request.
    (7) Monitoring for Compliance: The foreign board of trade and the 
clearing organization will employ reasonable procedures for monitoring 
and enforcing compliance with the specified conditions of its 
registration.

[[Page 130]]

    (8) On-Site Visits: The foreign board of trade and the clearing 
organization will permit and will cooperate with Commission staff with 
respect to on-site visits for the purpose of overseeing ongoing 
compliance of the foreign board of trade and the clearing organization 
with registration requirements and conditions of registration.
    (9) Conditions Applicable to Swap Trading:
    (i) The foreign board of trade will ensure that all transaction data 
relating to each swap transaction, including price and volume, are 
reported as soon as technologically practicable after execution of the 
swap transaction to a swap data repository that is either registered 
with the Commission or has an information sharing arrangement with the 
Commission.
    (ii) The foreign board of trade will agree to coordinate with the 
Commission with respect to arrangements established to address cross 
market oversight issues involving swap trading, including surveillance, 
emergency actions and the monitoring of trading.
    (b) Other continuing obligations. (1) Registered foreign boards of 
trade and their clearing organizations will continue to comply with the 
following obligations on an ongoing basis:
    (i) The foreign board of trade will maintain the following updated 
information and submit such information to the Commission on at least a 
quarterly basis, not later than 30 days following the end of the 
quarter, and at any time promptly upon the request of a Commission 
representative, computed based upon separating buy sides and sell sides, 
in a format as determined by the Commission:
    (A) For each contract available to be traded through the foreign 
board of trade's trading system;
    (1) The total trade volume originating from electronic trading 
devices providing direct access;
    (2) The total trade volume for such contracts traded through the 
trading system worldwide;
    (3) The total trade volume for such contracts traded on the foreign 
board of trade generally; and
    (B) A listing of the names, National Futures Association 
identification numbers (if applicable), and main business addresses in 
the United States of all members and other participants that have direct 
access.
    (ii) The foreign board of trade will promptly provide to the 
Commission written notice of the following:
    (A) Any material change to the information provided in the foreign 
board of trade's registration application.
    (B) Any material change in the rules of the foreign board of trade 
or clearing organization or the laws, rules, or regulations in the home 
country jurisdictions of the foreign board of trade or clearing 
organization relevant to futures, option or swap contracts made 
available by direct access.
    (C) Any matter known to the foreign board of trade, the clearing 
organization or its representatives that, in the judgment of the foreign 
board of trade or clearing organization, may affect the financial or 
operational viability of the foreign board of trade or its clearing 
organization with respect to contracts traded by direct access, 
including, but not limited to, any significant system failure or 
interruption.
    (D) Any default, insolvency, or bankruptcy of any foreign board of 
trade member or other participant that is or should be known to the 
foreign board of trade or its representatives or the clearing 
organization or its representatives that may have a material, adverse 
impact upon the condition of the foreign board of trade as it relates to 
trading by direct access, its clearing organization or upon any United 
States customer or firm or any default, insolvency or bankruptcy of any 
member of the foreign board of trade's clearing organization.
    (E) Any violation of any specified conditions of the foreign board 
of trade's registration or failure to satisfy the requirements for 
registration under this part that is known or should be known by the 
foreign board of trade, the clearing organization or any of their 
respective members or participants.
    (F) Any disciplinary action by the foreign board of trade or its 
clearing organization, or any regulatory authority that governs their 
respective activities, taken against any of their respective members or 
participants with respect to any contract available

[[Page 131]]

to be traded by direct access that involves any market manipulation, 
abuse, fraud, deceit, or conversion or that results in suspension or 
expulsion.
    (iii) The foreign board of trade and the clearing organization, or 
their respective regulatory authorities, as applicable, will provide the 
following to the Commission annually as of June 30 and not later than 
July 31.
    (A) A certification from the foreign board of trade's regulatory 
authority confirming that the foreign board of trade retains its 
authorization, licensure or registration, as applicable, as a regulated 
market and/or exchange under the authorization, licensing, recognition 
or other registration methodology used by the foreign board of trade's 
regulatory authority and that the foreign board of trade is in continued 
good standing.
    (B) If the clearing organization is not a derivatives clearing 
organization registered with the Commission, a certification from the 
clearing organization's regulatory authority confirming that the 
clearing organization retains its authorization, licensure or 
registration, as applicable, as a clearing organization under the 
authorization, licensing or other registration methodology used by the 
clearing organization's regulatory authority and is in continued good 
standing.
    (C) If the clearing organization is not a derivatives clearing 
organization registered with the Commission, a recertification of the 
clearing organization's observance of the Recommendations for Central 
Counterparties.
    (D) A certification that affiliates, as defined in Sec.  48.2(k), 
continue to be required to comply with the rules of the foreign board of 
trade and clearing organization and that the members or other 
participants to which they are affiliated remain responsible to the 
foreign board of trade for ensuring their affiliates' compliance.
    (E) A description of any material changes regarding the foreign 
board of trade or clearing organization that have not been previously 
disclosed, in writing, to the Commission, or a certification that no 
such material changes have occurred.
    (F) A description of any significant disciplinary or enforcement 
actions that have been instituted by or against the foreign board of 
trade or the clearing organization or the senior officers of either 
during the prior year.
    (G) A written description of any material changes to the regulatory 
regime to which the foreign board of trade or the clearing organization 
are subject that have not been previously disclosed, in writing, to the 
Commission, or a certification that no material changes have occurred.
    (2) The above-referenced annual reports must be signed by an officer 
of the foreign board of trade or the clearing organization who maintains 
the authority to bind the foreign board of trade or clearing 
organization, as applicable, and must be based on the officer's personal 
knowledge.
    (c) Additional specified conditions for foreign boards of trade with 
linked contacts. If a registered foreign board of trade grants members 
or other participants direct access and makes available for trading a 
linked contract, the following additional conditions apply:
    (1) Statutory Conditions.
    (i) The foreign board of trade will make public daily trading 
information regarding the linked contract that is comparable to the 
daily trading information published by the registered entity for the 
contract to which the foreign board of trade's contract is linked, and
    (ii) The foreign board of trade (or its regulatory authority) will:
    (A) Adopt position limits (including related hedge exemption 
provisions) applicable to all market participants for the linked 
contract that are comparable to the position limits (including related 
hedge exemption provisions) adopted by the registered entity for the 
contract to which it is linked;
    (B) Have the authority to require or direct any market participant 
to limit, reduce, or liquidate any position the foreign board of trade 
(or its regulatory authority) determines to be necessary to prevent or 
reduce the threat of price manipulation, excessive speculation as 
described in section 4a of the Act, price distortion, or disruption of 
delivery on the cash settlement process;

[[Page 132]]

    (C) Agree to promptly notify the Commission, with regard to the 
linked contract, of any change regarding--
    (1) The information that the foreign board of trade will make 
publicly available,
    (2) The position limits that foreign board of trade or its 
regulatory authority will adopt and enforce,
    (3) The position reductions required to prevent manipulation, 
excessive speculation as described in section 4a of the Act, price 
distortion, or disruption of delivery or the cash settlement process, 
and
    (4) Any other area of interest expressed by the Commission to the 
foreign board of trade or its regulatory authority;
    (D) Provide information to the Commission regarding large trader 
positions in the linked contract that is comparable to the large trader 
position information collected by the Commission for the contract to 
which it is linked; and
    (E) Provide the Commission such information as is necessary to 
publish reports on aggregate trader positions for the linked contract 
that are comparable to such reports on aggregate trader positions for 
the contract to which it is linked.
    (2) Other Conditions on Linked Contracts.
    (i) The foreign board of trade will inform the Commission in a 
quarterly report of any member that had positions in a linked contract 
above the applicable foreign board of trade position limit, whether a 
hedge exemption was granted, and if not, whether a disciplinary action 
was taken.
    (ii) The foreign board of trade will provide the Commission, either 
directly or through its agent, with trade execution and audit trail data 
for the Commission's Trade Surveillance System on a trade-date plus one 
basis and in a form, content and manner acceptable to the Commission for 
all linked contracts.
    (iii) The foreign board of trade will provide to the Commission, at 
least one day prior to the effective date thereof, except in the event 
of an emergency market situation, copies of, or hyperlinks to, all 
rules, rule amendments, circulars and other notices published by the 
foreign board of trade with respect to all linked contracts.
    (iv) The foreign board of trade will provide to the Commission 
copies of all reports of disciplinary action involving the foreign board 
of trade's linked contracts upon closure of the action. Such reports 
should include the reason the action was undertaken, the results of the 
investigation that led to the disciplinary action, and any sanctions 
imposed.
    (v) In the event that the Commission, pursuant to its emergency 
powers authority, directs that the registered entity which lists the 
contract to which the foreign board of trade's contract is linked to 
take emergency action with respect to a linked contract (for example, to 
cease trading in the contract), the foreign board of trade, subject to 
information-sharing arrangements between the Commission and its 
regulatory authority, will promptly take similar action with respect to 
the its linked contract.



Sec.  48.9  Revocation of registration.

    (a) Failure to Satisfy Registration Requirements or Conditions:
    (1) If the Commission determines that a registered foreign board of 
trade or the clearing organization has failed to satisfy any 
registration requirements or conditions for registration, the Commission 
shall notify the foreign board of trade of such determination, including 
the particular requirements or conditions that are not being satisfied, 
and shall afford the foreign board of trade or clearing organization an 
opportunity to make appropriate changes to bring it into compliance.
    (2) If, not later than 30 days after receiving a notification under 
paragraph (a)(1) of this section, the foreign board of trade or clearing 
organization fails to make changes that, in the opinion of the 
Commission, are necessary to comply with the registration requirements 
or conditions of registration, the Commission may revoke the foreign 
board of trade's registration, after appropriate notice and an 
opportunity to respond, by issuing an Order Revoking Registration which 
sets forth the reasons therefor.

[[Page 133]]

    (3) A foreign board of trade whose registration has been revoked for 
failure to satisfy a registration requirement or condition of 
registration may apply for re-registration 360 days after the issuance 
of the Order Revoking Registration if the deficiency causing the 
revocation has been cured or relevant facts and circumstances have 
changed.
    (b) Other events that could result in revocation. Notwithstanding 
Sec.  48.9(a), revocation under these circumstances will be handled by 
the Commission as relevant facts or circumstances warrant.
    (1) The Commission may revoke a foreign board of trade's 
registration, after appropriate notice and an opportunity to respond, if 
the Commission determines that a representation made in the foreign 
board of trade's application for registration is found to be untrue or 
materially misleading or if the foreign board of trade failed to include 
information in the application that would have been material to the 
Commission's determination as to whether to issue an Order of 
Registration.
    (2) The Commission may revoke a foreign board of trade's 
registration, after appropriate notice and an opportunity to respond, if 
there is a material change in the regulatory regime applicable to the 
foreign board of trade or clearing organization such that the regulatory 
regime no longer satisfies any registration requirement or condition for 
registration applicable to the regulatory regime.
    (3) The Commission may revoke a foreign board of trade's 
registration in the event of an emergency or in a circumstance where the 
Commission determines that revocation would be necessary or appropriate 
in the public interest. Following revocation, the Commission will 
provide notice and an opportunity to respond.
    (4) The Commission may revoke a foreign board of trade's 
registration in the event the foreign board of trade or the clearing 
organization is no longer authorized, licensed or registered, as 
applicable, as a regulated market and/or exchange or clearing 
organization or ceases to operate as a foreign board of trade or 
clearing organization, subject to notice and an opportunity to respond.
    (c) Upon request by the Commission, a registered foreign board of 
trade must file with the Commission a written demonstration, containing 
such supporting data, information, and documents, in such form and 
manner and within such timeframe as the Commission may specify, that the 
foreign board of trade or clearing organization is in compliance with 
the registration requirements and/or conditions for registration.



Sec.  48.10  Additional contracts.

    (a) Generally. A registered foreign board of trade that wishes to 
make an additional futures, option or swap contract available for 
trading by identified members or other participants located in the 
United States with direct access to its electronic trading and order 
matching system must submit a written request prior to offering the 
contracts from within the United States. Such a written request must 
include the terms and conditions of the additional futures, option or 
swap contracts and a certification that the additional contracts meet 
the requirements of Sec.  48.8(c), if applicable, and that the foreign 
board of trade and the clearing organization continue to satisfy the 
requirements and conditions of registration. The foreign board of trade 
can make available for trading by direct access the additional contracts 
ten business days after the date of receipt by the Commission of the 
written request, unless the Commission notifies the foreign board of 
trade that additional time is needed to complete its review of policy or 
other issues pertinent to the additional contracts. A registered foreign 
board of trade may list for trading by direct access an additional 
futures or option contract on a non-narrow-based security index pursuant 
to the Commission certification procedures set forth in Sec.  30.13(d) 
and appendix D to part 30 of this chapter.
    (b) Option contracts on previously approved futures contracts. (1) 
If the option is on a futures contract that is not a linked contract, 
the option contract may be made available for trading by direct access 
by filing with the Commission no later than the business day

[[Page 134]]

preceding the initial listing of the contract:
    (i) A copy of the terms and conditions of the additional contract 
and
    (ii) A certification that the foreign board of trade and the 
clearing organization continue to satisfy the conditions of its 
registration.
    (2) If the option is on a futures contract that is a linked 
contract, the option contract may be made available for trading by 
direct access by filing with the Commission no later than the business 
day preceding the initial listing of the contract:
    (i) A copy of the terms and conditions of the additional contract; 
and
    (ii) A certification that the foreign board of trade and the 
clearing organization continue to satisfy the conditions of its 
registration, including the conditions specifically applicable to linked 
contracts set forth in Sec.  48.8(c).
    (3) If the option is on a non-narrow-based security index futures 
contract which may be offered or sold in the United States pursuant to a 
Commission certification issued pursuant to Sec.  30.13 of this chapter, 
the option contract may be listed for trading by direct access without 
further action by either the registered foreign board of trade or the 
Commission.



Sec.  48.11  Delegation of authority.

    (a) The Commission hereby delegates, until it orders otherwise, to 
the Director of the Division of Market Oversight, or such other employee 
or employees as the Director may designate from time to time, the 
authority:
    (1) In Sec.  48.7, to request additional information and 
documentation in connection with an application for registration;
    (2) In Sec.  48.9(a)(1), to notify a registered foreign board of 
trade that it or the clearing organization has failed to satisfy any 
registration requirements or conditions for registration;
    (3) In Sec.  48.9(c), to request that a registered foreign board of 
trade file with the Commission a written demonstration, containing such 
supporting data, information, and documents, in such form and manner and 
within such timeframe as the Commission may specify, that the foreign 
board of trade or clearing organization is in compliance with the 
registration requirements and/or conditions for registration; and
    (4) In Sec.  48.10, to notify a foreign board of trade whether 
additional time is needed for staff to complete its review of policy or 
other issues pertinent to the additional contracts, or that the contract 
can be made available for trading by direct access.
    (b) The Director of the Division of Market Oversight may submit to 
the Commission for its consideration any matter which has been delegated 
in this section.
    (c) Nothing in this section prohibits the Commission, at its 
election, from exercising the authority delegated in this section.

[82 FR 28769, June 26, 2017]



                   Sec. Appendix to Part 48--Form FBOT

                  COMMODITY FUTURES TRADING COMMISSION

                                FORM FBOT

FOREIGN BOARD OF TRADE APPLICATION FOR REGISTRATION (IN ORDER TO PERMIT 
            DIRECT ACCESS TO MEMBERS AND OTHER PARTICIPANTS)

                        APPLICATION INSTRUCTIONS

                               DEFINITIONS

    1. Unless the context requires otherwise, all terms used in this 
application have the same meaning as in the Commodity Exchange Act, as 
amended (CEA or Act),\1\ and in the regulations of the Commodity Futures 
Trading Commission (Commission or CFTC).\2\
---------------------------------------------------------------------------

    \1\ 7 U.S.C. 1 et seq.
    \2\ 17 CFR chapter I.
---------------------------------------------------------------------------

    2. For the purposes of this Form FBOT, the term ``applicant'' refers 
to the foreign board of trade applying for registration pursuant to CEA 
section 4(b) and part 48 of the Commission's regulations. The term 
``clearing organization'' refers to the clearing organization that will 
be clearing trades executed on the trading system of such foreign board 
of trade.

                          GENERAL INSTRUCTIONS

    1. A Form FBOT (including exhibits) shall be completed by any 
foreign board of trade applying for registration with the Commission 
pursuant to CEA section 4(b) and part 48 of the Commission's 
regulations.

[[Page 135]]

    2. Form FBOT (including exhibits and any supplement thereto) 
(collectively, the ``application'' or ``application for registration'') 
must be filed electronically with the Secretary of the Commission at 
[email protected]. Applicants may prepare their own Form FBOT, 
but must follow the format prescribed herein.
    3. The name of any individual listed in Form FBOT shall be provided 
in full (Last Name, First Name and Middle Name or Initial).
    4. Form FBOT must be signed by the Chief Executive Officer (or the 
functional equivalent) of the foreign board of trade who must possess 
the authority to bind the foreign board of trade.
    5. If this Form FBOT is being filed as a new application for 
registration, all applicable items on the Form FBOT must be answered in 
full. Non-applicable items should be indicated by marking ``none'' or 
``N/A.''
    6. Submission of a complete Form FBOT (including all information, 
documentation and exhibits requested therein, and any required 
supplement) is mandatory and must be received by the Commission before 
it will begin to process a foreign board of trade's application for 
registration. The information provided with a Form FBOT (including 
exhibits and any supplement thereto) will be used to determine whether 
the Commission should approve or deny registration to an applicant. 
Pursuant to its regulations, the Commission may determine that 
information and/or documentation in addition to that requested in the 
Form FBOT is required from the applicant in order to process the 
application for registration or to determine whether registration is 
appropriate.
    7. Pursuant to Commission regulations, an applicant or its clearing 
organization must identify with particularity any information in the 
application (including, but not limited to, any information contained in 
this Form FBOT) that will be the subject of a request for confidential 
treatment and must provide support for any request for confidential 
treatment pursuant to the procedures set forth in Commission regulation 
145.9.\3\ Except in cases where confidential treatment is granted by the 
Commission pursuant to the Freedom of Information Act and Commission 
regulations, information supplied in the Form FBOT (including exhibits 
and any supplement thereto) will be included routinely in the public 
files of the Commission and will be available for inspection and comment 
by any interested person.
---------------------------------------------------------------------------

    \3\ 17 CFR 145.9.
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    8. A Form FBOT that is not prepared and executed in compliance with 
applicable requirements and instructions may be returned as not 
acceptable for filing.\4\ Acceptance of a Form FBOT by the Commission, 
however, shall not constitute a finding that the Form FBOT has been 
filed as required or that the information submitted is verified to be 
true, current, or complete. The Commission may revoke a foreign board of 
trade's registration, after appropriate notice and an opportunity to 
respond, if the Commission determines that a representation made in this 
Form FBOT is found to be untrue or materially misleading or if the 
foreign board of trade failed to include information in this Form FBOT 
that would have been material to the Commission's determination as to 
whether to issue an Order of Registration.
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    \4\ Applicants and their clearing organizations are encouraged to 
correspond with the Commission's Division of Market Oversight regarding 
any content, procedural, or formatting questions encountered in 
connection with the preparation of a Form FBOT, or any exhibits or 
supplements thereto, prior to formally submitting those documents to the 
Commission. When appropriate, potential applicants and clearing 
organizations, as applicable, may provide a complete draft Form FBOT 
(including exhibits and any required supplement) to the Division of 
Market Oversight for early review to minimize the risk of having a 
submission returned or otherwise denied as not acceptable for filing. 
Review of draft submissions by any division of the Commission and any 
comments provided by a division of the Commission are for consultation 
purposes only and do not bind the Commission. To obtain instructions for 
submitting drafts, please contact the Division of Market Oversight.
---------------------------------------------------------------------------

    9. In addition to this Form FBOT, the clearing organization 
associated with the foreign board of trade must complete and submit 
Supplement S-1 to this Form FBOT in accordance with the instructions 
thereto. To the extent a single document or description is responsive to 
more than one request for the same information in either the Form FBOT 
or the Supplement S-1, the document or description need only be provided 
once and may be cross-referenced elsewhere.
    10. All documents submitted as part of this Form FBOT (or exhibits 
thereto) must be written in English or accompanied by a certified 
English translation.

                  UPDATING INFORMATION ON THE FORM FBOT

    Pursuant to the Commission's regulations, if any information or 
documentation contained in this Form FBOT (including exhibits or any 
supplement or amendment thereto) is or becomes inaccurate for any reason 
prior to the issuance of an Order of Registration, an amendment 
correcting such information must be filed promptly with the

[[Page 136]]

Commission. A registered foreign board of trade also may submit an 
amendment to this Form FBOT to correct information that has become 
inaccurate subsequent to the receipt of an Order of Registration.
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[GRAPHIC] [TIFF OMITTED] TR23DE11.054

                 INSTRUCTIONS FOR EXHIBITS TO FORM FBOT

    1. The following exhibits must be filed with the Commission by any 
foreign board of trade (1) seeking registration for purposes of granting 
direct access to its members and other participants or (2) amending a 
previously submitted application, pursuant to

[[Page 140]]

CEA section 4(b) and part 48 of the Commission's regulations. The 
information and documentation requested relates to the activities of the 
foreign board of trade, unless otherwise stated.
    2. The exhibits should be filed in accordance with the General 
Instructions to this Form FBOT and labeled as specified herein. If any 
exhibit is not applicable, please specify the exhibit letter and number 
and indicate by marking ``none'' or ``N/A.'' If any exhibit may be 
satisfied by documentation or information submitted in a different 
exhibit, the documentation or information need not be submitted more 
than once--please use internal cross-references where appropriate.

                          GENERAL REQUIREMENTS

    A foreign board of trade applying for registration must submit 
sufficient information and documentation to successfully demonstrate to 
Commission staff that the foreign board of trade and its clearing 
organization satisfy all of the requirements of Commission regulation 
48.7. With respect to its review of the foreign board of trade, the 
Commission anticipates that such information and documentation would 
necessarily include, but not be limited to, the following:

            EXHIBIT A--GENERAL INFORMATION AND DOCUMENTATION

    Attach, as Exhibit A-1, a description of the following for the 
foreign board of trade: Location, history, size, ownership and corporate 
structure, governance and committee structure, current or anticipated 
presence of offices or staff in the United States, and anticipated 
volume of business emanating from members and other participants that 
will be provided direct access to the foreign board of trade's trading 
system.
    Attach, as Exhibit A-2, the following:
    Articles of association, constitution, or other similar 
organizational documents.
    Attach, as Exhibit A-3, the following:
    (1) Membership and trading participant agreements.
    (2) Clearing agreements.
    Attach, as Exhibit A-4, the following:
    Terms and conditions of contracts to be available through direct 
access (as specified in Exhibit E).
    Attach, as Exhibit A-5, the following:
    The national statutes, laws and regulations governing the activities 
of the foreign board of trade and its respective participants.
    Attach, as Exhibit A-6, the following:
    The current rules, regulations, guidelines and bylaws of the foreign 
board of trade.
    Attach, as Exhibit A-7, the following:
    Evidence of the authorization, licensure or registration of the 
foreign board of trade pursuant to the regulatory regime in its home 
country jurisdiction and a representation by its regulator(s) that it is 
in good regulatory standing in the capacity in which it is authorized, 
licensed or registered.
    Attach, as Exhibit A-8, the following document:
    A summary of any disciplinary or enforcement actions or proceedings 
that have been brought against the foreign board of trade, or any of the 
senior officers thereof, in the past five years and the resolution of 
those actions or proceedings.
    Attach, as Exhibit A-9, the following document:
    An undertaking by the chief executive officer(s) (or functional 
equivalent[s]) of the foreign board of trade to notify Commission staff 
promptly if any of the representations made in connection with or 
related to the foreign board of trade's application for registration 
cease to be true or correct, or become incomplete or misleading.

                     EXHIBIT B--MEMBERSHIP CRITERIA

    Attach, as Exhibit B, the following, separately labeling each 
description:
    (1) A description of the categories of membership and participation 
in the foreign board of trade and the access and trading privileges 
provided by the foreign board of trade. The description should include 
any restrictions applicable to members and other participants to which 
the foreign board of trade intends to grant direct access to its trading 
system.
    (2) A description of all requirements for each category of 
membership and participation on the trading system and the manner in 
which members and other participants are required to demonstrate their 
compliance with these requirements. The description should include, but 
not be limited to, the following:
    (i) Professional Qualification. A description of the specific 
professional requirements, qualifications, and/or competencies required 
of members or other participants and/or their staff and a description of 
the process by which the foreign board of trade confirms compliance with 
such requirements.
    (ii) Authorization, Licensure and Registration. A description of any 
regulatory and self-regulatory authorization, licensure or registration 
requirements that the foreign board of trade imposes upon, or enforces 
against, its members and other participants including, but not limited 
to any authorization, licensure or registration requirements imposed by 
the regulatory regime/authority in the home country jurisdiction(s) of 
the foreign board of trade. Please also include a description of the 
process by which the foreign board of trade confirms compliance with 
such requirements.
    (iii) Financial Integrity. A description of the following:

[[Page 141]]

    (A) The financial resource requirements, standards, guides or 
thresholds required of members and other participants.
    (B) The manner in which the foreign board of trade evaluates the 
financial resources/holdings of its members or participants.
    (C) The process by which applicants demonstrate compliance with 
financial requirements for membership or participation including, as 
applicable:
    (i) Working capital and collateral requirements, and
    (ii) Risk management mechanisms for members allowing customers to 
place orders.
    (iv) Fit and Proper Standards. A description of how the foreign 
board of trade ensures that potential members/other participants meet 
fit and proper standards.

              EXHIBIT C--BOARD AND/OR COMMITTEE MEMBERSHIP

    Attach, as Exhibit C, the following:
    (1) A description of the requirements applicable to membership on 
the governing board and significant committees of the foreign board of 
trade.
    (2) A description of the process by which the foreign board of trade 
ensures that potential governing board and committee members/other 
participants meet these standards.
    (3) A description of the provisions to minimize and resolve 
conflicts of interest with respect to membership on the governing board 
and significant committees of the foreign board of trade.
    (4) A description of the rules with respect to the disclosure of 
material non-public information obtained as a result of a member's or 
other participant's performance on the governing board or significant 
committee.

                 EXHIBIT D--THE AUTOMATED TRADING SYSTEM

    Attach, as Exhibit D-1, a description of (or where appropriate, 
documentation addressing) the following, separately labeling each 
description:
    (1) The order matching/trade execution system, including a complete 
description of all permitted ways in which members or other participants 
(or their customers) may connect to the trade matching/execution system 
and the related requirements (for example, authorization agreements).
    (2) The architecture of the systems, including hardware and 
distribution network, as well as any pre- and post-trade risk-management 
controls that are made available to system users.
    (3) The security features of the systems.
    (4) The length of time such systems have been operating.
    (5) Any significant system failures or interruptions.
    (6) The nature of any technical review of the order matching/trade 
execution system performed by the foreign board of trade, the home 
country regulator, or a third party.
    (7) Trading hours.
    (8) Types and duration of orders accepted.
    (9) Information that must be included on orders.
    (10) Trade confirmation and error trade procedures.
    (11) Anonymity of participants.
    (12) Trading system connectivity with clearing system.
    (13) Response time.
    (14) Ability to determine depth of market.
    (15) Market continuity provisions.
    (16) Reporting and recordkeeping requirements.
    Attach, as Exhibit D-2, a description of the manner in which the 
foreign board of trade assures the following with respect to the trading 
system, separately labeling each description:
    (1) Algorithm. The trade matching algorithm matches trades fairly 
and timely.
    (2) IOSCO Principles. The trading system complies with the 
Principles for the Oversight of Screen-Based Trading Systems for 
Derivative Products developed by the Technical Committee of the 
International Organization of Securities Commissions (IOSCO Principles). 
Provide a copy of any independent certification received or self-
certification performed and identify any system deficiencies with 
respect to the IOSCO Principles.
    (3) Audit Trail.
    (i) The audit trail timely captures all relevant data, including 
changes to orders.
    (ii) Audit trail data is securely maintained and available for an 
adequate time period.
    (4) Public Data. Adequate and appropriate trade data is available to 
users and the public.
    (5) Reliability. The trading system has demonstrated reliability.
    (6) Secure Access. Access to the trading system is secure and 
protected.
    (7) Emergency Provisions. There are adequate provisions for 
emergency operations and disaster recovery.
    (8) Data Loss Prevention. Trading data is backed up to prevent loss 
of data.
    (9) Contracts Available. Mechanisms are available to ensure that 
only those futures, option or swap contracts that have been identified 
to the Commission as part of the application or permitted to be made 
available for trading by direct access pursuant to the procedures set 
forth in Sec.  48.10 are made available for trading by direct access.
    (10) Predominance of the Centralized Market. Mechanisms are 
available that ensure a competitive, open, and efficient market and 
mechanism for executing transactions.

[[Page 142]]

  EXHIBIT E--THE TERMS AND CONDITIONS OF CONTRACTS PROPOSED TO BE MADE 
                     AVAILABLE IN THE UNITED STATES

    Attach, as Exhibit E-1, a description of the terms and conditions of 
futures, option or swap contracts intended to be made available for 
direct access. With respect to each contract, indicate whether the 
contract is regulated or otherwise treated as a futures, option or swap 
contract in the regulatory regime(s) of the foreign board of trade's 
home country.
    As Exhibit E-2, demonstrate that the contracts are not prohibited 
from being traded by United States persons, i.e., the contracts are not 
prohibited security futures or single stock contracts or narrow-based 
index contracts. For non-narrow based stock index futures contracts, 
demonstrate that the contracts have received Commission certification 
pursuant to the procedures set forth in Sec.  30.13 and appendix D to 
part 30 of this chapter.
    As Exhibit E-3, demonstrate that the contracts are required to be 
cleared.
    As Exhibit E-4, identify any contracts that are linked to a contract 
listed for trading on a United States-registered entity, as defined in 
section 1a(40) of the Act. A linked contract is a contract that settles 
against any price (including the daily or final settlement price) of one 
or more contracts listed for trading on such registered entity.
    As Exhibit E-5, identify any contracts that have any other 
relationship with a contract listed for trading on a registered entity, 
i.e., both the foreign board of trade's and the registered entity's 
contract settle to the price of the same third party-constructed index.
    As Exhibit E-6, demonstrate that the contracts are not readily 
susceptible to manipulation. In addition, for each contract to be 
listed, describe each investigation, action, proceeding or case 
involving manipulation and involving such contract in the three years 
preceding the application date, whether initiated by the foreign board 
of trade, a regulatory or self-regulatory authority or agency or other 
government or prosecutorial agency. For each such action, proceeding or 
case, describe the alleged manipulative activity and the current status 
or resolution thereof.

EXHIBIT F--THE REGULATORY REGIME GOVERNING THE FOREIGN BOARD OF TRADE IN 
                    ITS HOME COUNTRY \5\ OR COUNTRIES

    With respect to each relevant regulatory regime or authority 
governing the foreign board of trade, attach, as Exhibit F, the 
following (including, where appropriate, an indication as to whether the 
applicable regulatory regime is dependent on the home country's 
classification of the product being traded on the foreign board of trade 
as a future, option, swap, or otherwise, and a description of any 
difference between the applicable regulatory regime for each product 
classification type):
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    \5\ Where multiple foreign boards of trade subject to the same 
regulatory regime/authority and are similarly regulated are applying for 
registration at the same time, a single Exhibit E-1 may be submitted as 
part of the application for all such foreign boards of trade either by 
one of the applicant foreign boards of trade or by the regulatory 
regime/authority with responsibility to oversee each of the multiple 
foreign boards of trade applying for registration. Where an FBOT 
applying for registration is located in the same jurisdiction and 
subject to the same regulatory regime as a registered FBOT, the FBOT 
applying for registration may include by reference, as part of its 
application, information about the regulatory regime that is posted on 
the Commission's Web site. The FBOT applying for registration must 
certify that the information thus included in the application is 
directly applicable to it and remains current and valid.
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    (1) A description of the regulatory regime/authority's structure, 
resources, staff, and scope of authority; the regulatory regime/
authority's authorizing statutes, including the source of its authority 
to supervise the foreign board of trade; the rules and policy statements 
issued by the regulator with respect to the authorization and continuing 
oversight of markets, electronic trading systems, and clearing 
organizations; and the financial protections afforded customer funds.
    (2) A description of and, where applicable, copies of the laws, 
rules, regulations and policies applicable to: \6\
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    \6\ To the extent that any such laws, rules, regulations or policies 
were provided as part of Exhibit A-5, they need not be duplicated. They 
may be cross-referenced.
---------------------------------------------------------------------------

    (i) The authorization, licensure or registration of the foreign 
board of trade.
    (ii) The regulatory regime/authority's program for the ongoing 
supervision and oversight of the foreign board of trade and the 
enforcement of its trading rules.
    (iii) The financial resource requirements applicable to the 
authorization, licensure or registration of the foreign board of trade 
and the continued operations thereof.
    (iv) The extent to which the IOSCO Principles are used or applied by 
the regulatory regime/authority in its supervision and oversight of the 
foreign board of trade or are incorporated into its rules and 
regulations and the extent to which the regulatory regime/authority 
reviews the applicable trading systems for compliance therewith.

[[Page 143]]

    (v) The extent to which the regulatory regime/authority reviews and/
or approves the trading rules of the foreign board of trade prior to 
their implementation.
    (vi) The extent to which the regulatory regime/authority reviews 
and/or approves futures, option or swap contracts prior to their being 
listed for trading.
    (vii) The regulatory regime/authority's approach to the detection 
and deterrence of abusive trading practices, market manipulation, and 
other unfair trading practices or disruptions of the market.
    (3) A description of the laws, rules, regulations and policies that 
govern the authorization and ongoing supervision and oversight of market 
intermediaries who may deal with members and other participants located 
in the United States participants, including:
    (i) Recordkeeping requirements.
    (ii) The protection of customer funds.
    (iii) Procedures for dealing with the failure of a market 
intermediary in order to minimize damage and loss to investors and to 
contain systemic risk.
    (4) A description of the regulatory regime/authority's inspection, 
investigation and surveillance powers; and the program pursuant to which 
the regulatory regime/authority uses those powers to inspect, 
investigate, and enforce rules applicable to the foreign board of trade.
    (5) For both the foreign board of trade and the clearing 
organization (unless addressed in Supplement S-1), a report confirming 
that the foreign board of trade and clearing organization are in 
regulatory good standing, which report should be prepared subsequent to 
consulting with the regulatory regime/authority governing the activities 
of the foreign board of trade and any associated clearing organization. 
The report should include:
    (i) Confirmation of regulatory status (including proper 
authorization, licensure and registration) of the foreign board of trade 
and clearing organization.
    (ii) Any recent oversight reports generated by the regulatory 
regime/authority that are, in the judgment of the regulatory regime/
authority, relevant to the foreign board of trade's status as a 
registered foreign board of trade.
    (iii) Disclosure of any significant regulatory concerns, inquiries 
or investigations by the regulatory regime/authority, including any 
concerns, inquiries or investigations with regard to the foreign board 
of trade's arrangements to monitor trading by members or other 
participants located in the United States or the adequacy of the risk 
management controls of the trading or of the clearing system.
    (iv) A description of any investigations (formal or informal) or 
disciplinary actions initiated by the regulatory regime/authority or any 
other self-regulatory, regulatory or governmental entity against the 
foreign board of trade, the clearing organization or any of their 
respective senior officers during the past year.
    (6) For both the foreign board of trade and the clearing 
organization (unless addressed in Supplement S-1), a confirmation that 
the regulatory regime/authority governing the activities of the foreign 
board of trade and the clearing organization agree to cooperate with a 
Commission staff visit subsequent to submission of the application on an 
``as needed basis,'' the objectives of which will be to, among other 
things, familiarize Commission staff with supervisory staff of the 
regulatory regime/authority; discuss the laws, rules and regulations 
that formed the basis of the application and any changes thereto; 
discuss the cooperation and coordination between the authorities, 
including, without limitation, information sharing arrangements; and 
discuss issues of concern as they may develop from time to time (for 
example, linked contracts or unusual trading that may be of concern to 
Commission surveillance staff).

   EXHIBIT G--THE RULES OF THE FOREIGN BOARD OF TRADE AND ENFORCEMENT 
                                 THEREOF

    Attach, as Exhibit G-1, the following:
    A description of the foreign board of trade's regulatory or 
compliance department, including its size, experience level, 
competencies, duties and responsibilities.
    Attach, as Exhibit G-2, the following:
    A description of the foreign board of trade's trade practice rules, 
including but not limited to rules that address the following--
    (1) Capacity of the foreign board of trade to detect, investigate, 
and sanction persons who violate foreign board of trade rules.
    (2) Prohibition of fraud and abuse, as well as abusive trading 
practices including, but not limited to, wash sales and trading ahead, 
and other market abuses.
    (3) A trade surveillance system appropriate to the foreign board of 
trade and capable of detecting and investigating potential trade 
practice violations.
    (4) An audit trail that captures and retains sufficient order and 
trade-related data to allow the compliance staff to detect trading and 
market abuses and to reconstruct all transactions within a reasonable 
period of time.
    (5) Appropriate resources to conduct real-time supervision of 
trading.
    (6) Sufficient compliance staff and resources, including those 
outsourced or delegated to third parties, to fulfill regulatory 
responsibilities.
    (7) Rules that authorize compliance staff to obtain, from market 
participants, information and cooperation necessary to conduct effective 
rule enforcement and investigations.

[[Page 144]]

    (8) Staff investigations and investigation reports demonstrating 
that the compliance staff investigates suspected rule violations and 
prepares reports of their finding and recommendations.
    (9) Rules determining access requirements with respect to the 
persons that may trade on the foreign board of trade, and the means by 
which they connect to it.
    (10) The requirement that market participants submit to the foreign 
board of trade's jurisdiction as a condition of access to the market.
    Attach, as Exhibit G-3, the following:
    A description of the foreign board of trade's disciplinary rules, 
including but not limited to rules that address the following--
    (1) Disciplinary authority and procedures that empower staff to 
recommend and prosecute disciplinary actions for suspected rule 
violations and that provide the authority to fine, suspend, or expel any 
market participant pursuant to fair and clear standards.
    (2) The issuance of warning letters and/or summary fines for 
specified rule violations.
    (3) The review of investigation reports by a disciplinary panel or 
other authority for issuance of charges or instructions to investigate 
further, or findings that an insufficient basis exists to issue charges.
    (4) Disciplinary committees of the foreign board of trade that take 
disciplinary action via formal disciplinary processes.
    (5) Whether and how the foreign board of trade articulates its 
rationale for disciplinary decisions.
    (6) The sanctions for particular violations and a discussion of the 
adequacy of sanctions with respect to the violations committed and their 
effectiveness as a deterrent to future violations.
    Attach, as Exhibit G-4, the following:
    A description of the market surveillance program (and any related 
rules), addressing the following--
    The dedicated market surveillance department or the delegation or 
outsourcing of that function, including a general description of the 
staff; the data collected on traders' market activity; data collected to 
determine whether prices are responding to supply and demand; data on 
the size and ownership of deliverable supplies; a description of the 
manner in which the foreign board of trade detects and deters market 
manipulation; for cash-settled contracts, methods of monitoring the 
settlement price or value; and any foreign board of trade position 
limit, position management, large trader or other position reporting 
system.

  EXHIBIT H--INFORMATION SHARING AGREEMENTS AMONG THE COMMISSION, THE 
    FOREIGN BOARD OF TRADE, THE CLEARING ORGANIZATION, AND RELEVANT 
                         REGULATORY AUTHORITIES

    Attach, as Exhibit H, the following:
    (1) A description of the arrangements among the Commission, the 
foreign board of trade, the clearing organization, and the relevant 
foreign regulatory authorities that govern the sharing of information 
regarding the transactions that will be executed pursuant to the foreign 
board of trade's registration with the Commission and the clearing and 
settlement of those transactions. This description should address or 
identify whether and how the foreign board of trade, clearing 
organization, and the regulatory authorities governing the activities of 
the foreign board of trade and clearing organization agree to provide 
directly to the Commission information and documentation requested by 
Commission staff that Commission staff determines is needed:
    (i) To evaluate the continued eligibility of the foreign board of 
trade for registration.
    (ii) To enforce compliance with the specified conditions of the 
registration.
    (iii) To enable the CFTC to carry out its duties under the Act and 
Commission regulations and to provide adequate protection to the public 
or registered entities.
    (iv) To respond to potential market abuse associated with trading by 
direct access on the registered foreign board of trade.
    (v) To enable Commission staff to effectively accomplish its 
surveillance responsibilities with respect to a registered entity where 
Commission staff, in its discretion, determines that a contract traded 
on a registered foreign board of trade may affect such ability.
    (2) A statement as to whether and how the foreign board of trade has 
executed the International Information Sharing Memorandum of 
Understanding and Agreement.
    (3) A statement as to whether the regulatory authorities governing 
the activities of the foreign board of trade and clearing organization 
are signatories to the International Organization of Securities 
Commissions Multilateral Memorandum of Understanding. If not, describe 
any substitute information-sharing arrangements that are in place.
    (4) A statement as to whether the regulatory authorities governing 
the activities of the foreign board of trade and clearing organization 
are signatories to the Declaration on Cooperation and Supervision of 
International Futures Exchanges and Clearing Organizations. If not, a 
statement as to whether and how they have committed to share the types 
of information contemplated by the International Information Sharing

[[Page 145]]

Memorandum of Understanding and Agreement with the Commission, whether 
pursuant to an existing memorandum of understanding or some other 
arrangement.

           EXHIBIT I--ADDITIONAL INFORMATION AND DOCUMENTATION

    Attach, as Exhibit I, any additional information or documentation 
necessary to demonstrate that the requirements for registration 
applicable to the foreign board of trade set forth in Commission 
regulation 48.7 are satisfied.

    Continuation of Appendix to Part 48--Supplement S-1 to Form FBOT

                  COMMODITY FUTURES TRADING COMMISSION

                       SUPPLEMENT S-1 to FORM FBOT

 CLEARING ORGANIZATION SUPPLEMENT TO FOREIGN BOARD OF TRADE APPLICATION 
                            FOR REGISTRATION

                         SUPPLEMENT INSTRUCTIONS

                               DEFINITIONS

    1. Unless the context requires otherwise, all terms used in this 
supplement have the same meaning as in the Commodity Exchange Act, as 
amended (CEA or Act),\7\ and in the regulations of the Commodity Futures 
Trading Commission (Commission or CFTC).\8\
---------------------------------------------------------------------------

    \7\ 7 U.S.C. 1 et seq.
    \8\ 17 CFR chapter I.
---------------------------------------------------------------------------

    2. For the purposes of this Supplement S-1, the term ``applicant'' 
refers to the foreign board of trade applying for registration pursuant 
to CEA section 4(b) and part 48 of the Commission's regulations. The 
term ``clearing organization'' refers to the clearing organization that 
will be clearing trades executed on the trading system of such foreign 
board of trade.

                          GENERAL INSTRUCTIONS

    1. A Supplement S-1 (including exhibits) shall be completed by each 
clearing organization that will be clearing trades executed on the 
trading system of a foreign board of trade applying for registration 
with the Commission pursuant to CEA section 4(b) and part 48 of the 
Commission's regulations. Each clearing organization shall submit a 
separate Supplement S-1.
    2. In the event that the clearing functions of the foreign board of 
trade applying for registration will be performed by the foreign board 
of trade itself, the foreign board of trade shall complete this 
Supplement S-1, but need not duplicate information provided on its Form 
FBOT. Specific reference to or incorporation of information or 
documentation (including exhibits) on the associated Form FBOT, where 
appropriate, is acceptable. To the extent a singular document or 
description is responsive to more than one request for information in 
this Supplement S-1, the document or description need only be provided 
once and may be cross-referenced elsewhere.
    3. Supplement S-1, including exhibits, should accompany the foreign 
board of trade's Form FBOT and must be filed electronically with the 
Secretary of the Commission at [email protected]. Clearing 
organizations may prepare their own Supplement S-1, but must follow the 
format prescribed herein.
    4. The name of any individual listed in Supplement S-1 shall be 
provided in full (Last Name, First Name and Middle Name or Initial).
    5. Supplement S-1 must be signed by the Chief Executive Officer (or 
the functional equivalent) of the clearing organization who must possess 
the authority to bind the clearing organization.
    6. If this Supplement S-1 is being filed in connection with a new 
application for registration, all applicable items must be answered in 
full. If any item is not applicable, indicate by marking ``none'' or 
``N/A.''
    7. Submission of a complete Form FBOT and Supplement S-1 (including 
all information, documentation and exhibits requested therein) is 
mandatory and must be received by the Commission before it will begin to 
process a foreign board of trade's application for registration. The 
information provided with a Form FBOT and Supplement S-1 will be used to 
determine whether the Commission should approve or deny registration to 
an applicant. Pursuant to its regulations, the Commission may determine 
that information and/or documentation in addition to that requested in 
the Form FBOT and Supplement S-1 is required from the applicant and/or 
its clearing organization(s) in order to process the application for 
registration or to determine whether registration is appropriate.
    8. Pursuant to Commission regulations, an applicant or its clearing 
organization must identify with particularity any information in the 
application (including, but not limited to, any information contained in 
this Supplement S-1), that will be the subject of a request for 
confidential treatment and must provide support for any request for 
confidential treatment pursuant to the procedures set forth in 
Commission regulation 145.9.\9\ Except in cases where confidential 
treatment is granted by the Commission, pursuant to the Freedom of 
Information Act and Commission regulations, information supplied in the 
Supplement S-1 will be included

[[Page 146]]

routinely in the public files of the Commission and will be available 
for inspection by any interested person.
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    \9\ 17 CFR 145.9.
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    9. A Supplement S-1 that is not prepared and executed in compliance 
with applicable requirements and instructions may be returned as not 
acceptable for filing.\10\ Acceptance of either a Form FBOT or 
Supplement S-1 by the Commission, however, shall not constitute a 
finding that the either have been filed as required or that the 
information submitted is verified to be true, current, or complete. The 
Commission may revoke a foreign board of trade's registration, after 
appropriate notice and an opportunity to respond, if the Commission 
determines that a representation made in this Supplement S-1 is found to 
be untrue or materially misleading or if the foreign board of trade and/
or clearing organization failed to include information in this 
Supplement S-1 that would have been material to the Commission's 
determination as to whether to issue an Order of Registration.
---------------------------------------------------------------------------

    \10\ Applicants and their clearing organizations are encouraged to 
correspond with the Commission's Division of Market Oversight regarding 
any content, procedural, or formatting questions encountered in 
connection with the preparation of a Form FBOT, Supplement S-1, or 
exhibits thereto prior to formally submitting those documents to the 
Commission. When appropriate, potential applicants and clearing 
organizations, as applicable, may provide a complete draft Form FBOT and 
Supplement S-1 to the Division of Market Oversight for early review to 
minimize the risk of having a submission returned or otherwise denied as 
not acceptable for filing. Review of draft submissions by any division 
of the Commission and any comments provided by a division of the 
Commission are for consultation purposes only and do not bind the 
Commission. To obtain instructions for submitting drafts, please contact 
the Division of Market Oversight.
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    10. All documents submitted as part of this Supplement S-1 (or 
exhibits thereto) must be written in English or accompanied by a 
certified English translation.

                          UPDATING INFORMATION

    Pursuant to the Commission's regulations, if any information or 
documentation contained in this Supplement S-1 (including exhibits) is 
or becomes inaccurate for any reason prior to the issuance of an Order 
of Registration, an amendment correcting such information must be filed 
promptly with the Commission. A clearing organization also may submit an 
amendment to this Supplement S-1 to correct information that has become 
inaccurate subsequent to the issuance of an Order of Registration.

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               INSTRUCTIONS FOR EXHIBITS TO SUPPLEMENT S-1

    1. The following exhibits must be filed with the Commission by the 
clearing organization(s) that will be clearing trades executed on the 
trading system of a foreign board of trade applying for registration 
with the Commission pursuant to CEA section 4(b) and part 48 of 
Commission's regulations. The information and documentation requested 
relates to the activities of the clearing organization.

[[Page 152]]

    2. The exhibits should be filed in accordance with the General 
Instructions to this Supplement S-1 and labeled as specified herein. If 
any exhibit is not applicable, please specify the exhibit letter and 
number and indicate by marking ``none'' or ``N/A.'' If any exhibit may 
be satisfied by documentation or information submitted in a different 
exhibit, the documentation or information need not be submitted more 
than once--please use internal cross-references where appropriate.

                          GENERAL REQUIREMENTS

    A foreign board of trade applying for registration must submit 
sufficient information and documentation to successfully demonstrate to 
Commission staff that the foreign board of trade and its clearing 
organization satisfy all of the requirements of Commission regulation 
48.7. With respect to its review of the foreign board of trade's 
clearing organization, the Commission anticipates that such information 
and documentation would necessarily include, but not be limited to, the 
following:

            EXHIBIT A--GENERAL INFORMATION AND DOCUMENTATION

    Attach, as Exhibit A-1, a description of the following for the 
clearing organization:
    Location, history, size, ownership and corporate structure, 
governance and committee structure, and current or anticipated presence 
of staff in the United States.
    Attach, as Exhibit A-2, the following:
    Articles of association, constitution, or other similar 
organizational documents.
    Attach, as Exhibit A-3, the following:
    (1) Membership and participation agreements.
    (2) Clearing agreements.
    Attach, as Exhibit A-4, the following:
    The national statutes, laws and regulations governing the activities 
of the clearing organization and its members.
    Attach, as Exhibit A-5, the following:
    The current rules, regulations, guidelines and bylaws of the 
clearing organization.
    Attach, as Exhibit A-6, the following:
    Evidence of the authorization, licensure or registration of the 
clearing organization pursuant to the regulatory regime in its home 
country jurisdiction(s) and a representation by its regulator(s) that it 
is in good regulatory standing in the capacity in which it is 
authorized, licensed or registered.
    Attach, as Exhibit A-7, the following document:
    A summary of any disciplinary or enforcement actions or proceedings 
that have been brought against the clearing organization, or any of the 
senior officers thereof, in the past five years and the resolution of 
those actions or proceedings.
    Attach, as Exhibit A-8, the following document:
    An undertaking by the chief executive officer(s) (or functional 
equivalent[s]) of the clearing organization to notify Commission staff 
promptly if any of the representations made in connection with this 
supplement cease to be true or correct, or become incomplete or 
misleading.

                     EXHIBIT B--MEMBERSHIP CRITERIA

    Attach, as Exhibit B, the following, separately labeling each 
description:
    (1) A description of the categories of membership and participation 
in the clearing organization and the access and clearing privileges 
provided to each by the clearing organization.
    (2) A description of all requirements for each category of 
membership and participation and the manner in which members and other 
participants are required to demonstrate their compliance with these 
requirements. The description should include, but not be limited to, the 
following:
    (i) Professional Qualification. A description of the specific 
professional requirements, qualifications, and/or competencies required 
of members or other participants and/or their staff and a description of 
the process by which the clearing organization confirms compliance with 
such requirements.
    (ii) Authorization, Licensure and Registration. A description of any 
regulatory or self-regulatory authorization, licensure or registration 
requirements that the clearing organization imposes upon, or enforces 
against, its members and other participants including, but not limited 
to any authorization, licensure or registration requirements imposed by 
the regulatory regime/authority in the home country jurisdiction(s) of 
the clearing organization, and a description of the process by which the 
clearing organization confirms compliance with such requirements.
    (iii) Financial Integrity. A description of the following:
    (A) The financial resource requirements, standards, guides or 
thresholds required of members and other participants.
    (B) The manner in which the clearing organization evaluates the 
financial resources/holdings of its members or other participants.
    (C) The process by which applicants for clearing membership or 
participation demonstrate compliance with financial requirements 
including:
    (1) Working capital and collateral requirements, and
    (2) Risk management mechanisms.
    (iv) Fit and Proper Standards. A description of any other ways in 
which the clearing

[[Page 153]]

organization ensures that potential members/other participants meet fit 
and proper standards.

              EXHIBIT C--BOARD AND/OR COMMITTEE MEMBERSHIP

    Attach, as Exhibit C, the following:
    (1) A description of the requirements applicable to membership on 
the governing board and significant committees of the clearing 
organization.
    (2) A description of how the clearing organization ensures that 
potential governing board and committee members meet these standards.
    (3) A description of the clearing organization's provisions to 
minimize and resolve conflicts of interest with respect to membership on 
the governing board and significant committees of the clearing 
organization.
    (4) A description of the clearing organization's rules with respect 
to the disclosure of material non-public information obtained as a 
result of a member's performance on the governing board or on a 
significant committee.

                   EXHIBIT D--SETTLEMENT AND CLEARING

    Attach, as Exhibit D-1, the following:
    A description of the clearing and settlement systems, including, but 
not limited to, the manner in which such systems interface with the 
foreign board of trade's trading system and its members and other 
participants.
    Attach, as Exhibit D-2, the following:
    A certification, signed by the chief executive offer (or functional 
equivalent) of the clearing organization, that the clearing system 
observes (1) the current Recommendations for Central Counterparties that 
have been issued jointly by the Committee on Payment and Settlement 
Systems and the Technical Committee of the International Organization of 
Securities Commissions, as updated, revised or otherwise amended, or (2) 
successor standards, principles and guidance for central counterparties 
or financial market infrastructures adopted jointly by the Committee on 
Payment and Settlement Systems or the International Organization of 
Securities Commissions (RCCPs).
    Attach, as Exhibit D-3, the following:
    A detailed description of the manner in which the clearing 
organization observes each of the RCCPs or successor standards and 
documentation supporting the representations made, including any 
relevant rules or written policies or procedures of the clearing 
organization. Each RCCP should be addressed separately within the 
exhibit.

EXHIBIT E--THE REGULATORY REGIME GOVERNING THE CLEARING ORGANIZATION IN 
                      ITS HOME COUNTRY OR COUNTRIES

    With respect to each relevant regulatory regime or authority 
governing the clearing organization, attach, as Exhibit E, the 
following:
    (1) A description of the regulatory regime/authority's structure, 
resources, staff and scope of authority.
    (2) The regulatory regime/authority's authorizing statutes, 
including the source of its authority to supervise the clearing 
organization.
    (3) A description of and, where applicable, copies of the laws, 
rules, regulations and policies applicable to: \11\
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    \11\ To the extent that any such laws, rules, regulations or 
policies were provided as part of Exhibit A-4, they need not be 
duplicated. They may be cross-referenced.
---------------------------------------------------------------------------

    (i) The authorization, licensure or registration of the clearing 
organization.
    (ii) The financial resource requirements applicable to the 
authorization, licensure or registration of the clearing organization 
and the continued operations thereof.
    (iii) The regulatory regime/authority's program for the ongoing 
supervision and oversight of the clearing organization and the 
enforcement of its clearing rules.
    (iv) The extent to which the current RCCPs are used or applied by 
the regulatory regime/authority in its supervision and oversight of the 
clearing organization or are incorporated into its rules and regulations 
and the extent to which the regulatory regime/authority reviews the 
clearing systems for compliance therewith.
    (v) The extent to which the regulatory regime/authority reviews and/
or approves the rules of the clearing organization prior to their 
implementation.
    (vi) The regulatory regime/authority's inspection, investigation and 
surveillance powers; and the program pursuant to which the regulatory 
regime/authority uses those powers to inspect, investigate, sanction, 
and enforce rules applicable to the clearing organization.
    (vii) The financial protection afforded customer funds.

   EXHIBIT F--THE RULES OF THE CLEARING ORGANIZATION AND ENFORCEMENT 
                                 THEREOF

    Attach, as Exhibit F-1, the following:
    A description of the clearing organization's regulatory or 
compliance department, including its size, experience level, 
competencies, duties and responsibilities of staff.
    Attach, as Exhibit F-2, the following:

[[Page 154]]

    A description of the clearing organization's rules and how they are 
enforced, with reference to any rules provided as part of Exhibit A-5 
that require the clearing organization to comply with one or more of the 
RCCPs.
    Attach, as Exhibit F-3, the following, to the extent not included in 
Exhibit F-2:
    A description of the clearing organization's disciplinary rules, 
including but not limited to rules that address the following--
    (1) Disciplinary authority and procedures that empower staff to 
recommend and prosecute disciplinary actions for suspected rule 
violations and that provide the authority to fine, suspend, or expel any 
clearing participant pursuant to fair and clear standards.
    (2) The issuance of warning letters and/or summary fines for 
specified rule violations.
    (3) The review of investigation reports by a disciplinary panel or 
other authority for issuance of charges or instructions to investigate 
further, or findings that an insufficient basis exists to issue charges.
    (4) Disciplinary committees of the clearing organization that take 
disciplinary action via formal disciplinary processes.
    (5) Whether and how the clearing organization articulates its 
rationale for disciplinary decisions.
    (6) The sanctions for particular violations and a discussion of the 
adequacy of sanctions with respect to the violations committed and their 
effectiveness as deterrents to future violations.
    Attach, as Exhibit F-4, the following, to the extent not provided in 
Exhibit F-2:
    A demonstration that the clearing organization is authorized by rule 
or contractual agreement to obtain, from members and other participants, 
any information and cooperation necessary to conduct investigations, to 
effectively enforce its rules, and to ensure compliance with the 
conditions of registration.

  EXHIBIT G--INFORMATION SHARING AGREEMENTS AMONG THE COMMISSION, THE 
    FOREIGN BOARD OF TRADE, THE CLEARING ORGANIZATION, AND RELEVANT 
                         REGULATORY AUTHORITIES

    Attach, as Exhibit G, the following:
    (1) A description of the arrangements among the Commission, the 
foreign board of trade, the clearing organization, and the relevant 
foreign regulatory authorities that govern the sharing of information 
regarding the transactions that will be executed pursuant to the foreign 
board of trade's registration with the Commission and the clearing and 
settlement of those transactions. This description should address or 
identify whether and how the foreign board of trade, clearing 
organization, and the regulatory authorities governing the activities of 
the foreign board of trade and clearing organization agree to provide 
directly to the Commission information and documentation requested by 
Commission staff that Commission staff determines is needed:
    (i) To evaluate the continued eligibility of the foreign board of 
trade for registration.
    (ii) To enforce compliance with the specified conditions of the 
registration.
    (iii) To enable the CFTC to carry out its duties under the Act and 
Commission regulations and to provide adequate protection to the public 
or registered entities.
    (iv) To respond to potential market abuse associated with trading by 
direct access on the registered foreign board of trade.
    (v) To enable Commission staff to effectively accomplish its 
surveillance responsibilities with respect to a registered entity where 
Commission staff, in its discretion, determines that a contract traded 
on a registered foreign board of trade may affect such ability.
    (2) A statement as to whether the regulatory authorities governing 
the activities of the foreign board of trade and clearing organization 
are signatories to the International Organization of Securities 
Commissions Multilateral Memorandum of Understanding. If not, describe 
any substitute information-sharing arrangements that are in place.
    (3) A statement as to whether the regulatory authorities governing 
the activities of the foreign board of trade and clearing organization 
are signatories to the Declaration on Cooperation and Supervision of 
International Futures Exchanges and Clearing Organizations. If not, a 
statement as to whether and how they have committed to share the types 
of information contemplated by the International Information Sharing 
Memorandum of Understanding and Agreement with the Commission, whether 
pursuant to an existing memorandum of understanding or some other 
arrangement.

           EXHIBIT H--ADDITIONAL INFORMATION AND DOCUMENTATION

    Attach, as Exhibit H, any additional information or documentation 
necessary to demonstrate that the requirements for registration 
applicable to the clearing organization or clearing system set forth in 
Commission regulation 48.7 are satisfied.



PART 49_SWAP DATA REPOSITORIES--Table of Contents



Sec.
49.1 Scope.
49.2 Definitions.
49.3 Procedures for registration.
49.4 Withdrawal from registration.
49.5 Equity interest transfers.
49.6 Registration of successor entities.
49.7 Swap data repositories located in foreign jurisdictions.

[[Page 155]]

49.8 Procedures for implementing registered swap data repository rules.
49.9 Duties of registered swap data repositories.
49.10 Acceptance of data.
49.11 Confirmation of data accuracy.
49.12 Swap data repository recordkeeping requirements.
49.13 Monitoring, screening and analyzing swap data.
49.14 Monitoring, screening and analyzing end-user clearing exemption 
          claims by individual and affiliated entities.
49.15 Real-time public reporting of swap data.
49.16 Privacy and confidentiality requirements of swap data 
          repositories.
49.17 Access to SDR data.
49.18 Confidentiality arrangement.
49.19 Core principles applicable to registered swap data repositories.
49.20 Governance arrangements (Core Principle 2).
49.21 Conflicts of interest (Core Principle 3).
49.22 Chief compliance officer.
49.23 Emergency policies and procedures.
49.24 System safeguards.
49.25 Financial resources.
49.26 Disclosure requirements of swap data repositories.
49.27 Access and fees.

Appendix A to Part 49--Form SDR
Appendix B to Part 49--Confidentiality Arrangement for Appropriate 
          Domestic Regulators and Appropriate Foreign Regulators to 
          Obtain Access to Swap Data Maintained by Registered Swap Data 
          Respositories Pursuant to Sec. Sec.  49.17(d)(6) and 49.18(a)

    Authority: 7 U.S.C. 12a, and 24a, unless otherwise noted.

    Source: 76 FR 54575, Sept. 1, 2011, unless otherwise noted.



Sec.  49.1  Scope.

    The provisions of this part apply to any swap data repository as 
defined under Section 1a(48) of the Act which is registered or is 
required to register as such with the Commission pursuant to Section 
21(a) of the Act.



Sec.  49.2  Definitions.

    (a) As used in this part:
    (1) Affiliate. The term ``affiliate'' means a person that directly, 
or indirectly, controls, is controlled by, or is under common control 
with, the swap data repository.
    (2) Asset class. The term ``asset class'' means the particular broad 
category of goods, services or commodities underlying a swap. The asset 
classes include credit, equity, interest rates, foreign exchange, other 
commodities, and such other asset classes as may be determined by the 
Commission.
    (3) Commercial use. The term ``commercial use'' means the use of 
swap data held and maintained by a registered swap data repository for a 
profit or business purposes. The use of swap data for regulatory 
purposes and/or responsibilities by a registered swap data repository 
would not be considered a commercial use regardless of whether the 
registered swap data repository charges a fee for reporting such swap 
data.
    (4) Control. The term ``control'' (including the terms ``controlled 
by'' and ``under common control with'') means the possession, direct or 
indirect, of the power to direct or cause the direction of the 
management and policies of a person, whether through the ownership of 
voting securities, by contract, or otherwise.
    (5) Foreign Regulator. The term ``foreign regulator'' means a 
foreign futures authority as defined in Section 1a(26) of the Act, 
foreign financial supervisors, foreign central banks, foreign ministries 
and other foreign authorities.
    (6) Independent perspective. The term ``independent perspective'' 
means a viewpoint that is impartial regarding competitive, commercial, 
or industry concerns and contemplates the effect of a decision on all 
constituencies involved.
    (7) Market participant. The term ``market participant'' means any 
person participating in the swap market, including, but not limited to, 
designated contract markets, derivatives clearing organizations, swaps 
execution facilities, swap dealers, major swap participants, and any 
other counterparties to a swap transaction.
    (8) Non-affiliated third party. The term ``non-affiliated third 
party'' means any person except:
    (i) The swap data repository;
    (ii) The swap data repository's affiliate; or
    (iii) A person employed by a swap data repository and any entity 
that is not the swap data repository's affiliate (and ``non-affiliated 
third party'' includes such entity that jointly employs the person).

[[Page 156]]

    (9) Person associated with a swap data repository. The term ``person 
associated with a swap data repository'' means:
    (i) Any partner, officer, or director of such swap data repository 
(or any person occupying a similar status or performing similar 
functions);
    (ii) Any person directly or indirectly controlling, controlled by, 
or under common control with such swap data repository; or
    (iii) Any person employed by such swap data repository.
    (10) Position. The term ``position'' means the gross and net 
notional amounts of open swap transactions aggregated by one or more 
attributes, including, but not limited to, the:
    (i) Underlying instrument;
    (ii) Index, or reference entity;
    (iii) Counterparty;
    (iv) Asset class;
    (v) Long risk of the underlying instrument, index, or reference 
entity; and
    (vi) Short risk of the underlying instrument, index, or reference 
entity.
    (11) Registered swap data repository. The term ``registered swap 
data repository'' means a swap data repository that is registered under 
Section 21 of the Act.
    (12) Reporting entity. The term ``reporting entity'' means those 
entities that are required to report swap data to a registered swap data 
repository. These reporting entities include designated contract 
markets, swaps execution facilities, derivatives clearing organizations, 
swap dealers, major swap participants and certain non-swap dealers/non-
major swap participant counterparties.
    (13) SDR Information. The term ``SDR Information'' means any 
information that the swap data repository receives or maintains.
    (14) Section 8 Material. The term ``Section 8 Material'' means the 
business transactions, trade data, or market positions of any person and 
trade secrets or names of customers.
    (15) Swap data. The term ``swap data'' means the specific data 
elements and information set forth in part 45 of this chapter that is 
required to be reported by a reporting entity to a registered swap data 
repository.
    (b) Defined terms. Capitalized terms not defined in this part shall 
have the meanings assigned to them in Sec.  1.3 of this chapter.

[76 FR 54575, Sept. 1, 2011, as amended at 83 FR 27436, June 12, 2018]



Sec.  49.3  Procedures for registration.

    (a) Application procedures. (1) An applicant, person or entity 
desiring to be registered as a swap data repository shall file 
electronically an application for registration on Form SDR provided in 
appendix A to this part, with the Secretary of the Commission at its 
headquarters in Washington, DC in a format and in the manner specified 
by the Secretary of the Commission in accordance with the instructions 
contained therein.
    (2) The application shall include information sufficient to 
demonstrate compliance with core principles specified in Section 21 of 
the Act and the regulations thereunder. Form SDR consists of 
instructions, general questions and a list of Exhibits (documents, 
information and evidence) required by the Commission in order to 
determine whether an applicant is able to comply with the core 
principles. An application will not be considered to be materially 
complete unless the applicant has submitted, at a minimum, the exhibits 
as required in Form SDR. If the application is not materially complete, 
the Commission shall notify the applicant that the application will not 
be deemed to have been submitted for purposes of the 180-day review 
procedures.
    (3) 180-Day review procedures. The Commission will review the 
application for registration as a swap data repository within 180 days 
of the date of the filing of such application. In considering an 
application for registration as a swap data repository, the staff of the 
Commission shall include in its review, an applicant's past relevant 
submissions and compliance history. At or prior to the conclusion of the 
180-day period, the Commission will either by order grant registration; 
extend, by order, the 180-day review period for good cause; or deny the 
application for registration as a swap data repository. The 180-day 
review period shall commence once a completed submission on

[[Page 157]]

Form SDR is submitted to the Commission. The determination of when such 
submission on Form SDR is complete shall be at the sole discretion of 
the Commission. If deemed appropriate, the Commission may grant 
registration as a swap data repository subject to conditions. If the 
Commission denies an application for registration as a swap data 
repository, it shall specify the grounds for such denial. In the event 
of a denial of registration for a swap data repository, any person so 
denied shall be afforded an opportunity for a hearing before the 
Commission.
    (4) Standard for approval. The Commission shall grant the 
registration of a swap data repository if the Commission finds that such 
swap data repository is appropriately organized, and has the capacity: 
to ensure the prompt, accurate and reliable performance of its functions 
as a swap data repository; comply with any applicable provisions of the 
Act and regulations thereunder; carry out its functions in a manner 
consistent with the purposes of Section 21 of the Act and the 
regulations thereunder; and operate in a fair, equitable and consistent 
manner. The Commission shall deny registration of a swap data repository 
if it appears that the application is materially incomplete; fails in 
form or substance to meet the requirements of Section 21 of the Act and 
part 49; or is amended or supplemented in a manner that is inconsistent 
with this Sec.  49.3. The Commission shall notify the applicant seeking 
registration that the Commission is denying the application setting 
forth the deficiencies in the application, and/or the manner in which 
the application fails to meet the requirements of this part.
    (5) Amendments and annual filing. If any information reported on 
Form SDR or in any amendment thereto is or becomes inaccurate for any 
reason, whether before or after the application for registration has 
been granted, the swap data repository shall promptly file an amendment 
on Form SDR updating such information. In addition, the swap data 
repository shall annually file an amendment on Form SDR within 60 days 
after the end of each fiscal year.
    (6) Service of process. Each swap data repository shall designate 
and authorize on Form SDR an agent in the United States, other than a 
Commission official, who shall accept any notice or service of process, 
pleadings, or other documents in any action or proceedings brought 
against the swap data repository to enforce the Act and the regulations 
thereunder.
    (b) Provisional registration. The Commission, upon the request of an 
applicant, may grant provisional registration of a swap data repository 
if such applicant is in substantial compliance with the standards set 
forth in paragraph (a)(4) of this section and is able to demonstrate 
operational capability, real-time processing, multiple redundancy and 
robust security controls. Such provisional registration of a swap data 
repository shall expire on the earlier of: the date that the Commission 
grants or denies registration of the swap data repository; or the date 
that the Commission rescinds the temporary registration of the swap data 
repository. This paragraph (b) shall terminate within such time as 
determined by the Commission. A provisional registration granted by the 
Commission does not affect the right of the Commission to grant or deny 
permanent registration as provided under paragraph (a)(3) of this 
section.
    (c) Withdrawal of application for registration. An applicant for 
registration may withdraw its application submitted pursuant to 
paragraph (a) of this section by filing with the Commission such a 
request. Withdrawal of an application for registration shall not affect 
any action taken or to be taken by the Commission based upon actions, 
activities, or events occurring during the time that the application for 
registration was pending with the Commission, and shall not prejudice 
the filing of a new application by such applicant.
    (d) Reinstatement of dormant registration. Before accepting or re-
accepting swap transaction data, a dormant registered swap data 
repository as defined in Sec.  40.1(e) of this chapter shall reinstate 
its registration under the procedures set forth in paragraph (a) of this 
section; provided, however, that an application for reinstatement may 
rely

[[Page 158]]

upon previously submitted materials that still pertain to, and 
accurately describe, current conditions.
    (e) Delegation of authority. (1) The Commission hereby delegates, 
until it orders otherwise, to the Director of the Division of Market 
Oversight or the Director's delegates, with the consultation of the 
General Counsel or the General Counsel's delegates, the authority to 
notify an applicant seeking registration as a swap data repository 
pursuant to Section 21 of the Act that the application is materially 
incomplete and the 180-day period review period is extended.
    (2) The Director of the Division of Market Oversight may submit to 
the Commission for its consideration any matter which has been delegated 
in this paragraph.
    (3) Nothing in this paragraph prohibits the Commission, at its 
election, from exercising the authority delegated in paragraph (e)(1) of 
this section.
    (f) Request for confidential treatment. An applicant for 
registration may request confidential treatment for materials submitted 
in its application as set forth in Sec. Sec.  40.8 and 145.9 of this 
chapter. The applicant shall identify with particularity information in 
the application that will be subject to a request for confidential 
treatment.



Sec.  49.4  Withdrawal from registration.

    (a)(1) A registered swap data repository may withdraw its 
registration by giving notice in writing to the Commission requesting 
that its registration as a swap data repository be withdrawn, which 
notice shall be served at least sixty days prior to the date named 
therein as the date when the withdrawal of registration shall take 
effect. The request to withdraw shall be made by a person duly 
authorized by the registrant and shall specify:
    (i) The name of the registrant for which withdrawal of registration 
is being requested;
    (ii) The name, address and telephone number of the swap data 
repository that will have custody of data and records of the registrant;
    (iii) The address where such data and records will be located; and
    (iv) A statement that the custodial swap data repository is 
authorized to make such data and records available in accordance with 
Sec.  1.44.
    (2) Prior to filing a request to withdraw, a registered swap data 
repository shall file an amended Form SDR to update any inaccurate 
information. A withdrawal of registration shall not affect any action 
taken or to be taken by the Commission based upon actions, activities or 
events occurring during the time that the facility was designated by the 
Commission.
    (b) A notice of withdrawal from registration filed by a swap data 
repository shall become effective for all matters (except as provided in 
this paragraph (b)) on the 60th day after the filing thereof with the 
Commission, within such longer period of time as to which such swap data 
repository consents or which the Commission, by order, may determine as 
necessary or appropriate in the public interest.
    (c) Revocation of Registration for False Application. If, after 
notice and opportunity for hearing, the Commission finds that any 
registered swap data repository has obtained its registration by making 
any false or misleading statements with respect to any material fact or 
has violated or failed to comply with any provision of the Act and 
regulations thereunder, the Commission, by order, may revoke the 
registration. Pending final determination whether any registration shall 
be revoked, the Commission, by order, may suspend such registration, if 
such suspension appears to the Commission, after notice and opportunity 
for hearing, to be necessary or appropriate and in the public interest.



Sec.  49.5  Equity interest transfers.

    (a) Equity transfer notification. Upon entering into any 
agreement(s) that could result in an equity interest transfer of ten 
percent or more in the swap data repository, the swap data repository 
shall file a notification of the equity interest transfer with the 
Secretary of the Commission at its headquarters in Washington, DC in a 
format and in the manner specified by the Secretary of the Commission, 
no later than the business day, as defined in Sec.  40.1 of this 
chapter, following the date

[[Page 159]]

on which the swap data repository enters into a firm obligation to 
transfer the equity interest. The swap data repository shall also amend 
any information that is no longer accurate on Form SDR consistent with 
the procedures set forth in Sec.  49.3 of this part.
    (b) Required information. The notification must include and be 
accompanied by: any relevant agreement(s), including any preliminary 
agreements; any associated changes to relevant corporate documents; a 
chart outlining any new ownership or corporate or organizational 
structure; a brief description of the purpose and any impact of the 
equity interest transfer; and a representation from the swap data 
repository that it meets all of the requirements of Section 21 of the 
Act and Commission regulations adopted thereunder. The swap data 
repository shall keep the Commission apprised of the projected date that 
the transaction resulting in the equity interest transfer will be 
consummated, and must provide to the Commission any new agreements or 
modifications to the original agreement(s) filed pursuant to this 
section. The swap data repository shall notify the Commission of the 
consummation of the transaction on the day in which it occurs.
    (c) Certification. (1) Upon a transfer of an equity interest of ten 
percent or more in a registered swap data repository, the registered 
swap data repository shall file with the Secretary of the Commission at 
its headquarters in Washington, DC in a format and in the manner 
specified by the Secretary of the Commission, a certification that the 
registered swap data repository meets all of the requirements of Section 
21 of the Act and Commission regulations adopted thereunder, no later 
than two business days, as defined in Sec.  40.1 of this chapter, 
following the date on which the equity interest of ten percent or more 
was acquired. Such certification shall state whether changes to any 
aspects of the swap data repository's operations were made as a result 
of such change in ownership, and include a description of any such 
change(s).
    (2) The certification required under this paragraph may rely on and 
be supported by reference to an application for registration as a swap 
data repository or prior filings made pursuant to a rule submission 
requirement, along with any necessary new filings, including new filings 
that provide any and all material updates of prior submissions.



Sec.  49.6  Registration of successor entities.

    (a) In the event of a corporate transaction, such as a re-
organization, merger, acquisition, bankruptcy or other similar corporate 
event, that creates a new entity, in which the swap data repository 
continues to operate, the swap data repository shall request a transfer 
of the registration, rules, and other matters, no later than 30 days 
after the succession. The registration of the predecessor shall be 
deemed to remain effective as the registration of the successor if the 
successor, within 30 days after such succession, files an application 
for registration on Form SDR, and the predecessor files a request for 
vacation of registration on Form SDR provided, however, that the 
registration of the predecessor swap data repository shall cease to be 
effective 90 days after the application for registration on Form SDR is 
filed by the successor swap data repository.
    (b) If the succession is based solely on a change in the 
predecessor's date or state of incorporation, form of organization, or 
composition of a partnership, the successor may, within 30 days after 
the succession, amend the registration of the predecessor swap data 
repository on Form SDR to reflect these changes. This amendment shall be 
an application for registration filed by the predecessor and adopted by 
the successor.



Sec.  49.7  Swap data repositories located in foreign jurisdictions.

    Any swap data repository located outside of the United States 
applying for registration pursuant to Sec.  49.3 of this part shall 
certify on Form SDR and provide an opinion of counsel that the swap data 
repository, as a matter of law, is able to provide the Commission with 
prompt access to the books and records of such swap data repository and 
that the swap data repository can submit to onsite inspection and 
examination by the Commission.

[[Page 160]]



Sec.  49.8  Procedures for implementing registered swap data 
repository rules.

    (a) Request for Commission approval of rules. An applicant for 
registration as a swap data repository may request that the Commission 
approve under Section 5c(c) of the Act, any or all of its rules and 
subsequent amendments thereto, prior to their implementation or, 
notwithstanding the provisions of Section 5c(c)(2) of the Act, at 
anytime thereafter, under the procedures of Sec.  40.5 of this chapter.
    (b) Notwithstanding the timeline under Sec.  40.5(c) of this 
chapter, the rules of a swap data repository that have been submitted 
for Commission approval at the same time as an application for 
registration under Sec.  49.3 of this part or to reinstate the 
registration of a dormant registered swap data repository, as defined in 
Sec.  40.1 of this chapter, will be deemed approved by the Commission no 
earlier than when the swap data repository is deemed to be registered or 
reinstated.
    (c) Self-certification of rules. Rules of a registered swap data 
repository not voluntarily submitted for prior Commission approval 
pursuant to paragraph (a) of this section must be submitted to the 
Commission with a certification that the rule or rule amendment complies 
with the Act or rules thereunder pursuant to the procedures of Sec.  
40.6 of this chapter, as applicable.



Sec.  49.9  Duties of registered swap data repositories.

    (a) Duties. To be registered, and maintain registration, as a swap 
data repository, a registered swap data repository shall:
    (1) Accept swap data as prescribed in Sec.  49.10 for each swap;
    (2) Confirm, as prescribed in Sec.  49.11, with both counterparties 
to the swap the accuracy of the swap data that was submitted;
    (3) Maintain, as prescribed in Sec.  49.12, the swap data described 
in part 45 of the Commission's Regulations in such form and manner as 
provided therein and in the Act and the rules and regulations 
thereunder;
    (4) Provide direct electronic access to the Commission (or any 
designee of the Commission, including another registered entity) as 
prescribed in Sec.  49.17;
    (5) Provide the information set forth in Sec.  49.15 to comply with 
the public reporting requirements set forth in Section 2(a)(13) of the 
Act;
    (6) Establish automated systems for monitoring, screening, and 
analyzing swap data as prescribed in Sec.  49.13;
    (7) Establish automated systems for monitoring, screening and 
analyzing end-user clearing exemption claims as prescribed in Sec.  
49.14;
    (8) Maintain the privacy of any and all swap data and any other 
related information that the swap data repository receives from a 
reporting entity as prescribed in Sec.  49.16;
    (9) Upon request of Appropriate Domestic Regulators and Appropriate 
Foreign Regulators, provide access to swap data held and maintained by 
the swap data repository, as prescribed in Sec.  49.17;
    (10) Adopt and establish appropriate emergency policies and 
procedures, including business continuity and disaster recovery plans, 
as prescribed in Sec. Sec.  49.23 and 49.24.
    (11) Designate an individual to serve as a chief compliance officer 
who shall comply with Sec.  49.22; and
    (12) Subject itself to inspection and examination by the Commission.
    (b) This Regulation is not intended to limit, or restrict, the 
applicability of other provisions of the Act, including, but not limited 
to, Section 2(a)(13) of the Act and rules and regulations promulgated 
thereunder.

[76 FR 54575, Sept. 1, 2011, as amended at 83 FR 27436, June 12, 2018]



Sec.  49.10  Acceptance of data.

    (a) A registered swap data repository shall establish, maintain, and 
enforce policies and procedures for the reporting of swap data to the 
registered swap data repository and shall accept and promptly record all 
swap data in its selected asset class and other regulatory information 
that is required to be reported pursuant to part 45 and part 43 of this 
chapter by designated contract markets, derivatives clearing 
organizations, swap execution facilities, swap dealers, major swap 
participants and/or non-swap dealer/non-major swap participant 
counterparties.

[[Page 161]]

    (1) Electronic connectivity. For the purpose of accepting all swap 
data as required by part 45 and part 43, the registered swap data 
repository shall adopt policies and procedures, including technological 
protocols, which provide for electronic connectivity between the swap 
data repository and designated contract markets, derivatives clearing 
organizations, swaps execution facilities, swap dealers, major swap 
participants and/or certain other non-swap dealer/non-major swap 
participant counterparties who report such data. The technological 
protocols established by a swap data repository shall provide for the 
receipt of swap creation data, swap continuation data, real-time public 
reporting data, and all other data and information required to be 
reported to such swap data repository. The swap data repository shall 
ensure that its mechanisms for swap data acceptance are reliable and 
secure.
    (b) A registered swap data repository shall set forth in its 
application for registration as described in Sec.  49.3 the specific 
asset class or classes for which it will accept swaps data. If a swap 
data repository accepts swap data of a particular asset class, then it 
shall accept data from all swaps of that asset class, unless otherwise 
prescribed by the Commission.
    (c) A registered swap data repository shall establish policies and 
procedures reasonably designed to prevent any provision in a valid swap 
from being invalidated or modified through the confirmation or recording 
process of the swap data repository. The policies and procedures must 
ensure that the swap data repository's user agreements are designed to 
prevent any such invalidation or modification.
    (d) A registered swap data repository shall establish procedures and 
provide facilities for effectively resolving disputes over the accuracy 
of the swap data and positions that are recorded in the registered swap 
data repository.



Sec.  49.11  Confirmation of data accuracy.

    (a) A registered swap data repository shall establish policies and 
procedures to ensure the accuracy of swap data and other regulatory 
information required to be reported by part 45 that it receives from 
reporting entities or certain third-party service providers acting on 
their behalf, such as confirmation or matching service providers.
    (b) A registered swap data repository shall confirm the accuracy of 
all swap data that is submitted pursuant to part 45.
    (1) Confirmation of data accuracy for swap creation data as defined 
in part 45. (i) A registered swap data repository has confirmed the 
accuracy of swap creation data that was submitted directly by a 
counterparty if the swap data repository has notified both 
counterparties of the data that was submitted and received from both 
counterparties acknowledgement of the accuracy of the swap data and 
corrections for any errors.
    (ii) A registered swap data repository has confirmed the accuracy of 
swap creation data that was submitted by a swap execution facility, 
designated contract market, derivatives clearing organization, or third-
party service provider who is acting on behalf of a counterparty, if the 
swap data repository has complied with each of the following:
    (A) The swap data repository has formed a reasonable belief that the 
swap data is accurate;
    (B) The swap data that was submitted, or any accompanying 
information, evidences that both counterparties agreed to the data; and
    (C) The swap data repository has provided both counterparties with a 
48 hour correction period after which a counterparty is assumed to have 
acknowledged the accuracy of the swap data.
    (2) Confirmation of data accuracy for swap continuation data as 
defined in part 45. (i) A registered swap data repository has confirmed 
the accuracy of the swap continuation data that was submitted directly 
by a counterparty if the swap data repository has notified both 
counterparties of the data that was submitted and provided both 
counterparties with a 48 hour correction period after which a 
counterparty is assumed to have acknowledged the accuracy of the data.
    (ii) A registered swap data repository has confirmed the accuracy of 
swap continuation data that was submitted

[[Page 162]]

by a swap execution facility, designated contract market, derivatives 
clearing organization, or third-party service provider who is acting on 
behalf of a counterparty, if the swap data repository has complied with 
each of the following:
    (A) The swap data repository has formed a reasonable belief that the 
swap data is accurate; and
    (B) The swap data repository has provided both counterparties with a 
48 hour correction period after which a counterparty is assumed to have 
acknowledged the accuracy of the swap data.
    (c) A registered swap data repository shall keep a record of 
corrected errors that is available upon request to the Commission.



Sec.  49.12  Swap data repository recordkeeping requirements.

    (a) A registered swap data repository shall maintain its books and 
records in accordance with the requirements of part 45 of this chapter 
regarding the swap data required to be reported to the swap data 
repository.
    (b) A registered swap data repository shall maintain swap data 
(including all historical positions) throughout the existence of the 
swap and for five years following final termination of the swap, during 
which time the records must be readily accessible by the swap data 
repository and available to the Commission via real-time electronic 
access; and in archival storage for which such swap data is retrievable 
by the swap data repository within three business days.
    (c) All records required to be kept pursuant to this Regulation 
shall be open to inspection upon request by any representative of the 
Commission and the United States Department of Justice. Copies of all 
such records shall be provided, at the expense of the swap data 
repository or person required to keep the record, to any representative 
of the Commission upon request, either by electronic means, in hard 
copy, or both, as requested by the Commission.
    (d) A registered swap data repository shall comply with the real 
time public reporting and recordkeeping requirements prescribed in Sec.  
49.15 and part 43 of this chapter.
    (e) A registered swap data repository shall establish policies and 
procedures to calculate positions for position limits and any other 
purpose as required by the Commission, for all persons with swaps that 
have not expired maintained by the registered swap data repository.



Sec.  49.13  Monitoring, screening and analyzing swap data.

    (a) Duty to monitor, screen and analyze data. A registered swap data 
repository shall monitor, screen, and analyze all swap data in its 
possession in such a manner as the Commission may require. A swap data 
repository shall routinely monitor, screen, and analyze swap data for 
the purpose of any standing swap surveillance objectives which the 
Commission may establish as well as perform specific monitoring, 
screening, and analysis tasks based on ad hoc requests by the 
Commission.
    (b) Capacity to monitor, screen and analyze data. A registered swap 
data repository shall establish and maintain sufficient information 
technology, staff, and other resources to fulfill the requirements in 
this Sec.  49.13 in a manner prescribed by the Commission. A swap data 
repository shall monitor the sufficiency of such resources at least 
annually, and adjust its resources as its responsibilities, or the 
volume of swap transactions subject to monitoring, screening, and 
analysis, increase.



Sec.  49.14  Monitoring, screening and analyzing end-user clearing
exemption claims by individual and affiliated entities.

    A registered swap data repository shall have automated systems 
capable of identifying, aggregating, sorting, and filtering all swap 
transactions that are reported to it which are exempt from clearing 
pursuant to Section 2(h)(7) of the Act. Such capabilities shall be 
applicable to any information provided to a swap data repository by or 
on behalf of an end user regarding how such end user meets the 
requirements of Sections 2(h)(7)(A)(i), 2(h)(7)(A)(ii), and 
2(h)(7)(A)(iii) of the Act and any Commission regulations thereunder.

[[Page 163]]



Sec.  49.15  Real-time public reporting of swap data.

    (a) Scope. The provisions of this Sec.  49.15 apply to real-time 
public reporting of swap data, as defined in part 43 of this chapter.
    (b) Systems to accept and disseminate swap data in connection with 
real-time public reporting. A registered swap data repository shall 
establish such electronic systems as are necessary to accept and 
publicly disseminate real-time swap data submitted to meet the real-time 
public reporting obligations of part 43 of this chapter. Any electronic 
systems established for this purpose must be capable of accepting and 
ensuring the public dissemination of all data fields required by part 43 
of this chapter.
    (c) Duty to notify the commission of untimely data. A registered 
swap data repository must notify the Commission of any swap transaction 
for which the real-time swap data was not received by the swap data 
repository in accordance with part 43 of this chapter.



Sec.  49.16  Privacy and confidentiality requirements of swap data
repositories.

    (a) Each swap data repository shall:
    (1) Establish, maintain, and enforce written policies and procedures 
reasonably designed to protect the privacy and confidentiality of any 
and all SDR Information that is not subject to real-time public 
reporting set forth in part 43 of this chapter. Such policies and 
procedures shall include, but are not limited to, policies and 
procedures to protect the privacy and confidentiality of any and all SDR 
Information (except for swap data disseminated under part 43) that the 
swap data repository shares with affiliates and non-affiliated third 
parties; and
    (2) Establish and maintain safeguards, policies, and procedures 
reasonably designed to prevent the misappropriation or misuse, directly 
or indirectly, of:
    (i) Section 8 Material;
    (ii) Other SDR Information; and/or
    (iii) Intellectual property, such as trading strategies or portfolio 
positions, by the swap data repository or any person associated with the 
swap data repository. Such safeguards, policies, and procedures shall 
include, but are not limited to,
    (A) limiting access to such Section 8 Material, other SDR 
Information, and intellectual property,
    (B) standards controlling persons associated with the swap data 
repository trading for their personal benefit or the benefit of others, 
and
    (C) adequate oversight to ensure compliance with this subparagraph.
    (b) Swap data repositories shall not, as a condition of accepting 
swap data from reporting entities, require the waiver of any privacy 
rights by such reporting entities.
    (c) Subject to Section 8 of the Act, swap data repositories may 
disclose aggregated swap data on a voluntary basis or as requested, in 
the form and manner, prescribed by the Commission.



Sec.  49.17  Access to SDR data.

    (a) Purpose. This section provides a procedure by which the 
Commission, other domestic regulators and foreign regulators may obtain 
access to the swap data held and maintained by registered swap data 
repositories. Except as specifically set forth in this section, the 
Commission's duties and obligations regarding the confidentiality of 
business transactions or market positions of any person and trade 
secrets or names of customers identified in Section 8 of the Act are not 
affected.
    (b) Definitions. For purposes of this Sec.  49.17, the following 
terms shall be defined as follows:
    (1) Appropriate Domestic Regulator. The term ``Appropriate Domestic 
Regulator'' shall mean:
    (i) The Securities and Exchange Commission;
    (ii) Each prudential regulator identified in Section 1a(39) of the 
Act with respect to requests related to any of such regulator's 
statutory authorities, without limitation to the activities listed for 
each regulator in Section 1a(39);
    (iii) The Financial Stability Oversight Council;
    (iv) The Department of Justice;
    (v) Any Federal Reserve Bank;
    (vi) The Office of Financial Research; and

[[Page 164]]

    (vii) Any other person the Commission determines to be appropriate 
pursuant to the process set forth in paragraph (h) of this section.
    (2) Appropriate Foreign Regulator. The term ``Appropriate Foreign 
Regulator'' shall mean those Foreign Regulators the Commission 
determines to be appropriate pursuant to the process set forth in 
paragraph (h) of this section.
    (3) Direct electronic access. For the purposes of this regulation, 
the term ``direct electronic access'' shall mean an electronic system, 
platform or framework that provides Internet or Web-based access to 
real-time swap transaction data and also provides scheduled data 
transfers to Commission electronic systems.
    (c) Commission access--(1) Direct electronic access. A registered 
swap data repository shall provide direct electronic access to the 
Commission or the Commission's designee, including another registered 
entity, in order for the Commission to carry out its legal and statutory 
responsibilities under the Act and related regulations.
    (2) Monitoring tools. A registered swap data repository is required 
to provide the Commission with proper tools for the monitoring, 
screening and analyzing of swap data, including, but not limited to, 
Web-based services, services that provide automated transfer of data to 
Commission systems, various software and access to the staff of the swap 
data repository and/or third-party service providers or agents familiar 
with the operations of the registered swap data repository, which can 
provide assistance to the Commission regarding data structure and 
content.
    (3) Authorized users. The swap data provided to the Commission by a 
registered swap data repository shall be accessible only by 
authorizedusers. The swap data repository shall maintain and provide a 
list of authorized users in the manner and frequency determined by the 
Commission.
    (d) Other regulators--(1) General Procedure for Gaining Access to 
Registered Swap Data Repository Data. Except as set forth in paragraph 
(d)(2) or (3) of this section--
    (i) A person who is not an Appropriate Domestic Regulator or an 
Appropriate Foreign Regulator and who seeks to gain access to the swap 
data maintained by a swap data repository is required to first become an 
Appropriate Domestic Regulator or Appropriate Foreign Regulator through 
the process set forth in paragraph (h) of this section, and
    (ii) Appropriate Domestic Regulators and Appropriate Foreign 
Regulators seeking to gain access to the swap data maintained by a swap 
data repository are required to apply for access by filing a request for 
access with the registered swap data repository and certifying that it 
is acting within the scope of its jurisdiction, comply with paragraph 
(d)(6) of this section prior to receiving such access and, if applicable 
after receiving such access, comply with the notification requirement in 
paragraph (d)(4)(iii) of this section applicable to Appropriate Domestic 
Regulators and Appropriate Foreign Regulators.
    (2) Domestic regulator with regulatory responsibility over a swap 
data repository. When a swap data repository that is registered with the 
Commission pursuant to this chapter is also registered with a domestic 
regulator pursuant to a separate statutory authority, and such domestic 
regulator seeks access to swap data that has been reported to such swap 
data repository pursuant to the domestic regulator's regulatory regime, 
such access is not subject to the requirements of sections 21(c)(7) or 
21(d) of the Act, this paragraph (d) or Sec.  49.18.
    (3) Foreign Regulator with regulatory responsibility over a swap 
data repository. When a swap data repository that is registered with the 
Commission pursuant to this chapter is also registered with, or 
recognized or otherwise authorized by, a Foreign Regulator that has 
supervisory authority over such swap data repository pursuant to foreign 
law and/or regulation, and such Foreign Regulator seeks access to swap 
data that has been reported to such swap data repository pursuant to the 
Foreign Regulator's regulatory regime, such access is not subject to the 
requirements of sections 21(c)(7) or 21(d) of the Act, this paragraph 
(d) or Sec.  49.18.

[[Page 165]]

    (4) Obligations of the registered swap data repository in connection 
with appropriate domestic regulator or appropriate foreign regulator 
requests for data access.
    (i) A registered swap data repository shall notify the Commission 
promptly after receiving an initial request from an Appropriate Domestic 
Regulator or Appropriate Foreign Regulator to gain access to swap data 
maintained by such swap data repository and promptly after receiving any 
request that does not comport with the scope of the Appropriate Domestic 
Regulator's or Appropriate Foreign Regulator's jurisdiction, as 
described and appended to the confidentiality arrangement required by 
Sec.  49.18(a). Each registered swap data repository shall maintain 
records thereafter, pursuant to Sec.  49.12, of the details of such 
initial request and of all subsequent requests by such Appropriate 
Domestic Regulator or Appropriate Foreign Regulator for such access.
    (ii) The registered swap data repository shall notify the Commission 
electronically, in a format specified by the Secretary of the 
Commission, of the receipt of a request specified in paragraph (d)(4)(i) 
of this section.
    (iii) The registered swap data repository shall not provide an 
Appropriate Domestic Regulator or Appropriate Foreign Regulator access 
to swap data maintained by the swap data repository unless the swap data 
repository has determined that the swap data to which the Appropriate 
Domestic Regulator or Appropriate Foreign Regulator seeks access is 
within the then-current scope of such Appropriate Domestic Regulator's 
or Appropriate Foreign Regulator's jurisdiction, as described and 
appended to the confidentiality arrangement required by Sec.  49.18(a). 
An Appropriate Domestic Regulator or Appropriate Foreign Regulator that 
has executed a confidentiality arrangement with the Commission pursuant 
to Sec.  49.18(a) and provided such confidentiality arrangement to one 
or more swap data repositories shall notify the Commission and each such 
swap data repository of any change to such Appropriate Domestic 
Regulator's or Appropriate Foreign Regulator's scope of jurisdiction as 
described in such confidentiality arrangement. The Commission may direct 
a swap data repository to suspend, limit, or revoke access to swap data 
maintained by such swap data repository based on any such change to such 
Appropriate Domestic Regulator's or Appropriate Foreign Regulator's 
scope of jurisdiction, and, if so directed in writing, such swap data 
repository shall so suspend, limit, or revoke such access.
    (iv) The registered swap data repository need not make the 
determination required pursuant to paragraph (d)(4)(iii) of this section 
more than once with respect to a recurring swap data request. If such 
request changes, the swap data repository must make a new determination 
pursuant to paragraph (d)(4)(iii) of this section.
    (5) Timing; Limitation, Suspension or Revocation of Swap Data 
Access. Once a registered swap data repository has--
    (i) Notified the Commission, pursuant to paragraphs (d)(4)(i) and 
(ii) of this section, of an initial request for swap data access by an 
Appropriate Domestic Regulator or Appropriate Foreign Regulator, as 
applicable, that was submitted pursuant to paragraph (d)(1) of this 
section,
    (ii) Received from such Appropriate Domestic Regulator or 
Appropriate Foreign Regulator a confidentiality arrangement executed by 
the Commission and such Appropriate Domestic Regulator or Appropriate 
Foreign Regulator as required by Sec.  49.18(a), and
    (iii) Satisfied its obligations under paragraph (d)(4)(iii) of this 
section, such swap data repository shall provide access to the requested 
swap data; provided, however, that such swap data repository shall, if 
directed by the Commission in writing, limit, suspend or revoke such 
access should the Commission limit, suspend or revoke the 
appropriateness determination for such Appropriate Domestic Regulator or 
Appropriate Foreign Regulator or otherwise direct the swap data 
repository, in writing, to limit, suspend or revoke such access.
    (6) Confidentiality Arrangement. Consistent with Sec.  49.18(a), the 
Appropriate Domestic Regulator or Appropriate Foreign Regulator shall, 
prior to receiving access to any requested swap

[[Page 166]]

data, execute the form of confidentiality arrangement set out in 
appendix B of this part with the Commission; provided, however, that the 
Commission may, in its discretion, agree to execute a confidentiality 
arrangement with an Appropriate Domestic Regulator or Appropriate 
Foreign Regulator that is not in the form set forth in appendix B of 
this part, if the confidentiality arrangement is consistent with the 
requirements set forth in Sec.  49.18(b).
    (e) Third-party service providers to a registered swap data 
repository. Access to the swap data and SDR Information maintained by a 
registered swap data repository may be necessary for certain third 
parties that provide various technology and data-related services to a 
registered swap data repository. Third-party access to the swap data and 
SDR Information maintained by a swap data repository is permissible 
subject to the following conditions:

    (1) Both the registered swap data repository and the third party 
service provider shall have strict confidentiality procedures that 
protect swap data and SDR Information from improper disclosure.
    (2) Prior to a registered swap data repository granting access to 
swap data or SDR Information to a third-party service provider, the 
third-party service provider and the registered swap data repository 
shall execute a confidentiality agreement setting forth minimum 
confidentiality procedures and permissible uses of the swap data and SDR 
Information maintained by the swap data repository that are equivalent 
to the privacy procedures for swap data repositories outlined in Sec.  
49.16.
    (f) Access by market participants--(1) General. Access by market 
participants to swap data maintained by the registered swap data 
repository is prohibited other than as set forth in paragraph (f)(2) of 
this section.
    (2) Exception. Swap data and information related to a particular 
swap that is maintained by the registered swap data repository may be 
accessed by either counterparty to that particular swap. However, the 
swap data and information maintained by the registered swap data 
repository that may be accessed by either counterparty to a particular 
swap shall not include the identity or the legal entity identifier (as 
such term is used in part 45 of this chapter) of the other counterparty 
to the swap, or the other counterparty's clearing member for the swap, 
if the swap is executed anonymously on a swap execution facility or 
designated contract market, and cleared in accordance with Commission 
regulations in Sec. Sec.  1.74, 23.610, and 37.12(b)(7) of this chapter.
    (g) Commercial uses of data accepted and maintained by the 
registered swap data repository prohibited. Swap data accepted and 
maintained by the swap data repository generally may not be used for 
commercial or business purposes by the swap data repository or any of 
its affiliated entities.
    (1) The registered swap data repository is required to adopt and 
implement adequate ``firewalls'' or controls to protect the reported 
swap data required to be maintained under Sec.  49.12 of this part and 
Section 21(b) of the Act from any improper commercial use.
    (2) Exception. (A) The swap dealer, counterparty or any other 
registered entity that submits the swap data maintained by the 
registered swap data repository may permit the commercial or business 
use of that data by express written consent.
    (B) Swap data repositories shall not as a condition of the reporting 
of swap transaction data require a reporting party to consent to the use 
of any reported data for commercial or business purposes.
    (3) Swap data repositories responsible for the public dissemination 
of real-time swap data shall not make commercial use of such data prior 
to its public dissemination.
    (h) Appropriateness determination process. (1) Each person seeking 
an appropriateness determination pursuant to this paragraph shall file 
an application with the Commission.
    (2) Each applicant seeking an appropriateness determination shall 
provide sufficient detail in its application to permit the Commission to 
analyze whether the applicant is acting within the scope of its 
jurisdiction in seeking access to swap data maintained by a registered 
swap data repository, and

[[Page 167]]

whether the applicant employs appropriate confidentiality safeguards to 
ensure that any swap data such applicant receives from a registered swap 
data repository will not, except as allowed for in the form of 
confidentiality arrangement set forth in appendix B to this part 49, be 
disclosed.
    (3) If the Commission determines that an applicant pursuant to this 
paragraph is, conditionally or unconditionally, appropriate for purposes 
of CEA section 21(c)(7), the Commission shall issue an order setting 
forth its appropriateness determination. The Commission shall not 
determine that an applicant pursuant to this paragraph is appropriate 
unless the Commission is satisfied that--
    (i) The applicant employs appropriate confidentiality safeguards to 
ensure that any swap data such applicant receives from a registered swap 
data repository will not be disclosed, except as allowed for in the form 
of confidentiality arrangement set forth in appendix B to this part 49 
or, in the Commission's discretion as set forth in paragraph (d)(6) of 
this section, in a different form, provided that such confidentiality 
arrangement contains the elements required in Sec.  49.18(b), and
    (ii) Such applicant is acting within the scope of its jurisdiction 
in seeking access to swap data from a registered swap data repository.
    (4) The Commission reserves the right, in connection with any 
appropriateness determination with respect to an Appropriate Domestic 
Regulator or Appropriate Foreign Regulator, to revisit, reassess, limit, 
suspend or revoke such determination consistent with the Act.
    (i) Delegation of Authority Relating to Certain matters in this 
section. (1) The Commission hereby delegates, until such time as the 
Commission orders otherwise, the following functions to the Director of 
the Division of Market Oversight and to such members of the Commission's 
staff acting under his or her direction as he or she may designate from 
time to time: All functions reserved to the Commission in this section.
    (2) The Director of the Division of Market Oversight may submit any 
matter which has been delegated under paragraph (i)(1) of this section 
to the Commission for its consideration.
    (3) Nothing in this section may prohibit the Commission, at its 
election, from exercising the authority delegated under paragraph (i)(1) 
of this section.

[76 FR 54575, Sept. 1, 2011, as amended at 83 FR 27436, June 12, 2018]



Sec.  49.18  Confidentiality arrangement.

    (a) Confidentiality arrangement required prior to disclosure of swap 
data by a registered swap data repository to an Appropriate Domestic 
Regulator or Appropriate Foreign Regulator. Prior to a registered swap 
data repository providing access to swap data to any Appropriate 
Domestic Regulator or Appropriate Foreign Regulator, each as defined in 
Sec.  49.17(b), the swap data repository shall receive from such 
Appropriate Domestic Regulator or Appropriate Foreign Regulator, 
pursuant to Section 21(d) of the Act, an executed confidentiality 
arrangement between the Commission and the Appropriate Domestic 
Regulator or Appropriate Foreign Regulator, as applicable, in the form 
set forth in appendix B to this part 49 or, in the Commission's 
discretion as set forth in Sec.  49.17(d)(6), in a different form, 
provided that such confidentiality arrangement contains the elements 
required in paragraph (b) of this section. Such confidentiality 
arrangement must include, either as Exhibit A to the form set forth in 
appendix B of this part or similarly appended, a description of the 
Appropriate Domestic Regulator's or Appropriate Foreign Regulator's 
jurisdiction. Once a registered swap data repository is notified, in 
writing, that a confidentiality arrangement received from an Appropriate 
Domestic Regulator or Appropriate Foreign Regulator no longer is in 
effect, the swap data repository shall not provide access to swap data 
to such Appropriate Domestic Regulator or Appropriate Foreign Regulator.
    (b) Elements of confidentiality arrangement. The confidentiality 
arrangement required pursuant to paragraph (a) of this section shall, at 
a minimum, include all elements included in the form of confidentiality 
arrangement set forth in appendix B of this part.

[[Page 168]]

    (c) Reporting failures to fulfill the terms of a confidentiality 
arrangement. A registered swap data repository shall immediately report 
to the Commission any known failure to fulfill the terms of a 
confidentiality arrangement that it receives pursuant to paragraph (a) 
of this section.
    (d) Failures to fulfill the terms of the confidentiality 
arrangement. The Commission may, if an Appropriate Domestic Regulator or 
Appropriate Foreign Regulator fails to fulfill the terms of a 
confidentiality arrangement described in paragraph (a) of this section, 
direct, in writing, each registered swap data repository to limit, 
suspend or revoke such Appropriate Domestic Regulator's or Appropriate 
Foreign Regulator's access to swap data held by such swap data 
repository.
    (e) Delegation of authority relating to certain matters in this 
section. (1) The Commission hereby delegates, until such time as the 
Commission orders otherwise, the following functions to the Director of 
the Division of Market Oversight and to such members of the Commission's 
staff acting under his or her direction as he or she may designate from 
time to time: All functions reserved to the Commission in this section.
    (2) The Director of the Division of Market Oversight may submit any 
matter which has been delegated under paragraph (e)(1) of this section 
to the Commission for its consideration.
    (3) Nothing in this section may prohibit the Commission, at its 
election, from exercising the authority delegated under paragraph (e)(1) 
of this section.

[83 FR 27438, June 12, 2018]



Sec.  49.19  Core principles applicable to registered swap data 
repositories.

    (a) Compliance with core principles. To be registered, and maintain 
registration, a swap data repository shall comply with the core 
principles as described in this paragraph. Unless otherwise determined 
by the Commission by rule or regulation, a swap data repository shall 
have reasonable discretion in establishing the manner in which the swap 
data repository complies with the core principles described in this 
paragraph.
    (b) Antitrust considerations (Core Principle 1). Unless necessary or 
appropriate to achieve the purposes of the Act, a registered swap data 
repository shall avoid adopting any rule or taking any action that 
results in any unreasonable restraint of trade; or imposing any material 
anticompetitive burden on trading, clearing or reporting swaps.
    (c) Governance arrangements (Core Principle 2). Registered swap data 
repositories shall establish governance arrangements as set forth in 
Sec.  49.20.
    (d) Conflicts of interest (Core Principle 3). Registered swap data 
repositories shall manage and minimize conflicts of interest and 
establish processes for resolving such conflicts of interest as set 
forth in Sec.  49.21.
    (e) Additional duties (Core Principle 4). Registered swap data 
repositories shall also comply with the following additional duties:
    (1) Financial resources. Registered swap data repositories shall 
maintain sufficient financial resources as set forth in Sec.  49.25;
    (2) Disclosure requirements of registered swap data repositories. 
Registered swap data repositories shall furnish an appropriate 
disclosure document setting forth the risks and costs of swap data 
repository services as detailed in Sec.  49.26; and
    (3) Access and Fees. Registered swap data repositories shall adhere 
to Commission requirements regarding fair and open access and the 
charging of any fees, dues or other similar type charges as detailed in 
Sec.  49.27.



Sec.  49.20  Governance arrangements (Core Principle 2).

    (a) General. (1) Each registered swap data repository shall 
establish governance arrangements that are transparent to fulfill public 
interest requirements, and to support the objectives of the Federal 
Government, owners, and participants.
    (2) Each registered swap data repository shall establish governance 
arrangements that are well-defined and include a clear organizational 
structure with consistent lines of responsibility and effective internal 
controls, including with respect to administration, accounting, and the 
disclosure of confidential information. Sec.  49.22 of this

[[Page 169]]

part contains rules on internal controls applicable to administration 
and accounting. Sec.  49.16 of this part contains rules on internal 
controls applicable to the disclosure of confidential information.
    (b) Transparency of Governance Arrangements. (1) Each registered 
swap data repository shall state in its charter documents that its 
governance arrangements are transparent to support, among other things, 
the objectives of the Federal Government pursuant to Section 21(f)(2) of 
the Act.
    (2) Each registered swap data repository shall, at a minimum, make 
the following information available to the public and relevant 
authorities, including the Commission:
    (i) The mission statement of the registered swap data repository;
    (ii) The mission statement and/or charter of the board of directors, 
as well as of each committee of the registered swap data repository that 
has:
    (A) The authority to act on behalf of the board of directors or
    (B) The authority to amend or constrain actions of the board of 
directors;
    (iii) The board of directors nomination process for the registered 
swap data repository, as well as the process for assigning members of 
the board of directors or other persons to any committee referenced in 
paragraph (b)(2)(ii) of this section;
    (iv) For the board of directors and each committee referenced in 
paragraph (b)(2)(ii) of this section, the names of all members;
    (v) A description of the manner in which the board of directors, as 
well as any committee referenced in paragraph (b)(2)(ii) of this 
section, considers an Independent Perspective in its decision-making 
process, as Sec.  49.2(a)(14) of this part defines such term;
    (vi) The lines of responsibility and accountability for each 
operational unit of the registered swap data repository to any committee 
thereof and/or the board of directors; and
    (vii) Summaries of significant decisions implicating the public 
interest, the rationale for such decisions, and the process for reaching 
such decisions. Such significant decisions shall include decisions 
relating to pricing of repository services, offering of ancillary 
services, access to swap data, and use of Section 8 Material, other SDR 
Information, and intellectual property (as referenced in Sec.  49.16 of 
this part). Such summaries of significant decisions shall not require 
the registered swap data repository to disclose Section 8 Material or, 
where appropriate, information that the swap data repository received on 
a confidential basis from a reporting entity.
    (3) The registered swap data repository shall ensure that the 
information specified in paragraph (b)(2)(i) to (vii) of this section is 
current, accurate, clear, and readily accessible, for example, on its 
Web site. The swap data repository shall set forth such information in a 
language commonly used in the commodity futures and swap markets and at 
least one of the domestic language(s) of the jurisdiction in which the 
swap data repository is located.
    (4) Furthermore, the registered swap data repository shall disclose 
the information specified in paragraph (b)(2)(vii) of this section in a 
sufficiently comprehensive and detailed fashion so as to permit the 
public and relevant authorities, including the Commission, to understand 
the policies or procedures of the swap data repository implicated and 
the manner in which the decision implements or amends such policies or 
procedures. A swap data repository shall not disclose minutes from 
meetings of its board of directors or committees to the public, although 
it shall disclose such minutes to the Commission upon request.
    (c) The board of directors--(1) General. (i) Each registered swap 
data repository shall establish, maintain, and enforce (including, 
without limitation, pursuant to paragraph (c)(4) of this Regulation) 
written policies or procedures:
    (A) To ensure that its board of directors, as well as any committee 
that has:
    (1) Authority to act on behalf of its board of directors or
    (2) Authority to amend or constrain actions of its board of 
directors, adequately considers an Independent Perspective in its 
decision-making process;
    (B) To ensure that the nominations process for such board of 
directors, as

[[Page 170]]

well as the process for assigning members of the board of directors or 
other persons to such committees, adequately incorporates an Independent 
Perspective; and
    (C) To clearly articulate the roles and responsibilities of such 
board of directors, as well as such committees, especially with respect 
to the manner in which they ensure that a registered swap data 
repository complies with all statutory and regulatory responsibilities 
under the Act and the regulations promulgated thereunder.
    (ii) Each registered swap data repository shall submit to the 
Commission, within thirty days after each election of its board of 
directors:
    (A) For the board of directors, as well as each committee referenced 
in paragraph (c)(1)(i)(A) of this section, a list of all members;
    (B) A description of the relationship, if any, between such members 
and the registered swap data repository or any reporting entity thereof 
(or, in each case, affiliates thereof, as Sec.  49.2(a)(1) of this part 
defines such term); and
    (C) Any amendments to the written policies and procedures referenced 
in paragraph (c)(1)(i) of this section.
    (2) Compensation. The compensation of non-executive members of the 
board of directors of a registered swap data repository shall not be 
linked to the business performance of such swap data repository.
    (3) Annual self-review. The board of directors of a registered swap 
data repository shall review its performance and that of its individual 
members annually. It should consider periodically using external 
facilitators for such reviews.
    (4) Board member removal. A registered swap data repository shall 
have procedures to remove a member from the board of directors, where 
the conduct of such member is likely to be prejudicial to the sound and 
prudent management of the swap data repository.
    (5) Expertise. Each registered swap data repository shall ensure 
that members of its board of directors, members of any committee 
referenced in paragraph (c)(1)(i)(A) of this Regulation, and its senior 
management, in each case, are of sufficiently good repute and possess 
the requisite skills and expertise to fulfill their responsibilities in 
the management and governance of the swap data repository, to have a 
clear understanding of such responsibilities, and to exercise sound 
judgment about the affairs of the swap data repository.
    (d) Compliance with core principle. The chief compliance officer of 
the registered swap data repository shall review the compliance of the 
swap data repository with this core principle.



Sec.  49.21  Conflicts of interest (Core Principle 3).

    (a) General. (1) Each registered swap data repository shall 
establish and enforce rules to minimize conflicts of interest in the 
decision-making process of the swap data repository, and establish a 
process for resolving such conflicts of interest.
    (2) Nothing in this section shall supersede any requirement 
applicable to the swap data repository pursuant to Sec.  49.20 of this 
part.
    (b) Policies and procedures. (1) Each registered swap data 
repository shall establish, maintain, and enforce written procedures to:
    (i) Identify, on an ongoing basis, existing and potential conflicts 
of interest; and
    (ii) Make decisions in the event of a conflict of interest. Such 
procedures shall include rules regarding the recusal, in applicable 
circumstances, of parties involved in the making of decisions.
    (2) As further described in Sec.  49.20 of this part, the chief 
compliance officer of the registered swap data repository shall, in 
consultation with the board of directors or a senior officer of the swap 
data repository, as applicable, resolve any such conflicts of interest.
    (c) Compliance with core principle. The chief compliance officer of 
the registered swap data repository shall review the compliance of the 
swap data repository with this core principle.



Sec.  49.22  Chief compliance officer.

    (a) Definition of Board of Directors. For purposes of this part 49, 
the term ``board of directors'' means the board of directors of a 
registered swap data

[[Page 171]]

repository, or for those swap data repositories whose organizational 
structure does not include a board of directors, a body performing a 
function similar to that of a board of directors.
    (b) Designation and qualifications of chief compliance officer--(1) 
Chief Compliance Officer required. Each registered swap data repository 
shall establish the position of chief compliance officer, and designate 
an individual to serve in that capacity.
    (i) The position of chief compliance officer shall carry with it the 
authority and resources to develop and enforce policies and procedures 
necessary to fulfill the duties set forth for chief compliance officers 
in the Act and Commission regulations.
    (ii) The chief compliance officer shall have supervisory authority 
over all staff acting at the direction of the chief compliance officer.
    (2) Qualifications of Chief Compliance Officer. The individual 
designated to serve as chief compliance officer shall have the 
background and skills appropriate for fulfilling the responsibilities of 
the position and shall be subject to the following requirements:
    (i) No individual disqualified from registration pursuant to 
Sections 8a(2) or 8a(3) of the Act may serve as a chief compliance 
officer.
    (ii) The chief compliance officer may not be a member of the swap 
data repository's legal department or serve as its general counsel.
    (c) Appointment, supervision, and removal of chief compliance 
officer--(1) Appointment and Compensation of Chief Compliance Officer 
Determined by Board of Directors. A registered swap data repository's 
chief compliance officer shall be appointed by its board of directors. 
The board of directors shall also approve the compensation of the chief 
compliance officer and shall meet with the chief compliance officer at 
least annually. The appointment of the chief compliance officer and 
approval of the chief compliance officer's compensation shall require 
the approval of the board of directors. The senior officer of the swap 
data repository may fulfill these responsibilities. A swap data 
repository shall notify the Commission of the appointment of a new chief 
compliance officer within two business days of such appointment.
    (2) Supervision of chief compliance officer. A registered swap data 
repository's chief compliance officer shall report directly to the board 
of directors or to the senior officer of the swap data repository, at 
the swap data repository's discretion.
    (3) Removal of chief compliance officer by board of directors. (i) 
Removal of a registered swap data repository's chief compliance officer 
shall require the approval of the swap data repository's board of 
directors. If the swap data repository does not have a board of 
directors, then the chief compliance officer may be removed by the 
senior officer of the swap data repository;
    (ii) The swap data repository shall notify the Commission of such 
removal within two business days; and
    (iii) The swap data repository shall notify the Commission within 
two business days of appointing any new chief compliance officer, 
whether interim or permanent.
    (d) Duties of chief compliance officer. The chief compliance 
officer's duties shall include, but are not limited to, the following:
    (1) Overseeing and reviewing the swap data repository's compliance 
with Section 21 of the Act and any related rules adopted by the 
Commission;
    (2) In consultation with the board of directors, a body performing a 
function similar to the board, or the senior officer of the swap data 
repository, resolving any conflicts of interest that may arise 
including:
    (i) Conflicts between business considerations and compliance 
requirements;
    (ii) Conflicts between business considerations and the requirement 
that the registered swap data repository provide fair and open access as 
set forth in Sec.  49.27 of this part; and
    (iii) Conflicts between a registered swap data repository's 
management and members of the board of directors;
    (3) Establishing and administering written policies and procedures 
reasonably designed to prevent violation of the Act and any rules 
adopted by the Commission;

[[Page 172]]

    (4) Taking reasonable steps to ensure compliance with the Act and 
Commission regulations relating to agreements, contracts, or 
transactions, and with Commission regulations under Section 21 of the 
Act, including confidentiality arrangements received by the chief 
compliance officer's registered swap depository pursuant to Sec.  
49.18(a);
    (5) Establishing procedures for the remediation of noncompliance 
issues identified by the chief compliance officer through a compliance 
office review, look-back, internal or external audit finding, self-
reported error, or validated complaint;
    (6) Establishing and following appropriate procedures for the 
handling, management response, remediation, retesting, and closing of 
noncompliance issues; and
    (7) Establishing and administering a written code of ethics designed 
to prevent ethical violations and to promote honesty and ethical 
conduct.
    (e) Annual compliance report prepared by chief compliance officer. 
The chief compliance officer shall, not less than annually, prepare and 
sign an annual compliance report, that at a minimum, contains the 
following information covering the time period since the date on which 
the swap data repository became registered with the Commission or since 
the end of the period covered by a previously filed annual compliance 
report, as applicable:
    (1) A description of the registered swap data repository's written 
policies and procedures, including the code of ethics and conflict of 
interest policies;
    (2) A review of applicable Commission regulations and each 
subsection and core principle of Section 21 of the Act, that, with 
respect to each:
    (i) Identifies the policies and procedures that are designed to 
ensure compliance with each subsection and core principle, including 
each duty specified in Section 21(c);
    (ii) Provides a self-assessment as to the effectiveness of these 
policies and procedures; and
    (iii) Discusses areas for improvement, and recommends potential or 
prospective changes or improvements to its compliance program and 
resources;
    (3) A list of any material changes to compliance policies and 
procedures since the last annual compliance report;
    (4) A description of the financial, managerial, and operational 
resources set aside for compliance with respect to the Act and 
Commission regulations;
    (5) A description of any material compliance matters, including 
noncompliance issues identified through a compliance office review, 
look-back, internal or external audit finding, self-reported error, or 
validated complaint, and explains how they were resolved; and
    (6) A certification by the chief compliance officer that, to the 
best of his or her knowledge and reasonable belief, and under penalty of 
law, the annual compliance report is accurate and complete.
    (f) Submission of annual compliance report by chief compliance 
officer to the commission. (1) Prior to submission of the annual 
compliance report to the Commission, the chief compliance officer shall 
provide the annual compliance report to the board of the registered swap 
data repository for its review. If the swap data repository does not 
have a board, then the annual compliance report shall be provided to the 
senior officer for their review. Members of the board and the senior 
officer may not require the chief compliance officer to make any changes 
to the report. Submission of the report to the board or senior officer, 
and any subsequent discussion of the report, shall be recorded in board 
minutes or similar written record, as evidence of compliance with this 
requirement.
    (2) The annual compliance report shall be provided electronically to 
the Commission not more than 60 days after the end of the registered 
swap data repository's fiscal year, concurrently with the filing of the 
annual amendment to Form SDR that must be submitted to the Commission 
pursuant to Sec.  49.3(a)(5) of this part.
    (3) Promptly upon discovery of any material error or omission made 
in a previously filed compliance report, the chief compliance officer 
shall file an amendment with the Commission to correct any material 
error or omission.

[[Page 173]]

An amendment shall contain the oath or certification required under 
paragraph (e)(67) of this section.
    (4) A registered swap data repository may request the Commission for 
an extension of time to file its compliance report based on substantial, 
undue hardship. Extensions for the filing deadline may be granted at the 
discretion of the Commission.
    (g) Recordkeeping. (1) The registered swap data repository shall 
maintain:
    (i) A copy of the written policies and procedures, including the 
code of ethics and conflicts of interest policies adopted in furtherance 
of compliance with the Act and Commission regulations;
    (ii) Copies of all materials, including written reports provided to 
the board of directors or senior officer in connection with the review 
of the annual compliance report under paragraph (f)(1) of this section 
and the board minutes or similar written record of such review, that 
record the submission of the annual compliance report to the board of 
directors or senior officer; and
    (iii) Any records relevant to the registered swap data repository's 
annual compliance report, including, but not limited to, work papers and 
other documents that form the basis of the report, and memoranda, 
correspondence, other documents, and records that are:
    (A) Created, sent or received in connection with the annual 
compliance report and
    (B) Contain conclusions, opinions, analyses, or financial data 
related to the annual compliance report.
    (2) The registered swap data repository shall maintain records in 
accordance with Sec.  1.31 of this chapter.

[76 FR 54575, Sept. 1, 2011, as amended at 83 FR 27439, June 12, 2018]



Sec.  49.23  Emergency authority policies and procedures.

    (a) Emergency policies and procedures required. A registered swap 
data repository shall establish policies and procedures for the exercise 
of emergency authority in the event of any emergency, including but not 
limited to natural, man-made, and information technology emergencies. 
Such policies and procedures shall also require a swap data repository 
to exercise its emergency authority upon request by the Commission. A 
swap data repository's policies and procedures for the exercise of 
emergency authority shall be transparent to the Commission and to market 
participants whose swap transaction data resides at the swap data 
repository.
    (b) Invocation of emergency authority. A registered swap data 
repository's policies and procedures for the exercise of emergency 
authority shall enumerate the circumstances under which the swap data 
repository is authorized to invoke its emergency authority and the 
procedures that it shall follow to declare an emergency. Such policies 
and procedures shall also address the range of measures that it is 
authorized to take when exercising such emergency authority.
    (c) Designation of persons authorized to act in an emergency. A 
registered swap data repository shall designate one or more officials of 
the swap data repository as persons authorized to exercise emergency 
authority on its behalf. A swap data repository shall also establish a 
chain of command to be used in the event that the designated person(s) 
is unavailable. A swap data repository shall notify the Commission of 
the person(s) designated to exercise emergency authority.
    (d) Conflicts of interest. A registered swap data repository's 
policies and procedures for the exercise of emergency authority shall 
include provisions to avoid conflicts of interest in any decisions made 
pursuant to emergency authority. Such policies and procedures shall also 
include provisions to consult the swap data repository's chief 
compliance officer in any emergency decision that may raise potential 
conflicts of interest.
    (e) Notification to the commission. A registered swap data 
repository's policies and procedures for the exercise of emergency 
authority shall include provisions to notify the Commission as soon as 
reasonably practicable regarding any invocation of emergency authority. 
When notifying the Commission of any exercise of emergency authority, a 
swap data repository shall explain the reasons for taking such emergency 
action, explain how conflicts of interest were minimized, and document 
the decision-making process.

[[Page 174]]

Underlying documentation shall be made available to the Commission upon 
request.



Sec.  49.24  System safeguards.

    (a) Each registered swap data repository shall, with respect to all 
swap data in its custody:
    (1) Establish and maintain a program of risk analysis and oversight 
to identify and minimize sources of operational risk through the 
development of appropriate controls and procedures and the development 
of automated systems that are reliable, secure, and have adequate 
scalable capacity;
    (2) Establish and maintain emergency procedures, backup facilities, 
and a business continuity-disaster recovery plan that allow for the 
timely recovery and resumption of operations and the fulfillment of the 
duties and obligations of the swap data repository; and
    (3) Periodically conduct tests to verify that backup resources are 
sufficient to ensure continued fulfillment of all duties of the swap 
data repository established by the Act or the Commission's regulations.
    (b) A swap data repository's program of risk analysis and oversight 
with respect to its operations and automated systems shall address each 
of the following categories of risk analysis and oversight:
    (1) Enterprise risk management and governance. This category 
includes, but is not limited to: Assessment, mitigation, and monitoring 
of security and technology risk; security and technology capital 
planning and investment; board of directors and management oversight of 
technology and security; information technology audit and controls 
assessments; remediation of deficiencies; and any other elements of 
enterprise risk management and governance included in generally accepted 
best practices.
    (2) Information security. This category includes, but is not limited 
to, controls relating to: Access to systems and data (including least 
privilege, separation of duties, account monitoring and control); user 
and device identification and authentication; security awareness 
training; audit log maintenance, monitoring, and analysis; media 
protection; personnel security and screening; automated system and 
communications protection (including network port control, boundary 
defenses, encryption); system and information integrity (including 
malware defenses, software integrity monitoring); vulnerability 
management; penetration testing; security incident response and 
management; and any other elements of information security included in 
generally accepted best practices.
    (3) Business continuity-disaster recovery planning and resources. 
This category includes, but is not limited to: Regular, periodic testing 
and review of business continuity-disaster recovery capabilities, the 
controls and capabilities described in paragraph (a), (d), (e), (f), and 
(k) of this section; and any other elements of business continuity-
disaster recovery planning and resources included in generally accepted 
best practices.
    (4) Capacity and performance planning. This category includes, but 
is not limited to: Controls for monitoring the swap data repository's 
systems to ensure adequate scalable capacity (including testing, 
monitoring, and analysis of current and projected future capacity and 
performance, and of possible capacity degradation due to planned 
automated system changes); and any other elements of capacity and 
performance planning included in generally accepted best practices.
    (5) Systems operations. This category includes, but is not limited 
to: System maintenance; configuration management (including baseline 
configuration, configuration change and patch management, least 
functionality, inventory of authorized and unauthorized devices and 
software); event and problem response and management; and any other 
elements of system operations included in generally accepted best 
practices.
    (6) Systems development and quality assurance. This category 
includes, but is not limited to: Requirements development; pre-
production and regression testing; change management procedures and 
approvals; outsourcing and vendor management; training in secure coding 
practices; and any other elements of systems development and quality 
assurance included in generally accepted best practices.

[[Page 175]]

    (7) Physical security and environmental controls. This category 
includes, but is not limited to: Physical access and monitoring; power, 
telecommunication, and environmental controls; fire protection; and any 
other elements of physical security and environmental controls included 
in generally accepted best practices.
    (c) In addressing the categories of risk analysis and oversight 
required under paragraph (b) of this section, a swap data repository 
shall follow generally accepted standards and best practices with 
respect to the development, operation, reliability, security, and 
capacity of automated systems.
    (d) A swap data repository shall maintain a business continuity-
disaster recovery plan and business continuity-disaster recovery 
resources, emergency procedures, and backup facilities sufficient to 
enable timely recovery and resumption of its operations and resumption 
of its ongoing fulfillment of its duties and obligations as a swap data 
repository following any disruption of its operations. Such duties and 
obligations include, without limitation: The duties set forth in Sec.  
49.19, and maintenance of a comprehensive audit trail. The swap data 
repository's business continuity-disaster recovery plan and resources 
generally should enable resumption of the swap data repository's 
operations and resumption of ongoing fulfillment of the swap data 
repository's duties and obligations during the next business day 
following the disruption. A swap data repository shall update its 
business continuity-disaster recovery plan and emergency procedures at a 
frequency determined by an appropriate risk analysis, but at a minimum 
no less frequently than annually.
    (e) Registered swap data repositories determined by the Commission 
to be critical swap data repositories are subject to more stringent 
requirements as set forth below.
    (1) Each swap data repository that the Commission determines is 
critical must maintain a disaster recovery plan and business continuity 
and disaster recovery resources, including infrastructure and personnel, 
sufficient to enable it to achieve a same-day recovery time objective in 
the event that its normal capabilities become temporarily inoperable for 
any reason up to and including a wide-scale disruption.
    (2) A same-day recovery time objective is a recovery time objective 
within the same business day on which normal capabilities become 
temporarily inoperable for any reason up to and including a wide-scale 
disruption.
    (3) To ensure its ability to achieve a same-day recovery time 
objective in the event of a wide-scale disruption, each swap data 
repository that the Commission determines is critical must maintain a 
degree of geographic dispersal of both infrastructure and personnel such 
that:
    (i) Infrastructure sufficient to enable the swap data repository to 
meet a same-day recovery time objective after interruption is located 
outside the relevant area of the infrastructure the entity normally 
relies upon to conduct activities necessary to the reporting, 
recordkeeping and/or dissemination of swap data, and does not rely on 
the same critical transportation, telecommunications, power, water, or 
other critical infrastructure components the entity normally relies upon 
for such activities; and
    (ii) Personnel sufficient to enable the swap data repository to meet 
a same-day recovery time objective, after interruption of normal swap 
data reporting, recordkeeping and/or dissemination by a wide-scale 
disruption affecting the relevant area in which the personnel the entity 
normally relies upon to engage in such activities are located, live and 
work outside that relevant area.
    (4) Each swap data repository that the Commission determines is 
critical must conduct regular, periodic tests of its business continuity 
and disaster recovery plans and resources and its capacity to achieve a 
same-day recovery time objective in the event of a wide-scale 
disruption. The swap data repository shall keep records of the results 
of such tests, and make the results available to the Commission upon 
request.
    (f) A registered swap data repository that is not determined by the 
Commission to be a critical swap data repository satisfies the 
requirement to be able to resume operations and resume ongoing 
fulfillment of the swap data

[[Page 176]]

repository's duties and obligations during the next business day 
following a disruption by maintaining either:
    (1) Infrastructure and personnel resources of its own that are 
sufficient to ensure timely recovery and resumption of its operations, 
duties and obligations as a registered swap data repository following 
any disruption of its operations; or
    (2) Contractual arrangements with other registered swap data 
repositories or disaster recovery service providers, as appropriate, 
that are sufficient to ensure continued fulfillment of all of the swap 
data repository's duties and obligations following any disruption of its 
operations, both with respect to all swaps reported to the swap data 
repository and with respect to all swap data contained in the swap data 
repository.
    (g) A registered swap data repository shall notify Commission staff 
promptly of all:
    (1) Systems malfunctions;
    (2) Cyber security incidents or targeted threats that actually or 
potentially jeopardize automated system operation, reliability, 
security, or capacity; and
    (3) Any activation of the swap data repository's business 
continuity-disaster recovery plan.
    (h) A registered swap data repository shall give Commission staff 
timely advance notice of all:
    (1) Planned changes to automated systems that may impact the 
reliability, security, or adequate scalable capacity of such systems; 
and
    (2) Planned changes to the swap data repository's program of risk 
analysis and oversight.
    (i) As part of a swap data repository's obligation to produce books 
and records in accordance with Sec. Sec.  1.31 and 45.2 of this chapter, 
and Sec.  49.12, a swap data repository shall provide to the Commission 
the following system safeguards-related books and records, promptly upon 
the request of any Commission representative:
    (1) Current copies of its business continuity-disaster recovery 
plans and other emergency procedures;
    (2) All assessments of its operational risks or system safeguards-
related controls;
    (3) All reports concerning system safeguards testing and assessment 
required by this chapter, whether performed by independent contractors 
or by employees of the swap data repository; and
    (4) All other books and records requested by Commission staff in 
connection with Commission oversight of system safeguards pursuant to 
the Act or Commission regulations, or in connection with Commission 
maintenance of a current profile of the swap data repository's automated 
systems.
    (5) Nothing in paragraph (i) of this section shall be interpreted as 
reducing or limiting in any way a swap data repository's obligation to 
comply with Sec. Sec.  1.31 and 45.2 of this chapter, or with Sec.  
49.12.
    (j) A swap data repository shall conduct regular, periodic, 
objective testing and review of its automated systems to ensure that 
they are reliable, secure, and have adequate scalable capacity. It shall 
also conduct regular, periodic testing and review of its business 
continuity-disaster recovery capabilities. Such testing and review shall 
include, without limitation, all of the types of testing set forth in 
this paragraph.
    (1) Definitions. As used in this paragraph (j):
    Controls means the safeguards or countermeasures employed by the 
swap data repository in order to protect the reliability, security, or 
capacity of its automated systems or the confidentiality, integrity, and 
availability of its data and information, and in order to enable the 
swap data repository to fulfill its statutory and regulatory duties and 
responsibilities.
    Controls testing means assessment of the swap data repository's 
controls to determine whether such controls are implemented correctly, 
are operating as intended, and are enabling the swap data repository to 
meet the requirements established by this section.
    Enterprise technology risk assessment means a written assessment 
that includes, but is not limited to, an analysis of threats and 
vulnerabilities in the context of mitigating controls. An enterprise 
technology risk assessment identifies, estimates, and prioritizes

[[Page 177]]

risks to swap data repository operations or assets, or to market 
participants, individuals, or other entities, resulting from impairment 
of the confidentiality, integrity, and availability of data and 
information or the reliability, security, or capacity of automated 
systems.
    External penetration testing means attempts to penetrate the swap 
data repository's automated systems from outside the systems' boundaries 
to identify and exploit vulnerabilities. Methods of conducting external 
penetration testing include, but are not limited to, methods for 
circumventing the security features of an automated system.
    Internal penetration testing means attempts to penetrate the swap 
data repository's automated systems from inside the systems' boundaries, 
to identify and exploit vulnerabilities. Methods of conducting internal 
penetration testing include, but are not limited to, methods for 
circumventing the security features of an automated system.
    Key controls means those controls that an appropriate risk analysis 
determines are either critically important for effective system 
safeguards or intended to address risks that evolve or change more 
frequently and therefore require more frequent review to ensure their 
continuing effectiveness in addressing such risks.
    Security incident means a cyber security or physical security event 
that actually jeopardizes or has a significant likelihood of 
jeopardizing automated system operation, reliability, security, or 
capacity, or the availability, confidentiality or integrity of data.
    Security incident response plan means a written plan documenting the 
swap data repository's policies, controls, procedures, and resources for 
identifying, responding to, mitigating, and recovering from security 
incidents, and the roles and responsibilities of its management, staff 
and independent contractors in responding to security incidents. A 
security incident response plan may be a separate document or a business 
continuity-disaster recovery plan section or appendix dedicated to 
security incident response.
    Security incident response plan testing means testing of a swap data 
repository's security incident response plan to determine the plan's 
effectiveness, identify its potential weaknesses or deficiencies, enable 
regular plan updating and improvement, and maintain organizational 
preparedness and resiliency with respect to security incidents. Methods 
of conducting security incident response plan testing may include, but 
are not limited to, checklist completion, walk-through or table-top 
exercises, simulations, and comprehensive exercises.
    Vulnerability testing means testing of a swap data repository's 
automated systems to determine what information may be discoverable 
through a reconnaissance analysis of those systems and what 
vulnerabilities may be present on those systems.
    (2) Vulnerability testing. A swap data repository shall conduct 
vulnerability testing of a scope sufficient to satisfy the requirements 
set forth in paragraph (l) of this section.
    (i) A swap data repository shall conduct such vulnerability testing 
at a frequency determined by an appropriate risk analysis, but no less 
frequently than quarterly.
    (ii) Such vulnerability testing shall include automated 
vulnerability scanning, which shall follow generally accepted best 
practices.
    (iii) A swap data repository shall conduct vulnerability testing by 
engaging independent contractors or by using employees of the swap data 
repository who are not responsible for development or operation of the 
systems or capabilities being tested.
    (3) External penetration testing. A swap data repository shall 
conduct external penetration testing of a scope sufficient to satisfy 
the requirements set forth in paragraph (l) of this section.
    (i) A swap data repository shall conduct such external penetration 
testing at a frequency determined by an appropriate risk analysis, but 
no less frequently than annually.
    (ii) A swap data repository shall engage independent contractors to 
conduct the required annual external penetration test. The swap data 
repository may conduct other external penetration testing by using 
employees of the swap data repository who are not responsible for 
development or operation

[[Page 178]]

of the systems or capabilities being tested.
    (4) Internal penetration testing. A swap data repository shall 
conduct internal penetration testing of a scope sufficient to satisfy 
the requirements set forth in paragraph (l) of this section.
    (i) A swap data repository shall conduct such internal penetration 
testing at a frequency determined by an appropriate risk analysis, but 
no less frequently than annually.
    (ii) A swap data repository shall conduct internal penetration 
testing by engaging independent contractors, or by using employees of 
the swap data repository who are not responsible for development or 
operation of the systems or capabilities being tested.
    (5) Controls testing. A swap data repository shall conduct controls 
testing of a scope sufficient to satisfy the requirements set forth in 
paragraph (l) of this section.
    (i) A swap data repository shall conduct controls testing, which 
includes testing of each control included in its program of risk 
analysis and oversight, at a frequency determined by an appropriate risk 
analysis. Such testing may be conducted on a rolling basis. A swap data 
repository shall conduct testing of its key controls no less frequently 
than every three years. The swap data repository may conduct testing of 
its key controls on a rolling basis over the course of three years or 
the period determined by such risk analysis, whichever is shorter.
    (ii) A swap data repository shall engage independent contractors to 
test and assess the key controls included in its program of risk 
analysis and oversight no less frequently than every three years. The 
swap data repository may conduct any other controls testing required by 
this section by using independent contractors or employees of the swap 
data repository who are not responsible for development or operation of 
the systems or capabilities being tested.
    (6) Security incident response plan testing. A swap data repository 
shall conduct security incident response plan testing sufficient to 
satisfy the requirements set forth in paragraph (l) of this section.
    (i) A swap data repository shall conduct such security incident 
response plan testing at a frequency determined by an appropriate risk 
analysis, but no less frequently than annually.
    (ii) A swap data repository's security incident response plan shall 
include, without limitation, the swap data repository's definition and 
classification of security incidents, its policies and procedures for 
reporting security incidents and for internal and external communication 
and information sharing regarding security incidents, and the hand-off 
and escalation points in its security incident response process.
    (iii) A swap data repository may coordinate its security incident 
response plan testing with other testing required by this section or 
with testing of its other business continuity-disaster recovery and 
crisis management plans.
    (iv) A swap data repository may conduct security incident response 
plan testing by engaging independent contractors or by using employees 
of the swap data repository.
    (7) Enterprise technology risk assessment. A swap data repository 
shall conduct enterprise technology risk assessment of a scope 
sufficient to satisfy the requirements set forth in paragraph (l) of 
this section.
    (i) A swap data repository shall conduct an enterprise technology 
risk assessment at a frequency determined by an appropriate risk 
analysis, but no less frequently than annually. A swap data repository 
that has conducted an enterprise technology risk assessment that 
complies with this section may conduct subsequent assessments by 
updating the previous assessment.
    (ii) A swap data repository may conduct enterprise technology risk 
assessments by using independent contractors or employees of the swap 
data repository who are not responsible for development or operation of 
the systems or capabilities being assessed.
    (k) To the extent practicable, a swap data repository shall:
    (1) Coordinate its business continuity-disaster recovery plan with 
those of swap execution facilities, designated contract markets, 
derivatives clearing organizations, swap dealers,

[[Page 179]]

and major swap participants who report swap data to the swap data 
repository, and with those regulators identified in Section 21(c)(7) of 
the Act, in a manner adequate to enable effective resumption of the 
registered swap data repository's fulfillment of its duties and 
obligations following a disruption causing activation of the swap data 
repository's business continuity and disaster recovery plan;
    (2) Participate in periodic, synchronized testing of its business 
continuity--disaster recovery plan and the business continuity--disaster 
recovery plans of swap execution facilities, designated contract 
markets, derivatives clearing organizations, swap dealers, and major 
swap participants who report swap data to the registered swap data 
repository, and the business continuity--disaster recovery plans 
required by the regulators identified in Section 21(c)(7) of the Act; 
and
    (3) Ensure that its business continuity--disaster recovery plan 
takes into account the business continuity--disaster recovery plans of 
its telecommunications, power, water, and other essential service 
providers.
    (l) Scope of testing and assessment. The scope for all system 
safeguards testing and assessment required by this part shall be broad 
enough to include the testing of automated systems and controls that the 
swap data repository's required program of risk analysis and oversight 
and its current cybersecurity threat analysis indicate is necessary to 
identify risks and vulnerabilities that could enable an intruder or 
unauthorized user or insider to:
    (1) Interfere with the swap data repository's operations or with 
fulfillment of its statutory and regulatory responsibilities;
    (2) Impair or degrade the reliability, security, or adequate 
scalable capacity of the swap data repository's automated systems;
    (3) Add to, delete, modify, exfiltrate, or compromise the integrity 
of any data related to the swap data repository's regulated activities; 
or
    (4) Undertake any other unauthorized action affecting the swap data 
repository's regulated activities or the hardware or software used in 
connection with those activities.
    (m) Internal reporting and review. Both the senior management and 
the Board of Directors of a swap data repository shall receive and 
review reports setting forth the results of the testing and assessment 
required by this section. A swap data repository shall establish and 
follow appropriate procedures for the remediation of issues identified 
through such review, as provided in paragraph (n) of this section, and 
for evaluation of the effectiveness of testing and assessment protocols.
    (n) Remediation. A swap data repository shall identify and document 
the vulnerabilities and deficiencies in its systems revealed by the 
testing and assessment required by this section. The swap data 
repository shall conduct and document an appropriate analysis of the 
risks presented by such vulnerabilities and deficiencies, to determine 
and document whether to remediate or accept the associated risk. When 
the swap data repository determines to remediate a vulnerability or 
deficiency, it must remediate in a timely manner given the nature and 
magnitude of the associated risk.

[76 FR 54575, Sept. 1, 2011, as amended at 81 FR 64315, Sept. 19, 2016]



Sec.  49.25  Financial resources.

    (a) General rule. (1) A registered swap data repository shall 
maintain sufficient financial resources to perform its statutory duties 
set forth in Sec.  49.9 and the core principles set forth in Sec.  
49.19.
    (2) An entity that operates as both a swap data repository and a 
derivatives clearing organization shall also comply with the financial 
resource requirements applicable to derivatives clearing organizations 
under Sec.  39.11 of this chapter.
    (3) Financial resources shall be considered sufficient if their 
value is at least equal to a total amount that would enable the swap 
data repository, or applicant for registration, to cover its operating 
costs for a period of at least one year, calculated on a rolling basis.
    (4) The financial resources described in this paragraph (a) must be 
independent and separately dedicated to ensure that assets and capital 
are not used for multiple purposes.

[[Page 180]]

    (b) Types of financial resources. Financial resources available to 
satisfy the requirements of paragraph (a) of this section may include:
    (1) The swap data repository's own capital; and
    (2) Any other financial resource deemed acceptable by the 
Commission.
    (c) Computation of financial resource requirement. A registered swap 
data repository shall, on a quarterly basis, based upon its fiscal year, 
make a reasonable calculation of its projected operating costs over a 
12-month period in order to determine the amount needed to meet the 
requirements of paragraph (a) of this section. The swap data repository 
shall have reasonable discretion in determining the methodology used to 
compute such projected operating costs. The Commission may review the 
methodology and require changes as appropriate.
    (d) Valuation of financial resources. At appropriate intervals, but 
not less than quarterly, a registered swap data repository shall compute 
the current market value of each financial resource used to meet its 
obligations under paragraph (a) of this section. Reductions in value to 
reflect market and credit risk (haircuts) shall be applied as 
appropriate.
    (e) Liquidity of financial resources. The financial resources 
allocated by the registered swap data repository to meet the 
requirements of paragraph (a) shall include unencumbered, liquid 
financial assets (i.e., cash and/or highly liquid securities) equal to 
at least six months' operating costs. If any portion of such financial 
resources is not sufficiently liquid, the swap data repository may take 
into account a committed line of credit or similar facility for the 
purpose of meeting this requirement.
    (f) Reporting requirements. (1) Each fiscal quarter, or at any time 
upon Commission request, a registered swap data repository shall report 
to the Commission the amount of financial resources necessary to meet 
the requirements of paragraph (a), the value of each financial resource 
available, computed in accordance with the requirements of paragraph 
(d); and provide the Commission with a financial statement, including 
the balance sheet, income statement, and statement of cash flows of the 
swap data repository or of its parent company. Financial statements 
shall be prepared in conformity with generally accepted accounting 
principles (GAAP) applied on a basis consistent with that of the 
preceding financial statement.
    (2) The calculations required by this paragraph shall be made as of 
the last business day of the swap data repository's fiscal quarter.
    (3) The report shall be filed not later than 17 business days after 
the end of the swap data repository's fiscal quarter, or at such later 
time as the Commission may permit, in its discretion, upon request by 
the swap data repository.



Sec.  49.26  Disclosure requirements of swap data repositories.

    Before accepting any swap data from a reporting entity or upon a 
reporting entity's request, a registered swap data repository shall 
furnish to the reporting entity a disclosure document that contains the 
following written information, which shall reasonably enable the 
reporting entity to identify and evaluate accurately the risks and costs 
associated with using the services of the swap data repository:
    (a) The registered swap data repository's criteria for providing 
others with access to services offered and swap data maintained by the 
swap data repository;
    (b) The registered swap data repository's criteria for those seeking 
to connect to or link with the swap data repository;
    (c) A description of the registered swap data repository's policies 
and procedures regarding its safeguarding of swap data and operational 
reliability to protect the confidentiality and security of such data, as 
described in Sec.  49.24;
    (d) The registered swap data repository's policies and procedures 
reasonably designed to protect the privacy of any and all swap data that 
the swap data repository receives from a reporting entity, as described 
in Sec.  49.16;
    (e) The registered swap data repository's policies and procedures 
regarding its non-commercial and/or commercial use of the swap data that 
it receives from a market participant, any registered entity, or any 
other person;

[[Page 181]]

    (f) The registered swap data repository's dispute resolution 
procedures;
    (g) A description of all the registered swap data repository's 
services, including any ancillary services;
    (h) The registered swap data repository's updated schedule of any 
fees, rates, dues, unbundled prices, or other charges for all of its 
services, including any ancillary services; any discounts or rebates 
offered; and the criteria to benefit from such discounts or rebates; and
    (i) A description of the registered swap data repository's 
governance arrangements.



Sec.  49.27  Access and fees.

    (a) Fair, open and equal access. (1) A registered swap data 
repository, consistent with Section 21 of the Act, shall provide its 
services to market participants, including but not limited to designated 
contract markets, swap execution facilities, derivatives clearing 
organizations, swap dealers, major swap participants and any other 
counterparties, on a fair, open and equal basis. For this purpose, a 
swap data repository shall not provide access to its services on a 
discriminatory basis but is required to provide its services to all 
market participants for swaps it accepts in an asset class.
    (2) Consistent with the principles of open access set forth in 
paragraph (a)(1) of this Regulation, a registered swap data repository 
shall not tie or bundle the offering of mandated regulatory services 
with other ancillary services that a swap data repository may provide to 
market participants.
    (b) Fees. (1) Any fees or charges imposed by a registered swap data 
repository in connection with the reporting of swap data and any other 
supplemental or ancillary services provided by such swap data repository 
shall be equitable and established in a uniform and non-discriminatory 
manner. Fees or charges shall not be used as an artificial barrier to 
access to the swap data repository. Swap data repositories shall not 
offer preferential pricing arrangements to any market participant on any 
basis, including volume discounts or reductions unless such discounts or 
reductions apply to all market participants uniformly and are not 
otherwise established in a manner that would effectively limit the 
application of such discount or reduction to a select number of market 
participants.
    (2) All fees or charges are to be fully disclosed and transparent to 
market participants. At a minimum, the registered swap data repository 
shall provide a schedule of fees and charges that is accessible by all 
market participants on its Web site.
    (3) The Commission notes that it will not specifically approve the 
fees charged by registered swap data repositories. However, any and all 
fees charged by swap data repositories must be consistent with the 
principles set forth in paragraph (b)(1) of this section.



                  Sec. Appendix A to Part 49--Form SDR

                  COMMODITY FUTURES TRADING COMMISSION

                                FORM SDR

    SWAP DATA REPOSITORY APPLICATION OR AMENDMENT TO APPLICATION FOR

                 REGISTRATION REGISTRATION INSTRUCTIONS

Intentional misstatements or omissions of material fact may constitute 
federal criminal violations (7 U.S.C. Sec.  13 and 18 U.S.C. Sec.  1001) 
or grounds for disqualification from registration.

                               DEFINITIONS

    Unless the context requires otherwise, all terms used in this Form 
SDR have the same meaning as in the Commodity Exchange Act, as amended, 
and in the Regulations of the Commission thereunder.
    For the purposes of this Form SDR, the term ``Applicant'' shall 
include any applicant for registration as a swap data repository or any 
registered swap data repository that is amending Form SDR.

                          GENERAL INSTRUCTIONS

    1. Form SDR and Exhibits thereto are to be filed with the Commodity 
Futures Trading Commission by Applicants for registration as a swap data 
repository, or by a registered swap data repository amending such 
registration, pursuant to Section 21 of the Commodity Exchange Act and 
the regulations thereunder. Upon the filing of an application for 
registration, the Commission will publish notice of the filing and 
afford interested persons an opportunity to submit written data, views 
and arguments concerning such application. No application for 
registration shall be effective unless the Commission, by order, grants 
such registration.

[[Page 182]]

    2. Individuals' names shall be given in full (Last Name, First Name, 
Middle Name).
    3. Signatures must accompany each copy of the Form SDR filed with 
the Commission. If this Form SDR is filed by a corporation, it must be 
signed in the name of the corporation by a principal officer duly 
authorized; if filed by a limited liability company, this Form SDR must 
be signed in the name of the limited liability company by a member duly 
authorized to sign on the limited liability company's behalf; if filed 
by a partnership, this Form SDR must be signed in the name of the 
partnership by a general partner authorized; if filed by an 
unincorporated organization or association which is not a partnership, 
it must be signed in the name of the organization or association by the 
managing agent, i.e., a duly authorized person who directs, manages or 
who participates in the directing or managing of its affairs.
    4. If Form SDR is being filed as an initial application for 
registration, all applicable items must be answered in full. If any item 
is not applicable, indicate by ``none,'' ``not applicable,'' or ``N/A'' 
as appropriate.
    5. Under Section 21 of the Commodity Exchange Act and the 
regulations thereunder, the Commission is authorized to solicit the 
information required to be supplied by this form from Applicants for 
registration as a swap data repository and from registered swap data 
repositories amending their registration. Disclosure of the information 
specified on this form is mandatory prior to processing of an 
application for registration as a swap data repository. The information 
will be used for the principal purpose of determining whether the 
Commission should grant or deny registration to an Applicant. The 
Commission may determine that additional information is required from 
the Applicant in order to process its application. An Applicant is 
therefore encouraged to supplement this Form SDR with any additional 
information that may be significant to its operation as a swap data 
repository and to the Commission's review of its application. A Form SDR 
which is not prepared and executed in compliance with applicable 
requirements and instructions may be returned as not acceptable for 
filing. Acceptance of this Form SDR, however, shall not constitute any 
finding that the Form SDR has been filed as required or that the 
information submitted is true, current or complete.
    6. Except in cases where confidential treatment is requested by the 
Applicant and granted by the Commission pursuant to the Freedom of 
Information Act and Commission Regulation Sec.  145.9, information 
supplied on this form will be included routinely in the public files of 
the Commission and will be available for inspection by any interested 
person. The Applicant must identify with particularity the information 
in these exhibits that will be subject to a request for confidential 
treatment and supporting documentation for such request pursuant to 
Commission Regulations Sec.  40.8, and Sec.  145.9.

                  UPDATING INFORMATION ON THE FORM SDR

    1. Section 21 requires that if any information contained in Items 1 
through 17, 23, 29, and Item 53 of this application, or any supplement 
or amendment thereto, is or becomes inaccurate for any reason, an 
amendment must be filed promptly, unless otherwise specified, on Form 
SDR correcting such information.
    2. Registrants filing Form SDR as an amendment (other than an annual 
amendment) need file only the first page of Form SDR, the signature page 
(Item 13), and any pages on which an answer is being amended, together 
with such exhibits as are being amended. The submission of an amendment 
represents that all unamended items and exhibits remain true, current 
and complete as previously filed.

                    ANNUAL AMENDMENT ON THE FORM SDR

    Annual amendments on the Form SDR shall be submitted within 60 days 
of the end of the Applicant's fiscal year. Applicants must complete the 
first page and provide updated information or exhibits.
    An Applicant may request an extension of time for submitting the 
annual amendment with the Secretary of the Commission based on 
substantial, undue hardship. Extensions for filing annual amendments may 
be granted at the discretion of the Commission.

                              WHERE TO FILE

    File registration application and appropriate exhibits 
electronically with the Commission at the Washington, D.C. headquarters 
in a format and in the manner specified by the Secretary of the 
Commission.

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Sec. Appendix B to Part 49--Confidentiality Arrangement for Appropriate 
Domestic Regulators and Appropriate Foreign Regulators to Obtain Access 
 to Swap Data Maintained by Registered Swap Data Respositories Pursuant 
                 to Sec. Sec.  49.17(d)(6) and 49.18(a)
[GRAPHIC] [TIFF OMITTED] TR12JN18.000

    The U.S. Commodity Futures Trading Commission (``CFTC'') and the 
[name of foreign/domestic regulator (``ABC'')] (each an ``Authority'' 
and collectively the ``Authorities'') have entered into this 
Confidentiality Arrangement (``Arrangement'') in connection with 
[whichever is applicable] [CFTC Regulation 49.17(b)(1)[(i)-(vi)]/the 
determination order issued by the CFTC to [ABC] (``Order'')] and any 
request for swap data by [ABC] to any swap data repository (``SDR'') 
registered with the CFTC.

                     Article One: General Provisions

    1. ABC is permitted to request and receive swap data directly from a 
registered SDR (``Swap Data'') on the terms and subject to the 
conditions of this Arrangement.
    2. This Arrangement is entered into to fulfill the requirements 
under Section 21(d) of the Commodity Exchange Act (``Act'') and CFTC 
Regulation 49.18. Upon receipt by a registered SDR, this Arrangement 
will satisfy the requirement for a written agreement pursuant to Section 
21(d) of the Act and

[[Page 192]]

CFTC Regulation 49.17(d)(6). This Arrangement does not apply to 
information that is [reported to a registered SDR pursuant to [ABC]'s 
regulatory regime where the SDR also is registered with [ABC] pursuant 
to separate statutory authority, even if such information also is 
reported pursuant to the Act and CFTC regulations][reported to a 
registered SDR pursuant to [ABC]'s regulatory regime where the SDR also 
is registered with, or recognized or otherwise authorized by, [ABC], 
which has supervisory authority over the repository pursuant to foreign 
law and/or regulation, even if such information also is reported 
pursuant to the Act and CFTC regulations.] \1\
---------------------------------------------------------------------------

    \1\ The first bracketed phrase will be used for ADRs; the second 
will be used for AFRs. The inapplicable phrase will be deleted.
---------------------------------------------------------------------------

    3. This Arrangement is not intended to limit or condition the 
discretion of an Authority in any way in the discharge of its regulatory 
responsibilities or to prejudice the individual responsibilities or 
autonomy of any Authority.
    4. This Arrangement does not alter the terms and conditions of any 
existing arrangements.

                Article Two: Confidentiality of Swap Data

    5. ABC will be acting within the scope of its jurisdiction in 
requesting Swap Data and employs procedures to maintain the 
confidentiality of Swap Data and any information and analyses derived 
therefrom (collectively, the ``Confidential Information''). ABC 
undertakes to notify the CFTC and each relevant SDR promptly of any 
change to ABC's scope of jurisdiction.
    6. ABC undertakes to treat Confidential Information as confidential 
and will employ safeguards that:
    a. To the maximum extent practicable, identify the Confidential 
Information and maintain it separately from other data and information;
    b. Protect the Confidential Information from misappropriation and 
misuse;
    c. Ensure that only authorized ABC personnel with a need to access 
particular Confidential Information to perform their job functions 
related to such Confidential Information have access thereto, and that 
such access is permitted only to the extent necessary to perform their 
job functions related to such particular Confidential Information;
    d. Prevent the disclosure of aggregated Confidential Information; 
provided, however, that ABC is permitted to disclose any sufficiently 
aggregated Confidential Information that is anonymized to prevent 
identification, through disaggregation or otherwise, of a market 
participant's business transactions, trade data, market positions, 
customers or counterparties;
    e. Prohibit use of the Confidential Information by ABC personnel for 
any improper purpose, including in connection with trading for their 
personal benefit or for the benefit of others or with respect to any 
commercial or business purpose; and
    f. Include a process for monitoring compliance with the 
confidentiality safeguards described herein and for promptly notifying 
the CFTC, and each SDR from which ABC has received Swap Data, of any 
violation of such safeguards or failure to fulfill the terms of this 
Arrangement.
    7. Except as provided in Paragraphs 6.d. and 8, ABC will not onward 
share or otherwise disclose any Confidential Information.
    8. ABC undertakes that:
    a. If a department, central bank, or agency of the Government of the 
United States, it will not disclose Confidential Information except in 
an action or proceeding under the laws of the United States to which it, 
the CFTC, or the United States is a party;
    b. If a department or agency of a State or political subdivision 
thereof, it will not disclose Confidential Information except in 
connection with an adjudicatory action or proceeding brought under the 
Act or the laws of [name of either the State or the State and political 
subdivision] to which it is a party; or
    c. If a foreign futures authority or a department, central bank, 
ministry, or agency of a foreign government or subdivision thereof, or 
any other Foreign Regulator, as defined in Commission Regulation 
49.2(a)(5), it will not disclose Confidential Information except in 
connection with an adjudicatory action or proceeding brought under the 
laws of [name of country, political subdivision, or (if a supranational 
organization) supranational lawmaking body] to which it is a party.
    9. Prior to complying with any legally enforceable demand for 
Confidential Information, ABC will notify the CFTC of such demand in 
writing, assert all available appropriate legal exemptions or privileges 
with respect to such Confidential Information, and use its best efforts 
to protect the confidentiality of the Confidential Information.
    10. ABC acknowledges that, if it does not fulfill the terms of this 
Arrangement, the CFTC may direct any registered SDR to suspend or revoke 
ABC's access to Swap Data.
    11. ABC will comply with all applicable security-related 
requirements imposed by an SDR in connection with access to Swap Data 
maintained by the SDR, as such requirements may be revised from time to 
time.
    12. ABC will promptly destroy all Confidential Information for which 
it no longer has a need or which no longer falls within the scope of its 
jurisdiction, and will certify to the CFTC, upon request, that ABC has 
destroyed such Confidential Information.

[[Page 193]]

                Article Three: Administrative Provisions

    13. This Arrangement may be amended with the written consent of the 
Authorities.
    14. The text of this Arrangement will be executed in English, and 
may be made available to the public.
    15. On the date this Arrangement is signed by the Authorities, it 
will become effective and may be provided to any registered SDR that 
holds and maintains Swap Data that falls within the scope of ABC's 
jurisdiction.
    16. This Arrangement will expire 30 days after any Authority gives 
written notice to the other Authority of its intention to terminate the 
Arrangement. In the event of termination of this Arrangement, 
Confidential Information will continue to remain confidential and will 
continue to be covered by this Arrangement.
    This Arrangement is executed in duplicate, this ___ day of ___.

________________________________________________________________________
[name of Chairman]

Chairman
U.S. Commodity Futures Trading Commission

________________________________________________________________________
[name of signatory]

[title]
[name of foreign/domestic regulator]

    [Exhibit A: Description of Scope of Jurisdiction. If ABC is not 
enumerated in Commission Regulations 49.17(b)(1)(i)-(vi), it must attach 
the Determination Order received from the Commission pursuant to 
Commission Regulation 49.17(h). If ABC is enumerated in Commission 
Regulations 49.17(b)(1)(i)-(vi), it must attach a sufficiently detailed 
description of the scope of ABC's jurisdiction as it relates to Swap 
Data maintained by SDRs. In both cases, the description of the scope of 
jurisdiction must include elements allowing SDRs to establish, without 
undue obstacles, objective parameters for determining whether a 
particular Swap Data request falls within such scope of jurisdiction. 
Such elements could include LEIs of all jurisdictional entities and 
could also include UPIs of all jurisdictional products or, if no CFTC-
approved UPI and product classification system is yet available, the 
internal product identifier or product description used by an SDR from 
which Swap Data is to be sought.]

[83 FR 27439, June 12, 2018]



PART 50_CLEARING REQUIREMENT AND RELATED RULES--Table of Contents



             Subpart A_Definitions and Clearing Requirement

Sec.
50.1 Definitions.
50.2 Treatment of swaps subject to a clearing requirement.
50.3 Notice to the public.
50.4 Classes of swaps required to be cleared.
50.5 Swaps exempt from a clearing requirement.
50.6 Delegation of authority.
50.7-50.9 [Reserved]
50.10 Prevention of evasion of the clearing requirement and abuse of an 
          exception or exemption to the clearing requirement.
50.11-50.24 [Reserved]

                      Subpart B_Compliance Schedule

50.25 Clearing requirement compliance schedule.
50.26-50.49 [Reserved]

       Subpart C_Exceptions and Exemptions to Clearing Requirement

50.50 Exceptions to the clearing requirement.
50.51 Exemption for cooperatives.
50.52 Exemption for swaps between affiliates.

    Authority: 7 U.S.C. 2(h) and 7a-1 as amended by Pub. L. 111-203, 124 
Stat. 1376.

    Source: 77 FR 44455, July 30, 2012, unless otherwise noted.



             Subpart A_Definitions and Clearing Requirement

    Source: 77 FR 74335, Dec. 13, 2012, unless otherwise noted.



Sec.  50.1  Definitions.

    For the purposes of this part,
    Business day means any day other than a Saturday, Sunday, or legal 
holiday.
    Day of execution means the calendar day of the party to the swap 
that ends latest, provided that if a swap is:
    (1) Entered into after 4:00 p.m. in the location of a party; or
    (2) Entered into on a day that is not a business day in the location 
of a party, then such swap shall be deemed to have been entered into by 
that party on the immediately succeeding business day of that party, and 
the day of execution shall be determined with reference to such business 
day.



Sec.  50.2  Treatment of swaps subject to a clearing requirement.

    (a) All persons executing a swap that:

[[Page 194]]

    (1) Is not subject to an exception under section 2(h)(7) of the Act 
or Sec.  50.50 of this part; and
    (2) Is included in a class of swaps identified in Sec.  50.4 of this 
part, shall submit such swap to any eligible derivatives clearing 
organization that accepts such swap for clearing as soon as 
technologically practicable after execution, but in any event by the end 
of the day of execution.
    (b) Each person subject to the requirements of paragraph (a) of this 
section shall undertake reasonable efforts to verify whether a swap is 
required to be cleared.
    (c) For purposes of paragraph (a) of this section, persons that are 
not clearing members of an eligible derivatives clearing organization 
shall be deemed to have complied with paragraph (a) of this section upon 
submission of such swap to a futures commission merchant or clearing 
member of a derivatives clearing organization, provided that submission 
occurs as soon as technologically practicable after execution, but in 
any event by the end of the day of execution.



Sec.  50.3  Notice to the public.

    (a) In addition to its obligations under Sec.  39.21(c)(1), each 
derivatives clearing organization shall make publicly available on its 
Web site a list of all swaps that it will accept for clearing and 
identify which swaps on the list are required to be cleared under 
section 2(h)(1) of the Act and this part.
    (b) The Commission shall maintain a current list of all swaps that 
are required to be cleared and all derivatives clearing organizations 
that are eligible to clear such swaps on its Web site.



Sec.  50.4  Classes of swaps required to be cleared.

    (a) Interest rate swaps. Swaps that have the following 
specifications are required to be cleared under section 2(h)(1) of the 
Act, and shall be cleared pursuant to the rules of any derivatives 
clearing organization eligible to clear such swaps under Sec.  39.5(a) 
of this chapter.

                                                                        Table 1a
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Specification                                                                  Fixed-to-floating swap class
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Currency.....................  Australian Dollar   Canadian Dollar     Euro (EUR)........  Hong Kong Dollar    Mexican Peso (MXN)  Norwegian Krone
                                   (AUD).              (CAD).                                  (HKD).                                  (NOK).
2. Floating Rate Indexes........  BBSW..............  CDOR..............  EURIBOR...........  HIBOR.............  TIIE-BANXICO......  NIBOR.
3. Stated Termination Date Range  28 days to 30       28 days to 30       28 days to 50       28 days to 10       28 days to 21       28 days to 10
                                   years.              years.              years.              years.              years.              years.
4. Optionality..................  No................  No................  No................  No................  No................  No.
5. Dual Currencies..............  No................  No................  No................  No................  No................  No.
6. Conditional Notional Amounts.  No................  No................  No................  No................  No................  No.
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                                        Table 1b
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Specification                                                                 Fixed-to-floating swap class
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Currency..................  Polish Zloty      Singapore Dollar  Swedish Krona     Swiss Franc       Sterling (GBP).  U.S. Dollar      Yen (JPY).
                                (PLN).            (SGD).            (SEK).            (CHF).                             (USD).
2. Floating Rate Indexes.....  WIBOR...........  SOR-VWAP........  STIBOR..........  LIBOR...........  LIBOR..........  LIBOR..........  LIBOR.
3. Stated Termination Date     28 days to 10     28 days to 10     28 days to 15     28 days to 30     28 days to 50    28 days to 50    28 days to 30
 Range.                         years.            years.            years.            years.            years.           years.           years.
4. Optionality...............  No..............  No..............  No..............  No..............  No.............  No.............  No.
5. Dual Currencies...........  No..............  No..............  No..............  No..............  No.............  No.............  No.

[[Page 195]]

 
6. Conditional Notional        No..............  No..............  No..............  No..............  No.............  No.............  No.
 Amounts.
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                                         Table 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Specification                                                                          Basis swap class
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Currency........................  Australian Dollar       Euro (EUR)............  Sterling (GBP).......  U.S. Dollar (USD)....  Yen (JPY).
                                      (AUD).
2. Floating Rate Indexes...........  BBSW..................  EURIBOR...............  LIBOR................  LIBOR................  LIBOR.
3. Stated Termination Date Range...  28 days to 30 years...  28 days to 50 years...  28 days to 50 years..  28 days to 50 years..  28 days to 30 years.
4. Optionality.....................  No....................  No....................  No...................  No...................  No.
5. Dual Currencies.................  No....................  No....................  No...................  No...................  No.
6. Conditional Notional Amounts....  No....................  No....................  No...................  No...................  No.
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                                         Table 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Specification                                                                 Forward rate agreement class
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Currency..................  Euro (EUR)......  Polish Zloty      Norwegian Krone   Swedish Krona     Sterling (GBP).  U.S. Dollar      Yen (JPY).
                                                  (PLN).            (NOK).            (SEK).                             (USD).
2. Floating Rate Indexes.....  EURIBOR.........  WIBOR...........  NIBOR...........  STIBOR..........  LIBOR..........  LIBOR..........  LIBOR.
3. Stated Termination Date     3 days to 3       3 days to 2       3 days to 2       3 days to 3       3 days to 3      3 days to 3      3 days to 3
 Range.                         years.            years.            years.            years.            years.           years.           years.
4. Optionality...............  No..............  No..............  No..............  No..............  No.............  No.............  No.
5. Dual Currencies...........  No..............  No..............  No..............  No..............  No.............  No.............  No.
6. Conditional Notional        No..............  No..............  No..............  No..............  No.............  No.............  No.
 Amounts.
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                                         Table 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Specification                                                                     Overnight index swap class
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Currency........................  Australian Dollar       Canadian Dollar (CAD).  Euro (EUR)...........  Sterling (GBP).......  U.S. Dollar (USD).
                                      (AUD).
2. Floating Rate Indexes...........  AONIA-OISec............  CORRA-OISec............  EONIA................  SONIA................  FedFunds.
3. Stated Termination Date Range...  7 days to 2 years.....  7 days to 2 years.....  7 days to 3 years....  7 days to 3 years....  7 days to 3 years.
4. Optionality.....................  No....................  No....................  No...................  No...................  No.
5. Dual Currencies.................  No....................  No....................  No...................  No...................  No.
6. Conditional Notional Amounts....  No....................  No....................  No...................  No...................  No.
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 196]]

    (b) Credit default swaps. Swaps that have the following 
specifications are required to be cleared under section 2(h)(1) of the 
Act, and shall be cleared pursuant to the rules of any derivatives 
clearing organization eligible to clear such swaps under Sec.  39.5(a) 
of this chapter.

----------------------------------------------------------------------------------------------------------------
                          Specification                             North American untranched CDS indices class
----------------------------------------------------------------------------------------------------------------
Reference Entities...............................................  Corporate.
Region...........................................................  North America.
Indices..........................................................  CDX.NA.IG; CDX.NA.HY.
Tenor............................................................  CDX.NA.IG: 3Y, 5Y, 7Y, 10Y; CDX.NA.HY: 5Y.
Applicable Series................................................  CDX.NA.IG 3Y: Series 15 and all subsequent
                                                                    Series, up to and including the current
                                                                    Series.
                                                                   CDX.NA.IG 5Y: Series 11 and all subsequent
                                                                    Series, up to and including the current
                                                                    Series.
                                                                   CDX.NA.IG 7Y: Series 8 and all subsequent
                                                                    Series, up to and including the current
                                                                    Series.
                                                                   CDX.NA.IG 10Y: Series 8 and all subsequent
                                                                    Series, up to and including the current
                                                                    Series.
                                                                   CDX.NA.HY 5Y: Series 11 and all subsequent
                                                                    Series, up to and including the current
                                                                    Series.
Tranched.........................................................  No.
----------------------------------------------------------------------------------------------------------------


 
                          Specification                                European untranched CDS indices class
----------------------------------------------------------------------------------------------------------------
Reference Entities...............................................  Corporate.
Region...........................................................  Europe.
Indices..........................................................  iTraxx Europe.
                                                                   iTraxx Europe Crossover.
                                                                   iTraxx Europe HiVol.
Tenor............................................................  iTraxx Europe: 5Y, 10Y.
                                                                   iTraxx Europe Crossover: 5Y.
                                                                   iTraxx Europe HiVol: 5Y.
Applicable Series................................................  iTraxx Europe 5Y: Series 10 and all
                                                                    subsequent Series, up to and including the
                                                                    current Series.
                                                                   iTraxx Europe 10Y: Series 7 and all
                                                                    subsequent Series, up to and including the
                                                                    current Series.
                                                                   iTraxx Europe Crossover 5Y: Series 10 and all
                                                                    subsequent Series, up to and including the
                                                                    current Series.
                                                                   iTraxx Europe HiVol 5Y: Series 10 and all
                                                                    subsequent Series, up to and including the
                                                                    current Series.
Tranched.........................................................  No.
----------------------------------------------------------------------------------------------------------------


[77 FR 74335, Dec. 13, 2012, as amended at 81 FR 71239, Oct. 14, 2016]



Sec.  50.5  Swaps exempt from a clearing requirement.

    (a) Swaps entered into before July 21, 2010 shall be exempt from the 
clearing requirement under Sec.  50.2 of this part if reported to a swap 
data repository pursuant to section 2(h)(5)(A) of the Act and Sec.  
46.3(a) of this chapter.
    (b) Swaps entered into before the application of the clearing 
requirement for a particular class of swaps under Sec. Sec.  50.2 and 
50.4 of this part shall be exempt from the clearing requirement if 
reported to a swap data repository pursuant to section 2(h)(5)(B) of the 
Act and either Sec.  46.3(a) or Sec. Sec.  45.3 and 45.4 of this 
chapter, as appropriate.



Sec.  50.6  Delegation of Authority.

    (a) The Commission hereby delegates to the Director of the Division 
of Clearing and Risk or such other employee or employees as the Director 
may designate from time to time, with the consultation of the General 
Counsel or such other employee or employees as the General Counsel may 
designate from time to time, the authority:
    (1) After prior notice to the Commission, to determine whether one 
or more swaps submitted by a derivatives clearing organization under 
Sec.  39.5 falls within a class of swaps as described in Sec.  50.4, 
provided that inclusion of such swaps is consistent with the 
Commission's clearing requirement determination for that class of swaps; 
and
    (2) To notify all relevant derivatives clearing organizations of 
that determination.
    (b) The Director of the Division of Clearing and Risk may submit to 
the Commission for its consideration any matter which has been delegated 
in

[[Page 197]]

this section. Nothing in this section prohibits the Commission, at its 
election, from exercising the authority delegated in this section.



Sec.  50.7-50.9  [Reserved]



Sec.  50.10  Prevention of evasion of the clearing requirement and 
abuse of an exception or exemption to the clearing requirement.

    (a) It shall be unlawful for any person to knowingly or recklessly 
evade or participate in or facilitate an evasion of the requirements of 
section 2(h) of the Act or any Commission rule or regulation promulgated 
thereunder.
    (b) It shall be unlawful for any person to abuse the exception to 
the clearing requirement as provided under section 2(h)(7) of the Act or 
an exception or exemption under this chapter.
    (c) It shall be unlawful for any person to abuse any exemption or 
exception to the requirements of section 2(h) of the Act, including any 
exemption or exception as the Commission may provide by rule, 
regulation, or order.



Sec.  50.11-50.24  [Reserved]



                      Subpart B_Compliance Schedule



Sec.  50.25  Clearing requirement compliance schedule.

    (a) Definitions. For the purposes of this paragraph:
    Active fund means any private fund as defined in section 202(a) of 
the Investment Advisers Act of 1940, that is not a third-party 
subaccount and that executes 200 or more swaps per month based on a 
monthly average over the 12 months preceding the Commission issuing a 
clearing requirement determination under section 2(h)(2) of the Act.
    Category 1 Entity means a swap dealer, a security-based swap dealer; 
a major swap participant; a major security-based swap participant; or an 
active fund.
    Category 2 Entity means a commodity pool; a private fund as defined 
in section 202(a) of the Investment Advisers Act of 1940 other than an 
active fund; or a person predominantly engaged in activities that are in 
the business of banking, or in activities that are financial in nature 
as defined in section 4(k) of the Bank Holding Company Act of 1956, 
provided that, in each case, the entity is not a third-party subaccount.
    Third-party Subaccount means an account that is managed by an 
investment manager that is independent of and unaffiliated with the 
account's beneficial owner or sponsor, and is responsible for the 
documentation necessary for the account's beneficial owner to clear 
swaps.
    (b) Upon issuing a clearing requirement determination under section 
2(h)(2) of the Act, the Commission may determine, based on the group, 
category, type, or class of swaps subject to such determination, that 
the following schedule for compliance with the requirements of section 
2(h)(1)(A) of the Act shall apply:
    (1) A swap between a Category 1 Entity and another Category 1 
Entity, or any other entity that desires to clear the transaction, must 
comply with the requirements of section 2(h)(1)(A) of the Act no later 
than ninety (90) days from the date of publication of such clearing 
requirement determination in the Federal Register.
    (2) A swap between a Category 2 Entity and a Category 1 Entity, 
another Category 2 Entity, or any other entity that desires to clear the 
transaction, must comply with the requirements of section 2(h)(1)(A) of 
the Act no later than one hundred and eighty (180) days from the date of 
publication of such clearing requirement determination in the Federal 
Register.
    (3) All other swaps for which neither of the parties to the swap is 
eligible to claim the exception from the clearing requirement set forth 
in section 2(h)(7) of the Act and Sec.  39.6, must comply with the 
requirements of section 2(h)(1)(A) of the Act no later than two hundred 
and seventy (270) days from the date of publication of such clearing 
requirement determination in the Federal Register.
    (c) Nothing in this rule shall be construed to prohibit any person 
from voluntarily complying with the requirements of section 2(h)(1)(A) 
of the Act sooner than the implementation schedule provided under 
paragraph (b).

[77 FR 44455, July 30, 2012]

[[Page 198]]



Sec. Sec.  50.26-50.49  [Reserved]



       Subpart C_Exceptions and Exemptions to Clearing Requirement

    Source: 77 FR 74337, Dec. 13, 2012, unless otherwise noted.



Sec.  50.50  Exceptions to the clearing requirement.

    (a) Non-financial entities. (1) A counterparty to a swap may elect 
the exception to the clearing requirement under section 2(h)(7)(A) of 
the Act if the counterparty:
    (i) Is not a ``financial entity'' as defined in section 
2(h)(7)(C)(i) of the Act;
    (ii) Is using the swap to hedge or mitigate commercial risk as 
provided in paragraph (c) of this section; and
    (iii) Provides, or causes to be provided, the information specified 
in paragraph (b) of this section to a registered swap data repository 
or, if no registered swap data repository is available to receive the 
information from the reporting counterparty, to the Commission. A 
counterparty that satisfies the criteria in this paragraph (a)(1) and 
elects the exception is an ``electing counterparty.''
    (2) If there is more than one electing counterparty to a swap, the 
information specified in paragraph (b) of this section shall be provided 
with respect to each of the electing counterparties.
    (b) Reporting. (1) When a counterparty elects the exception to the 
clearing requirement under section 2(h)(7)(A) of the Act, one of the 
counterparties to the swap (the ``reporting counterparty,'' as 
determined in accordance with Sec.  45.8 of this part) shall provide, or 
cause to be provided, the following information to a registered swap 
data repository or, if no registered swap data repository is available 
to receive the information from the reporting counterparty, to the 
Commission, in the form and manner specified by the Commission:
    (i) Notice of the election of the exception;
    (ii) The identity of the electing counterparty to the swap; and
    (iii) The following information, unless such information has 
previously been provided by the electing counterparty in a current 
annual filing pursuant to paragraph (b)(2) of this section:
    (A) Whether the electing counterparty is a ``financial entity'' as 
defined in section 2(h)(7)(C)(i) of the Act, and if the electing 
counterparty is a financial entity, whether it is:
    (1) Electing the exception in accordance with section 
2(h)(7)(C)(iii) or section 2(h)(7)(D) of the Act; or
    (2) Exempt from the definition of ``financial entity'' as described 
in paragraph (d) of this section;
    (B) Whether the swap or swaps for which the electing counterparty is 
electing the exception are used by the electing counterparty to hedge or 
mitigate commercial risk as provided in paragraph (c) of this section;
    (C) How the electing counterparty generally meets its financial 
obligations associated with entering into non-cleared swaps by 
identifying one or more of the following categories, as applicable:
    (1) A written credit support agreement;
    (2) Pledged or segregated assets (including posting or receiving 
margin pursuant to a credit support agreement or otherwise);
    (3) A written third-party guarantee;
    (4) The electing counterparty's available financial resources; or
    (5) Means other than those described in paragraphs 
(b)(1)(iii)(C)(1), (2), (3) or (4) of this section; and
    (D) Whether the electing counterparty is an entity that is an issuer 
of securities registered under section 12 of, or is required to file 
reports under section 15(d) of, the Securities Exchange Act of 1934, and 
if so:
    (1) The relevant SEC Central Index Key number for that counterparty; 
and
    (2) Whether an appropriate committee of that counterparty's board of 
directors (or equivalent body) has reviewed and approved the decision to 
enter into swaps that are exempt from the requirements of sections 
2(h)(1) and 2(h)(8) of the Act.
    (2) An entity that qualifies for an exception to the clearing 
requirement under this section may report the information listed in 
paragraph (b)(1)(iii) of this section annually in anticipation of 
electing the exception for one or

[[Page 199]]

more swaps. Any such reporting under this paragraph shall be effective 
for purposes of paragraph (b)(1)(iii) of this section for swaps entered 
into by the entity for 365 days following the date of such reporting. 
During such period, the entity shall amend such information as necessary 
to reflect any material changes to the information reported.
    (3) Each reporting counterparty shall have a reasonable basis to 
believe that the electing counterparty meets the requirements for an 
exception to the clearing requirement under this section.
    (c) Hedging or mitigating commercial risk. For purposes of section 
2(h)(7)(A)(ii) of the Act and paragraph (b)(1)(iii)(B) of this section, 
a swap is used to hedge or mitigate commercial risk if:
    (1) Such swap:
    (i) Is economically appropriate to the reduction of risks in the 
conduct and management of a commercial enterprise, where the risks arise 
from:
    (A) The potential change in the value of assets that a person owns, 
produces, manufactures, processes, or merchandises or reasonably 
anticipates owning, producing, manufacturing, processing, or 
merchandising in the ordinary course of business of the enterprise;
    (B) The potential change in the value of liabilities that a person 
has incurred or reasonably anticipates incurring in the ordinary course 
of business of the enterprise;
    (C) The potential change in the value of services that a person 
provides, purchases, or reasonably anticipates providing or purchasing 
in the ordinary course of business of the enterprise;
    (D) The potential change in the value of assets, services, inputs, 
products, or commodities that a person owns, produces, manufactures, 
processes, merchandises, leases, or sells, or reasonably anticipates 
owning, producing, manufacturing, processing, merchandising, leasing, or 
selling in the ordinary course of business of the enterprise;
    (E) Any potential change in value related to any of the foregoing 
arising from interest, currency, or foreign exchange rate movements 
associated with such assets, liabilities, services, inputs, products, or 
commodities; or
    (F) Any fluctuation in interest, currency, or foreign exchange rate 
exposures arising from a person's current or anticipated assets or 
liabilities; or
    (ii) Qualifies as bona fide hedging for purposes of an exemption 
from position limits under the Act; or
    (iii) Qualifies for hedging treatment under:
    (A) Financial Accounting Standards Board Accounting Standards 
Codification Topic 815, Derivatives and Hedging (formerly known as 
Statement No. 133); or
    (B) Governmental Accounting Standards Board Statement 53, Accounting 
and Financial Reporting for Derivative Instruments; and
    (2) Such swap is:
    (i) Not used for a purpose that is in the nature of speculation, 
investing, or trading; and
    (ii) Not used to hedge or mitigate the risk of another swap or 
security-based swap position, unless that other position itself is used 
to hedge or mitigate commercial risk as defined by this rule or Sec.  
240.3a67-4 of this title.
    (d) For purposes of section 2(h)(7)(A) of the Act, a person that is 
a ``financial entity'' solely because of section 2(h)(7)(C)(i)(VIII) 
shall be exempt from the definition of ``financial entity'' if such 
person:
    (1) Is organized as a bank, as defined in section 3(a) of the 
Federal Deposit Insurance Act, the deposits of which are insured by the 
Federal Deposit Insurance Corporation; a savings association, as defined 
in section 3(b) of the Federal Deposit Insurance Act, the deposits of 
which are insured by the Federal Deposit Insurance Corporation; a farm 
credit system institution chartered under the Farm Credit Act of 1971; 
or an insured Federal credit union or State-chartered credit union under 
the Federal Credit Union Act; and
    (2) Has total assets of $10,000,000,000 or less on the last day of 
such person's most recent fiscal year.



Sec.  50.51  Exemption for cooperatives.

    Exemption for cooperatives. Exempt cooperatives may elect not to 
clear certain swaps identified in paragraph (b)

[[Page 200]]

of this section that are otherwise subject to the clearing requirement 
of section 2(h)(1)(A) of the Act if the following requirements are 
satisfied.
    (a) For the purposes of this paragraph, an exempt cooperative means 
a cooperative:
    (1) Formed and existing pursuant to Federal or state law as a 
cooperative;
    (2) That is a ``financial entity,'' as defined in section 
2(h)(7)(C)(i) of the Act, solely because of section 2(h)(7)(C)(i)(VIII) 
of the Act; and
    (3) Each member of which is not a ``financial entity,'' as defined 
in section 2(h)(7)(C)(i) of the Act, or if any member is a financial 
entity solely because of section 2(h)(7)(C)(i)(VIII) of the Act, such 
member is:
    (i) Exempt from the definition of ``financial entity'' pursuant to 
Sec.  50.50(d); or
    (ii) A cooperative formed under Federal or state law as a 
cooperative and each member thereof is either not a ``financial 
entity,'' as defined in section 2(h)(7)(C)(i) of the Act, or is exempt 
from the definition of ``financial entity'' pursuant to Sec.  50.50(d).
    (b) An exempt cooperative may elect not to clear a swap that is 
subject to the clearing requirement of section 2(h)(1)(A) of the Act if 
the swap:
    (1) Is entered into with a member of the exempt cooperative in 
connection with originating loan or loans for the member, which means 
the requirements of paragraphs (5)(i), (ii), and (iii) of the definition 
of swap dealer in Sec.  1.3 of this chapter are satisfied; provided 
that, for this purpose, the term ``insured depository institution'' as 
used in those paragraphs is replaced with the term ``exempt 
cooperative'' and the word ``customer'' is replaced with the word 
``member''; or
    (2) Hedges or mitigates commercial risk, in accordance with Sec.  
50.50(c), related to loans to members or arising from a swap or swaps 
that meet the requirements of paragraph (b)(1) of this section.
    (c) An exempt cooperative that elects the exemption provided in this 
section shall comply with the requirements of Sec.  50.50(b). For this 
purpose, the exempt cooperative shall be the ``electing counterparty,'' 
as such term is used in Sec.  50.50(b), and for purposes of Sec.  
50.50(b)(1)(iii)(A), the reporting counterparty, as determined pursuant 
to Sec.  45.8, shall report that an exemption is being elected in 
accordance with this section.

[78 FR 52307, Aug. 22, 2013, as amended at 83 FR 7997, Feb. 23, 2018]



Sec.  50.52  Exemption for swaps between affiliates.

    (a) Eligible affiliate counterparty status. Subject to the 
conditions in paragraph (b) of this section:
    (1) Counterparties to a swap may elect not to clear a swap subject 
to the clearing requirement of section 2(h)(1)(A) of the Act and this 
part if:
    (i) One counterparty, directly or indirectly, holds a majority 
ownership interest in the other counterparty, and the counterparty that 
holds the majority interest in the other counterparty reports its 
financial statements on a consolidated basis under Generally Accepted 
Accounting Principles or International Financial Reporting Standards, 
and such consolidated financial statements include the financial results 
of the majority-owned counterparty; or
    (ii) A third party, directly or indirectly, holds a majority 
ownership interest in both counterparties, and the third party reports 
its financial statements on a consolidated basis under Generally 
Accepted Accounting Principles or International Financial Reporting 
Standards, and such consolidated financial statements include the 
financial results of both of the swap counterparties.
    (2) For purposes of this section:
    (i) A counterparty or third party directly or indirectly holds a 
majority ownership interest if it directly or indirectly holds a 
majority of the equity securities of an entity, or the right to receive 
upon dissolution, or the contribution of, a majority of the capital of a 
partnership; and
    (ii) The term ``eligible affiliate counterparty'' means an entity 
that meets the requirements of this paragraph.
    (b) Additional conditions. Eligible affiliate counterparties to a 
swap may elect the exemption described in paragraph (a) of this section 
if:

[[Page 201]]

    (1) Both counterparties elect not to clear the swap;
    (2)(i) A swap dealer or major swap participant that is an eligible 
affiliate counterparty to the swap satisfies the requirements of Sec.  
23.504 of this chapter; or
    (ii) If neither eligible affiliate counterparty is a swap dealer or 
major swap participant, the terms of the swap are documented in a swap 
trading relationship document that shall be in writing and shall include 
all terms governing the trading relationship between the eligible 
affiliate counterparties;
    (3) The swap is subject to a centralized risk management program 
that is reasonably designed to monitor and manage the risks associated 
with the swap. If at least one of the eligible affiliate counterparties 
is a swap dealer or major swap participant, this centralized risk 
management requirement shall be satisfied by complying with the 
requirements of Sec.  23.600 of this chapter; and
    (4)(i) Each eligible affiliate counterparty that enters into a swap, 
which is included in a class of swaps identified in Sec.  50.4, with an 
unaffiliated counterparty shall:
    (A) Comply with the requirements for clearing the swap in section 
2(h) of the Act and this part;
    (B) Comply with the requirements for clearing the swap under a 
foreign jurisdiction's clearing mandate that is comparable, and 
comprehensive but not necessarily identical, to the clearing requirement 
of section 2(h) of the Act and this part, as determined by the 
Commission;
    (C) Comply with an exception or exemption under section 2(h)(7) of 
the Act or this part;
    (D) Comply with an exception or exemption under a foreign 
jurisdiction's clearing mandate, provided that:
    (1) The foreign jurisdiction's clearing mandate is comparable, and 
comprehensive but not necessarily identical, to the clearing requirement 
of section 2(h) of the Act and this part, as determined by the 
Commission; and
    (2) The foreign jurisdiction's exception or exemption is comparable 
to an exception or exemption under section 2(h)(7) of the Act or this 
part, as determined by the Commission; or
    (E) Clear such swap through a registered derivatives clearing 
organization or a clearing organization that is subject to supervision 
by appropriate government authorities in the home country of the 
clearing organization and has been assessed to be in compliance with the 
Principles for Financial Market Infrastructures.
    (ii)(A) Except as provided in paragraph (b)(4)(ii)(B) of this 
section, if one of the eligible affiliate counterparties is located in 
the European Union, Japan, or Singapore, the following may satisfy the 
requirements of paragraph (b)(4)(i) of this section until March 11, 
2014:
    (1) Each eligible affiliate counterparty, or a third party that 
directly or indirectly holds a majority interest in both eligible 
affiliate counterparties, pays and collects full variation margin daily 
on all swaps entered into between the eligible affiliate counterparty 
located in the European Union, Japan, or Singapore and an unaffiliated 
counterparty; or
    (2) Each eligible affiliate counterparty, or a third party that 
directly or indirectly holds a majority interest in both eligible 
affiliate counterparties, pays and collects full variation margin daily 
on all of the eligible affiliate counterparties' swaps with other 
eligible affiliate counterparties.
    (B) If one of the eligible affiliate counterparties is located in 
the European Union, Japan, or Singapore, the requirements of paragraph 
(b)(4)(i) of this section shall not apply to the eligible affiliate 
counterparty located in the European Union, Japan, or Singapore until 
March 11, 2014, provided that:
    (1) The one counterparty that directly or indirectly holds a 
majority ownership interest in the other counterparty or the third party 
that directly or indirectly holds a majority ownership interest in both 
counterparties is not a ``financial entity'' as defined in section 
2(h)(7)(C)(i) of the Act; and

[[Page 202]]

    (2) Neither eligible affiliate counterparty is affiliated with an 
entity that is a swap dealer or major swap participant, as defined in 
Sec.  1.3.
    (iii) If an eligible affiliate counterparty located in the United 
States enters into swaps, which are included in a class of swaps 
identified in Sec.  50.4, with eligible affiliate counterparties located 
in jurisdictions other than the United States, the European Union, 
Japan, and Singapore, and the aggregate notional value of such swaps, 
which are included in a class of swaps identified in Sec.  50.4, does 
not exceed five percent of the aggregate notional value of all swaps, 
which are included in a class of swaps identified in Sec.  50.4, in each 
instance the notional value as measured in U.S. dollar equivalents and 
calculated for each calendar quarter, entered into by the eligible 
affiliate counterparty located in the United States, then such swaps 
shall be deemed to satisfy the requirements of paragraph (b)(4)(i) of 
this section until March 11, 2014, provided that:
    (A) Each eligible affiliate counterparty, or a third party that 
directly or indirectly holds a majority interest in both eligible 
affiliate counterparties, pays and collects full variation margin daily 
on all swaps entered into between the eligible affiliate counterparties 
located in jurisdictions other than the United States, the European 
Union, Japan, and Singapore and an unaffiliated counterparty; or
    (B) Each eligible affiliate counterparty, or a third party that 
directly or indirectly holds a majority interest in both eligible 
affiliate counterparties, pays and collects full variation margin daily 
on all of the eligible affiliate counterparties' swaps with other 
eligible affiliate counterparties.
    (c) Reporting requirements. When the exemption described in 
paragraph (a) of this section is elected, the reporting counterparty, as 
determined in accordance with Sec.  45.8 of this chapter, shall provide 
or cause to be provided the following information to a registered swap 
data repository or, if no registered swap data repository is available 
to receive the information from the reporting counterparty, to the 
Commission, in the form and manner specified by the Commission:
    (1) Confirmation that both eligible affiliate counterparties to the 
swap are electing not to clear the swap and that each of the electing 
eligible affiliate counterparties satisfies the requirements in 
paragraph (b) of this section applicable to it;
    (2) For each electing eligible affiliate counterparty, how the 
counterparty generally meets its financial obligations associated with 
entering into non-cleared swaps by identifying one or more of the 
following categories, as applicable:
    (i) A written credit support agreement;
    (ii) Pledged or segregated assets (including posting or receiving 
margin pursuant to a credit support agreement or otherwise);
    (iii) A written guarantee from another party;
    (iv) The electing counterparty's available financial resources; or
    (v) Means other than those described in paragraphs (c)(2)(i), (ii), 
(iii) or (iv) of this section; and
    (3) If an electing eligible affiliate counterparty is an entity that 
is an issuer of securities registered under section 12 of, or is 
required to file reports under section 15(d) of, the Securities Exchange 
Act of 1934:
    (i) The relevant SEC Central Index Key number for that counterparty; 
and
    (ii) Acknowledgment that an appropriate committee of the board of 
directors (or equivalent body) of the eligible affiliate counterparty 
has reviewed and approved the decision to enter into swaps that are 
exempt from the requirements of section 2(h)(1) and 2(h)(8) of the Act.
    (d) Annual reporting. An eligible affiliate counterparty that 
qualifies for the exemption described in paragraph (a) of this section 
may report the information listed in paragraphs (c)(2) and (3) of this 
section annually in anticipation of electing the exemption for one or 
more swaps. Any such reporting by a reporting counterparty under this 
paragraph will be effective for purposes of paragraphs (c)(2) and (3) of 
this section for 365 days following the date of such reporting. During 
the 365-day period, the reporting counterparty shall

[[Page 203]]

amend the report as necessary to reflect any material changes to the 
information reported. Each reporting counterparty shall have a 
reasonable basis to believe that the eligible affiliate counterparties 
meet the requirements for the exemption under this section.

[78 FR 21783, Apr. 11, 2013]



PART 75_PROPRIETARY TRADING AND CERTAIN INTERESTS IN AND
RELATIONSHIPS WITH COVERED FUNDS--Table of Contents



                   Subpart A_Authority and Definitions

Sec.
75.1 Authority, purpose, scope, and relationship to other authorities.
75.2 Definitions.

                      Subpart B_Proprietary Trading

75.3 Prohibition on proprietary trading.
75.4 Permitted underwriting and market making-related activities.
75.5 Permitted risk-mitigating hedging activities.
75.6 Other permitted proprietary trading activities.
75.7 Limitations on permitted proprietary trading activities.
75.8-75.9 [Reserved]

            Subpart C_Covered Fund Activities and Investments

75.10 Prohibition on acquiring or retaining an ownership interest in and 
          having certain relationships with a covered fund.
75.11 Permitted organizing and offering, underwriting, and market making 
          with respect to a covered fund.
75.12 Permitted investment in a covered fund.
75.13 Other permitted covered fund activities and investments.
75.14 Limitations on relationships with a covered fund.
75.15 Other limitations on permitted covered fund activities.
75.16 Ownership of interests in and sponsorship of issuers of certain 
          collateralized debt obligations backed by trust-preferred 
          securities.
75.17-75.19 [Reserved]

          Subpart D_Compliance Program Requirement; Violations

75.20 Program for compliance; reporting.
75.21 Termination of activities or investments; penalties for 
          violations.

Appendix A to Part 75--Reporting and Recordkeeping Requirements for 
          Covered Trading Activities
Appendix Z to Part 75--Proprietary Trading and Certain Interests in and 
          Relationships with Covered Funds (Alternative Compliance)

    Authority: 12 U.S.C. 1851.

    Source: 79 FR 6048, Jan. 31, 2014, unless otherwise noted.



                   Subpart A_Authority and Definitions



Sec.  75.1  Authority, purpose, scope, and relationship to other
authorities.

    (a) Authority. This part is issued by the Commission under section 
13 of the Bank Holding Company Act of 1956, as amended (12 U.S.C. 1851).
    (b) Purpose. Section 13 of the Bank Holding Company Act establishes 
prohibitions and restrictions on proprietary trading by, and investments 
in or relationships with covered funds by, certain banking entities. 
This part implements section 13 of the Bank Holding Company Act by 
defining terms used in the statute and related terms, establishing 
prohibitions and restrictions on proprietary trading and investments in 
or relationships with covered funds, and further explaining the 
statute's requirements.
    (c) Scope. This part implements section 13 of the Bank Holding 
Company Act with respect to banking entities for which the CFTC is the 
primary financial regulatory agency, as defined in section 2(12) of the 
Dodd-Frank Act, but does not include such entities to the extent they 
are not within the definition of banking entity in Sec.  75.2(c).
    (d) Relationship to other authorities. Except as otherwise provided 
under section 13 of the BHC Act, and notwithstanding any other provision 
of law, the prohibitions and restrictions under section 13 of the BHC 
Act shall apply to the activities of an applicable banking entity, even 
if such activities are authorized for the applicable banking entity 
under other applicable provisions of law.

[79 FR 6048, Jan. 31, 2014, as amended at 84 FR 35021, July 22, 2019]

[[Page 204]]



Sec.  75.2  Definitions.

    Unless otherwise specified, for purposes of this part:
    (a) Affiliate has the same meaning as in section 2(k) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1841(k)).
    (b) Bank holding company has the same meaning as in section 2 of the 
Bank Holding Company Act of 1956 (12 U.S.C. 1841).
    (c) Banking entity. (1) Except as provided in paragraph (c)(2) of 
this section, banking entity means:
    (i) Any insured depository institution;
    (ii) Any company that controls an insured depository institution;
    (iii) Any company that is treated as a bank holding company for 
purposes of section 8 of the International Banking Act of 1978 (12 
U.S.C. 3106); and
    (iv) Any affiliate or subsidiary of any entity described in 
paragraph (c)(1)(i), (ii), or (iii) of this section.
    (2) Banking entity does not include:
    (i) A covered fund that is not itself a banking entity under 
paragraph (c)(1)(i), (ii), or (iii) of this section;
    (ii) A portfolio company held under the authority contained in 
section 4(k)(4)(H) or (I) of the BHC Act (12 U.S.C. 1843(k)(4)(H), (I)), 
or any portfolio concern, as defined under 13 CFR 107.50, that is 
controlled by a small business investment company, as defined in section 
103(3) of the Small Business Investment Act of 1958 (15 U.S.C. 662), so 
long as the portfolio company or portfolio concern is not itself a 
banking entity under paragraph (c)(1)(i), (ii), or (iii) of this 
section; or
    (iii) The FDIC acting in its corporate capacity or as conservator or 
receiver under the Federal Deposit Insurance Act or Title II of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act.
    (d) Board means the Board of Governors of the Federal Reserve 
System.
    (e) CFTC means the Commodity Futures Trading Commission.
    (f) Dealer has the same meaning as in section 3(a)(5) of the 
Exchange Act (15 U.S.C. 78c(a)(5)).
    (g) Depository institution has the same meaning as in section 3(c) 
of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)).
    (h) Derivative. (1) Except as provided in paragraph (h)(2) of this 
section, derivative means:
    (i) Any swap, as that term is defined in section 1a(47) of the 
Commodity Exchange Act (7 U.S.C. 1a(47)), or security-based swap, as 
that term is defined in section 3(a)(68) of the Exchange Act (15 U.S.C. 
78c(a)(68));
    (ii) Any purchase or sale of a commodity, that is not an excluded 
commodity, for deferred shipment or delivery that is intended to be 
physically settled;
    (iii) Any foreign exchange forward (as that term is defined in 
section 1a(24) of the Commodity Exchange Act (7 U.S.C. 1a(24)) or 
foreign exchange swap (as that term is defined in section 1a(25) of the 
Commodity Exchange Act (7 U.S.C. 1a(25));
    (iv) Any agreement, contract, or transaction in foreign currency 
described in section 2(c)(2)(C)(i) of the Commodity Exchange Act (7 
U.S.C. 2(c)(2)(C)(i));
    (v) Any agreement, contract, or transaction in a commodity other 
than foreign currency described in section 2(c)(2)(D)(i) of the 
Commodity Exchange Act (7 U.S.C. 2(c)(2)(D)(i)); and
    (vi) Any transaction authorized under section 19 of the Commodity 
Exchange Act (7 U.S.C. 23(a) or (b));
    (2) A derivative does not include:
    (i) Any consumer, commercial, or other agreement, contract, or 
transaction that the CFTC and SEC have further defined by joint 
regulation, interpretation, or other action as not within the definition 
of swap, as that term is defined in section 1a(47) of the Commodity 
Exchange Act (7 U.S.C. 1a(47)), or security-based swap, as that term is 
defined in section 3(a)(68) of the Exchange Act (15 U.S.C. 78c(a)(68)); 
or
    (ii) Any identified banking product, as defined in section 402(b) of 
the Legal Certainty for Bank Products Act of 2000 (7 U.S.C. 27(b)), that 
is subject to section 403(a) of that Act (7 U.S.C. 27a(a)).
    (i) Employee includes a member of the immediate family of the 
employee.
    (j) Exchange Act means the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.).
    (k) Excluded commodity has the same meaning as in section 1a(19) of 
the

[[Page 205]]

Commodity Exchange Act (7 U.S.C. 1a(19)).
    (l) FDIC means the Federal Deposit Insurance Corporation.
    (m) Federal banking agencies means the Board, the Office of the 
Comptroller of the Currency, and the FDIC.
    (n) Foreign banking organization has the same meaning as in Sec.  
211.21(o) of the Board's Regulation K (12 CFR 211.21(o)), but does not 
include a foreign bank, as defined in section 1(b)(7) of the 
International Banking Act of 1978 (12 U.S.C. 3101(7)), that is organized 
under the laws of the Commonwealth of Puerto Rico, Guam, American Samoa, 
the United States Virgin Islands, or the Commonwealth of the Northern 
Mariana Islands.
    (o) Foreign insurance regulator means the insurance commissioner, or 
a similar official or agency, of any country other than the United 
States that is engaged in the supervision of insurance companies under 
foreign insurance law.
    (p) General account means all of the assets of an insurance company 
except those allocated to one or more separate accounts.
    (q) Insurance company means a company that is organized as an 
insurance company, primarily and predominantly engaged in writing 
insurance or reinsuring risks underwritten by insurance companies, 
subject to supervision as such by a state insurance regulator or a 
foreign insurance regulator, and not operated for the purpose of evading 
the provisions of section 13 of the BHC Act (12 U.S.C. 1851).
    (r) Insured depository institution has the same meaning as in 
section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)), 
but does not include: (1) An insured depository institution that is 
described in section 2(c)(2)(D) of the BHC Act (12 U.S.C. 
1841(c)(2)(D)); or (2) An insured depository institution if it has, and 
if every company that controls it has, total consolidated assets of $10 
billion or less and total trading assets and trading liabilities, on a 
consolidated basis, that are 5 percent or less of total consolidated 
assets.
    (s) Limited trading assets and liabilities means with respect to a 
banking entity that:
    (1)(i) The banking entity has, together with its affiliates and 
subsidiaries, trading assets and liabilities (excluding trading assets 
and liabilities attributable to trading activities permitted pursuant to 
Sec.  75.6(a)(1) and (2) of subpart B) the average gross sum of which 
over the previous consecutive four quarters, as measured as of the last 
day of each of the four previous calendar quarters, is less than $1 
billion; and
    (ii) The CFTC has not determined pursuant to Sec.  75.20(g) or (h) 
of this part that the banking entity should not be treated as having 
limited trading assets and liabilities.
    (2) With respect to a banking entity other than a banking entity 
described in paragraph (s)(3) of this section, trading assets and 
liabilities for purposes of this paragraph (s) means trading assets and 
liabilities (excluding trading assets and liabilities attributable to 
trading activities permitted pursuant to Sec.  75.6(a)(1) and (2) of 
subpart B) on a worldwide consolidated basis.
    (3)(i) With respect to a banking entity that is a foreign banking 
organization or a subsidiary of a foreign banking organization, trading 
assets and liabilities for purposes of this paragraph (s) means the 
trading assets and liabilities (excluding trading assets and liabilities 
attributable to trading activities permitted pursuant to Sec.  
75.6(a)(1) and (2) of subpart B) of the combined U.S. operations of the 
top-tier foreign banking organization (including all subsidiaries, 
affiliates, branches, and agencies of the foreign banking organization 
operating, located, or organized in the United States).
    (ii) For purposes of paragraph (s)(3)(i) of this section, a U.S. 
branch, agency, or subsidiary of a banking entity is located in the 
United States; however, the foreign bank that operates or controls that 
branch, agency, or subsidiary is not considered to be located in the 
United States solely by virtue of operating or controlling the U.S. 
branch, agency, or subsidiary. For purposes of paragraph (s)(3)(i) of 
this section, all foreign operations of a U.S. agency, branch, or 
subsidiary of a foreign banking organization are considered to be 
located in the United States, including branches outside the United 
States that are managed or controlled

[[Page 206]]

by a U.S. branch or agency of the foreign banking organization, for 
purposes of calculating the banking entity's U.S. trading assets and 
liabilities.
    (t) Loan means any loan, lease, extension of credit, or secured or 
unsecured receivable that is not a security or derivative.
    (u) Moderate trading assets and liabilities means, with respect to a 
banking entity, that the banking entity does not have significant 
trading assets and liabilities or limited trading assets and 
liabilities.
    (v) Primary financial regulatory agency has the same meaning as in 
section 2(12) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (12 U.S.C. 5301(12)).
    (w) Purchase includes any contract to buy, purchase, or otherwise 
acquire. For security futures products, purchase includes any contract, 
agreement, or transaction for future delivery. With respect to a 
commodity future, purchase includes any contract, agreement, or 
transaction for future delivery. With respect to a derivative, purchase 
includes the execution, termination (prior to its scheduled maturity 
date), assignment, exchange, or similar transfer or conveyance of, or 
extinguishing of rights or obligations under, a derivative, as the 
context may require.
    (x) Qualifying foreign banking organization means a foreign banking 
organization that qualifies as such under Sec.  211.23(a), (c) or (e) of 
the Board's Regulation K (12 CFR 211.23(a), (c), or (e)).
    (y) SEC means the Securities and Exchange Commission.
    (z) Sale and sell each include any contract to sell or otherwise 
dispose of. For security futures products, such terms include any 
contract, agreement, or transaction for future delivery. With respect to 
a commodity future, such terms include any contract, agreement, or 
transaction for future delivery. With respect to a derivative, such 
terms include the execution, termination (prior to its scheduled 
maturity date), assignment, exchange, or similar transfer or conveyance 
of, or extinguishing of rights or obligations under, a derivative, as 
the context may require.
    (aa) Security has the meaning specified in section 3(a)(10) of the 
Exchange Act (15 U.S.C. 78c(a)(10)).
    (bb) Security-based swap dealer has the same meaning as in section 
3(a)(71) of the Exchange Act (15 U.S.C. 78c(a)(71)).
    (cc) Security future has the meaning specified in section 3(a)(55) 
of the Exchange Act (15 U.S.C. 78c(a)(55)).
    (dd) Separate account means an account established and maintained by 
an insurance company in connection with one or more insurance contracts 
to hold assets that are legally segregated from the insurance company's 
other assets, under which income, gains, and losses, whether or not 
realized, from assets allocated to such account, are, in accordance with 
the applicable contract, credited to or charged against such account 
without regard to other income, gains, or losses of the insurance 
company.
    (ee) Significant trading assets and liabilities means with respect 
to a banking entity that:
    (1)(i) The banking entity has, together with its affiliates and 
subsidiaries, trading assets and liabilities the average gross sum of 
which over the previous consecutive four quarters, as measured as of the 
last day of each of the four previous calendar quarters, equals or 
exceeds $20 billion; or
    (ii) The CFTC has determined pursuant to Sec.  75.20(h) of this part 
that the banking entity should be treated as having significant trading 
assets and liabilities.
    (2) With respect to a banking entity, other than a banking entity 
described in paragraph (ee)(3) of this section, trading assets and 
liabilities for purposes of this paragraph (ee) means trading assets and 
liabilities (excluding trading assets and liabilities attributable to 
trading activities permitted pursuant to Sec.  75.6(a)(1) and (2) of 
subpart B) on a worldwide consolidated basis.
    (3)(i) With respect to a banking entity that is a foreign banking 
organization or a subsidiary of a foreign banking organization, trading 
assets and liabilities for purposes of this paragraph (ee) means the 
trading assets and liabilities (excluding trading assets and liabilities 
attributable to trading activities permitted pursuant to

[[Page 207]]

Sec.  75.6(a)(1) and (2) of subpart B) of the combined U.S. operations 
of the top-tier foreign banking organization (including all 
subsidiaries, affiliates, branches, and agencies of the foreign banking 
organization operating, located, or organized in the United States as 
well as branches outside the United States that are managed or 
controlled by a branch or agency of the foreign banking entity 
operating, located or organized in the United States).
    (ii) For purposes of paragraph (ee)(3)(i) of this section, a U.S. 
branch, agency, or subsidiary of a banking entity is located in the 
United States; however, the foreign bank that operates or controls that 
branch, agency, or subsidiary is not considered to be located in the 
United States solely by virtue of operating or controlling the U.S. 
branch, agency, or subsidiary. For purposes of paragraph (ee)(3)(i) of 
this section, all foreign operations of a U.S. agency, branch, or 
subsidiary of a foreign banking organization are considered to be 
located in the United States for purposes of calculating the banking 
entity's U.S. trading assets and liabilities.
    (ff) State means any State, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, American Samoa, the United States 
Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
    (gg) Subsidiary has the same meaning as in section 2(d) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1841(d)).
    (hh) State insurance regulator means the insurance commissioner, or 
a similar official or agency, of a State that is engaged in the 
supervision of insurance companies under State insurance law.
    (ii) Swap dealer has the same meaning as in section 1(a)(49) of the 
Commodity Exchange Act (7 U.S.C. 1a(49)).

[84 FR 62201, Nov. 14, 2019]



                      Subpart B_Proprietary Trading



Sec.  75.3  Prohibition on proprietary trading.

    (a) Prohibition. Except as otherwise provided in this subpart, a 
banking entity may not engage in proprietary trading. Proprietary 
trading means engaging as principal for the trading account of the 
banking entity in any purchase or sale of one or more financial 
instruments.
    (b) Definition of trading account--(1) Trading account. Trading 
account means:
    (i) Any account that is used by a banking entity to purchase or sell 
one or more financial instruments principally for the purpose of short-
term resale, benefitting from actual or expected short-term price 
movements, realizing short-term arbitrage profits, or hedging one or 
more of the positions resulting from the purchases or sales of financial 
instruments described in this paragraph;
    (ii) Any account that is used by a banking entity to purchase or 
sell one or more financial instruments that are both market risk capital 
rule covered positions and trading positions (or hedges of other market 
risk capital rule covered positions), if the banking entity, or any 
affiliate with which the banking entity is consolidated for regulatory 
reporting purposes, calculates risk-based capital ratios under the 
market risk capital rule; or
    (iii) Any account that is used by a banking entity to purchase or 
sell one or more financial instruments, if the banking entity:
    (A) Is licensed or registered, or is required to be licensed or 
registered, to engage in the business of a dealer, swap dealer, or 
security-based swap dealer, to the extent the instrument is purchased or 
sold in connection with the activities that require the banking entity 
to be licensed or registered as such; or
    (B) Is engaged in the business of a dealer, swap dealer, or 
security-based swap dealer outside of the United States, to the extent 
the instrument is purchased or sold in connection with the activities of 
such business.
    (2) Trading account application for certain banking entities. (i) A 
banking entity that is subject to paragraph (b)(1)(ii) of this section 
in determining the scope of its trading account is not subject to 
paragraph (b)(1)(i) of this section.
    (ii) A banking entity that does not calculate risk-based capital 
ratios under the market risk capital rule and is not a consolidated 
affiliate for regulatory reporting purposes of a banking

[[Page 208]]

entity that calculates risk based capital ratios under the market risk 
capital rule may elect to apply paragraph (b)(1)(ii) of this section in 
determining the scope of its trading account as if it were subject to 
that paragraph. A banking entity that elects under this subsection to 
apply paragraph (b)(1)(ii) of this section in determining the scope of 
its trading account as if it were subject to that paragraph is not 
required to apply paragraph (b)(1)(i) of this section.
    (3) Consistency of account election for certain banking entities. 
(i) Any election or change to an election under paragraph (b)(2)(ii) of 
this section must apply to the electing banking entity and all of its 
wholly owned subsidiaries. The primary financial regulatory agency of a 
banking entity that is affiliated with but is not a wholly owned 
subsidiary of such electing banking entity may require that the banking 
entity be subject to this uniform application requirement if the primary 
financial regulatory agency determines that it is necessary to prevent 
evasion of the requirements of this part after notice and opportunity 
for response as provided in subpart D of this part.
    (ii) A banking entity that does not elect under paragraph (b)(2)(ii) 
of this section to be subject to the trading account definition in 
(b)(1)(ii) may continue to apply the trading account definition in 
paragraph (b)(1)(i) of this section for one year from the date on which 
it becomes, or becomes a consolidated affiliate for regulatory reporting 
purposes with, a banking entity that calculates risk-based capital 
ratios under the market risk capital rule.
    (4) Rebuttable presumption for certain purchases and sales. The 
purchase (or sale) of a financial instrument by a banking entity shall 
be presumed not to be for the trading account of the banking entity 
under paragraph (b)(1)(i) of this section if the banking entity holds 
the financial instrument for sixty days or longer and does not transfer 
substantially all of the risk of the financial instrument within sixty 
days of the purchase (or sale).
    (c) Financial instrument--(1) Financial instrument means:
    (i) A security, including an option on a security;
    (ii) A derivative, including an option on a derivative; or
    (iii) A contract of sale of a commodity for future delivery, or 
option on a contract of sale of a commodity for future delivery.
    (2) A financial instrument does not include:
    (i) A loan;
    (ii) A commodity that is not:
    (A) An excluded commodity (other than foreign exchange or currency);
    (B) A derivative;
    (C) A contract of sale of a commodity for future delivery; or
    (D) An option on a contract of sale of a commodity for future 
delivery; or
    (iii) Foreign exchange or currency.
    (d) Proprietary trading does not include:--(1) Any purchase or sale 
of one or more financial instruments by a banking entity that arises 
under a repurchase or reverse repurchase agreement pursuant to which the 
banking entity has simultaneously agreed, in writing, to both purchase 
and sell a stated asset, at stated prices, and on stated dates or on 
demand with the same counterparty;
    (2) Any purchase or sale of one or more financial instruments by a 
banking entity that arises under a transaction in which the banking 
entity lends or borrows a security temporarily to or from another party 
pursuant to a written securities lending agreement under which the 
lender retains the economic interests of an owner of such security, and 
has the right to terminate the transaction and to recall the loaned 
security on terms agreed by the parties;
    (3) Any purchase or sale of a security, foreign exchange forward (as 
that term is defined in section 1a(24) of the Commodity Exchange Act (7 
U.S.C. 1a(24)), foreign exchange swap (as that term is defined in 
section 1a(25) of the Commodity Exchange Act (7 U.S.C. 1a(25)), or 
cross-currency swap by a banking entity for the purpose of liquidity 
management in accordance with a documented liquidity management plan of 
the banking entity that:

[[Page 209]]

    (i) Specifically contemplates and authorizes the particular 
financial instruments to be used for liquidity management purposes, the 
amount, types, and risks of these financial instruments that are 
consistent with liquidity management, and the liquidity circumstances in 
which the particular financial instruments may or must be used;
    (ii) Requires that any purchase or sale of financial instruments 
contemplated and authorized by the plan be principally for the purpose 
of managing the liquidity of the banking entity, and not for the purpose 
of short-term resale, benefitting from actual or expected short-term 
price movements, realizing short-term arbitrage profits, or hedging a 
position taken for such short-term purposes;
    (iii) Requires that any financial instruments purchased or sold for 
liquidity management purposes be highly liquid and limited to financial 
instruments the market, credit, and other risks of which the banking 
entity does not reasonably expect to give rise to appreciable profits or 
losses as a result of short-term price movements;
    (iv) Limits any financial instruments purchased or sold for 
liquidity management purposes, together with any other financial 
instruments purchased or sold for such purposes, to an amount that is 
consistent with the banking entity's near-term funding needs, including 
deviations from normal operations of the banking entity or any affiliate 
thereof, as estimated and documented pursuant to methods specified in 
the plan;
    (v) Includes written policies and procedures, internal controls, 
analysis, and independent testing to ensure that the purchase and sale 
of financial instruments that are not permitted under Sec.  75.6(a) or 
(b) of this subpart are for the purpose of liquidity management and in 
accordance with the liquidity management plan described in this 
paragraph (d)(3); and
    (vi) Is consistent with the CFTC's regulatory requirements regarding 
liquidity management;
    (4) Any purchase or sale of one or more financial instruments by a 
banking entity that is a derivatives clearing organization or a clearing 
agency in connection with clearing financial instruments;
    (5) Any excluded clearing activities by a banking entity that is a 
member of a clearing agency, a member of a derivatives clearing 
organization, or a member of a designated financial market utility;
    (6) Any purchase or sale of one or more financial instruments by a 
banking entity, so long as:
    (i) The purchase (or sale) satisfies an existing delivery obligation 
of the banking entity or its customers, including to prevent or close 
out a failure to deliver, in connection with delivery, clearing, or 
settlement activity; or
    (ii) The purchase (or sale) satisfies an obligation of the banking 
entity in connection with a judicial, administrative, self-regulatory 
organization, or arbitration proceeding;
    (7) Any purchase or sale of one or more financial instruments by a 
banking entity that is acting solely as agent, broker, or custodian;
    (8) Any purchase or sale of one or more financial instruments by a 
banking entity through a deferred compensation, stock-bonus, profit-
sharing, or pension plan of the banking entity that is established and 
administered in accordance with the law of the United States or a 
foreign sovereign, if the purchase or sale is made directly or 
indirectly by the banking entity as trustee for the benefit of persons 
who are or were employees of the banking entity;
    (9) Any purchase or sale of one or more financial instruments by a 
banking entity in the ordinary course of collecting a debt previously 
contracted in good faith, provided that the banking entity divests the 
financial instrument as soon as practicable, and in no event may the 
banking entity retain such instrument for longer than such period 
permitted by the OCC;
    (10) Any purchase or sale of one or more financial instruments that 
was made in error by a banking entity in the course of conducting a 
permitted or excluded activity or is a subsequent transaction to correct 
such an error;
    (11) Contemporaneously entering into a customer-driven swap or 
customer-driven security-based swap and a

[[Page 210]]

matched swap or security-based swap if:
    (i) The banking entity retains no more than minimal price risk; and
    (ii) The banking entity is not a registered dealer, swap dealer, or 
security-based swap dealer;
    (12) Any purchase or sale of one or more financial instruments that 
the banking entity uses to hedge mortgage servicing rights or mortgage 
servicing assets in accordance with a documented hedging strategy; or
    (13) Any purchase or sale of a financial instrument that does not 
meet the definition of trading asset or trading liability under the 
applicable reporting form for a banking entity as of January 1, 2020.
    (e) Definition of other terms related to proprietary trading. For 
purposes of this subpart:
    (1) Anonymous means that each party to a purchase or sale is unaware 
of the identity of the other party(ies) to the purchase or sale.
    (2) Clearing agency has the same meaning as in section 3(a)(23) of 
the Exchange Act (15 U.S.C. 78c(a)(23)).
    (3) Commodity has the same meaning as in section 1a(9) of the 
Commodity Exchange Act (7 U.S.C. 1a(9)), except that a commodity does 
not include any security;
    (4) Contract of sale of a commodity for future delivery means a 
contract of sale (as that term is defined in section 1a(13) of the 
Commodity Exchange Act (7 U.S.C. 1a(13)) for future delivery (as that 
term is defined in section 1a(27) of the Commodity Exchange Act (7 
U.S.C. 1a(27))).
    (5) Cross-currency swap means a swap in which one party exchanges 
with another party principal and interest rate payments in one currency 
for principal and interest rate payments in another currency, and the 
exchange of principal occurs on the date the swap is entered into, with 
a reversal of the exchange of principal at a later date that is agreed 
upon when the swap is entered into.
    (6) Derivatives clearing organization means:
    (i) A derivatives clearing organization registered under section 5b 
of the Commodity Exchange Act (7 U.S.C. 7a-1);
    (ii) A derivatives clearing organization that, pursuant to CFTC 
regulation, is exempt from the registration requirements under section 
5b of the Commodity Exchange Act (7 U.S.C. 7a-1); or
    (iii) A foreign derivatives clearing organization that, pursuant to 
CFTC regulation, is permitted to clear for a foreign board of trade that 
is registered with the CFTC.
    (7) Exchange, unless the context otherwise requires, means any 
designated contract market, swap execution facility, or foreign board of 
trade registered with the CFTC, or, for purposes of securities or 
security-based swaps, an exchange, as defined under section 3(a)(1) of 
the Exchange Act (15 U.S.C. 78c(a)(1)), or security-based swap execution 
facility, as defined under section 3(a)(77) of the Exchange Act (15 
U.S.C. 78c(a)(77)).
    (8) Excluded clearing activities means:
    (i) With respect to customer transactions cleared on a derivatives 
clearing organization, a clearing agency, or a designated financial 
market utility, any purchase or sale necessary to correct trading errors 
made by or on behalf of a customer provided that such purchase or sale 
is conducted in accordance with, for transactions cleared on a 
derivatives clearing organization, the Commodity Exchange Act, CFTC 
regulations, and the rules or procedures of the derivatives clearing 
organization, or, for transactions cleared on a clearing agency, the 
rules or procedures of the clearing agency, or, for transactions cleared 
on a designated financial market utility that is neither a derivatives 
clearing organization nor a clearing agency, the rules or procedures of 
the designated financial market utility;
    (ii) Any purchase or sale in connection with and related to the 
management of a default or threatened imminent default of a customer 
provided that such purchase or sale is conducted in accordance with, for 
transactions cleared on a derivatives clearing organization, the 
Commodity Exchange Act, CFTC regulations, and the rules or procedures of 
the derivatives clearing organization, or, for transactions cleared on a 
clearing agency, the rules or procedures of the clearing agency,

[[Page 211]]

or, for transactions cleared on a designated financial market utility 
that is neither a derivatives clearing organization nor a clearing 
agency, the rules or procedures of the designated financial market 
utility;
    (iii) Any purchase or sale in connection with and related to the 
management of a default or threatened imminent default of a member of a 
clearing agency, a member of a derivatives clearing organization, or a 
member of a designated financial market utility;
    (iv) Any purchase or sale in connection with and related to the 
management of the default or threatened default of a clearing agency, a 
derivatives clearing organization, or a designated financial market 
utility; and
    (v) Any purchase or sale that is required by the rules or procedures 
of a clearing agency, a derivatives clearing organization, or a 
designated financial market utility to mitigate the risk to the clearing 
agency, derivatives clearing organization, or designated financial 
market utility that would result from the clearing by a member of 
security-based swaps that reference the member or an affiliate of the 
member.
    (9) Designated financial market utility has the same meaning as in 
section 803(4) of the Dodd-Frank Act (12 U.S.C. 5462(4)).
    (10) Issuer has the same meaning as in section 2(a)(4) of the 
Securities Act of 1933 (15 U.S.C. 77b(a)(4)).
    (11) Market risk capital rule covered position and trading position 
means a financial instrument that meets the criteria to be a covered 
position and a trading position, as those terms are respectively 
defined, without regard to whether the financial instrument is reported 
as a covered position or trading position on any applicable regulatory 
reporting forms:
    (i) In the case of a banking entity that is a bank holding company, 
savings and loan holding company, or insured depository institution, 
under the market risk capital rule that is applicable to the banking 
entity; and
    (ii) In the case of a banking entity that is affiliated with a bank 
holding company or savings and loan holding company, other than a 
banking entity to which a market risk capital rule is applicable, under 
the market risk capital rule that is applicable to the affiliated bank 
holding company or savings and loan holding company.
    (12) Market risk capital rule means the market risk capital rule 
that is contained in 12 CFR part 3, subpart F, with respect to a banking 
entity for which the OCC is the primary financial regulatory agency, 12 
CFR part 217 with respect to a banking entity for which the Board is the 
primary financial regulatory agency, or 12 CFR part 324 with respect to 
a banking entity for which the FDIC is the primary financial regulatory 
agency.
    (13) Municipal security means a security that is a direct obligation 
of or issued by, or an obligation guaranteed as to principal or interest 
by, a State or any political subdivision thereof, or any agency or 
instrumentality of a State or any political subdivision thereof, or any 
municipal corporate instrumentality of one or more States or political 
subdivisions thereof.
    (14) Trading desk means a unit of organization of a banking entity 
that purchases or sells financial instruments for the trading account of 
the banking entity or an affiliate thereof that is:
    (i)(A) Structured by the banking entity to implement a well-defined 
business strategy;
    (B) Organized to ensure appropriate setting, monitoring, and 
management review of the desk's trading and hedging limits, current and 
potential future loss exposures, and strategies; and
    (C) Characterized by a clearly defined unit that:
    (1) Engages in coordinated trading activity with a unified approach 
to its key elements;
    (2) Operates subject to a common and calibrated set of risk metrics, 
risk levels, and joint trading limits;
    (3) Submits compliance reports and other information as a unit for 
monitoring by management; and
    (4) Books its trades together; or
    (ii) For a banking entity that calculates risk-based capital ratios 
under the market risk capital rule, or a consolidated affiliate for 
regulatory reporting purposes of a banking entity that calculates risk-
based capital ratios under the market risk capital rule, established by 
the banking entity or

[[Page 212]]

its affiliate for purposes of market risk capital calculations under the 
market risk capital rule.

[79 FR 6048, Jan. 31, 2014, as amended at 84 FR 62203, Nov. 14, 2019]



Sec.  75.4  Permitted underwriting and market making-related activities.

    (a) Underwriting activities--(1) Permitted underwriting activities. 
The prohibition contained in Sec.  75.3(a) does not apply to a banking 
entity's underwriting activities conducted in accordance with this 
paragraph (a).
    (2) Requirements. The underwriting activities of a banking entity 
are permitted under paragraph (a)(1) of this section only if:
    (i) The banking entity is acting as an underwriter for a 
distribution of securities and the trading desk's underwriting position 
is related to such distribution;
    (ii)(A) The amount and type of the securities in the trading desk's 
underwriting position are designed not to exceed the reasonably expected 
near term demands of clients, customers, or counterparties, taking into 
account the liquidity, maturity, and depth of the market for the 
relevant types of securities; and
    (B) Reasonable efforts are made to sell or otherwise reduce the 
underwriting position within a reasonable period, taking into account 
the liquidity, maturity, and depth of the market for the relevant types 
of securities;
    (iii) In the case of a banking entity with significant trading 
assets and liabilities, the banking entity has established and 
implements, maintains, and enforces an internal compliance program 
required by subpart D of this part that is reasonably designed to ensure 
the banking entity's compliance with the requirements of paragraph (a) 
of this section, including reasonably designed written policies and 
procedures, internal controls, analysis and independent testing 
identifying and addressing:
    (A) The products, instruments or exposures each trading desk may 
purchase, sell, or manage as part of its underwriting activities;
    (B) Limits for each trading desk, in accordance with paragraph 
(a)(2)(ii)(A) of this section;
    (C) Written authorization procedures, including escalation 
procedures that require review and approval of any trade that would 
exceed a trading desk's limit(s), demonstrable analysis of the basis for 
any temporary or permanent increase to a trading desk's limit(s), and 
independent review of such demonstrable analysis and approval; and
    (D) Internal controls and ongoing monitoring and analysis of each 
trading desk's compliance with its limits.
    (iv) A banking entity with significant trading assets and 
liabilities may satisfy the requirements in paragraphs (a)(2))iii)(B) 
and (C) of this section by complying with the requirements set forth 
below in paragraph (c) of this section;
    (v) The compensation arrangements of persons performing the 
activities described in this paragraph (a) are designed not to reward or 
incentivize prohibited proprietary trading; and
    (vi) The banking entity is licensed or registered to engage in the 
activity described in this paragraph (a) in accordance with applicable 
law.
    (3) Definition of distribution. For purposes of this paragraph (a), 
a distribution of securities means:
    (i) An offering of securities, whether or not subject to 
registration under the Securities Act of 1933, that is distinguished 
from ordinary trading transactions by the presence of special selling 
efforts and selling methods; or
    (ii) An offering of securities made pursuant to an effective 
registration statement under the Securities Act of 1933.
    (4) Definition of underwriter. For purposes of this paragraph (a), 
underwriter means:
    (i) A person who has agreed with an issuer or selling security 
holder to:
    (A) Purchase securities from the issuer or selling security holder 
for distribution;
    (B) Engage in a distribution of securities for or on behalf of the 
issuer or selling security holder; or
    (C) Manage a distribution of securities for or on behalf of the 
issuer or selling security holder; or
    (ii) A person who has agreed to participate or is participating in a 
distribution of such securities for or on

[[Page 213]]

behalf of the issuer or selling security holder.
    (5) Definition of selling security holder. For purposes of this 
paragraph (a), selling security holder means any person, other than an 
issuer, on whose behalf a distribution is made.
    (6) Definition of underwriting position. For purposes of this 
section, underwriting position means the long or short positions in one 
or more securities held by a banking entity or its affiliate, and 
managed by a particular trading desk, in connection with a particular 
distribution of securities for which such banking entity or affiliate is 
acting as an underwriter.
    (7) Definition of client, customer, and counterparty. For purposes 
of this paragraph (a), the terms client, customer, and counterparty, on 
a collective or individual basis, refer to market participants that may 
transact with the banking entity in connection with a particular 
distribution for which the banking entity is acting as underwriter.
    (b) Market making-related activities--(1) Permitted market making-
related activities. The prohibition contained in Sec.  75.3(a) does not 
apply to a banking entity's market making-related activities conducted 
in accordance with this paragraph (b).
    (2) Requirements. The market making-related activities of a banking 
entity are permitted under paragraph (b)(1) of this section only if:
    (i) The trading desk that establishes and manages the financial 
exposure, routinely stands ready to purchase and sell one or more types 
of financial instruments related to its financial exposure, and is 
willing and available to quote, purchase and sell, or otherwise enter 
into long and short positions in those types of financial instruments 
for its own account, in commercially reasonable amounts and throughout 
market cycles on a basis appropriate for the liquidity, maturity, and 
depth of the market for the relevant types of financial instruments;
    (ii) The trading desk's market-making related activities are 
designed not to exceed, on an ongoing basis, the reasonably expected 
near term demands of clients, customers, or counterparties, taking into 
account the liquidity, maturity, and depth of the market for the 
relevant types of financial instruments;
    (iii) In the case of a banking entity with significant trading 
assets and liabilities, the banking entity has established and 
implements, maintains, and enforces an internal compliance program 
required by subpart D of this part that is reasonably designed to ensure 
the banking entity's compliance with the requirements of paragraph (b) 
of this section, including reasonably designed written policies and 
procedures, internal controls, analysis and independent testing 
identifying and addressing:
    (A) The financial instruments each trading desk stands ready to 
purchase and sell in accordance with paragraph (b)(2)(i) of this 
section;
    (B) The actions the trading desk will take to demonstrably reduce or 
otherwise significantly mitigate promptly the risks of its financial 
exposure consistent with the limits required under paragraph 
(b)(2)(iii)(C) of this section; the products, instruments, and exposures 
each trading desk may use for risk management purposes; the techniques 
and strategies each trading desk may use to manage the risks of its 
market making-related activities and positions; and the process, 
strategies, and personnel responsible for ensuring that the actions 
taken by the trading desk to mitigate these risks are and continue to be 
effective;
    (C) Limits for each trading desk, in accordance with paragraph 
(b)(2)(ii) of this section;
    (D) Written authorization procedures, including escalation 
procedures that require review and approval of any trade that would 
exceed a trading desk's limit(s), demonstrable analysis of the basis for 
any temporary or permanent increase to a trading desk's limit(s), and 
independent review of such demonstrable analysis and approval; and
    (E) Internal controls and ongoing monitoring and analysis of each 
trading desk's compliance with its limits.
    (iv) A banking entity with significant trading assets and 
liabilities may satisfy the requirements in paragraphs (b)(2)(iii)(C) 
and (D) of this section by complying with the requirements set

[[Page 214]]

forth below in paragraph (c) of this section;
    (v) The compensation arrangements of persons performing the 
activities described in this paragraph (b) are designed not to reward or 
incentivize prohibited proprietary trading; and
    (vi) The banking entity is licensed or registered to engage in 
activity described in this paragraph (b) in accordance with applicable 
law.
    (3) Definition of client, customer, and counterparty. For purposes 
of paragraph (b) of this section, the terms client, customer, and 
counterparty, on a collective or individual basis refer to market 
participants that make use of the banking entity's market making-related 
services by obtaining such services, responding to quotations, or 
entering into a continuing relationship with respect to such services, 
provided that:
    (i) A trading desk or other organizational unit of another banking 
entity is not a client, customer, or counterparty of the trading desk if 
that other entity has trading assets and liabilities of $50 billion or 
more as measured in accordance with the methodology described in Sec.  
75.2(ee) of this part, unless:
    (A) The trading desk documents how and why a particular trading desk 
or other organizational unit of the entity should be treated as a 
client, customer, or counterparty of the trading desk for purposes of 
paragraph (b)(2) of this section; or
    (B) The purchase or sale by the trading desk is conducted 
anonymously on an exchange or similar trading facility that permits 
trading on behalf of a broad range of market participants.
    (ii) [Reserved]
    (4) Definition of financial exposure. For purposes of this section, 
financial exposure means the aggregate risks of one or more financial 
instruments and any associated loans, commodities, or foreign exchange 
or currency, held by a banking entity or its affiliate and managed by a 
particular trading desk as part of the trading desk's market making-
related activities.
    (5) Definition of market-maker positions. For the purposes of this 
section, market-maker positions means all of the positions in the 
financial instruments for which the trading desk stands ready to make a 
market in accordance with paragraph (b)(2)(i) of this section, that are 
managed by the trading desk, including the trading desk's open positions 
or exposures arising from open transactions.
    (c) Rebuttable presumption of compliance--(1) Internal limits. (i) A 
banking entity shall be presumed to meet the requirement in paragraph 
(a)(2)(ii)(A) or (b)(2)(ii) of this section with respect to the purchase 
or sale of a financial instrument if the banking entity has established 
and implements, maintains, and enforces the internal limits for the 
relevant trading desk as described in paragraph (c)(1)(ii) of this 
section.
    (ii)(A) With respect to underwriting activities conducted pursuant 
to paragraph (a) of this section, the presumption described in paragraph 
(c)(1)(i) of this section shall be available to each trading desk that 
establishes, implements, maintains, and enforces internal limits that 
should take into account the liquidity, maturity, and depth of the 
market for the relevant types of securities and are designed not to 
exceed the reasonably expected near term demands of clients, customers, 
or counterparties, based on the nature and amount of the trading desk's 
underwriting activities, on the:
    (1) Amount, types, and risk of its underwriting position;
    (2) Level of exposures to relevant risk factors arising from its 
underwriting position; and
    (3) Period of time a security may be held.
    (B) With respect to market making-related activities conducted 
pursuant to paragraph (b) of this section, the presumption described in 
paragraph (c)(1)(i) of this section shall be available to each trading 
desk that establishes, implements, maintains, and enforces internal 
limits that should take into account the liquidity, maturity, and depth 
of the market for the relevant types of financial instruments and are 
designed not to exceed the reasonably expected near term demands of 
clients, customers, or counterparties, based on the nature and amount of 
the trading desk's market-making related activities, that address the:

[[Page 215]]

    (1) Amount, types, and risks of its market-maker positions;
    (2) Amount, types, and risks of the products, instruments, and 
exposures the trading desk may use for risk management purposes;
    (3) Level of exposures to relevant risk factors arising from its 
financial exposure; and
    (4) Period of time a financial instrument may be held.
    (2) Supervisory review and oversight. The limits described in 
paragraph (c)(1) of this section shall be subject to supervisory review 
and oversight by the CFTC on an ongoing basis.
    (3) Limit Breaches and Increases. (i) With respect to any limit set 
pursuant to paragraph (c)(1)(ii)(A) or (B) of this section, a banking 
entity shall maintain and make available to the CFTC upon request 
records regarding:
    (A) Any limit that is exceeded; and
    (B) Any temporary or permanent increase to any limit(s), in each 
case in the form and manner as directed by the CFTC.
    (ii) In the event of a breach or increase of any limit set pursuant 
to paragraph (c)(1)(ii)(A) or (B) of this section, the presumption 
described in paragraph (c)(1)(i) of this section shall continue to be 
available only if the banking entity:
    (A) Takes action as promptly as possible after a breach to bring the 
trading desk into compliance; and
    (B) Follows established written authorization procedures, including 
escalation procedures that require review and approval of any trade that 
exceeds a trading desk's limit(s), demonstrable analysis of the basis 
for any temporary or permanent increase to a trading desk's limit(s), 
and independent review of such demonstrable analysis and approval.
    (4) Rebutting the presumption. The presumption in paragraph 
(c)(1)(i) of this section may be rebutted by the CFTC if the CFTC 
determines, taking into account the liquidity, maturity, and depth of 
the market for the relevant types of financial instruments and based on 
all relevant facts and circumstances, that a trading desk is engaging in 
activity that is not based on the reasonably expected near term demands 
of clients, customers, or counterparties. The CFTC's rebuttal of the 
presumption in paragraph (c)(1)(i) of this section must be made in 
accordance with the notice and response procedures in subpart D of this 
part.

[84 FR 62205, Nov. 14, 2019]



Sec.  75.5  Permitted risk-mitigating hedging activities.

    (a) Permitted risk-mitigating hedging activities. The prohibition 
contained in Sec.  75.3(a) does not apply to the risk-mitigating hedging 
activities of a banking entity in connection with and related to 
individual or aggregated positions, contracts, or other holdings of the 
banking entity and designed to reduce the specific risks to the banking 
entity in connection with and related to such positions, contracts, or 
other holdings.
    (b) Requirements. (1) The risk-mitigating hedging activities of a 
banking entity that has significant trading assets and liabilities are 
permitted under paragraph (a) of this section only if:
    (i) The banking entity has established and implements, maintains and 
enforces an internal compliance program required by subpart D of this 
part that is reasonably designed to ensure the banking entity's 
compliance with the requirements of this section, including:
    (A) Reasonably designed written policies and procedures regarding 
the positions, techniques and strategies that may be used for hedging, 
including documentation indicating what positions, contracts or other 
holdings a particular trading desk may use in its risk-mitigating 
hedging activities, as well as position and aging limits with respect to 
such positions, contracts or other holdings;
    (B) Internal controls and ongoing monitoring, management, and 
authorization procedures, including relevant escalation procedures; and
    (C) The conduct of analysis and independent testing designed to 
ensure that the positions, techniques and strategies that may be used 
for hedging may reasonably be expected to reduce or otherwise 
significantly mitigate the specific, identifiable risk(s) being hedged;
    (ii) The risk-mitigating hedging activity:

[[Page 216]]

    (A) Is conducted in accordance with the written policies, 
procedures, and internal controls required under this section;
    (B) At the inception of the hedging activity, including, without 
limitation, any adjustments to the hedging activity, is designed to 
reduce or otherwise significantly mitigate one or more specific, 
identifiable risks, including market risk, counterparty or other credit 
risk, currency or foreign exchange risk, interest rate risk, commodity 
price risk, basis risk, or similar risks, arising in connection with and 
related to identified positions, contracts, or other holdings of the 
banking entity, based upon the facts and circumstances of the identified 
underlying and hedging positions, contracts or other holdings and the 
risks and liquidity thereof;
    (C) Does not give rise, at the inception of the hedge, to any 
significant new or additional risk that is not itself hedged 
contemporaneously in accordance with this section;
    (D) Is subject to continuing review, monitoring and management by 
the banking entity that:
    (1) Is consistent with the written hedging policies and procedures 
required under paragraph (b)(1)(i) of this section;
    (2) Is designed to reduce or otherwise significantly mitigate the 
specific, identifiable risks that develop over time from the risk-
mitigating hedging activities undertaken under this section and the 
underlying positions, contracts, and other holdings of the banking 
entity, based upon the facts and circumstances of the underlying and 
hedging positions, contracts and other holdings of the banking entity 
and the risks and liquidity thereof; and
    (3) Requires ongoing recalibration of the hedging activity by the 
banking entity to ensure that the hedging activity satisfies the 
requirements set out in paragraph (b)(1)(ii) of this section and is not 
prohibited proprietary trading; and
    (iii) The compensation arrangements of persons performing risk-
mitigating hedging activities are designed not to reward or incentivize 
prohibited proprietary trading.
    (2) The risk-mitigating hedging activities of a banking entity that 
does not have significant trading assets and liabilities are permitted 
under paragraph (a) of this section only if the risk-mitigating hedging 
activity:
    (i) At the inception of the hedging activity, including, without 
limitation, any adjustments to the hedging activity, is designed to 
reduce or otherwise significantly mitigate one or more specific, 
identifiable risks, including market risk, counterparty or other credit 
risk, currency or foreign exchange risk, interest rate risk, commodity 
price risk, basis risk, or similar risks, arising in connection with and 
related to identified positions, contracts, or other holdings of the 
banking entity, based upon the facts and circumstances of the identified 
underlying and hedging positions, contracts or other holdings and the 
risks and liquidity thereof; and
    (ii) Is subject, as appropriate, to ongoing recalibration by the 
banking entity to ensure that the hedging activity satisfies the 
requirements set out in paragraph (b)(2) of this section and is not 
prohibited proprietary trading.
    (c) Documentation requirement. (1) A banking entity that has 
significant trading assets and liabilities must comply with the 
requirements of paragraphs (c)(2) and (3) of this section, unless the 
requirements of paragraph (c)(4) of this section are met, with respect 
to any purchase or sale of financial instruments made in reliance on 
this section for risk-mitigating hedging purposes that is:
    (i) Not established by the specific trading desk establishing or 
responsible for the underlying positions, contracts, or other holdings 
the risks of which the hedging activity is designed to reduce;
    (ii) Established by the specific trading desk establishing or 
responsible for the underlying positions, contracts, or other holdings 
the risks of which the purchases or sales are designed to reduce, but 
that is effected through a financial instrument, exposure, technique, or 
strategy that is not specifically identified in the trading desk's 
written policies and procedures established under paragraph (b)(1) of 
this section or under Sec.  75.4(b)(2)(iii)(B) as a product, instrument, 
exposure, technique, or strategy such trading desk may use for hedging; 
or

[[Page 217]]

    (iii) Established to hedge aggregated positions across two or more 
trading desks.
    (2) In connection with any purchase or sale identified in paragraph 
(c)(1) of this section, a banking entity must, at a minimum, and 
contemporaneously with the purchase or sale, document:
    (i) The specific, identifiable risk(s) of the identified positions, 
contracts, or other holdings of the banking entity that the purchase or 
sale is designed to reduce;
    (ii) The specific risk-mitigating strategy that the purchase or sale 
is designed to fulfill; and
    (iii) The trading desk or other business unit that is establishing 
and responsible for the hedge.
    (3) A banking entity must create and retain records sufficient to 
demonstrate compliance with the requirements of paragraph (c) of this 
section for a period that is no less than five years in a form that 
allows the banking entity to promptly produce such records to the 
Commission on request, or such longer period as required under other law 
or this part.
    (4) The requirements of paragraphs (c)(2) and (3) of this section do 
not apply to the purchase or sale of a financial instrument described in 
paragraph (c)(1) of this section if:
    (i) The financial instrument purchased or sold is identified on a 
written list of pre-approved financial instruments that are commonly 
used by the trading desk for the specific type of hedging activity for 
which the financial instrument is being purchased or sold; and
    (ii) At the time the financial instrument is purchased or sold, the 
hedging activity (including the purchase or sale of the financial 
instrument) complies with written, pre-approved limits for the trading 
desk purchasing or selling the financial instrument for hedging 
activities undertaken for one or more other trading desks. The limits 
shall be appropriate for the:
    (A) Size, types, and risks of the hedging activities commonly 
undertaken by the trading desk;
    (B) Financial instruments purchased and sold for hedging activities 
by the trading desk; and
    (C) Levels and duration of the risk exposures being hedged.

[79 FR 6048, Jan. 31, 2014, as amended at 84 FR 62207, Nov. 14, 2019]



Sec.  75.6  Other permitted proprietary trading activities.

    (a) Permitted trading in domestic government obligations. The 
prohibition contained in Sec.  75.3(a) does not apply to the purchase or 
sale by a banking entity of a financial instrument that is:
    (1) An obligation of, or issued or guaranteed by, the United States;
    (2) An obligation, participation, or other instrument of, or issued 
or guaranteed by, an agency of the United States, the Government 
National Mortgage Association, the Federal National Mortgage 
Association, the Federal Home Loan Mortgage Corporation, a Federal Home 
Loan Bank, the Federal Agricultural Mortgage Corporation or a Farm 
Credit System institution chartered under and subject to the provisions 
of the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.);
    (3) An obligation of any State or any political subdivision thereof, 
including any municipal security; or
    (4) An obligation of the FDIC, or any entity formed by or on behalf 
of the FDIC for purpose of facilitating the disposal of assets acquired 
or held by the FDIC in its corporate capacity or as conservator or 
receiver under the Federal Deposit Insurance Act or Title II of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act.
    (b) Permitted trading in foreign government obligations--(1) 
Affiliates of foreign banking entities in the United States. The 
prohibition contained in Sec.  75.3(a) does not apply to the purchase or 
sale of a financial instrument that is an obligation of, or issued or 
guaranteed by, a foreign sovereign (including any multinational central 
bank of which the foreign sovereign is a member), or any agency or 
political subdivision of such foreign sovereign, by a banking entity, so 
long as:
    (i) The banking entity is organized under or is directly or 
indirectly controlled by a banking entity that is organized under the 
laws of a foreign sovereign and is not directly or indirectly controlled 
by a top-tier banking entity

[[Page 218]]

that is organized under the laws of the United States;
    (ii) The financial instrument is an obligation of, or issued or 
guaranteed by, the foreign sovereign under the laws of which the foreign 
banking entity referred to in paragraph (b)(1)(i) of this section is 
organized (including any multinational central bank of which the foreign 
sovereign is a member), or any agency or political subdivision of that 
foreign sovereign; and
    (iii) The purchase or sale as principal is not made by an insured 
depository institution.
    (2) Foreign affiliates of a U.S. banking entity. The prohibition 
contained in Sec.  75.3(a) does not apply to the purchase or sale of a 
financial instrument that is an obligation of, or issued or guaranteed 
by, a foreign sovereign (including any multinational central bank of 
which the foreign sovereign is a member), or any agency or political 
subdivision of that foreign sovereign, by a foreign entity that is owned 
or controlled by a banking entity organized or established under the 
laws of the United States or any State, so long as:
    (i) The foreign entity is a foreign bank, as defined in Sec.  
211.2(j) of the Board's Regulation K (12 CFR 211.2(j)), or is regulated 
by the foreign sovereign as a securities dealer;
    (ii) The financial instrument is an obligation of, or issued or 
guaranteed by, the foreign sovereign under the laws of which the foreign 
entity is organized (including any multinational central bank of which 
the foreign sovereign is a member), or any agency or political 
subdivision of that foreign sovereign; and
    (iii) The financial instrument is owned by the foreign entity and is 
not financed by an affiliate that is located in the United States or 
organized under the laws of the United States or of any State.
    (c) Permitted trading on behalf of customers--(1) Fiduciary 
transactions. The prohibition contained in Sec.  75.3(a) does not apply 
to the purchase or sale of financial instruments by a banking entity 
acting as trustee or in a similar fiduciary capacity, so long as:
    (i) The transaction is conducted for the account of, or on behalf 
of, a customer; and
    (ii) The banking entity does not have or retain beneficial ownership 
of the financial instruments.
    (2) Riskless principal transactions. The prohibition contained in 
Sec.  75.3(a) does not apply to the purchase or sale of financial 
instruments by a banking entity acting as riskless principal in a 
transaction in which the banking entity, after receiving an order to 
purchase (or sell) a financial instrument from a customer, purchases (or 
sells) the financial instrument for its own account to offset a 
contemporaneous sale to (or purchase from) the customer.
    (d) Permitted trading by a regulated insurance company. The 
prohibition contained in Sec.  75.3(a) does not apply to the purchase or 
sale of financial instruments by a banking entity that is an insurance 
company or an affiliate of an insurance company if:
    (1) The insurance company or its affiliate purchases or sells the 
financial instruments solely for:
    (i) The general account of the insurance company; or
    (ii) A separate account established by the insurance company;
    (2) The purchase or sale is conducted in compliance with, and 
subject to, the insurance company investment laws, regulations, and 
written guidance of the State or jurisdiction in which such insurance 
company is domiciled; and
    (3) The appropriate Federal banking agencies, after consultation 
with the Financial Stability Oversight Council and the relevant 
insurance commissioners of the States and foreign jurisdictions, as 
appropriate, have not jointly determined, after notice and comment, that 
a particular law, regulation, or written guidance described in paragraph 
(d)(2) of this section is insufficient to protect the safety and 
soundness of the covered banking entity, or the financial stability of 
the United States.
    (e) Permitted trading activities of foreign banking entities. (1) 
The prohibition contained in Sec.  75.3(a) does not apply to the 
purchase or sale of financial instruments by a banking entity if:
    (i) The banking entity is not organized or directly or indirectly 
controlled by a banking entity that is organized under the laws of the 
United States or of any State;

[[Page 219]]

    (ii) The purchase or sale by the banking entity is made pursuant to 
paragraph (9) or (13) of section 4(c) of the BHC Act; and
    (iii) The purchase or sale meets the requirements of paragraph 
(e)(3) of this section.
    (2) A purchase or sale of financial instruments by a banking entity 
is made pursuant to paragraph (9) or (13) of section 4(c) of the BHC Act 
for purposes of paragraph (e)(1)(ii) of this section only if:
    (i) The purchase or sale is conducted in accordance with the 
requirements of paragraph (e) of this section; and
    (ii)(A) With respect to a banking entity that is a foreign banking 
organization, the banking entity meets the qualifying foreign banking 
organization requirements of Sec.  211.23(a), (c) or (e) of the Board's 
Regulation K (12 CFR 211.23(a), (c) or (e)), as applicable; or
    (B) With respect to a banking entity that is not a foreign banking 
organization, the banking entity is not organized under the laws of the 
United States or of any State and the banking entity, on a fully-
consolidated basis, meets at least two of the following requirements:
    (1) Total assets of the banking entity held outside of the United 
States exceed total assets of the banking entity held in the United 
States;
    (2) Total revenues derived from the business of the banking entity 
outside of the United States exceed total revenues derived from the 
business of the banking entity in the United States; or
    (3) Total net income derived from the business of the banking entity 
outside of the United States exceeds total net income derived from the 
business of the banking entity in the United States.
    (3) A purchase or sale by a banking entity is permitted for purposes 
of this paragraph (e) if:
    (i) The banking entity engaging as principal in the purchase or sale 
(including relevant personnel) is not located in the United States or 
organized under the laws of the United States or of any State;
    (ii) The banking entity (including relevant personnel) that makes 
the decision to purchase or sell as principal is not located in the 
United States or organized under the laws of the United States or of any 
State; and
    (iii) The purchase or sale, including any transaction arising from 
risk-mitigating hedging related to the instruments purchased or sold, is 
not accounted for as principal directly or on a consolidated basis by 
any branch or affiliate that is located in the United States or 
organized under the laws of the United States or of any State.
    (4) For purposes of paragraph (e) of this section, a U.S. branch, 
agency, or subsidiary of a foreign banking entity is considered to be 
located in the United States; however, the foreign bank that operates or 
controls that branch, agency, or subsidiary is not considered to be 
located in the United States solely by virtue of operating or 
controlling the U.S. branch, agency, or subsidiary.

[79 FR 6048, Jan. 31, 2014, as amended at 84 FR 62208, Nov. 14, 2019]



Sec.  75.7  Limitations on permitted proprietary trading activities.

    (a) No transaction, class of transactions, or activity may be deemed 
permissible under Sec. Sec.  75.4 through 75.6 if the transaction, class 
of transactions, or activity would:
    (1) Involve or result in a material conflict of interest between the 
banking entity and its clients, customers, or counterparties;
    (2) Result, directly or indirectly, in a material exposure by the 
banking entity to a high-risk asset or a high-risk trading strategy; or
    (3) Pose a threat to the safety and soundness of the banking entity 
or to the financial stability of the United States.
    (b) Definition of material conflict of interest. (1) For purposes of 
this section, a material conflict of interest between a banking entity 
and its clients, customers, or counterparties exists if the banking 
entity engages in any transaction, class of transactions, or activity 
that would involve or result in the banking entity's interests being 
materially adverse to the interests of its client, customer, or 
counterparty with respect to such transaction, class of transactions, or 
activity, and the banking entity has not taken at least one of

[[Page 220]]

the actions in paragraph (b)(2) of this section.
    (2) Prior to effecting the specific transaction or class or type of 
transactions, or engaging in the specific activity, the banking entity:
    (i) Timely and effective disclosure. (A) Has made clear, timely, and 
effective disclosure of the conflict of interest, together with other 
necessary information, in reasonable detail and in a manner sufficient 
to permit a reasonable client, customer, or counterparty to meaningfully 
understand the conflict of interest; and
    (B) Such disclosure is made in a manner that provides the client, 
customer, or counterparty the opportunity to negate, or substantially 
mitigate, any materially adverse effect on the client, customer, or 
counterparty created by the conflict of interest; or
    (ii) Information barriers. Has established, maintained, and enforced 
information barriers that are memorialized in written policies and 
procedures, such as physical separation of personnel, or functions, or 
limitations on types of activity, that are reasonably designed, taking 
into consideration the nature of the banking entity's business, to 
prevent the conflict of interest from involving or resulting in a 
materially adverse effect on a client, customer, or counterparty. A 
banking entity may not rely on such information barriers if, in the case 
of any specific transaction, class or type of transactions or activity, 
the banking entity knows or should reasonably know that, notwithstanding 
the banking entity's establishment of information barriers, the conflict 
of interest may involve or result in a materially adverse effect on a 
client, customer, or counterparty.
    (c) Definition of high-risk asset and high-risk trading strategy. 
For purposes of this section:
    (1) High-risk asset means an asset or group of related assets that 
would, if held by a banking entity, significantly increase the 
likelihood that the banking entity would incur a substantial financial 
loss or would pose a threat to the financial stability of the United 
States.
    (2) High-risk trading strategy means a trading strategy that would, 
if engaged in by a banking entity, significantly increase the likelihood 
that the banking entity would incur a substantial financial loss or 
would pose a threat to the financial stability of the United States.



Sec. Sec.  75.8-75.9  [Reserved]



            Subpart C_Covered Fund Activities and Investments



Sec.  75.10  Prohibition on acquiring or retaining an ownership interest
in and having certain relationships with a covered fund.

    (a) Prohibition. (1) Except as otherwise provided in this subpart, a 
banking entity may not, as principal, directly or indirectly, acquire or 
retain any ownership interest in or sponsor a covered fund.
    (2) Paragraph (a)(1) of this section does not include acquiring or 
retaining an ownership interest in a covered fund by a banking entity:
    (i) Acting solely as agent, broker, or custodian, so long as;
    (A) The activity is conducted for the account of, or on behalf of, a 
customer; and
    (B) The banking entity and its affiliates do not have or retain 
beneficial ownership of such ownership interest;
    (ii) Through a deferred compensation, stock-bonus, profit-sharing, 
or pension plan of the banking entity (or an affiliate thereof) that is 
established and administered in accordance with the law of the United 
States or a foreign sovereign, if the ownership interest is held or 
controlled directly or indirectly by the banking entity as trustee for 
the benefit of persons who are or were employees of the banking entity 
(or an affiliate thereof);
    (iii) In the ordinary course of collecting a debt previously 
contracted in good faith, provided that the banking entity divests the 
ownership interest as soon as practicable, and in no event may the 
banking entity retain such ownership interest for longer than such 
period permitted by the Commission; or
    (iv) On behalf of customers as trustee or in a similar fiduciary 
capacity for a customer that is not a covered fund, so long as:

[[Page 221]]

    (A) The activity is conducted for the account of, or on behalf of, 
the customer; and
    (B) The banking entity and its affiliates do not have or retain 
beneficial ownership of such ownership interest.
    (b) Definition of covered fund. (1) Except as provided in paragraph 
(c) of this section, covered fund means:
    (i) An issuer that would be an investment company, as defined in the 
Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), but for 
section 3(c)(1) or 3(c)(7) of that Act (15 U.S.C. 80a-3(c)(1) or (7));
    (ii) Any commodity pool under section 1a(10) of the Commodity 
Exchange Act (7 U.S.C. 1a(10)) for which:
    (A) The commodity pool operator has claimed an exemption under Sec.  
4.7 of this chapter; or
    (B) (1) A commodity pool operator is registered with the CFTC as a 
commodity pool operator in connection with the operation of the 
commodity pool;
    (2) Substantially all participation units of the commodity pool are 
owned by qualified eligible persons under Sec.  4.7(a)(2) and (3) of 
this chapter; and
    (3) Participation units of the commodity pool have not been publicly 
offered to persons who are not qualified eligible persons under Sec.  
4.7(a)(2) and (3) of this chapter; or
    (iii) For any banking entity that is, or is controlled directly or 
indirectly by a banking entity that is, located in or organized under 
the laws of the United States or of any State, an entity that:
    (A) Is organized or established outside the United States and the 
ownership interests of which are offered and sold solely outside the 
United States;
    (B) Is, or holds itself out as being, an entity or arrangement that 
raises money from investors primarily for the purpose of investing in 
securities for resale or other disposition or otherwise trading in 
securities; and
    (C) (1) Has as its sponsor that banking entity (or an affiliate 
thereof); or
    (2) Has issued an ownership interest that is owned directly or 
indirectly by that banking entity (or an affiliate thereof).
    (2) An issuer shall not be deemed to be a covered fund under 
paragraph (b)(1)(iii) of this section if, were the issuer subject to 
U.S. securities laws, the issuer could rely on an exclusion or exemption 
from the definition of ``investment company'' under the Investment 
Company Act of 1940 (15 U.S.C. 80a-1 et seq.) other than the exclusions 
contained in section 3(c)(1) and 3(c)(7) of that Act.
    (3) For purposes of paragraph (b)(1)(iii) of this section, a U.S. 
branch, agency, or subsidiary of a foreign banking entity is located in 
the United States; however, the foreign bank that operates or controls 
that branch, agency, or subsidiary is not considered to be located in 
the United States solely by virtue of operating or controlling the U.S. 
branch, agency, or subsidiary.
    (c) Notwithstanding paragraph (b) of this section, unless the 
appropriate Federal banking agencies, the SEC, and the CFTC jointly 
determine otherwise, a covered fund does not include:
    (1) Foreign public funds. (i) Subject to paragraphs (c)(1)(ii) and 
(iii) of this section, an issuer that:
    (A) Is organized or established outside of the United States;
    (B) Is authorized to offer and sell ownership interests to retail 
investors in the issuer's home jurisdiction; and
    (C) Sells ownership interests predominantly through one or more 
public offerings outside of the United States.
    (ii) With respect to a banking entity that is, or is controlled 
directly or indirectly by a banking entity that is, located in or 
organized under the laws of the United States or of any State and any 
issuer for which such banking entity acts as sponsor, the sponsoring 
banking entity may not rely on the exemption in paragraph (c)(1)(i) of 
this section for such issuer unless ownership interests in the issuer 
are sold predominantly to persons other than:
    (A) Such sponsoring banking entity;
    (B) Such issuer;
    (C) Affiliates of such sponsoring banking entity or such issuer; and
    (D) Directors and employees of such entities.
    (iii) For purposes of paragraph (c)(1)(i)(C) of this section, the 
term public offering means a distribution (as defined in Sec.  
75.4(a)(3)) of securities in any jurisdiction outside the United

[[Page 222]]

States to investors, including retail investors, provided that:
    (A) The distribution complies with all applicable requirements in 
the jurisdiction in which such distribution is being made;
    (B) The distribution does not restrict availability to investors 
having a minimum level of net worth or net investment assets; and
    (C) The issuer has filed or submitted, with the appropriate 
regulatory authority in such jurisdiction, offering disclosure documents 
that are publicly available.
    (2) Wholly-owned subsidiaries. An entity, all of the outstanding 
ownership interests of which are owned directly or indirectly by the 
banking entity (or an affiliate thereof), except that:
    (i) Up to five percent of the entity's outstanding ownership 
interests, less any amounts outstanding under paragraph (c)(2)(ii) of 
this section, may be held by employees or directors of the banking 
entity or such affiliate (including former employees or directors if 
their ownership interest was acquired while employed by or in the 
service of the banking entity); and
    (ii) Up to 0.5 percent of the entity's outstanding ownership 
interests may be held by a third party if the ownership interest is 
acquired or retained by the third party for the purpose of establishing 
corporate separateness or addressing bankruptcy, insolvency, or similar 
concerns.
    (3) Joint ventures. A joint venture between a banking entity or any 
of its affiliates and one or more unaffiliated persons, provided that 
the joint venture:
    (i) Is comprised of no more than 10 unaffiliated co-venturers;
    (ii) Is in the business of engaging in activities that are 
permissible for the banking entity or affiliate, other than investing in 
securities for resale or other disposition; and
    (iii) Is not, and does not hold itself out as being, an entity or 
arrangement that raises money from investors primarily for the purpose 
of investing in securities for resale or other disposition or otherwise 
trading in securities.
    (4) Acquisition vehicles. An issuer:
    (i) Formed solely for the purpose of engaging in a bona fide merger 
or acquisition transaction; and
    (ii) That exists only for such period as necessary to effectuate the 
transaction.
    (5) Foreign pension or retirement funds. A plan, fund, or program 
providing pension, retirement, or similar benefits that is:
    (i) Organized and administered outside the United States;
    (ii) A broad-based plan for employees or citizens that is subject to 
regulation as a pension, retirement, or similar plan under the laws of 
the jurisdiction in which the plan, fund, or program is organized and 
administered; and
    (iii) Established for the benefit of citizens or residents of one or 
more foreign sovereigns or any political subdivision thereof.
    (6) Insurance company separate accounts. A separate account, 
provided that no banking entity other than the insurance company 
participates in the account's profits and losses.
    (7) Bank owned life insurance. A separate account that is used 
solely for the purpose of allowing one or more banking entities to 
purchase a life insurance policy for which the banking entity or 
entities is beneficiary, provided that no banking entity that purchases 
the policy:
    (i) Controls the investment decisions regarding the underlying 
assets or holdings of the separate account; or
    (ii) Participates in the profits and losses of the separate account 
other than in compliance with applicable requirements regarding bank 
owned life insurance.
    (8) Loan securitizations--(i) Scope. An issuing entity for asset-
backed securities that satisfies all the conditions of paragraph (c)(8) 
of this section and the assets or holdings of which are comprised solely 
of:
    (A) Loans as defined in Sec.  75.2(t) of subpart A;
    (B) Rights or other assets designed to assure the servicing or 
timely distribution of proceeds to holders of such securities and rights 
or other assets that are related or incidental to purchasing or 
otherwise acquiring and holding the loans, provided that each asset 
meets the requirements of paragraph (c)(8)(iii) of this section;
    (C) Interest rate or foreign exchange derivatives that meet the 
requirements

[[Page 223]]

of paragraph (c)(8)(iv) of this section; and
    (D) Special units of beneficial interest and collateral certificates 
that meet the requirements of paragraph (c)(8)(v) of this section.
    (ii) Impermissible assets. For purposes of paragraph (c)(8) of this 
section, the assets or holdings of the issuing entity shall not include 
any of the following:
    (A) A security, including an asset-backed security, or an interest 
in an equity or debt security other than as permitted in paragraph 
(c)(8)(iii) of this section;
    (B) A derivative, other than a derivative that meets the 
requirements of paragraph (c)(8)(iv) of this section; or
    (C) A commodity forward contract.
    (iii) Permitted securities. Notwithstanding paragraph (c)(8)(ii)(A) 
of this section, the issuing entity may hold securities if those 
securities are:
    (A) Cash equivalents for purposes of the rights and assets in 
paragraph (c)(8)(i)(B) of this section; or
    (B) Securities received in lieu of debts previously contracted with 
respect to the loans supporting the asset-backed securities.
    (iv) Derivatives. The holdings of derivatives by the issuing entity 
shall be limited to interest rate or foreign exchange derivatives that 
satisfy all of the following conditions:
    (A) The written terms of the derivative directly relate to the 
loans, the asset-backed securities, or the contractual rights of other 
assets described in paragraph (c)(8)(i)(B) of this section; and
    (B) The derivatives reduce the interest rate and/or foreign exchange 
risks related to the loans, the asset-backed securities, or the 
contractual rights or other assets described in paragraph (c)(8)(i)(B) 
of this section.
    (v) Special units of beneficial interest and collateral 
certificates. The assets or holdings of the issuing entity may include 
collateral certificates and special units of beneficial interest issued 
by a special purpose vehicle, provided that:
    (A) The special purpose vehicle that issues the special unit of 
beneficial interest or collateral certificate meets the requirements in 
paragraph (c)(8) of this section;
    (B) The special unit of beneficial interest or collateral 
certificate is used for the sole purpose of transferring to the issuing 
entity for the loan securitization the economic risks and benefits of 
the assets that are permissible for loan securitizations under paragraph 
(c)(8) of this section and does not directly or indirectly transfer any 
interest in any other economic or financial exposure;
    (C) The special unit of beneficial interest or collateral 
certificate is created solely to satisfy legal requirements or otherwise 
facilitate the structuring of the loan securitization; and
    (D) The special purpose vehicle that issues the special unit of 
beneficial interest or collateral certificate and the issuing entity are 
established under the direction of the same entity that initiated the 
loan securitization.
    (9) Qualifying asset-backed commercial paper conduits. (i) An 
issuing entity for asset-backed commercial paper that satisfies all of 
the following requirements:
    (A) The asset-backed commercial paper conduit holds only:
    (1) Loans and other assets permissible for a loan securitization 
under paragraph (c)(8)(i) of this section; and
    (2) Asset-backed securities supported solely by assets that are 
permissible for loan securitizations under paragraph (c)(8)(i) of this 
section and acquired by the asset-backed commercial paper conduit as 
part of an initial issuance either directly from the issuing entity of 
the asset-backed securities or directly from an underwriter in the 
distribution of the asset-backed securities;
    (B) The asset-backed commercial paper conduit issues only asset-
backed securities, comprised of a residual interest and securities with 
a legal maturity of 397 days or less; and
    (C) A regulated liquidity provider has entered into a legally 
binding commitment to provide full and unconditional liquidity coverage 
with respect to all of the outstanding asset-backed securities issued by 
the asset-backed commercial paper conduit (other than any residual 
interest) in the event that funds are required to redeem maturing asset-
backed securities.

[[Page 224]]

    (ii) For purposes of this paragraph (c)(9) of this section, a 
regulated liquidity provider means:
    (A) A depository institution, as defined in section 3(c) of the 
Federal Deposit Insurance Act (12 U.S.C. 1813(c));
    (B) A bank holding company, as defined in section 2(a) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1841(a)), or a subsidiary 
thereof;
    (C) A savings and loan holding company, as defined in section 10a of 
the Home Owners' Loan Act (12 U.S.C. 1467a), provided all or 
substantially all of the holding company's activities are permissible 
for a financial holding company under section 4(k) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1843(k)), or a subsidiary thereof;
    (D) A foreign bank whose home country supervisor, as defined in 
Sec.  211.21(q) of the Board's Regulation K (12 CFR 211.21(q)), has 
adopted capital standards consistent with the Capital Accord for the 
Basel Committee on Banking Supervision, as amended, and that is subject 
to such standards, or a subsidiary thereof; or
    (E) The United States or a foreign sovereign.
    (10) Qualifying covered bonds--(i) Scope. An entity owning or 
holding a dynamic or fixed pool of loans or other assets as provided in 
paragraph (c)(8) of this section for the benefit of the holders of 
covered bonds, provided that the assets in the pool are comprised solely 
of assets that meet the conditions in paragraph (c)(8)(i) of this 
section.
    (ii) Covered bond. For purposes of paragraph (c)(10) of this 
section, a covered bond means:
    (A) A debt obligation issued by an entity that meets the definition 
of foreign banking organization, the payment obligations of which are 
fully and unconditionally guaranteed by an entity that meets the 
conditions set forth in paragraph (c)(10)(i) of this section; or
    (B) A debt obligation of an entity that meets the conditions set 
forth in paragraph (c)(10)(i) of this section, provided that the payment 
obligations are fully and unconditionally guaranteed by an entity that 
meets the definition of foreign banking organization and the entity is a 
wholly-owned subsidiary, as defined in paragraph (c)(2) of this section, 
of such foreign banking organization.
    (11) SBICs and public welfare investment funds. An issuer:
    (i) That is a small business investment company, as defined in 
section 103(3) of the Small Business Investment Act of 1958 (15 U.S.C. 
662), or that has received from the Small Business Administration notice 
to proceed to qualify for a license as a small business investment 
company, which notice or license has not been revoked; or
    (ii) The business of which is to make investments that are:
    (A) Designed primarily to promote the public welfare, of the type 
permitted under paragraph (11) of section 5136 of the Revised Statutes 
of the United States (12 U.S.C. 24), including the welfare of low- and 
moderate-income communities or families (such as providing housing, 
services, or jobs); or
    (B) Qualified rehabilitation expenditures with respect to a 
qualified rehabilitated building or certified historic structure, as 
such terms are defined in section 47 of the Internal Revenue Code of 
1986 or a similar State historic tax credit program.
    (12) Registered investment companies and excluded entities. An 
issuer:
    (i) That is registered as an investment company under section 8 of 
the Investment Company Act of 1940 (15 U.S.C. 80a-8), or that is formed 
and operated pursuant to a written plan to become a registered 
investment company as described in Sec.  75.20(e)(3) and that complies 
with the requirements of section 18 of the Investment Company Act of 
1940 (15 U.S.C. 80a-18);
    (ii) That may rely on an exclusion or exemption from the definition 
of ``investment company'' under the Investment Company Act of 1940 (15 
U.S.C. 80a-1 et seq.) other than the exclusions contained in section 
3(c)(1) and 3(c)(7) of that Act; or
    (iii) That has elected to be regulated as a business development 
company pursuant to section 54(a) of that Act (15 U.S.C. 80a-53) and has 
not withdrawn its election, or that is formed and operated pursuant to a 
written plan to become a business development company as described in 
Sec.  75.20(e)(3) and that

[[Page 225]]

complies with the requirements of section 61 of the Investment Company 
Act of 1940 (15 U.S.C. 80a-60).
    (13) Issuers in conjunction with the FDIC's receivership or 
conservatorship operations. An issuer that is an entity formed by or on 
behalf of the FDIC for the purpose of facilitating the disposal of 
assets acquired in the FDIC's capacity as conservator or receiver under 
the Federal Deposit Insurance Act or Title II of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act.
    (14) Other excluded issuers. (i) Any issuer that the appropriate 
Federal banking agencies, the SEC, and the CFTC jointly determine the 
exclusion of which is consistent with the purposes of section 13 of the 
BHC Act.
    (ii) A determination made under paragraph (c)(14)(i) of this section 
will be promptly made public.
    (d) Definition of other terms related to covered funds. For purposes 
of this subpart:
    (1) Applicable accounting standards means U.S. generally accepted 
accounting principles, or such other accounting standards applicable to 
a banking entity that the Commission determines are appropriate and that 
the banking entity uses in the ordinary course of its business in 
preparing its consolidated financial statements.
    (2) Asset-backed security has the meaning specified in section 
3(a)(79) of the Exchange Act (15 U.S.C. 78c(a)(79)).
    (3) Director has the same meaning as provided in Sec.  215.2(d)(1) 
of the Board's Regulation O (12 CFR 215.2(d)(1)).
    (4) Issuer has the same meaning as in section 2(a)(22) of the 
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(22)).
    (5) Issuing entity means with respect to asset-backed securities the 
special purpose vehicle that owns or holds the pool assets underlying 
asset-backed securities and in whose name the asset-backed securities 
supported or serviced by the pool assets are issued.
    (6) Ownership interest--(i) Ownership interest means any equity, 
partnership, or other similar interest. An ``other similar interest'' 
means an interest that:
    (A) Has the right to participate in the selection or removal of a 
general partner, managing member, member of the board of directors or 
trustees, investment manager, investment adviser, or commodity trading 
advisor of the covered fund (excluding the rights of a creditor to 
exercise remedies upon the occurrence of an event of default or an 
acceleration event);
    (B) Has the right under the terms of the interest to receive a share 
of the income, gains or profits of the covered fund;
    (C) Has the right to receive the underlying assets of the covered 
fund after all other interests have been redeemed and/or paid in full 
(excluding the rights of a creditor to exercise remedies upon the 
occurrence of an event of default or an acceleration event);
    (D) Has the right to receive all or a portion of excess spread (the 
positive difference, if any, between the aggregate interest payments 
received from the underlying assets of the covered fund and the 
aggregate interest paid to the holders of other outstanding interests);
    (E) Provides under the terms of the interest that the amounts 
payable by the covered fund with respect to the interest could be 
reduced based on losses arising from the underlying assets of the 
covered fund, such as allocation of losses, write-downs or charge-offs 
of the outstanding principal balance, or reductions in the amount of 
interest due and payable on the interest;
    (F) Receives income on a pass-through basis from the covered fund, 
or has a rate of return that is determined by reference to the 
performance of the underlying assets of the covered fund; or
    (G) Any synthetic right to have, receive, or be allocated any of the 
rights in paragraphs (d)(6)(i)(A) through (d)(6)(i)(F) of this section.
    (ii) Ownership interest does not include restricted profit interest, 
which is an interest held by an entity (or an employee or former 
employee thereof) in a covered fund for which the entity (or employee 
thereof) serves as investment manager, investment adviser, commodity 
trading advisor, or other service provider so long as:
    (A) The sole purpose and effect of the interest is to allow the 
entity (or employee or former employee thereof) to share in the profits 
of the covered fund as performance compensation for the

[[Page 226]]

investment management, investment advisory, commodity trading advisory, 
or other services provided to the covered fund by the entity (or 
employee or former employee thereof), provided that the entity (or 
employee or former employee thereof) may be obligated under the terms of 
such interest to return profits previously received;
    (B) All such profit, once allocated, is distributed to the entity 
(or employee or former employee thereof) promptly after being earned or, 
if not so distributed, is retained by the covered fund for the sole 
purpose of establishing a reserve amount to satisfy contractual 
obligations with respect to subsequent losses of the covered fund and 
such undistributed profit of the entity (or employee or former employee 
thereof) does not share in the subsequent investment gains of the 
covered fund;
    (C) Any amounts invested in the covered fund, including any amounts 
paid by the entity (or employee or former employee thereof) in 
connection with obtaining the restricted profit interest, are within the 
limits of Sec.  75.12; and
    (D) The interest is not transferable by the entity (or employee or 
former employee thereof) except to an affiliate thereof (or an employee 
of the banking entity or affiliate), to immediate family members, or 
through the intestacy, of the employee or former employee, or in 
connection with a sale of the business that gave rise to the restricted 
profit interest by the entity (or employee or former employee thereof) 
to an unaffiliated party that provides investment management, investment 
advisory, commodity trading advisory, or other services to the fund.
    (7) Prime brokerage transaction means any transaction that would be 
a covered transaction, as defined in section 23A(b)(7) of the Federal 
Reserve Act (12 U.S.C. 371c(b)(7)), that is provided in connection with 
custody, clearance and settlement, securities borrowing or lending 
services, trade execution, financing, or data, operational, and 
administrative support.
    (8) Resident of the United States means a person that is a ``U.S. 
person'' as defined in rule 902(k) of the SEC's Regulation S (17 CFR 
230.902(k)).
    (9) Sponsor means, with respect to a covered fund:
    (i) To serve as a general partner, managing member, or trustee of a 
covered fund, or to serve as a commodity pool operator with respect to a 
covered fund as defined in (b)(1)(ii) of this section;
    (ii) In any manner to select or to control (or to have employees, 
officers, or directors, or agents who constitute) a majority of the 
directors, trustees, or management of a covered fund; or
    (iii) To share with a covered fund, for corporate, marketing, 
promotional, or other purposes, the same name or a variation of the same 
name, except as permitted under Sec.  75.11(a)(6).
    (10) Trustee. (i) For purposes of paragraph (d)(9) of this section 
and Sec.  75.11, a trustee does not include:
    (A) A trustee that does not exercise investment discretion with 
respect to a covered fund, including a trustee that is subject to the 
direction of an unaffiliated named fiduciary who is not a trustee 
pursuant to section 403(a)(1) of the Employee's Retirement Income 
Security Act (29 U.S.C. 1103(a)(1)); or
    (B) A trustee that is subject to fiduciary standards imposed under 
foreign law that are substantially equivalent to those described in 
paragraph (d)(10)(i)(A) of this section;
    (ii) Any entity that directs a person described in paragraph 
(d)(10)(i) of this section, or that possesses authority and discretion 
to manage and control the investment decisions of a covered fund for 
which such person serves as trustee, shall be considered to be a trustee 
of such covered fund.

[79 FR 6048, Jan. 31, 2014, as amended at 84 FR 35021, July 22, 2019; 84 
FR 62208, Nov. 14, 2019]



Sec.  75.11  Permitted organizing and offering, underwriting, and
market making with respect to a covered fund.

    (a) Organizing and offering a covered fund in general. 
Notwithstanding Sec.  75.10(a), a banking entity is not prohibited from 
acquiring or retaining an ownership interest in, or acting as sponsor 
to, a covered fund in connection with, directly or indirectly, 
organizing and offering a covered fund, including serving as a general 
partner, managing member, trustee, or commodity pool operator of the 
covered fund and in any manner selecting or

[[Page 227]]

controlling (or having employees, officers, directors, or agents who 
constitute) a majority of the directors, trustees, or management of the 
covered fund, including any necessary expenses for the foregoing, only 
if:
    (1) The banking entity (or an affiliate thereof) provides bona fide 
trust, fiduciary, investment advisory, or commodity trading advisory 
services;
    (2) The covered fund is organized and offered only in connection 
with the provision of bona fide trust, fiduciary, investment advisory, 
or commodity trading advisory services and only to persons that are 
customers of such services of the banking entity (or an affiliate 
thereof), pursuant to a written plan or similar documentation outlining 
how the banking entity or such affiliate intends to provide advisory or 
similar services to its customers through organizing and offering such 
fund;
    (3) The banking entity and its affiliates do not acquire or retain 
an ownership interest in the covered fund except as permitted under 
Sec.  75.12;
    (4) The banking entity and its affiliates comply with the 
requirements of Sec.  75.14;
    (5) The banking entity and its affiliates do not, directly or 
indirectly, guarantee, assume, or otherwise insure the obligations or 
performance of the covered fund or of any covered fund in which such 
covered fund invests;
    (6) The covered fund, for corporate, marketing, promotional, or 
other purposes:
    (i) Does not share the same name or a variation of the same name 
with the banking entity (or an affiliate thereof), except that a covered 
fund may share the same name or a variation of the same name with a 
banking entity that is an investment adviser to the covered fund if:
    (A) The investment adviser is not an insured depository institution, 
a company that controls an insured depository institution, or a company 
that is treated as a bank holding company for purposes of section 8 of 
the International Banking Act of 1978 (12 U.S.C. 3106); and
    (B) The investment adviser does not share the same name or a 
variation of the same name as an insured depository institution, a 
company that controls an insured depository institution, or a company 
that is treated as a bank holding company for purposes of section 8 of 
the International Banking Act of 1978 (12 U.S.C. 3106); and
    (ii) Does not use the word ``bank'' in its name;
    (7) No director or employee of the banking entity (or an affiliate 
thereof) takes or retains an ownership interest in the covered fund, 
except for any director or employee of the banking entity or such 
affiliate who is directly engaged in providing investment advisory, 
commodity trading advisory, or other services to the covered fund at the 
time the director or employee takes the ownership interest; and
    (8) The banking entity:
    (i) Clearly and conspicuously discloses, in writing, to any 
prospective and actual investor in the covered fund (such as through 
disclosure in the covered fund's offering documents):
    (A) That ``any losses in [such covered fund] will be borne solely by 
investors in [the covered fund] and not by [the banking entity] or its 
affiliates; therefore, [the banking entity's] losses in [such covered 
fund] will be limited to losses attributable to the ownership interests 
in the covered fund held by [the banking entity] and any affiliate in 
its capacity as investor in the [covered fund] or as beneficiary of a 
restricted profit interest held by [the banking entity] or any 
affiliate'';
    (B) That such investor should read the fund offering documents 
before investing in the covered fund;
    (C) That the ``ownership interests in the covered fund are not 
insured by the FDIC, and are not deposits, obligations of, or endorsed 
or guaranteed in any way, by any banking entity'' (unless that happens 
to be the case); and
    (D) The role of the banking entity and its affiliates and employees 
in sponsoring or providing any services to the covered fund; and
    (ii) Complies with any additional rules of the appropriate Federal 
banking agencies, the SEC, or the CFTC, as provided in section 13(b)(2) 
of the BHC Act, designed to ensure that losses in such covered fund are 
borne solely by investors in the covered fund and not

[[Page 228]]

by the covered banking entity and its affiliates.
    (b) Organizing and offering an issuing entity of asset-backed 
securities. (1) Notwithstanding Sec.  75.10(a), a banking entity is not 
prohibited from acquiring or retaining an ownership interest in, or 
acting as sponsor to, a covered fund that is an issuing entity of asset-
backed securities in connection with, directly or indirectly, organizing 
and offering that issuing entity, so long as the banking entity and its 
affiliates comply with all of the requirements of paragraphs (a)(3) 
through (a)(8) of this section.
    (2) For purposes of paragraph (b) of this section, organizing and 
offering a covered fund that is an issuing entity of asset-backed 
securities means acting as the securitizer, as that term is used in 
section 15G(a)(3) of the Exchange Act (15 U.S.C. 78o-11(a)(3)) of the 
issuing entity, or acquiring or retaining an ownership interest in the 
issuing entity as required by section 15G of that Act (15 U.S.C. 78o-11) 
and the implementing regulations issued thereunder.
    (c) Underwriting and market making in ownership interests of a 
covered fund. The prohibition contained in Sec.  75.10(a) of this 
subpart does not apply to a banking entity's underwriting activities or 
market making-related activities involving a covered fund so long as:
    (1) Those activities are conducted in accordance with the 
requirements of Sec.  75.4(a) or (b) of subpart B, respectively; and
    (2) With respect to any banking entity (or any affiliate thereof) 
that: Acts as a sponsor, investment adviser or commodity trading advisor 
to a particular covered fund or otherwise acquires and retains an 
ownership interest in such covered fund in reliance on paragraph (a) of 
this section; or acquires and retains an ownership interest in such 
covered fund and is either a securitizer, as that term is used in 
section 15G(a)(3) of the Exchange Act (15 U.S.C. 78o-11(a)(3)), or is 
acquiring and retaining an ownership interest in such covered fund in 
compliance with section 15G of that Act (15 U.S.C. 78o-11) and the 
implementing regulations issued thereunder each as permitted by 
paragraph (b) of this section, then in each such case any ownership 
interests acquired or retained by the banking entity and its affiliates 
in connection with underwriting and market making related activities for 
that particular covered fund are included in the calculation of 
ownership interests permitted to be held by the banking entity and its 
affiliates under the limitations of Sec.  75.12(a)(2)(ii); Sec.  
75.12(a)(2)(iii), and Sec.  75.12(d) of this subpart.

[79 FR 6048, Jan. 31, 2014, as amended at 84 FR 35022, July 22, 2019; 84 
FR 62208, Nov. 14, 2019]



Sec.  75.12  Permitted investment in a covered fund.

    (a) Authority and limitations on permitted investments in covered 
funds. (1) Notwithstanding the prohibition contained in Sec.  75.10(a), 
a banking entity may acquire and retain an ownership interest in a 
covered fund that the banking entity or an affiliate thereof organizes 
and offers pursuant to Sec.  75.11, for the purposes of:
    (i) Establishment. Establishing the fund and providing the fund with 
sufficient initial equity for investment to permit the fund to attract 
unaffiliated investors, subject to the limits contained in paragraphs 
(a)(2)(i) and (a)(2)(iii) of this section; or
    (ii) De minimis investment. Making and retaining an investment in 
the covered fund subject to the limits contained in paragraphs 
(a)(2)(ii) and (a)(2)(iii) of this section.
    (2) Investment limits--(i) Seeding period. With respect to an 
investment in any covered fund made or held pursuant to paragraph 
(a)(1)(i) of this section, the banking entity and its affiliates:
    (A) Must actively seek unaffiliated investors to reduce, through 
redemption, sale, dilution, or other methods, the aggregate amount of 
all ownership interests of the banking entity in the covered fund to the 
amount permitted in paragraph (a)(2)(i)(B) of this section; and
    (B) Must, no later than 1 year after the date of establishment of 
the fund (or such longer period as may be provided by the Board pursuant 
to paragraph (e) of this section), conform its ownership interest in the 
covered fund

[[Page 229]]

to the limits in paragraph (a)(2)(ii) of this section;
    (ii) Per-fund limits. (A) Except as provided in paragraph 
(a)(2)(ii)(B) of this section, an investment by a banking entity and its 
affiliates in any covered fund made or held pursuant to paragraph 
(a)(1)(ii) of this section may not exceed 3 percent of the total number 
or value of the outstanding ownership interests of the fund.
    (B) An investment by a banking entity and its affiliates in a 
covered fund that is an issuing entity of asset-backed securities may 
not exceed 3 percent of the total fair market value of the ownership 
interests of the fund measured in accordance with paragraph (b)(3) of 
this section, unless a greater percentage is retained by the banking 
entity and its affiliates in compliance with the requirements of section 
15G of the Exchange Act (15 U.S.C. 78o-11) and the implementing 
regulations issued thereunder, in which case the investment by the 
banking entity and its affiliates in the covered fund may not exceed the 
amount, number, or value of ownership interests of the fund required 
under section 15G of the Exchange Act and the implementing regulations 
issued thereunder.
    (iii) Aggregate limit. The aggregate value of all ownership 
interests of the banking entity and its affiliates in all covered funds 
acquired or retained under this section may not exceed 3 percent of the 
tier 1 capital of the banking entity, as provided under paragraph (c) of 
this section, and shall be calculated as of the last day of each 
calendar quarter.
    (iv) Date of establishment. For purposes of this section, the date 
of establishment of a covered fund shall be:
    (A) In general. The date on which the investment adviser or similar 
entity to the covered fund begins making investments pursuant to the 
written investment strategy for the fund;
    (B) Issuing entities of asset-backed securities. In the case of an 
issuing entity of asset-backed securities, the date on which the assets 
are initially transferred into the issuing entity of asset-backed 
securities.
    (b) Rules of construction--(1) Attribution of ownership interests to 
a covered banking entity. (i) For purposes of paragraph (a)(2) of this 
section, the amount and value of a banking entity's permitted investment 
in any single covered fund shall include any ownership interest held 
under Sec.  75.12 directly by the banking entity, including any 
affiliate of the banking entity.
    (ii) Treatment of registered investment companies, SEC-regulated 
business development companies and foreign public funds. For purposes of 
paragraph (b)(1)(i) of this section, a registered investment company, 
SEC-regulated business development companies or foreign public fund as 
described in Sec.  75.10(c)(1) will not be considered to be an affiliate 
of the banking entity so long as the banking entity:
    (A) Does not own, control, or hold with the power to vote 25 percent 
or more of the voting shares of the company or fund; and
    (B) Provides investment advisory, commodity trading advisory, 
administrative, and other services to the company or fund in compliance 
with the limitations under applicable regulation, order, or other 
authority.
    (iii) Covered funds. For purposes of paragraph (b)(1)(i) of this 
section, a covered fund will not be considered to be an affiliate of a 
banking entity so long as the covered fund is held in compliance with 
the requirements of this subpart.
    (iv) Treatment of employee and director investments financed by the 
banking entity. For purposes of paragraph (b)(1)(i) of this section, an 
investment by a director or employee of a banking entity who acquires an 
ownership interest in his or her personal capacity in a covered fund 
sponsored by the banking entity will be attributed to the banking entity 
if the banking entity, directly or indirectly, extends financing for the 
purpose of enabling the director or employee to acquire the ownership 
interest in the fund and the financing is used to acquire such ownership 
interest in the covered fund.
    (2) Calculation of permitted ownership interests in a single covered 
fund. Except as provided in paragraphs (b)(3) or (4) of this section, 
for purposes of determining whether an investment in a single covered 
fund complies with the restrictions on ownership interests under

[[Page 230]]

paragraphs (a)(2)(i)(B) and (ii)(A) of this section:
    (i) The aggregate number of the outstanding ownership interests held 
by the banking entity shall be the total number of ownership interests 
held under this section by the banking entity in a covered fund divided 
by the total number of ownership interests held by all entities in that 
covered fund, as of the last day of each calendar quarter (both measured 
without regard to committed funds not yet called for investment);
    (ii) The aggregate value of the outstanding ownership interests held 
by the banking entity shall be the aggregate fair market value of all 
investments in and capital contributions made to the covered fund by the 
banking entity, divided by the value of all investments in and capital 
contributions made to that covered fund by all entities, as of the last 
day of each calendar quarter (all measured without regard to committed 
funds not yet called for investment). If fair market value cannot be 
determined, then the value shall be the historical cost basis of all 
investments in and contributions made by the banking entity to the 
covered fund;
    (iii) For purposes of the calculation under paragraph (b)(2)(ii) of 
this section, once a valuation methodology is chosen, the banking entity 
must calculate the value of its investment and the investments of all 
others in the covered fund in the same manner and according to the same 
standards.
    (3) Issuing entities of asset-backed securities. In the case of an 
ownership interest in an issuing entity of asset-backed securities, for 
purposes of determining whether an investment in a single covered fund 
complies with the restrictions on ownership interests under paragraphs 
(a)(2)(i)(B) and (a)(2)(ii)(B) of this section:
    (i) For securitizations subject to the requirements of section 15G 
of the Exchange Act (15 U.S.C. 78o-11), the calculations shall be made 
as of the date and according to the valuation methodology applicable 
pursuant to the requirements of section 15G of the Exchange Act (15 
U.S.C. 78o-11) and the implementing regulations issued thereunder; or
    (ii) For securitization transactions completed prior to the 
compliance date of such implementing regulations (or as to which such 
implementing regulations do not apply), the calculations shall be made 
as of the date of establishment as defined in paragraph (a)(2)(iv)(B) of 
this section or such earlier date on which the transferred assets have 
been valued for purposes of transfer to the covered fund, and thereafter 
only upon the date on which additional securities of the issuing entity 
of asset-backed securities are priced for purposes of the sales of 
ownership interests to unaffiliated investors.
    (iii) For securitization transactions completed prior to the 
compliance date of such implementing regulations (or as to which such 
implementing regulations do not apply), the aggregate value of the 
outstanding ownership interests in the covered fund shall be the fair 
market value of the assets transferred to the issuing entity of the 
securitization and any other assets otherwise held by the issuing entity 
at such time, determined in a manner that is consistent with its 
determination of the fair market value of those assets for financial 
statement purposes.
    (iv) For purposes of the calculation under paragraph (b)(3)(iii) of 
this section, the valuation methodology used to calculate the fair 
market value of the ownership interests must be the same for both the 
ownership interests held by a banking entity and the ownership interests 
held by all others in the covered fund in the same manner and according 
to the same standards.
    (4) Multi-tier fund investments--(i) Master-feeder fund investments. 
If the principal investment strategy of a covered fund (the ``feeder 
fund'') is to invest substantially all of its assets in another single 
covered fund (the ``master fund''), then for purposes of the investment 
limitations in paragraphs (a)(2)(i)(B) and (a)(2)(ii) of this section, 
the banking entity's permitted investment in such funds shall be 
measured only by reference to the value of the master fund. The banking 
entity's permitted investment in the master fund shall include any 
investment by the banking entity in the master fund, as well as the 
banking entity's pro-rata

[[Page 231]]

share of any ownership interest of the master fund that is held through 
the feeder fund; and
    (ii) Fund-of-funds investments. If a banking entity organizes and 
offers a covered fund pursuant to Sec.  75.11 for the purpose of 
investing in other covered funds (a ``fund of funds'') and that fund of 
funds itself invests in another covered fund that the banking entity is 
permitted to own, then the banking entity's permitted investment in that 
other fund shall include any investment by the banking entity in that 
other fund, as well as the banking entity's pro-rata share of any 
ownership interest of the fund that is held through the fund of funds. 
The investment of the banking entity may not represent more than 3 
percent of the amount or value of any single covered fund.
    (c) Aggregate permitted investments in all covered funds. (1) For 
purposes of paragraph (a)(2)(iii) of this section, the aggregate value 
of all ownership interests held by a banking entity shall be the sum of 
all amounts paid or contributed by the banking entity in connection with 
acquiring or retaining an ownership interest in covered funds (together 
with any amounts paid by the entity (or employee thereof) in connection 
with obtaining a restricted profit interest under Sec.  
75.10(d)(6)(ii)), on a historical cost basis.
    (2) Calculation of tier 1 capital. For purposes of paragraph 
(a)(2)(iii) of this section:
    (i) Entities that are required to hold and report tier 1 capital. If 
a banking entity is required to calculate and report tier 1 capital, the 
banking entity's tier 1 capital shall be equal to the amount of tier 1 
capital of the banking entity as of the last day of the most recent 
calendar quarter, as reported to its primary financial regulatory 
agency; and
    (ii) If a banking entity is not required to calculate and report 
tier 1 capital, the banking entity's tier 1 capital shall be determined 
to be equal to:
    (A) In the case of a banking entity that is controlled, directly or 
indirectly, by a depository institution that calculates and reports tier 
1 capital, be equal to the amount of tier 1 capital reported by such 
controlling depository institution in the manner described in paragraph 
(c)(2)(i) of this section;
    (B) In the case of a banking entity that is not controlled, directly 
or indirectly, by a depository institution that calculates and reports 
tier 1 capital:
    (1) Bank holding company subsidiaries. If the banking entity is a 
subsidiary of a bank holding company or company that is treated as a 
bank holding company, be equal to the amount of tier 1 capital reported 
by the top-tier affiliate of such covered banking entity that calculates 
and reports tier 1 capital in the manner described in paragraph 
(c)(2)(i) of this section; and
    (2) Other holding companies and any subsidiary or affiliate thereof. 
If the banking entity is not a subsidiary of a bank holding company or a 
company that is treated as a bank holding company, be equal to the total 
amount of shareholders' equity of the top-tier affiliate within such 
organization as of the last day of the most recent calendar quarter that 
has ended, as determined under applicable accounting standards.
    (iii) Treatment of foreign banking entities--(A) Foreign banking 
entities. Except as provided in paragraph (c)(2)(iii)(B) of this 
section, with respect to a banking entity that is not itself, and is not 
controlled directly or indirectly by, a banking entity that is located 
or organized under the laws of the United States or of any State, the 
tier 1 capital of the banking entity shall be the consolidated tier 1 
capital of the entity as calculated under applicable home country 
standards.
    (B) U.S. affiliates of foreign banking entities. With respect to a 
banking entity that is located or organized under the laws of the United 
States or of any State and is controlled by a foreign banking entity 
identified under paragraph (c)(2)(iii)(A) of this section, the banking 
entity's tier 1 capital shall be as calculated under paragraphs 
(c)(2)(i) or (ii) of this section.
    (d) Capital treatment for a permitted investment in a covered fund. 
For purposes of calculating compliance with the applicable regulatory 
capital requirements, a banking entity shall deduct from the banking 
entity's tier 1 capital (as determined under paragraph (c)(2) of this 
section) the greater of:
    (1) The sum of all amounts paid or contributed by the banking entity 
in

[[Page 232]]

connection with acquiring or retaining an ownership interest (together 
with any amounts paid by the entity (or employee thereof) in connection 
with obtaining a restricted profit interest under Sec.  
75.10(d)(6)(ii)), on a historical cost basis, plus any earnings 
received; and
    (2) The fair market value of the banking entity's ownership 
interests in the covered fund as determined under paragraph (b)(2)(ii) 
or (3) of this section (together with any amounts paid by the entity (or 
employee thereof) in connection with obtaining a restricted profit 
interest under Sec.  75.10(d)(6)(ii)), if the banking entity accounts 
for the profits (or losses) of the fund investment in its financial 
statements.
    (e) Extension of time to divest an ownership interest. (1) Upon 
application by a banking entity, the Board may extend the period under 
paragraph (a)(2)(i) of this section for up to 2 additional years if the 
Board finds that an extension would be consistent with safety and 
soundness and not detrimental to the public interest. An application for 
extension must:
    (i) Be submitted to the Board at least 90 days prior to the 
expiration of the applicable time period;
    (ii) Provide the reasons for application, including information that 
addresses the factors in paragraph (e)(2) of this section; and
    (iii) Explain the banking entity's plan for reducing the permitted 
investment in a covered fund through redemption, sale, dilution or other 
methods as required in paragraph (a)(2) of this section.
    (2) Factors governing Board determinations. In reviewing any 
application under paragraph (e)(1) of this section, the Board may 
consider all the facts and circumstances related to the permitted 
investment in a covered fund, including:
    (i) Whether the investment would result, directly or indirectly, in 
a material exposure by the banking entity to high-risk assets or high-
risk trading strategies;
    (ii) The contractual terms governing the banking entity's interest 
in the covered fund;
    (iii) The date on which the covered fund is expected to have 
attracted sufficient investments from investors unaffiliated with the 
banking entity to enable the banking entity to comply with the 
limitations in paragraph (a)(2)(i) of this section;
    (iv) The total exposure of the covered banking entity to the 
investment and the risks that disposing of, or maintaining, the 
investment in the covered fund may pose to the banking entity and the 
financial stability of the United States;
    (v) The cost to the banking entity of divesting or disposing of the 
investment within the applicable period;
    (vi) Whether the investment or the divestiture or conformance of the 
investment would involve or result in a material conflict of interest 
between the banking entity and unaffiliated parties, including clients, 
customers or counterparties to which it owes a duty;
    (vii) The banking entity's prior efforts to reduce through 
redemption, sale, dilution, or other methods its ownership interests in 
the covered fund, including activities related to the marketing of 
interests in such covered fund;
    (viii) Market conditions; and
    (ix) Any other factor that the Board believes appropriate.
    (3) Authority to impose restrictions on activities or investment 
during any extension period. The Board may impose such conditions on any 
extension approved under paragraph (e)(1) of this section as the Board 
determines are necessary or appropriate to protect the safety and 
soundness of the banking entity or the financial stability of the United 
States, address material conflicts of interest or other unsound banking 
practices, or otherwise further the purposes of section 13 of the BHC 
Act and this part.
    (4) Consultation. In the case of a banking entity that is primarily 
regulated by another Federal banking agency, the SEC, or the CFTC, the 
Board will consult with such agency prior to acting on an application by 
the banking entity for an extension under paragraph (e)(1) of this 
section.



Sec.  75.13  Other permitted covered fund activities and investments.

    (a) Permitted risk-mitigating hedging activities. (1) The 
prohibition contained in Sec.  75.10(a) of this subpart does not

[[Page 233]]

apply with respect to an ownership interest in a covered fund acquired 
or retained by a banking entity that is designed to reduce or otherwise 
significantly mitigate the specific, identifiable risks to the banking 
entity in connection with:
    (i) A compensation arrangement with an employee of the banking 
entity or an affiliate thereof that directly provides investment 
advisory, commodity trading advisory or other services to the covered 
fund; or
    (ii) A position taken by the banking entity when acting as 
intermediary on behalf of a customer that is not itself a banking entity 
to facilitate the exposure by the customer to the profits and losses of 
the covered fund.
    (2) The risk-mitigating hedging activities of a banking entity are 
permitted under this paragraph (a) only if:
    (i) The banking entity has established and implements, maintains and 
enforces an internal compliance program in accordance with subpart D of 
this part that is reasonably designed to ensure the banking entity's 
compliance with the requirements of this section, including:
    (A) Reasonably designed written policies and procedures; and
    (B) Internal controls and ongoing monitoring, management, and 
authorization procedures, including relevant escalation procedures; and
    (ii) The acquisition or retention of the ownership interest:
    (A) Is made in accordance with the written policies, procedures, and 
internal controls required under this section;
    (B) At the inception of the hedge, is designed to reduce or 
otherwise significantly mitigate one or more specific, identifiable 
risks arising:
    (1) Out of a transaction conducted solely to accommodate a specific 
customer request with respect to the covered fund; or
    (2) In connection with the compensation arrangement with the 
employee that directly provides investment advisory, commodity trading 
advisory, or other services to the covered fund;
    (C) Does not give rise, at the inception of the hedge, to any 
significant new or additional risk that is not itself hedged 
contemporaneously in accordance with this section; and
    (D) Is subject to continuing review, monitoring and management by 
the banking entity.
    (iii) With respect to risk-mitigating hedging activity conducted 
pursuant to paragraph (a)(1)(i) of this section, the compensation 
arrangement relates solely to the covered fund in which the banking 
entity or any affiliate has acquired an ownership interest pursuant to 
paragraph (a)(1)(i) and such compensation arrangement provides that any 
losses incurred by the banking entity on such ownership interest will be 
offset by corresponding decreases in amounts payable under such 
compensation arrangement.
    (b) Certain permitted covered fund activities and investments 
outside of the United States. (1) The prohibition contained in Sec.  
75.10(a) does not apply to the acquisition or retention of any ownership 
interest in, or the sponsorship of, a covered fund by a banking entity 
only if:
    (i) The banking entity is not organized or directly or indirectly 
controlled by a banking entity that is organized under the laws of the 
United States or of one or more States;
    (ii) The activity or investment by the banking entity is pursuant to 
paragraph (9) or (13) of section 4(c) of the BHC Act;
    (iii) No ownership interest in the covered fund is offered for sale 
or sold to a resident of the United States; and
    (iv) The activity or investment occurs solely outside of the United 
States.
    (2) An activity or investment by the banking entity is pursuant to 
paragraph (9) or (13) of section 4(c) of the BHC Act for purposes of 
paragraph (b)(1)(ii) of this section only if:
    (i) The activity or investment is conducted in accordance with the 
requirements of this section; and
    (ii)(A) With respect to a banking entity that is a foreign banking 
organization, the banking entity meets the qualifying foreign banking 
organization requirements of Sec.  211.23(a), (c) or (e) of the Board's 
Regulation K (12 CFR 211.23(a), (c) or (e)), as applicable; or

[[Page 234]]

    (B) With respect to a banking entity that is not a foreign banking 
organization, the banking entity is not organized under the laws of the 
United States or of one or more States and the banking entity, on a 
fully-consolidated basis, meets at least two of the following 
requirements:
    (1) Total assets of the banking entity held outside of the United 
States exceed total assets of the banking entity held in the United 
States;
    (2) Total revenues derived from the business of the banking entity 
outside of the United States exceed total revenues derived from the 
business of the banking entity in the United States; or
    (3) Total net income derived from the business of the banking entity 
outside of the United States exceeds total net income derived from the 
business of the banking entity in the United States.
    (3) An ownership interest in a covered fund is not offered for sale 
or sold to a resident of the United States for purposes of paragraph 
(b)(1)(iii) of this section only if it is not sold and has not been sold 
pursuant to an offering that targets residents of the United States in 
which the banking entity or any affiliate of the banking entity 
participates. If the banking entity or an affiliate sponsors or serves, 
directly or indirectly, as the investment manager, investment adviser, 
commodity pool operator or commodity trading advisor to a covered fund, 
then the banking entity or affiliate will be deemed for purposes of this 
paragraph (b)(3) to participate in any offer or sale by the covered fund 
of ownership interests in the covered fund.
    (4) An activity or investment occurs solely outside of the United 
States for purposes of paragraph (b)(1)(iv) of this section only if:
    (i) The banking entity acting as sponsor, or engaging as principal 
in the acquisition or retention of an ownership interest in the covered 
fund, is not itself, and is not controlled directly or indirectly by, a 
banking entity that is located in the United States or organized under 
the laws of the United States or of any State;
    (ii) The banking entity (including relevant personnel) that makes 
the decision to acquire or retain the ownership interest or act as 
sponsor to the covered fund is not located in the United States or 
organized under the laws of the United States or of any State; and
    (iii) The investment or sponsorship, including any transaction 
arising from risk-mitigating hedging related to an ownership interest, 
is not accounted for as principal directly or indirectly on a 
consolidated basis by any branch or affiliate that is located in the 
United States or organized under the laws of the United States or of any 
State.
    (5) For purposes of this section, a U.S. branch, agency, or 
subsidiary of a foreign bank, or any subsidiary thereof, is located in 
the United States; however, a foreign bank of which that branch, agency, 
or subsidiary is a part is not considered to be located in the United 
States solely by virtue of operation of the U.S. branch, agency, or 
subsidiary.
    (c) Permitted covered fund interests and activities by a regulated 
insurance company. The prohibition contained in Sec.  75.10(a) of this 
subpart does not apply to the acquisition or retention by an insurance 
company, or an affiliate thereof, of any ownership interest in, or the 
sponsorship of, a covered fund only if:
    (1) The insurance company or its affiliate acquires and retains the 
ownership interest solely for the general account of the insurance 
company or for one or more separate accounts established by the 
insurance company;
    (2) The acquisition and retention of the ownership interest is 
conducted in compliance with, and subject to, the insurance company 
investment laws and regulations of the State or jurisdiction in which 
such insurance company is domiciled; and
    (3) The appropriate Federal banking agencies, after consultation 
with the Financial Stability Oversight Council and the relevant 
insurance commissioners of the States and foreign jurisdictions, as 
appropriate, have not jointly determined, after notice and comment, that 
a particular law or regulation described in paragraph (c)(2) of this 
section is insufficient to protect

[[Page 235]]

the safety and soundness of the banking entity, or the financial 
stability of the United States.

[79 FR 6048, Jan. 31, 2014, as amended at 84 FR 62208, Nov. 14, 2019]



Sec.  75.14  Limitations on relationships with a covered fund.

    (a) Relationships with a covered fund. (1) Except as provided for in 
paragraph (a)(2) of this section, no banking entity that serves, 
directly or indirectly, as the investment manager, investment adviser, 
commodity trading advisor, or sponsor to a covered fund, that organizes 
and offers a covered fund pursuant to Sec.  75.11, or that continues to 
hold an ownership interest in accordance with Sec.  75.11(b), and no 
affiliate of such entity, may enter into a transaction with the covered 
fund, or with any other covered fund that is controlled by such covered 
fund, that would be a covered transaction as defined in section 23A of 
the Federal Reserve Act (12 U.S.C. 371c(b)(7)), as if such banking 
entity and the affiliate thereof were a member bank and the covered fund 
were an affiliate thereof.
    (2) Notwithstanding paragraph (a)(1) of this section, a banking 
entity may:
    (i) Acquire and retain any ownership interest in a covered fund in 
accordance with the requirements of Sec.  75.11, Sec.  75.12, or Sec.  
75.13; and
    (ii) Enter into any prime brokerage transaction with any covered 
fund in which a covered fund managed, sponsored, or advised by such 
banking entity (or an affiliate thereof) has taken an ownership 
interest, if:
    (A) The banking entity is in compliance with each of the limitations 
set forth in Sec.  75.11 with respect to a covered fund organized and 
offered by such banking entity (or an affiliate thereof);
    (B) The chief executive officer (or equivalent officer) of the 
banking entity certifies in writing annually no later than March 31 to 
the CFTC (with a duty to update the certification if the information in 
the certification materially changes) that the banking entity does not, 
directly or indirectly, guarantee, assume, or otherwise insure the 
obligations or performance of the covered fund or of any covered fund in 
which such covered fund invests; and
    (C) The Board has not determined that such transaction is 
inconsistent with the safe and sound operation and condition of the 
banking entity.
    (b) Restrictions on transactions with covered funds. A banking 
entity that serves, directly or indirectly, as the investment manager, 
investment adviser, commodity trading advisor, or sponsor to a covered 
fund, or that organizes and offers a covered fund pursuant to Sec.  
75.11, or that continues to hold an ownership interest in accordance 
with Sec.  75.11(b), shall be subject to section 23B of the Federal 
Reserve Act (12 U.S.C. 371c-1), as if such banking entity were a member 
bank and such covered fund were an affiliate thereof.
    (c) Restrictions on prime brokerage transactions. A prime brokerage 
transaction permitted under paragraph (a)(2)(ii) of this section shall 
be subject to section 23B of the Federal Reserve Act (12 U.S.C. 371c-1) 
as if the counterparty were an affiliate of the banking entity.

[79 FR 6048, Jan. 31, 2014, as amended at 84 FR 62209, Nov. 14, 2019]



Sec.  75.15  Other limitations on permitted covered fund activities.

    (a) No transaction, class of transactions, or activity may be deemed 
permissible under Sec. Sec.  75.11 through 75.13 if the transaction, 
class of transactions, or activity would:
    (1) Involve or result in a material conflict of interest between the 
banking entity and its clients, customers, or counterparties;
    (2) Result, directly or indirectly, in a material exposure by the 
banking entity to a high-risk asset or a high-risk trading strategy; or
    (3) Pose a threat to the safety and soundness of the banking entity 
or to the financial stability of the United States.
    (b) Definition of material conflict of interest. (1) For purposes of 
this section, a material conflict of interest between a banking entity 
and its clients, customers, or counterparties exists if the banking 
entity engages in any transaction, class of transactions, or activity 
that would involve or result in the

[[Page 236]]

banking entity's interests being materially adverse to the interests of 
its client, customer, or counterparty with respect to such transaction, 
class of transactions, or activity, and the banking entity has not taken 
at least one of the actions in paragraph (b)(2) of this section.
    (2) Prior to effecting the specific transaction or class or type of 
transactions, or engaging in the specific activity, the banking entity:
    (i) Timely and effective disclosure. (A) Has made clear, timely, and 
effective disclosure of the conflict of interest, together with other 
necessary information, in reasonable detail and in a manner sufficient 
to permit a reasonable client, customer, or counterparty to meaningfully 
understand the conflict of interest; and
    (B) Such disclosure is made in a manner that provides the client, 
customer, or counterparty the opportunity to negate, or substantially 
mitigate, any materially adverse effect on the client, customer, or 
counterparty created by the conflict of interest; or
    (ii) Information barriers. Has established, maintained, and enforced 
information barriers that are memorialized in written policies and 
procedures, such as physical separation of personnel, or functions, or 
limitations on types of activity, that are reasonably designed, taking 
into consideration the nature of the banking entity's business, to 
prevent the conflict of interest from involving or resulting in a 
materially adverse effect on a client, customer, or counterparty. A 
banking entity may not rely on such information barriers if, in the case 
of any specific transaction, class or type of transactions or activity, 
the banking entity knows or should reasonably know that, notwithstanding 
the banking entity's establishment of information barriers, the conflict 
of interest may involve or result in a materially adverse effect on a 
client, customer, or counterparty.
    (c) Definition of high-risk asset and high-risk trading strategy. 
For purposes of this section:
    (1) High-risk asset means an asset or group of related assets that 
would, if held by a banking entity, significantly increase the 
likelihood that the banking entity would incur a substantial financial 
loss or would pose a threat to the financial stability of the United 
States.
    (2) High-risk trading strategy means a trading strategy that would, 
if engaged in by a banking entity, significantly increase the likelihood 
that the banking entity would incur a substantial financial loss or 
would pose a threat to the financial stability of the United States.



Sec.  75.16  Ownership of interests in and sponsorship of issuers 
of certain collateralized debt obligations backed by trust-preferred
securities.

    (a) The prohibition contained in Sec.  75.10(a)(1) does not apply to 
the ownership by a banking entity of an interest in, or sponsorship of, 
any issuer if:
    (1) The issuer was established, and the interest was issued, before 
May 19, 2010;
    (2) The banking entity reasonably believes that the offering 
proceeds received by the issuer were invested primarily in Qualifying 
TruPS Collateral; and
    (3) The banking entity acquired such interest on or before December 
10, 2013 (or acquired such interest in connection with a merger with or 
acquisition of a banking entity that acquired the interest on or before 
December 10, 2013).
    (b) For purposes of this Sec.  75.16, Qualifying TruPS Collateral 
shall mean any trust preferred security or subordinated debt instrument 
issued prior to May 19, 2010 by a depository institution holding company 
that, as of the end of any reporting period within 12 months immediately 
preceding the issuance of such trust preferred security or subordinated 
debt instrument, had total consolidated assets of less than 
$15,000,000,000 or issued prior to May 19, 2010 by a mutual holding 
company.
    (c) Notwithstanding paragraph (a)(3) of this section, a banking 
entity may act as a market maker with respect to the interests of an 
issuer described in paragraph (a) of this section in accordance with the 
applicable provisions of Sec. Sec.  75.4 and 75.11.
    (d) Without limiting the applicability of paragraph (a) of this 
section, the Board, the FDIC and the OCC will make public a non-
exclusive list of

[[Page 237]]

issuers that meet the requirements of paragraph (a). A banking entity 
may rely on the list published by the Board, the FDIC and the OCC.

[79 FR 5228, Jan. 31, 2014]



Sec. Sec.  75.17-75.19  [Reserved]



          Subpart D_Compliance Program Requirement; Violations



Sec.  75.20  Program for compliance; reporting.

    (a) Program requirement. Each banking entity (other than a banking 
entity with limited trading assets and liabilities) shall develop and 
provide for the continued administration of a compliance program 
reasonably designed to ensure and monitor compliance with the 
prohibitions and restrictions on proprietary trading and covered fund 
activities and investments set forth in section 13 of the BHC Act and 
this part. The terms, scope, and detail of the compliance program shall 
be appropriate for the types, size, scope, and complexity of activities 
and business structure of the banking entity.
    (b) Banking entities with significant trading assets and 
liabilities. With respect to a banking entity with significant trading 
assets and liabilities, the compliance program required by paragraph (a) 
of this section, at a minimum, shall include:
    (1) Written policies and procedures reasonably designed to document, 
describe, monitor and limit trading activities subject to subpart B of 
this part (including those permitted under Sec. Sec.  75.3 to 75.6), 
including setting, monitoring and managing required limits set out in 
Sec. Sec.  75.4 and 75.5, and activities and investments with respect to 
a covered fund subject to subpart C of this part (including those 
permitted under Sec. Sec.  75.11 through 75.14) conducted by the banking 
entity to ensure that all activities and investments conducted by the 
banking entity that are subject to section 13 of the BHC Act and this 
part comply with section 13 of the BHC Act and this part;
    (2) A system of internal controls reasonably designed to monitor 
compliance with section 13 of the BHC Act and this part and to prevent 
the occurrence of activities or investments that are prohibited by 
section 13 of the BHC Act and this part;
    (3) A management framework that clearly delineates responsibility 
and accountability for compliance with section 13 of the BHC Act and 
this part and includes appropriate management review of trading limits, 
strategies, hedging activities, investments, incentive compensation and 
other matters identified in this part or by management as requiring 
attention;
    (4) Independent testing and audit of the effectiveness of the 
compliance program conducted periodically by qualified personnel of the 
banking entity or by a qualified outside party;
    (5) Training for trading personnel and managers, as well as other 
appropriate personnel, to effectively implement and enforce the 
compliance program; and
    (6) Records sufficient to demonstrate compliance with section 13 of 
the BHC Act and this part, which a banking entity must promptly provide 
to the Commission upon request and retain for a period of no less than 5 
years or such longer period as required by the Commission.
    (c) CEO attestation. The CEO of a banking entity that has 
significant trading assets and liabilities must, based on a review by 
the CEO of the banking entity, attest in writing to the CFTC, each year 
no later than March 31, that the banking entity has in place processes 
to establish, maintain, enforce, review, test and modify the compliance 
program required by paragraph (b) of this section in a manner reasonably 
designed to achieve compliance with section 13 of the BHC Act and this 
part. In the case of a U.S. branch or agency of a foreign banking 
entity, the attestation may be provided for the entire U.S. operations 
of the foreign banking entity by the senior management officer of the 
U.S. operations of the foreign banking entity who is located in the 
United States.
    (d) Reporting requirements under appendix A to this part. (1) A 
banking entity engaged in proprietary trading activity permitted under 
subpart B of this part shall comply with the reporting requirements 
described in appendix A to this part, if:

[[Page 238]]

    (i) The banking entity has significant trading assets and 
liabilities; or
    (ii) The CFTC notifies the banking entity in writing that it must 
satisfy the reporting requirements contained in appendix A to this part.
    (2) Frequency of reporting: Unless the CFTC notifies the banking 
entity in writing that it must report on a different basis, a banking 
entity subject to appendix A to this part shall report the information 
required by appendix A for each quarter within 30 days of the end of the 
quarter.
    (e) Additional documentation for covered funds. A banking entity 
with significant trading assets and liabilities shall maintain records 
that include:
    (1) Documentation of the exclusions or exemptions other than 
sections 3(c)(1) and 3(c)(7) of the Investment Company Act of 1940 
relied on by each fund sponsored by the banking entity (including all 
subsidiaries and affiliates) in determining that such fund is not a 
covered fund;
    (2) For each fund sponsored by the banking entity (including all 
subsidiaries and affiliates) for which the banking entity relies on one 
or more of the exclusions from the definition of covered fund provided 
by Sec.  75.10(c)(1), (5), (8), (9), or (10), documentation supporting 
the banking entity's determination that the fund is not a covered fund 
pursuant to one or more of those exclusions;
    (3) For each seeding vehicle described in Sec.  75.10(c)(12)(i) or 
(iii) that will become a registered investment company or SEC-regulated 
business development company, a written plan documenting the banking 
entity's determination that the seeding vehicle will become a registered 
investment company or SEC-regulated business development company; the 
period of time during which the vehicle will operate as a seeding 
vehicle; and the banking entity's plan to market the vehicle to third-
party investors and convert it into a registered investment company or 
SEC-regulated business development company within the time period 
specified in Sec.  75.12(a)(2)(i)(B);
    (4) For any banking entity that is, or is controlled directly or 
indirectly by a banking entity that is, located in or organized under 
the laws of the United States or of any State, if the aggregate amount 
of ownership interests in foreign public funds that are described in 
Sec.  75.10(c)(1) owned by such banking entity (including ownership 
interests owned by any affiliate that is controlled directly or 
indirectly by a banking entity that is located in or organized under the 
laws of the United States or of any State) exceeds $50 million at the 
end of two or more consecutive calendar quarters, beginning with the 
next succeeding calendar quarter, documentation of the value of the 
ownership interests owned by the banking entity (and such affiliates) in 
each foreign public fund and each jurisdiction in which any such foreign 
public fund is organized, calculated as of the end of each calendar 
quarter, which documentation must continue until the banking entity's 
aggregate amount of ownership interests in foreign public funds is below 
$50 million for two consecutive calendar quarters; and
    (5) For purposes of paragraph (e)(4) of this section, a U.S. branch, 
agency, or subsidiary of a foreign banking entity is located in the 
United States; however, the foreign bank that operates or controls that 
branch, agency, or subsidiary is not considered to be located in the 
United States solely by virtue of operating or controlling the U.S. 
branch, agency, or subsidiary.
    (f) Simplified programs for less active banking entities--(1) 
Banking entities with no covered activities. A banking entity that does 
not engage in activities or investments pursuant to subpart B or subpart 
C of this part (other than trading activities permitted pursuant to 
Sec.  75.6(a)) may satisfy the requirements of this section by 
establishing the required compliance program prior to becoming engaged 
in such activities or making such investments (other than trading 
activities permitted pursuant to Sec.  75.6(a)).
    (2) Banking entities with moderate trading assets and liabilities. A 
banking entity with moderate trading assets and liabilities may satisfy 
the requirements of this section by including in its existing compliance 
policies and procedures appropriate references to the requirements of 
section 13 of the BHC Act and

[[Page 239]]

this part and adjustments as appropriate given the activities, size, 
scope, and complexity of the banking entity.
    (g) Rebuttable presumption of compliance for banking entities with 
limited trading assets and liabilities--(1) Rebuttable presumption. 
Except as otherwise provided in this paragraph, a banking entity with 
limited trading assets and liabilities shall be presumed to be compliant 
with subpart B and subpart C of this part and shall have no obligation 
to demonstrate compliance with this part on an ongoing basis.
    (2) Rebuttal of presumption. If upon examination or audit, the CFTC 
determines that the banking entity has engaged in proprietary trading or 
covered fund activities that are otherwise prohibited under subpart B or 
subpart C of this part, the CFTC may require the banking entity to be 
treated under this part as if it did not have limited trading assets and 
liabilities. The CFTC's rebuttal of the presumption in this paragraph 
must be made in accordance with the notice and response procedures in 
paragraph (i) of this section.
    (h) Reservation of authority. Notwithstanding any other provision of 
this part, the CFTC retains its authority to require a banking entity 
without significant trading assets and liabilities to apply any 
requirements of this part that would otherwise apply if the banking 
entity had significant or moderate trading assets and liabilities if the 
CFTC determines that the size or complexity of the banking entity's 
trading or investment activities, or the risk of evasion of subpart B or 
subpart C, of this part does not warrant a presumption of compliance 
under paragraph (g) of this section or treatment as a banking entity 
with moderate trading assets and liabilities, as applicable. The CFTC's 
exercise of this reservation of authority must be made in accordance 
with the notice and response procedures in paragraph (i) of this 
section.
    (i) Notice and response procedures--(1) Notice. The CFTC will notify 
the banking entity in writing of any determination requiring notice 
under this part and will provide an explanation of the determination.
    (2) Response. The banking entity may respond to any or all items in 
the notice described in paragraph (i)(1) of this section. The response 
should include any matters that the banking entity would have the CFTC 
consider in deciding whether to make the determination. The response 
must be in writing and delivered to the designated CFTC official within 
30 days after the date on which the banking entity received the notice. 
The CFTC may shorten the time period when, in the opinion of the CFTC, 
the activities or condition of the banking entity so requires, provided 
that the banking entity is informed of the time period at the time of 
notice, or with the consent of the banking entity. In its discretion, 
the CFTC may extend the time period for good cause.
    (3) Waiver. Failure to respond within 30 days or such other time 
period as may be specified by the CFTC shall constitute a waiver of any 
objections to the CFTC's determination.
    (4) Decision. The CFTC will notify the banking entity of the 
decision in writing. The notice will include an explanation of the 
decision.

[79 FR 6048, Jan. 31, 2014, as amended at 84 FR 62209, Nov. 14, 2019]



Sec.  75.21  Termination of activities or investments; penalties 
for violations.

    (a) Any banking entity that engages in an activity or makes an 
investment in violation of section 13 of the BHC Act or this part, or 
acts in a manner that functions as an evasion of the requirements of 
section 13 of the BHC Act or this part, including through an abuse of 
any activity or investment permitted under subparts B or C of this part, 
or otherwise violates the restrictions and requirements of section 13 of 
the BHC Act or this part, shall, upon discovery, promptly terminate the 
activity and, as relevant, dispose of the investment.
    (b) Whenever the Commission finds reasonable cause to believe any 
banking entity has engaged in an activity or made an investment in 
violation of section 13 of the BHC Act or this part, or engaged in any 
activity or made any investment that functions as an evasion of the 
requirements of section 13 of the BHC Act or this part, the Commission 
may take any action permitted by law to enforce compliance with section 
13 of the BHC Act and this part, including directing the banking entity

[[Page 240]]

to restrict, limit, or terminate any or all activities under this part 
and dispose of any investment.





Sec. Appendix A to Part 75--Reporting and Recordkeeping Requirements for 
                       Covered Trading Activities

                               I. Purpose

    a. This appendix sets forth reporting and recordkeeping requirements 
that certain banking entities must satisfy in connection with the 
restrictions on proprietary trading set forth in subpart B 
(``proprietary trading restrictions''). Pursuant to Sec.  75.20(d), this 
appendix applies to a banking entity that, together with its affiliates 
and subsidiaries, has significant trading assets and liabilities. These 
entities are required to (i) furnish periodic reports to the CFTC 
regarding a variety of quantitative measurements of their covered 
trading activities, which vary depending on the scope and size of 
covered trading activities, and (ii) create and maintain records 
documenting the preparation and content of these reports. The 
requirements of this appendix must be incorporated into the banking 
entity's internal compliance program under Sec.  75.20.
    b. The purpose of this appendix is to assist banking entities and 
the CFTC in:
    (1) Better understanding and evaluating the scope, type, and profile 
of the banking entity's covered trading activities;
    (2) Monitoring the banking entity's covered trading activities;
    (3) Identifying covered trading activities that warrant further 
review or examination by the banking entity to verify compliance with 
the proprietary trading restrictions;
    (4) Evaluating whether the covered trading activities of trading 
desks engaged in market making-related activities subject to Sec.  
75.4(b) are consistent with the requirements governing permitted market 
making-related activities;
    (5) Evaluating whether the covered trading activities of trading 
desks that are engaged in permitted trading activity subject to Sec.  
75.4, 75.5, or 75.6(a) and (b) (i.e., underwriting and market making-
related activity, risk-mitigating hedging, or trading in certain 
government obligations) are consistent with the requirement that such 
activity not result, directly or indirectly, in a material exposure to 
high-risk assets or high-risk trading strategies;
    (6) Identifying the profile of particular covered trading activities 
of the banking entity, and the individual trading desks of the banking 
entity, to help establish the appropriate frequency and scope of 
examination by CFTC of such activities; and
    (7) Assessing and addressing the risks associated with the banking 
entity's covered trading activities.
    c. Information that must be furnished pursuant to this appendix is 
not intended to serve as a dispositive tool for the identification of 
permissible or impermissible activities.
    d. In addition to the quantitative measurements required in this 
appendix, a banking entity may need to develop and implement other 
quantitative measurements in order to effectively monitor its covered 
trading activities for compliance with section 13 of the BHC Act and 
this part and to have an effective compliance program, as required by 
Sec.  75.20. The effectiveness of particular quantitative measurements 
may differ based on the profile of the banking entity's businesses in 
general and, more specifically, of the particular trading desk, 
including types of instruments traded, trading activities and 
strategies, and history and experience (e.g., whether the trading desk 
is an established, successful market maker or a new entrant to a 
competitive market). In all cases, banking entities must ensure that 
they have robust measures in place to identify and monitor the risks 
taken in their trading activities, to ensure that the activities are 
within risk tolerances established by the banking entity, and to monitor 
and examine for compliance with the proprietary trading restrictions in 
this part.
    e. On an ongoing basis, banking entities must carefully monitor, 
review, and evaluate all furnished quantitative measurements, as well as 
any others that they choose to utilize in order to maintain compliance 
with section 13 of the BHC Act and this part. All measurement results 
that indicate a heightened risk of impermissible proprietary trading, 
including with respect to otherwise-permitted activities under 
Sec. Sec.  75.4 through 75.6(a) and (b), or that result in a material 
exposure to high-risk assets or high-risk trading strategies, must be 
escalated within the banking entity for review, further analysis, 
explanation to CFTC, and remediation, where appropriate. The 
quantitative measurements discussed in this appendix should be helpful 
to banking entities in identifying and managing the risks related to 
their covered trading activities.

                             II. Definitions

    The terms used in this appendix have the same meanings as set forth 
in Sec. Sec.  75.2 and 75.3. In addition, for purposes of this appendix, 
the following definitions apply:
    Applicability identifies the trading desks for which a banking 
entity is required to calculate and report a particular quantitative 
measurement based on the type of covered trading activity conducted by 
the trading desk.

[[Page 241]]

    Calculation period means the period of time for which a particular 
quantitative measurement must be calculated.
    Comprehensive profit and loss means the net profit or loss of a 
trading desk's material sources of trading revenue over a specific 
period of time, including, for example, any increase or decrease in the 
market value of a trading desk's holdings, dividend income, and interest 
income and expense.
    Covered trading activity means trading conducted by a trading desk 
under Sec.  75.4, Sec.  75.5, Sec.  75.6(a), or Sec.  75.6(b). A banking 
entity may include in its covered trading activity trading conducted 
under Sec.  75.3(d), Sec.  75.6(c), Sec.  75.6(d) or Sec.  75.6(e).
    Measurement frequency means the frequency with which a particular 
quantitative metric must be calculated and recorded.
    Trading day means a calendar day on which a trading desk is open for 
trading.

                    III. Reporting and Recordkeeping

                     a. Scope of Required Reporting

    1. Quantitative measurements. Each banking entity made subject to 
this appendix by Sec.  75.20 must furnish the following quantitative 
measurements, as applicable, for each trading desk of the banking entity 
engaged in covered trading activities and calculate these quantitative 
measurements in accordance with this appendix:
    i. Internal Limits and Usage;
    ii. Value-at-Risk;
    iii. Comprehensive Profit and Loss Attribution;
    iv. Positions; and
    v. Transaction Volumes.
    2. Trading desk information. Each banking entity made subject to 
this appendix by Sec.  75.20 must provide certain descriptive 
information, as further described in this appendix, regarding each 
trading desk engaged in covered trading activities.
    3. Quantitative measurements identifying information. Each banking 
entity made subject to this appendix by Sec.  75.20 must provide certain 
identifying and descriptive information, as further described in this 
appendix, regarding its quantitative measurements.
    4. Narrative statement. Each banking entity made subject to this 
appendix by Sec.  75.20 may provide an optional narrative statement, as 
further described in this appendix.
    5. File identifying information. Each banking entity made subject to 
this appendix by Sec.  75.20 must provide file identifying information 
in each submission to the CFTC pursuant to this appendix, including the 
name of the banking entity, the RSSD ID assigned to the top-tier banking 
entity by the Board, and identification of the reporting period and 
creation date and time.

                       b. Trading Desk Information

    1. Each banking entity must provide descriptive information 
regarding each trading desk engaged in covered trading activities, 
including:
    i. Name of the trading desk used internally by the banking entity 
and a unique identification label for the trading desk;
    ii. Identification of each type of covered trading activity in which 
the trading desk is engaged;
    iii. Brief description of the general strategy of the trading desk;
    v. A list identifying each Agency receiving the submission of the 
trading desk;
    2. Indication of whether each calendar date is a trading day or not 
a trading day for the trading desk; and
    3. Currency reported and daily currency conversion rate.

          c. Quantitative Measurements Identifying Information

    Each banking entity must provide the following information regarding 
the quantitative measurements:
    1. An Internal Limits Information Schedule that provides identifying 
and descriptive information for each limit reported pursuant to the 
Internal Limits and Usage quantitative measurement, including the name 
of the limit, a unique identification label for the limit, a description 
of the limit, the unit of measurement for the limit, the type of limit, 
and identification of the corresponding risk factor attribution in the 
particular case that the limit type is a limit on a risk factor 
sensitivity and profit and loss attribution to the same risk factor is 
reported; and
    2. A Risk Factor Attribution Information Schedule that provides 
identifying and descriptive information for each risk factor attribution 
reported pursuant to the Comprehensive Profit and Loss Attribution 
quantitative measurement, including the name of the risk factor or other 
factor, a unique identification label for the risk factor or other 
factor, a description of the risk factor or other factor, and the risk 
factor or other factor's change unit.

                         d. Narrative Statement

    Each banking entity made subject to this appendix by Sec.  75.20 may 
submit in a separate electronic document a Narrative Statement to the 
CFTC with any information the banking entity views as relevant for 
assessing the information reported. The Narrative Statement may include 
further description of or changes to calculation methods, identification 
of material events, description of and reasons for changes in the 
banking entity's trading desk structure or trading desk strategies, and 
when any such changes occurred.

[[Page 242]]

      e. Frequency and Method of Required Calculation and Reporting

    A banking entity must calculate any applicable quantitative 
measurement for each trading day. A banking entity must report the 
Trading Desk Information, the Quantitative Measurements Identifying 
Information, and each applicable quantitative measurement electronically 
to the CFTC on the reporting schedule established in Sec.  75.20 unless 
otherwise requested by the CFTC. A banking entity must report the 
Trading Desk Information, the Quantitative Measurements Identifying 
Information, and each applicable quantitative measurement to the CFTC in 
accordance with the XML Schema specified and published on the CFTC's 
website.

                            f. Recordkeeping

    A banking entity must, for any quantitative measurement furnished to 
the CFTC pursuant to this appendix and Sec.  75.20(d), create and 
maintain records documenting the preparation and content of these 
reports, as well as such information as is necessary to permit the CFTC 
to verify the accuracy of such reports, for a period of five years from 
the end of the calendar year for which the measurement was taken. A 
banking entity must retain the Narrative Statement, the Trading Desk 
Information, and the Quantitative Measurements Identifying Information 
for a period of five years from the end of the calendar year for which 
the information was reported to the CFTC.

                      IV. Quantitative Measurements

                     a. Risk-Management Measurements

                      1. Internal Limits and Usage

    i. Description: For purposes of this appendix, Internal Limits are 
the constraints that define the amount of risk and the positions that a 
trading desk is permitted to take at a point in time, as defined by the 
banking entity for a specific trading desk. Usage represents the value 
of the trading desk's risk or positions that are accounted for by the 
current activity of the desk. Internal limits and their usage are key 
compliance and risk management tools used to control and monitor risk 
taking and include, but are not limited to, the limits set out in 
Sec. Sec.  75.4 and 75.5. A trading desk's risk limits, commonly 
including a limit on ``Value-at-Risk,'' are useful in the broader 
context of the trading desk's overall activities, particularly for the 
market making activities under Sec.  75.4(b) and hedging activity under 
Sec.  75.5. Accordingly, the limits required under Sec. Sec.  
75.4(b)(2)(iii)(C) and 75.5(b)(1)(i)(A) must meet the applicable 
requirements under Sec. Sec.  75.4(b)(2)(iii)(C) and 75.5(b)(1)(i)(A) 
and also must include appropriate metrics for the trading desk limits 
including, at a minimum, ``Value-at-Risk'' except to the extent the 
``Value-at-Risk'' metric is demonstrably ineffective for measuring and 
monitoring the risks of a trading desk based on the types of positions 
traded by, and risk exposures of, that desk.
    A. A banking entity must provide the following information for each 
limit reported pursuant to this quantitative measurement: The unique 
identification label for the limit reported in the Internal Limits 
Information Schedule, the limit size (distinguishing between an upper 
and a lower limit), and the value of usage of the limit.
    ii. Calculation Period: One trading day.
    iii. Measurement Frequency: Daily.
    iv. Applicability: All trading desks engaged in covered trading 
activities.

                            2. Value-at-Risk

    i. Description: For purposes of this appendix, Value-at-Risk 
(``VaR'') is the measurement of the risk of future financial loss in the 
value of a trading desk's aggregated positions at the ninety-nine 
percent confidence level over a one-day period, based on current market 
conditions.
    ii. Calculation Period: One trading day.
    iii. Measurement Frequency: Daily.
    iv. Applicability: All trading desks engaged in covered trading 
activities.

                    b. Source-of-Revenue Measurements

              1. Comprehensive Profit and Loss Attribution

    i. Description: For purposes of this appendix, Comprehensive Profit 
and Loss Attribution is an analysis that attributes the daily 
fluctuation in the value of a trading desk's positions to various 
sources. First, the daily profit and loss of the aggregated positions is 
divided into two categories: (i) Profit and loss attributable to a 
trading desk's existing positions that were also positions held by the 
trading desk as of the end of the prior day (``existing positions''); 
and (ii) profit and loss attributable to new positions resulting from 
the current day's trading activity (``new positions'').
    A. The comprehensive profit and loss associated with existing 
positions must reflect changes in the value of these positions on the 
applicable day. The comprehensive profit and loss from existing 
positions must be further attributed, as applicable, to (i) changes in 
the specific risk factors and other factors that are monitored and 
managed as part of the trading desk's overall risk management policies 
and procedures; and (ii) any other applicable elements, such as cash 
flows, carry, changes in reserves, and the correction, cancellation, or 
exercise of a trade.

[[Page 243]]

    B. For the attribution of comprehensive profit and loss from 
existing positions to specific risk factors and other factors, a banking 
entity must provide the following information for the factors that 
explain the preponderance of the profit or loss changes due to risk 
factor changes: The unique identification label for the risk factor or 
other factor listed in the Risk Factor Attribution Information Schedule, 
and the profit or loss due to the risk factor or other factor change.
    C. The comprehensive profit and loss attributed to new positions 
must reflect commissions and fee income or expense and market gains or 
losses associated with transactions executed on the applicable day. New 
positions include purchases and sales of financial instruments and other 
assets/liabilities and negotiated amendments to existing positions. The 
comprehensive profit and loss from new positions may be reported in the 
aggregate and does not need to be further attributed to specific 
sources.
    D. The portion of comprehensive profit and loss from existing 
positions that is not attributed to changes in specific risk factors and 
other factors must be allocated to a residual category. Significant 
unexplained profit and loss must be escalated for further investigation 
and analysis.
    ii. Calculation Period: One trading day.
    iii. Measurement Frequency: Daily.
    iv. Applicability: All trading desks engaged in covered trading 
activities.

            c. Positions and Transaction Volumes Measurements

                              1. Positions

    i. Description: For purposes of this appendix, Positions is the 
value of securities and derivatives positions managed by the trading 
desk. For purposes of the Positions quantitative measurement, do not 
include in the Positions calculation for ``securities'' those securities 
that are also ``derivatives,'' as those terms are defined under subpart 
A; instead, report those securities that are also derivatives as 
``derivatives.'' \1227\ A banking entity must separately report the 
trading desk's market value of long securities positions, short 
securities positions, derivatives receivables, and derivatives payables.
---------------------------------------------------------------------------

    \1227\ See Sec.  75.2(h), (aa). For example, under this part, a 
security-based swap is both a ``security'' and a ``derivative.'' For 
purposes of the Positions quantitative measurement, security-based swaps 
are reported as derivatives rather than securities.
---------------------------------------------------------------------------

    ii. Calculation Period: One trading day.
    iii. Measurement Frequency: Daily.
    iv. Applicability: All trading desks that rely on Sec.  75.4(a) or 
(b) to conduct underwriting activity or market-making-related activity, 
respectively.

                         2. Transaction Volumes

    i. Description: For purposes of this appendix, Transaction Volumes 
measures three exclusive categories of covered trading activity 
conducted by a trading desk. A banking entity is required to report the 
value and number of security and derivative transactions conducted by 
the trading desk with: (i) Customers, excluding internal transactions; 
(ii) non-customers, excluding internal transactions; and (iii) trading 
desks and other organizational units where the transaction is booked 
into either the same banking entity or an affiliated banking entity. For 
securities, value means gross market value. For derivatives, value means 
gross notional value. For purposes of calculating the Transaction 
Volumes quantitative measurement, do not include in the Transaction 
Volumes calculation for ``securities'' those securities that are also 
``derivatives,'' as those terms are defined under subpart A; instead, 
report those securities that are also derivatives as ``derivatives.'' 
\1228\ Further, for purposes of the Transaction Volumes quantitative 
measurement, a customer of a trading desk that relies on Sec.  75.4(a) 
to conduct underwriting activity is a market participant identified in 
Sec.  75.4(a)(7), and a customer of a trading desk that relies on Sec.  
75.4(b) to conduct market making-related activity is a market 
participant identified in Sec.  75.4(b)(3).
---------------------------------------------------------------------------

    \1228\ See Sec.  75.2(h), (aa).
---------------------------------------------------------------------------

    ii. Calculation Period: One trading day.
    iii. Measurement Frequency: Daily.
    iv. Applicability: All trading desks that rely on Sec.  75.4(a) or 
(b) to conduct underwriting activity or market-making-related activity, 
respectively.

[84 FR 62210, Nov. 14, 2019]



Sec. Appendix Z to Part 75--Proprietary Trading and Certain Interests in 
      and Relationships with Covered Funds (Alternative Compliance)

    Note: The content of this appendix reproduces the regulation 
implementing Section 13 of the Bank Holding Company Act as of November 
13, 2019.

                  Subpart A--Authority and Definitions

Sec.  75.1 Authority, purpose, scope, and relationship to other 
          authorities.
    (a) Authority. This part is issued by the Commission under section 
13 of the Bank Holding Company Act of 1956, as amended (12 U.S.C. 1851).
    (b) Purpose. Section 13 of the Bank Holding Company Act establishes 
prohibitions and restrictions on proprietary trading by, and investments 
in or relationships with covered funds by, certain banking entities. 
This part

[[Page 244]]

implements section 13 of the Bank Holding Company Act by defining terms 
used in the statute and related terms, establishing prohibitions and 
restrictions on proprietary trading and investments in or relationships 
with covered funds, and further explaining the statute's requirements.
    (c) Scope. This part implements section 13 of the Bank Holding 
Company Act with respect to banking entities for which the CFTC is the 
primary financial regulatory agency, as defined in section 2(12) of the 
Dodd-Frank Act, but does not include such entities to the extent they 
are not within the definition of banking entity in Sec.  75.2(c).
    (d) Relationship to other authorities. Except as otherwise provided 
under section 13 of the BHC Act, and notwithstanding any other provision 
of law, the prohibitions and restrictions under section 13 of the BHC 
Act shall apply to the activities of an applicable banking entity, even 
if such activities are authorized for the applicable banking entity 
under other applicable provisions of law.

Sec.  75.2 Definitions.
    Unless otherwise specified, for purposes of this part:
    (a) Affiliate has the same meaning as in section 2(k) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1841(k)).
    (b) Bank holding company has the same meaning as in section 2 of the 
Bank Holding Company Act of 1956 (12 U.S.C. 1841).
    (c) Banking entity. (1) Except as provided in paragraph (c)(2) of 
this section, banking entity means:
    (i) Any insured depository institution;
    (ii) Any company that controls an insured depository institution;
    (iii) Any company that is treated as a bank holding company for 
purposes of section 8 of the International Banking Act of 1978 (12 
U.S.C. 3106); and
    (iv) Any affiliate or subsidiary of any entity described in 
paragraphs (c)(1)(i), (ii), or (iii) of this section.
    (2) Banking entity does not include:
    (i) A covered fund that is not itself a banking entity under 
paragraphs (c)(1)(i), (ii), or (iii) of this section;
    (ii) A portfolio company held under the authority contained in 
section 4(k)(4)(H) or (I) of the BHC Act (12 U.S.C. 1843(k)(4)(H), (I)), 
or any portfolio concern, as defined under 13 CFR 107.50, that is 
controlled by a small business investment company, as defined in section 
103(3) of the Small Business Investment Act of 1958 (15 U.S.C. 662), so 
long as the portfolio company or portfolio concern is not itself a 
banking entity under paragraphs (c)(1)(i), (ii), or (iii) of this 
section; or
    (iii) The FDIC acting in its corporate capacity or as conservator or 
receiver under the Federal Deposit Insurance Act or Title II of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act.
    (d) Board means the Board of Governors of the Federal Reserve 
System.
    (e) CFTC or Commission means the Commodity Futures Trading 
Commission.
    (f) Dealer has the same meaning as in section 3(a)(5) of the 
Exchange Act (15 U.S.C. 78c(a)(5)).
    (g) Depository institution has the same meaning as in section 3(c) 
of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)).
    (h) Derivative. (1) Except as provided in paragraph (h)(2) of this 
section, derivative means:
    (i) Any swap, as that term is defined in section 1a(47) of the 
Commodity Exchange Act (7 U.S.C. 1a(47)), or security-based swap, as 
that term is defined in section 3(a)(68) of the Exchange Act (15 U.S.C. 
78c(a)(68));
    (ii) Any purchase or sale of a commodity, that is not an excluded 
commodity, for deferred shipment or delivery that is intended to be 
physically settled;
    (iii) Any foreign exchange forward (as that term is defined in 
section 1a(24) of the Commodity Exchange Act (7 U.S.C. 1a(24)) or 
foreign exchange swap (as that term is defined in section 1a(25) of the 
Commodity Exchange Act (7 U.S.C. 1a(25));
    (iv) Any agreement, contract, or transaction in foreign currency 
described in section 2(c)(2)(C)(i) of the Commodity Exchange Act (7 
U.S.C. 2(c)(2)(C)(i));
    (v) Any agreement, contract, or transaction in a commodity other 
than foreign currency described in section 2(c)(2)(D)(i) of the 
Commodity Exchange Act (7 U.S.C. 2(c)(2)(D)(i)); and
    (vi) Any transaction authorized under section 19 of the Commodity 
Exchange Act (7 U.S.C. 23(a) or (b));
    (2) A derivative does not include:
    (i) Any consumer, commercial, or other agreement, contract, or 
transaction that the CFTC and SEC have further defined by joint 
regulation, interpretation, guidance, or other action as not within the 
definition of swap, as that term is defined in section 1a(47) of the 
Commodity Exchange Act (7 U.S.C. 1a(47)), or security-based swap, as 
that term is defined in section 3(a)(68) of the Exchange Act (15 U.S.C. 
78c(a)(68)); or
    (ii) Any identified banking product, as defined in section 402(b) of 
the Legal Certainty for Bank Products Act of 2000 (7 U.S.C. 27(b)), that 
is subject to section 403(a) of that Act (7 U.S.C. 27a(a)).
    (i) Employee includes a member of the immediate family of the 
employee.
    (j) Exchange Act means the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.).
    (k) Excluded commodity has the same meaning as in section 1a(19) of 
the Commodity Exchange Act (7 U.S.C. 1a(19)).
    (l) FDIC means the Federal Deposit Insurance Corporation.

[[Page 245]]

    (m) Federal banking agencies means the Board, the Office of the 
Comptroller of the Currency, and the FDIC.
    (n) Foreign banking organization has the same meaning as in section 
211.21(o) of the Board's Regulation K (12 CFR 211.21(o)), but does not 
include a foreign bank, as defined in section 1(b)(7) of the 
International Banking Act of 1978 (12 U.S.C. 3101(7)), that is organized 
under the laws of the Commonwealth of Puerto Rico, Guam, American Samoa, 
the United States Virgin Islands, or the Commonwealth of the Northern 
Mariana Islands.
    (o) Foreign insurance regulator means the insurance commissioner, or 
a similar official or agency, of any country other than the United 
States that is engaged in the supervision of insurance companies under 
foreign insurance law.
    (p) General account means all of the assets of an insurance company 
except those allocated to one or more separate accounts.
    (q) Insurance company means a company that is organized as an 
insurance company, primarily and predominantly engaged in writing 
insurance or reinsuring risks underwritten by insurance companies, 
subject to supervision as such by a state insurance regulator or a 
foreign insurance regulator, and not operated for the purpose of evading 
the provisions of section 13 of the BHC Act (12 U.S.C. 1851).
    (r) Insured depository institution, unless otherwise indicated, has 
the same meaning as in section 3(c) of the Federal Deposit Insurance Act 
(12 U.S.C. 1813(c)), but does not include:
    (1) An insured depository institution that is described in section 
2(c)(2)(D) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1841(c)(2)(D)); or
    (2) An insured depository institution if it has, and if every 
company that controls it has, total consolidated assets of $10 billion 
or less and total trading assets and trading liabilities, on a 
consolidated basis, that are 5 percent or less of total consolidated 
assets.
    (s) Loan means any loan, lease, extension of credit, or secured or 
unsecured receivable that is not a security or derivative.
    (t) Primary financial regulatory agency has the same meaning as in 
section 2(12) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (12 U.S.C. 5301(12)).
    (u) Purchase includes any contract to buy, purchase, or otherwise 
acquire. For security futures products, purchase includes any contract, 
agreement, or transaction for future delivery. With respect to a 
commodity future, purchase includes any contract, agreement, or 
transaction for future delivery. With respect to a derivative, purchase 
includes the execution, termination (prior to its scheduled maturity 
date), assignment, exchange, or similar transfer or conveyance of, or 
extinguishing of rights or obligations under, a derivative, as the 
context may require.
    (v) Qualifying foreign banking organization means a foreign banking 
organization that qualifies as such under Sec.  211.23(a), (c) or (e) of 
the Board's Regulation K (12 CFR 211.23(a), (c), or (e)).
    (w) SEC means the Securities and Exchange Commission.
    (x) Sale and sell each include any contract to sell or otherwise 
dispose of. For security futures products, such terms include any 
contract, agreement, or transaction for future delivery. With respect to 
a commodity future, such terms include any contract, agreement, or 
transaction for future delivery. With respect to a derivative, such 
terms include the execution, termination (prior to its scheduled 
maturity date), assignment, exchange, or similar transfer or conveyance 
of, or extinguishing of rights or obligations under, a derivative, as 
the context may require.
    (y) Security has the meaning specified in section 3(a)(10) of the 
Exchange Act (15 U.S.C. 78c(a)(10)).
    (z) Security-based swap dealer has the same meaning as in section 
3(a)(71) of the Exchange Act (15 U.S.C. 78c(a)(71)).
    (aa) Security future has the meaning specified in section 3(a)(55) 
of the Exchange Act (15 U.S.C. 78c(a)(55)).
    (bb) Separate account means an account established and maintained by 
an insurance company in connection with one or more insurance contracts 
to hold assets that are legally segregated from the insurance company's 
other assets, under which income, gains, and losses, whether or not 
realized, from assets allocated to such account, are, in accordance with 
the applicable contract, credited to or charged against such account 
without regard to other income, gains, or losses of the insurance 
company.
    (cc) State means any State, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, American Samoa, the United States 
Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
    (dd) Subsidiary has the same meaning as in section 2(d) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1841(d)).
    (ee) State insurance regulator means the insurance commissioner, or 
a similar official or agency, of a State that is engaged in the 
supervision of insurance companies under State insurance law.
    (ff) Swap dealer has the same meaning as in section 1(a)(49) of the 
Commodity Exchange Act (7 U.S.C. 1a(49)).

                     Subpart B--Proprietary Trading

Sec.  75.3 Prohibition on proprietary trading.
    (a) Prohibition. Except as otherwise provided in this subpart, a 
banking entity may not engage in proprietary trading. Proprietary 
trading means engaging as principal for the trading account of the 
banking entity in

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any purchase or sale of one or more financial instruments.
    (b) Definition of trading account. (1) Trading account means any 
account that is used by a banking entity to:
    (i) Purchase or sell one or more financial instruments principally 
for the purpose of:
    (A) Short-term resale;
    (B) Benefitting from actual or expected short-term price movements;
    (C) Realizing short-term arbitrage profits; or
    (D) Hedging one or more positions resulting from the purchases or 
sales of financial instruments described in paragraphs (b)(1)(i)(A), 
(B), or (C) of this section;
    (ii) Purchase or sell one or more financial instruments that are 
both market risk capital rule covered positions and trading positions 
(or hedges of other market risk capital rule covered positions), if the 
banking entity, or any affiliate of the banking entity, is an insured 
depository institution, bank holding company, or savings and loan 
holding company, and calculates risk-based capital ratios under the 
market risk capital rule; or
    (iii) Purchase or sell one or more financial instruments for any 
purpose, if the banking entity:
    (A) Is licensed or registered, or is required to be licensed or 
registered, to engage in the business of a dealer, swap dealer, or 
security-based swap dealer, to the extent the instrument is purchased or 
sold in connection with the activities that require the banking entity 
to be licensed or registered as such; or
    (B) Is engaged in the business of a dealer, swap dealer, or 
security-based swap dealer outside of the United States, to the extent 
the instrument is purchased or sold in connection with the activities of 
such business.
    (2) Rebuttable presumption for certain purchases and sales. The 
purchase (or sale) of a financial instrument by a banking entity shall 
be presumed to be for the trading account of the banking entity under 
paragraph (b)(1)(i) of this section if the banking entity holds the 
financial instrument for fewer than sixty days or substantially 
transfers the risk of the financial instrument within sixty days of the 
purchase (or sale), unless the banking entity can demonstrate, based on 
all relevant facts and circumstances, that the banking entity did not 
purchase (or sell) the financial instrument principally for any of the 
purposes described in paragraph (b)(1)(i) of this section.
    (c) Financial instrument--(1) Financial instrument means:
    (i) A security, including an option on a security;
    (ii) A derivative, including an option on a derivative; or
    (iii) A contract of sale of a commodity for future delivery, or 
option on a contract of sale of a commodity for future delivery.
    (2) A financial instrument does not include:
    (i) A loan;
    (ii) A commodity that is not:
    (A) An excluded commodity (other than foreign exchange or currency);
    (B) A derivative;
    (C) A contract of sale of a commodity for future delivery; or
    (D) An option on a contract of sale of a commodity for future 
delivery; or
    (iii) Foreign exchange or currency.
    (d) Proprietary trading does not include:--(1) Any purchase or sale 
of one or more financial instruments by a banking entity that arises 
under a repurchase or reverse repurchase agreement pursuant to which the 
banking entity has simultaneously agreed, in writing, to both purchase 
and sell a stated asset, at stated prices, and on stated dates or on 
demand with the same counterparty;
    (2) Any purchase or sale of one or more financial instruments by a 
banking entity that arises under a transaction in which the banking 
entity lends or borrows a security temporarily to or from another party 
pursuant to a written securities lending agreement under which the 
lender retains the economic interests of an owner of such security, and 
has the right to terminate the transaction and to recall the loaned 
security on terms agreed by the parties;
    (3) Any purchase or sale of a security by a banking entity for the 
purpose of liquidity management in accordance with a documented 
liquidity management plan of the banking entity that:
    (i) Specifically contemplates and authorizes the particular 
securities to be used for liquidity management purposes, the amount, 
types, and risks of these securities that are consistent with liquidity 
management, and the liquidity circumstances in which the particular 
securities may or must be used;
    (ii) Requires that any purchase or sale of securities contemplated 
and authorized by the plan be principally for the purpose of managing 
the liquidity of the banking entity, and not for the purpose of short-
term resale, benefitting from actual or expected short-term price 
movements, realizing short-term arbitrage profits, or hedging a position 
taken for such short-term purposes;
    (iii) Requires that any securities purchased or sold for liquidity 
management purposes be highly liquid and limited to securities the 
market, credit, and other risks of which the banking entity does not 
reasonably expect to give rise to appreciable profits or losses as a 
result of short-term price movements;
    (iv) Limits any securities purchased or sold for liquidity 
management purposes, together with any other instruments purchased or 
sold for such purposes, to an amount that is consistent with the banking 
entity's near-term funding needs, including deviations

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from normal operations of the banking entity or any affiliate thereof, 
as estimated and documented pursuant to methods specified in the plan;
    (v) Includes written policies and procedures, internal controls, 
analysis, and independent testing to ensure that the purchase and sale 
of securities that are not permitted under Sec.  75.6(a) or (b) are for 
the purpose of liquidity management and in accordance with the liquidity 
management plan described in paragraph (d)(3) of this section; and
    (vi) Is consistent with the Commission's supervisory requirements, 
guidance, and expectations regarding liquidity management;
    (4) Any purchase or sale of one or more financial instruments by a 
banking entity that is a derivatives clearing organization or a clearing 
agency in connection with clearing financial instruments;
    (5) Any excluded clearing activities by a banking entity that is a 
member of a clearing agency, a member of a derivatives clearing 
organization, or a member of a designated financial market utility;
    (6) Any purchase or sale of one or more financial instruments by a 
banking entity, so long as:
    (i) The purchase (or sale) satisfies an existing delivery obligation 
of the banking entity or its customers, including to prevent or close 
out a failure to deliver, in connection with delivery, clearing, or 
settlement activity; or
    (ii) The purchase (or sale) satisfies an obligation of the banking 
entity in connection with a judicial, administrative, self-regulatory 
organization, or arbitration proceeding;
    (7) Any purchase or sale of one or more financial instruments by a 
banking entity that is acting solely as agent, broker, or custodian;
    (8) Any purchase or sale of one or more financial instruments by a 
banking entity through a deferred compensation, stock-bonus, profit-
sharing, or pension plan of the banking entity that is established and 
administered in accordance with the law of the United States or a 
foreign sovereign, if the purchase or sale is made directly or 
indirectly by the banking entity as trustee for the benefit of persons 
who are or were employees of the banking entity; or
    (9) Any purchase or sale of one or more financial instruments by a 
banking entity in the ordinary course of collecting a debt previously 
contracted in good faith, provided that the banking entity divests the 
financial instrument as soon as practicable, and in no event may the 
banking entity retain such instrument for longer than such period 
permitted by the Commission.
    (e) Definition of other terms related to proprietary trading. For 
purposes of this subpart:
    (1) Anonymous means that each party to a purchase or sale is unaware 
of the identity of the other party(ies) to the purchase or sale.
    (2) Clearing agency has the same meaning as in section 3(a)(23) of 
the Exchange Act (15 U.S.C. 78c(a)(23)).
    (3) Commodity has the same meaning as in section 1a(9) of the 
Commodity Exchange Act (7 U.S.C. 1a(9)), except that a commodity does 
not include any security;
    (4) Contract of sale of a commodity for future delivery means a 
contract of sale (as that term is defined in section 1a(13) of the 
Commodity Exchange Act (7 U.S.C. 1a(13)) for future delivery (as that 
term is defined in section 1a(27) of the Commodity Exchange Act (7 
U.S.C. 1a(27))).
    (5) Derivatives clearing organization means:
    (i) A derivatives clearing organization registered under section 5b 
of the Commodity Exchange Act (7 U.S.C. 7a-1);
    (ii) A derivatives clearing organization that, pursuant to CFTC 
regulation, is exempt from the registration requirements under section 
5b of the Commodity Exchange Act (7 U.S.C. 7a-1); or
    (iii) A foreign derivatives clearing organization that, pursuant to 
CFTC regulation, is permitted to clear for a foreign board of trade that 
is registered with the CFTC.
    (6) Exchange, unless the context otherwise requires, means any 
designated contract market, swap execution facility, or foreign board of 
trade registered with the CFTC, or, for purposes of securities or 
security-based swaps, an exchange, as defined under section 3(a)(1) of 
the Exchange Act (15 U.S.C. 78c(a)(1)), or security-based swap execution 
facility, as defined under section 3(a)(77) of the Exchange Act (15 
U.S.C. 78c(a)(77)).
    (7) Excluded clearing activities means:
    (i) With respect to customer transactions cleared on a derivatives 
clearing organization, a clearing agency, or a designated financial 
market utility, any purchase or sale necessary to correct trading errors 
made by or on behalf of a customer provided that such purchase or sale 
is conducted in accordance with, for transactions cleared on a 
derivatives clearing organization, the Commodity Exchange Act, CFTC 
regulations, and the rules or procedures of the derivatives clearing 
organization, or, for transactions cleared on a clearing agency, the 
rules or procedures of the clearing agency, or, for transactions cleared 
on a designated financial market utility that is neither a derivatives 
clearing organization nor a clearing agency, the rules or procedures of 
the designated financial market utility;
    (ii) Any purchase or sale in connection with and related to the 
management of a default or threatened imminent default of a customer 
provided that such purchase or sale is conducted in accordance with, for 
transactions cleared on a derivatives clearing organization, the 
Commodity Exchange Act,

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CFTC regulations, and the rules or procedures of the derivatives 
clearing organization, or, for transactions cleared on a clearing 
agency, the rules or procedures of the clearing agency, or, for 
transactions cleared on a designated financial market utility that is 
neither a derivatives clearing organization nor a clearing agency, the 
rules or procedures of the designated financial market utility;
    (iii) Any purchase or sale in connection with and related to the 
management of a default or threatened imminent default of a member of a 
clearing agency, a member of a derivatives clearing organization, or a 
member of a designated financial market utility;
    (iv) Any purchase or sale in connection with and related to the 
management of the default or threatened default of a clearing agency, a 
derivatives clearing organization, or a designated financial market 
utility; and
    (v) Any purchase or sale that is required by the rules or procedures 
of a clearing agency, a derivatives clearing organization, or a 
designated financial market utility to mitigate the risk to the clearing 
agency, derivatives clearing organization, or designated financial 
market utility that would result from the clearing by a member of 
security-based swaps that reference the member or an affiliate of the 
member.
    (8) Designated financial market utility has the same meaning as in 
section 803(4) of the Dodd-Frank Act (12 U.S.C. 5462(4)).
    (9) Issuer has the same meaning as in section 2(a)(4) of the 
Securities Act of 1933 (15 U.S.C. 77b(a)(4)).
    (10) Market risk capital rule covered position and trading position 
means a financial instrument that is both a covered position and a 
trading position, as those terms are respectively defined:
    (i) In the case of a banking entity that is a bank holding company, 
savings and loan holding company, or insured depository institution, 
under the market risk capital rule that is applicable to the banking 
entity; and
    (ii) In the case of a banking entity that is affiliated with a bank 
holding company or savings and loan holding company, other than a 
banking entity to which a market risk capital rule is applicable, under 
the market risk capital rule that is applicable to the affiliated bank 
holding company or savings and loan holding company.
    (11) Market risk capital rule means the market risk capital rule 
that is contained in subpart F of 12 CFR part 3, 12 CFR parts 208 and 
225, or 12 CFR part 324, as applicable.
    (12) Municipal security means a security that is a direct obligation 
of or issued by, or an obligation guaranteed as to principal or interest 
by, a State or any political subdivision thereof, or any agency or 
instrumentality of a State or any political subdivision thereof, or any 
municipal corporate instrumentality of one or more States or political 
subdivisions thereof.
    (13) Trading desk means the smallest discrete unit of organization 
of a banking entity that purchases or sells financial instruments for 
the trading account of the banking entity or an affiliate thereof.

Sec.  75.4 Permitted underwriting and market making-related activities.
    (a) Underwriting activities--(1) Permitted underwriting activities. 
The prohibition contained in Sec.  75.3(a) does not apply to a banking 
entity's underwriting activities conducted in accordance with paragraph 
(a) of this section.
    (2) Requirements. The underwriting activities of a banking entity 
are permitted under paragraph (a)(1) of this section only if:
    (i) The banking entity is acting as an underwriter for a 
distribution of securities and the trading desk's underwriting position 
is related to such distribution;
    (ii) The amount and type of the securities in the trading desk's 
underwriting position are designed not to exceed the reasonably expected 
near term demands of clients, customers, or counterparties, and 
reasonable efforts are made to sell or otherwise reduce the underwriting 
position within a reasonable period, taking into account the liquidity, 
maturity, and depth of the market for the relevant type of security;
    (iii) The banking entity has established and implements, maintains, 
and enforces an internal compliance program required by subpart D of 
this part that is reasonably designed to ensure the banking entity's 
compliance with the requirements of paragraph (a) of this section, 
including reasonably designed written policies and procedures, internal 
controls, analysis and independent testing identifying and addressing:
    (A) The products, instruments or exposures each trading desk may 
purchase, sell, or manage as part of its underwriting activities;
    (B) Limits for each trading desk, based on the nature and amount of 
the trading desk's underwriting activities, including the reasonably 
expected near term demands of clients, customers, or counterparties, on 
the:
    (1) Amount, types, and risk of its underwriting position;
    (2) Level of exposures to relevant risk factors arising from its 
underwriting position; and
    (3) Period of time a security may be held;
    (C) Internal controls and ongoing monitoring and analysis of each 
trading desk's compliance with its limits; and
    (D) Authorization procedures, including escalation procedures that 
require review and approval of any trade that would exceed a trading 
desk's limit(s), demonstrable analysis of the basis for any temporary or 
permanent increase to a trading desk's limit(s),

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and independent review of such demonstrable analysis and approval;
    (iv) The compensation arrangements of persons performing the 
activities described in paragraph (a) of this section are designed not 
to reward or incentivize prohibited proprietary trading; and
    (v) The banking entity is licensed or registered to engage in the 
activity described in paragraph (a) of this section in accordance with 
applicable law.
    (3) Definition of distribution. For purposes of paragraph (a) of 
this section, a distribution of securities means:
    (i) An offering of securities, whether or not subject to 
registration under the Securities Act of 1933, that is distinguished 
from ordinary trading transactions by the presence of special selling 
efforts and selling methods; or
    (ii) An offering of securities made pursuant to an effective 
registration statement under the Securities Act of 1933.
    (4) Definition of underwriter. For purposes of paragraph (a) of this 
section, underwriter means:
    (i) A person who has agreed with an issuer or selling security 
holder to:
    (A) Purchase securities from the issuer or selling security holder 
for distribution;
    (B) Engage in a distribution of securities for or on behalf of the 
issuer or selling security holder; or
    (C) Manage a distribution of securities for or on behalf of the 
issuer or selling security holder; or
    (ii) A person who has agreed to participate or is participating in a 
distribution of such securities for or on behalf of the issuer or 
selling security holder.
    (5) Definition of selling security holder. For purposes of paragraph 
(a) of this section, selling security holder means any person, other 
than an issuer, on whose behalf a distribution is made.
    (6) Definition of underwriting position. For purposes of paragraph 
(a) of this section, underwriting position means the long or short 
positions in one or more securities held by a banking entity or its 
affiliate, and managed by a particular trading desk, in connection with 
a particular distribution of securities for which such banking entity or 
affiliate is acting as an underwriter.
    (7) Definition of client, customer, and counterparty. For purposes 
of paragraph (a) of this section, the terms client, customer, and 
counterparty, on a collective or individual basis, refer to market 
participants that may transact with the banking entity in connection 
with a particular distribution for which the banking entity is acting as 
underwriter.
    (b) Market making-related activities--(1) Permitted market making-
related activities. The prohibition contained in Sec.  75.3(a) does not 
apply to a banking entity's market making-related activities conducted 
in accordance with paragraph (b) of this section.
    (2) Requirements. The market making-related activities of a banking 
entity are permitted under paragraph (b)(1) of this section only if:
    (i) The trading desk that establishes and manages the financial 
exposure routinely stands ready to purchase and sell one or more types 
of financial instruments related to its financial exposure and is 
willing and available to quote, purchase and sell, or otherwise enter 
into long and short positions in those types of financial instruments 
for its own account, in commercially reasonable amounts and throughout 
market cycles on a basis appropriate for the liquidity, maturity, and 
depth of the market for the relevant types of financial instruments;
    (ii) The amount, types, and risks of the financial instruments in 
the trading desk's market-maker inventory are designed not to exceed, on 
an ongoing basis, the reasonably expected near term demands of clients, 
customers, or counterparties, based on:
    (A) The liquidity, maturity, and depth of the market for the 
relevant types of financial instrument(s); and
    (B) Demonstrable analysis of historical customer demand, current 
inventory of financial instruments, and market and other factors 
regarding the amount, types, and risks, of or associated with financial 
instruments in which the trading desk makes a market, including through 
block trades;
    (iii) The banking entity has established and implements, maintains, 
and enforces an internal compliance program required by subpart D of 
this part that is reasonably designed to ensure the banking entity's 
compliance with the requirements of paragraph (b) of this section, 
including reasonably designed written policies and procedures, internal 
controls, analysis and independent testing identifying and addressing:
    (A) The financial instruments each trading desk stands ready to 
purchase and sell in accordance with paragraph (b)(2)(i) of this 
section;
    (B) The actions the trading desk will take to demonstrably reduce or 
otherwise significantly mitigate promptly the risks of its financial 
exposure consistent with the limits required under paragraph 
(b)(2)(iii)(C) of this section; the products, instruments, and exposures 
each trading desk may use for risk management purposes; the techniques 
and strategies each trading desk may use to manage the risks of its 
market making-related activities and inventory; and the process, 
strategies, and personnel responsible for ensuring that the actions 
taken by the trading desk to mitigate these risks are and continue to be 
effective;
    (C) Limits for each trading desk, based on the nature and amount of 
the trading desk's market making-related activities, that address the 
factors prescribed by paragraph (b)(2)(ii) of this section, on:

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    (1) The amount, types, and risks of its market-maker inventory;
    (2) The amount, types, and risks of the products, instruments, and 
exposures the trading desk may use for risk management purposes;
    (3) The level of exposures to relevant risk factors arising from its 
financial exposure; and
    (4) The period of time a financial instrument may be held;
    (D) Internal controls and ongoing monitoring and analysis of each 
trading desk's compliance with its limits; and
    (E) Authorization procedures, including escalation procedures that 
require review and approval of any trade that would exceed a trading 
desk's limit(s), demonstrable analysis that the basis for any temporary 
or permanent increase to a trading desk's limit(s) is consistent with 
the requirements of paragraph (b) of this section, and independent 
review of such demonstrable analysis and approval;
    (iv) To the extent that any limit identified pursuant to paragraph 
(b)(2)(iii)(C) of this section is exceeded, the trading desk takes 
action to bring the trading desk into compliance with the limits as 
promptly as possible after the limit is exceeded;
    (v) The compensation arrangements of persons performing the 
activities described in paragraph (b) of this section are designed not 
to reward or incentivize prohibited proprietary trading; and
    (vi) The banking entity is licensed or registered to engage in 
activity described in paragraph (b) of this section in accordance with 
applicable law.
    (3) Definition of client, customer, and counterparty. For purposes 
of paragraph (b) of this section, the terms client, customer, and 
counterparty, on a collective or individual basis refer to market 
participants that make use of the banking entity's market making-related 
services by obtaining such services, responding to quotations, or 
entering into a continuing relationship with respect to such services, 
provided that:
    (i) A trading desk or other organizational unit of another banking 
entity is not a client, customer, or counterparty of the trading desk if 
that other entity has trading assets and liabilities of $50 billion or 
more as measured in accordance with Sec.  75.20(d)(1), unless:
    (A) The trading desk documents how and why a particular trading desk 
or other organizational unit of the entity should be treated as a 
client, customer, or counterparty of the trading desk for purposes of 
paragraph (b)(2) of this section; or
    (B) The purchase or sale by the trading desk is conducted 
anonymously on an exchange or similar trading facility that permits 
trading on behalf of a broad range of market participants.
    (ii) [Reserved]
    (4) Definition of financial exposure. For purposes of paragraph (b) 
of this section, financial exposure means the aggregate risks of one or 
more financial instruments and any associated loans, commodities, or 
foreign exchange or currency, held by a banking entity or its affiliate 
and managed by a particular trading desk as part of the trading desk's 
market making-related activities.
    (5) Definition of market-maker inventory. For the purposes of 
paragraph (b) of this section, market-maker inventory means all of the 
positions in the financial instruments for which the trading desk stands 
ready to make a market in accordance with paragraph (b)(2)(i) of this 
section that are managed by the trading desk, including the trading 
desk's open positions or exposures arising from open transactions.

Sec.  75.5 Permitted risk-mitigating hedging activities.
    (a) Permitted risk-mitigating hedging activities. The prohibition 
contained in Sec.  75.3(a) does not apply to the risk-mitigating hedging 
activities of a banking entity in connection with and related to 
individual or aggregated positions, contracts, or other holdings of the 
banking entity and designed to reduce the specific risks to the banking 
entity in connection with and related to such positions, contracts, or 
other holdings.
    (b) Requirements. The risk-mitigating hedging activities of a 
banking entity are permitted under paragraph (a) of this section only 
if:
    (1) The banking entity has established and implements, maintains and 
enforces an internal compliance program required by subpart D of this 
part that is reasonably designed to ensure the banking entity's 
compliance with the requirements of this section, including:
    (i) Reasonably designed written policies and procedures regarding 
the positions, techniques and strategies that may be used for hedging, 
including documentation indicating what positions, contracts or other 
holdings a particular trading desk may use in its risk-mitigating 
hedging activities, as well as position and aging limits with respect to 
such positions, contracts or other holdings;
    (ii) Internal controls and ongoing monitoring, management, and 
authorization procedures, including relevant escalation procedures; and
    (iii) The conduct of analysis, including correlation analysis, and 
independent testing designed to ensure that the positions, techniques 
and strategies that may be used for hedging may reasonably be expected 
to demonstrably reduce or otherwise significantly mitigate the specific, 
identifiable risk(s) being hedged, and such correlation analysis

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demonstrates that the hedging activity demonstrably reduces or otherwise 
significantly mitigates the specific, identifiable risk(s) being hedged;
    (2) The risk-mitigating hedging activity:
    (i) Is conducted in accordance with the written policies, 
procedures, and internal controls required under this section;
    (ii) At the inception of the hedging activity, including, without 
limitation, any adjustments to the hedging activity, is designed to 
reduce or otherwise significantly mitigate and demonstrably reduces or 
otherwise significantly mitigates one or more specific, identifiable 
risks, including market risk, counterparty or other credit risk, 
currency or foreign exchange risk, interest rate risk, commodity price 
risk, basis risk, or similar risks, arising in connection with and 
related to identified positions, contracts, or other holdings of the 
banking entity, based upon the facts and circumstances of the identified 
underlying and hedging positions, contracts or other holdings and the 
risks and liquidity thereof;
    (iii) Does not give rise, at the inception of the hedge, to any 
significant new or additional risk that is not itself hedged 
contemporaneously in accordance with this section;
    (iv) Is subject to continuing review, monitoring and management by 
the banking entity that:
    (A) Is consistent with the written hedging policies and procedures 
required under paragraph (b)(1) of this section;
    (B) Is designed to reduce or otherwise significantly mitigate and 
demonstrably reduces or otherwise significantly mitigates the specific, 
identifiable risks that develop over time from the risk-mitigating 
hedging activities undertaken under this section and the underlying 
positions, contracts, and other holdings of the banking entity, based 
upon the facts and circumstances of the underlying and hedging 
positions, contracts and other holdings of the banking entity and the 
risks and liquidity thereof; and
    (C) Requires ongoing recalibration of the hedging activity by the 
banking entity to ensure that the hedging activity satisfies the 
requirements set out in paragraph (b)(2) of this section and is not 
prohibited proprietary trading; and
    (3) The compensation arrangements of persons performing risk-
mitigating hedging activities are designed not to reward or incentivize 
prohibited proprietary trading.
    (c) Documentation requirement. (1) A banking entity must comply with 
the requirements of paragraphs (c)(2) and (c)(3) of this section with 
respect to any purchase or sale of financial instruments made in 
reliance on this section for risk-mitigating hedging purposes that is:
    (i) Not established by the specific trading desk establishing or 
responsible for the underlying positions, contracts, or other holdings 
the risks of which the hedging activity is designed to reduce;
    (ii) Established by the specific trading desk establishing or 
responsible for the underlying positions, contracts, or other holdings 
the risks of which the purchases or sales are designed to reduce, but 
that is effected through a financial instrument, exposure, technique, or 
strategy that is not specifically identified in the trading desk's 
written policies and procedures established under paragraph (b)(1) of 
this section or under Sec.  75.4(b)(2)(iii)(B) as a product, instrument, 
exposure, technique, or strategy such trading desk may use for hedging; 
or
    (iii) Established to hedge aggregated positions across two or more 
trading desks.
    (2) In connection with any purchase or sale identified in paragraph 
(c)(1) of this section, a banking entity must, at a minimum, and 
contemporaneously with the purchase or sale, document:
    (i) The specific, identifiable risk(s) of the identified positions, 
contracts, or other holdings of the banking entity that the purchase or 
sale is designed to reduce;
    (ii) The specific risk-mitigating strategy that the purchase or sale 
is designed to fulfill; and
    (iii) The trading desk or other business unit that is establishing 
and responsible for the hedge.
    (3) A banking entity must create and retain records sufficient to 
demonstrate compliance with the requirements of paragraph (c) of this 
section for a period that is no less than five years in a form that 
allows the banking entity to promptly produce such records to the 
Commission on request, or such longer period as required under other law 
or this part.

Sec.  75.6 Other permitted proprietary trading activities.
    (a) Permitted trading in domestic government obligations. The 
prohibition contained in Sec.  75.3(a) does not apply to the purchase or 
sale by a banking entity of a financial instrument that is:
    (1) An obligation of, or issued or guaranteed by, the United States;
    (2) An obligation, participation, or other instrument of, or issued 
or guaranteed by, an agency of the United States, the Government 
National Mortgage Association, the Federal National Mortgage 
Association, the Federal Home Loan Mortgage Corporation, a Federal Home 
Loan Bank, the Federal Agricultural Mortgage Corporation or a Farm 
Credit System institution chartered under and subject to the provisions 
of the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.);
    (3) An obligation of any State or any political subdivision thereof, 
including any municipal security; or
    (4) An obligation of the FDIC, or any entity formed by or on behalf 
of the FDIC for

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purpose of facilitating the disposal of assets acquired or held by the 
FDIC in its corporate capacity or as conservator or receiver under the 
Federal Deposit Insurance Act or Title II of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act.
    (b) Permitted trading in foreign government obligations--(1) 
Affiliates of foreign banking entities in the United States. The 
prohibition contained in Sec.  75.3(a) does not apply to the purchase or 
sale of a financial instrument that is an obligation of, or issued or 
guaranteed by, a foreign sovereign (including any multinational central 
bank of which the foreign sovereign is a member), or any agency or 
political subdivision of such foreign sovereign, by a banking entity, so 
long as:
    (i) The banking entity is organized under or is directly or 
indirectly controlled by a banking entity that is organized under the 
laws of a foreign sovereign and is not directly or indirectly controlled 
by a top-tier banking entity that is organized under the laws of the 
United States;
    (ii) The financial instrument is an obligation of, or issued or 
guaranteed by, the foreign sovereign under the laws of which the foreign 
banking entity referred to in paragraph (b)(1)(i) of this section is 
organized (including any multinational central bank of which the foreign 
sovereign is a member), or any agency or political subdivision of that 
foreign sovereign; and
    (iii) The purchase or sale as principal is not made by an insured 
depository institution.
    (2) Foreign affiliates of a U.S. banking entity. The prohibition 
contained in Sec.  75.3(a) does not apply to the purchase or sale of a 
financial instrument that is an obligation of, or issued or guaranteed 
by, a foreign sovereign (including any multinational central bank of 
which the foreign sovereign is a member), or any agency or political 
subdivision of that foreign sovereign, by a foreign entity that is owned 
or controlled by a banking entity organized or established under the 
laws of the United States or any State, so long as:
    (i) The foreign entity is a foreign bank, as defined in Sec.  
211.2(j) of the Board's Regulation K (12 CFR 211.2(j)), or is regulated 
by the foreign sovereign as a securities dealer;
    (ii) The financial instrument is an obligation of, or issued or 
guaranteed by, the foreign sovereign under the laws of which the foreign 
entity is organized (including any multinational central bank of which 
the foreign sovereign is a member), or any agency or political 
subdivision of that foreign sovereign; and
    (iii) The financial instrument is owned by the foreign entity and is 
not financed by an affiliate that is located in the United States or 
organized under the laws of the United States or of any State.
    (c) Permitted trading on behalf of customers--(1) Fiduciary 
transactions. The prohibition contained in Sec.  75.3(a) does not apply 
to the purchase or sale of financial instruments by a banking entity 
acting as trustee or in a similar fiduciary capacity, so long as:
    (i) The transaction is conducted for the account of, or on behalf 
of, a customer; and
    (ii) The banking entity does not have or retain beneficial ownership 
of the financial instruments.
    (2) Riskless principal transactions. The prohibition contained in 
Sec.  75.3(a) does not apply to the purchase or sale of financial 
instruments by a banking entity acting as riskless principal in a 
transaction in which the banking entity, after receiving an order to 
purchase (or sell) a financial instrument from a customer, purchases (or 
sells) the financial instrument for its own account to offset a 
contemporaneous sale to (or purchase from) the customer.
    (d) Permitted trading by a regulated insurance company. The 
prohibition contained in Sec.  75.3(a) does not apply to the purchase or 
sale of financial instruments by a banking entity that is an insurance 
company or an affiliate of an insurance company if:
    (1) The insurance company or its affiliate purchases or sells the 
financial instruments solely for:
    (i) The general account of the insurance company; or
    (ii) A separate account established by the insurance company;
    (2) The purchase or sale is conducted in compliance with, and 
subject to, the insurance company investment laws, regulations, and 
written guidance of the State or jurisdiction in which such insurance 
company is domiciled; and
    (3) The appropriate Federal banking agencies, after consultation 
with the Financial Stability Oversight Council and the relevant 
insurance commissioners of the States and foreign jurisdictions, as 
appropriate, have not jointly determined, after notice and comment, that 
a particular law, regulation, or written guidance described in paragraph 
(d)(2) of this section is insufficient to protect the safety and 
soundness of the covered banking entity, or the financial stability of 
the United States.
    (e) Permitted trading activities of foreign banking entities. (1) 
The prohibition contained in Sec.  75.3(a) does not apply to the 
purchase or sale of financial instruments by a banking entity if:
    (i) The banking entity is not organized or directly or indirectly 
controlled by a banking entity that is organized under the laws of the 
United States or of any State;
    (ii) The purchase or sale by the banking entity is made pursuant to 
paragraph (9) or (13) of section 4(c) of the BHC Act; and
    (iii) The purchase or sale meets the requirements of paragraph 
(e)(3) of this section.

[[Page 253]]

    (2) A purchase or sale of financial instruments by a banking entity 
is made pursuant to paragraph (9) or (13) of section 4(c) of the BHC Act 
for purposes of paragraph (e)(1)(ii) of this section only if:
    (i) The purchase or sale is conducted in accordance with the 
requirements of paragraph (e) of this section; and
    (ii)(A) With respect to a banking entity that is a foreign banking 
organization, the banking entity meets the qualifying foreign banking 
organization requirements of Sec.  211.23(a), (c) or (e) of the Board's 
Regulation K (12 CFR 211.23(a), (c) or (e)), as applicable; or
    (B) With respect to a banking entity that is not a foreign banking 
organization, the banking entity is not organized under the laws of the 
United States or of any State and the banking entity, on a fully-
consolidated basis, meets at least two of the following requirements:
    (1) Total assets of the banking entity held outside of the United 
States exceed total assets of the banking entity held in the United 
States;
    (2) Total revenues derived from the business of the banking entity 
outside of the United States exceed total revenues derived from the 
business of the banking entity in the United States; or
    (3) Total net income derived from the business of the banking entity 
outside of the United States exceeds total net income derived from the 
business of the banking entity in the United States.
    (3) A purchase or sale by a banking entity is permitted for purposes 
of paragraph (e) of this section only if:
    (i) The banking entity engaging as principal in the purchase or sale 
(including any personnel of the banking entity or its affiliate that 
arrange, negotiate or execute such purchase or sale) is not located in 
the United States or organized under the laws of the United States or of 
any State;
    (ii) The banking entity (including relevant personnel) that makes 
the decision to purchase or sell as principal is not located in the 
United States or organized under the laws of the United States or of any 
State;
    (iii) The purchase or sale, including any transaction arising from 
risk-mitigating hedging related to the instruments purchased or sold, is 
not accounted for as principal directly or on a consolidated basis by 
any branch or affiliate that is located in the United States or 
organized under the laws of the United States or of any State;
    (iv) No financing for the banking entity's purchases or sales is 
provided, directly or indirectly, by any branch or affiliate that is 
located in the United States or organized under the laws of the United 
States or of any State; and
    (v) The purchase or sale is not conducted with or through any U.S. 
entity, other than:
    (A) A purchase or sale with the foreign operations of a U.S. entity 
if no personnel of such U.S. entity that are located in the United 
States are involved in the arrangement, negotiation, or execution of 
such purchase or sale;
    (B) A purchase or sale with an unaffiliated market intermediary 
acting as principal, provided the purchase or sale is promptly cleared 
and settled through a clearing agency or derivatives clearing 
organization acting as a central counterparty; or
    (C) A purchase or sale through an unaffiliated market intermediary 
acting as agent, provided the purchase or sale is conducted anonymously 
on an exchange or similar trading facility and is promptly cleared and 
settled through a clearing agency or derivatives clearing organization 
acting as a central counterparty,
    (4) For purposes of paragraph (e) of this section, a U.S. entity is 
any entity that is, or is controlled by, or is acting on behalf of, or 
at the direction of, any other entity that is, located in the United 
States or organized under the laws of the United States or of any State.
    (5) For purposes of paragraph (e) of this section, a U.S. branch, 
agency, or subsidiary of a foreign banking entity is considered to be 
located in the United States; however, the foreign bank that operates or 
controls that branch, agency, or subsidiary is not considered to be 
located in the United States solely by virtue of operating or 
controlling the U.S. branch, agency, or subsidiary.
    (6) For purposes of paragraph (e) of this section, unaffiliated 
market intermediary means an unaffiliated entity, acting as an 
intermediary, that is:
    (i) A broker or dealer registered with the SEC under section 15 of 
the Exchange Act or exempt from registration or excluded from regulation 
as such;
    (ii) A swap dealer registered with the CFTC under section 4s of the 
Commodity Exchange Act or exempt from registration or excluded from 
regulation as such;
    (iii) A security-based swap dealer registered with the SEC under 
section 15F of the Exchange Act or exempt from registration or excluded 
from regulation as such; or
    (iv) A futures commission merchant registered with the CFTC under 
section 4f of the Commodity Exchange Act or exempt from registration or 
excluded from regulation as such.

Sec.  75.7 Limitations on permitted proprietary trading activities.
    (a) No transaction, class of transactions, or activity may be deemed 
permissible under Sec. Sec.  75.4 through 75.6 if the transaction, class 
of transactions, or activity would:
    (1) Involve or result in a material conflict of interest between the 
banking entity and its clients, customers, or counterparties;

[[Page 254]]

    (2) Result, directly or indirectly, in a material exposure by the 
banking entity to a high-risk asset or a high-risk trading strategy; or
    (3) Pose a threat to the safety and soundness of the banking entity 
or to the financial stability of the United States.
    (b) Definition of material conflict of interest. (1) For purposes of 
this section, a material conflict of interest between a banking entity 
and its clients, customers, or counterparties exists if the banking 
entity engages in any transaction, class of transactions, or activity 
that would involve or result in the banking entity's interests being 
materially adverse to the interests of its client, customer, or 
counterparty with respect to such transaction, class of transactions, or 
activity, and the banking entity has not taken at least one of the 
actions in paragraph (b)(2) of this section.
    (2) Prior to effecting the specific transaction or class or type of 
transactions, or engaging in the specific activity, the banking entity:
    (i) Timely and effective disclosure. (A) Has made clear, timely, and 
effective disclosure of the conflict of interest, together with other 
necessary information, in reasonable detail and in a manner sufficient 
to permit a reasonable client, customer, or counterparty to meaningfully 
understand the conflict of interest; and
    (B) Such disclosure is made in a manner that provides the client, 
customer, or counterparty the opportunity to negate, or substantially 
mitigate, any materially adverse effect on the client, customer, or 
counterparty created by the conflict of interest; or
    (ii) Information barriers. Has established, maintained, and enforced 
information barriers that are memorialized in written policies and 
procedures, such as physical separation of personnel, or functions, or 
limitations on types of activity, that are reasonably designed, taking 
into consideration the nature of the banking entity's business, to 
prevent the conflict of interest from involving or resulting in a 
materially adverse effect on a client, customer, or counterparty. A 
banking entity may not rely on such information barriers if, in the case 
of any specific transaction, class or type of transactions or activity, 
the banking entity knows or should reasonably know that, notwithstanding 
the banking entity's establishment of information barriers, the conflict 
of interest may involve or result in a materially adverse effect on a 
client, customer, or counterparty.
    (c) Definition of high-risk asset and high-risk trading strategy. 
For purposes of this section:
    (1) High-risk asset means an asset or group of related assets that 
would, if held by a banking entity, significantly increase the 
likelihood that the banking entity would incur a substantial financial 
loss or would pose a threat to the financial stability of the United 
States.
    (2) High-risk trading strategy means a trading strategy that would, 
if engaged in by a banking entity, significantly increase the likelihood 
that the banking entity would incur a substantial financial loss or 
would pose a threat to the financial stability of the United States.

Sec. Sec.  75.8-75.9 [Reserved]

           Subpart C--Covered Fund Activities and Investments

Sec.  75.10 Prohibition on acquiring or retaining an ownership interest 
          in and having certain relationships with a covered fund.
    (a) Prohibition. (1) Except as otherwise provided in this subpart, a 
banking entity may not, as principal, directly or indirectly, acquire or 
retain any ownership interest in or sponsor a covered fund.
    (2) Paragraph (a)(1) of this section does not include acquiring or 
retaining an ownership interest in a covered fund by a banking entity:
    (i) Acting solely as agent, broker, or custodian, so long as;
    (A) The activity is conducted for the account of, or on behalf of, a 
customer; and
    (B) The banking entity and its affiliates do not have or retain 
beneficial ownership of such ownership interest;
    (ii) Through a deferred compensation, stock-bonus, profit-sharing, 
or pension plan of the banking entity (or an affiliate thereof) that is 
established and administered in accordance with the law of the United 
States or a foreign sovereign, if the ownership interest is held or 
controlled directly or indirectly by the banking entity as trustee for 
the benefit of persons who are or were employees of the banking entity 
(or an affiliate thereof);
    (iii) In the ordinary course of collecting a debt previously 
contracted in good faith, provided that the banking entity divests the 
ownership interest as soon as practicable, and in no event may the 
banking entity retain such ownership interest for longer than such 
period permitted by the Commission; or
    (iv) On behalf of customers as trustee or in a similar fiduciary 
capacity for a customer that is not a covered fund, so long as:
    (A) The activity is conducted for the account of, or on behalf of, 
the customer; and
    (B) The banking entity and its affiliates do not have or retain 
beneficial ownership of such ownership interest.
    (b) Definition of covered fund. (1) Except as provided in paragraph 
(c) of this section, covered fund means:
    (i) An issuer that would be an investment company, as defined in the 
Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), but

[[Page 255]]

for section 3(c)(1) or 3(c)(7) of that Act (15 U.S.C. 80a-3(c)(1) or 
(7));
    (ii) Any commodity pool under section 1a(10) of the Commodity 
Exchange Act (7 U.S.C. 1a(10)) for which:
    (A) The commodity pool operator has claimed an exemption under Sec.  
4.7 of this chapter; or
    (B)(1) A commodity pool operator is registered with the CFTC as a 
commodity pool operator in connection with the operation of the 
commodity pool;
    (2) Substantially all participation units of the commodity pool are 
owned by qualified eligible persons under Sec.  4.7(a)(2) and (3) of 
this chapter; and
    (3) Participation units of the commodity pool have not been publicly 
offered to persons who are not qualified eligible persons under Sec.  
4.7(a)(2) and (3) of this chapter; or
    (iii) For any banking entity that is, or is controlled directly or 
indirectly by a banking entity that is, located in or organized under 
the laws of the United States or of any State, an entity that:
    (A) Is organized or established outside the United States and the 
ownership interests of which are offered and sold solely outside the 
United States;
    (B) Is, or holds itself out as being, an entity or arrangement that 
raises money from investors primarily for the purpose of investing in 
securities for resale or other disposition or otherwise trading in 
securities; and
    (C)(1) Has as its sponsor that banking entity (or an affiliate 
thereof); or
    (2) Has issued an ownership interest that is owned directly or 
indirectly by that banking entity (or an affiliate thereof).
    (2) An issuer shall not be deemed to be a covered fund under 
paragraph (b)(1)(iii) of this section if, were the issuer subject to 
U.S. securities laws, the issuer could rely on an exclusion or exemption 
from the definition of ``investment company'' under the Investment 
Company Act of 1940 (15 U.S.C. 80a-1 et seq.) other than the exclusions 
contained in section 3(c)(1) and 3(c)(7) of that Act.
    (3) For purposes of paragraph (b)(1)(iii) of this section, a U.S. 
branch, agency, or subsidiary of a foreign banking entity is located in 
the United States; however, the foreign bank that operates or controls 
that branch, agency, or subsidiary is not considered to be located in 
the United States solely by virtue of operating or controlling the U.S. 
branch, agency, or subsidiary.
    (c) Notwithstanding paragraph (b) of this section, unless the 
appropriate Federal banking agencies, the SEC, and the CFTC jointly 
determine otherwise, a covered fund does not include:
    (1) Foreign public funds. (i) Subject to paragraphs (c)(1)(ii) and 
(iii) of this section, an issuer that:
    (A) Is organized or established outside of the United States;
    (B) Is authorized to offer and sell ownership interests to retail 
investors in the issuer's home jurisdiction; and
    (C) Sells ownership interests predominantly through one or more 
public offerings outside of the United States.
    (ii) With respect to a banking entity that is, or is controlled 
directly or indirectly by a banking entity that is, located in or 
organized under the laws of the United States or of any State and any 
issuer for which such banking entity acts as sponsor, the sponsoring 
banking entity may not rely on the exemption in paragraph (c)(1)(i) of 
this section for such issuer unless ownership interests in the issuer 
are sold predominantly to persons other than:
    (A) Such sponsoring banking entity;
    (B) Such issuer;
    (C) Affiliates of such sponsoring banking entity or such issuer; and
    (D) Directors and employees of such entities.
    (iii) For purposes of paragraph (c)(1)(i)(C) of this section, the 
term public offering means a distribution (as defined in Sec.  
75.4(a)(3)) of securities in any jurisdiction outside the United States 
to investors, including retail investors, provided that:
    (A) The distribution complies with all applicable requirements in 
the jurisdiction in which such distribution is being made;
    (B) The distribution does not restrict availability to investors 
having a minimum level of net worth or net investment assets; and
    (C) The issuer has filed or submitted, with the appropriate 
regulatory authority in such jurisdiction, offering disclosure documents 
that are publicly available.
    (2) Wholly-owned subsidiaries. An entity, all of the outstanding 
ownership interests of which are owned directly or indirectly by the 
banking entity (or an affiliate thereof), except that:
    (i) Up to five percent of the entity's outstanding ownership 
interests, less any amounts outstanding under paragraph (c)(2)(ii) of 
this section, may be held by employees or directors of the banking 
entity or such affiliate (including former employees or directors if 
their ownership interest was acquired while employed by or in the 
service of the banking entity); and
    (ii) Up to 0.5 percent of the entity's outstanding ownership 
interests may be held by a third party if the ownership interest is 
acquired or retained by the third party for the purpose of establishing 
corporate separateness or addressing bankruptcy, insolvency, or similar 
concerns.
    (3) Joint ventures. A joint venture between a banking entity or any 
of its affiliates and one or more unaffiliated persons, provided that 
the joint venture:
    (i) Is comprised of no more than 10 unaffiliated co-venturers;

[[Page 256]]

    (ii) Is in the business of engaging in activities that are 
permissible for the banking entity or affiliate, other than investing in 
securities for resale or other disposition; and
    (iii) Is not, and does not hold itself out as being, an entity or 
arrangement that raises money from investors primarily for the purpose 
of investing in securities for resale or other disposition or otherwise 
trading in securities.
    (4) Acquisition vehicles. An issuer:
    (i) Formed solely for the purpose of engaging in a bona fide merger 
or acquisition transaction; and
    (ii) That exists only for such period as necessary to effectuate the 
transaction.
    (5) Foreign pension or retirement funds. A plan, fund, or program 
providing pension, retirement, or similar benefits that is:
    (i) Organized and administered outside the United States;
    (ii) A broad-based plan for employees or citizens that is subject to 
regulation as a pension, retirement, or similar plan under the laws of 
the jurisdiction in which the plan, fund, or program is organized and 
administered; and
    (iii) Established for the benefit of citizens or residents of one or 
more foreign sovereigns or any political subdivision thereof.
    (6) Insurance company separate accounts. A separate account, 
provided that no banking entity other than the insurance company 
participates in the account's profits and losses.
    (7) Bank owned life insurance. A separate account that is used 
solely for the purpose of allowing one or more banking entities to 
purchase a life insurance policy for which the banking entity or 
entities is beneficiary, provided that no banking entity that purchases 
the policy:
    (i) Controls the investment decisions regarding the underlying 
assets or holdings of the separate account; or
    (ii) Participates in the profits and losses of the separate account 
other than in compliance with applicable supervisory guidance regarding 
bank owned life insurance.
    (8) Loan securitizations--(i) Scope. An issuing entity for asset-
backed securities that satisfies all the conditions of paragraph (c)(8) 
of this section and the assets or holdings of which are comprised solely 
of:
    (A) Loans as defined in Sec.  75.2(s);
    (B) Rights or other assets designed to assure the servicing or 
timely distribution of proceeds to holders of such securities and rights 
or other assets that are related or incidental to purchasing or 
otherwise acquiring and holding the loans, provided that each asset 
meets the requirements of paragraph (c)(8)(iii) of this section;
    (C) Interest rate or foreign exchange derivatives that meet the 
requirements of paragraph (c)(8)(iv) of this section; and
    (D) Special units of beneficial interest and collateral certificates 
that meet the requirements of paragraph (c)(8)(v) of this section.
    (ii) Impermissible assets. For purposes of paragraph (c)(8) of this 
section, the assets or holdings of the issuing entity shall not include 
any of the following:
    (A) A security, including an asset-backed security, or an interest 
in an equity or debt security other than as permitted in paragraph 
(c)(8)(iii) of this section;
    (B) A derivative, other than a derivative that meets the 
requirements of paragraph (c)(8)(iv) of this section; or
    (C) A commodity forward contract.
    (iii) Permitted securities. Notwithstanding paragraph (c)(8)(ii)(A) 
of this section, the issuing entity may hold securities if those 
securities are:
    (A) Cash equivalents for purposes of the rights and assets in 
paragraph (c)(8)(i)(B) of this section; or
    (B) Securities received in lieu of debts previously contracted with 
respect to the loans supporting the asset-backed securities.
    (iv) Derivatives. The holdings of derivatives by the issuing entity 
shall be limited to interest rate or foreign exchange derivatives that 
satisfy all of the following conditions:
    (A) The written terms of the derivative directly relate to the 
loans, the asset-backed securities, or the contractual rights of other 
assets described in paragraph (c)(8)(i)(B) of this section; and
    (B) The derivatives reduce the interest rate and/or foreign exchange 
risks related to the loans, the asset-backed securities, or the 
contractual rights or other assets described in paragraph (c)(8)(i)(B) 
of this section.
    (v) Special units of beneficial interest and collateral 
certificates. The assets or holdings of the issuing entity may include 
collateral certificates and special units of beneficial interest issued 
by a special purpose vehicle, provided that:
    (A) The special purpose vehicle that issues the special unit of 
beneficial interest or collateral certificate meets the requirements in 
paragraph (c)(8) of this section;
    (B) The special unit of beneficial interest or collateral 
certificate is used for the sole purpose of transferring to the issuing 
entity for the loan securitization the economic risks and benefits of 
the assets that are permissible for loan securitizations under paragraph 
(c)(8) of this section and does not directly or indirectly transfer any 
interest in any other economic or financial exposure;
    (C) The special unit of beneficial interest or collateral 
certificate is created solely to satisfy legal requirements or otherwise 
facilitate the structuring of the loan securitization; and
    (D) The special purpose vehicle that issues the special unit of 
beneficial interest or collateral certificate and the issuing entity are

[[Page 257]]

established under the direction of the same entity that initiated the 
loan securitization.
    (9) Qualifying asset-backed commercial paper conduits. (i) An 
issuing entity for asset-backed commercial paper that satisfies all of 
the following requirements:
    (A) The asset-backed commercial paper conduit holds only:
    (1) Loans and other assets permissible for a loan securitization 
under paragraph (c)(8)(i) of this section; and
    (2) Asset-backed securities supported solely by assets that are 
permissible for loan securitizations under paragraph (c)(8)(i) of this 
section and acquired by the asset-backed commercial paper conduit as 
part of an initial issuance either directly from the issuing entity of 
the asset-backed securities or directly from an underwriter in the 
distribution of the asset-backed securities;
    (B) The asset-backed commercial paper conduit issues only asset-
backed securities, comprised of a residual interest and securities with 
a legal maturity of 397 days or less; and
    (C) A regulated liquidity provider has entered into a legally 
binding commitment to provide full and unconditional liquidity coverage 
with respect to all of the outstanding asset-backed securities issued by 
the asset-backed commercial paper conduit (other than any residual 
interest) in the event that funds are required to redeem maturing asset-
backed securities.
    (ii) For purposes of this paragraph (c)(9) of this section, a 
regulated liquidity provider means:
    (A) A depository institution, as defined in section 3(c) of the 
Federal Deposit Insurance Act (12 U.S.C. 1813(c));
    (B) A bank holding company, as defined in section 2(a) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1841(a)), or a subsidiary 
thereof;
    (C) A savings and loan holding company, as defined in section 10a of 
the Home Owners' Loan Act (12 U.S.C. 1467a), provided all or 
substantially all of the holding company's activities are permissible 
for a financial holding company under section 4(k) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1843(k)), or a subsidiary thereof;
    (D) A foreign bank whose home country supervisor, as defined in 
Sec.  211.21(q) of the Board's Regulation K (12 CFR 211.21(q)), has 
adopted capital standards consistent with the Capital Accord for the 
Basel Committee on Banking Supervision, as amended, and that is subject 
to such standards, or a subsidiary thereof; or
    (E) The United States or a foreign sovereign.
    (10) Qualifying covered bonds--(i) Scope. An entity owning or 
holding a dynamic or fixed pool of loans or other assets as provided in 
paragraph (c)(8) of this section for the benefit of the holders of 
covered bonds, provided that the assets in the pool are comprised solely 
of assets that meet the conditions in paragraph (c)(8)(i) of this 
section.
    (ii) Covered bond. For purposes of paragraph (c)(10) of this 
section, a covered bond means:
    (A) A debt obligation issued by an entity that meets the definition 
of foreign banking organization, the payment obligations of which are 
fully and unconditionally guaranteed by an entity that meets the 
conditions set forth in paragraph (c)(10)(i) of this section; or
    (B) A debt obligation of an entity that meets the conditions set 
forth in paragraph (c)(10)(i) of this section, provided that the payment 
obligations are fully and unconditionally guaranteed by an entity that 
meets the definition of foreign banking organization and the entity is a 
wholly-owned subsidiary, as defined in paragraph (c)(2) of this section, 
of such foreign banking organization.
    (11) SBICs and public welfare investment funds. An issuer:
    (i) That is a small business investment company, as defined in 
section 103(3) of the Small Business Investment Act of 1958 (15 U.S.C. 
662), or that has received from the Small Business Administration notice 
to proceed to qualify for a license as a small business investment 
company, which notice or license has not been revoked; or
    (ii) The business of which is to make investments that are:
    (A) Designed primarily to promote the public welfare, of the type 
permitted under paragraph (11) of section 5136 of the Revised Statutes 
of the United States (12 U.S.C. 24), including the welfare of low- and 
moderate-income communities or families (such as providing housing, 
services, or jobs); or
    (B) Qualified rehabilitation expenditures with respect to a 
qualified rehabilitated building or certified historic structure, as 
such terms are defined in section 47 of the Internal Revenue Code of 
1986 or a similar State historic tax credit program.
    (12) Registered investment companies and excluded entities. An 
issuer:
    (i) That is registered as an investment company under section 8 of 
the Investment Company Act of 1940 (15 U.S.C. 80a-8), or that is formed 
and operated pursuant to a written plan to become a registered 
investment company as described in Sec.  75.20(e)(3) and that complies 
with the requirements of section 18 of the Investment Company Act of 
1940 (15 U.S.C. 80a-18);
    (ii) That may rely on an exclusion or exemption from the definition 
of ``investment company'' under the Investment Company Act of 1940 (15 
U.S.C. 80a-1 et seq.) other than the exclusions contained in section 
3(c)(1) and 3(c)(7) of that Act; or
    (iii) That has elected to be regulated as a business development 
company pursuant to

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section 54(a) of that Act (15 U.S.C. 80a-53) and has not withdrawn its 
election, or that is formed and operated pursuant to a written plan to 
become a business development company as described in Sec.  75.20(e)(3) 
and that complies with the requirements of section 61 of the Investment 
Company Act of 1940 (15 U.S.C. 80a-60).
    (13) Issuers in conjunction with the FDIC's receivership or 
conservatorship operations. An issuer that is an entity formed by or on 
behalf of the FDIC for the purpose of facilitating the disposal of 
assets acquired in the FDIC's capacity as conservator or receiver under 
the Federal Deposit Insurance Act or Title II of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act.
    (14) Other excluded issuers. (i) Any issuer that the appropriate 
Federal banking agencies, the SEC, and the CFTC jointly determine the 
exclusion of which is consistent with the purposes of section 13 of the 
BHC Act.
    (ii) A determination made under paragraph (c)(14)(i) of this section 
will be promptly made public.
    (d) Definition of other terms related to covered funds. For purposes 
of this subpart:
    (1) Applicable accounting standards means U.S. generally accepted 
accounting principles, or such other accounting standards applicable to 
a banking entity that the Commission determines are appropriate and that 
the banking entity uses in the ordinary course of its business in 
preparing its consolidated financial statements.
    (2) Asset-backed security has the meaning specified in section 
3(a)(79) of the Exchange Act (15 U.S.C. 78c(a)(79)).
    (3) Director has the same meaning as provided in Sec.  215.2(d)(1) 
of the Board's Regulation O (12 CFR 215.2(d)(1)).
    (4) Issuer has the same meaning as in section 2(a)(22) of the 
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(22)).
    (5) Issuing entity means with respect to asset-backed securities the 
special purpose vehicle that owns or holds the pool assets underlying 
asset-backed securities and in whose name the asset-backed securities 
supported or serviced by the pool assets are issued.
    (6) Ownership interest--(i) Ownership interest means any equity, 
partnership, or other similar interest. An ``other similar interest'' 
means an interest that:
    (A) Has the right to participate in the selection or removal of a 
general partner, managing member, member of the board of directors or 
trustees, investment manager, investment adviser, or commodity trading 
advisor of the covered fund (excluding the rights of a creditor to 
exercise remedies upon the occurrence of an event of default or an 
acceleration event);
    (B) Has the right under the terms of the interest to receive a share 
of the income, gains or profits of the covered fund;
    (C) Has the right to receive the underlying assets of the covered 
fund after all other interests have been redeemed and/or paid in full 
(excluding the rights of a creditor to exercise remedies upon the 
occurrence of an event of default or an acceleration event);
    (D) Has the right to receive all or a portion of excess spread (the 
positive difference, if any, between the aggregate interest payments 
received from the underlying assets of the covered fund and the 
aggregate interest paid to the holders of other outstanding interests);
    (E) Provides under the terms of the interest that the amounts 
payable by the covered fund with respect to the interest could be 
reduced based on losses arising from the underlying assets of the 
covered fund, such as allocation of losses, write-downs or charge-offs 
of the outstanding principal balance, or reductions in the amount of 
interest due and payable on the interest;
    (F) Receives income on a pass-through basis from the covered fund, 
or has a rate of return that is determined by reference to the 
performance of the underlying assets of the covered fund; or
    (G) Any synthetic right to have, receive, or be allocated any of the 
rights in paragraphs (d)(6)(i)(A) through (d)(6)(i)(F) of this section.
    (ii) Ownership interest does not include restricted profit interest, 
which is an interest held by an entity (or an employee or former 
employee thereof) in a covered fund for which the entity (or employee 
thereof) serves as investment manager, investment adviser, commodity 
trading advisor, or other service provider so long as:
    (A) The sole purpose and effect of the interest is to allow the 
entity (or employee or former employee thereof) to share in the profits 
of the covered fund as performance compensation for the investment 
management, investment advisory, commodity trading advisory, or other 
services provided to the covered fund by the entity (or employee or 
former employee thereof), provided that the entity (or employee or 
former employee thereof) may be obligated under the terms of such 
interest to return profits previously received;
    (B) All such profit, once allocated, is distributed to the entity 
(or employee or former employee thereof) promptly after being earned or, 
if not so distributed, is retained by the covered fund for the sole 
purpose of establishing a reserve amount to satisfy contractual 
obligations with respect to subsequent losses of the covered fund and 
such undistributed profit of the entity (or employee or former employee 
thereof) does not share in the subsequent investment gains of the 
covered fund;

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    (C) Any amounts invested in the covered fund, including any amounts 
paid by the entity (or employee or former employee thereof) in 
connection with obtaining the restricted profit interest, are within the 
limits of Sec.  75.12; and
    (D) The interest is not transferable by the entity (or employee or 
former employee thereof) except to an affiliate thereof (or an employee 
of the banking entity or affiliate), to immediate family members, or 
through the intestacy, of the employee or former employee, or in 
connection with a sale of the business that gave rise to the restricted 
profit interest by the entity (or employee or former employee thereof) 
to an unaffiliated party that provides investment management, investment 
advisory, commodity trading advisory, or other services to the fund.
    (7) Prime brokerage transaction means any transaction that would be 
a covered transaction, as defined in section 23A(b)(7) of the Federal 
Reserve Act (12 U.S.C. 371c(b)(7)), that is provided in connection with 
custody, clearance and settlement, securities borrowing or lending 
services, trade execution, financing, or data, operational, and 
administrative support.
    (8) Resident of the United States means a person that is a ``U.S. 
person'' as defined in rule 902(k) of the SEC's Regulation S (17 CFR 
230.902(k)).
    (9) Sponsor means, with respect to a covered fund:
    (i) To serve as a general partner, managing member, or trustee of a 
covered fund, or to serve as a commodity pool operator with respect to a 
covered fund as defined in (b)(1)(ii) of this section;
    (ii) In any manner to select or to control (or to have employees, 
officers, or directors, or agents who constitute) a majority of the 
directors, trustees, or management of a covered fund; or
    (iii) To share with a covered fund, for corporate, marketing, 
promotional, or other purposes, the same name or a variation of the same 
name, except as permitted under Sec.  75.11(a)(6).
    (10) Trustee. (i) For purposes of paragraph (d)(9) of this section 
and Sec.  75.11, a trustee does not include:
    (A) A trustee that does not exercise investment discretion with 
respect to a covered fund, including a trustee that is subject to the 
direction of an unaffiliated named fiduciary who is not a trustee 
pursuant to section 403(a)(1) of the Employee's Retirement Income 
Security Act (29 U.S.C. 1103(a)(1)); or
    (B) A trustee that is subject to fiduciary standards imposed under 
foreign law that are substantially equivalent to those described in 
paragraph (d)(10)(i)(A) of this section;
    (ii) Any entity that directs a person described in paragraph 
(d)(10)(i) of this section, or that possesses authority and discretion 
to manage and control the investment decisions of a covered fund for 
which such person serves as trustee, shall be considered to be a trustee 
of such covered fund.

Sec.  75.11 Permitted organizing and offering, underwriting, and market 
          making with respect to a covered fund.
    (a) Organizing and offering a covered fund in general. 
Notwithstanding Sec.  75.10(a), a banking entity is not prohibited from 
acquiring or retaining an ownership interest in, or acting as sponsor 
to, a covered fund in connection with, directly or indirectly, 
organizing and offering a covered fund, including serving as a general 
partner, managing member, trustee, or commodity pool operator of the 
covered fund and in any manner selecting or controlling (or having 
employees, officers, directors, or agents who constitute) a majority of 
the directors, trustees, or management of the covered fund, including 
any necessary expenses for the foregoing, only if:
    (1) The banking entity (or an affiliate thereof) provides bona fide 
trust, fiduciary, investment advisory, or commodity trading advisory 
services;
    (2) The covered fund is organized and offered only in connection 
with the provision of bona fide trust, fiduciary, investment advisory, 
or commodity trading advisory services and only to persons that are 
customers of such services of the banking entity (or an affiliate 
thereof), pursuant to a written plan or similar documentation outlining 
how the banking entity or such affiliate intends to provide advisory or 
similar services to its customers through organizing and offering such 
fund;
    (3) The banking entity and its affiliates do not acquire or retain 
an ownership interest in the covered fund except as permitted under 
Sec.  75.12;
    (4) The banking entity and its affiliates comply with the 
requirements of Sec.  75.14;
    (5) The banking entity and its affiliates do not, directly or 
indirectly, guarantee, assume, or otherwise insure the obligations or 
performance of the covered fund or of any covered fund in which such 
covered fund invests;
    (6) The covered fund, for corporate, marketing, promotional, or 
other purposes:
    (i) Does not share the same name or a variation of the same name 
with the banking entity (or an affiliate thereof), except that a covered 
fund may share the same name or a variation of the same name with a 
banking entity that is an investment adviser to the covered fund if:
    (A) The investment adviser is not an insured depository institution, 
a company that controls an insured depository institution, or a company 
that is treated as a bank holding company for purposes of section 8 of 
the International Banking Act of 1978 (12 U.S.C. 3106); and

[[Page 260]]

    (B) The investment adviser does not share the same name or a 
variation of the same name as an insured depository institution, a 
company that controls an insured depository institution, or a company 
that is treated as a bank holding company for purposes of section 8 of 
the International Banking Act of 1978 (12 U.S.C. 3106); and
    (ii) Does not use the word ``bank'' in its name;
    (7) No director or employee of the banking entity (or an affiliate 
thereof) takes or retains an ownership interest in the covered fund, 
except for any director or employee of the banking entity or such 
affiliate who is directly engaged in providing investment advisory, 
commodity trading advisory, or other services to the covered fund at the 
time the director or employee takes the ownership interest; and
    (8) The banking entity:
    (i) Clearly and conspicuously discloses, in writing, to any 
prospective and actual investor in the covered fund (such as through 
disclosure in the covered fund's offering documents):
    (A) That ``any losses in [such covered fund] will be borne solely by 
investors in [the covered fund] and not by [the banking entity] or its 
affiliates; therefore, [the banking entity's] losses in [such covered 
fund] will be limited to losses attributable to the ownership interests 
in the covered fund held by [the banking entity] and any affiliate in 
its capacity as investor in the [covered fund] or as beneficiary of a 
restricted profit interest held by [the banking entity] or any 
affiliate'';
    (B) That such investor should read the fund offering documents 
before investing in the covered fund;
    (C) That the ``ownership interests in the covered fund are not 
insured by the FDIC, and are not deposits, obligations of, or endorsed 
or guaranteed in any way, by any banking entity'' (unless that happens 
to be the case); and
    (D) The role of the banking entity and its affiliates and employees 
in sponsoring or providing any services to the covered fund; and
    (ii) Complies with any additional rules of the appropriate Federal 
banking agencies, the SEC, or the CFTC, as provided in section 13(b)(2) 
of the BHC Act, designed to ensure that losses in such covered fund are 
borne solely by investors in the covered fund and not by the covered 
banking entity and its affiliates.
    (b) Organizing and offering an issuing entity of asset-backed 
securities. (1) Notwithstanding Sec.  75.10(a), a banking entity is not 
prohibited from acquiring or retaining an ownership interest in, or 
acting as sponsor to, a covered fund that is an issuing entity of asset-
backed securities in connection with, directly or indirectly, organizing 
and offering that issuing entity, so long as the banking entity and its 
affiliates comply with all of the requirements of paragraphs (a)(3) 
through (a)(8) of this section.
    (2) For purposes of paragraph (b) of this section, organizing and 
offering a covered fund that is an issuing entity of asset-backed 
securities means acting as the securitizer, as that term is used in 
section 15G(a)(3) of the Exchange Act (15 U.S.C. 78o-11(a)(3)) of the 
issuing entity, or acquiring or retaining an ownership interest in the 
issuing entity as required by section 15G of that Act (15 U.S.C. 78o-11) 
and the implementing regulations issued thereunder.
    (c) Underwriting and market making in ownership interests of a 
covered fund. The prohibition contained in Sec.  75.10(a) does not apply 
to a banking entity's underwriting activities or market making-related 
activities involving a covered fund so long as:
    (1) Those activities are conducted in accordance with the 
requirements of Sec.  75.4(a) or (b), respectively;
    (2) With respect to any banking entity (or any affiliate thereof) 
that acts as a sponsor, investment adviser or commodity trading advisor 
to a particular covered fund or otherwise acquires and retains an 
ownership interest in such covered fund in reliance on paragraph (a) of 
this section; acquires and retains an ownership interest in such covered 
fund and is either a securitizer, as that term is used in section 
15G(a)(3) of the Exchange Act (15 U.S.C. 78o-11(a)(3)), or is acquiring 
and retaining an ownership interest in such covered fund in compliance 
with section 15G of that Act (15 U.S.C. 78o-11) and the implementing 
regulations issued thereunder each as permitted by paragraph (b) of this 
section; or, directly or indirectly, guarantees, assumes, or otherwise 
insures the obligations or performance of the covered fund or of any 
covered fund in which such fund invests, then in each such case any 
ownership interests acquired or retained by the banking entity and its 
affiliates in connection with underwriting and market making related 
activities for that particular covered fund are included in the 
calculation of ownership interests permitted to be held by the banking 
entity and its affiliates under the limitations of Sec.  75.12(a)(2)(ii) 
and (d); and
    (3) With respect to any banking entity, the aggregate value of all 
ownership interests of the banking entity and its affiliates in all 
covered funds acquired and retained under Sec.  75.11, including all 
covered funds in which the banking entity holds an ownership interest in 
connection with underwriting and market making related activities 
permitted under paragraph (c) of this section, are included in the 
calculation of all ownership interests under Sec.  75.12(a)(2)(iii) and 
(d).

Sec.  75.12 Permitted investment in a covered fund.

[[Page 261]]

    (a) Authority and limitations on permitted investments in covered 
funds. (1) Notwithstanding the prohibition contained in Sec.  75.10(a), 
a banking entity may acquire and retain an ownership interest in a 
covered fund that the banking entity or an affiliate thereof organizes 
and offers pursuant to Sec.  75.11, for the purposes of:
    (i) Establishment. Establishing the fund and providing the fund with 
sufficient initial equity for investment to permit the fund to attract 
unaffiliated investors, subject to the limits contained in paragraphs 
(a)(2)(i) and (a)(2)(iii) of this section; or
    (ii) De minimis investment. Making and retaining an investment in 
the covered fund subject to the limits contained in paragraphs 
(a)(2)(ii) and (a)(2)(iii) of this section.
    (2) Investment limits--(i) Seeding period. With respect to an 
investment in any covered fund made or held pursuant to paragraph 
(a)(1)(i) of this section, the banking entity and its affiliates:
    (A) Must actively seek unaffiliated investors to reduce, through 
redemption, sale, dilution, or other methods, the aggregate amount of 
all ownership interests of the banking entity in the covered fund to the 
amount permitted in paragraph (a)(2)(i)(B) of this section; and
    (B) Must, no later than 1 year after the date of establishment of 
the fund (or such longer period as may be provided by the Board pursuant 
to paragraph (e) of this section), conform its ownership interest in the 
covered fund to the limits in paragraph (a)(2)(ii) of this section;
    (ii) Per-fund limits. (A) Except as provided in paragraph 
(a)(2)(ii)(B) of this section, an investment by a banking entity and its 
affiliates in any covered fund made or held pursuant to paragraph 
(a)(1)(ii) of this section may not exceed 3 percent of the total number 
or value of the outstanding ownership interests of the fund.
    (B) An investment by a banking entity and its affiliates in a 
covered fund that is an issuing entity of asset-backed securities may 
not exceed 3 percent of the total fair market value of the ownership 
interests of the fund measured in accordance with paragraph (b)(3) of 
this section, unless a greater percentage is retained by the banking 
entity and its affiliates in compliance with the requirements of section 
15G of the Exchange Act (15 U.S.C. 78o-11) and the implementing 
regulations issued thereunder, in which case the investment by the 
banking entity and its affiliates in the covered fund may not exceed the 
amount, number, or value of ownership interests of the fund required 
under section 15G of the Exchange Act and the implementing regulations 
issued thereunder.
    (iii) Aggregate limit. The aggregate value of all ownership 
interests of the banking entity and its affiliates in all covered funds 
acquired or retained under this section may not exceed 3 percent of the 
tier 1 capital of the banking entity, as provided under paragraph (c) of 
this section, and shall be calculated as of the last day of each 
calendar quarter.
    (iv) Date of establishment. For purposes of this section, the date 
of establishment of a covered fund shall be:
    (A) In general. The date on which the investment adviser or similar 
entity to the covered fund begins making investments pursuant to the 
written investment strategy for the fund;
    (B) Issuing entities of asset-backed securities. In the case of an 
issuing entity of asset-backed securities, the date on which the assets 
are initially transferred into the issuing entity of asset-backed 
securities.
    (b) Rules of construction--(1) Attribution of ownership interests to 
a covered banking entity. (i) For purposes of paragraph (a)(2) of this 
section, the amount and value of a banking entity's permitted investment 
in any single covered fund shall include any ownership interest held 
under Sec.  75.12 directly by the banking entity, including any 
affiliate of the banking entity.
    (ii) Treatment of registered investment companies, SEC-regulated 
business development companies and foreign public funds. For purposes of 
paragraph (b)(1)(i) of this section, a registered investment company, 
SEC-regulated business development companies or foreign public fund as 
described in Sec.  75.10(c)(1) will not be considered to be an affiliate 
of the banking entity so long as the banking entity:
    (A) Does not own, control, or hold with the power to vote 25 percent 
or more of the voting shares of the company or fund; and
    (B) Provides investment advisory, commodity trading advisory, 
administrative, and other services to the company or fund in compliance 
with the limitations under applicable regulation, order, or other 
authority.
    (iii) Covered funds. For purposes of paragraph (b)(1)(i) of this 
section, a covered fund will not be considered to be an affiliate of a 
banking entity so long as the covered fund is held in compliance with 
the requirements of this subpart.
    (iv) Treatment of employee and director investments financed by the 
banking entity. For purposes of paragraph (b)(1)(i) of this section, an 
investment by a director or employee of a banking entity who acquires an 
ownership interest in his or her personal capacity in a covered fund 
sponsored by the banking entity will be attributed to the banking entity 
if the banking entity, directly or indirectly, extends financing for the 
purpose of enabling the director or employee to acquire the ownership 
interest in the fund and the financing is used to acquire such ownership 
interest in the covered fund.

[[Page 262]]

    (2) Calculation of permitted ownership interests in a single covered 
fund. Except as provided in paragraphs (b)(3) or (4) of this section, 
for purposes of determining whether an investment in a single covered 
fund complies with the restrictions on ownership interests under 
paragraphs (a)(2)(i)(B) and (ii)(A) of this section:
    (i) The aggregate number of the outstanding ownership interests held 
by the banking entity shall be the total number of ownership interests 
held under this section by the banking entity in a covered fund divided 
by the total number of ownership interests held by all entities in that 
covered fund, as of the last day of each calendar quarter (both measured 
without regard to committed funds not yet called for investment);
    (ii) The aggregate value of the outstanding ownership interests held 
by the banking entity shall be the aggregate fair market value of all 
investments in and capital contributions made to the covered fund by the 
banking entity, divided by the value of all investments in and capital 
contributions made to that covered fund by all entities, as of the last 
day of each calendar quarter (all measured without regard to committed 
funds not yet called for investment). If fair market value cannot be 
determined, then the value shall be the historical cost basis of all 
investments in and contributions made by the banking entity to the 
covered fund;
    (iii) For purposes of the calculation under paragraph (b)(2)(ii) of 
this section, once a valuation methodology is chosen, the banking entity 
must calculate the value of its investment and the investments of all 
others in the covered fund in the same manner and according to the same 
standards.
    (3) Issuing entities of asset-backed securities. In the case of an 
ownership interest in an issuing entity of asset-backed securities, for 
purposes of determining whether an investment in a single covered fund 
complies with the restrictions on ownership interests under paragraphs 
(a)(2)(i)(B) and (a)(2)(ii)(B) of this section:
    (i) For securitizations subject to the requirements of section 15G 
of the Exchange Act (15 U.S.C. 78o-11), the calculations shall be made 
as of the date and according to the valuation methodology applicable 
pursuant to the requirements of section 15G of the Exchange Act (15 
U.S.C. 78o-11) and the implementing regulations issued thereunder; or
    (ii) For securitization transactions completed prior to the 
compliance date of such implementing regulations (or as to which such 
implementing regulations do not apply), the calculations shall be made 
as of the date of establishment as defined in paragraph (a)(2)(iv)(B) of 
this section or such earlier date on which the transferred assets have 
been valued for purposes of transfer to the covered fund, and thereafter 
only upon the date on which additional securities of the issuing entity 
of asset-backed securities are priced for purposes of the sales of 
ownership interests to unaffiliated investors.
    (iii) For securitization transactions completed prior to the 
compliance date of such implementing regulations (or as to which such 
implementing regulations do not apply), the aggregate value of the 
outstanding ownership interests in the covered fund shall be the fair 
market value of the assets transferred to the issuing entity of the 
securitization and any other assets otherwise held by the issuing entity 
at such time, determined in a manner that is consistent with its 
determination of the fair market value of those assets for financial 
statement purposes.
    (iv) For purposes of the calculation under paragraph (b)(3)(iii) of 
this section, the valuation methodology used to calculate the fair 
market value of the ownership interests must be the same for both the 
ownership interests held by a banking entity and the ownership interests 
held by all others in the covered fund in the same manner and according 
to the same standards.
    (4) Multi-tier fund investments--(i) Master-feeder fund investments. 
If the principal investment strategy of a covered fund (the ``feeder 
fund'') is to invest substantially all of its assets in another single 
covered fund (the ``master fund''), then for purposes of the investment 
limitations in paragraphs (a)(2)(i)(B) and (a)(2)(ii) of this section, 
the banking entity's permitted investment in such funds shall be 
measured only by reference to the value of the master fund. The banking 
entity's permitted investment in the master fund shall include any 
investment by the banking entity in the master fund, as well as the 
banking entity's pro-rata share of any ownership interest of the master 
fund that is held through the feeder fund; and
    (ii) Fund-of-funds investments. If a banking entity organizes and 
offers a covered fund pursuant to Sec.  75.11 for the purpose of 
investing in other covered funds (a ``fund of funds'') and that fund of 
funds itself invests in another covered fund that the banking entity is 
permitted to own, then the banking entity's permitted investment in that 
other fund shall include any investment by the banking entity in that 
other fund, as well as the banking entity's pro-rata share of any 
ownership interest of the fund that is held through the fund of funds. 
The investment of the banking entity may not represent more than 3 
percent of the amount or value of any single covered fund.
    (c) Aggregate permitted investments in all covered funds. (1) For 
purposes of paragraph (a)(2)(iii) of this section, the aggregate value 
of all ownership interests held by a banking entity shall be the sum of 
all amounts paid

[[Page 263]]

or contributed by the banking entity in connection with acquiring or 
retaining an ownership interest in covered funds (together with any 
amounts paid by the entity (or employee thereof) in connection with 
obtaining a restricted profit interest under Sec.  75.10(d)(6)(ii)), on 
a historical cost basis.
    (2) Calculation of tier 1 capital. For purposes of paragraph 
(a)(2)(iii) of this section:
    (i) Entities that are required to hold and report tier 1 capital. If 
a banking entity is required to calculate and report tier 1 capital, the 
banking entity's tier 1 capital shall be equal to the amount of tier 1 
capital of the banking entity as of the last day of the most recent 
calendar quarter, as reported to its primary financial regulatory 
agency; and
    (ii) If a banking entity is not required to calculate and report 
tier 1 capital, the banking entity's tier 1 capital shall be determined 
to be equal to:
    (A) In the case of a banking entity that is controlled, directly or 
indirectly, by a depository institution that calculates and reports tier 
1 capital, be equal to the amount of tier 1 capital reported by such 
controlling depository institution in the manner described in paragraph 
(c)(2)(i) of this section;
    (B) In the case of a banking entity that is not controlled, directly 
or indirectly, by a depository institution that calculates and reports 
tier 1 capital:
    (1) Bank holding company subsidiaries. If the banking entity is a 
subsidiary of a bank holding company or company that is treated as a 
bank holding company, be equal to the amount of tier 1 capital reported 
by the top-tier affiliate of such covered banking entity that calculates 
and reports tier 1 capital in the manner described in paragraph 
(c)(2)(i) of this section; and
    (2) Other holding companies and any subsidiary or affiliate thereof. 
If the banking entity is not a subsidiary of a bank holding company or a 
company that is treated as a bank holding company, be equal to the total 
amount of shareholders' equity of the top-tier affiliate within such 
organization as of the last day of the most recent calendar quarter that 
has ended, as determined under applicable accounting standards.
    (iii) Treatment of foreign banking entities--(A) Foreign banking 
entities. Except as provided in paragraph (c)(2)(iii)(B) of this 
section, with respect to a banking entity that is not itself, and is not 
controlled directly or indirectly by, a banking entity that is located 
or organized under the laws of the United States or of any State, the 
tier 1 capital of the banking entity shall be the consolidated tier 1 
capital of the entity as calculated under applicable home country 
standards.
    (B) U.S. affiliates of foreign banking entities. With respect to a 
banking entity that is located or organized under the laws of the United 
States or of any State and is controlled by a foreign banking entity 
identified under paragraph (c)(2)(iii)(A) of this section, the banking 
entity's tier 1 capital shall be as calculated under paragraphs 
(c)(2)(i) or (ii) of this section.
    (d) Capital treatment for a permitted investment in a covered fund. 
For purposes of calculating compliance with the applicable regulatory 
capital requirements, a banking entity shall deduct from the banking 
entity's tier 1 capital (as determined under paragraph (c)(2) of this 
section) the greater of:
    (1) The sum of all amounts paid or contributed by the banking entity 
in connection with acquiring or retaining an ownership interest 
(together with any amounts paid by the entity (or employee thereof) in 
connection with obtaining a restricted profit interest under Sec.  
75.10(d)(6)(ii)), on a historical cost basis, plus any earnings 
received; and
    (2) The fair market value of the banking entity's ownership 
interests in the covered fund as determined under paragraph (b)(2)(ii) 
or (3) of this section (together with any amounts paid by the entity (or 
employee thereof) in connection with obtaining a restricted profit 
interest under Sec.  75.10(d)(6)(ii)), if the banking entity accounts 
for the profits (or losses) of the fund investment in its financial 
statements.
    (e) Extension of time to divest an ownership interest. (1) Upon 
application by a banking entity, the Board may extend the period under 
paragraph (a)(2)(i) of this section for up to 2 additional years if the 
Board finds that an extension would be consistent with safety and 
soundness and not detrimental to the public interest. An application for 
extension must:
    (i) Be submitted to the Board at least 90 days prior to the 
expiration of the applicable time period;
    (ii) Provide the reasons for application, including information that 
addresses the factors in paragraph (e)(2) of this section; and
    (iii) Explain the banking entity's plan for reducing the permitted 
investment in a covered fund through redemption, sale, dilution or other 
methods as required in paragraph (a)(2) of this section.
    (2) Factors governing Board determinations. In reviewing any 
application under paragraph (e)(1) of this section, the Board may 
consider all the facts and circumstances related to the permitted 
investment in a covered fund, including:
    (i) Whether the investment would result, directly or indirectly, in 
a material exposure by the banking entity to high-risk assets or high-
risk trading strategies;
    (ii) The contractual terms governing the banking entity's interest 
in the covered fund;
    (iii) The date on which the covered fund is expected to have 
attracted sufficient investments from investors unaffiliated with the 
banking entity to enable the banking entity

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to comply with the limitations in paragraph (a)(2)(i) of this section;
    (iv) The total exposure of the covered banking entity to the 
investment and the risks that disposing of, or maintaining, the 
investment in the covered fund may pose to the banking entity and the 
financial stability of the United States;
    (v) The cost to the banking entity of divesting or disposing of the 
investment within the applicable period;
    (vi) Whether the investment or the divestiture or conformance of the 
investment would involve or result in a material conflict of interest 
between the banking entity and unaffiliated parties, including clients, 
customers or counterparties to which it owes a duty;
    (vii) The banking entity's prior efforts to reduce through 
redemption, sale, dilution, or other methods its ownership interests in 
the covered fund, including activities related to the marketing of 
interests in such covered fund;
    (viii) Market conditions; and
    (ix) Any other factor that the Board believes appropriate.
    (3) Authority to impose restrictions on activities or investment 
during any extension period. The Board may impose such conditions on any 
extension approved under paragraph (e)(1) of this section as the Board 
determines are necessary or appropriate to protect the safety and 
soundness of the banking entity or the financial stability of the United 
States, address material conflicts of interest or other unsound banking 
practices, or otherwise further the purposes of section 13 of the BHC 
Act and this part.
    (4) Consultation. In the case of a banking entity that is primarily 
regulated by another Federal banking agency, the SEC, or the CFTC, the 
Board will consult with such agency prior to acting on an application by 
the banking entity for an extension under paragraph (e)(1) of this 
section.

Sec.  75.13 Other permitted covered fund activities and investments.
    (a) Permitted risk-mitigating hedging activities. (1) The 
prohibition contained in Sec.  75.10(a) does not apply with respect to 
an ownership interest in a covered fund acquired or retained by a 
banking entity that is designed to demonstrably reduce or otherwise 
significantly mitigate the specific, identifiable risks to the banking 
entity in connection with a compensation arrangement with an employee of 
the banking entity or an affiliate thereof that directly provides 
investment advisory, commodity trading advisory or other services to the 
covered fund.
    (2) Requirements. The risk-mitigating hedging activities of a 
banking entity are permitted under paragraph (a) of this section only 
if:
    (i) The banking entity has established and implements, maintains and 
enforces an internal compliance program required by subpart D of this 
part that is reasonably designed to ensure the banking entity's 
compliance with the requirements of this section, including:
    (A) Reasonably designed written policies and procedures; and
    (B) Internal controls and ongoing monitoring, management, and 
authorization procedures, including relevant escalation procedures; and
    (ii) The acquisition or retention of the ownership interest:
    (A) Is made in accordance with the written policies, procedures and 
internal controls required under this section;
    (B) At the inception of the hedge, is designed to reduce or 
otherwise significantly mitigate and demonstrably reduces or otherwise 
significantly mitigates one or more specific, identifiable risks arising 
in connection with the compensation arrangement with the employee that 
directly provides investment advisory, commodity trading advisory, or 
other services to the covered fund;
    (C) Does not give rise, at the inception of the hedge, to any 
significant new or additional risk that is not itself hedged 
contemporaneously in accordance with this section; and
    (D) Is subject to continuing review, monitoring and management by 
the banking entity.
    (iii) The compensation arrangement relates solely to the covered 
fund in which the banking entity or any affiliate has acquired an 
ownership interest pursuant to this paragraph and such compensation 
arrangement provides that any losses incurred by the banking entity on 
such ownership interest will be offset by corresponding decreases in 
amounts payable under such compensation arrangement.
    (b) Certain permitted covered fund activities and investments 
outside of the United States. (1) The prohibition contained in Sec.  
75.10(a) does not apply to the acquisition or retention of any ownership 
interest in, or the sponsorship of, a covered fund by a banking entity 
only if:
    (i) The banking entity is not organized or directly or indirectly 
controlled by a banking entity that is organized under the laws of the 
United States or of one or more States;
    (ii) The activity or investment by the banking entity is pursuant to 
paragraph (9) or (13) of section 4(c) of the BHC Act;
    (iii) No ownership interest in the covered fund is offered for sale 
or sold to a resident of the United States; and
    (iv) The activity or investment occurs solely outside of the United 
States.
    (2) An activity or investment by the banking entity is pursuant to 
paragraph (9) or (13) of section 4(c) of the BHC Act for purposes of 
paragraph (b)(1)(ii) of this section only if:

[[Page 265]]

    (i) The activity or investment is conducted in accordance with the 
requirements of this section; and
    (ii)(A) With respect to a banking entity that is a foreign banking 
organization, the banking entity meets the qualifying foreign banking 
organization requirements of Sec.  211.23(a), (c) or (e) of the Board's 
Regulation K (12 CFR 211.23(a), (c) or (e)), as applicable; or
    (B) With respect to a banking entity that is not a foreign banking 
organization, the banking entity is not organized under the laws of the 
United States or of one or more States and the banking entity, on a 
fully-consolidated basis, meets at least two of the following 
requirements:
    (1) Total assets of the banking entity held outside of the United 
States exceed total assets of the banking entity held in the United 
States;
    (2) Total revenues derived from the business of the banking entity 
outside of the United States exceed total revenues derived from the 
business of the banking entity in the United States; or
    (3) Total net income derived from the business of the banking entity 
outside of the United States exceeds total net income derived from the 
business of the banking entity in the United States.
    (3) An ownership interest in a covered fund is not offered for sale 
or sold to a resident of the United States for purposes of paragraph 
(b)(1)(iii) of this section only if it is sold or has been sold pursuant 
to an offering that does not target residents of the United States.
    (4) An activity or investment occurs solely outside of the United 
States for purposes of paragraph (b)(1)(iv) of this section only if:
    (i) The banking entity acting as sponsor, or engaging as principal 
in the acquisition or retention of an ownership interest in the covered 
fund, is not itself, and is not controlled directly or indirectly by, a 
banking entity that is located in the United States or organized under 
the laws of the United States or of any State;
    (ii) The banking entity (including relevant personnel) that makes 
the decision to acquire or retain the ownership interest or act as 
sponsor to the covered fund is not located in the United States or 
organized under the laws of the United States or of any State;
    (iii) The investment or sponsorship, including any transaction 
arising from risk-mitigating hedging related to an ownership interest, 
is not accounted for as principal directly or indirectly on a 
consolidated basis by any branch or affiliate that is located in the 
United States or organized under the laws of the United States or of any 
State; and
    (iv) No financing for the banking entity's ownership or sponsorship 
is provided, directly or indirectly, by any branch or affiliate that is 
located in the United States or organized under the laws of the United 
States or of any State.
    (5) For purposes of this section, a U.S. branch, agency, or 
subsidiary of a foreign bank, or any subsidiary thereof, is located in 
the United States; however, a foreign bank of which that branch, agency, 
or subsidiary is a part is not considered to be located in the United 
States solely by virtue of operation of the U.S. branch, agency, or 
subsidiary.
    (c) Permitted covered fund interests and activities by a regulated 
insurance company. The prohibition contained in Sec.  75.10(a) does not 
apply to the acquisition or retention by an insurance company, or an 
affiliate thereof, of any ownership interest in, or the sponsorship of, 
a covered fund only if:
    (1) The insurance company or its affiliate acquires and retains the 
ownership interest solely for the general account of the insurance 
company or for one or more separate accounts established by the 
insurance company;
    (2) The acquisition and retention of the ownership interest is 
conducted in compliance with, and subject to, the insurance company 
investment laws, regulations, and written guidance of the State or 
jurisdiction in which such insurance company is domiciled; and
    (3) The appropriate Federal banking agencies, after consultation 
with the Financial Stability Oversight Council and the relevant 
insurance commissioners of the States and foreign jurisdictions, as 
appropriate, have not jointly determined, after notice and comment, that 
a particular law, regulation, or written guidance described in paragraph 
(c)(2) of this section is insufficient to protect the safety and 
soundness of the banking entity, or the financial stability of the 
United States.

Sec.  75.14 Limitations on relationships with a covered fund.
    (a) Relationships with a covered fund. (1) Except as provided for in 
paragraph (a)(2) of this section, no banking entity that serves, 
directly or indirectly, as the investment manager, investment adviser, 
commodity trading advisor, or sponsor to a covered fund, that organizes 
and offers a covered fund pursuant to Sec.  75.11, or that continues to 
hold an ownership interest in accordance with Sec.  75.11(b), and no 
affiliate of such entity, may enter into a transaction with the covered 
fund, or with any other covered fund that is controlled by such covered 
fund, that would be a covered transaction as defined in section 23A of 
the Federal Reserve Act (12 U.S.C. 371c(b)(7)), as if such banking 
entity and the affiliate thereof were a member bank and the covered fund 
were an affiliate thereof.

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    (2) Notwithstanding paragraph (a)(1) of this section, a banking 
entity may:
    (i) Acquire and retain any ownership interest in a covered fund in 
accordance with the requirements of Sec.  75.11, Sec.  75.12, or Sec.  
75.13; and
    (ii) Enter into any prime brokerage transaction with any covered 
fund in which a covered fund managed, sponsored, or advised by such 
banking entity (or an affiliate thereof) has taken an ownership 
interest, if:
    (A) The banking entity is in compliance with each of the limitations 
set forth in Sec.  75.11 with respect to a covered fund organized and 
offered by such banking entity (or an affiliate thereof);
    (B) The chief executive officer (or equivalent officer) of the 
banking entity certifies in writing annually to the Commission (with a 
duty to update the certification if the information in the certification 
materially changes) that the banking entity does not, directly or 
indirectly, guarantee, assume, or otherwise insure the obligations or 
performance of the covered fund or of any covered fund in which such 
covered fund invests; and
    (C) The Board has not determined that such transaction is 
inconsistent with the safe and sound operation and condition of the 
banking entity.
    (b) Restrictions on transactions with covered funds. A banking 
entity that serves, directly or indirectly, as the investment manager, 
investment adviser, commodity trading advisor, or sponsor to a covered 
fund, or that organizes and offers a covered fund pursuant to Sec.  
75.11, or that continues to hold an ownership interest in accordance 
with Sec.  75.11(b), shall be subject to section 23B of the Federal 
Reserve Act (12 U.S.C. 371c-1), as if such banking entity were a member 
bank and such covered fund were an affiliate thereof.
    (c) Restrictions on prime brokerage transactions. A prime brokerage 
transaction permitted under paragraph (a)(2)(ii) of this section shall 
be subject to section 23B of the Federal Reserve Act (12 U.S.C. 371c-1) 
as if the counterparty were an affiliate of the banking entity.

Sec.  75.15 Other limitations on permitted covered fund activities.
    (a) No transaction, class of transactions, or activity may be deemed 
permissible under Sec. Sec.  75.11 through 75.13 if the transaction, 
class of transactions, or activity would:
    (1) Involve or result in a material conflict of interest between the 
banking entity and its clients, customers, or counterparties;
    (2) Result, directly or indirectly, in a material exposure by the 
banking entity to a high-risk asset or a high-risk trading strategy; or
    (3) Pose a threat to the safety and soundness of the banking entity 
or to the financial stability of the United States.
    (b) Definition of material conflict of interest. (1) For purposes of 
this section, a material conflict of interest between a banking entity 
and its clients, customers, or counterparties exists if the banking 
entity engages in any transaction, class of transactions, or activity 
that would involve or result in the banking entity's interests being 
materially adverse to the interests of its client, customer, or 
counterparty with respect to such transaction, class of transactions, or 
activity, and the banking entity has not taken at least one of the 
actions in paragraph (b)(2) of this section.
    (2) Prior to effecting the specific transaction or class or type of 
transactions, or engaging in the specific activity, the banking entity:
    (i) Timely and effective disclosure. (A) Has made clear, timely, and 
effective disclosure of the conflict of interest, together with other 
necessary information, in reasonable detail and in a manner sufficient 
to permit a reasonable client, customer, or counterparty to meaningfully 
understand the conflict of interest; and
    (B) Such disclosure is made in a manner that provides the client, 
customer, or counterparty the opportunity to negate, or substantially 
mitigate, any materially adverse effect on the client, customer, or 
counterparty created by the conflict of interest; or
    (ii) Information barriers. Has established, maintained, and enforced 
information barriers that are memorialized in written policies and 
procedures, such as physical separation of personnel, or functions, or 
limitations on types of activity, that are reasonably designed, taking 
into consideration the nature of the banking entity's business, to 
prevent the conflict of interest from involving or resulting in a 
materially adverse effect on a client, customer, or counterparty. A 
banking entity may not rely on such information barriers if, in the case 
of any specific transaction, class or type of transactions or activity, 
the banking entity knows or should reasonably know that, notwithstanding 
the banking entity's establishment of information barriers, the conflict 
of interest may involve or result in a materially adverse effect on a 
client, customer, or counterparty.
    (c) Definition of high-risk asset and high-risk trading strategy. 
For purposes of this section:
    (1) High-risk asset means an asset or group of related assets that 
would, if held by a banking entity, significantly increase the 
likelihood that the banking entity would incur a substantial financial 
loss or would pose a threat to the financial stability of the United 
States.
    (2) High-risk trading strategy means a trading strategy that would, 
if engaged in by a banking entity, significantly increase the likelihood 
that the banking entity would incur a substantial financial loss or 
would pose a threat to the financial stability of the United States.


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Sec.  75.16 Ownership of interests in and sponsorship of issuers of 
          certain collateralized debt obligations backed by trust-
          preferred securities.
    (a) The prohibition contained in Sec.  75.10(a)(1) does not apply to 
the ownership by a banking entity of an interest in, or sponsorship of, 
any issuer if:
    (1) The issuer was established, and the interest was issued, before 
May 19, 2010;
    (2) The banking entity reasonably believes that the offering 
proceeds received by the issuer were invested primarily in Qualifying 
TruPS Collateral; and
    (3) The banking entity acquired such interest on or before December 
10, 2013 (or acquired such interest in connection with a merger with or 
acquisition of a banking entity that acquired the interest on or before 
December 10, 2013).
    (b) For purposes of this Sec.  75.16, Qualifying TruPS Collateral 
shall mean any trust preferred security or subordinated debt instrument 
issued prior to May 19, 2010 by a depository institution holding company 
that, as of the end of any reporting period within 12 months immediately 
preceding the issuance of such trust preferred security or subordinated 
debt instrument, had total consolidated assets of less than 
$15,000,000,000 or issued prior to May 19, 2010 by a mutual holding 
company.
    (c) Notwithstanding paragraph (a)(3) of this section, a banking 
entity may act as a market maker with respect to the interests of an 
issuer described in paragraph (a) of this section in accordance with the 
applicable provisions of Sec. Sec.  75.4 and 75.11.
    (d) Without limiting the applicability of paragraph (a) of this 
section, the Board, the FDIC and the OCC will make public a non-
exclusive list of issuers that meet the requirements of paragraph (a). A 
banking entity may rely on the list published by the Board, the FDIC and 
the OCC.

Sec. Sec.  75.17-75.19 [Reserved]

          Subpart D--Compliance Program Requirement; Violations

Sec.  75.20 Program for compliance; reporting.
    (a) Program requirement. Each banking entity shall develop and 
provide for the continued administration of a compliance program 
reasonably designed to ensure and monitor compliance with the 
prohibitions and restrictions on proprietary trading and covered fund 
activities and investments set forth in section 13 of the BHC Act and 
this part. The terms, scope and detail of the compliance program shall 
be appropriate for the types, size, scope and complexity of activities 
and business structure of the banking entity.
    (b) Contents of compliance program. Except as provided in paragraph 
(f) of this section, the compliance program required by paragraph (a) of 
this section, at a minimum, shall include:
    (1) Written policies and procedures reasonably designed to document, 
describe, monitor and limit trading activities subject to subpart B of 
this part (including those permitted under Sec. Sec.  75.3 to 75.6), 
including setting, monitoring and managing required limits set out in 
Sec. Sec.  75.4 and 75.5, and activities and investments with respect to 
a covered fund subject to subpart C of this part (including those 
permitted under Sec. Sec.  75.11 through 75.14) conducted by the banking 
entity to ensure that all activities and investments conducted by the 
banking entity that are subject to section 13 of the BHC Act and this 
part comply with section 13 of the BHC Act and this part;
    (2) A system of internal controls reasonably designed to monitor 
compliance with section 13 of the BHC Act and this part and to prevent 
the occurrence of activities or investments that are prohibited by 
section 13 of the BHC Act and this part;
    (3) A management framework that clearly delineates responsibility 
and accountability for compliance with section 13 of the BHC Act and 
this part and includes appropriate management review of trading limits, 
strategies, hedging activities, investments, incentive compensation and 
other matters identified in this part or by management as requiring 
attention;
    (4) Independent testing and audit of the effectiveness of the 
compliance program conducted periodically by qualified personnel of the 
banking entity or by a qualified outside party;
    (5) Training for trading personnel and managers, as well as other 
appropriate personnel, to effectively implement and enforce the 
compliance program; and
    (6) Records sufficient to demonstrate compliance with section 13 of 
the BHC Act and this part, which a banking entity must promptly provide 
to the Commission upon request and retain for a period of no less than 5 
years or such longer period as required by the Commission.
    (c) Additional standards. In addition to the requirements in 
paragraph (b) of this section, the compliance program of a banking 
entity must satisfy the requirements and other standards contained in 
appendix B of this part, if:
    (1) The banking entity engages in proprietary trading permitted 
under subpart B of this part and is required to comply with the 
reporting requirements of paragraph (d) of this section;
    (2) The banking entity has reported total consolidated assets as of 
the previous calendar year end of $50 billion or more or, in the case of 
a foreign banking entity, has total U.S. assets as of the previous 
calendar year end of $50 billion or more (including all

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subsidiaries, affiliates, branches and agencies of the foreign banking 
entity operating, located or organized in the United States); or
    (3) The Commission notifies the banking entity in writing that it 
must satisfy the requirements and other standards contained in appendix 
B of this part.
    (d) Reporting requirements under appendix A of this part. (1) A 
banking entity engaged in proprietary trading activity permitted under 
subpart B of this part shall comply with the reporting requirements 
described in appendix A of this part, if:
    (i) The banking entity (other than a foreign banking entity as 
provided in paragraph (d)(1)(ii) of this section) has, together with its 
affiliates and subsidiaries, trading assets and liabilities (excluding 
trading assets and liabilities involving obligations of or guaranteed by 
the United States or any agency of the United States) the average gross 
sum of which (on a worldwide consolidated basis) over the previous 
consecutive four quarters, as measured as of the last day of each of the 
four prior calendar quarters, equals or exceeds the threshold 
established in paragraph (d)(2) of this section;
    (ii) In the case of a foreign banking entity, the average gross sum 
of the trading assets and liabilities of the combined U.S. operations of 
the foreign banking entity (including all subsidiaries, affiliates, 
branches and agencies of the foreign banking entity operating, located 
or organized in the United States and excluding trading assets and 
liabilities involving obligations of or guaranteed by the United States 
or any agency of the United States) over the previous consecutive four 
quarters, as measured as of the last day of each of the four prior 
calendar quarters, equals or exceeds the threshold established in 
paragraph (d)(2) of this section; or
    (iii) The Commission notifies the banking entity in writing that it 
must satisfy the reporting requirements contained in appendix A of this 
part.
    (2) The threshold for reporting under paragraph (d)(1) of this 
section shall be $50 billion beginning on June 30, 2014; $25 billion 
beginning on April 30, 2016; and $10 billion beginning on December 31, 
2016.
    (3) Frequency of reporting. Unless the Commission notifies the 
banking entity in writing that it must report on a different basis, a 
banking entity with $50 billion or more in trading assets and 
liabilities (as calculated in accordance with paragraph (d)(1) of this 
section) shall report the information required by appendix A of this 
part for each calendar month within 30 days of the end of the relevant 
calendar month; beginning with information for the month of January 
2015, such information shall be reported within 10 days of the end of 
each calendar month. Any other banking entity subject to appendix A of 
this part shall report the information required by appendix A of this 
part for each calendar quarter within 30 days of the end of that 
calendar quarter unless the Commission notifies the banking entity in 
writing that it must report on a different basis.
    (e) Additional documentation for covered funds. Any banking entity 
that has more than $10 billion in total consolidated assets as reported 
on December 31 of the previous two calendar years shall maintain records 
that include:
    (1) Documentation of the exclusions or exemptions other than 
sections 3(c)(1) and 3(c)(7) of the Investment Company Act of 1940 
relied on by each fund sponsored by the banking entity (including all 
subsidiaries and affiliates) in determining that such fund is not a 
covered fund;
    (2) For each fund sponsored by the banking entity (including all 
subsidiaries and affiliates) for which the banking entity relies on one 
or more of the exclusions from the definition of covered fund provided 
by Sec.  75.10(c)(1), (5), (8), (9), or (10), documentation supporting 
the banking entity's determination that the fund is not a covered fund 
pursuant to one or more of those exclusions;
    (3) For each seeding vehicle described in Sec.  75.10(c)(12)(i) or 
(iii) that will become a registered investment company or SEC-regulated 
business development company, a written plan documenting the banking 
entity's determination that the seeding vehicle will become a registered 
investment company or SEC-regulated business development company; the 
period of time during which the vehicle will operate as a seeding 
vehicle; and the banking entity's plan to market the vehicle to third-
party investors and convert it into a registered investment company or 
SEC-regulated business development company within the time period 
specified in Sec.  75.12(a)(2)(i)(B);
    (4) For any banking entity that is, or is controlled directly or 
indirectly by a banking entity that is, located in or organized under 
the laws of the United States or of any State, if the aggregate amount 
of ownership interests in foreign public funds that are described in 
Sec.  75.10(c)(1) owned by such banking entity (including ownership 
interests owned by any affiliate that is controlled directly or 
indirectly by a banking entity that is located in or organized under the 
laws of the United States or of any State) exceeds $50 million at the 
end of two or more consecutive calendar quarters, beginning with the 
next succeeding calendar quarter, documentation of the value of the 
ownership interests owned by the banking entity (and such affiliates) in 
each foreign public fund and each jurisdiction in which any such foreign 
public fund is organized, calculated as of the end of each calendar 
quarter, which documentation must continue until the banking entity's 
aggregate amount of ownership interests in foreign public funds is below

[[Page 269]]

$50 million for two consecutive calendar quarters; and
    (5) For purposes of paragraph (e)(4) of this section, a U.S. branch, 
agency, or subsidiary of a foreign banking entity is located in the 
United States; however, the foreign bank that operates or controls that 
branch, agency, or subsidiary is not considered to be located in the 
United States solely by virtue of operating or controlling the U.S. 
branch, agency, or subsidiary.
    (f) Simplified programs for less active banking entities--(1) 
Banking entities with no covered activities. A banking entity that does 
not engage in activities or investments pursuant to subpart B or subpart 
C of this part (other than trading activities permitted pursuant to 
Sec.  75.6(a)) may satisfy the requirements of this section by 
establishing the required compliance program prior to becoming engaged 
in such activities or making such investments (other than trading 
activities permitted pursuant to Sec.  75.6(a)).
    (2) Banking entities with modest activities. A banking entity with 
total consolidated assets of $10 billion or less as reported on December 
31 of the previous two calendar years that engages in activities or 
investments pursuant to subpart B or subpart C of this part (other than 
trading activities permitted under Sec.  75.6(a)) may satisfy the 
requirements of this section by including in its existing compliance 
policies and procedures appropriate references to the requirements of 
section 13 of the BHC Act and this part and adjustments as appropriate 
given the activities, size, scope and complexity of the banking entity.

Sec.  75.21 Termination of activities or investments; penalties for 
          violations.
    (a) Any banking entity that engages in an activity or makes an 
investment in violation of section 13 of the BHC Act or this part, or 
acts in a manner that functions as an evasion of the requirements of 
section 13 of the BHC Act or this part, including through an abuse of 
any activity or investment permitted under subparts B or C of this part, 
or otherwise violates the restrictions and requirements of section 13 of 
the BHC Act or this part, shall, upon discovery, promptly terminate the 
activity and, as relevant, dispose of the investment.
    (b) Whenever the Commission finds reasonable cause to believe any 
banking entity has engaged in an activity or made an investment in 
violation of section 13 of the BHC Act or this part, or engaged in any 
activity or made any investment that functions as an evasion of the 
requirements of section 13 of the BHC Act or this part, the Commission 
may take any action permitted by law to enforce compliance with section 
13 of the BHC Act and this part, including directing the banking entity 
to restrict, limit, or terminate any or all activities under this part 
and dispose of any investment.

  Appendix A to Part 75--Reporting and Recordkeeping Requirements for 
                       Covered Trading Activities

                               I. Purpose

    a. This appendix sets forth reporting and recordkeeping requirements 
that certain banking entities must satisfy in connection with the 
restrictions on proprietary trading set forth in subpart B of this part 
(``proprietary trading restrictions''). Pursuant to Sec.  75.20(d), this 
appendix generally applies to a banking entity that, together with its 
affiliates and subsidiaries, has significant trading assets and 
liabilities. These entities are required to (i) furnish periodic reports 
to the Commission regarding a variety of quantitative measurements of 
their covered trading activities, which vary depending on the scope and 
size of covered trading activities, and (ii) create and maintain records 
documenting the preparation and content of these reports. The 
requirements of this appendix must be incorporated into the banking 
entity's internal compliance program under Sec.  75.20 and Appendix B of 
this part.
    b. The purpose of this appendix is to assist banking entities and 
the Commission in:
    (i) Better understanding and evaluating the scope, type, and profile 
of the banking entity's covered trading activities;
    (ii) Monitoring the banking entity's covered trading activities;
    (iii) Identifying covered trading activities that warrant further 
review or examination by the banking entity to verify compliance with 
the proprietary trading restrictions;
    (iv) Evaluating whether the covered trading activities of trading 
desks engaged in market making-related activities subject to Sec.  
75.4(b) are consistent with the requirements governing permitted market 
making-related activities;
    (v) Evaluating whether the covered trading activities of trading 
desks that are engaged in permitted trading activity subject to Sec.  
75.4, 75.5, or 75.6(a) and (b) (i.e., underwriting and market making-
related related activity, risk-mitigating hedging, or trading in certain 
government obligations) are consistent with the requirement that such 
activity not result, directly or indirectly, in a material exposure to 
high-risk assets or high-risk trading strategies;
    (vi) Identifying the profile of particular covered trading 
activities of the banking entity, and the individual trading desks of 
the banking entity, to help establish the appropriate frequency and 
scope of examination by the Commission of such activities; and
    (vii) Assessing and addressing the risks associated with the banking 
entity's covered trading activities.

[[Page 270]]

    c. The quantitative measurements that must be furnished pursuant to 
this appendix are not intended to serve as a dispositive tool for the 
identification of permissible or impermissible activities.
    d. In order to allow banking entities and the Agencies to evaluate 
the effectiveness of these metrics, banking entities must collect and 
report these metrics for all trading desks beginning on the dates 
established in Sec.  75.20. The Agencies will review the data collected 
and revise this collection requirement as appropriate based on a review 
of the data collected prior to September 30, 2015.
    e. In addition to the quantitative measurements required in this 
appendix, a banking entity may need to develop and implement other 
quantitative measurements in order to effectively monitor its covered 
trading activities for compliance with section 13 of the BHC Act and 
this part and to have an effective compliance program, as required by 
Sec.  75.20 and Appendix B of this part. The effectiveness of particular 
quantitative measurements may differ based on the profile of the banking 
entity's businesses in general and, more specifically, of the particular 
trading desk, including types of instruments traded, trading activities 
and strategies, and history and experience (e.g., whether the trading 
desk is an established, successful market maker or a new entrant to a 
competitive market). In all cases, banking entities must ensure that 
they have robust measures in place to identify and monitor the risks 
taken in their trading activities, to ensure that the activities are 
within risk tolerances established by the banking entity, and to monitor 
and examine for compliance with the proprietary trading restrictions in 
this part.
    f. On an ongoing basis, banking entities must carefully monitor, 
review, and evaluate all furnished quantitative measurements, as well as 
any others that they choose to utilize in order to maintain compliance 
with section 13 of the BHC Act and this part. All measurement results 
that indicate a heightened risk of impermissible proprietary trading, 
including with respect to otherwise-permitted activities under 
Sec. Sec.  75.4 through 75.6(a) and (b), or that result in a material 
exposure to high-risk assets or high-risk trading strategies, must be 
escalated within the banking entity for review, further analysis, 
explanation to the Commission, and remediation, where appropriate. The 
quantitative measurements discussed in this appendix should be helpful 
to banking entities in identifying and managing the risks related to 
their covered trading activities.

                             II. Definitions

    The terms used in this appendix have the same meanings as set forth 
in Sec. Sec.  75.2 and 75.3. In addition, for purposes of this appendix, 
the following definitions apply:
    Calculation period means the period of time for which a particular 
quantitative measurement must be calculated.
    Comprehensive profit and loss means the net profit or loss of a 
trading desk's material sources of trading revenue over a specific 
period of time, including, for example, any increase or decrease in the 
market value of a trading desk's holdings, dividend income, and interest 
income and expense.
    Covered trading activity means trading conducted by a trading desk 
under Sec.  75.4, 75.5, or 75.6(a) or (b). A banking entity may include 
trading under Sec.  75.3(d) or 75.6(c), (d) or (e).
    Measurement frequency means the frequency with which a particular 
quantitative metric must be calculated and recorded.
    Trading desk means the smallest discrete unit of organization of a 
banking entity that purchases or sells financial instruments for the 
trading account of the banking entity or an affiliate thereof.

      III. Reporting and Recordkeeping of Quantitative Measurements

                     a. Scope of Required Reporting

    General scope. Each banking entity made subject to this part by 
Sec.  75.20 must furnish the following quantitative measurements for 
each trading desk of the banking entity, calculated in accordance with 
this appendix:
     Risk and Position Limits and Usage;
     Risk Factor Sensitivities;
     Value-at-Risk and Stress VaR;
     Comprehensive Profit and Loss Attribution;
     Inventory Turnover;
     Inventory Aging; and
     Customer Facing Trade Ratio

           b. Frequency of Required Calculation and Reporting

    A banking entity must calculate any applicable quantitative 
measurement for each trading day. A banking entity must report each 
applicable quantitative measurement to the Commission on the reporting 
schedule established in Sec.  75.20 unless otherwise requested by the 
Commission. All quantitative measurements for any calendar month must be 
reported within the time period required by Sec.  75.20.

                            c. Recordkeeping

    A banking entity must, for any quantitative measurement furnished to 
the Commission pursuant to this appendix and Sec.  75.20(d), create and 
maintain records documenting the preparation and content of these 
reports, as well as such information as is necessary to permit the 
Commission to verify the accuracy of such reports, for a period of 5 
years from the end of the calendar year for which the measurement was 
taken.

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                      IV. Quantitative Measurements

                     a. Risk-Management Measurements

                  1. Risk and Position Limits and Usage

    i. Description: For purposes of this appendix, Risk and Position 
Limits are the constraints that define the amount of risk that a trading 
desk is permitted to take at a point in time, as defined by the banking 
entity for a specific trading desk. Usage represents the portion of the 
trading desk's limits that are accounted for by the current activity of 
the desk. Risk and position limits and their usage are key risk 
management tools used to control and monitor risk taking and include, 
but are not limited, to the limits set out in Sec. Sec.  75.4 and 75.5. 
A number of the metrics that are described below, including ``Risk 
Factor Sensitivities'' and ``Value-at-Risk and Stress Value-at-Risk,'' 
relate to a trading desk's risk and position limits and are useful in 
evaluating and setting these limits in the broader context of the 
trading desk's overall activities, particularly for the market making 
activities under Sec.  75.4(b) and hedging activity under Sec.  75.5. 
Accordingly, the limits required under Sec. Sec.  75.4(b)(2)(iii) and 
75.5(b)(1)(i) must meet the applicable requirements under Sec. Sec.  
75.4(b)(2)(iii) and 75.5(b)(1)(i) and also must include appropriate 
metrics for the trading desk limits including, at a minimum, the ``Risk 
Factor Sensitivities'' and ``Value-at-Risk and Stress Value-at-Risk'' 
metrics except to the extent any of the ``Risk Factor Sensitivities'' or 
``Value-at-Risk and Stress Value-at-Risk'' metrics are demonstrably 
ineffective for measuring and monitoring the risks of a trading desk 
based on the types of positions traded by, and risk exposures of, that 
desk.
    ii. General Calculation Guidance: Risk and Position Limits must be 
reported in the format used by the banking entity for the purposes of 
risk management of each trading desk. Risk and Position Limits are often 
expressed in terms of risk measures, such as VaR and Risk Factor 
Sensitivities, but may also be expressed in terms of other observable 
criteria, such as net open positions. When criteria other than VaR or 
Risk Factor Sensitivities are used to define the Risk and Position 
Limits, both the value of the Risk and Position Limits and the value of 
the variables used to assess whether these limits have been reached must 
be reported.
    iii. Calculation Period: One trading day.
    iv. Measurement Frequency: Daily.

                      2. Risk Factor Sensitivities

    i. Description: For purposes of this appendix, Risk Factor 
Sensitivities are changes in a trading desk's Comprehensive Profit and 
Loss that are expected to occur in the event of a change in one or more 
underlying variables that are significant sources of the trading desk's 
profitability and risk.
    ii. General Calculation Guidance: A banking entity must report the 
Risk Factor Sensitivities that are monitored and managed as part of the 
trading desk's overall risk management policy. The underlying data and 
methods used to compute a trading desk's Risk Factor Sensitivities will 
depend on the specific function of the trading desk and the internal 
risk management models employed. The number and type of Risk Factor 
Sensitivities that are monitored and managed by a trading desk, and 
furnished to the Commission, will depend on the explicit risks assumed 
by the trading desk. In general, however, reported Risk Factor 
Sensitivities must be sufficiently granular to account for a 
preponderance of the expected price variation in the trading desk's 
holdings.
    A. Trading desks must take into account any relevant factors in 
calculating Risk Factor Sensitivities, including, for example, the 
following with respect to particular asset classes:
     Commodity derivative positions: Risk factors with 
respect to the related commodities set out in Sec.  20.2 of this 
chapter, the maturity of the positions, volatility and/or correlation 
sensitivities (expressed in a manner that demonstrates any significant 
non-linearities), and the maturity profile of the positions;
     Credit positions: Risk factors with respect to 
credit spreads that are sufficiently granular to account for specific 
credit sectors and market segments, the maturity profile of the 
positions, and risk factors with respect to interest rates of all 
relevant maturities;
     Credit-related derivative positions: Risk factor 
sensitivities, for example credit spreads, shifts (parallel and non-
parallel) in credit spreads--volatility, and/or correlation 
sensitivities (expressed in a manner that demonstrates any significant 
non-linearities), and the maturity profile of the positions;
     Equity derivative positions: Risk factor 
sensitivities such as equity positions, volatility, and/or correlation 
sensitivities (expressed in a manner that demonstrates any significant 
non-linearities), and the maturity profile of the positions;
     Equity positions: Risk factors for equity prices 
and risk factors that differentiate between important equity market 
sectors and segments, such as a small capitalization equities and 
international equities;
     Foreign exchange derivative positions: Risk 
factors with respect to major currency pairs and maturities, exposure to 
interest rates at relevant maturities, volatility, and/or correlation 
sensitivities (expressed in a manner that demonstrates any significant 
non-linearities), as well as the maturity profile of the positions; and
     Interest rate positions, including interest rate 
derivative positions: Risk factors with respect to major interest rate 
categories and

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maturities and volatility and/or correlation sensitivities (expressed in 
a manner that demonstrates any significant non-linearities), and shifts 
(parallel and non-parallel) in the interest rate curve, as well as the 
maturity profile of the positions.
    B. The methods used by a banking entity to calculate sensitivities 
to a common factor shared by multiple trading desks, such as an equity 
price factor, must be applied consistently across its trading desks so 
that the sensitivities can be compared from one trading desk to another.
    iii. Calculation Period: One trading day.
    iv. Measurement Frequency: Daily.

                3. Value-at-Risk and Stress Value-at-Risk

    i. Description: For purposes of this appendix, Value-at-Risk 
(``VaR'') is the commonly used percentile measurement of the risk of 
future financial loss in the value of a given set of aggregated 
positions over a specified period of time, based on current market 
conditions. For purposes of this appendix, Stress Value-at-Risk 
(``Stress VaR'') is the percentile measurement of the risk of future 
financial loss in the value of a given set of aggregated positions over 
a specified period of time, based on market conditions during a period 
of significant financial stress.
    ii. General Calculation Guidance: Banking entities must compute and 
report VaR and Stress VaR by employing generally accepted standards and 
methods of calculation. VaR should reflect a loss in a trading desk that 
is expected to be exceeded less than one percent of the time over a one-
day period. For those banking entities that are subject to regulatory 
capital requirements imposed by a Federal banking agency, VaR and Stress 
VaR must be computed and reported in a manner that is consistent with 
such regulatory capital requirements. In cases where a trading desk does 
not have a standalone VaR or Stress VaR calculation but is part of a 
larger aggregation of positions for which a VaR or Stress VaR 
calculation is performed, a VaR or Stress VaR calculation that includes 
only the trading desk's holdings must be performed consistent with the 
VaR or Stress VaR model and methodology used for the larger aggregation 
of positions.
    iii. Calculation Period: One trading day.
    iv. Measurement Frequency: Daily.

                    b. Source-of-Revenue Measurements

              1. Comprehensive Profit and Loss Attribution

    i. Description: For purposes of this appendix, Comprehensive Profit 
and Loss Attribution is an analysis that attributes the daily 
fluctuation in the value of a trading desk's positions to various 
sources. First, the daily profit and loss of the aggregated positions is 
divided into three categories: (i) Profit and loss attributable to a 
trading desk's existing positions that were also positions held by the 
trading desk as of the end of the prior day (``existing positions''); 
(ii) profit and loss attributable to new positions resulting from the 
current day's trading activity (``new positions''); and (iii) residual 
profit and loss that cannot be specifically attributed to existing 
positions or new positions. The sum of (i), (ii), and (iii) must equal 
the trading desk's comprehensive profit and loss at each point in time. 
In addition, profit and loss measurements must calculate volatility of 
comprehensive profit and loss (i.e., the standard deviation of the 
trading desk's one-day profit and loss, in dollar terms) for the 
reporting period for at least a 30-, 60- and 90-day lag period, from the 
end of the reporting period, and any other period that the banking 
entity deems necessary to meet the requirements of the rule.
    A. The comprehensive profit and loss associated with existing 
positions must reflect changes in the value of these positions on the 
applicable day. The comprehensive profit and loss from existing 
positions must be further attributed, as applicable, to changes in (i) 
the specific Risk Factors and other factors that are monitored and 
managed as part of the trading desk's overall risk management policies 
and procedures; and (ii) any other applicable elements, such as cash 
flows, carry, changes in reserves, and the correction, cancellation, or 
exercise of a trade.
    B. The comprehensive profit and loss attributed to new positions 
must reflect commissions and fee income or expense and market gains or 
losses associated with transactions executed on the applicable day. New 
positions include purchases and sales of financial instruments and other 
assets/liabilities and negotiated amendments to existing positions. The 
comprehensive profit and loss from new positions may be reported in the 
aggregate and does not need to be further attributed to specific 
sources.
    C. The portion of comprehensive profit and loss that cannot be 
specifically attributed to known sources must be allocated to a residual 
category identified as an unexplained portion of the comprehensive 
profit and loss. Significant unexplained profit and loss must be 
escalated for further investigation and analysis.
    ii. General Calculation Guidance: The specific categories used by a 
trading desk in the attribution analysis and amount of detail for the 
analysis should be tailored to the type and amount of trading activities 
undertaken by the trading desk. The new position attribution must be 
computed by calculating the difference between the prices at which 
instruments were bought and/or sold and the prices at which those 
instruments are marked to market at the close of business on that day 
multiplied by the notional or principal amount of each purchase or sale. 
Any

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fees, commissions, or other payments received (paid) that are associated 
with transactions executed on that day must be added (subtracted) from 
such difference. These factors must be measured consistently over time 
to facilitate historical comparisons.
    iii. Calculation Period: One trading day.
    iv. Measurement Frequency: Daily.

                c. Customer-Facing Activity Measurements

                          1. Inventory Turnover

    i. Description: For purposes of this appendix, Inventory Turnover is 
a ratio that measures the turnover of a trading desk's inventory. The 
numerator of the ratio is the absolute value of all transactions over 
the reporting period. The denominator of the ratio is the value of the 
trading desk's inventory at the beginning of the reporting period.
    ii. General Calculation Guidance: For purposes of this appendix, for 
derivatives, other than options and interest rate derivatives, value 
means gross notional value, for options, value means delta adjusted 
notional value, and for interest rate derivatives, value means 10-year 
bond equivalent value.
    iii. Calculation Period: 30 days, 60 days, and 90 days.
    iv. Measurement Frequency: Daily.

                           2. Inventory Aging

    i. Description: For purposes of this appendix, Inventory Aging 
generally describes a schedule of the trading desk's aggregate assets 
and liabilities and the amount of time that those assets and liabilities 
have been held. Inventory Aging should measure the age profile of the 
trading desk's assets and liabilities.
    ii. General Calculation Guidance: In general, Inventory Aging must 
be computed using a trading desk's trading activity data and must 
identify the value of a trading desk's aggregate assets and liabilities. 
Inventory Aging must include two schedules, an asset-aging schedule and 
a liability-aging schedule. Each schedule must record the value of 
assets or liabilities held over all holding periods. For derivatives, 
other than options, and interest rate derivatives, value means gross 
notional value, for options, value means delta adjusted notional value 
and, for interest rate derivatives, value means 10-year bond equivalent 
value.
    iii. Calculation Period: One trading day.
    iv. Measurement Frequency: Daily.

    3. Customer-Facing Trade Ratio--Trade Count Based and Value Based

    i. Description: For purposes of this appendix, the Customer-Facing 
Trade Ratio is a ratio comparing (i) the transactions involving a 
counterparty that is a customer of the trading desk to (ii) the 
transactions involving a counterparty that is not a customer of the 
trading desk. A trade count based ratio must be computed that records 
the number of transactions involving a counterparty that is a customer 
of the trading desk and the number of transactions involving a 
counterparty that is not a customer of the trading desk. A value based 
ratio must be computed that records the value of transactions involving 
a counterparty that is a customer of the trading desk and the value of 
transactions involving a counterparty that is not a customer of the 
trading desk.
    ii. General Calculation Guidance: For purposes of calculating the 
Customer-Facing Trade Ratio, a counterparty is considered to be a 
customer of the trading desk if the counterparty is a market participant 
that makes use of the banking entity's market making-related services by 
obtaining such services, responding to quotations, or entering into a 
continuing relationship with respect to such services. However, a 
trading desk or other organizational unit of another banking entity 
would not be a client, customer, or counterparty of the trading desk if 
the other entity has trading assets and liabilities of $50 billion or 
more as measured in accordance with Sec.  75.20(d)(1) unless the trading 
desk documents how and why a particular trading desk or other 
organizational unit of the entity should be treated as a client, 
customer, or counterparty of the trading desk. Transactions conducted 
anonymously on an exchange or similar trading facility that permits 
trading on behalf of a broad range of market participants would be 
considered transactions with customers of the trading desk. For 
derivatives, other than options, and interest rate derivatives, value 
means gross notional value, for options, value means delta adjusted 
notional value, and for interest rate derivatives, value means 10-year 
bond equivalent value.
    iii. Calculation Period: 30 days, 60 days, and 90 days.
    iv. Measurement Frequency: Daily.

    Appendix B to Part 75--Enhanced Minimum Standards for Compliance 
                                Programs

                               I. Overview

    Section 75.20(c) requires certain banking entities to establish, 
maintain, and enforce an enhanced compliance program that includes the 
requirements and standards in this Appendix as well as the minimum 
written policies and procedures, internal controls, management 
framework, independent testing, training, and recordkeeping provisions 
outlined in Sec.  75.20. This Appendix sets forth additional minimum 
standards with respect to the establishment, oversight, maintenance, and 
enforcement by these banking entities of an enhanced internal compliance 
program for ensuring and monitoring compliance with the prohibitions and 
restrictions on proprietary trading and covered

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fund activities and investments set forth in section 13 of the BHC Act 
and this part.
    a. This compliance program must:
    1. Be reasonably designed to identify, document, monitor, and report 
the permitted trading and covered fund activities and investments of the 
banking entity; identify, monitor and promptly address the risks of 
these covered activities and investments and potential areas of 
noncompliance; and prevent activities or investments prohibited by, or 
that do not comply with, section 13 of the BHC Act and this part;
    2. Establish and enforce appropriate limits on the covered 
activities and investments of the banking entity, including limits on 
the size, scope, complexity, and risks of the individual activities or 
investments consistent with the requirements of section 13 of the BHC 
Act and this part;
    3. Subject the effectiveness of the compliance program to periodic 
independent review and testing, and ensure that the entity's internal 
audit, corporate compliance and internal control functions involved in 
review and testing are effective and independent;
    4. Make senior management, and others as appropriate, accountable 
for the effective implementation of the compliance program, and ensure 
that the board of directors and chief executive officer (or equivalent) 
of the banking entity review the effectiveness of the compliance 
program; and
    5. Facilitate supervision and examination by the Agencies of the 
banking entity's permitted trading and covered fund activities and 
investments.

                     II. Enhanced Compliance Program

                    a. Proprietary Trading Activities

    A banking entity must establish, maintain and enforce a compliance 
program that includes written policies and procedures that are 
appropriate for the types, size, and complexity of, and risks associated 
with, its permitted trading activities. The compliance program may be 
tailored to the types of trading activities conducted by the banking 
entity, and must include a detailed description of controls established 
by the banking entity to reasonably ensure that its trading activities 
are conducted in accordance with the requirements and limitations 
applicable to those trading activities under section 13 of the BHC Act 
and this part, and provide for appropriate revision of the compliance 
program before expansion of the trading activities of the banking 
entity. A banking entity must devote adequate resources and use 
knowledgeable personnel in conducting, supervising and managing its 
trading activities, and promote consistency, independence and rigor in 
implementing its risk controls and compliance efforts. The compliance 
program must be updated with a frequency sufficient to account for 
changes in the activities of the banking entity, results of independent 
testing of the program, identification of weaknesses in the program, and 
changes in legal, regulatory or other requirements.
    1. Trading Desks: The banking entity must have written policies and 
procedures governing each trading desk that include a description of:
    i. The process for identifying, authorizing and documenting 
financial instruments each trading desk may purchase or sell, with 
separate documentation for market making-related activities conducted in 
reliance on Sec.  75.4(b) and for hedging activity conducted in reliance 
on Sec.  75.5;
    ii. A mapping for each trading desk to the division, business line, 
or other organizational structure that is responsible for managing and 
overseeing the trading desk's activities;
    iii. The mission (i.e., the type of trading activity, such as 
market-making, trading in sovereign debt, etc.) and strategy (i.e., 
methods for conducting authorized trading activities) of each trading 
desk;
    iv. The activities that the trading desk is authorized to conduct, 
including (i) authorized instruments and products, and (ii) authorized 
hedging strategies, techniques and instruments;
    v. The types and amount of risks allocated by the banking entity to 
each trading desk to implement the mission and strategy of the trading 
desk, including an enumeration of material risks resulting from the 
activities in which the trading desk is authorized to engage (including 
but not limited to price risks, such as basis, volatility and 
correlation risks, as well as counterparty credit risk). Risk 
assessments must take into account both the risks inherent in the 
trading activity and the strength and effectiveness of controls designed 
to mitigate those risks;
    vi. How the risks allocated to each trading desk will be measured;
    vii. Why the allocated risks levels are appropriate to the 
activities authorized for the trading desk;
    viii. The limits on the holding period of, and the risk associated 
with, financial instruments under the responsibility of the trading 
desk;
    ix. The process for setting new or revised limits, as well as 
escalation procedures for granting exceptions to any limits or to any 
policies or procedures governing the desk, the analysis that will be 
required to support revising limits or granting exceptions, and the 
process for independently reviewing and documenting those exceptions and 
the underlying analysis;
    x. The process for identifying, documenting and approving new 
products, trading strategies, and hedging strategies;

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    xi. The types of clients, customers, and counterparties with whom 
the trading desk may trade; and
    xii. The compensation arrangements, including incentive 
arrangements, for employees associated with the trading desk, which may 
not be designed to reward or incentivize prohibited proprietary trading 
or excessive or imprudent risk-taking.
    2. Description of risks and risk management processes: The 
compliance program for the banking entity must include a comprehensive 
description of the risk management program for the trading activity of 
the banking entity. The compliance program must also include a 
description of the governance, approval, reporting, escalation, review 
and other processes the banking entity will use to reasonably ensure 
that trading activity is conducted in compliance with section 13 of the 
BHC Act and this part. Trading activity in similar financial instruments 
should be subject to similar governance, limits, testing, controls, and 
review, unless the banking entity specifically determines to establish 
different limits or processes and documents those differences. 
Descriptions must include, at a minimum, the following elements:
    i. A description of the supervisory and risk management structure 
governing all trading activity, including a description of processes for 
initial and senior-level review of new products and new strategies;
    ii. A description of the process for developing, documenting, 
testing, approving and reviewing all models used for valuing, 
identifying and monitoring the risks of trading activity and related 
positions, including the process for periodic independent testing of the 
reliability and accuracy of those models;
    iii. A description of the process for developing, documenting, 
testing, approving and reviewing the limits established for each trading 
desk;
    iv. A description of the process by which a security may be 
purchased or sold pursuant to the liquidity management plan, including 
the process for authorizing and monitoring such activity to ensure 
compliance with the banking entity's liquidity management plan and the 
restrictions on liquidity management activities in this part;
    v. A description of the management review process, including 
escalation procedures, for approving any temporary exceptions or 
permanent adjustments to limits on the activities, positions, 
strategies, or risks associated with each trading desk; and
    vi. The role of the audit, compliance, risk management and other 
relevant units for conducting independent testing of trading and hedging 
activities, techniques and strategies.
    3. Authorized risks, instruments, and products. The banking entity 
must implement and enforce limits and internal controls for each trading 
desk that are reasonably designed to ensure that trading activity is 
conducted in conformance with section 13 of the BHC Act and this part 
and with the banking entity's written policies and procedures. The 
banking entity must establish and enforce risk limits appropriate for 
the activity of each trading desk. These limits should be based on 
probabilistic and non-probabilistic measures of potential loss (e.g., 
Value-at-Risk and notional exposure, respectively), and measured under 
normal and stress market conditions. At a minimum, these internal 
controls must monitor, establish and enforce limits on:
    i. The financial instruments (including, at a minimum, by type and 
exposure) that the trading desk may trade;
    ii. The types and levels of risks that may be taken by each trading 
desk; and
    iii. The types of hedging instruments used, hedging strategies 
employed, and the amount of risk effectively hedged.
    4. Hedging policies and procedures. The banking entity must 
establish, maintain, and enforce written policies and procedures 
regarding the use of risk-mitigating hedging instruments and strategies 
that, at a minimum, describe:
    i. The positions, techniques and strategies that each trading desk 
may use to hedge the risk of its positions;
    ii. The manner in which the banking entity will identify the risks 
arising in connection with and related to the individual or aggregated 
positions, contracts or other holdings of the banking entity that are to 
be hedged and determine that those risks have been properly and 
effectively hedged;
    iii. The level of the organization at which hedging activity and 
management will occur;
    iv. The manner in which hedging strategies will be monitored and the 
personnel responsible for such monitoring;
    v. The risk management processes used to control unhedged or 
residual risks; and
    vi. The process for developing, documenting, testing, approving and 
reviewing all hedging positions, techniques and strategies permitted for 
each trading desk and for the banking entity in reliance on Sec.  75.5.
    5. Analysis and quantitative measurements. The banking entity must 
perform robust analysis and quantitative measurement of its trading 
activities that is reasonably designed to ensure that the trading 
activity of each trading desk is consistent with the banking entity's 
compliance program; monitor and assist in the identification of 
potential and actual prohibited proprietary trading activity; and 
prevent the occurrence of prohibited proprietary trading. Analysis and 
models used to determine, measure and limit

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risk must be rigorously tested and be reviewed by management responsible 
for trading activity to ensure that trading activities, limits, 
strategies, and hedging activities do not understate the risk and 
exposure to the banking entity or allow prohibited proprietary trading. 
This review should include periodic and independent back-testing and 
revision of activities, limits, strategies and hedging as appropriate to 
contain risk and ensure compliance. In addition to the quantitative 
measurements reported by any banking entity subject to Appendix A of 
this part, each banking entity must develop and implement, to the extent 
appropriate to facilitate compliance with this part, additional 
quantitative measurements specifically tailored to the particular risks, 
practices, and strategies of its trading desks. The banking entity's 
analysis and quantitative measurements must incorporate the quantitative 
measurements reported by the banking entity pursuant to Appendix A of 
this part (if applicable) and include, at a minimum, the following:
    i. Internal controls and written policies and procedures reasonably 
designed to ensure the accuracy and integrity of quantitative 
measurements;
    ii. Ongoing, timely monitoring and review of calculated quantitative 
measurements;
    iii. The establishment of numerical thresholds and appropriate 
trading measures for each trading desk and heightened review of trading 
activity not consistent with those thresholds to ensure compliance with 
section 13 of the BHC Act and this part, including analysis of the 
measurement results or other information, appropriate escalation 
procedures, and documentation related to the review; and
    iv. Immediate review and compliance investigation of the trading 
desk's activities, escalation to senior management with oversight 
responsibilities for the applicable trading desk, timely notification to 
the Commission, appropriate remedial action (e.g., divesting of 
impermissible positions, cessation of impermissible activity, 
disciplinary actions), and documentation of the investigation findings 
and remedial action taken when quantitative measurements or other 
information, considered together with the facts and circumstances, or 
findings of internal audit, independent testing or other review suggest 
a reasonable likelihood that the trading desk has violated any part of 
section 13 of the BHC Act or this part.
    6. Other Compliance Matters. In addition to the requirements 
specified above, the banking entity's compliance program must:
    i. Identify activities of each trading desk that will be conducted 
in reliance on exemptions contained in Sec. Sec.  75.4 through 75.6, 
including an explanation of:
    A. How and where in the organization the activity occurs; and
    B. Which exemption is being relied on and how the activity meets the 
specific requirements for reliance on the applicable exemption;
    ii. Include an explanation of the process for documenting, approving 
and reviewing actions taken pursuant to the liquidity management plan, 
where in the organization this activity occurs, the securities 
permissible for liquidity management, the process for ensuring that 
liquidity management activities are not conducted for the purpose of 
prohibited proprietary trading, and the process for ensuring that 
securities purchased as part of the liquidity management plan are highly 
liquid and conform to the requirements of this part;
    iii. Describe how the banking entity monitors for and prohibits 
potential or actual material exposure to high-risk assets or high-risk 
trading strategies presented by each trading desk that relies on the 
exemptions contained in Sec. Sec.  75.3(d)(3) and 75.4 through 75.6, 
which must take into account potential or actual exposure to:
    A. Assets whose values cannot be externally priced or, where 
valuation is reliant on pricing models, whose model inputs cannot be 
externally validated;
    B. Assets whose changes in value cannot be adequately mitigated by 
effective hedging;
    C. New products with rapid growth, including those that do not have 
a market history;
    D. Assets or strategies that include significant embedded leverage;
    E. Assets or strategies that have demonstrated significant 
historical volatility;
    F. Assets or strategies for which the application of capital and 
liquidity standards would not adequately account for the risk; and
    G. Assets or strategies that result in large and significant 
concentrations to sectors, risk factors, or counterparties;
    iv. Establish responsibility for compliance with the reporting and 
recordkeeping requirements of subpart B of this part and Sec.  75.20; 
and
    v. Establish policies for monitoring and prohibiting potential or 
actual material conflicts of interest between the banking entity and its 
clients, customers, or counterparties.
    7. Remediation of violations. The banking entity's compliance 
program must be reasonably designed and established to effectively 
monitor and identify for further analysis any trading activity that may 
indicate potential violations of section 13 of the BHC Act and this part 
and to prevent actual violations of section 13 of the BHC Act and this 
part. The compliance program must describe procedures for identifying 
and remedying violations of section 13 of the BHC Act and this part, and 
must include, at a minimum, a requirement to promptly document, address 
and remedy any violation of section 13 of the

[[Page 277]]

BHC Act or this part, and document all proposed and actual remediation 
efforts. The compliance program must include specific written policies 
and procedures that are reasonably designed to assess the extent to 
which any activity indicates that modification to the banking entity's 
compliance program is warranted and to ensure that appropriate 
modifications are implemented. The written policies and procedures must 
provide for prompt notification to appropriate management, including 
senior management and the board of directors, of any material weakness 
or significant deficiencies in the design or implementation of the 
compliance program of the banking entity.

                b. Covered Fund Activities or Investments

    A banking entity must establish, maintain and enforce a compliance 
program that includes written policies and procedures that are 
appropriate for the types, size, complexity and risks of the covered 
fund and related activities conducted and investments made, by the 
banking entity.
    1. Identification of covered funds. The banking entity's compliance 
program must provide a process, which must include appropriate 
management review and independent testing, for identifying and 
documenting covered funds that each unit within the banking entity's 
organization sponsors or organizes and offers, and covered funds in 
which each such unit invests. In addition to the documentation 
requirements for covered funds, as specified under Sec.  75.20(e), the 
documentation must include information that identifies all pools that 
the banking entity sponsors or has an interest in and the type of 
exemption from the Commodity Exchange Act (whether or not the pool 
relies on Sec.  4.7 of the regulations under the Commodity Exchange Act 
(Sec.  4.7 of this chapter)), and the amount of ownership interest the 
banking entity has in those pools.
    2. Identification of covered fund activities and investments. The 
banking entity's compliance program must identify, document and map each 
unit within the organization that is permitted to acquire or hold an 
interest in any covered fund or sponsor any covered fund and map each 
unit to the division, business line, or other organizational structure 
that will be responsible for managing and overseeing that unit's 
activities and investments.
    3. Explanation of compliance. The banking entity's compliance 
program must explain how:
    i. The banking entity monitors for and prohibits potential or actual 
material conflicts of interest between the banking entity and its 
clients, customers, or counterparties related to its covered fund 
activities and investments;
    ii. The banking entity monitors for and prohibits potential or 
actual transactions or activities that may threaten the safety and 
soundness of the banking entity related to its covered fund activities 
and investments; and
    iii. The banking entity monitors for and prohibits potential or 
actual material exposure to high-risk assets or high-risk trading 
strategies presented by its covered fund activities and investments, 
taking into account potential or actual exposure to:
    A. Assets whose values cannot be externally priced or, where 
valuation is reliant on pricing models, whose model inputs cannot be 
externally validated;
    B. Assets whose changes in values cannot be adequately mitigated by 
effective hedging;
    C. New products with rapid growth, including those that do not have 
a market history;
    D. Assets or strategies that include significant embedded leverage;
    E. Assets or strategies that have demonstrated significant 
historical volatility;
    F. Assets or strategies for which the application of capital and 
liquidity standards would not adequately account for the risk; and
    G. Assets or strategies that expose the banking entity to large and 
significant concentrations with respect to sectors, risk factors, or 
counterparties;
    4. Description and documentation of covered fund activities and 
investments. For each organizational unit engaged in covered fund 
activities and investments, the banking entity's compliance program must 
document:
    i. The covered fund activities and investments that the unit is 
authorized to conduct;
    ii. The banking entity's plan for actively seeking unaffiliated 
investors to ensure that any investment by the banking entity conforms 
to the limits contained in Sec.  75.12 or registered in compliance with 
the securities laws and thereby exempt from those limits within the time 
periods allotted in Sec.  75.12; and
    iii. How it complies with the requirements of subpart C of this 
part.
    5. Internal Controls. A banking entity must establish, maintain, and 
enforce internal controls that are reasonably designed to ensure that 
its covered fund activities or investments comply with the requirements 
of section 13 of the BHC Act and this part and are appropriate given the 
limits on risk established by the banking entity. These written internal 
controls must be reasonably designed and established to effectively 
monitor and identify for further analysis any covered fund activity or 
investment that may indicate potential violations of section 13 of the 
BHC Act or this part. The internal controls must, at a minimum require:
    i. Monitoring and limiting the banking entity's individual and 
aggregate investments in covered funds;

[[Page 278]]

    ii. Monitoring the amount and timing of seed capital investments for 
compliance with the limitations under subpart C of this part (including 
but not limited to the redemption, sale or disposition requirements of 
Sec.  75.12), and the effectiveness of efforts to seek unaffiliated 
investors to ensure compliance with those limits;
    iii. Calculating the individual and aggregate levels of ownership 
interests in one or more covered fund required by Sec.  75.12;
    iv. Attributing the appropriate instruments to the individual and 
aggregate ownership interest calculations above;
    v. Making disclosures to prospective and actual investors in any 
covered fund organized and offered or sponsored by the banking entity, 
as provided under Sec.  75.11(a)(8);
    vi. Monitoring for and preventing any relationship or transaction 
between the banking entity and a covered fund that is prohibited under 
Sec.  75.14, including where the banking entity has been designated as 
the sponsor, investment manager, investment adviser, or commodity 
trading advisor to a covered fund by another banking entity; and
    vii. Appropriate management review and supervision across legal 
entities of the banking entity to ensure that services and products 
provided by all affiliated entities comply with the limitation on 
services and products contained in Sec.  75.14.
    6. Remediation of violations. The banking entity's compliance 
program must be reasonably designed and established to effectively 
monitor and identify for further analysis any covered fund activity or 
investment that may indicate potential violations of section 13 of the 
BHC Act or this part and to prevent actual violations of section 13 of 
the BHC Act and this part. The banking entity's compliance program must 
describe procedures for identifying and remedying violations of section 
13 of the BHC Act and this part, and must include, at a minimum, a 
requirement to promptly document, address and remedy any violation of 
section 13 of the BHC Act or this part, including Sec.  75.21, and 
document all proposed and actual remediation efforts. The compliance 
program must include specific written policies and procedures that are 
reasonably designed to assess the extent to which any activity or 
investment indicates that modification to the banking entity's 
compliance program is warranted and to ensure that appropriate 
modifications are implemented. The written policies and procedures must 
provide for prompt notification to appropriate management, including 
senior management and the board of directors, of any material weakness 
or significant deficiencies in the design or implementation of the 
compliance program of the banking entity.

    III. Responsibility and Accountability for the Compliance Program

    a. A banking entity must establish, maintain, and enforce a 
governance and management framework to manage its business and employees 
with a view to preventing violations of section 13 of the BHC Act and 
this part. A banking entity must have an appropriate management 
framework reasonably designed to ensure that: Appropriate personnel are 
responsible and accountable for the effective implementation and 
enforcement of the compliance program; a clear reporting line with a 
chain of responsibility is delineated; and the compliance program is 
reviewed periodically by senior management. The board of directors (or 
equivalent governance body) and senior management should have the 
appropriate authority and access to personnel and information within the 
organizations as well as appropriate resources to conduct their 
oversight activities effectively.
    1. Corporate governance. The banking entity must adopt a written 
compliance program approved by the board of directors, an appropriate 
committee of the board, or equivalent governance body, and senior 
management.
    2. Management procedures. The banking entity must establish, 
maintain, and enforce a governance framework that is reasonably designed 
to achieve compliance with section 13 of the BHC Act and this part, 
which, at a minimum, provides for:
    i. The designation of appropriate senior management or committee of 
senior management with authority to carry out the management 
responsibilities of the banking entity for each trading desk and for 
each organizational unit engaged in covered fund activities;
    ii. Written procedures addressing the management of the activities 
of the banking entity that are reasonably designed to achieve compliance 
with section 13 of the BHC Act and this part, including:
    A. A description of the management system, including the titles, 
qualifications, and locations of managers and the specific 
responsibilities of each person with respect to the banking entity's 
activities governed by section 13 of the BHC Act and this part; and
    B. Procedures for determining compensation arrangements for traders 
engaged in underwriting or market making-related activities under Sec.  
75.4 or risk-mitigating hedging activities under Sec.  75.5 so that such 
compensation arrangements are designed not to reward or incentivize 
prohibited proprietary trading and appropriately balance risk and 
financial results in a manner that does not encourage employees to 
expose the banking entity to excessive or imprudent risk.
    3. Business line managers. Managers with responsibility for one or 
more trading desks of the banking entity are accountable for the

[[Page 279]]

effective implementation and enforcement of the compliance program with 
respect to the applicable trading desk(s).
    4. Board of directors, or similar corporate body, and senior 
management. The board of directors, or similar corporate body, and 
senior management are responsible for setting and communicating an 
appropriate culture of compliance with section 13 of the BHC Act and 
this part and ensuring that appropriate policies regarding the 
management of trading activities and covered fund activities or 
investments are adopted to comply with section 13 of the BHC Act and 
this part. The board of directors or similar corporate body (such as a 
designated committee of the board or an equivalent governance body) must 
ensure that senior management is fully capable, qualified, and properly 
motivated to manage compliance with this part in light of the 
organization's business activities and the expectations of the board of 
directors. The board of directors or similar corporate body must also 
ensure that senior management has established appropriate incentives and 
adequate resources to support compliance with this part, including the 
implementation of a compliance program meeting the requirements of this 
appendix into management goals and compensation structures across the 
banking entity.
    5. Senior management. Senior management is responsible for 
implementing and enforcing the approved compliance program. Senior 
management must also ensure that effective corrective action is taken 
when failures in compliance with section 13 of the BHC Act and this part 
are identified. Senior management and control personnel charged with 
overseeing compliance with section 13 of the BHC Act and this part 
should review the compliance program for the banking entity periodically 
and report to the board, or an appropriate committee thereof, on the 
effectiveness of the compliance program and compliance matters with a 
frequency appropriate to the size, scope, and risk profile of the 
banking entity's trading activities and covered fund activities or 
investments, which shall be at least annually.
    6. CEO attestation. Based on a review by the CEO of the banking 
entity, the CEO of the banking entity must, annually, attest in writing 
to the Commission that the banking entity has in place processes to 
establish, maintain, enforce, review, test and modify the compliance 
program established under this appendix and Sec.  75.20 in a manner 
reasonably designed to achieve compliance with section 13 of the BHC Act 
and this part. In the case of a U.S. branch or agency of a foreign 
banking entity, the attestation may be provided for the entire U.S. 
operations of the foreign banking entity by the senior management 
officer of the United States operations of the foreign banking entity 
who is located in the United States.

                         IV. Independent Testing

    a. Independent testing must occur with a frequency appropriate to 
the size, scope, and risk profile of the banking entity's trading and 
covered fund activities or investments, which shall be at least 
annually. This independent testing must include an evaluation of:
    1. The overall adequacy and effectiveness of the banking entity's 
compliance program, including an analysis of the extent to which the 
program contains all the required elements of this appendix;
    2. The effectiveness of the banking entity's internal controls, 
including an analysis and documentation of instances in which such 
internal controls have been breached, and how such breaches were 
addressed and resolved; and
    3. The effectiveness of the banking entity's management procedures.
    b. A banking entity must ensure that independent testing regarding 
the effectiveness of the banking entity's compliance program is 
conducted by a qualified independent party, such as the banking entity's 
internal audit department, compliance personnel or risk managers 
independent of the organizational unit being tested, outside auditors, 
consultants, or other qualified independent parties. A banking entity 
must promptly take appropriate action to remedy any significant 
deficiencies or material weaknesses in its compliance program and to 
terminate any violations of section 13 of the BHC Act or this part.

                               V. Training

    Banking entities must provide adequate training to personnel and 
managers of the banking entity engaged in activities or investments 
governed by section 13 of the BHC Act or this part, as well as other 
appropriate supervisory, risk, independent testing, and audit personnel, 
in order to effectively implement and enforce the compliance program. 
This training should occur with a frequency appropriate to the size and 
the risk profile of the banking entity's trading activities and covered 
fund activities or investments.

                            VI. Recordkeeping

    Banking entities must create and retain records sufficient to 
demonstrate compliance and support the operations and effectiveness of 
the compliance program. A banking entity must retain these records for a 
period that is no less than 5 years or such longer period as required by 
the Commission in a form that allows it to promptly produce such records 
to the Commission on request.

[84 FR 62212, Nov. 14, 2019]

[[Page 280]]



PART 100_DELIVERY PERIOD REQUIRED--Table of Contents



    Authority: 7 U.S.C. 7a(a)(4) and 12a.



Sec.  100.1  Delivery period required with respect to certain grains.

    A period of seven business days is required during which contracts 
for future delivery in the current delivery month of wheat, corn, oats, 
barley, rye, or flaxseed may be settled by delivery of the actual cash 
commodity after trading in such contracts has ceased, for each delivery 
month after May 1938, on all contract markets on which there is trading 
in futures in any of such commodities, and such contract markets, and 
each of them, are directed to provide therefor.

[41 FR 3211, Jan. 21, 1976]



PART 140_ORGANIZATION, FUNCTIONS, AND PROCEDURES OF THE COMMISSION-
-Table of Contents



                         Subpart A_Organization

Sec.
140.1 Headquarters office.
140.2 Regional office--regional coordinators.

                           Subpart B_Functions

140.10 The Commission.
140.11 Emergency action by the senior Commissioner available.
140.12 Disposition of business by seriatim Commission consideration.
140.13 Vacancy in position of Chairman.
140.14 Delegation of authority to the Secretary of the Commission.
140.20 Designation of senior official to oversee Commission use of 
          national security information.
140.21 Definitions.
140.22 Procedures.
140.23 General access requirements.
140.24 Control and accountability procedures.
140.61 [Reserved]
140.72 Delegation of authority to disclose confidential information to a 
          registered entity, swap execution facility, swap data 
          repository, registered futures association or self-regulatory 
          organization.
140.73 Delegation of authority to disclose information to United States, 
          States, and foreign government agencies and foreign futures 
          authorities.
140.74 Delegation of authority to issue special calls for Series 03 
          Reports.
140.75 Delegation of authority to the Director of the Division of Swap 
          Dealer and Intermediary Oversight.
140.76 Delegation of authority to disclose information in a receivership 
          or bankruptcy proceeding.
140.77 Delegation of authority to determine that applications for 
          contract market designation, swap execution facility 
          registration, or swap data repository registration are 
          materially incomplete.
140.80 Disclosure of information pursuant to a subpoena or summons.
140.81 [Reserved]
140.91 Delegation of authority to the Director of the Division of 
          Clearing and Risk and to the Director of the Division of Swap 
          Dealer and Intermediary Oversight.
140.92 Delegation of authority to grant registrations and renewals 
          thereof.
140.93 Delegation of authority to the Director of the Division of Swap 
          Dealer and Intermediary Oversight.
140.94 Delegation of authority to the Director of the Division of Swap 
          Dealer and Intermediary Oversight and the Director of the 
          Division of Clearing and Risk.
140.95 Delegation of authority with respect to withdrawals from 
          registration.
140.96 Delegation of authority to publish in the Federal Register.
140.97 Delegation of authority regarding requests for classification of 
          positions as bona fide hedging.
140.98 Publication of no-action, interpretative and exemption letters 
          and other written communications.
140.99 Requests for exemptive, no-action and interpretative letters.

  Subpart C_Regulation Concerning Conduct of Members and Employees and 
             Former Members and Employees of the Commission

140.735-1 Authority and purpose.
140.735-2 Prohibited transactions.
140.735-2a Prohibited interests.
140.735-3 Non-governmental employment and other outside activity.
140.735-4 Receipt and disposition of foreign gifts and decorations.
140.735-5 Disclosure of information.
140.735-6 Practice by former members and employees of the Commission.
140.735-7 Statutory violations applicable to conduct of Commission 
          members and employees.
140.735-8 Interpretative and advisory service.

    Authority: 7 U.S.C. 2(a)(12), 12a, 13(c), 13(d), 13(e), and 16(b).

[[Page 281]]



                         Subpart A_Organization



Sec.  140.1  Headquarters office.

    (a) General. The headquarters office of the Commission is located at 
Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581.
    (b) [Reserved]

[48 FR 2734, Jan. 21, 1983, as amended at 60 FR 49335, Sept. 25, 1995]



Sec.  140.2  Regional office--regional coordinators.

    Each of the Regional offices described herein functions as set forth 
in this section under the direction of a Regional Coordinator who, as a 
collateral duty, oversees the administration of the office and 
represents the Commission in negotiations with employee union officials 
and in interactions with external parties. Each regional office has 
delegated authority for the enforcement of the Act and administration of 
the programs of the Commission in the particular regions.
    (a) The Eastern Regional Office is located at 140 Broadway, New 
York, New York, 10005 and is responsible for enforcement of the Act and 
administration of programs of the Commission in the States of Alabama, 
Connecticut, Delaware, Florida, Georgia, Kentucky, Maine, Maryland, 
Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North 
Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee, 
Vermont, Virginia, and West Virginia.
    (b) The Central Regional Office is located at 525 West Monroe 
Street, Suite 1100, Chicago, Illinois 60661 and is responsible for 
enforcement of the Act and administration of programs of the Commission 
in the States of Illinois, Indiana, Michigan, Ohio and Wisconsin.
    (c) The Southwestern Regional Office is located at Two Emanuel 
Cleaver II Blvd., Suite 300, Kansas City, Missouri 64112, and is 
responsible for enforcement of the Act and administration of the 
programs of the Commission in the States of Alaska, Arizona, Arkansas, 
California, Colorado, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, 
Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, 
Oregon, South Dakota, Texas, Utah, Washington, and Wyoming.

[69 FR 41426, July 9, 2004, as amended at 72 FR 16269, Apr. 4, 2007]



                           Subpart B_Functions



Sec.  140.10  The Commission.

    The Commission is composed of a Chairman and four other 
Commissioners, not more than three of whom may be members of the same 
political party, who are appointed by the President, with the advice and 
consent of the Senate, for 5-year terms, one term ending each year. The 
Commission is assisted by a staff, which includes lawyers, economists, 
accountants, investigators and examiners, as well as administrative and 
clerical employees.

[41 FR 28474, July 12, 1976]



Sec.  140.11  Emergency action by the senior Commissioner available.

    (a) Authority of senior Commissioner. When it is not feasible to 
convene a quorum of the Commission, the Senior Commissioner present at 
the principal offices of the Commission (or, during non-business hours, 
available in the Washington, DC area) may take emergency action on 
behalf of and in the name of the Commission in accordance with the 
procedures set forth in this section. Members of the Commission shall be 
considered senior in the following order: The Chairman, the Vice-
Chairman, and other Commissioners in order of their length of service on 
the Commission. Where two or more Commissioners have commenced their 
service on the same date, the Commissioner whose unexpired term in 
office is the longest will be considered senior.
    (b) Exercise of authority. Subject to the right of the Commission to 
review any emergency action taken as hereinafter provided, the Senior 
Commissioner may act on behalf of and in the name of the Commission with 
respect to all of the functions of the Commission except general 
rulemaking functions: Provided, however, That the Senior Commissioner 
shall not exercise any authority on behalf of the Commission (1) without 
consultation with such other member of the Commission as

[[Page 282]]

may at the time be present at the Commission's offices in Washington, 
DC, and without a reasonable attempt to consult, by telephone, with 
other members of the Commission; and (2) unless, in the opinion of the 
Senior Commissioner (after consulting with the General Counsel or his 
deputy or associate, and such other members of the Commission staff as 
the Senior Commissioner deems appropriate) the public interest requires 
that action be taken prior to the next scheduled meeting of the 
Commission.
    (c) Report to the Commission. The exercise of Senior Commissioner 
authority shall be reported to the Commission within one business day 
thereafter either by the Senior Commissioner or at his direction, and 
shall be recorded by the Secretariat in the Minute Record of all 
official actions of the Commission. The Secretariat shall promptly 
notify any directly affected person of the action taken and that it was 
the Senior Commissioner available, rather than the Commission as a 
whole, who took the action.
    (d) Review by the Commission. The Commission may, in the following 
circumstances, review any action taken under Senior Commissioner 
authority and may affirm, modify, alter or set aside the decision:
    (1) Upon the request of any member of the Commission, any action 
taken by a Senior Commissioner shall be reviewed by the Commission.
    (2) In the event action by a Senior Commissioner suspends, denies or 
revokes or otherwise directly and adversely affects any license, right 
or privilege of any person, that person may in writing request review by 
the Commission and shall be entitled to have the action of the Senior 
Commissioner reviewed by the Commission.
    (3) The Commission may, in its discretion, review any action taken 
by a Senior Commissioner upon petition by any other person.
    (e) Final effect of action by Senior Commissioner. In any matter, 
the action taken under Senior Commissioner authority shall be deemed the 
action of the Commission unless and until the Commission shall otherwise 
direct.

[41 FR 28474, July 12, 1976]



Sec.  140.12  Disposition of business by seriatim Commission consideration.

    (a) Whenever the Chairman of the Commission is of the opinion that 
joint deliberation among the members of the Commission upon any matter 
is unnecessary in light of the nature of the matter, impracticable, or 
would impede the orderly disposition of agency business, but is of the 
view that such matter should be the subject of a vote of the Commission, 
such matter may be disposed of by circulation of any relevant materials 
concerning the matter. The relevant materials shall be circulated to 
each member of the Commission, unless a member is unavailable or has 
determined not to participate in the matter. A written record of the 
vote of each participating Commission member shall be reported to the 
Secretariat who shall retain it in the records of the Commission.
    (b) Whenever any member of the Commission so requests, any matter 
circulated for disposition pursuant to paragraph (a) of this section 
shall be withdrawn from circulation and scheduled instead for a 
Commission meeting.

[43 FR 43452, Sept. 26, 1978]



Sec.  140.13  Vacancy in position of Chairman.

    At any time that a vacancy exists in the position of Chairman of the 
Commission the remaining members of the Commission shall elect a member 
to serve as acting Chairman who shall exercise the executive and 
administrative functions of the Commission that would otherwise be 
exercised by a Chairman in accordance with section 2(a)(6) of the 
Commodity Exchange Act, as amended, until a new Chairman has been 
appointed by the President and confirmed by the Senate: Provided, 
however, That if the President shall appoint a new Chairman from among 
the existing members of the Commission, that Commissioner shall serve as 
acting Chairman for these purposes until such time as his appointment as 
Chairman has been confirmed or rejected by the Senate.

[43 FR 50167, Oct. 27, 1978]

[[Page 283]]



Sec.  140.14  Delegation of authority to the Secretary of the 
Commission.

    After the Commission has formally reached a decision or taken other 
action on a matter, has agreed upon the language of the document which 
embodies the Commission decision or other action, including, but not 
limited to, a rule, regulation or order, and has directed that the 
document be issued, the Secretary of the Commission (or a person 
designated in writing by the Secretary) shall sign the document on 
behalf of the Commission. Signature by the Secretary shall be a 
ministerial function and shall not be discretionary. The delegation to 
the Secretary of the authority to sign documents on the Commission's 
behalf shall not affect any other delegation which the Commission has 
made, or may make, which authorizes any other officer or employee of the 
Commission to take action and to sign documents on the Commission's 
behalf. In addition, the Commission reserves the authority to provide 
for signature on its behalf by the Chairman or any other member of the 
Commission in particular circumstances.

[44 FR 33677, June 12, 1979]



Sec.  140.20  Designation of senior official to oversee Commission use
of national security information.

    (a) The Executive Director is hereby designated to oversee the 
Commission's program to ensure the safeguarding of national security 
information received by the Commission from other agencies, to chair a 
Commission committee composed of members of the staff selected by him 
with authority to act on all suggestions and complaints with respect to 
the Commission administration of its information security program, and, 
in conjunction with the Security Officer of the Commission, to ensure 
that practices for safeguarding national security information are 
systematically reviewed and that those practices which are duplicative 
or unnecessary are eliminated.
    (b) The Executive Director may submit any matter for which he has 
been designated under paragraph (a) of this section to the Commission 
for its consideration.

[44 FR 65736, Nov. 15, 1979, as amended at 61 FR 21955, May 13, 1996]



Sec.  140.21  Definitions.

    (a) Classified information. Information or material that is:
    (1) Owned by, produced for or by, or under control of the United 
States Government, and
    (2) Determined pursuant to Executive Order 12356 or prior or 
succeeding orders to require protection against unauthorized disclosure, 
and
    (3) So designated.
    (b) Compromise. The disclosure of classified information to persons 
not authorized access thereto.
    (c) Custodians. An individual who has possession of or is otherwise 
charged with the responsibility for safeguarding or accounting for 
classified information.
    (d) Classification levels. Refers to Top Secret ``(TS)'', Secret 
``(S)'', and Confidential ``(C)'' levels used to identify national 
security information. Markings ``For Official Use Only,'' and ``Limited 
Official Use'' shall not be used to identify national security 
information.

[48 FR 15464, Apr. 11, 1983]



Sec.  140.22  Procedures.

    (a) Original classification. The Commodity Futures Trading 
Commission has no original classification authority.
    (b) Derivative classification. Personnel of the Commission shall 
respect the original classification markings assigned to information 
they receive from other agencies.
    (c) Declassification and downgrading. Since the Commission does no 
original classification of material, declassification and downgrading of 
sensitive material is not applicable.
    (d) Dissemination. All classified national security information 
which the Commission receives from any agency will be cared for and 
returned in accordance with the particular agency's policy guidelines 
and may not be disseminated to any other agency without the consent of 
the originating agency.

[48 FR 15464, Apr. 11, 1983]

[[Page 284]]



Sec.  140.23  General access requirements.

    (a) Determination of trustworthiness. No person shall be given 
access to classified information unless a favorable determination has 
been made as to the person's trustworthiness. The determination of 
eligibility, referred to as a security clearance, shall be based on such 
investigations as the Commission may require in accordance with the 
applicable Office of Personnel Management standards and criteria.
    (b) Determination of need-to-know. A person is not entitled to 
receive classified information solely by virtue of having been granted a 
security clearance. A person must also have a need for access to the 
particular classified information sought in connection with the 
performance of official government duties or contractual obligations. 
The determination of that need shall be made by officials having 
responsibility for the classified information.

[48 FR 15464, Apr. 11, 1983]



Sec.  140.24  Control and accountability procedures.

    Persons entrusted with classified information shall be responsible 
for providing protection and accountability for such information at all 
times and for locking classified information in approved security 
equipment whenever it is not in use or under direct supervision of 
authorized persons.
    (a) General safeguards. (1) Classified material must not be left in 
unoccupied rooms or be left inadequately protected in an occupied 
office, or one occupied by other than security cleared employees. Under 
no circumstances shall classified material be placed in desk drawers or 
anywhere other than in approved storage containers.
    (2) Employees using classified material shall take every precaution 
to prevent deliberate or casual inspection of it by unauthorized 
persons. Classified material shall be kept under constant surveillance 
and face down or covered when not in use.
    (3) All copies of classified documents and any informal material 
such as memoranda, rough drafts, shorthand notes, carbon copies, carbon 
paper, typewriter ribbons, recording discs, spools and tapes shall be 
given the same classification and secure handling as the classified 
information they contain.
    (4) Commission personnel authorized to use classified materials will 
obtain them from the Executive Director or his delegee on the day 
required and return them to the Executive Director or his delegee before 
the close of business on the same day.
    (5) Classified information shall not be revealed in telephone or 
telecommunications conversations.
    (6) Any person who has knowledge of the loss or possible compromise 
of classified information shall immediately report the circumstances 
either to the Security Officer or to the Executive Director or his 
delegee. The Executive Director or his delegee shall initiate a 
preliminary inquiry to determine the circumstances surrounding an actual 
or possible compromise, and to determine what corrective measures and 
administrative, disciplinary, or legal action is necessary.
    (b) Reproduction controls. (1) The number of copies of documents 
containing classified information must be kept to the minimum required 
by operational necessity to decrease the risk of compromise and reduce 
storage costs.
    (2) Top Secret documents, except for the controlled initial 
distribution of information processed or received electrically, shall 
not be reproduced without the consent of the originator.
    (3) Unless restricted by the originating agency, Secret and 
Confidential documents may be reproduced to the extent required by 
operational needs.
    (4) Reproduced copies of classified documents shall be subject to 
the same accountability and controls as the original documents.
    (5) Classified reproduction shall be controlled by persons with the 
proper level of security clearance.
    (6) Records shall be maintained to show the number and distribution 
of reproduced copies to all Top Secret documents, of all classified 
documents covered by special access programs distributed outside the 
originating agency, and of all Secret and Confidential documents which 
are marked with special dissemination and reproduction limitations.

[[Page 285]]

    (7) Unauthorized reproduction of classified material will be subject 
to appropriate disciplinary action.
    (c) Storage of classified material. (1) All classified material in 
the custody of the Commission will be stored in accordance with the 
guidelines set forth in 32 CFR 2001.43.
    (2) In addition, the Commission remains subject to the provisions of 
32 CFR part 2001, et seq., insofar as they are applicable to classified 
materials held by the Commission.

[48 FR 15464, Apr. 11, 1983, as amended at 61 FR 21955, May 13, 1996]



Sec.  140.61  [Reserved]



Sec.  140.72  Delegation of authority to disclose confidential 
information to a registered entity, swap execution facility, swap
data repository, registered futures association or self-regulatory
organization.

    (a) Pursuant to the authority granted under sections 2(a)(11), 8a(5) 
and 8a(6) of the Act, the Commission hereby delegates, until such time 
as the Commission orders otherwise, to the Executive Director, the 
Director of the Division of Swap Dealer and Intermediary Oversight, the 
Director of the Division of Clearing and Risk, the Chief Accountant, the 
General Counsel, the Director of the Division of Market Oversight, the 
Director of the Division of Enforcement, the Chief Economist of the 
Office of the Chief Economist, the Director of the Office of 
International Affairs, or such other employee or employees as the 
General Counsel, Directors, Chief Accountant or Chief Economist each may 
designate from time to time, the authority to disclose to an official of 
any registered entity, swap execution facility, swap data repository, 
registered futures association, or self-regulatory organization as 
defined in section 3(a)(26) of the Securities Exchange Act of 1934, any 
information necessary or appropriate to effectuate the purposes of the 
Act, including, but not limited to, the full facts concerning any 
transaction or market operation, including the names of the parties 
thereto. This authority to disclose shall be based on a determination 
that the transaction or market operation disrupts or tends to disrupt 
any market or is otherwise harmful or against the best interests of 
producers, consumers, or investors or that disclosure is necessary or 
appropriate to effectuate the purposes of the Act.
    (b) Disclosure under this section shall only be made to a registered 
entity, swap execution facility, swap data repository, registered 
futures association or self-regulatory organization official who is 
named in a list filed with the Commission by the chief executive officer 
of the registered entity, swap execution facility, swap data repository, 
registered futures association or self-regulatory organization, which 
sets forth the official's name, business address and telephone number. 
The chief executive officer shall thereafter notify the Commission of 
any deletions or additions to the list of officials authorized to 
receive disclosures under this section. The original list and any 
supplemental list required by this paragraph shall be filed with the 
Secretary of the Commission, and a copy thereof shall also be filed with 
the Regional Coordinator for the region in which the registered entity, 
swap execution facility, or swap data repository is located or in which 
the registered futures association or self-regulatory organization has 
its principal office.
    (c) Notwithstanding the provisions of paragraph (a) of this section, 
in any case in which a Commission employee delegated authority under 
this section believes it appropriate, he or she may submit to the 
Commission for its consideration the question of whether disclosure of 
information should be made.
    (d) For purposes of this section, the term ``official'' shall mean 
any officer or member of a committee of a registered entity, swap 
execution facility, swap data repository, registered futures association 
or self-regulatory organization who is specifically charged with market 
surveillance or audit or investigative responsibilities, or their duly 
authorized representative or agent, who is named on the list filed 
pursuant to paragraph (b) of this section or any supplement thereto.
    (e) For the purposes of this section, the term ``self-regulatory 
organization'' shall mean the same as that defined in section 3(a) (26) 
of the Securities Exchange Act of 1934.

[[Page 286]]

    (f) Any registered entity, swap execution facility, swap data 
repository, registered futures association or self-regulatory 
organization receiving information from the Commission under these 
provisions shall not disclose such information except that disclosure 
may be made in any self-regulatory action or proceeding.

[48 FR 22134, May 17, 1983, as amended at 57 FR 20638, May 14, 1992; 61 
FR 1709, Jan. 23, 1996; 66 FR 1576, Jan. 9, 2001; 67 FR 62352, Oct. 7, 
2002; 73 FR 79609, Dec. 30, 2008; 77 FR 66346, Nov. 2, 2012; 78 FR 
21523, Apr. 11, 2013; 78 FR 22419, Apr. 16, 2013; 82 FR 28769, June 26, 
2017]



Sec.  140.73  Delegation of authority to disclose information to
United States, States, and foreign government agencies and foreign
futures authorities.

    (a) Pursuant to sections 2(a)(11), 8a(5) and 8(e) of the Act, the 
Commission hereby delegates, until such time as the Commission orders 
otherwise, to the General Counsel, the Director of the Division of 
Enforcement, the Director of the Division of Market Oversight, the 
Director of the Division of Swap Dealer and Intermediary Oversight, the 
Director of the Division of Clearing and Risk, the Chief Economist of 
the Office of the Chief Economist, the Director of the Office of 
International Affairs, or such other employee or employees as the 
General Counsel, Chief Economist or Directors listed in this section 
each may designate from time to time the authority to furnish 
information in the possession of the Commission obtained in connection 
with the administration of the Act, upon written request, to:
    (1) Any department or agency of the United States, including for 
this purpose an independent regulatory agency, acting within the scope 
of its jurisdiction;
    (2) Any department or agency of any State or any political 
subdivision thereof, acting within the scope of its jurisdiction; or
    (3) Any foreign futures authority, as defined in section 1a(10) of 
the Act, or any department or agency of any foreign government or 
political subdivision thereof, acting within the scope of its 
jurisdiction, provided that the Commission official making the 
disclosure is satisfied that the information will not be disclosed 
except in connection with an adjudicatory action or proceeding brought 
under the laws of such foreign government or political subdivision to 
which such foreign government or political subdivision or any department 
or agency thereof, or foreign futures authority is a party.
    (b) Any disclosure made pursuant to paragraph (a) of this section 
shall be made with the concurrence of the Director of the Division of 
Enforcement or in his or her absence a Deputy Director of the Division 
of Enforcement. Provided, however, that no such concurrence is necessary 
for the Director of the Division of Market Oversight or in his or her 
absence each Deputy Director of the Division or for the Director of the 
Market Surveillance Section to release information under paragraph 
(a)(1) of this section concerning current or on-going market 
transactions or operations.
    (c) In furnishing information under this delegation pursuant to 
paragraphs (a)(1) and (2) of this section, the Commission official 
making the disclosure shall remind the department or agency involved 
that section 8(e) of the Act prohibits the disclosure by such department 
or agency of information that would separately disclose the business 
transactions or market positions of any person and trade secrets or 
names of customers except in an action or proceeding under the laws of 
the United States, the State, or a political subdivision thereof to 
which the department or the agency of either the state or political 
subdivision, the Commission, or the United States is a party.
    (d) This delegation shall not affect any other delegation which the 
Commission has made or may make, which authorizes any other officer or 
employee of the Commission to furnish information to governmental bodies 
on the Commission's behalf.
    (e) Notwithstanding the provisions of paragraph (a) of this section, 
in any case in which any employee delegated authority therein believes 
it appropriate the matter may be submitted to the Commission for its 
consideration. Nothing in this section shall prohibit the Commission 
from exercising the

[[Page 287]]

authority delegated in paragraph (a) of this section.

[48 FR 22135, May 17, 1983, as amended at 57 FR 20638, May 14, 1992; 61 
FR 1709, Jan. 23, 1996; 66 FR 1576, Jan. 9, 2001; 67 FR 62352, Oct. 7, 
2002; 73 FR 79609, Dec. 30, 2008; 78 FR 22419, Apr. 16, 2013; 82 FR 
28770, June 26, 2017]



Sec.  140.74  Delegation of authority to issue special calls for
Series 03 Reports.

    (a) The Commodity Futures Trading Commission hereby delegates, until 
such time as the Commission orders otherwise, to the Director of the 
Division of Enforcement, or such other employee or employees as the 
Director may designate from time to time, the authority to issue special 
calls for series 03 reports under Sec.  18.00 of this chapter.
    (b) The Director of the Division of Enforcement may submit any 
matter which has been delegated to the Director under this section to 
the Commission for its consideration.
    (c) Nothing in this section may prohibit the Commission, at its 
election, from exercising the authority delegated to the Director of the 
Division of Enforcement under paragraph (a) of this section.

[82 FR 28770, June 26, 2017]



Sec.  140.75  Delegation of authority to the Director of the Division
of Clearing and Risk and Division of Swap Dealer and Intermediary
Oversight.

    Pursuant to sections 2(a)(11), 8a(5) and 8(g) of the Act, the 
Commission hereby delegates to the Director of the Division of Clearing 
and Risk and Division of Swap Dealer and Intermediary Oversight and to 
such members of the Commission's staff acting under his or her direction 
as the Director may designate from time to time, the authority to 
disclose any registration information contained in the registration 
applications filed by Commission registrants or any compilation of such 
information maintained by the Commission to any department or agency of 
any State or any political subdivision thereof. Disclosure under this 
section may be made upon reasonable request made to the Commission or 
without request whenever the Director of Trading and Markets or any 
Commission employee designated by the Director to make disclosures under 
this section determines that such information may be appropriate for use 
by any department or agency of a State or political subdivision thereof. 
Notwithstanding the provisions of this section, in any case in which the 
Director of Division of Clearing and Risk and Division of Swap Dealer 
and Intermediary Oversight deems it appropriate, or in any case in which 
the Commission so requests, the Director may submit matter to the 
Commission for its consideration.

[48 FR 22136, May 17, 1983, as amended at 67 FR 62352, Oct. 7, 2002; 78 
FR 22419, Apr. 16, 2013]



Sec.  140.76  Delegation of authority to disclose information in a
receivership or bankruptcy proceeding.

    (a) Pursuant to sections 2(a)(11) and 8(b) of the Act, the 
Commission hereby delegates, until such time as the Commission orders 
otherwise, to the Director of the Division of Enforcement, the Director 
of the Division of Clearing and Risk and Division of Swap Dealer and 
Intermediary Oversight, the General Counsel or any Commission employee 
under their direction as they may designate, the authority to disclose 
data and information that would separately disclose the business 
transactions or market positions of any person and trade secrets or 
names of customers, when such disclosure is made in any receivership 
proceeding involving a receiver appointed in a judicial proceeding 
brought under the Act, or in any bankruptcy proceeding in which the 
Commission has intervened or in which the Commission has the right to 
appear and be heard under title 11 of the United States Code.
    (b) Notwithstanding the provisions of paragraph (a), in any case in 
which the Director of the Division of Enforcement, the Director of the 
Division of Clearing and Risk and Division of Swap Dealer and 
Intermediary Oversight, the General Counsel, or any employee designated 
by them to make disclosures

[[Page 288]]

pursuant to this section believes it appropriate, the matter may be 
submitted to the Commission for consideration. In addition, the 
Commission reserves to itself the authority to determine whether to 
grant a request for information in any particular case.

[49 FR 4464, Feb. 7, 1984, as amended at 67 FR 62352, Oct. 7, 2002; 78 
FR 22419, Apr. 16, 2013]



Sec.  140.77  Delegation of authority to determine that applications
for contract market designation, swap execution facility registration,
or swap data repository registration are materially incomplete.

    (a) The Commodity Futures Trading Commission hereby delegates, until 
such time as the Commission orders otherwise, to the Director of the 
Division of Market Oversight or the Director's designees, the authority 
to determine that an application for contract market designation, swap 
execution facility registration, or swap data repository registration is 
materially incomplete under section 6 of the Commodity Exchange Act and 
to so notify the applicant.
    (b) The Director of the Division of Market Oversight may submit any 
matter which has been delegated to the director under paragraph (a) of 
this section to the Commission for its consideration.
    (c) Nothing in this section may prohibit the Commission, at its 
election, from exercising the authority delegated to the Director of the 
Division of Market Oversight under paragraph (a) of this section.

[48 FR 34946, Aug. 2, 1983, as amended at 57 FR 20638, May 14, 1992; 67 
FR 62353, Oct. 7, 2002; 77 FR 66347, Nov. 2, 2012]



Sec.  140.80  Disclosure of information pursuant to a subpoena or
summons.

    The Commission shall provide notice to any person who has submitted 
information to the Commission when a summons or subpoena seeking the 
submitted information is received by the Commission. Notice ordinarily 
will be provided by mailing a copy of the summons or subpoena to the 
last known home or business address of the person who submitted the 
information. However, under circumstances which would make notice by 
mail unduly burdensome or costly, notice of the existence of the summons 
or subpoena may be affected by alternative means such as publication in 
the Federal Register. The Commission will not disclose such information 
until the expiration of at least fourteen days from the date of mailing, 
or such other notice as is given. This section shall not apply to (a) 
Congressional subpoenas or Congressional requests for information, (b) 
information which is considered by the Commission to be public 
information, or (c) information as to which the submitter has waived the 
notice provision of this section.

[49 FR 4464, Feb. 7, 1984]



Sec.  140.81  [Reserved]



Sec.  140.91  Delegation of authority to the Director of the Division
of Clearing and Risk and to the Director of the Division of Swap Dealer
and Intermediary Oversight.

    (a) The Commission hereby delegates, until such time as the 
Commission orders otherwise, the following functions to the Director of 
the Division of Clearing and Risk and Division of Swap Dealer and 
Intermediary Oversight and to such members of the Commission's staff 
acting under his direction as he may designate from time to time:
    (1) All functions reserved to the Commission in Sec.  1.10 of this 
chapter, except for those relating to nonpublic treatment of reports set 
forth in Sec.  1.10(g) of this chapter;
    (2) All functions reserved to the Commission in Sec.  1.12 of this 
chapter;
    (3) All functions reserved to the Commission in Sec.  1.14 of this 
chapter;
    (4) All functions reserved to the Commission in Sec.  1.15 of this 
chapter;
    (5) All functions reserved to the Commission in Sec.  1.16 of this 
chapter; and
    (6) All functions reserved to the Commission in Sec.  1.17 of this 
chapter, except for those relating to non-enumerated cover cases set 
forth in Sec.  1.17(j)(3) of this chapter.
    (7) All functions reserved to the Commission in Sec.  1.20 of this 
chapter.
    (8) All functions reserved to the Commission in Sec.  1.25 of this 
chapter.
    (9) All functions reserved to the Commission in Sec.  1.26 of this 
chapter.

[[Page 289]]

    (10) All functions reserved to the Commission in Sec.  1.52 of this 
chapter.
    (11) All functions reserved to the Commission in Sec.  30.7 of this 
chapter.
    (12) All functions reserved to the Commission in Sec.  41.41 of this 
chapter. Any action taken pursuant to the delegation of authority under 
this paragraph (a)(12) shall be made with the concurrence of the General 
Counsel or, in his or her absence, a Deputy General Counsel.
    (b) The Director of the Division of Clearing and Risk and the 
Director of the Division of Swap Dealer and Intermediary Oversight may 
submit any matter which has been delegated to him or her under paragraph 
(a) of this section to the Commission for its consideration.

[44 FR 13460, Mar. 12, 1979, as amended at 60 FR 8195, Feb. 13, 1995; 66 
FR 43087, Aug. 17, 2001; 66 FR 53523, Oct. 23, 2001; 67 FR 62353, Oct. 
7, 2002; 78 FR 22419, Apr. 16, 2013; 78 FR 68655, Nov. 14, 2013; 79 FR 
44126, July 30, 2014]



Sec.  140.92  Delegation of authority to grant registrations and 
renewals thereof.

    (a) The Commission hereby delegates, until such time as the 
Commission orders otherwise, to the Director of the Division of Clearing 
and Risk and Division of Swap Dealer and Intermediary Oversight and to 
such members of the Commission's staff acting under his direction as he 
may designate, the authority to grant registrations and renewals 
thereof.
    (b) The Director of the Division of Clearing and Risk and Division 
of Swap Dealer and Intermediary Oversight may submit any matter which 
has been delegated to him under paragraph (a) of this section to the 
Commission for its consideration.
    (c) Nothing in this section may prohibit the Commission, at its 
election, from exercising the authority delegated to the Director of the 
Division of Clearing and Risk and Division of Swap Dealer and 
Intermediary Oversight under paragraph (a) of this section.

[45 FR 20785, Mar. 31, 1980, as amended at 67 FR 62353, Oct. 7, 2002; 78 
FR 22419, Apr. 16, 2013]



Sec.  140.93  Delegation of authority to the Director of the Division
of Swap Dealer and Intermediary Oversight.

    (a) The Commission hereby delegates, until such time as the 
Commission orders otherwise, the following functions to the Director of 
the Division of Clearing and Risk and Division of Swap Dealer and 
Intermediary Oversight and to such members of the Commission's staff 
acting under his direction as he may designate from time to time:
    (1) All functions reserved to the Commission in Sec.  4.12(a) of 
this chapter.
    (2) All functions reserved to the Commission in Sec.  4.22(g)(3) of 
this chapter.
    (3) All functions reserved to the Commission in Sec.  4.20(a) of 
this chapter.
    (4) All functions reserved to the Commission in Sec.  4.5(c)(2)(ii) 
of this chapter.
    (5) All functions reserved to the Commission in Sec.  4.6(b) of this 
chapter.
    (6) All functions reserved to the Commission in Sec. Sec.  23.150 
through 23.161 of this chapter.
    (b) The Director of the Division of Clearing and Risk and Division 
of Swap Dealer and Intermediary Oversight may submit any matter which 
has been delegated to him under paragraph (a) of this section to the 
Commission for its consideration.
    (c) Nothing in this section may prohibit the Commission, at its 
election, from exercising the authority delegated to the Director of the 
Division of Clearing and Risk and Division of Swap Dealer and 
Intermediary Oversight under paragraph (a) of this section.

[46 FR 26023, May 8, 1981, as amended at 46 FR 34311, July 1, 1981; 50 
FR 15884, Apr. 23, 1985; 52 FR 41986, Nov. 2, 1987; 67 FR 62353, Oct. 7, 
2002; 70 FR 2566, Jan. 14, 2005; 78 FR 22419, Apr. 16, 2013; 81 FR 704, 
Jan. 6, 2016]



Sec.  140.94  Delegation of authority to the Director of the Division
of Swap Dealer and Intermediary Oversight and the Director of the
Division of Clearing and Risk.

    (a) The Commission hereby delegates, until such time as the 
Commission orders otherwise, the following functions to the Director of 
the Division of Swap Dealer and Intermediary Oversight and to such 
members of the Commission's staff acting under his or

[[Page 290]]

her direction as he or she may designate from time to time:
    (1) All functions reserved to the Commission in Sec.  5.7 of this 
chapter;
    (2) All function reserved to the Commission in Sec.  5.10 of this 
chapter;
    (3) All functions reserved to the Commission in Sec.  5.11 of this 
chapter;
    (4) All functions reserved to the Commission in Sec.  5.12 of this 
chapter, except for those relating to nonpublic treatment of reports set 
forth in Sec.  5.12(i) of this chapter; and
    (5) All functions reserved to the Commission in Sec.  5.14 of this 
chapter.
    (b) The Director of the Division of Swap Dealer and Intermediary 
Oversight may submit any matter which has been delegated to him or her 
under paragraph (a) of this section to the Commission for its 
consideration.
    (c) The Commission hereby delegates, until such time as the 
Commission orders otherwise, the following function to the Director of 
the Division of Clearing and Risk and to such members of the 
Commission's staff acting under his or her direction as he or she may 
designate from time to time:
    (1) The authority to review applications for registration as a 
derivatives clearing organization filed with the Commission under Sec.  
39.3(a)(1) of this chapter, to determine that an application is 
materially complete pursuant to Sec.  39.3(a)(2) of this chapter, to 
request additional information in support of an application pursuant to 
Sec.  39.3(a)(3) of this chapter, to extend the review period for an 
application pursuant to Sec.  39.3(a)(6) of this chapter, to stay the 
running of the 180-day review period if an application is incomplete 
pursuant to Sec.  39.3(b)(1) of this chapter, to review requests for 
amendments to orders of registration filed with the Commission under 
Sec.  39.3(d)(1) of this chapter, to request additional information in 
support of a request for an amendment to an order of registration 
pursuant to Sec.  39.3(d)(2) of this chapter, and to request additional 
information in support of a rule submission pursuant to Sec.  39.3(g)(3) 
of this chapter;
    (2) All functions reserved to the Commission in Sec.  39.4(a) of 
this chapter;
    (3) All functions reserved to the Commission in Sec.  39.5(b)(2), 
(b)(3)(ix), (c)(1), and (d)(3) of this chapter;
    (4) All functions reserved to the Commission in Sec.  
39.10(c)(4)(iv) of this chapter;
    (5) All functions reserved to the Commission in Sec.  
39.11(b)(1)(v), (b)(2)(ii), (c)(1) and (3), and (f)(1), and (2) of this 
chapter;
    (6) All functions reserved to the Commission in Sec.  
39.12(a)(5)(iii) of this chapter;
    (7) All functions reserved to the Commission in Sec.  
39.13(g)(8)(ii), (h)(1)(i)(C), (h)(1)(ii), (h)(3)(i) and (ii), and 
(h)(5)(i)(C) of this chapter;
    (8) The authority to request additional information in support of a 
rule submission under Sec. Sec.  39.13(i)(2) and 39.15(b)(2)(iii) of 
this chapter;
    (9) All functions reserved to the Commission in Sec.  39.19(c)(2), 
(c)(3)(iv), and (c)(5) of this chapter;
    (10) All functions reserved to the Commission in Sec.  39.20(a)(5) 
of this chapter;
    (11) All functions reserved to the Commission in Sec.  39.21(c) of 
this chapter;
    (12) All functions reserved to the Commission in Sec.  39.31 of this 
chapter; and
    (13) The authority to approve the requests described in Sec. Sec.  
39.34(d) and 39.39(f) of this chapter.
    (d) The Director of Clearing and Risk may submit any matter which 
has been delegated to him or her under paragraph (c) of this section to 
the Commission for its consideration.
    (e) Nothing in this section may prohibit the Commission, at its 
election, from exercising the authority delegated to the Director of the 
Division of Swap Dealers and Intermediary Oversight under paragraph (a) 
or to the Director of the Division of Clearing and Risk under paragraph 
(c) of this section.

[78 FR 22420, Apr. 16, 2013, as amended at 78 FR 72514, Dec. 2, 2013; 85 
FR 4900, Jan. 27, 2020]



Sec.  140.95  Delegation of authority with respect to withdrawals
from registration.

    (a) The Commission hereby delegates, until such time as the 
Commission orders otherwise, to the Director of the Division of Clearing 
and Risk

[[Page 291]]

and Division of Swap Dealer and Intermediary Oversight. and to such 
members of the Commission's staff acting under his direction as he may 
designate, the authority to review, postpone, condition, deny, or 
otherwise act upon a request for withdrawal from registration.
    (b) The Director of the Division of Clearing and Risk and Division 
of Swap Dealer and Intermediary Oversight. may submit any matter which 
has been delegated to him under paragraph (a) of this section to the 
Commission for its consideration.
    (c) Nothing in this section shall prohibit the Commission, at its 
election, from exercising the authority delegated to the Director of the 
Division of Clearing and Risk and Division of Swap Dealer and 
Intermediary Oversight. under paragraph (a) of this section.

[46 FR 48918, Oct. 5, 1981, as amended at 67 FR 62353, Oct. 7, 2002; 78 
FR 22419, Apr. 16, 2013]



Sec.  140.96  Delegation of authority to publish in the Federal Register.

    (a) The Commodity Futures Trading Commission hereby delegates, until 
such time as the Commission orders otherwise, to the Director of the 
Division of Market Oversight or the Director's designee, with the 
concurrence of the General Counsel or the General Counsel's designee, 
the authority to publish in the Federal Register notice of the 
availability for comment of the proposed terms and conditions of 
applications for contract market designation, swap execution facility 
and swap data repository registration, and to determine to publish, and 
to publish, requests for public comment on proposed exchange, swap 
execution facility, or swap data repository rules, and rule amendments, 
when there exists novel or complex issues that require additional time 
to analyze, an inadequate explanation by the submitting registered 
entity, or a potential inconsistency with the Act, including regulations 
under the Act.
    (b) The Commodity Futures Trading Commission hereby delegates, until 
such time as the Commission orders otherwise, to the Director of the 
Division of Market Oversight or the Director's designee, and to the 
Director of the Director of Swap Dealer and Intermediary Oversight or 
the Director's designee, and to the Director of the Division of Clearing 
and Risk or the Director's designee or the Director's designee, with the 
concurrence of the General Counsel or the General Counsel's designee, 
the authority to determine to publish, and to publish, in the Federal 
Register, requests for public comment on proposed exchange and self-
regulatory organization rule amendments when publication of the proposed 
rule amendment is in the public interest and will assist the Commission 
in considering the views of interested persons.
    (c) The Director of the Division of Market Oversight or the Director 
of the Division of Swap Dealer and Intermediary Oversight or the 
Director of the Division of Clearing and Risk may submit any matter 
which has been delegated to such Director under paragraphs (a) or (b) of 
this section to the Commission for its consideration.
    (d) Nothing in this section may prohibit the Commission, at its 
election, from exercising the authority delegated to the Director of the 
Division of Market Oversight and to the Director of the Division of Swap 
Dealer and Intermediary Oversight or the Director of the Division of 
Clearing and Risk under paragraphs (a) and (b) of this section.

[50 FR 47532, Nov. 19, 1985, as amended at 55 FR 35897, Sept. 4, 1990; 
57 FR 20638, May 14, 1992; 67 FR 62353, Oct. 7, 2002; 7 FR 66347, Nov. 
2, 2012; 78 FR 22419, Apr. 16, 2013]



Sec.  140.97  Delegation of authority regarding requests for
classification of positions as bona fide hedging.

    (a) The Commodity Futures Trading Commission hereby delegates, until 
such time as the Commission orders otherwise, to the Director of the 
Division of Enforcement, or such other employee or employees as the 
Director may designate from time to time, all functions reserved to the 
Commission in Sec. Sec.  1.47 and 1.48 of this chapter.
    (b) The Director of the Division of Enforcement may submit any 
matter which has been delegated to the Director under paragraph (a) of 
this section to the Commission for its consideration.

[[Page 292]]

    (c) Nothing in this section may prohibit the Commission, at its 
election, from exercising the authority delegated to the Director of the 
Division of Enforcement under paragraph (a) of this section.

[82 FR 28770, June 26, 2017]



Sec.  140.98  Publication of no-action, interpretative and exemption
letters and other written communications.

    (a) Except as provided in paragraphs (b) and (c) of this section, 
and except for applications for orders granting exemptions submitted 
pursuant to section 4(c) of the Commodity Exchange Act and any written 
responses thereto, each written response by the Commission or its staff 
to a letter or other written communication requesting:
    (1) Interpretative legal advice with respect to the Commodity 
Exchange Act or any rule, regulation or order issued or adopted by the 
Commission thereunder;
    (2) A statement that, on the basis of the facts stated in such 
letter or other communication, the staff would not recommend that the 
Commission take any enforcement action; or
    (3) An exemption, on the basis of the facts stated in such letter or 
other communication, from the provisions of the Commodity Exchange Act 
or any rules, or regulations or orders issued or adopted by the 
Commission thereunder; shall be made available, together with the letter 
or other written communication making the request, for inspection and 
copying by any person as soon as practicable after the response has been 
sent or given to the person requesting it.
    (b) Any person submitting a letter or other written communication 
making such a request may also submit therewith a request that the 
letter or other written communication, as well as any Commission or 
staff response thereto, be accorded confidential treatment for a 
specified period of time, not exceeding 120 days from the date of the 
response thereto, together with a statement setting forth the 
considerations upon which the request for such treatment is based. If 
the staff determines that the request is reasonable and appropriate it 
will be granted and the letter or other written communication as well as 
the response thereto will not be made available for public inspection or 
copying until the expiration of the specified period. If it appears to 
the staff that the request for confidential treatment should be denied, 
the staff shall so advise the person making the request and such person 
may withdraw the letter or other written communication within 30 days 
thereafter. In such case, no response will be sent or given and the 
letter or other written communication shall remain in the Commission's 
files but will not be made public pursuant to this section. If such 
letter or other written communication is not so withdrawn, it shall be 
deemed to be available for public inspection and copying together with 
any written response thereto.
    (c) Notwithstanding the provisions of paragraphs (a) and (b) of this 
section, no portion of a letter or other written communication received 
by the Commission or its staff of the type described in paragraph (a) of 
this section, or any written response thereto, shall be made available 
for inspection and copying or otherwise published which would separately 
disclose the business transactions or market positions of any person and 
trade secrets or names of customers, except in accordance with the 
provisions of section 8 of the Commodity Exchange Act.

[57 FR 61291, Dec. 24, 1992]



Sec.  140.99  Requests for exemptive, no-action and interpretative
letters.

    (a) Definitions. For the purpose of this section:
    (1) Exemptive letter means a written grant of relief issued by the 
staff of a Division of the Commission from the applicability of a 
specific provision of the Act or of a rule, regulation or order issued 
thereunder by the Commission. An exemptive letter may only be issued by 
staff of a Division when the Commission itself has exemptive authority 
and that authority has been delegated by the Commission to the Division 
in question. An exemptive letter binds the Commission and its staff with 
respect to the relief provided therein. Only the Beneficiary may rely 
upon the exemptive letter.

[[Page 293]]

    (2) No-action letter means a written statement issued by the staff 
of a Division of the Commission or of the Office of the General Counsel 
that it will not recommend enforcement action to the Commission for 
failure to comply with a specific provision of the Act or of a 
Commission rule, regulation or order if a proposed transaction is 
completed or a proposed activity is conducted by the Beneficiary. A no-
action letter represents the position only of the Division that issued 
it, or the Office of the General Counsel if issued thereby. A no-action 
letter binds only the issuing Division or the Office of the General 
Counsel, as applicable, and not the Commission or other Commission 
staff. Only the Beneficiary may rely upon the no-action letter.
    (3) Interpretative letter means written advice or guidance issued by 
the staff of a Division of the Commission or the Office of the General 
Counsel. An interpretative letter binds only the issuing Division or the 
Office of the General Counsel, as applicable, and does not bind the 
Commission or other Commission staff. An interpretative letter may be 
relied upon by persons in addition to the Beneficiary.
    (4) Letter means an exemptive, no-action or interpretative letter.
    (5) Division means the Division of Swap Dealer and Intermediary 
Oversight, the Division of Clearing and Risk or the Division of Market 
Oversight.
    (b) General requirements. (1) Issuance of a Letter is entirely 
within the discretion of Commission staff.
    (2) Each request for a Letter must comply with the requirements of 
this section. Commission staff may reject or decline to respond to a 
request that does not comply with the requirements of this section.
    (3) The request must relate to a proposed transaction or a proposed 
activity. Absent extraordinary circumstances, Commission staff will not 
issue a Letter based upon transactions or activities that have been 
completed or activities that have been conducted prior to the date upon 
which the request is filed with the Commission.
    (4) The request must be made by or on behalf of the person whose 
activities or transactions are the subject of the request. Commission 
staff will not respond to a request for a Letter that is made by or on 
behalf of an unidentified person.
    (5)(i) The request must set forth as completely as possible all 
material facts and circumstances giving rise to the request.
    (ii) Commission staff will not respond to a request based on a 
hypothetical situation. However, a requester may set forth one or more 
alternative structures or fact situations for a proposed transaction or 
activity; Provided, That the request complies with this section with 
respect to each alternative structure or fact situation.
    (c) Information requirements. Each request for a Letter must comply 
with the following information requirements:
    (1)(i) A request made by the person on whose behalf the Letter is 
sought must contain:
    (A) The name, main business address, main telephone number and, if 
applicable, the National Futures Association registration identification 
number of such person; and
    (B) The name and, if applicable, the National Futures Association 
registration identification number of each other person for whose 
benefit the person is seeking the Letter.
    (ii) When made by a requester other than the person on whose behalf 
the Letter is sought, the request must contain:
    (A) The name, main business address and main business telephone 
number of the requester;
    (B) The name and, if applicable, the National Futures Association 
registration identification number of the person on whose behalf the 
Letter is sought; and
    (C) The name and, if applicable, the National Futures Association 
registration identification number of each other person for whose 
benefit the requester is seeking the Letter.
    (iii) The request must provide the name, address and telephone 
number of a contact person from whom Commission staff may obtain 
additional information if necessary.
    (2) The section number of the particular provision of the Act and/or 
Commission rules, regulations or orders to which the request relates 
must

[[Page 294]]

be set forth in the upper right-hand corner of the first page of the 
request.
    (3) The request must be accompanied by:
    (i) A certification by a person with knowledge of the facts that the 
material facts as represented in the request are true and complete. The 
following form of certification is sufficient for this purpose:

    I hereby certify that the material facts set forth in the attached 
letter dated ____ are true and complete to the best of my knowledge.
(name and title)________________________________________________________


and
    (ii) An undertaking made by the person on whose behalf the Letter is 
sought or by that person's authorized representative that, if at any 
time prior to issuance of a Letter, any material representation made in 
the request ceases to be true and complete, the person who made the 
undertaking will ensure that Commission staff is informed promptly in 
writing of all materially changed facts and circumstances. If a material 
change in facts or circumstances occurs subsequent to issuance of a 
Letter, the person on whose behalf the Letter is sought (or that 
person's authorized representative at the time of the change) must 
promptly so inform Commission staff.
    (4) The request must identify the type of relief requested and 
Letter sought and must clearly state why a Letter is needed. The request 
must identify all relevant legal and factual issues and discuss the 
legal and public policy bases supporting issuance of the Letter.
    (5) The request must contain references to all relevant authorities, 
including applicable provisions of the Act, Commission rules, 
regulations and orders, judicial decisions, administrative decisions, 
relevant statutory interpretations and policy statements. Adverse 
authority must be cited and discussed.
    (6) The request must identify prior publicly available Letters 
issued by Commission staff in response to circumstances similar to those 
surrounding the request (including adverse Letters), and must identify 
any conditions imposed by prior Letters as prerequisites for the 
issuance of those Letters. Citation of a representative sample of prior 
Letters is sufficient where a comprehensive recitation of prior Letters 
on a given topic would be repetitious or would not assist the staff in 
considering the request.
    (7) Requests may ask that, if the requested exemptive relief, no-
action position or interpretative guidance is denied, the staff consider 
granting alternative relief or adopting an alternative position.
    (d) Filing requirements. Each request for a Letter must comply with 
the following filing requirements:
    (1) The request must be in writing and signed.
    (2)(i) A request for a Letter relating to the provisions of the Act 
or the Commission's rules, regulations or orders governing designated 
contract markets, registered swap execution facilities, registered swap 
data repositories, registered foreign boards of trade, the nature of 
particular transactions and whether they are exempt or excluded from 
being required to be traded on one of the foregoing entities, made 
available for trading determinations, position limits, hedging 
exemptions, position aggregation treatment or the reporting of market 
positions shall be filed with the Director, Division of Market 
Oversight, Commodity Futures Trading Commission, Three Lafayette Centre, 
1155 21st Street NW., Washington, DC 20581.
    (ii) A request for a Letter relating to the provisions of the Act or 
the Commission's rules, regulations or orders governing or related to 
derivatives clearing organizations and other central counterparties, the 
clearing process, the clearing requirement determination, Commission 
regulation 1.25 jointly with the Director of the Division of Swap Dealer 
and Intermediary Oversight, risk assessment, financial surveillance, the 
end user exemption, and bankruptcy shall be filed with the Director, 
Division of Clearing and Risk, Commodity Futures Trading Commission, 
Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581.
    (iii) A request for a Letter relating to all other provisions of the 
Act or Commission rules, including Commission

[[Page 295]]

regulation 1.25 jointly with the Director of the Division of Clearing 
and Risk, shall be filed with the Director, Division of Swap Dealer and 
Intermediary Oversight, Commodity Futures Trading Commission, Three 
Lafayette Centre, 1155 21st Street NW., Washington, DC 20581.
    (iv) The requests described in paragraphs (d)(2)(i) through (iii) of 
this section must be submitted electronically using the email address 
[email protected] (for a request filed with the Division of Market 
Oversight), [email protected] (for a request filed with the Division 
of Clearing and Risk), or [email protected] (for a request filed with 
the Division of Swap Dealer and Intermediary Oversight), as appropriate, 
and a properly signed paper copy of the request must be provided to the 
Division of Market Oversight, the Division of Clearing and Risk, or the 
Division of Swap Dealer and Intermediary Oversight, as appropriate, 
within ten days for purposes of verification of the electronic 
submission.
    (e) Form of staff response. No response to any request governed by 
this section is effective unless it is in writing, signed by appropriate 
Commission staff, and transmitted in final form to the recipient. 
Failure by Commission staff to respond to a request for a Letter does 
not constitute approval of the request. Nothing in this section shall 
preclude Commission staff from responding to a request for a Letter by 
way of endorsement or any other abbreviated, written form of response.
    (f) Withdrawal of requests. (1) A request for a Letter may be 
withdrawn by filing with Commission staff a written request for 
withdrawal, signed by the person on whose behalf the Letter was sought 
or by that person's authorized representative, that states whether the 
person on whose behalf the Letter was sought will proceed with the 
proposed transaction or activity.
    (2) Where a request has been submitted by an authorized 
representative of the person on whose behalf a Letter is sought, the 
authorized representative may withdraw from representation at any time 
without explanation, Provided, That Commission staff is promptly so 
notified.
    (g) Failure to pursue a request. In the event that Commission staff 
requests additional information or analysis from a requester and the 
requester does not provide that information or analysis within thirty 
calendar days, Commission staff generally will issue a denial of the 
request; Provided, however, that Commission staff in its discretion may 
issue an extension of time to provide the information and or analysis.
    (h) Confidential treatment. Confidential treatment of a request for 
a Letter must be requested separately in accordance with Sec.  140.98 or 
Sec.  145.9 of this chapter, as applicable.
    (i) Applicability to other sections. The provisions of this section 
shall not affect the requirements of, or otherwise be applicable to:
    (1) Notice filings required to be made to claim relief from the Act 
or from a Commission rule, regulation, or order including, without 
limitations, Sec. Sec.  4.5, 4.7(a), 4.7(b), 4.12(b), 4.13(b) and 
4.14(a)(8) of this chapter;
    (2) Requests for exemption pursuant to section 4(c) of the Act; or
    (3) Requests for exemption pursuant to Sec.  41.33 of this chapter.

[63 FR 68181, Dec. 10, 1998, as amended at 65 FR 47859, Aug. 4, 2000; 66 
FR 44967, Aug. 27, 2001; 67 FR 62353, Oct. 7, 2002; 69 FR 41426, July 9, 
2004; 77 FR 66347, Nov. 2, 2012; 78 FR 22419, Apr. 16, 2013; 80 FR 
59578, Oct. 2, 2015]



  Subpart C_Regulation Concerning Conduct of Members and Employees and 
             Former Members and Employees of the Commission

    Authority: 7 U.S.C. 4a(f) and (j), 12a(5), and 13, as amended by the 
Commodity Futures Modernization Act of 2000, Appendix E of Pub. L. 106-
554, 114 Stat. 2763 (2000).

    Source: 41 FR 27511, July 2, 1976, unless otherwise noted.



Sec.  140.735-1  Authority and purpose.

    This subpart sets forth specific standards of conduct required of 
Commission members, employees of the Commission, and special government 
employees as well as regulations concerning former Commissioners, 
employees, and special government employees of the Commodity Futures

[[Page 296]]

Trading Commission. These rules are separate from and in addition to the 
Office of Government Ethics' conduct rules, Standards of Ethical Conduct 
for Employees of the Executive Branch, 5 CFR part 2635. In addition, 
this subpart contains references to various statutes governing employee 
conduct in order to aid Commission members, employees of the Commission 
and others in their understanding of statutory restrictions and 
requirements. \1\ Absent compelling countervailing reasons, all 
Commission members and employees are subject to all the terms of this 
section.
---------------------------------------------------------------------------

    \1\ These references, however, do not purport to cover all 
restrictions and requirements, and paraphrased restatements of statutory 
provisions are not intended to be, and should not be construed as, 
verbatim quotations of the law. Statutory text should be consulted in 
any situation in which it might apply.

[67 FR 5939, Feb. 8, 2002]



Sec.  140.735-2  Prohibited transactions.

    (a) Application. This section applies to all transactions effected 
by or on behalf of a Commission member or employee of the Commission, 
including transactions for the account of other persons effected by the 
member or employee, directly or indirectly under a power of attorney or 
otherwise. A member or employee shall be deemed to have a sufficient 
interest in the transactions of his or her spouse, minor child, or other 
relative who is a resident of the immediate household of the member or 
employee so that such transactions must be reported and are subject to 
all the terms of this section.
    (b) Prohibitions. Except as otherwise provided in this subsection, 
no member or employee of the Commission shall:
    (1) Participate, directly or indirectly, in any transaction:
    (i) In swaps;
    (ii) In commodity futures;
    (iii) In retail forex transactions, as that term is defined in Sec.  
5.1(m) of this chapter;
    (iv) Involving any commodity that is of the character of or which is 
commonly known to the trade as an option, privilege, indemnity, bid, 
offer, put, call, advance guaranty, or decline guaranty; or
    (v) For the delivery of any commodity under a standardized contract 
commonly known to the trade as a margin account, margin contract, 
leverage account, or leverage contract, or under any contract, account, 
arrangement, scheme, or device that the Commission determines serves the 
same function or functions as such a standardized contract, or is 
marketed or managed in substantially the same manner as such a 
standardized contract;
    (2) Effect any purchase or sale of a commodity option, futures 
contract, or swap involving a security or group of securities;
    (3) Sell a security which he or she does not own or consummate a 
sale by the delivery of a security borrowed by or for his or her 
account;
    (4) Participate, directly or indirectly, in any investment 
transaction in an actual commodity if:
    (i) Nonpublic information is used in the investment transaction;
    (ii) It is prohibited by rule or regulation of the Commission; or
    (iii) It is effected by means of any instrument regulated by the 
Commission and is not otherwise permitted by an exception under this 
section;
    (5) Purchase or sell any securities of a company which, to his or 
her knowledge, is involved in any:
    (i) Pending investigation by the Commission;
    (ii) Proceeding before the Commission or to which the Commission is 
a party;
    (iii) Other matter under consideration by the Commission that could 
have a direct and predictable effect upon the company; or
    (6) Recommend or suggest to another person any transaction in which 
the member or employee is not permitted to participate in any 
circumstance where the member or employee could reasonably expect to 
benefit or where the member or employee has or may have control or 
substantial influence over such person.
    (c) Exception for farming, ranching, and natural resource 
operations. The prohibitions in paragraphs (b)(1)(i), (ii), and (iv) of 
this section shall not apply to a transaction in connection with any 
farming, ranching, oil and gas,

[[Page 297]]

mineral rights, or other natural resource operation in which the member 
or employee has a financial interest, if he or she is not involved in 
the decision to engage in, and does not have prior knowledge of, the 
actual futures, commodity option, or swap transaction and has previously 
notified the General Counsel \2\ in writing of the nature of the 
operation, the extent of the member's or employee's interest, the types 
of transactions in which the operation may engage, and the identity of 
the person or persons who will make trading decisions for the operation; 
\3\ or
---------------------------------------------------------------------------

    \2\ As used in this subpart, ``General Counsel'' refers to the 
General Counsel in his or her capacity as counselor for the Commission 
and designated agency ethics official for the Commission, and includes 
his or her designee and the alternate designated agency ethics official 
appointed by the agency head pursuant to 5 CFR 2638.202.
    \3\ Although not required, if they choose to do so, members or 
employees may use powers of attorney or other arrangements in order to 
meet the notice requirements of, and to assure that they have no control 
or knowledge of, futures, commodity option, or swap transactions 
permitted under paragraph (c) of this section. A member or employee 
considering such arrangements should consult with the Office of General 
Counsel in advance for approval. Should a member or employee gain 
knowledge of an actual futures, commodity option, or swap transaction 
entered into by an operation described in paragraph (c) of this section 
that has already taken place and the market position represented by that 
transaction remains open, he or she should promptly report that fact and 
all other details to the General Counsel and seek advice as to what 
action, including recusal from any particular matter that will have a 
direct and predictable effect on the financial interest in question, may 
be appropriate.
---------------------------------------------------------------------------

    (d) Other exceptions. The prohibitions in paragraphs (b)(1), (2) and 
(3) of this section shall not apply to:
    (1) A transaction entered into by any publicly-available pooled 
investment vehicle (such as a mutual fund or exchange-traded fund) other 
than one operated by a person who is a commodity pool operator with 
respect to such entity if the direct or indirect ownership interest of 
the member or employee neither exercises control nor has the ability to 
exercise control over the transactions entered into by such vehicle; \4\
---------------------------------------------------------------------------

    \4\ Section 9(c) of the Commodity Exchange Act makes it a felony for 
any member or employee, or agent thereof, to participate, directly or 
indirectly in, inter alia, any transaction in commodity futures, option, 
leverage transaction, or other arrangement that the Commission 
determines serves the same function, unless authorized to do so by 
Commission rule or regulation. 17 CFR 4.5 excludes certain otherwise 
regulated persons from the definition of ``commodity pool operator'' 
with respect to operation of specific investment entities enumerated in 
the regulation.
---------------------------------------------------------------------------

    (2) The acceptance or exercise of any stock option or similar right 
granted by an employer as part of a compensation package to a spouse or 
minor child or other related member of the immediate household of a 
member or employee, or to the exercise of any stock option or similar 
right granted to the member or employee by a previous employer prior to 
commencement of the member's or employee's tenure with the Commission as 
part of such member's or employee's compensation package from such 
previous employer;
    (3) A transaction by any trust or estate of which the member or 
employee or the spouse, minor child, or other related member of the 
immediate household of the member or employee is solely a beneficiary, 
has no power to control, and does not in fact control or advise with 
respect to the investments of the trust or estate;
    (4) The exercise of any privilege to convert or exchange securities, 
of rights accruing unconditionally by virtue of ownership of other 
securities (as distinguished from a contingent right to acquire 
securities not subscribed for by others), or of rights in order to round 
out fractional shares in securities;
    (5) The acceptance of stock dividends on securities already owned, 
the reinvestment of cash dividends on a security already owned, or the 
participation in a periodic investment plan when the original purchase 
was otherwise consistent with this rule; or
    (6) Investment in any fund established pursuant to the Federal 
Employees Retirement System.
    (e) No prohibition on stocks or funds. Nothing in paragraph (b)(1) 
or (2) of

[[Page 298]]

this section shall prohibit a member or employee from purchasing, 
selling, or retaining any share that represents ownership of a publicly-
owned corporation or interest in a publicly-available pooled investment 
vehicle containing any such shares (such as a mutual fund or exchange-
traded fund) other than one operated by a person who is a commodity pool 
operator with respect to such pooled investment vehicle, regardless of 
whether any security futures product may at any time be or have been 
based upon shares of such corporation or pooled investment vehicle, and 
regardless of whether such pooled investment vehicle may, by design or 
effect, track or follow any group of securities that also underlies a 
futures contract.
    (f) Exception applicable to legally separated employees. This 
section shall not apply to transactions of a legally separated spouse of 
a member or employee, including transactions for the benefit of a minor 
child, if the member or employee has no power to control, and does not, 
in fact, advise or control with respect to such transactions. If the 
member or employee has actual or constructive knowledge of such 
transactions of a legally separated spouse or for the benefit of a minor 
child, the disqualification provisions of Sec.  140.735-2a(d)(2)(i)-
(iii) and 18 U.S.C. 208 are applicable.

[67 FR 5939, Feb. 8, 2002, as amended at 77 FR 66347, Nov. 2, 2012]



Sec.  140.735-2a  Prohibited interests.

    (a) Application. This section applies to all financial interests of 
a Commission member or employee of the Commission, including financial 
interests held by the member or employee for the account of other 
persons. A member or employee shall be deemed to have a sufficient 
interest in the financial interests of his or her spouse, minor child, 
or other relative who is a resident of the immediate household of the 
member or employee, so that such financial interests must be reported 
and are subject to all the terms of this section.
    (b) Prohibitions. Except as otherwise provided in this subsection, 
no member or employee of the Commission shall:
    (1) Have a financial interest, through ownership of securities or 
otherwise, in any person \5\ registered with the Commission (including 
futures commission merchants, associated persons and agents of futures 
commission merchants, floor brokers, commodity trading advisors and 
commodity pool operators, and any other persons required to be 
registered in a fashion similar to any of the above under the Commodity 
Exchange Act or pursuant to any rule or regulation promulgated by the 
Commission), or any contract market, swap execution facility, swap data 
repository, board of trade, or other trading facility, or any 
derivatives clearing organization subject to regulation or oversight by 
the Commission; \6\
---------------------------------------------------------------------------

    \5\ As defined in section 1a(38) of the Commodity Exchange Act and 
17 CFR 1.3(u) thereunder, a ``person'' includes an individual, 
association, partnership, corporation and a trust.
    \6\ Attention is directed to 18 U.S.C. 208.
    \7\ [Reserved]
---------------------------------------------------------------------------

    (c) Exceptions. The prohibitions in paragraph (b) of this section 
shall not apply to:
    (1) A financial interest in any publicly-available pooled investment 
vehicle (such as a mutual fund or exchange-traded fund) other than one 
operated by a person who is a commodity pool operator with respect to 
such entity if such vehicle does not have invested, or indicate in its 
prospectus the intent to invest, ten percent or more of its assets in 
securities of persons described in paragraph (b) of this section and the 
member or employee neither exercises control nor has the ability to 
exercise control over the financial interests held in such vehicle;
    (2) A financial interest in any corporate parent or affiliate of a 
person described in paragraph (b)(1) of this section if the operations 
of such person provide less than ten percent of the gross revenues of 
the corporate parent or affiliate; \8\
---------------------------------------------------------------------------

    \8\ It is the member's or employee's responsibility to monitor his 
or her financial interests and those of a spouse or minor child or other 
related member of his or her immediate household, to promptly report 
relevant changes to the General Counsel in writing, and to seek the 
advice of the General Counsel as to what action may be appropriate. In 
this regard, attention is directed to 18 U.S.C. 208, which bars an 
employee from participating in any particular matter that will have a 
direct and predictable effect on the financial interest in question.

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

[[Page 299]]

    (3) A financial interest in any trust or estate of which the member 
or employee is solely a beneficiary, has no power to control, and does 
not in fact control or advise with respect to the investments of the 
trust or estate; except that such interest is subject to the provisions 
of paragraphs (d) and (f) of this section.
    (d) Retention or passive acquisition of prohibited financial 
interests. Nothing in this section shall prohibit a member or employee, 
or a spouse or minor child or other related member of the immediate 
household of the member or employee, from:
    (1) Retaining a financial interest that was permitted to be retained 
by the member or employee prior to the adoption of this regulation, was 
obtained prior to the commencement of employment with the Commission, or 
was acquired by a spouse prior to marriage to the member or employee; or
    (2) Acquiring, retaining, or controlling an otherwise prohibited 
financial interest, including but not limited to any security or option 
on a security (but not a security futures product), where the financial 
interest was acquired by inheritance, gift, stock split, involuntary 
stock dividend, merger, acquisition, or other change in corporate 
ownership, exercise of preemptive right, or otherwise without specific 
intent to acquire the financial interest, or by a spouse or minor child 
or other related member of the immediate household of the member or 
employee as part of an employment compensation package; provided, 
however, that retention of any interest allowed by paragraph (c)(3) or 
(d) of this section is permitted only where the employee:
    (i) Makes full disclosure of any such interest on his or her annual 
financial disclosure (Standard Form 278 or Standard Form 450);
    (ii) Makes full written disclosure to the General Counsel within 30 
days of commencing employment or, for incumbents, within twenty days of 
his or her receipt of actual or constructive notice that the interest 
has been acquired; \9\ and
---------------------------------------------------------------------------

    \9\ Changes in holdings, other than by purchase, which do not affect 
disqualification, such as those resulting from the automatic 
reinvestment of dividends, stock splits, stock dividends or 
reclassifications, may be reported on the annual statement, SF 278 or SF 
450, rather than when notification of the transaction is received. 
Acquisition by, for example, gifts, inheritance, or spinoffs, which may 
result in additional disqualifications pursuant to paragraph (d)(2)(iii) 
of this section and 18 U.S.C. 208 shall be reported to the General 
Counsel within 20 days of the receipt of actual or constructive notice 
thereof.
---------------------------------------------------------------------------

    (iii) Will be disqualified in accordance with 5 CFR part 2635, 
subpart D, and 18 U.S.C. 208 from participating in any particular matter 
that will have a direct and predictable effect on the financial interest 
in question. Any Commission member or employee affected by this section 
may, pursuant to 18 U.S.C. 208(b)(1) and 5 CFR 2640.301-303, request a 
waiver of the disqualification requirement.

    Note: With respect to any financial interest retained under 
paragraph (c)(3) or (d) of this section, Commission members and 
employees are reminded of their obligations under 18 U.S.C. 208 and 5 
CFR part 2635, subpart D, to disqualify themselves from participating in 
any particular matter in which they, their spouses or minor children 
have a financial interest.

    (e) Exception applicable to legally separated employees. This 
section shall not apply to the financial interests of a legally 
separated spouse of a Commission member or employee, including 
transactions for the benefit of a minor child, if the member or employee 
has no power to control and does not, in fact, advise or control with 
respect to such transactions. If the member or employee has actual or 
constructive knowledge of such financial interests held by a legally 
separated spouse or for the benefit of a minor child, the 
disqualification provisions of paragraphs (d)(2)(i)-(iii) of this 
section and 18 U.S.C. 208 are applicable.
    (f) Divestiture. Based upon a determination of substantial conflict 
under 5 CFR 2635.403(b) and 18 U.S.C. 208, the Commission, or its 
designee, may require in writing that a member or employee, or the 
spouse or minor child or

[[Page 300]]

other related member of the immediate household of a member or employee, 
divest a financial interest that he or she is otherwise authorized to 
retain under this section. \10\
---------------------------------------------------------------------------

    \10\ Any evidence of a violation of 18 U.S.C. 208 must be reported 
by the General Counsel to the Commission, which may refer the matter to 
the Criminal Division of the Department of Justice and the United States 
Attorney in whose venue the violations lie. See 28 U.S.C. 535.

[67 FR 5940, Feb. 8, 2002, as amended at 67 FR 62353, Oct. 7, 2002; 77 
FR 66348, Nov. 2, 2012]



Sec.  140.735-3  Non-governmental employment and other outside activity.

    A Commission member or employee shall not accept employment or 
compensation from any person, exchange, swap execution facility, swap 
data repository or derivatives clearing organization subject to 
regulation by the Commission. For purposes of this section, a person 
subject to regulation by the Commission includes but is not limited to a 
contract market, swap execution facility, swap data repository or 
derivatives clearing organization or member thereof, a registered 
futures commission merchant, any person associated with a futures 
commission merchant or with any agent of a futures commission merchant, 
floor broker, commodity trading advisor, commodity pool operator or any 
person required to be registered in a fashion similar to any of the 
above or file reports under the Act or pursuant to any rule or 
regulation promulgated by the Commission.\11\
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    \11\ Attention is directed to section 2(a)(8) of the Commodity 
Exchange Act, which provides, among other things, that no Commission 
member or employee shall accept employment or compensation from any 
person, exchange or derivatives clearing organization 
(``clearinghouse'') subject to regulation by the Commission, or 
participate, directly or indirectly, in any contract market operations 
or transactions of a character subject to regulation by the Commission.

[ 77 FR 66348, Nov. 2, 2012]



Sec.  140.735-4  Receipt and disposition of foreign gifts and decorations.

    (a) For purposes of this section only:
    (1) Commission member or employee means any Commission member or any 
person employed by or who occupies an office or a position in the 
Commission; an expert or consultant under contract with the Commission, 
or in the case of an organization performing services under such 
contract, any individual involved in the performance of such service; 
and the spouse, unless the individual and his or her spouse are 
separated, and any dependent, as defined by section 152 of the Internal 
Revenue Code of 1954, of any such person.
    (2) Foreign government means:
    (A) Any unit of foreign governmental authority, including any 
foreign national, state, local, and municipal government;
    (B) Any international or multinational organization whose membership 
is composed of any unit of foreign government described in paragraph 
(a)(2)(A) of this section; and
    (C) Any agent or representative of any such unit or such 
organization, while acting as such.
    (3) Gift means a tangible or intangible present (other than a 
decoration) tendered by, or received from, a foreign government, except 
grants and other forms of assistance to which section 108A of the Mutual 
Educational and Cultural Exchange Act of 1961 applies.
    (4) Decoration means an order, device, medal, badge, insignia, 
emblem, or award tendered by, or received from, a foreign government.
    (5) Minimal value means a retail value in the United States at the 
time of acceptance of $140 or less, except as redefined to reflect 
changes in the consumer price index at three year intervals by the 
Administrator of General Services pursuant to authority granted in 5 
U.S.C. 7342(a)(5)(A).
    (b) Commission members and employees shall not:
    (1) Request or otherwise encourage the tender of a gift or 
decoration;
    (2) Accept a gift of currency, except that which has an historical 
or numismatic value;
    (3) Accept gifts of travel or gifts of expenses for travel, such as 
transportation, food and lodging, from foreign governments, other than 
those authorized in paragraph (c)(5) of this section; or
    (4) Accept any gift or decoration, except as authorized by this 
section.

[[Page 301]]

    (c) Gifts which may be accepted:
    (1) Commission members and employees may accept and retain gifts of 
minimal value tendered or received as a souvenir or mark of courtesy 
from a foreign government without further approval. If the value of a 
gift is uncertain, the recipient shall be responsible for establishing 
that it is of minimal value, as defined in this section. Documentary 
evidence may be required in support of the valuation.
    (2) Commission members and employees may accept, on behalf of the 
United States, gifts of more than minimal value tendered or received 
from a foreign government when it appears that to refuse the gift would 
likely cause offense or embarrassment or otherwise adversely affect the 
foreign relations of the United States. When a tangible gift of more 
than minimal value is accepted on behalf of the United States, it 
becomes the property of the United States.
    (3) Commission members and employees may accept a gift of more than 
minimal value where such gift is in the nature of an educational 
scholarship or medical treatment.
    (4) Within 60 days after accepting a tangible gift of more than 
minimal value, other than a gift described in paragraph (c)(5) of this 
section, a Commission member or employee shall file a statement with the 
Executive Director of the Commission which shall include the following 
information:
    (A) The name and position of the Commission member or employee;
    (B) A brief description of the gift and the circumstances justify 
acceptance;
    (C) The identity, if known, of the foreign government and the name 
and position of the individual who presented the gift;
    (D) The date of acceptance of the gift;
    (E) The estimated value in the United States of the gift at the time 
of acceptance; and
    (F) The disposition or current location of the gift.
    (5) Commission members and employees are authorized to accept from a 
foreign government gifts of travel or gifts of expenses for travel 
taking place entirely outside the United States, such as transportation, 
food and lodging, of more than minimal value if the acceptance is 
approved by the Executive Director, upon a finding that it is consistent 
with the interests of the Commission. Either prior to or within 30 days 
after accepting each gift of travel or gift of travel expenses pursuant 
to this paragraph, the Commission member or employee concerned shall 
file a statement with the Executive Director containing the following 
information:
    (A) The name and position of the Commission member or employee;
    (B) A brief description of the gift and the circumstances justifying 
acceptance;
    (C) The identity, if known, of the foreign government and the name 
and position of the individual who presented the gift; and
    (D) The date of acceptance.
    (6) Not later than January 31 of each year the Executive Director 
shall compile a listing of all statements filed during the preceding 
year by Commission members and employees pursuant to paragraphs (c)(4) 
and (c)(5) of this section and shall transmit the listing to the 
Secretary of State.
    (d) Commission members or employees may accept, retain and wear 
decorations tendered by a foreign government in recognition of active 
field service in time of combat operations or awarded for other 
outstanding or unusually meritorious performance, subject to the 
approval of the Executive Director. Without this approval, the 
decoration is deemed to have been accepted on behalf of the United 
States, shall become the property of the United States, and shall be 
deposited by the employee, within 60 days of acceptance, with the 
Executive Director for official use or forwarding to the Administrator 
of General Services for disposal in accordance with paragraph (g) of 
this section. Under normal circumstances, it can be expected that a 
Commission member or employee will be notified of the intent of a 
foreign government to award him or her or a spouse or dependent a 
decoration for outstanding or unusually meritorious service sufficiently 
in advance so that the approval required can be sought prior to its 
acceptance. A request for the approval of the Executive Director shall 
be submitted in writing, stating

[[Page 302]]

the nature of the decoration and the reason why it is being awarded. 
Whenever possible, the request should also be accompanied by a statement 
from the foreign government, preferably in the form of the citation, 
which shows the basis for the tender of the award, whether it is in 
recognition of active field service in time of combat operations or for 
other outstanding or unusually meritorious performance.
    (e) Within 60 days after acceptance of a tangible gift of more than 
minimal value or a decoration for which the Executive Director has not 
given approval, a Commission member or employee shall:
    (1) Deposit the gift or decoration for disposal with the Executive 
Director; or
    (2) Subject to the approval of the Commission, upon the 
recommendation of the Executive Director, deposit the gift or decoration 
with the Commission for official use.

A gift or decoration may be retained for official use if the Commission 
determines that it can be properly displayed in an area accessible to 
employees and members of the public. Within 30 days after termination of 
the official use of a gift, the Executive Director shall forward the 
gift to the Administrator of General Services in accordance with 
paragraph (g) of this section.
    (f) Whenever possible, gifts and decorations that have been 
deposited with the Executive Director for disposal shall be returned to 
the donor. The Executive Director, in coordination with the Office of 
the General Counsel, shall examine the circumstances surrounding the 
donation, assessing whether any adverse effect on the foreign relations 
of the United States might result from the return of the gift or 
decoration to the donor. The appropriate Department of State officials 
shall be consulted if a question of adverse effect on United States 
foreign relations arises.
    (g) Gifts and decorations that have not been returned to the donor, 
retained for official use, or for which official use has terminated, 
shall be forwarded by the Executive Director to the Administrator of 
General Services for transfer, donation, or other disposal in accordance 
with the provisions of the Federal Property and Administrative Services 
Act of 1949, as amended, and 5 U.S.C. 7342.
    (h) In accordance with 5 U.S.C. 7342(h), the U.S. Attorney General 
may bring a civil action in any United States district court against any 
Commission member or employee who knowingly solicits or accepts a gift 
from a foreign government not consented to by the Congress of the United 
States in 5 U.S.C. 7342, or who fails to deposit or report such gift as 
required by 5 U.S.C. 7342. The court may assess a penalty against such 
Commission member or employee in any amount not exceeding the retail 
value of the gift improperly solicited or received plus $5,000.
    (i) A violation of the requirements set forth in this section by a 
Commission employee may be cause for appropriate disciplinary action 
which may be in addition to any penalty prescribed by law.
    (j)(1) The burden of proving minimal value shall be on the 
recipient. In the event of a dispute over the value of a gift, the 
Executive Director shall arrange for an outside appraiser to determine 
whether the gift is of more or less than minimal value.
    (2) When requested by the Administrator of Government Services, the 
Executive Director shall arrange for an appraisal of a gift or 
decoration.
    (k) No appropriated funds of the Commission may be used to buy any 
tangible gift of more than minimal value for any foreign individual, 
unless the gift has been approved by Congress.

[47 FR 24115, June 3, 1982. Redesignated at 58 FR 52658, Oct. 12, 1993; 
63 FR 32733, June 16, 1998]



Sec.  140.735-5  Disclosure of information.

    A Commission employee or former employee shall not divulge, or cause 
or allow to be divulged, confidential or non-public commercial, economic 
or official information to any unauthorized person, or release such 
information in

[[Page 303]]

advance of authorization for its release. \9\ Except as directed by the 
Commission or its General Counsel as provided in these regulations, no 
Commission employee or former employee is authorized to accept service 
of any subpoena for documentary information contained in or relating to 
the files of the Commission. Any employee or former employee who is 
served with a subpoena requiring testimony regarding non-public 
information or documents shall, unless the Commission authorizes the 
disclosure of such information, respectfully decline to disclose the 
information or produce the documents called for, basing his refusal on 
these regulations. \10\ Any employee or former employee who is served 
with a subpoena calling for information regarding the Commission's 
business shall promptly advise the General Counsel of the service of 
such subpoena, the nature of the information or documents sought, and 
any circumstances which may bear upon the desirability of making such 
information or document available in the public interest. \11\ In any 
proceeding in which the Commission is not a party, no employee of the 
Commission shall testify concerning matters related to the business of 
the Commission unless authorized to do so by the Commission.
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    \9\ Attention is directed to section 9(d) of the Commodity Exchange 
Act, which provides that it shall be a felony punishable by a fine of 
not more than $500,000 or imprisonment for not more than five years, or 
both, together with the costs of prosecution--(1) for any Commissioner 
of the Commission or any employee or agent thereof who, by virtue of his 
employment or position, acquires information which may affect or tend to 
affect the price of any commodity future or commodity and which 
information has not been promptly made public, to impart such 
information with intent to assist another person, directly or 
indirectly, to participate in any transaction in commodity futures, any 
transaction in an actual commodity, or in any transaction of the 
character of or which is commonly known to the trade as an option, 
privilege, indemnity, bid, offer, put, call, advance guaranty or decline 
guaranty, or in any transaction for the delivery of any commodity under 
a standardized contract commonly known to the trade as a margin account, 
margin contract, leverage account or leverage contract, or under any 
contract or other arrangement that the Commission determines to serve 
the same function or is marketed in the same manner as such standardized 
contract, and (2) for any person to acquire such information from any 
Commissioner of the Commission or any employee or agent thereof and to 
use such information in any of the foregoing transactions.
    \10\ No employee shall disclose such information unless directed to 
do so by the Commission.
    \11\ The prohibitions regarding confidential or nonpublic 
information stated above are intended to cover the matters addressed in 
sections 4(c), 8, and 9(d) of the Commodity Exchange Act as well as 
nonpublic information under the Freedom of Information Act, 5 U.S.C. 
552, the rules of the Commission thereunder, 17 CFR part 145, the 
Privacy Act, 5 U.S.C. 552a, the rules of the Commission thereunder, 17 
CFR part 146, and cases where, apart from specific prohibitions in any 
statute or rule, the disclosure or use of such information would be 
unethical.

[58 FR 52658, Oct. 12, 1993]



Sec.  140.735-6  Practice by former members and employees of the Commission.

    (a) Personal and substantial participation or nonpublic knowledge of 
a particular matter. No person who has been a member or employee of the 
Commission shall ever knowingly make, with the intent to influence, any 
communication to or appearance before the Commission in connection with 
any particular matter involving a specific party or parties \12\ in 
which such person, or one participating with him or her in the 
particular matter, participated personally and substantially, or gained 
nonpublic knowledge of facts thereof, while with the Commission. \13\
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    \12\ The phrase ``particular matter involving a specific party or 
parties'' does not apply to general rulemaking, general policy and 
standards formulation or other similar matters. See Sec.  2637.201(c)(1) 
of the regulations of the Office of Government Ethics, 5 CFR 
2637.201(c)(1); cf., memorandum of the Attorney General dealing with the 
conflict-of-interest provisions prior to amendment by the Ethics in 
Government Act (reproduced following 18 U.S.C. 201).
    \13\ Attention is directed to 18 U.S.C. 207(a)(1), as amended, which 
generally prohibits former Federal officers and employees permanently 
from knowingly making, with the intent to influence, any communication 
to or appearance before any Federal (or District of Columbia) 
department, agency or court, or court martial, or any officer or 
employee thereof, in connection with any particular matter involving a 
specific party or parties in which the United States (or the District of 
Columbia) is a party or has a direct and substantial interest and in 
which the former officer or employee participated personally and 
substantially while with the government.

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[[Page 304]]

    (b) Particular matter under an individual's official responsibility. 
No person who has been a member or employee of the Commission shall, 
within two years after that employment has ceased, knowingly make, with 
the intent to influence, any communication to or appearance before the 
Commission in connection with a particular matter involving a specific 
party or parties which was actually pending under his official 
responsibility as a member or employee of the Commission at any time 
within one year prior to the termination of government service. \14\
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    \14\ Attention is directed to 18 U.S.C. 207(a)(2), as amended. 
Section 207(a)(2) generally prohibits former Federal officers and 
employees, within two years after their Federal employment has ceased, 
from knowingly making, with the intent to influence, any communication 
to or appearance before any Federal (or District of Columbia) 
department, agency or court, or court martial, or any officer or 
employee thereof, in connection with any particular matter involving a 
specific party or parties in which the United States (or the District of 
Columbia) is a party or has a direct and substantial interest and which 
was actually pending under the official responsibility of the former 
officer or employee within one year prior to the termination of 
government service.
    As used in paragraph (b) of this section, the term ``official 
responsibility'' has the meaning assigned to it in 18 U.S.C. 202(b), 
namely, the ``direct administrative or operating authority, whether 
intermediate or final, and either exercisable alone or with others, and 
either personally or through subordinates, to approve, disapprove, or 
otherwise direct Government action.''
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    (c) Restrictions on former members and senior employees. A former 
member or employee of the Commission who occupied a ``senior'' position 
specified in 18 U.S.C. 207(c)(2), as amended, shall not within one year 
after such ``senior'' employment has ceased, knowingly make, with the 
intent to influence, any communication to or appearance before the 
Commission on behalf of any other person in connection with any matter 
in which such person seeks official action by the Commission. \15\
---------------------------------------------------------------------------

    \15\ Attention is directed to 18 U.S.C. 207(c), as amended, which 
places restrictions on the representational activities of certain senior 
officers and employees after their departure from a senior position. 
Section 207(c) generally makes it unlawful for one year after service in 
a ``senior'' position terminates for a former ``senior'' Federal 
employee to knowingly make, with the intent to influence, any 
communication to or appearance before an employee of a department or 
agency in which he served in any capacity during the one year period 
prior to termination from ``senior'' service, if that communication or 
appearance is on behalf of any other person (except the United States), 
in connection with any matter concerning which he seeks official action 
by that employee.
    Note that the one year period is measured from the date when the 
employee ceases to be a senior employee, not from the termination of 
Government service, unless the two occur simultaneously. This provision 
prohibits communications to or appearances before the Government and 
does not prohibit ``behind-the-scenes'' assistance. The restriction does 
not require that the former employee have ever been in any way involved 
in the matter that is the subject of the communication or appearance. 
The restriction applies with respect to any matter, whether or not 
involving a specific party.
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    (d) Exceptions. The prohibitions contained in paragraphs (a), (b), 
and (c) of this section do not apply to communications solely for the 
purpose of furnishing scientific or technological information if 
approved by the Commission or generally to giving testimony under oath 
or making a statement which is subject to penalty or perjury. Further, 
the prohibition contained in paragraph (c) of this section does not 
apply to an uncompensated statement in a particular area within the 
special knowledge of the former Commission member or employee. \16\
---------------------------------------------------------------------------

    \16\ Attention is directed to 18 U.S.C. 207(j), as amended (listing 
other exceptions). Self-representation is not prohibited under section 
207.
---------------------------------------------------------------------------

    (e) Reporting requirement. Any former member or employee of the 
Commission who, within two years after ceasing to be such, is employed 
or retained as the representative of any person (except the United 
States) in connection with a matter in which it is contemplated that he 
will appear before or communicate with the Commission

[[Page 305]]

shall, within ten days of such retainer or employment, or of the time 
when appearance before or communication with the Commission is first 
contemplated, file with the General Counsel of the Commission a 
statement as to the nature thereof together with any desired explanation 
as to why it is deemed consistent with this section. Employment of a 
recurrent character may be covered by a single comprehensive statement. 
Each such statement should include an appropriate caption indicating 
that it is filed pursuant to this section. The reporting requirement of 
this paragraph does not apply to communications incidental to court 
appearances in litigation involving the Commission.
    (f) Definitions. As used in this section, the phrase ``appearance 
before the Commission'' means any formal or informal appearance on 
behalf of any person (except the United States) before the Commission, 
or any member or employee thereof with an intent to influence. As used 
in this section, the phrase ``communication with the Commission'' means 
any oral or written communication made to the Commission, or any member 
or employee thereof, on behalf of any person (except the United States) 
with an intent to influence.
    (g) Advisory ruling. Persons in doubt as to the applicability of 
this section may apply for an advisory ruling by addressing a letter 
requesting such a ruling to the General Counsel.
    (h) Procedures for administrative enforcement of statutory 
restrictions on post-government employment conflicts of interest \17\--
(1) Scope. The provisions of this paragraph prescribe procedures for 
administrative enforcement of the restrictions which 18 U.S.C. 207 (a), 
(b), and (c), as amended, place on appearances before or communications 
with Federal (and District of Columbia) departments, agencies and 
courts, and other enumerated entities, as well as the officers and 
employees thereof, by former Commission members and employees.
---------------------------------------------------------------------------

    \17\ This section does not apply to employees who leave service 
after December 31, 1990.
---------------------------------------------------------------------------

    (2) Investigations. The General Counsel of the Commission, or his or 
her designee, shall conduct such investigations as he or she deems 
appropriate to determine whether any former Commission member or 
employee have violated 18 U.S.C. 207 (a), (b) or (c), as amended. The 
General Counsel shall report the results of his or her investigations to 
the Commission and shall recommend to the Commission such action as he 
or she deems appropriate.
    (3) Hearings. Hearings required to be held under the provisions of 
this section shall be held before an Administrative Law Judge, utilizing 
the procedures prescribed by the Commission's rules of practice for 
adjudicatory proceedings (17 CFR part 10), except to the extent that 
those rules are inconsistent with the provisions of this section. Any 
proceeding brought under the provisions of this section shall be 
prosecuted by the General Counsel or his or her designee.
    (4) Sanctions. If the Commission finds, after notice and opportunity 
for a hearing, that a former Commission member or employee has violated 
18 U.S.C. 207 (a), (b) or (c), as amended, the Commission may prohibit 
that person from making, on behalf of any other person (except the 
United States), any formal or informal appearance before, or with the 
intent to influence any oral or written communication to, the Commission 
on a pending matter of business for a period not to exceed five years, 
or may take other appropriate disciplinary action.

[58 FR 52658, Oct. 12, 1993; 58 FR 58593, Nov. 2, 1993]



Sec.  140.735-7  Statutory violations applicable to conduct of 
Commission members and employees.

    A violation of section 2(a)(7), 8 or 9 (c) or (d) of the Commodity 
Exchange Act, as amended, shall be deemed to be a violation of this 
subpart as well.

[58 FR 52660, Oct. 12, 1993]



Sec.  140.735-8  Interpretative and advisory service.

    (a) Counselor for the Commission. The General Counsel, or his or her 
designee, will serve as Counselor for the Commission and as the 
Commission's representative to the Office of Government Ethics, on 
matters covered by this subpart. The General Counsel will

[[Page 306]]

also serve as the Commission's designated agency ethics official to 
review the financial reports filed by high-level Commission officials 
under title II of the Ethics in Government Act, as well as otherwise to 
coordinate and manage the Commission's ethics program.
    (b) Duties of the Counselor. The Counselor shall:
    (1) Coordinate the agency's counseling services and assure that 
counseling and interpretations on questions of conflict of interests and 
other matters covered by the regulations in this subpart are available 
as needed to Regional Deputy Counselors, who shall be appointed by the 
General Counsel, in coordination with the Chairman of the Commission, 
for each Regional Office of the Commission;
    (2) Render authoritative advice and guidance on matters covered by 
the regulations in this subpart which are presented to him or her by 
employees in the Washington, DC headquarters office; and
    (3) Receive information on, and resolve or forward to the Commission 
for consideration, any conflict of interests or apparent conflict of 
interests which appears in the annual financial disclosure (Standard 
Form 278 or Standard Form 450), or is disclosed to the General Counsel 
by a member or employee pursuant to Sec.  140.735-2a(d) of this part, or 
otherwise is made known to the General Counsel.
    (i) A conflict of interests or apparent conflict of interests is 
considered resolved by the General Counsel when the affected member or 
employee has executed an ethics agreement pursuant to 5 CFR 2634.801 et 
seq. to undertake specific actions in order to resolve the actual or 
apparent conflict.
    (ii) If, after advice and guidance from the General Counsel, a 
member or employee does not execute an ethics agreement, the conflict of 
interests is considered unresolved and must be referred to the 
Commission for resolution or further action consistent with 18 U.S.C. 
208 and 28 U.S.C. 535.
    (iii) Where an unresolved conflict of interests or apparent conflict 
of interests is to be forwarded to the Commission by the General 
Counsel, the General Counsel will promptly notify the affected member or 
employee in writing of his or her intent to forward the matter to the 
Commission. Any member or employee so affected will be afforded an 
opportunity to be heard by the Commission through written submission.
    (c) Regional Deputy Counselors. Regional Deputy Counselors shall:
    (1) Give advice and guidance as requested to the employees assigned 
to their respective Regional Offices; and
    (2) Receive information on and refer to the Director of Human 
Resources, any conflict of interests or appearance of conflict of 
interests in Statements of Employment and Financial Interests submitted 
by employees to whom they are required to give advice and guidance.
    (d) Confidentiality of communications. Communications between the 
Counselor and Regional Deputy Counselors and an employee shall be 
confidential, except as deemed necessary by the Commission or the 
Counselor to carry out the purposes of this subpart and of the laws of 
the United States. \18\
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    \18\ No attorney-client privilege, however, attaches to such 
communications since the Counselors are counsel to the Commission, not 
to the employee. Thus, any evidence of criminal law violations divulged 
by an employee to the Counselor must be reported by the latter to the 
Commission, which may refer the matter to the Criminal Division of the 
Department of Justice and the United States Attorney in whose venue the 
violations lie.
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    (e) Furnishing of conduct regulations. The Director of Human 
Resources shall furnish a copy of this Conduct Regulation to each 
member, employee, and special government employee immediately upon his 
or her entrance on duty and shall thereafter, annually, and at such 
other times as circumstances warrant, bring to the attention of each 
member and employee this Conduct Regulation and all revisions thereof.
    (f) Availability of counseling services. The Director of Human 
Resources shall notify each member, employee, and special government 
employee of the availability of counseling services and of how and where 
these services are

[[Page 307]]

available at the time of entrance on duty and periodically thereafter.

[58 FR 52660, Oct. 12, 1993, as amended at 61 FR 21955, May 13, 1996; 62 
FR 13302, Mar. 20, 1997; 67 FR 5941, Feb. 8, 2002]



PART 141_SALARY OFFSET--Table of Contents



Sec.
141.1 Purpose and scope.
141.2 Definitions.
141.3 Applicability.
141.4 Notice requirements.
141.5 Hearing.
141.6 Written decision.
141.7 Coordinating offset with another Federal agency.
141.8 Procedures for salary offset.
141.9 Refunds.
141.10 Statute of limitations.
141.11 Non-waiver of rights.
141.12 Interest, penalties, and administrative costs.

    Authority: 5 U.S.C. 5514, E.O. 11609 (redesignated E.O. 12197), 5 
CFR part 550, subpart K, and 7 U.S.C. 4a(j), unless otherwise noted.

    Source: 55 FR 5207, Feb. 14, 1990, unless otherwise noted.



Sec.  141.1  Purpose and scope.

    (a) This regulation provides procedures for the collection by 
administrative offset of a federal employee's salary without his/her 
consent to satisfy certain debts owed to the federal government. These 
regulations apply to employees of other federal agencies and current 
employees of the Commission who owe debts to the Commission and to 
current employees of the Commission who owe debts to other federal 
agencies. This regulation does not apply when the employee consents to 
recovery from his/her current pay account.
    (b) This regulation does not apply to debts or claims arising under:
    (1) The Internal Revenue Code of 1954, as amended, 26 U.S.C. 1 et 
seq.;
    (2) The Social Security Act, 42 U.S.C. 301 et seq.;
    (3) The tariff laws of the United States; or
    (4) Any case where a collection of a debt by salary offset is 
explicitly provided for or prohibited by another statute.
    (c) This regulation does not apply to any adjustment to pay arising 
out of an employee's selection of coverage or a change in coverage under 
a federal benefits program requiring periodic deductions from pay if the 
amount to be recovered was accumulated over four pay periods or less.
    (d) This regulation does not preclude the compromise, suspension, or 
termination of collection action where appropriate under the standards 
implementing the Federal Claims Collection Act, 31 U.S.C. 3711 et seq., 
4 CFR parts 101 through 105, 45 CFR part 1177.
    (e) This regulation does not preclude an employee from requesting 
waiver of an overpayment under 5 U.S.C. 5584, 10 U.S.C. 2774 or 32 
U.S.C. 716 or in any way questioning the amount or validity of the debt 
by submitting a subsequent claim to the General Accounting Office in 
accordance with General Accounting Office procedures. This regulation 
does not preclude an employee from requesting a waiver pursuant to other 
statutory provisions applicable to the particular debt being collected. 
Neither the requesting of a waiver nor the filing of a claim with the 
General Accounting Office will affect the amount or validity of the debt 
being collected until a waiver has been granted or the debt has been 
determined to be for an incorrect amount or invalid.
    (f) Matters not addressed in these regulations should be reviewed in 
accordance with the Federal Claims Collection Standards at 4 CFR 101.1 
et seq.



Sec.  141.2  Definitions.

    For the purposes of this part the following definitions will apply:
    Agency means an executive agency as defined at 5 U.S.C. 105 
including the U.S. Postal Service, the U.S. Postal Commission, a 
military department as defined at 5 U.S.C. 102, an agency or court in 
the judicial branch, an agency of the legislative branch including the 
U.S. Senate and House of Representatives and other independent 
establishments that are entities of the Federal government.
    Creditor agency means the agency to which the debt is owed.
    Debt means an amount owed to the United States from sources which 
include loans insured or guaranteed by the United States and all other 
amounts due the United States from fees, leases, rents, royalties, 
services,

[[Page 308]]

sales of real or personal property, overpayments, penalties, damages, 
interests, fines, forfeitures (except those arising under the Uniform 
Code of Military Justice), and all other similar sources.
    Disposable pay means the amount that remains from an employee's 
federal pay after required deductions for social security, federal, 
state or local income tax, health insurance premiums, retirement 
contributions, life insurance premiums, federal employment taxes, and 
any other deductions that are required to be withheld by law.
    Hearing official means an individual responsible for conducting any 
hearing with respect to the existence or amount of a debt claimed, and 
who renders a decision on the basis of such hearing. A hearing official 
shall be an impartial member of the Office of the Executive Director not 
under the supervision or control of the head of the Commission.
    Paying agency means the agency that employs the individual who owes 
the debt and authorizes the payment of his/her current pay.
    Salary offset means an administrative offset to collect a debt 
pursuant to 5 U.S.C. 5514 by deduction(s) at one or more officially 
established pay intervals from the current pay account of an employee 
without his/her consent.



Sec.  141.3  Applicability.

    These regulations are to be followed when:
    (a) The Commission is owed a debt by an individual currently 
employed by another federal agency;
    (b) The Commission is owed a debt by an individual who is a current 
employee of the Commission;
    (c) The Commission employs an individual who owes a debt to another 
federal agency.



Sec.  141.4  Notice requirements.

    (a) Deductions shall not be made unless the employee is provided 
with written notice of the debt at least 30 days before salary offset 
commences.
    (b) The written notice shall contain:
    (1) A statement that the debt is owed and an explanation of its 
nature, and amount;
    (2) The agency's intention to collect the debt by deducting from the 
employee's current disposable pay account;
    (3) The amount, frequency, proposed beginning date, and duration of 
the intended deduction(s);
    (4) An explanation of interest, penalties, and administrative 
charges, including a statement that such charges will be assessed unless 
excused in accordance with the Federal Claims Collections Standards at 4 
CFR 101.1 et seq.;
    (5) The employee's right to inspect, request, and receive a copy of 
government records relating to the debt;
    (6) The opportunity to establish a written schedule for the 
voluntary repayment of the debt;
    (7) The right to a hearing conducted by an impartial hearing 
official;
    (8) The methods and time period for petitioning for hearings;
    (9) A statement that the timely filing of a petition for a hearing 
will stay the commencement of collection proceedings;
    (10) A statement that a final decision on the hearing will be issued 
not later than 60 days after the filing of the petition requesting the 
hearing unless the employee requests and the hearing official grants a 
delay in the proceedings;
    (11) A statement that knowingly false or frivolous statements, 
representations, or evidence may subject the employee to:
    (i) Disciplinary procedures appropriate under chapter 75 of 5 
U.S.C., 5 CFR part 752, or any other applicable statutes or regulations;
    (ii) Penalties under the False Claims Act, 31 U.S.C. 3729-3731, or 
any other applicable statutory authority; or
    (iii) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002 or 
any other applicable statutory authority.
    (12) A statement of other rights and remedies available to the 
employee under statutes or regulations governing the program for which 
the collection is being made; and
    (13) Unless there are contractual or statutory provisions to the 
contrary, a statement that amounts paid on or deducted for the debt 
which are later waived or found not owed to the United States will be 
promptly refunded to the employee.

[[Page 309]]



Sec.  141.5  Hearing.

    (a) Request for hearing. (1) An employee must file a petition for a 
hearing in accordance with the instructions outlined in the Commission's 
notice to offset.
    (2) A hearing may be requested by filing a written petition 
addressed to the Executive Director stating why the employee disputes 
the existence or amount of the debt. The petition for a hearing must be 
received by the Executive Director no later than fifteen (15) calendar 
days after the date of the notice to offset unless the employee can show 
good cause for failing to meet the deadline date.
    (b) Hearing procedures. (1) The hearing will be presided over by an 
impartial hearing official.
    (2) The hearing shall conform to procedures contained in the Federal 
Claims Collection Standards 4 CFR 102.3(c). The burden shall be on the 
employee to demonstrate that the existence or the amount of the debt is 
in error.



Sec.  141.6  Written decision.

    (a) The hearing official shall issue a written opinion no later than 
60 days after the hearing.
    (b) The written opinion will include a statement of the facts 
presented to demonstrate the nature and origin of the alleged debt; the 
hearing official's analysis, findings and conclusions; the amount and 
validity of the debt, and the repayment schedule.



Sec.  141.7  Coordinating offset with another Federal agency.

    (a) The Commission as the creditor agency. When the Commission 
determines that an employee of another federal agency owes a delinquent 
debt to the Commission, the Commission shall as appropriate:
    (1) Arrange for a hearing upon the proper petitioning by the 
employee;
    (2) Certify to the paying agency in writing that the employee owes 
the debt, the amount and basis of the debt, the date on which payment is 
due, the date the Government's right to collect the debt accrued, and 
that Commission regulations for salary offset have been approved by the 
Office of Personnel Management;
    (3) If collection must be made in installments, the Commission must 
advise the paying agency of the amount or percentage of disposable pay 
to be collected in each installment;
    (4) Advise the paying agency of the actions taken under 5 U.S.C. 
5514(b) and provide the dates on which action was taken unless the 
employee has consented to salary offset in writing or signed a statement 
acknowledging that the Commission has complied with the procedures 
required by law. The written consent or acknowledgment must be sent to 
the paying agency;
    (5) If the employee is in the process of separating, the Commission 
must submit its debt claim to the paying agency as provided in this 
part. The paying agency must certify any amounts already collected, 
notify the employee, and send a copy of the certification and notice of 
the employee's separation to the Commission. If the paying agency is 
aware that the employee is entitled to payments from the Civil Service 
Retirement and Disability Fund or similar payments, it must certify to 
the agency responsible for making such payments the amount of the debt 
and that the provisions of 5 CFR 550.1108 have been followed; and
    (6) If the employee has already separated and all payments due from 
the paying agency have been paid, the Commission may request, unless 
otherwise prohibited, that money payable to the employee from the Civil 
Service Retirement and Disability Fund or other similar funds be 
collected by administrative offset.
    (b) The Commission as the paying agency. (1) Upon receipt of a 
properly certified debt claim from another agency, deductions will be 
scheduled to begin at the next established pay interval. The employee 
must receive written notice from the Commission that the Commission has 
received a certified debt claim from the creditor agency, the amount of 
the debt, the date salary offset will begin, and the amount of the 
deduction(s). The Commission shall not review the merits of the creditor 
agency's determination of the validity or the amount of the certified 
claim.
    (2) If the employee transfers to another agency after the creditor 
agency has submitted its debt claim to the

[[Page 310]]

Commission and before the debt is collected completely, the Commission 
must certify the total amount collected. One copy of the certification 
must be furnished to the employee. A copy must be furnished the creditor 
agency with notice of the employee's transfer.



Sec.  141.8  Procedures for salary offset.

    (a) Deductions to liquidate an employee's debt will be by the method 
and in the amount stated in the Commission's notice of intention to 
offset as provided in Sec.  141.4. Debts will be collected in one lump 
sum where possible. If the employee is financially unable to pay in one 
lump sum, collection must be made in installments.
    (b) Debts will be collected by deduction at officially established 
pay intervals from an employee's current pay account unless alternative 
arrangements for repayment are made.
    (c) Installment deductions will be made over a period not greater 
than the anticipated period of employment. The size of installment 
deductions must bear a reasonable relationship to the size of the debt 
and the employee's ability to pay. The deduction for the pay intervals 
for any period must not exceed 15% of disposable pay unless the employee 
has agreed in writing to a deduction of a greater amount.
    (d) Unliquidated debts may be offset against any financial payment 
due to a separated employee including but not limited to final salary or 
leave payments in accordance with 31 U.S.C. 3716.



Sec.  141.9  Refunds.

    (a) The Commission will refund promptly any amounts deducted to 
satisfy debts owed to the Commission when the debt is waived, found not 
owed to the Commission or when directed by an administrative or judicial 
order.
    (b) The creditor agency will promptly return any amounts deducted by 
the Commission to satisfy debts owed to the creditor agency when the 
debt is waived, found not owed, or when directed by an administrative or 
judicial order.
    (c) Unless required by law, refunds under this subsection shall not 
bear interest.



Sec.  141.10  Statute of limitations.

    If a debt has been outstanding for more than 10 years after the 
agency's right to collect the debt first accrued, the agency may not 
collect by salary offset unless facts material to the Government's right 
to collect were not known and could not reasonably have been known by 
the official or officials who were charged with the responsibility for 
discovery and collection of such debts.



Sec.  141.11  Non-waiver of rights.

    An employee's involuntary payment of all or any part of a debt 
collected under these regulations will not be construed as a waiver of 
any rights that employee may have under 5 U.S.C. 5514 or any other 
provision of contract or law unless there are statutes or contract(s) to 
the contrary.



Sec.  141.12  Interest, penalties, and administrative costs.

    Charges may be assessed for interest, penalties, and administrative 
costs in accordance with the Federal Claims Collection Standards, 4 CFR 
102.13.



PART 142_INDEMNIFICATION OF CFTC EMPLOYEES--Table of Contents



Sec.
142.1 Purpose and scope.
142.2 Policy.

    Authority: 7 U.S.C. 4a(j).

    Source: 54 FR 25234, June 14, 1989, unless otherwise noted.



Sec.  142.1  Purpose and scope.

    This part sets forth the policy and procedure with respect to the 
indemnification of Commission employees who are sued in their individual 
capacities and suffer an adverse judgment as a result of conduct taken 
within the scope of employment. (For purposes of this part the term 
Commission employees includes all present and former Commissioners and 
employees of the Commission). This part is intended to provide 
indemnification for adverse

[[Page 311]]

judgments for constitutional and federal statutory torts excepted from 
the Federal Tort Claims Act exclusive remedy provision 28 U.S.C. 2679(b) 
(as amended by the Federal Employees Liability Reform and Tort 
Compensation Act of 1988 (Pub. L. 100-694)). In any lawsuit which is 
filed against the employee alleging a common law tort occurring within 
the scope of employment, the United States may be substituted for the 
individual employee and any liability which may be found will be 
assessed against the government, pursuant to the Federal Employees 
Liability Reform and Tort Compensation Act of 1988.



Sec.  142.2  Policy.

    (a) The Commission may indemnify its employees by the payment of 
available funds, in whole, or in part, for any verdict, judgment or 
other monetary award which is rendered against any employee, provided 
that the conduct giving rise to the verdict, judgment or award was taken 
within the scope of his or her employment with the Commission and that 
such indemnification is in the interest of the United States, as 
determined by the Commission.
    (b) The Commission may settle or compromise a personal damage claim 
against its employee by the payment of available funds, at any time, 
provided the alleged conduct giving rise to the personal damage claim 
was taken within the scope of employment and that such settlement is in 
the interest of the United States as determined by the Commission in its 
discretion.
    (c) Absent exceptional circumstances, as determined by the 
Commission, the Commission will not entertain a request either to agree 
to indemnify or to settle a personal damage claim before entry of an 
adverse verdict, judgment or monetary award.
    (d) When an employee of the Commission becomes aware that an action 
may be or has been filed against the employee in his or her individual 
capacity as a result of conduct taken within the scope of his or her 
employment, the employee should immediately notify the Commission's 
Office of General Counsel that such an action is pending or threatened.
    (e) The employee may thereafter request either (1) indemnification 
to satisfy a verdict, judgment or award entered against the employee or 
(2) payment to satisfy the requirements of a settlement proposal. The 
employee shall submit a written request, with documentation including 
copies of the verdict, judgment, award or settlement proposal, as 
appropriate, to the head of his or her division or office, who thereupon 
shall submit to the General Counsel, in a timely manner, a recommended 
disposition of the request. The General Counsel shall also seek the 
views of the Department of Justice. The General Counsel shall forward 
the request, the division or office's recommendation and the General 
Counsel's recommendation to the Commission for decision.
    (f) Any payment under this section either to indemnify a Commodity 
Futures Trading Commission employee or to settle a personal damage claim 
shall be contingent upon the availability of appropriated funds of the 
Commodity Futures Trading Commission.



PART 143_COLLECTION OF CLAIMS OWED THE UNITED STATES ARISING FROM
ACTIVITIES UNDER THE COMMISSION'S JURISDICTION--Table of Contents



Sec.
143.1 Purpose.

                      Subpart A_General Provisions

143.2 Notice of claim.
143.3 Interest, penalty charges, and administrative costs.
143.4 Collection by offset.
143.5 Collection by compromise.
143.6 Referral for litigation.
143.7 Delegation of authority to the Executive Director.
143.8 Inflation-adjusted civil monetary penalties.

                Subpart B_Administrative Wage Garnishment

143.9 Administrative wage garnishment orders.
143.10 Garnishment hearings.

    Authority: 7 U.S.C. 9, 15, 9a, 12a(5), 13a, 13a-1(d), 13(a), 13b; 31 
U.S.C. 3701-3720E; 28 U.S.C. 2461 note.

[[Page 312]]


    Source: 50 FR 5384, Feb. 8, 1985, unless otherwise noted.



Sec.  143.1  Purpose.

    This part provides procedures that the Commission will use to 
collect debts owed the United States arising from activities under the 
Commission's jurisdiction. As applicable, these procedures are based 
upon, and conform to, the Federal Claims Collection Act, as amended, 31 
U.S.C. 3701-3720E; the Federal Claims Collection Standards, 31 CFR Parts 
900-905, issued by the Department of the Treasury and the Department of 
Justice; administrative wage garnishment regulations issued by the 
Department of the Treasury, 31 CFR 285.11; and other laws applicable to 
the collection of non-tax debts owed to the United States arising from 
activities under the Commission's jurisdiction. Subpart A describes 
procedures for collection by offset against obligations of the United 
States to the debtor, by compromise, and by referral to the Department 
of Justice for litigation. It also sets forth the Commission's policy on 
collecting interest on unpaid claims, the method used in calculating 
such interest, and the maximum inflation-adjusted civil monetary 
penalties that may be assessed and enforced for each violation of the 
Commodity Exchange Act or regulations or orders of the Commission 
promulgated thereunder. Subpart B describes procedures for collection by 
administrative garnishment of the debtor's wages.

[69 FR 52997, Aug. 31, 2004]



                      Subpart A_General Provisions



Sec.  143.2  Notice of claim.

    (a) The Commission will send a written notice to any person who owes 
payment to the United States under this part, stating the basis for the 
claim, the interest, penalties, and administrative costs that may be 
imposed for non-payment, and the date full payment is due.
    (b) If the claim is disputed, the debtor shall respond to the notice 
in writing and state the reasons for non-payment. If the claim is not 
disputed but full payment is not made by the date indicated in the 
notice, the debtor shall state the reasons for the failure to make full 
payment.
    (c) If no response or an unsatisfactory response is received by the 
date indicated in the notice, the Commission may take further action as 
appropriate under the Commodity Exchange Act or regulations thereunder, 
or under 31 CFR parts 900-905 or the Federal Claims Collection Act as 
amended, 31 U.S.C. 3701-3720E.

[50 FR 5384, Feb. 8, 1985, as amended at 69 FR 52997, Aug. 31, 2004]



Sec.  143.3  Interest, penalty charges, and administrative costs.

    (a) The Commission will assess interest on unpaid claims. The rate 
of interest assessed shall be the rate of the current value of funds to 
the U.S. Treasury (i.e., the Treasury tax and loan account rate) as 
prescribed and published by the Secretary of the Treasury. The 
Commission will charge penalty fees of not more than 6 percent per year 
on any portion of a claim that is delinquent for more than 90 days. The 
Commission will also impose actual administrative costs to cover the 
processing and handling of delinquent claims.
    (b) Interest on claims will be charged and will run from the date 
the notice of claim is mailed if the amount of the claim is not paid 
within 30 days from that date. Interest will be calculated only on the 
principal of the claim. The rate of interest charged is the rate in 
effect on the date from which interest begins to run. The rate will 
remain fixed for the duration of the indebtedness.
    (c) The Commission may waive in whole or in part interest, penalty 
charges or administrative costs if it finds that:
    (1) The debtor is unable to pay any significant sum within a 
reasonable period of time;
    (2) Collection of interest or penalty charges jeopardizes collection 
of the principal of the claim; or
    (3) It is in the best interests of the United States.



Sec.  143.4  Collection by offset.

    (a) Whenever feasible, the Commission will collect claims under this 
part by means of administrative offset

[[Page 313]]

against obligations of the United States to the debtor.
    (b) The Commission will notify the debtor in writing of its intent 
to use offset procedures to collect the debt unless the debtor agrees to 
repayment. The notice to the debtor shall include the type and amount of 
the claim and an explanation of the debtor's rights for records and 
review under 31 U.S.C. 3716(a).
    (c) The Commission will seek to coordinate administrative offset 
with other federal agencies in accordance with 4 CFR part 102.



Sec.  143.5  Collection by compromise.

    The Commission may settle claims not exceeding $100,000 (excluding 
interest) by compromise at less than the principal amount of the claim 
if--
    (a) The debtor shows an inability to pay the full amount within a 
reasonable period of time;
    (b) The Government would be unable to enforce collection in full 
through litigation or administrative means within a reasonable period of 
time;
    (c) The cost of collecting the claim in full is not justified by the 
amount of the claim; or
    (d) The Commission's enforcement policy would be served by 
settlement of the claim for less than the full amount.

[50 FR 5384, Feb. 8, 1985, as amended at 57 FR 61292, Dec. 24, 1992]



Sec.  143.6  Referral for litigation.

    Claims that cannot be collected by the Commission under this part or 
for which collection action cannot be ended or suspended under 4 CFR 
part 104 will be referred to the Department of Justice for litigation.



Sec.  143.7  Delegation of authority to the Executive Director.

    (a) The Commission hereby delegates, until such time as the 
Commission orders otherwise, to the Executive Director or to any 
Commission employee under the Executive Director's supervision as he or 
she may designate, authority to take action to carry out subpart A and 
subpart B of this part and the requirements of 31 CFR parts 900-905 and 
31 CFR 285.11.
    (b) Delegated waivers or compromise under this part shall be with 
the concurrence of the General Counsel and the Director of the Division 
of Enforcement or of their respective designees.

[50 FR 5384, Feb. 8, 1985, as amended at 69 FR 52997, Aug. 31, 2004]



Sec.  143.8  Inflation-adjusted civil monetary penalties.

    (a) Statutory inflation adjustment of civil monetary penalties. The 
Inflation Adjustment Act of 1990, as amended, requires annual inflation 
adjustments to the civil monetary penalties imposed under the Commodity 
Exchange Act for violations that occurred on or after November 2, 2015. 
The Commission will publish notice of these adjusted penalty amounts in 
the Federal Register. The inflation adjustment is calculated by 
multiplying the maximum dollar amount of the civil monetary penalty for 
the previous calendar year by the cost-of-living inflation adjustment 
multiplier provided by the Office Management and Budget, which is based 
on the change in the Consumer Price Index, and rounding the total to the 
nearest dollar. Set forth in the charts in paragraph (b) of this section 
are the inflation adjusted penalty amounts for violations occurring on 
or after November 2, 2015 and the penalty amounts for violations that 
occurred prior to November 2, 2015. These penalty charts are also 
available on the Commission's website at: http://www.cftc.gov/
LawRegulation/Enforcement/InflationAdjustedCivilMonetaryPenalties/
index.htm.
    (b) 2020 Inflation adjustment. The maximum amount of each civil 
monetary penalty in the following charts applies to penalties assessed 
after January 15, 2020:
    (1) For non-manipulation or attempted manipulation violations:

[[Page 314]]



                                           Table 1 to Paragraph (b)(1)
----------------------------------------------------------------------------------------------------------------
                                                            Date of violation and corresponding penalty
                                 Civil monetary  ---------------------------------------------------------------
      U.S. Code citation             penalty        10/23/2004      10/23/2008      10/23/2012
                                   description    through 10/22/  through 10/22/  through 11/01/   11/02/2015 to
                                                       2008            2012            2015           present
----------------------------------------------------------------------------------------------------------------
                  Civil Monetary Penalty Imposed by the Commission in an Administrative Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 9 (Section 6(c) of     For any person          $130,000        $130,000        $140,000        $168,142
 the Commodity Exchange Act).    other than a
                                 registered
                                 entity\1\.
7 U.S.C. 13a (Section 6b of     For a registered         625,000         675,000         700,000         926,213
 the Commodity Exchange Act).    entity\1\ or
                                 any of its
                                 directors,
                                 officers or
                                 employees.
----------------------------------------------------------------------------------------------------------------
             Civil Monetary Penalty Imposed by a Federal District Court in a Civil Injunctive Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 13a-1 (Section 6c of   Any Person......         130,000         140,000         140,000         185,242
 the Commodity Exchange Act).
----------------------------------------------------------------------------------------------------------------
\1\ The term ``Registered Entity'' is defined in 7 U.S.C. 1a (Section 1a of the Commodity Exchange Act).

    (2) For manipulation or attempted manipulation violations:

                                           Table 1 to Paragraph (b)(2)
----------------------------------------------------------------------------------------------------------------
                                                            Date of violation and corresponding penalty
                                 Civil monetary  ---------------------------------------------------------------
      U.S. Code citation             penalty        10/23/2004      05/22/2008      08//15/2011
                                   description     through 5/21/   through 8/14/  through 11/01/   11/02/2015 to
                                                       2008            2011            2015           present
----------------------------------------------------------------------------------------------------------------
                  Civil Monetary Penalty Imposed by the Commission in an Administrative Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 9 (Section 6(c) of     For any person          $130,000      $1,000,000      $1,025,000      $1,212,866
 the Commodity Exchange Act).    other than a
                                 registered
                                 entity\1\.
7 U.S.C. 13a (Section 6b of     For a registered         625,000       1,000,000       1,025,000       1,212,866
 the Commodity Exchange Act).    entity\1\ or
                                 any of its
                                 directors,
                                 officers or
                                 employees.
----------------------------------------------------------------------------------------------------------------
             Civil Monetary Penalty Imposed by a Federal District Court in a Civil Injunctive Action
----------------------------------------------------------------------------------------------------------------
7 U.S.C. 13a-1 (Section 6c of   Any Person......        $130,000      $1,000,000      $1,025,000      $1,212,866
 the Commodity Exchange Act).
----------------------------------------------------------------------------------------------------------------
\1\ The term ``Registered Entity'' is defined in 7 U.S.C. 1a (Section 1a of the Commodity Exchange Act).


[83 FR 9428, Mar. 6, 2018, as amended at 84 FR 3104, Feb. 11, 2019; 85 
FR 1749, Jan. 13, 2020]



                Subpart B_Administrative Wage Garnishment

    Source: 69 FR 52997, Aug. 31, 2004, unless otherwise noted.



Sec.  143.9  Administrative wage garnishment orders.

    Whenever an individual owes the United States a delinquent non-tax 
debt arising from activities under the Commission's jurisdiction, the 
Commission, or another federal agency collecting the debt on behalf of 
the Commission, may initiate administrative proceedings to garnish the 
disposable income of the delinquent debtor in accordance with the 
requirements of, and the procedures set forth in, 31 CFR 285.11. The 
Commission's use of other debt-collection measures set forth in subpart 
A of this part does not preclude the initiation of an administrative 
wage garnishment proceeding against a delinquent debtor.



Sec.  143.10  Garnishment hearings.

    Any oral or written hearing required to establish the Commission's 
right to collect a delinquent debt through administrative wage 
garnishment shall be presided over by a hearing official designated by 
the Executive Director,

[[Page 315]]

with the concurrence of the General Counsel or the General Counsel's 
designee. Any qualified and impartial employee of the Commission 
designated by the Executive Director may serve as a hearing official. 
Except as otherwise provided in this section, the hearing shall be 
conducted in accordance with the requirements of, and the procedures set 
forth in, 31 CFR 285.11(f). All documents presented to the hearing 
official for his or her consideration shall be marked as exhibits and 
retained in the record. All testimony given at an oral hearing, either 
in person or by telephone, shall be under oath or affirmation; a 
transcript of the hearing shall be prepared and made part of the record. 
When a debtor requests a hearing, the designated hearing official shall 
hold the hearing and issue his or her written decision within 60 days of 
the Commission's receipt of the request, unless otherwise approved, in 
writing, by the Executive Director.



  PART 144_PROCEDURES REGARDING THE DISCLOSURE OF INFORMATION AND
  THE TESTIMONY OF PRESENT OR FORMER OFFICERS AND EMPLOYEES IN
  RESPONSE TO SUBPOENAS OR OTHER DEMANDS OF A COURT--Table of Contents



Sec.
144.0 Purpose and scope.
144.1 Service upon the Commission.
144.2 Service upon an employee or former employee of the Commission.
144.3 Testimony by present or former Commission employees.
144.4 Production or disclosure of records by present or former 
          employees.
144.5 Procedures when production or disclosure of Commission records or 
          information relating to Commission business is sought.
144.6 Fees.

    Authority: 5 U.S.C. 301; 7 U.S.C. 4a(j) and 12a(5); 31 U.S.C. 9701, 
unless otherwise noted.

    Source: 50 FR 11149, Mar. 20, 1985, unless otherwise noted.



Sec.  144.0  Purpose and scope.

    (a) The regulations in this part set forth procedures to be followed 
with respect to the disclosure, in response to a subpoena, order or 
other demand (collectively ``demand'') of a court or other authority of 
any material contained in the files of the Commission, of any 
information relating to material contained in the files of the 
Commission or any information acquired by any person while such person 
is or was an employee of the Commission as part of the performance of 
that person's official duties or by virtue of that person's official 
status. Employee as used in this part includes both members and 
employees of the Commission. Demand as used in this part does not 
include requests for the production of documents in compliance with Fed. 
R. Civ. P. 34.
    (b) Nothing in this part affects disclosure of information under the 
Freedom of Information Act (FOIA), 5 U.S.C. 552, the Privacy Act, 5 
U.S.C. 552a, the Sunshine Act, 552b, or the Commission's implementing 
regulations in part 145, 17 CFR 145.0, et seq., or pursuant to 
Congressional subpoena or pursuant to other Commission regulation. 
Nothing in this part otherwise permits disclosure of information by the 
Commission except as is provided by statute or other applicable law.
    (c) This part is intended to provide guidance for the internal 
operations of the Commission and is not intended to, does not, and may 
not be relied upon to create any right or benefit, substantive or 
procedural, enforceable at law against the Commission.



Sec.  144.1  Service upon the Commission.

    (a) Subject to paragraph (e) of this section, the Secretary of the 
Commission is the only person authorized to accept service of a demand 
directed to the Commission or to an employee of the Commission for 
documentary information contained in or relating to information 
contained in the files of the Commission.
    (b) Any such demand must be addressed to the Secretary of the 
Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, 
DC 20581.
    (c) In the event that any such demand is attempted to be served upon 
an employee of the Commission other than the Secretary of the 
Commission, unless otherwise directed by the Commission's General 
Counsel, that employee shall respectfully decline to accept service on 
the ground that the employee is without authority to do so.

[[Page 316]]

    (d) The Secretary shall promptly advise the General Counsel of any 
service of any demand, and the General Counsel shall thereafter advise 
the Commission regarding the matter.
    (e) A demand for information contained in the Commission's files 
concerning the registration of persons or entities for which authority 
has been delegated to the National Futures Association must be served 
upon the National Futures Association, 200 West Madison Street, Suite 
1600, Chicago, Illinois 60606, to the attention of the General Counsel.

[50 FR 11149, Mar. 20, 1985, as amended at 60 FR 49335, Sept. 25, 1995]



Sec.  144.2  Service upon an employee or former employee of the
Commission.

    (a) Any employee of the Commission who is served or is attempted to 
be served with a demand of a court or other authority seeking 
information or documents relating to the business of the Commission 
shall promptly advise the General Counsel of the service or attempted 
service of such demand, the nature of the information or documents 
sought by the demand and any circumstances that may bear upon the 
desirability in the public interest of disclosure of the information or 
the production of documents.
    (b) Any former employee of the Commission who is served or is 
attempted to be served with a demand of a court or other authority 
seeking information or documents relating to the business of the 
Commission shall promptly advise the General Counsel of the service or 
the attempted service of such demand, the nature of the information or 
documents sought by the demand and any circumstances that might bear 
upon the desirability in the public interest of the disclosure of the 
information or the production of documents.
    (c) After such further inquiry as appropriate, the General Counsel 
shall advise the Commission concerning the matter.



Sec.  144.3  Testimony by present or former Commission employees.

    (a) In any proceeding to which the Commission is not a party, an 
employee of the Commission shall not testify concerning matters related 
to the business of the Commission unless authorized to do so by the 
Commission upon the advice of the General Counsel.
    (b) In any proceeding, an employee or former employee of the 
Commission shall not testify concerning non-public matters related to 
the business of the Commission unless authorized to do so by the 
Commission upon the advice of the General Counsel. See Sec.  140.735-9 
of these regulations.



Sec.  144.4  Production or disclosure of records by present or
former employees.

    (a) No employee of the Commission shall, in response to a demand by 
a court or other authority or otherwise in any proceeding in which the 
Commission is not a party, produce any material contained in the files 
of the Commission or disclose any information relating to material 
contained in the files of the Commission or disclose any information or 
produce any material acquired as part of the performance of the 
employee's official duties or by virtue of the employee's official 
status unless authorized to do so by the Commission, provided that 
Commission authorization shall not be required to comply with a demand 
solely for Commission documents generally available to the public. In 
litigation in which the Commission is a party no employee may produce 
any confidential Commission material without Commission authorization.
    (b) No former employee of the Commission shall, in response to a 
demand by a court or other authority or otherwise in any proceeding in 
which the Commission is not a party, produce without Commission 
authorization any material contained in or from the files of the 
Commission acquired as part of the performance of the former employee's 
official duties while employed by the Commission. No former employee may 
in any litigation produce confidential material acquired as part of the 
performance of the former employee's official duties while employed by 
the Commission unless authorized to do so by the Commission.

[[Page 317]]



Sec.  144.5  Procedures when production or disclosure of Commission
records or information relating to Commission business is sought.

    (a) If in any proceeding oral testimony of an employee or former 
employee of the Commission is sought concerning matters related to the 
business of the Commission, an affidavit or, if that is not feasible, a 
signed statement by the party seeking the testimony or by his attorney, 
setting forth with particularity a summary of the testimony sought and 
its relevance to the proceeding, must be furnished to the Commission's 
General Counsel at the Commission's office in Washington, DC. When 
authorization by the Commission is required, any authorization shall be 
limited to the scope of the demand as summarized in such statement.
    (b) If a response to a demand by a court or other authority is 
required before instructions from the Commission are received, and 
Commission authorization is required, a Commission attorney shall be 
designated by the General Counsel to appear and to inform the court or 
other authority of these regulations and that the subpoena or demand has 
been referred for prompt consideration by the Commission. The Commission 
attorney shall request a stay of the demand pending receipt of 
instructions.
    (c) In the event that the court or other authority declines to stay 
the effect of the demand pending receipt of instructions or in the event 
that the court rules that there must be compliance with the demand 
irrespective of instructions not to produce the material or disclose the 
information sought, the Commission employee or former employee upon whom 
the demand has been made shall respectfully decline to comply with the 
demand.



Sec.  144.6  Fees.

    The provisions of Sec.  145.8 of these regulations with respect to 
fees for production of documents pursuant to the FOIA are applicable to 
this part.



PART 145_COMMISSION RECORDS AND INFORMATION--Table of Contents



Sec.
145.0 Definitions.
145.1 Information published in the Federal Register.
145.2 Records available for public inspection and copying; documents 
          published and indexed.
145.3 [Reserved]
145.4 Public records available with identifying details deleted; 
          nonpublic records available in abridged or summary form.
145.5 Disclosure of nonpublic records.
145.6 Commission offices to contact for assistance; registration records 
          available.
145.7 Requests for Commission records and copies thereof.
145.8 Fees for records services.
145.9 Petition for confidential treatment of information submitted to 
          the Commission.

Appendix A to Part 145--Compilation of Commission Records Available to 
          the Public
Appendix B to Part 145--Schedule of Fees
Appendix C to Part 145 [Reserved]

    Authority: Pub. L. 99-570, 100 Stat. 3207; Pub. L. 89-554, 80 Stat. 
383; Pub. L. 90-23, 81 Stat. 54; Pub. L. 98-502, 88 Stat. 1561-1564 (5 
U.S.C. 552); Sec. 101(a), Pub. L. 93-463, 88 Stat. 1389 (5 U.S.C. 
4a(j)); Pub. L. 114-185, 130 Stat. 538; unless otherwise noted.
    Section 145.5 is also issued under 5 U.S.C. 552, 5 U.S.C. 552b, and 
secs. 2(a)(11), 4b, 4f, 4g, 5a, 8a, and 17 of the Commodity Exchange 
Act, 7 U.S.C. 2, 4a(j), 6b, 6f, 6g, 7a, 12a, and 21, as amended, 92 
Stat. 865 et seq.; secs. 2(a)(1), 4c(a)-(d), 4d, 4f, 4g, 4k, 4m, 4n, 8a, 
15 and 17, Commodity Exchange Act (7 U.S.C. 2, 4, 6c(a)-(d), 6f, 6g, 6k, 
6m, 6n, 12a, 19 and 21; 5 U.S.C. 552 and 552b); secs. 2(a)(11) and 8 of 
the Commodity Exchange Act, 7 U.S.C. 4(j) and 12 (1983); secs. 8a(5) and 
19 of the Commodity Exchange Act, as amended, 7 U.S.C. 12a(5) and 23 
(1982); 5 U.S.C. 552 and 552b.
    Section 145.6 is also issued under 7 U.S.C. 2, 4, 6, and 12; secs. 
2(a)(1), 4c, 4d, 4e, 4f, 4k, 4m, 4n, 4p, 8, 8a and 19 of the Commodity 
Exchange Act (7 U.S.C. 2 and 4, 6c, 6d, 6e, 6f, 6k, 6m, 6n, 6p, 12, 12a 
and 23 (1982)); 5 U.S.C. 552 and 552b.
    Section 145.8 is also issued under 7 U.S.C. 4a(j) and 16a as amended 
by Pub. L. 97-444, 96 Stat. 2294 (1983), and 5 U.S.C. 552, 552a and 
552b.



Sec.  145.0  Definitions.

    For the purposes of part 145 the following definitions are 
applicable:

[[Page 318]]

    (a) Compliance staff--refers to the FOI Compliance Staff of the 
Office of General Counsel at the Commission's principal office in 
Washington, DC assigned to respond to requests for information and to 
handle various other matters under the Freedom of Information Act.
    (b) Public records--in addition to the records described in Sec.  
145.1 (material published in the Federal Register) and in Sec.  145.2 
(records required to be made publicly available under the Freedom of 
Information Act), includes those records that have been determined by 
the Commission to be generally available to the public directly upon 
oral or written request from the Commission office or division 
responsible for the maintenance of such records. A compilation of 
Commission records routinely available to the public upon request 
appears in appendix A to this part 145.
    (c) Nonpublic records--are records not identified in Sec.  145.1, 
Sec.  145.2, or appendix A of this part 145. Nonpublic records must be 
requested, in writing, in accordance with the provisions of Sec.  145.7.
    (d) Record--is any information or agency record maintained by the 
Commission in any format, including an electronic format. It includes 
any document, writing, photograph, sound or magnetic recording, 
videotape, microfiche, drawing, or computer-stored information or output 
in the possession of the Commission. The term ``record'' does not 
include personal convenience materials over which the Commission has no 
control, such as appointment calendars and handwritten notes, which may 
be retained or destroyed at an employee's discretion.

[82 FR 28003, June 20, 2017]



Sec.  145.1  Information published in the Federal Register.

    Except as provided in Sec.  145.5, pertaining to nonpublic matters, 
the following materials shall be published in the Federal Register for 
the guidance of the public:
    (a) Description of the Commission's central and field organization 
and the established place at which, the employees from whom, and the 
methods whereby the public may obtain information, make submittals or 
requests, or obtain decisions;
    (b) Statements of the general course and method by which the 
Commission's functions are channeled and determined, including the 
nature and requirements of all formal and informal procedures available;
    (c) Rules of procedure, descriptions of forms available or the 
places at which forms may be obtained, and instructions as to the scope 
and contents of all papers, reports, or examinations;
    (d) Substantive rules of general applicability adopted as authorized 
by law, and statements of general policy or interpretations of general 
applicability formulated and adopted by the Commission; and
    (e) Each amendment, revision, or repeal of the foregoing.

[41 FR 16290, Apr. 16, 1976]



Sec.  145.2  Records available for public inspection and copying;
documents published and indexed.

    Except as provided in Sec.  145.5, pertaining to nonpublic matters, 
and in addition to those documents listed in appendix A to part 145, 
Compilation of Commission Records Available to the Public, the following 
materials are available for public inspection and copying during normal 
business hours at the Commission's Public Reading Room, located at the 
principal office of the Commission in Washington, DC and at the regional 
offices of the Commission:
    (a) A guide for requesting records or publicly available information 
from the Commission which includes:
    (1) An index of all publicly available information of the 
Commission;
    (2) A description of major information and record locator systems;
    (3) Guidance for obtaining various types and categories of public 
information from the Commission;
    (b) Final opinions and orders of the Commission in the adjudication 
of cases, including concurring and dissenting opinions;
    (c) Statements of policy and interpretations which have been adopted 
by the Commission and are not published in the Federal Register;
    (d) Records released in response to FOIA requests that have been, or 
the Commission anticipates will be, the subject of additional FOIA 
requests;

[[Page 319]]

    (e) Administrative manuals and instructions that affect the public; 
and
    (f) Indices providing identifying information to the public as to 
the materials made available pursuant to paragraphs (a) through (e) of 
this section.

[62 FR 17069, Apr. 9, 1997]



Sec.  145.3  [Reserved]



Sec.  145.4  Public records available with identifying details deleted;
nonpublic records available in abridged or summary form.

    (a) To the extent required to prevent a clearly unwarranted invasion 
of personal privacy, the Commission may delete identifying details when 
it makes available ``public records'' as defined in Sec.  145.0(b). In 
such instances, the Commission shall explain the justification for the 
deletion fully in writing.
    (b) Certain ``nonpublic records,'' as defined in Sec.  145.0(c), 
may, as authorized by the Commission, be made available for public 
inspection and copying in an abridged or summary form, with identifying 
details deleted.

[51 FR 26869, July 28, 1986, as amended at 82 FR 28003, June 20, 2017]



Sec.  145.5  Disclosure of nonpublic records.

    The Commission shall withhold information in ``nonpublic records,'' 
as defined in Sec.  145.0(c), only if the Commission reasonably foresees 
that disclosure would harm an interest protected by an exemption 
described in paragraphs (a) through (i) of this section, or if 
disclosure is prohibited by law. The Commission shall consider whether 
partial disclosure of information is possible whenever the Commission 
determines that a full disclosure of the requested record is not 
possible. The Commission shall take reasonable steps necessary to 
segregate and release nonexempt information in ``nonpublic records'' 
subject to a request under Sec.  145.7 if those portions do not fall 
within an exemption described in paragraphs (a) through (i) of this 
section.
    (a)(1) Specifically authorized under criteria established by an 
executive order to be kept secret in the interest of national defense or 
foreign policy, and (2) are in fact properly classified pursuant to such 
executive order;
    (b) Related solely to the internal personnel rules and practices of 
the Commission or any other agency of the Government of the United 
States, including operation rules, guidelines, and manuals of procedure 
for investigators, auditors, and other employees (other than those rules 
and practices which establish legal requirements to which members of the 
public are expected to conform);
    (c) Specifically exempted from disclosure by statute, including:
    (1) Data and information which would separately disclose the 
business transactions or market positions of any person and trade 
secrets or names of customers; and
    (2) Any data or information concerning or obtained in connection 
with any pending investigation of any person;
    (d) Trade secrets and commercial or financial information obtained 
from a person and privileged or confidential, including, but not limited 
to:
    (1)(i) Reports of stocks of grain, such as Forms 38, 38C, 38M and 
38T required to be filed pursuant to 17 CFR 1.44;
    (ii) Statements of reporting traders on Form 40 required to be filed 
pursuant to 17 CFR 18.04;
    (iii) Statements concerning special calls on positions required to 
be filed pursuant to 17 CFR part 21;
    (iv) Statements concerning identification of special accounts on 
Form 102 required to be filed pursuant to 17 CFR 17.01;
    (v) Reports required to be filed pursuant to parts 15 through 21 of 
this chapter;
    (vi) Reports concerning option positions of large traders required 
to be filed pursuant to part 16 of this chapter;
    (vii) Form 188; and
    (viii) The following reports and statements that are also set forth 
in paragraph (h) of this section, except as specified in 17 CFR 
1.10(g)(2) or 17 CFR 31.13(m): Forms 1-FR required to be filed pursuant 
to 17 CFR 1.10; FOCUS reports that are filed in lieu of Forms 1-FR 
pursuant to 17 CFR 1.10(h); Forms 2-FR required to be filed pursuant to 
17 CFR 31.13; the accountant's report on

[[Page 320]]

material inadequacies filed in accordance with 17 CFR 1.16(c)(5); all 
reports and statements required to be filed pursuant to 17 CFR 
1.17(c)(6); and
    (A)(1) The following portions of Form CPO-PQR required to be filed 
pursuant to 17 CFR 4.27: Schedule A: Question 2, subparts (b) and (d); 
Question 3, subparts (g) and (h); Question 9; Question 10, subparts (b), 
(c), (d), (e), and (g); Question 11; Question 12; and Schedules B and C;
    (2) The following portions of Form CTA-PR required to be filed 
pursuant to 17 CFR 4.27: Question 2, subparts (c) and (d);
    (2) Information contained in reports, summaries, analyses, 
transcripts, letters or memoranda arising out of, in anticipation of or 
in connection with an examination or inspection of the books and records 
of any person or any other formal or informal inquiry or investigation; 
and
    (3) Information for which confidential treatment has been requested 
and granted in accordance with Sec.  145.9;
    (e) Inter-agency or intra-agency memoranda or letters, except those 
which by law would routinely be made available to a party other than an 
agency in litigation with the Commission. Exemption 5 (5 U.S.C. 
552(b)(5)) protects inter-agency or intra-agency communications that are 
protected by legal privileges, such as the attorney-client privilege, 
the attorney work-product privilege, and the deliberative process 
privilege. The deliberative process privilege shall not apply to records 
created 25 years or more before the date on which the records were 
requested.
    (f) Personnel files, medical files and similar files the disclosure 
of which would constitute a clearly unwarranted invasion of personal 
privacy, including but not limited to, information of that character 
contained in:
    (1) Files concerning employees of the Commission;
    (2) Files concerning persons subject to regulation by the 
Commission, including files with respect to applications for 
registration and biographical supplements submitted with such 
applications. Examples of the information on the applications and 
biographical supplements which may be protected are an individual's home 
address and telephone number, social security number, date and place of 
birth, fingerprints and, in appropriate cases, the information 
concerning prior arrests, indictments, criminal convictions or other 
judgments or sanctions imposed by State or Federal courts or regulatory 
authorities;
    (3) Files concerning information for which confidential treatment 
has been requested and granted in accordance with Sec.  145.9;
    (g) Records or information compiled for law enforcement purposes to 
the extent that the production of such records or information:
    (1) Could reasonably be expected to interfere with enforcement 
activities undertaken or likely to be undertaken by the Commission or 
any other authority including, but not limited to, the Department of 
Justice or any United States Attorney or any Federal, State, local, or 
foreign governmental authority or any futures or securities industry 
self-regulatory organization;
    (2) Would deprive a person of a right to a fair trail or an 
impartial adjudication;
    (3) Could reasonably be expected to constitute an unwarranted 
invasion of personal privacy;
    (4) Could reasonably be expected to disclose the identity of a 
confidential source including a State, local or foreign agency or 
authority or any private institution which furnished information on a 
confidential basis and, in the case of a record or information compiled 
by a criminal law enforcement authority in the course of a criminal 
investigation or by an agency conducting a lawful national security 
intelligence investigation, information furnished by a confidential 
source;
    (5) Would disclose techniques or procedures or would disclose 
guidelines for law enforcement investigations or prosecutions if such 
disclosure could reasonably be expected to risk circumvention of the 
law; or
    (6) Could reasonably be expected to endanger the life or physical 
safety of any individual.
    (h) Contained in or related to examinations, operating, or condition 
reports prepared by, on behalf of, or for the use of the Commission or 
any other agency

[[Page 321]]

responsible for the regulation or supervision of financial institutions, 
including, but not limited to the following reports and statements that 
are also set forth in paragraph (d)(1)(viii) of this section, except as 
specified in 17 CFR 1.10(g)(2) and 17 CFR 31.13(m): Forms 1-FR required 
to be filed pursuant to 17 CFR 1.10; FOCUS reports that are filed in 
lieu of Forms 1-FR pursuant to 17 CFR 1.10(h); Forms 2-FR required to be 
filed pursuant to 17 CFR 31.13; the accountant's report on material 
inadequacies filed in accordance with 17 CFR 1.16(c)(5); all reports and 
statements required to be filed pursuant to 17 CFR 1.17(c)(6); and
    (1) The following portions of Form CPO-PQR required to be filed 
pursuant to 17 CFR 4.27: Schedule A: Question 2, subparts (b) and (d); 
Question 3, subparts (g) and (h); Question 9; Question 10, subparts (b), 
(c), (d), (e), and (g); Question 11; Question 12; and Question 13; and 
Schedules B and C;
    (2) The following portions of Form CTA-PR required to be filed 
pursuant to 17 CFR 4.27: Question 2, subparts (c) and (d); and
    (i) Geological and geophysical information and data, including maps, 
concerning wells.

(5 U.S.C. 552, 5 U.S.C. 552b, and secs. 2(a)(11), 4b, 4f, 4g, 5a, 8a, 
and 17 of the Commodity Exchange Act, 7 U.S.C. 2, 4a(j), 6b, 6f, 6g, 7a, 
12a, and 21, as amended, 92 Stat. 865 et seq.; secs. 2(a)(1), 4c(a)-(d), 
4d, 4f, 4g, 4k, 4m, 4n, 8a, 15 and 17, Commodity Exchange Act (7 U.S.C. 
2, 4, 6c(a)-(d), 6f, 6g, 6k, 6m, 6n, 12a, 19 and 21; 5 U.S.C. 552 and 
552b); secs. 2(a)(11) and 8 of the Commodity Exchange Act, 7 U.S.C. 4(j) 
and 12 (1983); secs. 8a(5) and 19 of the Commodity Exchange Act, as 
amended, 7 U.S.C. 12a(5) and 23 (1982); 5 U.S.C. 552 and 552b)

[41 FR 16290, Apr. 16, 1976, as amended at 44 FR 13458, Mar. 12, 1979; 
45 FR 2023, Jan. 10, 1980; 46 FR 24943, May 4, 1981; 46 FR 54534, Nov. 
3, 1981; 48 FR 35303, Aug. 3, 1983; 49 FR 4464, Feb. 7, 1984; 49 FR 
5541, Feb. 13, 1984; 51 FR 26870, July 28, 1986; 53 FR 4613, Feb. 17, 
1988; 54 FR 41084, Oct. 5, 1989; 62 FR 4642, Jan. 31, 1997; 64 FR 25, 
Jan. 4, 1999; 71 FR 5595, Feb. 2, 2006; 75 FR 55449, Sept. 10, 2010; 77 
FR 11342, Feb. 24, 2012; 82 FR 28003, June 20, 2017]



Sec.  145.6  Commission offices to contact for assistance; registration
records available.

    (a) All requests for non-public records shall be made in writing and 
shall be addressed or otherwise directed to the Office of General 
Counsel, Commodity Futures Trading Commission, Three Lafayette Centre, 
1155 21st Street NW., Washington, DC 20581. Requests for public records 
directed to a regional office of the Commission pursuant to Sec.  145.2 
should be sent to:

Commodity Futures Trading Commission, 140 Broadway, 19th Floor, New 
York, New York 10005, Telephone: (646) 746-9700.
Commodity Futures Trading Commission, 525 West Monroe Street, Suite 
1100, Chicago, Illinois 60661, Telephone: (312) 596-0700.
Commodity Futures Trading Commission, 4900 Main Street, Suite 500, 
Kansas City, Missouri 64112, Telephone: (816) 960-7700.

    (b)(1) The publicly available portions of Form 7-R (application for 
registration as a futures commission merchant, introducing broker, 
commodity trading advisor, commodity pool operator or leverage 
transaction merchant), Form 8-R (application for registration as an 
associated person, floor broker, floor trader and biographical 
supplement to application on Form 7-R), Form 3-R (changes and 
corrections; multiple associations) Form 8-S (certificate of special 
registration), Form 8-T (notice of termination), Form 7-W (withdrawal 
from firm registration) and Form 8-W (withdrawal from floor broker or 
floor trader registration) will be available for public inspection and 
copying. Such registration forms will be available in the offices of the 
National Futures Association, 200 West Madison Street, Chicago, Illinois 
60606. Telephone: (312) 781-1300.
    (2) The fingerprint card and any supplementary attachments filed in 
response to:
    (i) Items 6-9, 14-21, the ``Personal Information,'' or the 
``Disciplinary Information'' sections on Form 8-R;
    (ii) Item 3 on Form 8-S;
    (iii) Items 3-5, 9-11, the ``Withdrawal Reasons,'' the 
``Disciplinary Information,'' or the ``Matter Information'' sections on 
Form 8-T;
    (iv) Items 9-10 on Form 7-R;
    (v) Item 7 and the ``Additional Customer Information'' section on 
Form 7-W; and
    (vi) Item 7 on Form 8-W generally will not be available for public 
inspection and copying unless such disclosure

[[Page 322]]

is required under the Freedom of Information Act. Changes or corrections 
to those items reported on Form 3-R will be treated similarly. When such 
fingerprint cards or supplementary attachments are on file, the FOI, 
Privacy and Sunshine Acts compliance staff will decide any request for 
access in accordance with the procedures set forth in Sec. Sec.  145.7 
and 145.9.

(7 U.S.C. 2, 4, 6, and 12; secs. 2(a)(1), 4c, 4d, 4e, 4f, 4k, 4m, 4n, 
4p, 8, 8a and 19 of the Commodity Exchange Act (7 U.S.C. 2 and 4, 6c, 
6d, 6e, 6f, 6k, 6m, 6n, 6p, 12, 12a and 23 (1982)); 5 U.S.C. 552 and 
552b)

[49 FR 39534, Oct. 9, 1984, and 51 FR 26870, July 28, 1986, as amended 
at 53 FR 8435, Mar. 15, 1988; 54 FR 19886, May 9, 1989; 57 FR 29203, 
July 1, 1992; 58 FR 19597, Apr. 15, 1993; 60 FR 49335, Sept. 25, 1995; 
64 FR 26, Jan. 4, 1999; 67 FR 62353, Oct. 7, 2002; 67 FR 63539, Oct. 15, 
2002; 69 FR 41426, July 9, 2004; 72 FR 16269, Apr. 4, 2007; 82 FR 28003, 
June 20, 2017]



Sec.  145.7  Requests for Commission records and copies thereof.

    Requests for Commission records and copies thereof shall specify the 
preferred form or format (including electronic formats) of the response. 
The Commission will accommodate requesters as to form or format if the 
record is readily available in that form or format. When requesters do 
not specify the form or format of the response, the Commission will 
respond in the form or format in which the document is most accessible 
to the Commission.
    (a) Public inquiries and inspection of public records. Information 
concerning the nature and extent of available public records may be 
obtained in person, by telephone, via Internet (http://www.cftc.gov), or 
by writing to the Commission offices designated in Sec. Sec.  145.2 and 
145.6.
    (b) Requests for nonpublic records. Except as provided in paragraph 
(a) of this section with respect to public records, all requests for 
records maintained by the Commission shall be in writing, shall be 
addressed to the Office of General Counsel of the Commission and shall 
be clearly marked ``Freedom of Information Act Request.''
    (c) Misdirected written requests. The Commission cannot ensure that 
a timely or satisfactory response will be given to requests for records 
that are directed to the Commission other than in the manner prescribed 
in paragraph (b) of this section. Any misdirected written request for 
nonpublic records should be promptly forwarded to the Office of General 
Counsel of the Commission. Misdirected requests for nonpublic records 
will be considered to have been received for purposes of this section 
only when they actually have been received by the Office of General 
Counsel.
    (d) Description of requested records. Each written request for 
Commission records made under paragraph (b) of this section shall 
reasonably describe the records sought with sufficient specificity to 
permit the records to be located among the records maintained by or for 
the Commission. The Commission staff may communicate with the requester 
(by telephone when practicable) in an effort to reduce the 
administrative burden of processing a broad request and to minimize fees 
for copying and search services.
    (e) Description of requester and intended use of requested records. 
In each request for records, requesters shall reasonable identify 
themselves as a commercial user, educational institution, noncommercial 
scientific institution, or representative of the news media if one of 
these categories is applicable. The requester shall describe the use to 
which the records will be put.
    (f) Request for existing records. The Commission's response to a 
request for nonpublic records will encompass all nonpublic records 
identifiable as responsive to the request that are in existence on the 
date that the written request is received by the Office of General 
Counsel. The Commission need not create a new record in response to a 
FOIA request.
    (g) Fee agreement. A request for copies of records pursuant to 
paragraph (b) of this section must indicate the requester's agreement to 
pay all fees that are associated with the processing of the request, in 
accordance with the rates set forth in appendix B to this part, or the 
requester's intention to limit the fees incurred to a stated amount. If 
the requester states a fee limitation, no work will be done that will 
result in

[[Page 323]]

fees beyond the stated amount. A requester who seeks a waiver or 
reduction of fees pursuant to paragraph (b) of appendix B of this part 
must show that such a waiver or reduction would be in the public 
interest. If the Office of General Counsel receives a request for 
records under paragraph (b) of this section from a requester who has not 
paid fees from a previous request in accordance with appendix B of this 
part, the staff will decline to process the request until such fees have 
been paid.
    (h) Initial determination, denials. (1) With respect to any request 
for nonpublic records as defined in Sec.  145.0(c), the Compliance Staff 
of the Commission will forward the request to the Commission divisions 
or offices likely to maintain records that are responsive to the 
request. If a responsive record is located, the Compliance Staff will, 
in consultation with the Commission office in which the record was 
located, determine whether to comply with such request. The Compliance 
Staff may, in their discretion, determine whether to comply with any 
portion of a request for nonpublic records before considering the 
remainder of the request. The Compliance Staff will inform the requester 
of the availability of the Commission's FOIA Public Liaison to offer 
assistance.
    (2) Where it is determined to deny, in whole or in part, a request 
for nonpublic records, the Compliance Staff will notify the requester of 
the denial, citing applicable exemptions of the Freedom of Information 
Act or other provisions of law that require or allow the records to be 
withheld. The Compliance Staff's response to the FOIA request should 
describe in general terms what categories of documents are being 
withheld under which applicable FOIA exemption or exemptions. The 
Compliance Staff's response will include a statement notifying the 
requester of the right to seek dispute resolution services from the 
Commission's FOIA Public Liaison and the National Archives and Records 
Administration's Office of Government Information Services. The 
Compliance Staff, in denying an initial request for records, is not 
required to provide the requester with an inventory of those documents 
determined to be exempt from disclosure.
    (3) The Compliance Staff will issue an initial determination with 
respect to a FOIA request within twenty business days after receipt by 
the Office of General Counsel. In unusual circumstances, as defined in 
this paragraph, the prescribed time limit may be extended by written 
notice to the person making a request for a record or a copy. The notice 
shall set forth the reasons for the extension and the date on which a 
determination is expected to be dispatched. Where the extension exceeds 
ten business days, the Compliance Staff will provide the requester with 
an opportunity to modify the request or arrange an alternative time 
period for processing the original or modified request. The Compliance 
Staff or the FOIA Public Liaison is available to assist the requester in 
unusual circumstances. The Compliance Staff will notify the requester of 
the right to seek dispute resolution services from the Office of 
Government Information Services. As used in this paragraph, ``unusual 
circumstances'' means, but only to the extent reasonably necessary to 
the proper processing of a particular request:
    (i) The need to search for and collect the requested records from 
field facilities or other establishments that are separate from the 
office processing the request;
    (ii) The need to search for, collect, and appropriately examine a 
voluminous amount of separate and distinct records which are demanded in 
a single request;
    (iii) The need for consultation, which shall be conducted with all 
practicable speed, with another agency having a substantial interest in 
the determination of the request or among two or more components in the 
Commission having substantial subject matter interest therein;
    (iv) The need to coordinate a response with several Commission 
offices;
    (v) The need to obtain records currently being used by members of 
the Commission, the Commission staff, or the public;

[[Page 324]]

    (vi) The need to respond to a large number of previously-filed FOIA 
requests.
    (i) Administrative review. (1) Any person who has been notified 
pursuant to paragraph (g) of this section that his request for records 
has been denied in whole or in part may file an application for review 
as set forth below.
    (2) An application for review must be received by the Office of 
General Counsel within 90 days of the date of the denial by the 
Compliance Staff. This 90-day period shall not begin to run until the 
Compliance Staff has issued an initial determination with respect to all 
portions of the request for nonpublic records. An application for review 
shall be in writing and shall be marked ``Freedom of Information Act 
Appeal'' and be sent to the Commission's Office of General Counsel. If 
the appeal involves information as to which the FOIA requester has 
received a detailed written justification of a request for confidential 
treatment pursuant to Sec.  145.9(e), the requester must also serve a 
copy of the appeal on the submitter of the information.
    (3) The applicant must attach to the application for review a copy 
of all correspondence relevant to the request, i.e., the initial 
request, any correspondence amending or modifying the request, and all 
correspondence from the staff responding to the request.
    (4) The application for review shall state such facts and cite such 
legal or other authorities as the applicant may consider appropriate. 
The application may, in addition, include a description of the general 
benefit to the public from disclosure of that information.
    (5) If the appeal involves information that is subject to a petition 
for confidential treatment filed under Sec.  145.9, the submitter of the 
information shall have an opportunity to respond in writing to the 
appeal within 10 business days of the date of filing the appeal. Any 
response shall be sent to the Commission's Office of General Counsel. 
Copies shall be sent to the person requesting the information.
    (6) The General Counsel, or his or her designee, shall have the 
authority to consider all appeals under this section from initial 
determinations of the Compliance Staff of the Commission. The General 
Counsel, or his or her designee, may:
    (i) Determine either to affirm or to reverse the initial 
determination in whole or in part;
    (ii) Determine to disclose a record, even if exempt, if good cause 
for doing so either is shown by the application or otherwise appears;
    (iii) Remand the matter to the Compliance Staff--
    (A) To correct a deficiency in the initial processing of the 
request, or
    (B) When an investigation as to which the staff originally claimed 
exemption from mandatory disclosure on the basis of 5 U.S.C. 
555(b)(7)(A) or 7 U.S.C. 12(a) is subsequently closed; or
    (iv) Refer the matter to the Commission for a decision.
    (7) If the initial denial of the request for nonpublic records is 
reversed, the Office of General Counsel shall, in writing, advise the 
requester that the records will be available on or after a specified 
date. If, on appeal, the denial of access to a record is affirmed in 
whole or in part, the person who requested the information shall be 
notified in writing of:
    (i) The reasons for the denial,
    (ii) The mediation services offered by the Office of Government 
Information Services as a non-exclusive alternative to litigation, and
    (iii) The provisions of 5 U.S.C. 552(a)(4) providing for judicial 
review of a determination to withhold records.
    (j) Expedited processing. A request may be given expedited 
processing if the requester demonstrates a compelling need for the 
requested records. For purposes of this provision, the term ``compelling 
need'' means: That a failure to obtain requested records on an expedited 
basis could reasonably be expected to pose an imminent threat to the 
life or physical safety of an individual; or with respect to a request 
made by a person primarily engaged in disseminating information, urgency 
to inform the public concerning actual or alleged federal government 
activity. A requester who seeks expedited processing must demonstrate a 
compelling need by submitting a statement that is certified by the 
requester to be true and correct to the best of that person's knowledge 
and belief. The Compliance

[[Page 325]]

Staff will determine whether to provide expedited processing, and notice 
of the determination will be provided to requester, within ten days 
after the date of the request. If the request for expedited processing 
is denied, the requester may file an appeal with the Office of General 
Counsel within ten days of the date of the denial by the Compliance 
Staff. The Office of General Counsel will respond to the appeal within 
ten days after the date of the appeal.

[51 FR 26870, July 28, 1986, as amended at 52 FR 19307, May 22, 1987; 62 
FR 17069, Apr. 9, 1997; 69 FR 67507, Nov. 18, 2004; 82 FR 28003, June 
20, 2017]



Sec.  145.8  Fees for records services.

    A schedule of fees for record services, including locating, and 
making records available, and copying, appears in appendix B to this 
part. Copies of the schedule of fees may also be obtained upon request 
made in person, by telephone or by mail from the Compliance Staff or at 
any regional office of the Commission.

[82 FR 28005, June 20, 2017]



Sec.  145.9  Petition for confidential treatment of information 
submitted to the Commission.

    (a) Purpose. This section provides a procedure by which persons 
submitting information in any form to the Commission can request that 
the information not be disclosed pursuant to a request under the Freedom 
of Information Act, 5 U.S.C. 552. This section does not affect the 
Commission's right, authority, or obligation to disclose information in 
any other context.
    (b) Scope. The provisions of this section shall apply only where the 
Commission has not specified that an alternative procedure be utilized 
in connection with a particular study, report, investigation, or other 
matter. See 40.8 for procedures to be utilized in connection with filing 
information required to be filed pursuant to 17 CFR parts 40 and 41.
    (c) Definitions. The following definitions apply to this section:
    (1) Submitter. A ``submitter'' is any person who submits any 
information or material to the Commission or who permits any information 
or material to be submitted to the Commission. For purposes of paragraph 
(d)(1)(ii) of this section only, ``submitter'' includes any person whose 
information has been submitted to a designated contract market, 
derivatives clearing organization, swap execution facility, swap data 
repository or registered futures association that in turn has submitted 
the information to the Commission.
    (2) FOIA requester. A ``FOIA requester'' is any person who files 
with the Commission a request to inspect or copy Commission records or 
documents pursuant to the Freedom of Information Act, 5 U.S.C. 552.
    (d) Written request for confidential treatment. (1) Any submitter 
may request in writing that the Commission afford confidential treatment 
under the Freedom of Information Act to any information that he or she 
submits to the Commission. Except as provided in paragraph (d)(4) of 
this section, no oral requests for confidential treatment will be 
accepted by the Commission. The submitter shall specify the grounds on 
which confidential treatment is being requested but need not provide a 
detailed written justification of the request unless required to do so 
under paragraph (e) of this section. Confidential treatment may be 
requested only on the grounds that disclosure:
    (i) Is specifically exempted by a statute that either requires that 
the matters be withheld from the public in such manner as to leave no 
discretion on the issue or establishes particular criteria for 
withholding or refers to particular types of matters to be withheld.
    (ii) Would reveal the submitter's trade secrets or confidential 
commercial or financial information.
    (iii) Would constitute a clearly unwarranted invasion of the 
submitter's personal privacy.
    (iv) Would reveal investigatory records compiled for law enforcement 
purposes whose disclosure would deprive the submitter of a right to a 
fair trial or an impartial adjudication.
    (v) Would reveal investigatory records compiled for law enforcement 
purposes whose disclosure would constitute an unwarranted invasion of 
the personal privacy of the submitter.

[[Page 326]]

    (vi) Would reveal investigatory records compiled for law enforcement 
purposes when disclosure would interfere with enforcement proceedings or 
disclose investigative techniques and procedures, provided, that the 
claim may be made only by a designated contract market, derivatives 
clearing organization, swap execution facility, swap data repository or 
registered futures association with regard to its own investigatory 
records.
    (2) The original of any written request for confidential treatment 
must be sent to the Assistant Secretary of the Commission for FOI, 
Privacy and Sunshine Acts Compliance. A copy of any request for 
confidential treatment shall be sent to the Commission division or 
office receiving the original of any material for which confidential 
treatment is being sought.
    (3) A request for confidential treatment shall be clearly marked 
``FOIA Confidential Treatment Request'' and shall contain the name, 
address, and telephone number of the submitter. The submitter is 
responsible for informing the Assistant Secretary of the Commission for 
FOI, Privacy and Sunshine Acts Compliance of any changes in his or her 
name, address, and telephone number.
    (4) A request for confidential treatment should accompany the 
material for which confidential treatment is being sought. If a request 
for confidential treatment is filed after the filing of such material, 
the submitter shall have the burden of showing that it was not possible 
to request confidential treatment for that material at the time the 
material was filed. A request for confidential treatment of a future 
submission will not be processed. All records which contain information 
for which a request for confidential treatment is made or the 
appropriate segregable portions thereof should be marked by the person 
submitting the records with a prominent stamp, typed legend, or other 
suitable form of notice on each page or segregable portion of each page 
stating ``Confidential Treatment Requested by [name].'' If such marking 
is impractical under the circumstances, a cover sheet prominently marked 
``Confidential Treatment Requested by [name]'' should be securely 
attached to each group of records submitted for which confidential 
treatment is requested. Each of the records transmitted in this matter 
should be individually marked with an identifying number and code so 
that they are separately identifiable. In some circumstances, such as 
when a person is testifying in the course of a Commission investigation 
or providing documents requested in the course of a Commission 
inspection, it may be impractical to submit a written request for 
confidential treatment at the time the information is first provided to 
the Commission. In no circumstances can the need to comply with the 
requirements of this section justify or excuse any delay in submitting 
information to the Commission. Rather, in such circumstances, the person 
testifying or otherwise submitting information should inform the 
Commission employee receiving the information, at the time the 
information is submitted or as soon thereafter as practicable, that the 
person is requesting confidential treatment for the information. The 
person shall then submit a written request for confidential treatment 
within 30 days of the submission of the information. If access is 
requested under the Freedom of Information Act with respect to material 
for which no timely request for confidential treatment has been made, it 
may be presumed that the submitter of the information has waived any 
interest in asserting that the material is confidential.
    (5) A request for confidential treatment shall state the length of 
time for which confidential treatment is being sought.
    (6) A request for confidential treatment (as distinguishing from the 
material that is the subject of the request) shall be considered a 
public document. When a submitter deems it necessary to include, in its 
request for confidential treatment, information for which it seeks 
confidential treatment, the submitter shall place that information in an 
appendix to the request.
    (7) On 10 business days notice from the Assistant Secretary, a 
submitter shall submit a detailed written justification of a request for 
confidential treatment, as specified in paragraph (e) of this section. 
Upon request and for

[[Page 327]]

good cause shown, the Assistant Secretary may grant an extension of such 
time. The Assistant Secretary will notify the submitter that failure to 
provide timely a detailed written justification will be deemed a waiver 
of the submitter's opportunity to appeal an adverse determination.
    (8)(i) Requests for confidential treatment for any reasonably 
segregable material that is not exempt from public disclosure under the 
Freedom of Information Act, as implemented in Sec.  145.5, shall be 
summarily rejected under Sec.  145.9(d)(9). Requests for confidential 
treatment of public information contained in financial reports as 
specified in Sec.  1.10 shall not be processed. A submitter has the 
burden of specifying clearly and precisely the material that is the 
subject of the confidential treatment request. A submitter may be able 
to meet this burden in various ways, including:
    (A) Segregating material for which confidential treatment is being 
sought;
    (B) Submitting two copies of the submission: a copy from which 
material for which confidential treatment is being sought has been 
obliterated, deleted, or clearly marked and an unmarked copy; and
    (C) Clearly describing the material within a submission for which 
confidential treatment is being sought.
    (ii) A submitter shall not employ a method of specifying the 
material for which confidential treatment is being sought if that method 
makes it unduly difficult for the Commission to read the full 
submission, including all portion claimed to be confidential, in its 
entirely.
    (9) If a submitter fails to follow the procedures set forth in 
paragraphs (d)(1) through (d)(8) of this section, the Assistant 
Secretary of the Commission for FOI, Privacy and Sunshine Acts 
Compliance or his or her designee may summarily reject the submitter's 
request for confidential treatment with leave to the submitter to refile 
a proper petition. Failure of the Assistant Secretary or his or her 
designee summarily to reject a confidential treatment request pursuant 
to this paragraph shall not be construed to indicate that the submitter 
has complied with the procedures set forth in paragraphs (d)(1) through 
(d)(8) of this section.
    (10) Except as provided in paragraph (d)(9) of this section, no 
determination with respect to any request for confidential treatment 
will be made until the Commission receives a Freedom of Information Act 
request for the material for which confidential treatment is being 
sought.
    (e) Detailed written justification of request for confidential 
treatment. (1) If the Assistant Secretary or his or her designee 
determines that a FOIA request seeks material for which confidential 
treatment has been requested pursuant to Sec.  145.9, the Assistant 
Secretary or his or her designee shall require the submitter to file a 
detailed written justification of the confidential request within ten 
business days (unless under Sec.  145.9(d)(7) an extension of time has 
been granted) of that determination unless, pursuant to an earlier FOIA 
request, a prior determination to release or withhold the material has 
been made, the submitter has already provided sufficient information to 
grant the request for confidential treatment; or the material is 
otherwise in the public domain. The detailed written justification shall 
be filed with the Assistant Secretary of the Commission for FOI, Privacy 
and Sunshine Acts Compliance. It shall be clearly marked ``Detailed 
Written Justification of FOIA Confidential Treatment Request'' and shall 
contain the request number supplied by the Commission. The submitter 
shall also send a copy of the detailed written justification to the FOIA 
requester at the address specified by the Commission.
    (2) The period for filing a detailed written justification may be 
extended upon request and for good cause shown.
    (3) The detailed written justification of the confidential treatment 
request shall contain:
    (i) The reasons, referring to the specific exemptive provisions of 
the Freedom of Information Act listed in paragraph (d)(1) of this 
section, why the information that is the subject of the FOIA request 
should be withheld from access under the Freedom of Information Act;
    (ii) The applicability of any specific statutory or regulatory 
provisions that

[[Page 328]]

govern or may govern the treatment of the information;
    (iii) The existence and applicability of prior determinations by the 
Commission, other federal agencies, or courts concerning the specific 
exemptive provisions of the Freedom of Information Act pursuant to which 
confidential treatment is being requested. Submitters shall satisfy any 
evidentiary burdens imposed upon them by applicable Freedom of 
Information Act case law.
    (iv) Such additional facts and authorities as the submitter may 
consider appropriate.
    (4) The detailed written justification of a confidential treatment 
request shall be accompanied by affidavits to the extent necessary to 
establish the facts necessary to satisfy the submitter's evidentiary 
burden.
    (5) The detailed written justification of a confidential treatment 
request (as distinguished from the material that is the subject of the 
request) shall be considered a public document. However, a submitter 
will be permitted to submit to the Commission supplementary confidential 
affidavits with his or her detailed written justification if that is the 
only way in which he or she can convincingly demonstrate that the 
material that is the subject of the confidential treatment request 
should not be disclosed to the FOIA requester.
    (f) Initial determination with respect to petition for confidential 
treatment. (1) The Assistant Secretary for FOI, Privacy and Sunshine 
Acts Compliance or his or her designee, in consultation with the Office 
in which the record was located, shall issue an initial determination 
with respect to a confidential treatment request for material that is 
responsive to the FOIA request. This determination shall be issued at 
the same time as the initial determination with respect to the FOIA 
request. See Sec.  145.7(g). To the extent that the initial 
determination grants a confidential treatment request in full or in 
part, it should specify the FOIA exemptions upon which this 
determination is based and briefly describe the material to which each 
exemption applies. See Sec.  145.7(g)(2). To the extent that the initial 
determination denies confidential treatment to any material for which 
confidential treatment was requested, it should briefly describe the 
material for which confidential treatment is denied.
    (2) If the Assistant Secretary or his or her designee determines 
that a confidential treatment request shall be denied in full or in 
part, the submitter shall be informed of his or her right to appeal to 
the Commission's General Counsel in accordance with the procedures set 
forth in paragraph (g) of this section. The material for which 
confidential treatment was denied shall be released to the FOIA 
requester if the submitter does not file an appeal within 10 business 
days of the date on which his or her request was denied.
    (3) If the Assistant Secretary or his or her designee determines 
that a confidential treatment request shall be granted in full or in 
part, the FOIA requester shall be informed of his or her right to appeal 
to the Commission's General Counsel in accordance with the procedures 
set forth in Sec.  145.7(h).
    (g) Appeal from initial determination that confidential treatment is 
not warranted. (1) An appeal from an initial determination to deny a 
confidential treatment request in full or in part shall be filed with 
the General Counsel of the Commission. No disclosure of the material 
that is the subject of the appeal shall be made until the appeal is 
resolved. If both a submitter and a FOIA requester appeal to the General 
Counsel from a partial grant and partial denial of a confidential 
treatment request, those appeals shall be consolidated.
    (2) Any appeal of a denial of a request for confidential treatment 
shall be in writing, and shall be clearly marked ``FOIA Confidential 
Treatment Appeal.'' The appeal shall include a copy of the initial 
determination and shall clearly indicate the portions of the initial 
determination from which an appeal is being taken.
    (3) The appeal shall be sent to the Commission's Office of General 
Counsel. A copy of the appeal shall be sent to the FOIA requester. The 
General Counsel or his or her designee shall have the authority to 
consider all appeals from initial determinations of the Assistant 
Secretary of the Commission for FOI, Privacy and Sunshine

[[Page 329]]

Acts compliance. The General Counsel may, in his sole and unfettered 
discretion, refer such appeals and questions concerning stays under 
paragraph (g)(10) of this section to the Commission for decision.
    (4) In the appeal, the submitter may supply additional 
substantiation for his or her request for confidential treatment, 
including additional affidavits and additional legal argument. Such 
submissions shall be governed by paragraph (e)(5) of this section.
    (5) The FOIA requester shall have an opportunity to respond in 
writing to the appeal within 10 business days of the date of filing of 
the FOIA Confidential Treatment Appeal. The FOIA requester need not 
respond, however. Any response shall be sent to the Commission's Office 
of General Counsel. A copy shall be sent to the submitter.
    (6) All FOIA Confidential Treatment Appeals and all responses 
thereto shall be considered public documents.
    (7) The General Counsel will make a determination with respect to 
any appeal within twenty business days after receipt by the Office of 
General Counsel of such appeal or within such extended period as may be 
permitted in accordance with the standards set forth in Sec.  
145.7(g)(3). Although other procedures may be employed, to the extent 
possible the General Counsel will decide the appeal on the basis of the 
affidavits and other documentary evidence submitted by the submitter and 
the FOIA requests.
    (8) The General Counsel or his or her designee shall have the 
authority to remand any matter to the Assistant Secretary of the 
Commission for FOI, Privacy and Sunshine Acts Compliance to correct 
deficiencies in the initial processing of the confidential treatment 
request.
    (9) If the General Counsel or his or her designee denies a 
confidential treatment appeal in full or in part, the information for 
which confidential treatment is denied shall be disclosed to the FOIA 
requester 10 business days later, subject to any stay entered pursuant 
to paragraph (g)(10) of this section.
    (10) The General Counsel or his or here designee shall have the 
authority to enter and vacate stays as set forth below. If, within 10 
business days of the date of issuance of a determination by the General 
Counsel or his or her designee to disclose information for which a 
submitter sought confidential treatment, the submitter commences an 
action in federal court concerning that determination, the General 
Counsel will stay the public disclosure of the information pending final 
judicial resolution of the matter. The General Counsel or his or her 
designee may vacate a stay entered under this section, either on his or 
her own motion or at the request of the FOIA requester. If such a stay 
is vacated, the information will be released to the requester 10 
business days after the submitter is notified of this action, unless a 
court orders otherwise.
    (h) Extensions of time limits. Any time limit under this section may 
be extended for good cause shown, in the discretion of the Commission, 
the Commission's General Counsel, or the Assistant Secretary of the 
Commission for FOI, Privacy and Sunshine Acts Compliance.
    (i) A submitter whose confidential treatment request has been upheld 
by the Commission shall, upon request of the General Counsel, aid the 
Commission in defending a court action to compel the Commission to 
disclose the information subject to the confidential treatment request. 
If the submitter is unwilling to aid the Commission in this regard, the 
General Counsel may, in appropriate cases, make the information 
available to the public.

[51 FR 26871, July 28, 1986, as amended at 64 FR 26, Jan. 4, 1999; 69 FR 
67507, Nov. 18, 2004; 74 FR 17395, Apr. 15, 2009; 77 FR 66348, Nov. 2, 
2012]



Sec. Appendix A to Part 145--Compilation of Commission Records Available 
                              to the Public

    The following documents are available, upon request, directly from 
the office indicated. Unless otherwise noted, the mailing address for 
the Commission offices listed below is Three Lafayette Centre, 1155 21st 
Street, NW., Washington, DC 20581.
    (a) Office of External Affairs. (1) Commitments of Traders Reports.
    (2) Weekly Advisory (solely available on the Commission's Web site 
at http://www.cftc.gov/cftc/cftcpressoffice.htm).
    (3) Studies Prepared by Commission staff.

[[Page 330]]

    (4) Educational material (e.g., newsletters, brochures, annual 
reports, conference or advisory meetings, technical information about 
specific markets or contracts).
    (5) Press releases.
    (6) Rule enforcement and financial reviews (public version).
    (7) CFTC litigation documents (e.g. administrative and civil 
complaints, injunctions, initial decisions, opinions and orders).
    (8) Commission rules and regulations, Federal Register notices, 
interpretative letters.
    (9) Speeches, Commissioner biographies and photographs.
    (10) Statistical data concerning the Commission's budget.
    (11) Statistical data concerning specific contracts and markets.
    (b) Office of the Secretariat (Public reading area with copying 
facilities available). (1) Comment letters and CFTC summaries of comment 
letters.
    (2) Terms and conditions of proposed contracts.
    (3) Registered entity filings relating to rules as defined in Sec.  
40.1 of this chapter, unless covered by a request for confidential 
treatment.
    (4) National Futures Association (NFA) rule amendments.
    (5) Exchange and NFA disciplinary action notifications.
    (6) Open Commission meeting minutes.
    (7) Sunshine certificates for closed Commission meetings.
    (8) CFTC Advisory Committee final reports.
    (9) Opinions and orders of the Commission.
    (10) Reparations orders and enforcement orders index.
    (11) Rulemaking index.
    (12) Exchange membership notification.
    (13) Publicly available portions of applications to become a 
registered entity including the transmittal letter, first page of the 
application cover sheet, proposed rules, proposed bylaws, corporate 
documents, any overview or similar summary provided by the applicant, 
any documents pertaining to the applicant's legal status and governance 
structure, including governance fitness information, and any other part 
of the application not covered by a request for confidential treatment.
    (c) Office of Proceedings. (1) Documents contained in reparations 
and enforcement cases, unless subject to protective order.
    (2) Complaint packages, which contain the Reparation Rules, Brochure 
``Questions and Answers About How You Can Resolve a Commodity-Market 
Related Dispute,'' and the complaint form.
    (3) Rules of Practice concerning administrative enforcement 
proceedings.
    (d) Executive Director, Administrative Services Section. Information 
Collection requests submitted to the Office of Management and Budget 
relating to requirements under the Paperwork Reduction Act of 1980, Pub. 
L. 96-511.
    (e) Division of Market Oversight. (1) Weekly stocks of grain 
reports.
    (2) Weekly cotton or call reports.
    (f) Division of Enforcement. Complaint package containing Division 
of Enforcement Questionnaire and list of federal, state and local 
enforcement authorities.
    (g) Division of Swap Dealer and Intermediary Oversight. Publicly 
available portions of registration documents are available from the 
National Futures Association, 200 West Madison Street, Chicago, Illinois 
60606. See Commission Rule 145.6.

[51 FR 26874, July 28, 1986, as amended at 57 FR 29203, July 1, 1992; 59 
FR 5528, Feb. 7, 1994; 60 FR 49335, Sept. 25, 1995; 64 FR 27, Jan. 4, 
1999; 67 FR 62353, Oct. 7, 2002; 67 FR 63539, Oct. 15, 2002; 69 FR 
67507, Nov. 18, 2004; 77 FR 66348, Nov. 2, 2012; 78 FR 22419, Apr. 16, 
2013]



              Sec. Appendix B to Part 145--Schedule of Fees

    (a) Charges for requests. The following charges may be made where 
applicable for responding to requests for records.
    (1) $4.75 for each quarter hour spent by clerical personnel in 
searching for or reviewing records.
    (2) When a search or review cannot be performed by clerical 
personnel, $10.25 for each quarter hour spent by professional personnel 
in searching or reviewing records.
    (3) When searches require the expertise of a computer specialist, 
staff time for programming and performing searches will be charged at 
$10.25 per quarter hour. For searches of records stored on personal 
computers used as workstations by Commission staff and shared access 
network servers, the computer processing time is included in the search 
time for the staff member using the workstation as set forth in 
paragraph (a) of this appendix.
    (4) Document duplication, including computer printouts, will be 
charged at $0.15 per page.
    (5) For copies of materials other than paper records, the requester 
will be charged the actual cost of materials and reproduction, including 
the time of clerical personnel at a rate of $4.75 per quarter hour.
    (6) When a request has been made and granted to examine Commission 
records at an office of the Commission other than the office in which 
the records are routinely maintained, the requester:
    (i) Will reimburse the Commission for the actual cost of 
transporting the records; and
    (ii) Will be charged at a rate of $4.75 for each quarter hour spent 
by clerical personnel in preparing the records for transit.

[[Page 331]]

    (7) For certifying that requested records are true copies, the 
charge will be $3.00 per certification.
    (8) Upon request, records will be mailed by means of overnight or 
express mail at the fee of $10.00 per package mailed.
    (b) Waiver or reduction of fees. Fees will be waived or reduced by 
the Commission if:
    (1) The fee is less than or equal to $10.00, the approximate cost to 
the Commission of collecting the fee; or,
    (2) If the Commission determines that the disclosure of the 
information is likely to contribute significantly to public 
understanding of the operations or activities of the government and is 
not primarily in the commercial interest of the requester.
    (c) Applicability of fees. Fees shall be charged even if no records 
are ultimately furnished to the requester. Fees apply to various types 
of requests as follows.
    (1) Commercial use request. Fees for search time, review time and 
duplication of records will be charged to requests from or on behalf of 
one who seeks information for a user or purpose that furthers the 
commercial, trade or profit interests of the requester or the person on 
whose behalf the request is made.
    (2) Educational institution or noncommercial scientific institution. 
Only duplication fees will be charged to schools or to organizations 
which operate solely for the purpose of scientific research, the results 
of which are not intended to promote any particular product or industry. 
No charge will be made for the first 100 pages duplicated or for search 
or review time.
    (3) Representative of the news media. Only duplication fees will be 
charged to any person actively gathering news for an entity that is 
organized and operated to publish or broadcast news to the public. No 
charge will be made for the first 100 pages duplicated or for search or 
review time.
    (4) Other requesters. Fees for search time and duplication will be 
charged to requesters who are not covered by one of the categories 
above. No charge will be made for the first two hours of search time, 
the first 100 pages of duplication, or for review time. If the search is 
for records stored in a computer format, a combination of computer 
operation charges and search time charges will be waived up to the 
equivalent of two hours of professional search time.
    (d) Aggregation of requests. For purposes of determining fees, the 
Commission may aggregate reasonably related requests if multiple 
requests are made within a 30-day period or if there is a solid basis 
for believing that multiple requests were made solely to avoid fees.
    (e) Notification of fees. A request for Commission records may state 
that the party is willing to pay fees up to a stated limit for services 
to be provided in searching, reviewing and duplicating requested 
records. If such a statement is made, no work will be done that will 
result in fees beyond the stated limit without written authorization. If 
no limit is stated, no work will be done that will result in fees in 
excess of $25.00 without written authorization from the requester.
    (f) Advance payment of fees. The Commission may request advance 
payment of all or part of the fee (i) when fees are expected to exceed 
$250; or (ii) when a requester has previously failed to pay fees in a 
timely fashion.
    (g) Payment of fees. Payment should be made by check or money order 
payable to the Commodity Futures Trading Commission.
    (h) Interest on fees. The Commission will begin charging interest on 
unpaid bills starting on the 31th day following the day on which the 
bill was sent. Interest will be at the rate prescribed in 31 U.S.C. 
3717.
    (i) Collection of fees. If fees not paid, the Commission may 
disclose debts to appropriate authorities for collection or to consumer 
reporting agencies.

[52 FR 19308, May 22, 1987, as amended at 64 FR 27, Jan. 4, 1999; 69 FR 
67507, Nov. 18, 2004]



                 Sec. Appendix C to Part 145 [Reserved]



PART 146_RECORDS MAINTAINED ON INDIVIDUALS--Table of Contents



Sec.
146.1 Purpose and scope.
146.2 Definitions.
146.3 Requests by an individual for information or access.
146.4 Procedures for identifying the individual making the request.
146.5 Disclosure of requested information to individuals; fees for 
          copies of records.
146.6 Disclosure to third parties.
146.7 Content of systems of records.
146.8 Amendment of a record.
146.9 Appeals to the Commission.
146.10 Information supplied by the Commission when collecting 
          information from an individual.
146.11 Public notice of records systems.
146.12 Exemptions.
146.13 Inspector General exemptions.

Appendix A to Part 146--Fees for Copies of Records Requested Under the 
          Privacy Act of 1974

    Authority: 88 Stat. 1896 (5 U.S.C. 552a), as amended; 88 Stat. 1389 
(7 U.S.C. 4a(j)).

    Source: 41 FR 3212, Jan. 21, 1976, unless otherwise noted.



Sec.  146.1  Purpose and scope.

    (a) This part contains the rules of the Commodity Futures Trading 
Commission implementing the Privacy Act of

[[Page 332]]

1974 (Pub. L. 93-579, 5 U.S.C. 552a). These rules apply to all records 
maintained by this Commission which are not excepted or exempted as set 
forth in Sec.  146.12, insofar as they contain personal information 
concerning an individual, identify that individual by name or other 
symbol and are contained in a system of records from which information 
is retrieved by the individual's name or identifying symbol. Among the 
primary purposes of these rules are to permit individuals to determine 
whether information about them is contained in Commission files and, if 
so, to obtain access to that information; to establish procedures 
whereby individuals may have inaccurate and incomplete information 
corrected; and, to restrict access by unauthorized persons to that 
information.
    (b) In this part the Commission is also exempting certain Commission 
systems of records from some of the provisions of the Privacy Act of 
1974 that would otherwise be applicable to those systems. These 
exemptions are authorized under the Privacy Act, 5 U.S.C. 552a(k).



Sec.  146.2  Definitions.

    For purposes of this part 146:
    (a) The term Commission means the Commodity Futures Trading 
Commission;
    (b) The term Executive Director refers to the executive level staff 
official appointed pursuant to section 2(a)(5) of the Commodity Exchange 
Act.
    (c) The term FOI, Privacy and Sunshine Acts compliance staff refers 
to the staff in the Office of the Secretariat in the Commission's 
principal office in Washington, DC who are assigned to respond to 
requests and handle various other matters under the Freedom of 
Information Act, the Privacy Act of 1974 and the Government in the 
Sunshine Act;
    (d) The term individual means a citizen of the United States or an 
alien lawfully admitted for permanent residence;
    (e) The term maintain includes maintain, collect, use, or 
disseminate;
    (f) The term record means any item, collection, or grouping of 
information about an individual that is maintained by the Commission, 
including but not limited to, his education, financial transactions, and 
criminal or employment history and that contains his name, or the 
identifying number, symbol, or other identifying particular assigned to 
the individual;
    (g) The term system of records means a group of any records under 
the control of the Commission from which information is retrieved by the 
name of the individual or by some identifying number, symbol, or other 
identifying particular assigned to the individual;
    (h) The term system notice means a notice of the existence and 
character of the Commission's system of records published in the Federal 
Register pursuant to Sec.  146.11(a) of these rules;
    (i) The term routine use means, with respect to the disclosure of a 
record, the use of that record for a purpose which is compatible with 
the purpose for which it was collected;
    (j) The term Freedom of Information Act encompasses both the Freedom 
of Information Act, as amended, 5 U.S.C. 552, and the Commission's rules 
contained in part 145 of this title.
    (k) The term agency means any executive department, military 
department, Government corporation, Government controlled corporation or 
other establishment in the Executive branch of the Government or any 
independent regulatory agency.

[41 FR 3212, Jan. 21, 1976, as amended at 45 FR 26954, Apr. 22, 1980]



Sec.  146.3  Requests by an individual for information or access.

    (a) Any individual may request information on whether a system of 
records maintained by the Commission contains any information pertaining 
to him, or may request access to his record or to any information 
pertaining to him which is contained in a system of records. All 
requests shall be directed to the FOI, Privacy and Sunshine Acts 
compliance staff, Office of the Secretariat, Commodity Futures Trading 
Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, 
DC 20581.
    (b) A request for information or for access to records under this 
part may be made by mail or in person. The request shall:

[[Page 333]]

    (1) Be in writing and signed by the individual making the request;
    (2) Include the full name (including the middle name) of the 
individual seeking the information or record, his home address and 
telephone number, his business address and telephone number; and
    (3) If he is or ever has been registered with the Commission or its 
predecessor agency, or associated with a firm so registered as a 
partner, officer or director or 10% shareholder, state in what capacity 
he is or was registered.
    (c) For each system of records from which information is sought, the 
request shall:
    (1) Specify the title and identifying number for that system as it 
appears in the system notice published by the Commission;
    (2) Provide additional identifying information, if any, specified in 
the system notice;
    (3) Describe the specific information or kind of information sought 
within that system of records; and
    (4) Set forth any special arrangements sought concerning the time, 
place, or form of access. A description of the information contained in 
a system notice and instructions on how to obtain copies of the 
Commission's system notices appear in Sec.  146.11(b).
    (d) The Commission will respond in writing to a request made under 
this section within ten days (excluding Saturdays, Sundays and legal 
public holidays) after receipt of the request. If a definitive reply 
cannot be given within ten days, the request will be acknowledged and an 
explanation will be given of the status of the request.
    (e) When an individual has requested access to records, available to 
him under these rules, he will either be notified in writing of where 
and when he may obtain access to the records requested or be given the 
name, address and telephone number of the member of the Commission staff 
with whom he should communicate to make further arrangements for access.

[41 FR 3212, Jan. 21, 1976, as amended at 41 FR 28260, July 9, 1976; 60 
FR 49335, Sept. 25, 1995]



Sec.  146.4  Procedures for identifying the individual making the request.

    When a request for information or for access to records has been 
made pursuant to Sec.  146.3, before information is given or access is 
granted pursuant to Sec.  146.5 of these rules the Commission shall 
require reasonable identification of the person making the request to 
insure that information is given and records are disclosed only to the 
proper person.
    (a) An individual may establish his identity by:
    (1) Submitting with his request for information or for access a 
photocopy of two pieces of identification bearing his name and 
signature, one of which shall bear his current home or business address; 
or
    (2) Appearing at any office of the Commission (located at the 
addresses set forth in Sec.  145.6 of these rules) during the regular 
working hours for that office and presenting either:
    (i) One piece of identification containing a photograph and 
signature, such as a drivers license or passport or
    (ii) Two pieces of identification bearing his name and signature, 
one of which shall bear his current home or business address; or
    (3) Providing such other proof of identity as the Commission deems 
satisfactory in the circumstances of a particular request.
    (b) If the Executive Director or other designated Commission 
official determines that the data in a requested record is so sensitive 
that unauthorized access could cause harm or embarrassment to the person 
whose record is involved, or if the person making the request is unable 
to produce satisfactory evidence of identity under paragraph (a) of this 
section, the individual making the request may be required to submit a 
notarized statement attesting to his identity and that he is familiar 
with and understands the criminal penalties provided under section 1001 
of title 18 of the U.S. Code for making false statements to a Government 
agency and under the Privacy Act, section 552a(i)(3) of title 5 of the 
U.S. Code, for obtaining records under false pretenses. Copies of these 
statutory provisions and forms for such notarized

[[Page 334]]

statements may be attained upon request from the FOI, Privacy and 
Sunshine Acts compliance staff, Office of the Secretariat, Commodity 
Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, 
NW., Washington, DC 20581.
    (c) The parent or guardian of a minor or a person judicially 
determined to be incompetent, in addition to establishing the identity 
of the person he represents as described in the previous paragraphs of 
this section, shall establish his own identity and his parentage or 
guardianship by furnishing a copy of a birth certificate showing 
parentage or a court order establishing the guardianship.
    (d) Nothing in this section shall preclude the Commission from 
requiring additional identification before granting access to the 
records if there is reason to believe that the person making the request 
may not be the individual to whom the record pertains, or where the 
sensitivity of the data warrants it.
    (e) The requirements of this section shall not apply if the records 
involved would be available to any person pursuant to the Commission's 
rules under the Freedom of Information Act as set forth in part 145 of 
this chapter.

[41 FR 3212, Jan. 21, 1976, as amended at 41 FR 28260, July 9, 1976; 60 
FR 49335, Sept. 25, 1995]



Sec.  146.5  Disclosure of requested information to individuals; fee 
for copies of records.

    (a) Any individual who has requested access to his record or to any 
information pertaining to him in the manner prescribed in Sec.  146.3, 
and has identified himself as prescribed in Sec.  146.4, shall be 
permitted to review the record and have a copy made of all or any 
portion thereof in a form comprehensible to him, subject to fees for 
copying services set forth in appendix A to this part. Upon his request 
persons of his own choosing may accompany him, but the individual shall 
first furnish a written statement authorizing discussion of that 
individual's record in the accompany persons' presence.
    (b) Access will generally be granted in the office of the Commission 
where the records are maintained during normal business hours, but for 
good cause shown the Commission may grant access at another office of 
the Commission or at different times for the convenience of the 
individual making the request.
    (c) Where a document containing information about an individual also 
contains information not pertaining to him, the portion not pertaining 
to the individual shall not be disclosed to him except to the extent the 
information is available to any person under the Freedom of Information 
Act. If the records sought cannot be provided for review and copying in 
a meaningful form, the Commission shall provide to the individual a 
report of the information concerning the individual contained in the 
record or records which shall be complete and accurate in all material 
aspects.
    (d) Where the disclosure involves medical records, the records may 
be provided only to a physician designated in writing by the individual.
    (e) Requests for copies of documents may be directed to the FOI, 
Privacy and Sunshine Acts compliance staff, Office of the Secretariat, 
or to the member of the Commission's staff through whom arrangements for 
access were made.
    (f) Fees for copies of records shall be charged as set forth in the 
schedule of fees contained in appendix A to this part. Copies of the 
schedule may be obtained upon request from the FOI, Privacy and Sunshine 
Acts compliance staff, Office of the Secretariat, Commodity Futures 
Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., 
Washington, DC 20581. Payment should be made by check or money order 
payable to the Commodity Futures Trading Commission. Advance payment of 
all or part of the fee may be required at the discretion of the 
Commission, but generally this will not be required for requests where 
the anticipated fee is less than $25.
    (g) Nothing in this section or in Sec.  146.3 shall:
    (1) Require the disclosure of investigative records exempted under 
Sec.  146.12 of these rules;

[[Page 335]]

    (2) Allow an individual access to any information compiled in 
reasonable anticipation of a civil action, administrative proceeding or 
a criminal proceeding;
    (3) Require the furnishing of information or records which cannot be 
retrieved by the name or other identifier of the individual making the 
request.

[41 FR 3212, Jan. 21, 1976, as amended at 41 FR 28261, July 9, 1976; 45 
FR 26954, Apr. 22, 1980; 60 FR 49335, Sept. 25, 1995]



Sec.  146.6  Disclosure to third parties.

    (a) The Commission shall not disclose to any agency or to any person 
by any means of communication a record pertaining to an individual which 
is contained in a system of records, except under the following 
circumstances:
    (1) The individual to whom the record pertains has given his written 
consent to the disclosure;
    (2) The disclosure is to officers and employees of the Commission 
who need it in the performance of their duties;
    (3) Disclosure is required under the Freedom of Information Act (5 
U.S.C. 552);
    (4) Disclosure is for a routine use as defined in Sec.  146.2(i) and 
described in the system notice for that system of records;
    (5) The disclosure is made to the Bureau of the Census for purposes 
of planning or carrying out a census or survey or related activity;
    (6) The disclosure is made to a recipient who has provided the 
agency with advance adequate written assurance that the record will be 
used solely as a statistical research or reporting record, and the 
record is to be transferred in a form that is not individually 
identifiable;
    (7) The disclosure is made to another agency or to an 
instrumentality of any Governmental jurisdiction within or under the 
control of the United States for a civil or criminal law enforcement 
activity if the activity is authorized by law and if the head of the 
agency or instrumentality has made a written request to the Commission 
specifying the particular portion desired and the law enforcement 
activity for which the record is sought;
    (8) The disclosure is made to a person pursuant to a showing of 
compelling circumstances affecting the health or safety of an individual 
if upon such disclosure notification is transmitted to the last known 
address of such individual;
    (9) The disclosure is made to either House of Congress, or, to the 
extent of matter within its jurisdiction, any committee or subcommittee 
thereof, any joint committee of Congress or subcommittee of any such 
joint committee;
    (10) The disclosure is made to the Comptroller General, or any of 
his authorized representatives, in the course of the performance of the 
duties of the General Accounting Office; or
    (11) The disclosure is pursuant to the order of a court of competent 
jurisdiction.
    (12) The disclosure is made, upon request, to a department or agency 
of any state or political subdivision thereof acting within the scope of 
its jurisdiction as permitted by section 8(e) of the Act and subject to 
the limitations of further dissemination as contained in section 8(e). 
Information disclosed pursuant to this paragraph may also include 
registration information maintained by the Commission on any registrant 
as authorized to be disclosed by section 8(g) of the Act. Registration 
information may be furnished to a department or agency of any state or 
political subdivision thereof upon reasonable request made by the 
department or agency or without request whenever the Commission or an 
employee designated by Sec.  140.75 of this chapter determines that such 
information may be appropriate for use by the department or agency.
    (13) The disclosure is made, upon request, to a department or agency 
of any foreign government or any political subdivision thereof, acting 
within the scope of its jurisdiction, provided that, prior to 
disclosure, the Commission or an employee delegated authority by Sec.  
140.73 of this chapter to disclose information pursuant to section 8(e) 
of the Act is satisfied that the information will not be disclosed by 
such department or agency except in connection with an adjudicatory 
action or proceeding brought under the laws of

[[Page 336]]

such foreign government or political subdivision to which such foreign 
government or political subdivision or any department or agency thereof 
is a party.
    (b) The Commission will make reasonable efforts to serve notice on 
an individual when any record on such individual is made available to 
any person under compulsory legal process when such process becomes a 
matter of public record. In any instance where a record on an 
individual, which has been submitted to the Commission by such 
individual, is sought pursuant to a summons or subpoena, notice will be 
given in accordance with the provisions of section 8(f) of the Commodity 
Exchange Act, and Sec.  140.80 of this chapter, at least fourteen days 
prior to disclosure. Notice will not, however, be given with regard to 
any information as to which the submitter has waived the notice 
requirements of Sec.  140.80.
    (c) The Commission, with respect to each system of records under its 
control, shall keep an accurate accounting of certain disclosures.
    (1) A record shall be kept of all disclosures made under paragraph 
(a) of Sec.  146.6, except disclosures made with the consent of the 
individual to whom the record pertains (paragraph (a)(1) of this 
section), disclosures to authorized employees (paragraph (a)(2) of this 
section) and disclosures required under the Freedom of Information Act 
(paragraph (a)(3) of this section).
    (2) The record shall include:
    (i) The date, nature, and purpose of each disclosure of a record 
made to any person or to another agency;
    (ii) The name and address of the person or agency to whom the 
disclosure was made.
    (3) The accounting will be retained for at least five years or the 
life of the record, whichever is longer, after the disclosure for which 
the accounting is made.
    (d) The accounting described in paragraph (c) of this section will 
be made available to the individual named in the record upon his written 
request, directed to the FOI, Privacy and Sunshine Acts compliance 
staff, Office of the Secretariat, Commodity Futures Trading Commission, 
Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581, 
except that the accounting will not be revealed with respect to 
disclosures made under paragraph (a)(7) of this section pertaining to 
law enforcement activity, and to disclosures involving systems of 
investigative records exempted under Sec.  146.12 of these rules.
    (e) Whenever an amendment or correction of a record or a notation of 
dispute concerning the accuracy of records is made by the Commission in 
accordance with Sec. Sec.  146.8 and 146.9 of these rules, the 
Commission will inform any person or other agency to whom the record was 
previously disclosed, if an accounting of the disclosure was made 
pursuant to the requirements of paragraph (c) of this section.

(Secs. 2(a)(11), 8 and 8a of the Commodity Exchange Act, 7 U.S.C. 4a(j), 
12 and 12a, as amended by Pub. L. 97-444)

[41 FR 3212, Jan. 21, 1976, as amended at 41 FR 28261, July 9, 1976; 48 
FR 22136, May 17, 1983; 49 FR 4465, Feb. 7, 1984; 60 FR 49335, Sept. 25, 
1995]



Sec.  146.7  Content of systems of records.

    (a) The Commission will maintain in its records only such 
information about an individual as is relevant and necessary to 
accomplish the purposes of the Commodity Exchange Act and other purposes 
required to be accomplished by statute or by executive order of the 
President.
    (b) The Commission will maintain no record describing how any 
individual exercises rights guaranteed by the First Amendment unless 
expressly authorized by statute or by the individual about whom the 
record is maintained or unless pertinent to and within the scope of an 
authorized law enforcement activity.
    (c) The Commission will collect information to the greatest extent 
practicable directly from the subject individual when the information 
may result in adverse determinations about an individual's rights, 
benefits, and privileges under Federal programs.
    (d) The Commission will maintain all records which are used by the 
Commission in making any determination about any individual with such 
accuracy, relevance, timeliness, and completeness as is reasonably 
necessary to

[[Page 337]]

assure fairness to the individual in the determination.



Sec.  146.8  Amendment of a record.

    (a) Any individual may request amendment of information pertaining 
to him which is contained in a system of records maintained by the 
Commission and which is filed under his name or other individual 
identifier if he believes the information is not accurate, relevant, 
timely or complete. A request for amendment shall be directed to the 
FOI, Privacy and Sunshine Acts compliance staff, Office of the 
Secretariat, Commodity Futures Trading Commission, Three Lafayette 
Centre, 1155 21st Street, NW., Washington, DC 20581.
    (b) A request for amendment may be made by mail or in person and 
shall: (1) Be in writing and signed by the person making the request; 
(2) describe the particular record to be amended with sufficient 
specificity to permit the record to be located among those maintained by 
the Commission; and (3) specify the nature of the amendment sought and 
the justification for the requested change. The person making the 
request may be required to provide the information specified in 
Sec. Sec.  146.3 and 146.4 of these rules in order to simplify 
identification of the record and permit verification of the identity of 
the person making the request for amendment.
    (c) Receipt of a request for amendment will be acknowledged in 
writing within ten days (excluding Saturdays, Sundays, and legal public 
holidays) except that, if the individual is given notice within the ten 
day period that his request will or will not be complied with, no 
acknowledgement is required.
    (d) Assistance in preparing a request to amend a record may be 
obtained from the FOI, Privacy and Sunshine Acts compliance staff, 
Office of the Secretariat, Commodity Futures Trading Commission, Three 
Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581.
    (e) Upon receipt of a request for amendment the Executive Director 
of the Commission or a person designated by the Executive Director shall 
promptly determine whether the record is materially inaccurate, 
incomplete, misleading, or is irrelevant or not timely, as claimed by 
the individual, and, if so, shall cause the record to be amended in 
accordance with the individual's request.
    (f) If the Executive Director or designee grants the request to 
amend the record, the individual shall promptly be advised of the 
decision and of the action taken, and notice shall be given of the 
correction and its substance to each person or agency to whom the record 
had previously been disclosed, as shown on the record of disclosures 
maintained in accordance with Sec.  146.6(c).
    (g) If the Executive Director or designee disagrees in whole or in 
part with a request for amendment of a record, the individual shall 
promptly be notified of the complete or partial denial of his request 
and the reasons for the refusal. The individual shall also be notified 
of the procedures for administrative review by the Commission of any 
complete or partial denial of a request for amendment, which are set 
forth in Sec.  146.9.
    (h) If a request is received for amendment of a record prepared by 
another agency which is in the possession or control of the Commission, 
the request for amendment will be forwarded to that agency. If that 
agency determines that the correction should be made, the Commission 
will amend its records accordingly and notify the individual making the 
request for amendment of the change. If the other agency declines to 
make the amendment, the Executive Director or designee will 
independently determine whether the amendment will be made to the record 
in the Commission's possession or control, considering any explanation 
given by the other agency for its decision.

[41 FR 3211, Jan. 21, 1976, as amended at 41 FR 28261, July 9, 1976; 60 
FR 49335, Sept. 25, 1995]



Sec.  146.9  Appeals to the Commission.

    (a) Any individual may petition the Commission:
    (1) To review a refusal to comply with an individual request for 
access to records pursuant to the Privacy Act, 5 U.S.C. 552a(d)(1), and 
Sec. Sec.  146.3 and 146.5 of the rules in this part;
    (2) To review denial of a request for amendment made pursuant to 
Sec.  146.8;

[[Page 338]]

    (3) To correct any determination that may have been made adverse to 
the individual based in whole or in part upon inaccurate, irrelevant, 
untimely or incomplete information;
    (4) To correct a failure to comply with any other provision of the 
Privacy Act, 5 U.S.C. 552a, and the rules of this part 146, which has 
had an adverse effect on the individual.
    (b) The petition to the Commission shall be in writing and shall (1) 
state in what manner it is claimed the Commission or any Commission 
employee has failed or refused to comply with provisions of the Privacy 
Act or of the rules contained in this part 146, and (2) set forth the 
corrective action the petitioner wishes the Commission to take. The 
petitioner may, if he wishes, state such facts and cite such legal or 
other authorities as he considers appropriate.
    (c) The petition shall be directed to the FOI, Privacy and Sunshine 
Acts compliance staff, Office of the Secretariat, Commodity Futures 
Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., 
Washington, DC 20581.
    (d) The Commission will make a determination of any petition filed 
pursuant to this Sec.  146.9 within thirty days (excluding Saturdays, 
Sundays and legal public holidays) after receipt by the FOI, Privacy and 
Sunshine Acts compliance staff, Office of the Secretariat of the 
petition, unless for good cause shown, the Commission extends the 30-day 
period. If a petition is denied, the Commission will notify the 
petitioner in writing and state the reasons therefor.
    (e) Where the petition is made for review of a denial of a request 
for amendment made pursuant to Sec.  146.8, the following additional 
procedures shall apply:
    (1) If upon review the Commission grants the petition to amend the 
record, notice of the correction and its substance shall be given to 
each person or agency to whom the record had previously been disclosed, 
as shown on the record of disclosures maintained in accordance with 
Sec.  146.6(c) of these rules.
    (2) If upon review the initial denial of the request for amendment 
is upheld in whole or in part, the individual shall be notified of the 
provisions for judicial review of that determination which are set forth 
in section 552a(g)(1)(A) and (2)(A), of title 5 of the U.S. Code and the 
provisions for disputed records set forth in paragraph (e)(3) of this 
section.
    (3) If after review the Commission has declined to amend the records 
as the individual has requested, the individual may file with the FOI, 
Privacy and Sunshine Acts compliance staff, Office of the Secretariat a 
concise statement setting forth why he disagrees with the Commission's 
denial of his request. Any subsequent disclosure containing information 
about which a statement of disagreement has been filed shall clearly 
note the portion which is disputed, and include a copy of the 
individual's statement. The Commission may also include a copy of a 
concise statement explaining its reasons for not making the amendments 
requested.
    (f) The General Counsel or his or her designee is hereby delegated 
the authority to act for the Commission in deciding appeals under this 
section. The General Counsel may, in his or her sole and unfettered 
discretion, refer such appeals to the Commission for decision.

[41 FR 3211, Jan. 21, 1976, as amended at 41 FR 28261, July 9, 1976; 45 
FR 26954, Apr. 22, 1980; 51 FR 26874, July 28, 1986; 60 FR 49336, Sept. 
25, 1995]



Sec.  146.10  Information supplied by the Commission when collecting
information from an individual.

    The Commission will inform each individual whom it asks to supply 
information, on the form which it uses to collect the information or on 
a separate form that can be retained by the individual of:
    (a) The authority (whether granted by statute, or by executive order 
of the President) which authorizes the solicitation of the information 
and whether disclosure of such information is mandatory or voluntary;
    (b) The principal purpose or purposes for which the information is 
intended to be used;
    (c) The routine uses which may be made of the information, as 
published in the Federal Register; and

[[Page 339]]

    (d) The effects on him, if any, of not providing all or any part of 
the requested information.



Sec.  146.11  Public notice of records systems.

    (a) The Commission will publish in the Federal Register at least 
biennially a notice of the existence and character of each of its 
systems of records, which notice shall include--
    (1) The name and location of the system;
    (2) The categories of individuals on whom records are maintained in 
the system;
    (3) The categories of records maintained in the system;
    (4) Each routine use of the records contained in the system, 
including the categories of users and the purpose of such use;
    (5) The policies and practices of the Commission regarding storage, 
retrievability, access controls, retention, and disposal of the records;
    (6) The title and business address of the Commission official who is 
responsible for the system of records;
    (7) The procedures whereby an individual can be notified at his 
request if the system of records contains a record pertaining to him;
    (8) The procedures whereby an individual can be notified at his 
request how he can gain access to any record pertaining to him contained 
in the system of records, and how he can contest its contents; and
    (9) The categories of sources of records in the system.
    (b) Copies of the notices as printed in the Federal Register will be 
available in each office of the Commission. Locations of Commission 
offices are listed in Sec.  145.6. Mail requests shall be directed to 
the FOI, Privacy and Sunshine Acts compliance staff, Office of the 
Secretariat, Commodity Futures Trading Commission, Three Lafayette 
Centre, 1155 21st Street, NW., Washington, DC 20581. The first copy will 
be furnished free of charge. A charge will be made for each additional 
copy.

[41 FR 3212, Jan. 21, 1976, as amended at 41 FR 28261, July 9, 1976; 45 
FR 26955, Apr. 22, 1980; 60 FR 49336, Sept. 25, 1995; 65 FR 53560, Sept. 
5, 2000]



Sec.  146.12  Exemptions.

    (a) Investigatory materials compiled for law enforcement purposes 
are exempt from portions of the Privacy Act of 1974 and of these rules 
as set forth in paragraph (c) of this section, on the basis and to the 
extent that individual access to these files could impair the 
effectiveness and orderly conduct of the Commission's regulatory and 
enforcement program. Materials exempted under this paragraph are 
contained in the system of records entitled ``Exempted Investigatory 
Records'' and/or in the system of records entitled ``Exempted Closed 
Commission Meetings.'' Notwithstanding the foregoing, however, no record 
which has served as a basis for denying an individual a right, 
privilege, or benefit to which he would otherwise be eligible, shall be 
maintained in this system, unless the disclosure of such material would 
reveal the identity of a source who furnished information to the 
Government under an express promise that the identity of the source 
would be held in confidence, or, prior to the effective date of this 
section, under an implied promise that the identity of the source would 
be held in confidence. For records of this type, if practicable, 
material identifying the confidential source shall be extracted or 
summarized in a manner which protects the source and the summary or 
extract shall be maintained in a comparable nonexempted system of 
records.
    (b) Investigatory material compiled solely for the purpose of 
determining suitability, eligibility, or qualifications for employment 
with the Commission are exempt from portions of the Privacy Act of 1974 
and of these rules as set forth in paragraph (c) of this section, to the 
extent that it identifies a confidential source. This is done in order 
to encourage persons from whom information is sought to provide 
information to the Commission which, absent assurances of 
confidentiality, they would be unwilling to give. However, if 
practicable, material identifying a confidential source shall be 
extracted or summarized in a manner which protects the source and the 
summary or extract shall be maintained in a non-exempt system containing 
the same category of record.

[[Page 340]]

Materials exempted under this paragraph are included in the system of 
records entitled ``Exempted Employee Background Investigation Material'' 
and/or in the system of records entitled ``Exempted Closed Commission 
Meetings.''
    (c) The systems set forth in paragraphs (a) and (b) of this section 
are hereby exempted from the provisions of sections 552a(c), (3)(d), 
(e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I) and (f) of title 5 of the U.S. 
Code (the Privacy Act of 1974), and are also exempted from the following 
sections of these rules: Sec.  146.3 (requests for information and for 
access); Sec.  146.5 (access to records); Sec.  146.6(d) (accounting of 
disclosures to be made available to the individual); Sec.  146.11(a) 
(7), (8), (9) (content of the system notice); and Sec.  146.7(a) 
(relevancy of records).

[41 FR 3212, Jan. 21, 1976, as amended at 53 FR 35198, Sept. 12, 1988]



Sec.  146.13  Inspector General exemptions.

    (a) Pursuant to section (j) of the Privacy Act of 1974, the 
Commission has deemed it necessary to adopt the following exemptions to 
specified provisions of the Privacy Act:
    (1) Pursuant to, and limited by 5 U.S.C. 552a(j)(2), the system of 
records maintained by the Office of the Inspector General of the 
Commission entitled ``Office of the Inspector General Investigative 
Files,'' shall be exempted from the provisions of 5 U.S.C. 552a (except 
subsections (b), (c)(1) and (2), (e)(4)(A) through (F), (e)(6), (7), 
(9), (10), and (11), and (i)) and from 17 CFR 146.3, 146.4, 146.5, 146.6 
(b), (d) and (e), 146.7 (a), (c) and (d), 146.8, 146.9, 146.10, 
146.11(a) (7), (8) and (9), insofar as the system contains information 
pertaining to criminal law enforcement investigations.
    (2) [Reserved]
    (b) Pursuant to section (k) of the Privacy Act of 1974, the 
Commission has deemed it necessary to adopt the following exemptions to 
specified provisions of the Privacy Act:
    (1) Pursuant to, and limited by 5 U.S.C. 552(k)(2), the system of 
records maintained by the Office of the Inspector General of the 
Commission entitled ``Office of the Inspector General Investigative 
Files,'' shall be exempted from 5 U.S.C. 552a(c)(3), (d), (e)(1), 
(e)(4)(G), (H) and (I), and (f) and from 17 CFR 146.3, 146.4, 146.5, 
146.6(d), 146.7(a), 146.8, 146.9, 146.11(a) (7), (8) and (9), insofar as 
it contains investigatory materials compiled for law enforcement 
purposes.
    (2) [Reserved]

[57 FR 4364, Feb. 5, 1992]



Sec. Appendix A to Part 146--Fees for Copies of Records Requested Under 
                         the Privacy Act of 1974

    a. The following schedule of fees shall apply to copies of records 
requested pursuant to the Privacy Act of 1974, 5 U.S.C. 552a and Sec.  
146.5(f).
    (1) For requests for copies of documents, the charge will be 15 
cents per page.
    (2) For materials other than paper records, including computer and 
cassette tapes, the direct cost of the materials and, if required, time 
spent by clerical personnel copying the materials shall be charged. 
Persons making the request shall be notified of the amount of the charge 
and shall give specific approval before the request is processed.
    (3) For certifying that requested records are true copies, the fee 
will be $3.00 per certification in addition to other fees, if any.
    (4) Upon request, records will be mailed by means of an overnight/
express service at the fee of $10.00 per unit mailed.
    (5) The Commission may, upon application by the individual, furnish 
any records without charge or at a reduced rate, if it determines that 
such wavier or reduction of fee is in the public interest.
    b. Requests for copies of documents shall be addressed to FOI, 
Privacy and Sunshine Acts compliance staff, Office of Secretariat, 
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st 
Street, NW., Washington, DC 20581.
    c. Payment should be made by check or money order payable to the 
Commodity Futures Trading Commission.
    d. Advance payment of all or part of the fee may be required at the 
discretion of the Commission. Generally, advance payment will not be 
required where the anticipated fee is less than $25.

(7 U.S.C. 4a(j) and 16a as amended by Pub. L. 97-444, 96 Stat. 2294 
(1983) and 5 U.S.C. 552. 662a and 552b)

[41 FR 3212, Jan. 21, 1976, as amended at 45 FR 26955, Apr. 22, 1980; 48 
FR 46011, Oct. 11, 1983; 48 FR 55280, Dec. 12, 1983; 49 FR 12684, Mar. 
30, 1984; 60 FR 49336, Sept. 25, 1995]

[[Page 341]]



PART 147_OPEN COMMISSION MEETINGS--Table of Contents



Sec.
147.1 General policy considerations, purpose and scope of rules relating 
          to open Commission meetings.
147.2 Definitions.
147.3 General requirement of open meetings; grounds upon which meetings 
          may be closed.
147.4 Procedure for announcing meetings.
147.5 General procedure for closing meetings.
147.6 Special procedure for closing certain meetings.
147.7 Maintenance of transcripts, recordings and minutes of closed 
          meetings.
147.8 Public availability of transcripts, recordings and minutes of 
          closed meetings.
147.9 Requests for copies of transcripts, recordings or minutes of 
          closed meetings.
147.10 Interpretation of this part with other provisions.

    Authority: Sec. 3(a), Pub. L. 94-409, 90 Stat. 1241 (5 U.S.C. 552b); 
sec. 101(a)(11), Pub. L. 93-463, 88 Stat. 1391 (7 U.S.C. 4a(j) (Supp. V, 
1975)), unless otherwise noted.

    Source: 42 FR 13704, Mar. 11, 1977, unless otherwise noted.



Sec.  147.1  General policy considerations, purpose and scope of
rules relating to open Commission meetings.

    (a) This part contains the rules of the Commodity Futures Trading 
Commission implementing the open meeting requirements of the Government 
in the Sunshine Act (Pub. L. 94-409, 90 Stat. 1241, 5 U.S.C. 552b). 
These rules apply to all deliberations of a quorum of the Commission 
which determine or result in the conduct or disposition of official 
Commission business, with the exception of deliberations required or 
permitted by Sec.  147.4, Sec.  147.5 or Sec.  147.6.
    (b) Among the primary purposes of these rules is the Commission's 
desire to inform the public to the fullest extent possible of its 
activities as an aid to its properly carrying out its responsibility for 
administrating and enforcing the Commodity Exchange Act, as amended, 7 
U.S.C. 1 et seq., and the Commission's belief that, in order to 
guarantee public confidence in the integrity of its decision-making, it 
must, to the fullest possible extent, conduct its business in an open 
manner.



Sec.  147.2  Definitions.

    For purposes of this part:
    (a) Agency includes the Commodity Futures Trading Commission;
    (b) Commission means the Commodity Futures Trading Commission;
    (c) Commissioner means a member of the Commodity Futures Trading 
Commission duly appointed as a Commissioner in accordance with section 
2(a)(2) of the Commodity Exchange Act, as amended, 7 U.S.C. 4a(a);
    (d) Meeting means the deliberations of a quorum of Commissioners 
that determine or result in the joint conduct or disposition of official 
Commission business, but does not include deliberations required or 
permitted by Sec.  147.4, Sec.  147.5 or Sec.  147.6;
    (e) Person includes an individual, partnership, corporation, 
association, exchange or other entity or organization;
    (f) Quorum means at least the minimum number of Commissioners 
required to take action on behalf of the Commission;
    (g) The term FOI, Privacy and Sunshine Acts compliance staff refers 
to the staff in the Office of the Secretariat in the Commission's 
principal office in Washington, DC who are assigned to respond to 
requests and handle various other matters under the Freedom of 
Information Act, the Privacy Act of 1974 and the Government in the 
Sunshine Act.

[42 FR 13704, Mar. 11, 1977, as amended at 45 FR 26955, Apr. 22, 1980]



Sec.  147.3  General requirement of open meetings; grounds upon which
meetings may be closed.

    (a) Commissioners shall not jointly conduct or dispose of agency 
business other than in accordance with the rules of this part, and 
meetings shall not be held in places which restrict membership or 
attendance or otherwise discriminate on the basis of race, color, creed, 
national origin, ancestry, religion or sex. Except as provided in 
paragraph (b) of this section, every portion of every meeting of the 
Commission shall be open to public observation.
    (b) Except where the Commission finds that the public interest 
requires otherwise, meetings or portions of meetings shall not be open 
to public

[[Page 342]]

observation, and the requirements of Sec. Sec.  147.4, 147.5 and 147.6 
shall not apply to any information pertaining to such meetings or 
portions of meetings otherwise required by the rules of this part to be 
publicly disclosed, where the Commission determines that such meetings 
or portions of meetings or the disclosure of such information is likely 
to:
    (1) Disclose matters that (i) are specifically authorized under 
criteria established by an Executive order to be kept secret in the 
interests of national defense or foreign policy, and (ii) are in fact 
properly classified pursuant to such Executive order;
    (2) Relate solely to the internal personnel rules and personnel 
practices of the Commission or any other agency of the Government of the 
United States, including, but not limited to, operational rules, 
guidelines, and manuals of procedure for investigators, auditors, and 
other employees (other than those rules and practices which establish 
legal requirements to which members of the public are expected to 
conform);
    (3) Disclose matters specifically exempted from disclosure by 
statute (other than the Freedom of Information Act, as amended, 5 U.S.C. 
552), provided that such statute (i) requires that the matters be 
withheld from the public in such a manner as to leave no discretion on 
the issue, or (ii) establishes particular criteria for withholding or 
refers to particular types of matters to be withheld. This includes, but 
is not limited to, data and information which would separately disclose 
the business transactions or market positions of any person and trade 
secrets or names of customers and data and information concerning or 
obtained in connection with any pending investigation of any person;
    (4)(i) Disclose trade secrets and commercial or financial 
information obtained from a person and privileged or confidential 
including, but not limited to:
    (A) Reports of stocks of grain, such as Forms 38, 38C, 38M and 38T, 
required to be filed pursuant to 17 CFR 1.44;
    (B) Statements of reporting traders on Form 40 required to be filed 
pursuant to 17 CFR 18.04;
    (C) Statements concerning special calls on positions required to be 
filed pursuant to 17 CFR part 21;
    (D) Statements concerning identification of special accounts on Form 
102 required to be filed pursuant to 17 CFR 17.01;
    (E) Reports required to be filed pursuant to parts 15 through 21 of 
this chapter;
    (F) Reports concerning option positions of large traders required to 
be filed pursuant to part 16 of this chapter;
    (G) Form 188; and
    (H) The following reports and statements that are also set forth in 
paragraph (b)(8) of this section, except as specified in 17 CFR 
1.10(g)(2) or 17 CFR 31.13(m): Forms 1-FR required to be filed pursuant 
to 17 CFR 1.10; FOCUS reports that are filed in lieu of Forms 1-FR 
pursuant to 17 CFR 1.10(h); Forms 2-FR required to be filed pursuant to 
17 CFR 31.13; the accountant's report on material inadequacies filed in 
accordance with 17 CFR 1.16(c)(5); all reports and statements required 
to be filed pursuant to 17 CFR 1.17(c)(6); the following portions of 
Form CPO-PQR required to be filed pursuant to 17 CFR 4.27: Schedule A: 
Question 2, subparts (b) and (d); Question 3, subparts (g) and (h); 
Question 9; Question 10, subparts (b), (c), (d), (e), and (g); Question 
11; and Question 12; and Schedules B and C; and the following portions 
of Form CTA-PR required to be filed pursuant to 17 CFR 4.27: Question 2, 
subparts (c) and (d);
    (ii) Information contained in reports, summaries, analyses, 
transcripts, letters or memoranda arising out of, in anticipation of or 
in connection with an examination or inspection of the books and records 
of any person or any other formal or informal inquiry or investigation; 
and
    (iii) Information for which confidential treatment has been 
requested and granted in accordance with 17 CFR 145.9;
    (5) Involve accusing any person of a crime, or formally censuring 
any person, including but not limited to:
    (i) Requests by the Commission that the Attorney General of the 
United States institute a criminal action against any person believed to 
have

[[Page 343]]

violated any provision of the Commodity Exchange Act, as amended, 7 
U.S.C. 1, et seq., or any rule, regulation or order thereunder;
    (ii) The consideration of any administrative proceeding instituted 
or to be instituted by the Commission against any person for a violation 
of the Commodity Exchange Act, as amended, 7 U.S.C. 1, et seq., or any 
rule, regulation or order thereunder;
    (6) Disclose information of a personal nature where disclosure would 
constitute a clearly unwarranted invasion of personal privacy, 
including, but not limited to, information of that character contained 
in:
    (i) Files concerning employees of the Commission;
    (ii) Files concerning persons subject to regulation by the 
Commission, including files with respect to applications for 
registration and biographical supplements submitted with such 
applications. Examples of the information on the applications and 
biographical supplements which may be protected are an individual's home 
address and telephone number, social security number, date and place of 
birth, fingerprints and, in appropriate cases, the information 
concerning prior arrests, indictments, criminal convictions or other 
judgments or sanctions imposed by State or Federal courts or regulatory 
authorities; and
    (iii) Files containing information for which confidential treatment 
has been requested and granted in accordance with 17 CFR 145.9;
    (7) Disclose investigatory records compiled for law enforcement 
purposes, or information which if written would be contained in such 
records, to the extent that production of such records or information 
would (i) interfere with enforcement proceedings, (ii) deprive a person 
of a right to a fair trial or an impartial adjudication, (iii) 
constitute an unwarranted invasion of personal privacy, (iv) disclose 
the identity of a confidential source, (v) disclose investigative 
techniques and procedures, or (vi) endanger the life or physical safety 
of law enforcement personnel. Investigatory records and information 
include all documents, records, transcripts, correspondence and related 
memoranda and work-product concerning examinations and other inquiries 
or investigations and related litigation as authorized by law, which 
pertain to or may disclose the possible violations by any person of any 
provision of law, including the Commodity Exchange Act, as amended, or 
of any rule or regulation adopted by the Commission or which pertain to 
the qualifications of any person registered or seeking registration 
under that Act or of any person affiliated with such person; and all 
written communications from or to any person who has confidentially 
complained or otherwise furnished information respecting such possible 
violations, as well as all correspondence and memoranda in connection 
with such confidential complaints or information;
    (8) Disclose information contained in or related to examination, 
operating, or condition reports prepared by, on behalf of, or for the 
use of the Commission or any other agency responsible for the regulation 
or supervision of financial institutions, including, but not limited to 
the following reports and statements that are also set forth in 
paragraph (b)(4)(i)(H) of this section, except as specified in 17 CFR 
1.10(g)(2) or 17 CFR 31.13(m): Forms 1-FR required to be filed pursuant 
to 17 CFR 1.10; FOCUS reports that are filed in lieu of Forms 1-FR 
pursuant to 17 CFR 1.10(h); Forms 2-FR pursuant to 17 CFR 31.13; the 
accountant's report on material inadequacies filed in accordance with 
1.16(c)(5); and all reports and statements required to be filed pursuant 
to 17 CFR 1.17(c)(6); and
    (i) The following portions of Form CPO-PQR required to be filed 
pursuant to 17 CFR 4.27: Schedule A: Question 2, subparts (b) and D; 
Question 3, subparts (g) and (h); Question 10, subparts (b), (c), (d), 
(e), and (g); Question 11; Question 12; and Question 13; and Schedules B 
and C; and
    (ii) The following portions of Form CTA-PR required to be filed 
pursuant to 17 CFR 4.27: Schedule B: Question 4, subparts (b), (c), (d), 
and (e); Question 5; and Question 6;
    (9) Disclose information the premature disclosure of which would be 
likely to (i) lead to significant financial speculation in currencies, 
securities, or commodities, (ii) significantly

[[Page 344]]

endanger the stability of any financial institution, or (iii) frustrate 
significantly the implementation of a proposed Commission action, except 
where the Commission has already disclosed to the public the content or 
nature of its proposed action, or where the Commission is required by 
law to make such disclosure on its own initiative prior to taking final 
Commission action on such proposal; or
    (10) Specifically concern the Commission's issuance of a subpena, or 
the Commission's participation in a civil action or proceeding, an 
action in a foreign court or international tribunal, or an arbitration, 
or the initiation, conduct, or disposition by the Commission of a 
particular case of formal agency ajudication pursuant to the procedures 
in 5 U.S.C. 554 or otherwise involving a determination on the record 
after opportunity for a hearing.

(5 U.S.C. 552, 5 U.S.C. 552b, and secs. 2(a)(11), 4b, 4f, 4g, 5a, 8a, 
and 17 of the Commodity Exchange Act, 7 U.S.C. 2, 4a(j), 6b, 6f, 6g, 7a, 
12a, and 21, as amended, 92 Stat. 865 et seq.; secs. 2(a)(1), 4c(a)-(d), 
4d, 4f, 4g, 4k, 4m, 4n, 8a, 15 and 17, Commodity Exchange Act (7 U.S.C. 
2, 4, 6c(a)-(d), 6f, 6g, 6k, 6m, 6n, 12a, 19 and 21; 5 U.S.C. 552 and 
552b); secs. 2(a)(11) and 8, 7 U.S.C. 4a(j) and 12 (1983); secs. 8a(5) 
and 19 of the Commodity Exchange Act, as amended, 7 U.S.C. 12a(5) and 23 
(1982); 5 U.S.C. 552 and 552b)

[42 FR 13704, Mar. 11, 1977, as amended at 42 FR 42851, Aug. 25, 1977; 
44 FR 13458, Mar. 12, 1979; 45 FR 2023, Jan. 10, 1980; 46 FR 24943, May 
4, 1981; 46 FR 54534, Nov. 3, 1981; 48 FR 35303, Aug. 3, 1983; 49 FR 
4465, Feb. 7, 1984; 49 FR 5541, Feb. 13, 1984; 53 FR 4613, Feb. 17, 
1988; 54 FR 41084, Oct. 5, 1989; 62 FR 4642, Jan. 31, 1997; 64 FR 27, 
Jan. 4, 1999; 71 FR 5595, Feb. 2, 2006; 75 FR 55450, Sept. 10, 2010; 77 
FR 11342, Feb. 24, 2012]



Sec.  147.4  Procedure for announcing meetings.

    (a) Advance notice of all meetings of the Commission shall be 
provided to the public. In the case of each meeting, except as provided 
in paragraph (b) of this section and in Sec.  147.6, the Commission 
shall, except to the extent that such information is exempt from 
disclosure under the provisions of Sec.  147.3(b), make a public 
announcement, at least one week before the date of the meeting of the 
time, place and subject matter of the meeting and which portions of the 
meeting shall be open or closed to the public, and shall indicate an 
official of the Commission who may be contacted at a designated 
telephone number for information about the meeting.
    (b) When a majority of Commissioners determines by a recorded vote 
that Commission business requires a meeting be held upon public notice 
of less than one week as required by paragraph (a) of this section, the 
Commission shall, except to the extent that such information is exempt 
from disclosure under the provisions of Sec.  147.3(b), make a public 
announcement, at the earliest practicable time, of the time, place and 
subject matter of the meeting and which portions of the meeting shall be 
open or closed to the public, and indicate an official of the Commission 
who may be contacted at a designated telephone number for information 
about the meeting.
    (c)(1) When it becomes necessary to change the time or place of a 
meeting for which a public announcement has been made pursuant to 
paragraphs (a) or (b) of this section, the Commission shall publicly 
announce such change at the earliest practicable time.
    (2) When it becomes necessary with respect to a meeting for which a 
public announcement has already been made pursuant to paragraphs (a), 
(b) or (c)(1) of this section to change the subject matter of a meeting, 
or change the Commission's determination as to which portions of a 
meeting shall be open or closed to the public, a majority of all 
Commissioners shall determine by a recorded vote that Commission 
business requires such a change and that no earlier announcement of the 
charge was possible, and the Commission shall publicly announce such 
change and the vote of each Commissioner upon such change at the 
earliest practicable time.
    (d) Public announcement of meetings, as required by this section, 
shall be provided as follows:
    (1) A public calendar shall be printed and distributed by the 
Commission on a regular basis to interested persons to provide advance 
public notice of meetings as required by paragraph (a) of this section, 
and, to the extent practicable, as required by paragraphs (b) and (c) of 
this section. Upon request in

[[Page 345]]

writing to the Office of Public Affairs, Commodity Futures Trading 
Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, 
DC 20581, any person or organization will be sent the public calendar on 
a regular basis free of charge. Copies of the public calendar also will 
be publicly available in the Commission's Office of Public Affairs.
    (2) Interested persons may contact the Commission's Office of the 
Secretariat during normal business hours to obtain information 
concerning future meetings.
    (e) Immediately following each public announcement required by this 
section, the Commission shall submit for publication in the Federal 
Register, except to the extent that such information is exempt from 
disclosure under the provisions of Sec.  147.3(b), notice of the time, 
place, and subject matter of a meeting, which portions of the meeting 
shall be open or closed to the public, any change in one of the 
preceding, and the name and telephone number of an official of the 
Commission who may be contacted for information about the meeting.

[42 FR 13704, Mar. 11, 1977, as amended at 60 FR 49336, Sept. 25, 1995]



Sec.  147.5  General procedure for closing meetings.

    (a) The Commission shall determine that a meeting or portion of a 
meeting will be closed to public observation pursuant to Sec.  147.3(b) 
only upon the majority vote of all Commissioners. The vote of each 
Commissioner shall be recorded, and the use of proxies shall be 
prohibited.
    (b) A separate vote of Commissioners shall be taken with respect to 
each meeting a portion or portions of which are proposed to be closed to 
the public pursuant to Sec.  147.3(b), or with respect to any 
information which is proposed to be withheld under Sec.  147.3(b).
    (c) A single vote of Commissioners may be taken with respect to a 
series of meetings, a portion or portions of which are proposed to be 
closed to the public, or with respect to any information concerning such 
series of meetings, when each meeting in such series involves the same 
particular matters and is scheduled to be held no more than thirty days 
after the initial meeting in such series.
    (d) Whenever any person whose interests may be directly affected by 
a portion of a meeting requests in writing to the Commission that the 
Commission close such portion to the public for any of the reasons set 
forth in Sec.  147.3(b) (5), (6) or (7), the Commission, upon the 
request of any Commissioner, shall vote by recorded vote whether to 
close that portion of the meeting.
    (e) Whenever any Commission employee whose appointment, employment 
or dismissal is to be the subject of a meeting or portion of meeting 
closed to the public pursuant to Sec.  147.3(b) requests in writing to 
the Commission that the Commission open that meeting or portion of 
meeting, the Commission shall open that meeting or portion of meeting to 
the public.
    (f) Within one day of any vote taken pursuant to paragraphs (b), (c) 
or (d) of this section, the Commission shall make publicly available a 
written copy of that vote reflecting the vote of each Commissioner on 
the question. If the Commission determines by a vote taken pursuant to 
paragraphs (b), (c) or (d) of this section that a portion of a meeting 
is to be closed to the public, the Commission shall, within one day of 
such vote, make publicly available a full written explanation of its 
action closing the portion of the meeting together with a list of all 
persons expected to attend the meeting and their affiliations, except to 
the extent that such information is exempt from disclosure under the 
provisions of Sec.  147.3(b).
    (g) Before any meeting or portion of a meeting may be closed 
pursuant to Sec.  147.3(b), the Commission's General Counsel shall 
publicly certify that, in his or her opinion, the meeting or portion of 
meeting may be closed to the public, and shall state each relevant 
exemptive provision.
    (h) Written copies of votes to close meetings and written 
explanations of Commission actions closing portions of meetings to the 
public required to be made publicly available by paragraph (f) of this 
section shall be available for public inspection in the offices of the 
FOI, Privacy and Sunshine Acts compliance staff, Office of the 
Secretariat,

[[Page 346]]

Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st 
Street, NW., Washington, DC 20581.
    (i) A copy of the certification of the Commission's General Counsel 
required by paragraph (g) of this section, together with a statement 
from the presiding officer at any meeting closed, in whole or in part, 
pursuant to Sec.  147.3(b), setting forth the time and place of the 
meeting, and the persons present, shall be retained by the Commission 
and, except to the extent that such information is exempt from 
disclosure under the provisions of Sec.  147.3(b), shall be available 
for public inspection in the offices of the FOI, Privacy and Sunshine 
Acts compliance staff, Office of the Secretariat, Commodity Futures 
Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., 
Washington, DC 20581.

[42 FR 13704, Mar. 11, 1977, as amended at 45 FR 26955, Apr. 22, 1980; 
60 FR 49336, Sept. 25, 1995]



Sec.  147.6  Special procedure for closing certain meetings.

    (a) Any meeting or portion of meeting that may properly be closed to 
the public pursuant to Sec.  147.3(b) (4), (8), (9)(i), (9)(ii) or (10), 
or any combination thereof, may be closed if a majority of Commissioners 
votes by recorded vote at the beginning of such meeting, or portion 
thereof, to close the exempt portion or portions of the meeting.
    (b) The provisions of Sec.  147.4, and of Sec.  147.5 (a), (b), (c), 
(d), (e), (f) and (h) shall not apply to any portion of a meeting to 
which paragraph (a) of this section is applied. The provisions of Sec.  
147.5(g) and (i) shall apply to any such portions of meetings.
    (c) A written copy of all votes taken pursuant to paragraph (a) of 
this section reflecting the vote of each Commissioner on the question 
shall be made available for public inspection in the offices of the FOI, 
Privacy and Sunshine Acts compliance staff, Office of the Secretariat, 
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st 
Street, NW., Washington, DC 20581.
    (d) The Commission shall, except to the extent that such information 
is exempt from disclosure under the provisions of Sec.  147.3(b), make 
public announcement at the earliest practicable time of the time, place, 
and subject matter of any portion of a meeting to which paragraph (a) of 
this section is applied. Such public announcement shall be provided, to 
the extent practicable, through the Commission's public calendar as 
described in Sec.  147.4(d)(1), and by the Commission's Office of the 
Secretariat as set forth in Sec.  147.4(d)(2).

[42 FR 13704, Mar. 11, 1977, as amended at 45 FR 26955, Apr. 22, 1980; 
60 FR 49336, Sept. 25, 1995]



Sec.  147.7  Maintenance of transcripts, recordings and minutes of
closed meetings.

    (a) The Commission shall make and maintain a complete transcript or 
electronic recording adequate to record fully the proceedings of each 
meeting or portion of meeting closed to the public, except as provided 
in paragraph (b) of this section.
    (b)(1) In the case of each meeting or portion of meeting closed to 
the public pursuant to Sec.  147.3(b) (8), (9)(i), (9)(ii) or (b)(10), 
or any combination thereof, the Commission shall make and maintain 
either a complete transcript or recording as described in paragraph (a) 
of this section, or a set of minutes.
    (2) When the Commission elects to keep minutes under paragraph 
(b)(1) of this section, the minutes shall fully and clearly describe all 
matters discussed at the closed meeting or closed portion thereof, and 
shall provide a full and accurate summary of any actions taken, and the 
reasons therefor, including a description of each of the views expressed 
on any item, and a record of any roll call vote taken which reflects the 
vote of each Commissioner on the question. All documents considered in 
connection with any actions taken shall be identified in such minutes.



Sec.  147.8  Public availability of transcripts, recordings and minutes
of closed meetings.

    (a) The Commission shall make promptly available to the public, in 
the offices of the FOI, Privacy and Sunshine Acts compliance staff, 
Office of the Secretariat, Commodity Futures Trading Commission, Three 
Lafayette

[[Page 347]]

Centre, 1155 21st Street, NW., Washington, DC 20581, the transcript, 
electronic recording or set of minutes of the discussion of any item on 
the agenda of any closed meeting or closed portion thereof (as required 
by Sec.  147.7), or of any item of the testimony of any witness received 
at such meeting or portion thereof, except for such item or items of 
such discussion or testimony that are determined, in accordance with the 
procedure set forth in paragraph (b) of this section, to contain 
information which may be withheld under Sec.  147.3(b).
    (b)(1) All determinations made pursuant to paragraph (a) of this 
section that items of discussion or testimony reflected in transcripts, 
recordings or sets of minutes of closed meetings or closed portions 
thereof are exempt from disclosure pursuant to Sec.  147.3(b), shall be 
made by the Assistant Secretary of the Commission for FOI, Privacy and 
Sunshine Acts compliance after due consultation with the Office of the 
Commission's General Counsel and the Director of any affected staff 
division.
    (2) Any person who objects to any determination made pursuant to 
paragraph (b)(1) of this section may seek Commission review of that 
determination by filing with the Commission's Office of the Secretariat 
a brief written statement that review is sought which contains a concise 
statement of the reasons why the determination should be set aside.
    (c) The Commission shall maintain a complete verbatim copy of the 
transcript, a complete electronic recording or a complete copy of the 
minutes of each meeting or portion of a meeting closed to the public, 
which are made in accordance with Sec.  147.7(a) or Sec.  147.7(b), for 
a period of at least two years after such meeting or portion of meeting, 
or until one year after the conclusion of any Commission proceeding with 
respect to which the meeting or portion thereof was held, whichever 
occurs later.

[42 FR 13704, Mar. 11, 1977, as amended at 45 FR 26955, Apr. 22, 1980; 
60 FR 49336, Sept. 25, 1995]



Sec.  147.9  Requests for copies of transcripts, recordings or minutes
of closed meetings.

    (a) Copies of a transcript transcription of an electronic recording 
or set of minutes disclosing the identity of each speaker, which are 
publicly available pursuant to Sec.  147.8(a), shall be furnished to any 
person at the actual cost of duplication or transcription pursuant to 
the schedule of fees set forth in 17 CFR part 145, appendix B (a)(4), 
(a)(5), (a)(7), (a)(8), (a)(9), (d) and (e).
    (b) Requests for copies of transcripts, transcriptions of electronic 
recordings or sets of minutes as described in paragraph (a) of this 
section shall be made either in person, by telephone, or by mail 
addressed to the FOI, Privacy and Sunshine Acts compliance staff, Office 
of the Secretariat, Commodity Futures Trading Commission, Three 
Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581.

(7 U.S.C. 4a(j) and 16a as amended by Pub. L. 97-444, 96 Stat. 2294 
(1983) and 5 U.S.C. 552, 552a, and 552b)

[42 FR 13704, Mar. 11, 1977, as amended at 45 FR 26955, Apr. 22, 1980; 
48 FR 46012, Oct. 11, 1983; 49 FR 12684, Mar. 30, 1984; 60 FR 49336, 
Sept. 25, 1995]



Sec.  147.10  Interpretation of this part with other provisions.

    (a) Nothing in this part shall be interpreted as:
    (1) Expanding or limiting the present rights of any person under 
part 145 of this title (implementing the provisions of the Freedom of 
Information Act, 5 U.S.C. 552), except that the exemptions set forth in 
Sec.  147.3(b) of this part shall govern in the case of any request made 
pursuant to part 145 to copy or inspect the transcripts, recordings or 
sets of minutes described in this part; or
    (2) Authorizing the Commission to withhold from any person any 
record, including transcripts, recordings or sets of minutes required by 
this part, which is otherwise accessible to such individual under part 
146 of this title (implementing the provisions of the Privacy Act, 5 
U.S.C. 552a).
    (b) The requirements of chapter 33 of title 44, U.S. Code (with 
respect to the disposal of records), shall not apply to

[[Page 348]]

the transcripts, recordings and minutes described in this part.



PART 148_IMPLEMENTATION OF THE EQUAL ACCESS TO JUSTICE ACT IN COVERED
ADJUDICATORY PROCEEDINGS BEFORE THE COMMISSION--Table of Contents



                      Subpart A_General Provisions

Sec.
148.1 Purpose of these rules.
148.2 When the Act applies.
148.3 Proceedings covered.
148.4 Eligibility of applicants.
148.5 Standards for awards.
148.6 Allowable fees and expenses.
148.7 Rulemaking on maximum rates for attorney fees.
148.8 Awards against other agencies.

             Subpart B_Information Required from Applicants

148.11 Contents of application.
148.12 Net worth exhibit.
148.13 Documentation of fees and expenses.
148.14 When an application may be filed.

            Subpart C_Procedures for Considering Applications

148.21 Filing and service of documents.
148.22 Answer to application.
148.23 Reply.
148.24 Comments by other parties.
148.25 Settlement.
148.26 Further proceedings.
148.27 Decision.
148.28 Appeal to the Commission.
148.29 Judicial review.
148.30 Payment of award.

    Authority: Equal Access to Justice Act, 5 U.S.C. 504(c)(1) and secs. 
2(a)(11) and 8a(5) of the Commodity Exchange Act, 7 U.S.C. 4a(j) and 
12a(5), unless otherwise noted.

    Source: 46 FR 57671, Nov. 25, 1981, unless otherwise noted.



                      Subpart A_General Provisions



Sec.  148.1  Purpose of these rules.

    The Equal Access to Justice Act, 5 U.S.C. 504 (called ``the Act'' in 
this part), provides for the award of attorney fees and other expenses 
to eligible individuals and entities who are prevailing private parties 
in adjudicatory proceedings before the Commission. An eligible party may 
receive an award when it prevails over the Commission, unless the 
Commission's position was substantially justified or special 
circumstances make an award unjust. The rules in this part describe the 
parties eligible for awards and the proceedings that are covered. They 
also explain how to apply for awards, and the procedures and standards 
that the Commission will use to make them.

[51 FR 18880, May 23, 1986]



Sec.  148.2  When the Act applies.

    The Act applies to any covered adjudicatory proceeding pending 
before the Commission on or after October 1, 1981. This includes 
proceedings begun before October 1, 1981, if final Commission action has 
not been taken before that date. Awards may be sought for fees and other 
expenses incurred before October 1, 1981, in any such covered 
proceeding.

[51 FR 18880, May 23, 1986]



Sec.  148.3  Proceedings covered.

    (a) The Act applies to adjudicatory proceedings conducted by the 
Commission. These are adjudications under 5 U.S.C. 554 in which the 
position of the Commission or any other agency of the United States, or 
any component of an agency, is presented by an attorney or other 
representative who enters an appearance and participates in the 
proceeding. Reparation proceedings under section 14 of the Commodity 
Exchange Act, 7 U.S.C. 18, Commission review of exchange disciplinary 
and access denial actions under section 8c of the Commodity Exchange 
Act, 7 U.S.C. 12c, and registered futures association disciplinary and 
membership denial actions under section 17 of the Commodity Exchange 
Act, 7 U.S.C. 21, are not covered by the Act. Proceedings brought to 
determine whether or not to grant or renew registrations pursuant to 
sections 8a or 17(o), of the Commodity Exchange Act, 7 U.S.C. 8, 12a and 
21(o), or contract market designations pursuant to section 6(a) of the 
Commodity Exchange Act, 7 U.S.C. 8 (a), are excluded, but proceedings 
brought to suspend or revoke registrations or contract market 
designations are covered if they are otherwise adjudicatory proceedings.

[[Page 349]]

For the Commission, the types of proceedings generally covered are 
adjudicatory proceedings as defined in Sec.  10.2(b) of this chapter; 
part 14 proceedings, if they involve a hearing, are also covered.
    (b) The Commission's decision not to identify a type of proceeding 
as an adversary adjudication shall not preclude the filing of an 
application by a party who believes the proceeding is covered by the 
Act; whether the proceeding is covered will then be an issue for 
resolution in the proceedings on the application.
    (c) If a proceeding includes both matters covered by the Act and 
matters specifically excluded from coverage, any award made will include 
only fees and expenses related to covered issues.

[46 FR 57671, Nov. 25, 1981, as amended at 51 FR 18880, May 23, 1986; 59 
FR 5528, Feb. 7, 1994]



Sec.  148.4  Eligibility of applicants.

    (a) To be eligible for an award of attorney fees and other expenses 
under the Act, the applicant must be a party to the adjudicatory 
proceeding for which it seeks an award. The term ``party'' is defined in 
5 U.S.C. 551(3). The applicant must show that it meets all conditions of 
eligibility set out in this subpart and in subpart B.
    (b) The types of eligible applicants are as follows:
    (1) An individual with a net worth of not more than $2 million;
    (2) The sole owner of an unincorporated business who has a net worth 
of not more than $7 million, including both personal and business 
interests, and not more that 500 employees;
    (3) A charitable or other tax-exempt organization described in 
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) 
with not more than 500 employees;
    (4) A cooperative association as defined in section 15(a) of the 
Agricultural Marketing Act (12 U.S.C. 1141j(a)) with not more than 500 
employees; and
    (5) Any other partnership, corporation, association, unit of local 
government, or public or private organization with a net worth of not 
more than $7 million and not more than 500 employees.
    (c) For the purpose of eligibility, the net worth and number of 
employees of an applicant shall be determined as of the date the 
adjudicatory proceeding was initiated.
    (d) An applicant who owns an unincorporated business will be 
considered as an ``individual'' rather than a ``sole owner of an 
unincorporated business'' if the issues on which the applicant prevails 
are related primarily to personal interests rather than to business 
interests.
    (e) The employees of an applicant include all persons who regularly 
perform services for compensation for the applicant, under the 
applicant's direction and control. The term ``employee'' also embraces 
all the agents of an applicant, by whatever title or label they may be 
known, for whose acts or omissions the applicant may be held liable 
under the Commodity Exchange Act. See 7 U.S.C. 4. Part-time employees 
shall be included on a proportional basis.
    (f) The net worth and number of employees of the applicant and all 
of its affiliates shall be aggregated to determine eligibility. Any 
individual, corporation or other entity that directly or indirectly 
controls or owns a majority of the voting shares or other interest of 
the applicant, or any corporation or other entity of which the applicant 
directly or indirectly owns or controls a majority of the voting shares 
or other interest, will be considered an affiliate for purposes of this 
part, unless the Presiding Officer determines that such treatment would 
be unjust and contrary to the purposes of the Act in light of the actual 
relationship between the affiliated entities. In addition, the Presiding 
Officer may determine that financial relationships of the applicant 
other than those described in this paragraph constitute special 
circumstances that would make an award unjust.
    (g) An applicant that participates in a proceeding on behalf of one 
or more other persons or entitles that would be ineligible is not itself 
eligible for an award.

[46 FR 57671, Nov. 25, 1981, as amended at 51 FR 18880, May 23, 1986]

[[Page 350]]



Sec.  148.5  Standards for awards.

    (a) A prevailing applicant may receive an award for fees and 
expenses incurred in connection with an adjudicatory proceeding, or in a 
significant and discrete substantive portion of the proceeding, unless 
the position of the Commission was substantially justified. The position 
of the Commission includes, in addition to the position taken by the 
Commission in the adversary adjudication, the action or failure to act 
by the Commission upon which the adversary adjudication is based. The 
burden of proof that an award should not be made to an eligible 
prevailing applicant is on the Commission.
    (b) An award will be reduced or denied if the applicant has unduly 
or unreasonably protracted the adjudicatory proceeding or if special 
circumstances make the award sought unjust.

[46 FR 57671, Nov. 25, 1981, as amended at 51 FR 18880, May 23, 1986]



Sec.  148.6  Allowable fees and expenses.

    (a) Awards will be based on rates customarily charged by persons 
engaged in the business of acting as attorneys, agents and expert 
witnesses, even if the services were made available without charge or at 
a reduced rate to the applicant.
    (b) No award for the fee of an attorney or agent under these rules 
may exceed $75 per hour. No award to compensate an expert witness may 
exceed the maximum daily rate prescribed for GS-18 under section 5332 of 
title 5 of the U.S. Code. However, an award may also include the 
reasonable expenses of the attorney, agent, or witness as a separate 
item, if the attorney, agent or witness ordinarily charges clients 
separately for such expenses.
    (c) In determining the reasonableness of the fee sought for an 
attorney, agent or expert witness, the Presiding Officer shall consider 
the following:
    (1) If the attorney, agent or witness is in private practice, his or 
her customary fee for similar services, or, if an employee of the 
applicant, the fully allocated cost of the services;
    (2) The prevailing rate for similar services in the community in 
which the attorney, agent or witness ordinarily performs services;
    (3) The time actually spent in the representation of the applicant;
    (4) The time reasonably spent in light of the difficulty or 
complexity of the issues in the adjudicatory proceeding; and
    (5) Such other factors as may bear on the value of the services 
provided.
    (d) The reasonable cost of any study, analysis, test, project or 
similar matter prepared on behalf of a party may be awarded, to the 
extent that the charge for the service does not exceed the prevailing 
rate for similar services, and the study or other matter was necessary 
for preparation of the applicant's case.



Sec.  148.7  Rulemaking on maximum rates for attorney fees.

    (a) If warranted by an increase in the cost of living or by special 
circumstances (such as limited availability of attorneys qualified to 
handle certain types of proceedings), the Commission may adopt 
regulations providing that attorney fees may be awarded at a rate higher 
than $75 per hour in some or all of the types of proceedings covered by 
this part. The Commission will conduct any rulemaking proceedings for 
this purpose under the informal rulemaking procedures of the 
Administrative Procedure Act, 5 U.S.C. 553.
    (b) Any person may file with the Commission a petition for 
rulemaking to increase the maximum rate for attorney fees, in accordance 
with Sec.  13.2 of this chapter.



Sec.  148.8  Awards against other agencies.

    If an applicant is entitled to an award because it prevails over 
another agency of the United States that participates in an adjudicatory 
proceeding before the Commission and takes a postion that is not 
substantially justified, the award or an appropriate portion of the 
award shall be made against that agency.

[[Page 351]]



             Subpart B_Information Required from Applicants



Sec.  148.11  Contents of application.

    (a) An application for an award of fees and expenses under the Act 
shall identify the applicant and the adjudicatory proceeding for which 
an award is sought. The application shall show that the applicant has 
prevailed and identify the position of the Commission or other agency 
that the applicant alleges was not substantially justified. Unless the 
applicant is an individual, the application shall also state the number 
of employees of the applicant and describe briefly the type and purpose 
of its organization or business.
    (b) The application shall also include a statement that the 
applicant's net worth does not exceed $2 million (if an individual) or 
$7 million (for all other applicants, including their affiliates). 
However, an applicant may omit this statement if:
    (1) It attaches a copy of a ruling by the Internal Revenue Service 
that it qualifies as an organization described in section 501(c)(3) of 
the Internal Revenue Code (26 U.S.C. 501(c)(3)) or, in the case of a 
tax-exempt organization not required to obtain a ruling from the 
Internal Revenue Service on its exempt status, a statement that 
describes the basis for the applicant's belief that it qualifies under 
such section; or
    (2) It states that it is a cooperative association as defined in 
section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)).
    (c) The application shall state the amount of fees and expenses for 
which an award is sought.
    (d) The application may also include any other matters that the 
applicant wishes the Commission to consider in determining whether and 
in what amount an award should be made.
    (e) The application shall be signed by the applicant or an 
authorized officer or attorney of the applicant. It shall also contain 
or be accompanied by a written verification under oath or under penalty 
of perjury that the information provided in the application is true and 
correct.

[46 FR 57671, Nov. 25, 1981, as amended at 51 FR 18880, May 23, 1986]



Sec.  148.12  Net worth exhibit.

    (a) Each applicant except a qualified tax-exempt organization or 
cooperative association must provide with its application a detailed 
exhibit showing the net worth of the applicant and any affiliates (as 
defined in Sec.  148.4(f) of this part) when the adjudicatory proceeding 
was initiated. The exhibit may be in any form convenient to the 
applicant that provides full disclosure of the applicant's and its 
affiliates' assets and liabilities and is sufficient to determine 
whether the applicant qualifies under the standards in this part. The 
Presiding Officer may require an applicant to file additional 
information to determine its eligibility for an award.
    (b) Ordinarily, the net worth exhibit will be included in the public 
record of the adjudicatory proceeding. However, an applicant that 
objects to public disclosure of information in any portion of the 
exhibit and believes there are legal grounds for withholding it from 
disclosure may submit that portion of the exhibit directly to the 
Presiding Officer in a sealed envelope labeled ``Confidential Financial 
Information,'' accompanied by a motion to withhold the information from 
public disclosure. The motion shall describe the information sought to 
be withheld and explain, in detail, why it falls within one or more of 
the specific exemptions from mandatory disclosure under the Freedom of 
Information Act, 5 U.S.C. 552(b)(1)-(9), why public disclosure of the 
information would adversely affect the applicant, and why disclosure is 
not required in the public interest. The material in question shall be 
served on counsel representing the Commission or other agency against 
which the applicant seeks an award, but need not be served on any other 
party to the adjudicatory proceeding. If the Presiding Officer finds 
that the information should not be withheld from disclosure, it shall be 
placed in the public record of the adjudicatory proceeding. Otherwise, 
any request to inspect or copy the exhibit shall be disposed of in 
accordance with the Commission's established procedures under the 
Freedom of Information Act as provided in part 145 of this chapter. For 
that purpose, the applicant shall file a copy of its motion

[[Page 352]]

with the Commission's Freedom of Information Act Compliance Staff in the 
Office of the Secretariat, Washington, DC.



Sec.  148.13  Documentation of fees and expenses.

    The application shall be accompanied by full documentation of the 
fees and expenses, including the cost of any study, analysis, test, 
project or similar matter, for which an award is sought. A separate 
itemized statement shall be submitted for each professional firm or 
individual whose services are covered by the application, showing the 
hours spent in connection with the proceeding by each individual, a 
description of the specific services performed, the rate at which each 
fee has been computed, any expenses for which reimbursement is sought, 
the total amount claimed, and the total amount paid or payable by the 
applicant or by any other person or entity for the services provided. 
The Presiding Officer may require the applicant to provide vouchers, 
receipts, or other substantiation for any expenses claimed.



Sec.  148.14  When an application may be filed.

    (a) An application may be filed whenever the applicant has prevailed 
in the adjudicatory proceeding or in a significant and discrete 
substantive portion of the proceeding, subject to the separate hearing 
procedure pursuant to Sec.  10.63(b) of this chapter, but in no case 
later than 30 days after the Commission's final disposition of the 
adjudicatory proceeding.
    (b) If review or reconsideration is sought or taken of a decision as 
to which an applicant believes it has prevailed, proceedings for the 
award of fees shall be stayed pending final disposition of the 
underlying controversy.
    (c) For purposes of this rule, final disposition means the later of
    (1) The date on which an initial decision by the Presiding Officer 
becomes final pursuant to Sec.  10.84 of this chapter;
    (2) Issuance of an order disposing of any petitions for 
reconsideration of the Commission's final order in the proceeding 
pursuant to Sec.  10.106 of the Rules of Practice;
    (3) If no petition for reconsideration is filed, the last date on 
which such a petition could have been filed pursuant to Sec.  10.106 of 
the Rules of Practice; or
    (4) Issuance of a final Commission order or any other final 
resolution of a proceeding, such as a settlement or voluntary dismissal, 
which is not subject to a petition for reconsideration.



            Subpart C_Procedures for Considering Applications



Sec.  148.21  Filing and service of documents.

    Any application for an award or other pleading or document related 
to an application shall be filed and served on all parties to the 
adjudicatory proceeding, except as provided in Sec.  148.12(b) for 
confidential financial information.



Sec.  148.22  Answer to application.

    (a) Within 30 days after service of an application, counsel 
representing the Commission or other agency against which an award is 
sought may file an answer to the application. Unless counsel for the 
Commission or for another relevant agency requests an extension of time 
for filing or files a statement of intent to negotiate under paragraph 
(b) of this section, failure to file an answer within the 30-day period 
may be treated as a consent to the award requested.
    (b) If counsel for the Commission or for another relevant agency and 
the applicant believe that the issues in the fee application can be 
settled, they may jointly file a statement of their intent to negotiate 
a settlement. The filing of this statement shall extend the time for 
filing an answer for an additional 30 days, and further extensions may 
be granted by the Presiding Officer upon request by counsel for the 
Commission or for another relevant agency and the applicant.
    (c) Any answer shall explain in detail any objections to the award 
requested and identify the facts relied on in support of the position of 
counsel for the Commission or for another relevant agency. If the answer 
is based on any alleged facts not already in the record of the 
adjudicatory proceeding, counsel for the Commission or for another 
relevant agency shall include with the answer either supporting 
affidavits or a

[[Page 353]]

request for further proceedings under Sec.  148.26 of this part.



Sec.  148.23  Reply.

    Within 15 days after service of an answer, the applicant may file a 
reply. If the reply is based on any alleged facts not already in the 
record of the adjudicatory proceeding, the applicant shall include with 
the reply either supporting affidavits or a request for further 
proceedings under Sec.  148.26 of this part.



Sec.  148.24  Comments by other parties.

    Any party to an adjudicatory proceeding other than the applicant and 
counsel for the Commission or for another relevant agency may file 
comments on an application within 30 days after it is served or on an 
answer within 15 days after it is served. A commenting party may not 
participate further in proceedings on the application unless the 
Presiding Officer determines that the public interest requires such 
participation in order to permit full exploration of matters raised in 
the comments.



Sec.  148.25  Settlement.

    The applicant may propose settlement of the award to the Commission 
before final action on the application, either in connection with a 
settlement of the adjudicatory proceeding, or after the adjudicatory 
proceeding has been concluded, in either case in accordance with Sec.  
10.108 of this chapter. If a prevailing party offers a proposed 
settlement of an award before an application has been filed, the 
application shall be filed with the proposed settlement.



Sec.  148.26  Further proceedings.

    (a) Ordinarily, the determination of an award will be made on the 
basis of the written record. However, on request of either the applicant 
or counsel for the Commission or for another relevant agency, or on his 
or her own initiative, the Presiding Officer may order further 
proceedings, such as an informal conference, oral argument, additional 
written submissions or an evidentiary hearing. Such further proceedings 
shall be held only when necessary for full and fair resolution of the 
issues arising from the application, and shall be conducted as promptly 
as possible. Whether or not the position of the Commission was 
substantially justified shall be determined on the basis of the 
administrative record, as a whole, which is made in the adversary 
adjudication for which fees and other expenses are sought. No discovery 
and/or evidentiary proceedings shall be permitted into the question of 
whether the agency's position was substantially justified.
    (b) A request that the Presiding Officer order further proceedings 
under this section shall specifically identify the information sought or 
the disputed issues and shall explain why additional proceedings are 
necessary to resolve the issues.

[46 FR 57671, Nov. 25, 1981, as amended at 51 FR 18881, May 23, 1986]



Sec.  148.27  Decision.

    The Presiding Officer shall issue an initial decision on the 
application in accordance with the provisions of Sec.  10.84 of this 
chapter. The decision shall include written findings and conclusions on 
the applicant's eligibility and status as a prevailing party, and an 
explanation of the reasons for any difference between the amount 
requested and the amount awarded. The decision shall also include, if at 
issue, findings on whether the Commission's position was substantially 
justified, whether the applicant unduly or unreasonably protracted the 
adjudicatory proceedings, or whether special circumstances make an award 
unjust. If the applicant has sought an award against more than one 
agency, the decision shall allocate responsibility for payment of any 
award made among the agencies, and shall explain the reasons for the 
allocation made.



Sec.  148.28  Appeal to the Commission.

    (a) Either the applicant or counsel for the Commission or for 
another relevant agency may appeal the initial decision on the fee 
application by complying with the requirements of this section. An 
appealing party shall serve upon opposing parties and shall file with 
the Proceedings Clerk a notice of appeal within fifteen (15) days after

[[Page 354]]

service of the initial decision. The notice need consist only of a brief 
statement indicating the filing party's intent to appeal the initial 
decision, and shall include the date upon which the initial decision was 
rendered, the name of the proceeding, and the docket number of the 
proceeding. The failure of a party timely to file and serve a notice of 
appeal in accordance with this paragraph, or to perfect the appeal in 
accordance with paragraph (b) of this section, shall constitute a 
voluntary waiver of any objection to the initial decision, and of all 
further administrative or judicial review under these rules and the 
Equal Access to Justice Act.
    (b) An appeal shall be perfected by the appealing party by timely 
filing with the Proceedings Clerk an appeal brief which meets the 
requirements of paragraphs (b) and (d) of this section. An original and 
one copy of the appeal brief shall be filed within thirty (30) days 
after filing of the notice of appeal. By motion of the appealing party, 
the Commission may, for good cause shown, extend the time for filing the 
appeal brief. If the appeal brief is not filed within the time 
prescribed in this subparagraph, the Commission may, upon its own motion 
or upon motion by a party, dismiss the appeal, in which event the 
initial decision shall become the final decision and order of the 
Commission, effective upon service of the order of dismissal.
    (c) The opposing party may, within thirty (30) days after service of 
the appeal brief, file an original and one copy of an answering brief, 
and serve one copy thereof, unless the time limit is extended by the 
Commission upon motion of the party and for good cause shown.
    (d) Parties filing an appeal brief or answering brief shall meet the 
requirements of Sec.  10.12 of this chapter as to form. The content of 
briefs shall satisfy the requirements of Sec.  10.102(d) of this 
chapter, except that any party, with leave of the Commission, may file 
an informal document in lieu of a brief. No brief shall exceed thirty-
five (35) pages in length without advance leave of the Commission.
    (e) On review, the Commission may, in its discretion, consider sua 
sponte any issues arising from the record and may base its determination 
thereon, or limit the issues to those presented in the statement of 
issues in the briefs, treating those issues not raised as waived.

[51 FR 18881, May 23, 1986]



Sec.  148.29  Judicial review.

    Judicial review of final Commission decisions on awards may be 
sought as provided in 5 U.S.C. 504(c)(2).



Sec.  148.30  Payment of award.

    An applicant seeking payment of an award from the Commission shall 
submit to the Executive Director of the Commission, Three Lafayette 
Centre, 1155 21st Street, NW., Washington, DC 20581, a copy of the 
Commission's final decision granting the award, accompanied by a 
statement that the applicant will not seek review of the decision in the 
United States courts. At the same time, the applicant shall provide a 
copy of his submissions to counsel for the Commission. The Commission 
will, within 60 days of receipt of the applicant's submissions, forward 
to the United States Department of the Treasury a Standard Form 1166, 
``Voucher and Schedule of Payments,'' so as to have the Treasury 
Department issue a check in the amount awarded in the Commission's 
decision, unless judicial review of the award or of the underlying 
decision in the adjudicatory proceeding has been sought by the applicant 
or any other party to the adjudicatory proceeding.

[46 FR 57671, Nov. 25, 1981, as amended at 60 FR 49336, Sept. 25, 1995]



PART 149_ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF HANDICAP IN
PROGRAMS OR ACTIVITIES CONDUCTED BY THE COMMODITY FUTURES TRADING 
COMMISSION--Table of Contents



Sec.
149.101 Purpose.
149.102 Application.
149.103 Definitions.
149.104-149.110 [Reserved]
149.111 Notice.
149.112-149.129 [Reserved]
149.130 General prohibitions against discrimination.
149.131-149.139 [Reserved]

[[Page 355]]

149.140 Employment.
149.141-149.148 [Reserved]
149.149 Program accessibility: Discrimination prohibited.
149.150 Program accessibility: Existing facilities.
149.151 Program accessibility: New construction and alterations.
149.152-149.159 [Reserved]
149.160 Communications.
149.161-149.169 [Reserved]
149.170 Compliance procedures.

    Authority: 29 U.S.C 794, unless otherwise noted.

    Source: 51 FR 22889, 22896, June 23, 1986, unless otherwise noted.



Sec.  149.101  Purpose.

    This part effectuates section 119 of the Rehabilitation, 
Comprehensive Services, and Developmental Disabilities Amendments of 
1978, which amended section 504 of the Rehabilitation Act of 1973 to 
prohibit discrimination on the basis of handicap in programs or 
activities conducted by Executive agencies or the U.S. Postal Service.



Sec.  149.102  Application.

    This part applies to all programs or activities conducted by the 
agency.



Sec.  149.103  Definitions.

    For purposes of this part, the term--
    Assistant Attorney General means the Assistant Attorney General, 
Civil Rights Division, U.S. Department of Justice.
    Auxiliary aids means services or devices that enable persons with 
impaired sensory, manual, or speaking skills to have an equal 
opportunity to participate in, and enjoy the benefits of, programs or 
activities conducted by the agency. For example, auxiliary aids useful 
for persons with impaired vision include readers, brailled materials, 
audio recordings, telecommunications devices and other similar services 
and devices. Auxiliary aids useful for persons with impaired hearing 
include telephone handset amplifiers, telephones compatible with hearing 
aids, telecommunication devices for deaf persons (TDD's), interpreters, 
notetakers, written materials, and other similar services and devices.
    Complete complaint means a written statement that contains the 
complainant's name and address and describes the agency's alleged 
discriminatory action in sufficient detail to inform the agency of the 
nature and date of the alleged violation of section 504. It shall be 
signed by the complainant or by someone authorized to do so on his or 
her behalf. Complaints filed on behalf of classes or third parties shall 
describe or identify (by name, if possible) the alleged victims of 
discrimination.
    Facility means all or any portion of buildings, structures, 
equipment, roads, walks, parking lots, rolling stock or other 
conveyances, or other real or personal property.
    Handicapped person means any person who has a physical or mental 
impairment that substantially limits one or more major life activities, 
has a record of such an impairment, or is regarded as having such an 
impairment.
    As used in this definition, the phrase:
    (1) Physical or mental impairment includes--
    (i) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
Neurological; musculoskeletal; special sense organs; respiratory, 
including speech organs; cardiovascular; reproductive; digestive; 
genitourinary; hemic and lymphatic; skin; and endocrine; or
    (ii) Any mental or psychological disorder, such as mental 
retardation, organic brain syndrome, emotional or mental illness, and 
specific learning disabilities. The term ``physical or mental 
impairment'' includes, but is not limited to, such diseases and 
conditions as orthopedic, visual, speech, and hearing impairments, 
cerebral palsy, epilepsy, muscular dystrophy, multiple sclerosis, 
cancer, heart disease, diabetes, mental retardation, emotional illness, 
and drug addiction and alocoholism.
    (2) Major life activities includes functions such as caring for 
one's self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning, and working.
    (3) Has a record of such an impairment means has a history of, or 
has been misclassified as having, a mental or physical impairment that 
substantially limits one or more major life activities.

[[Page 356]]

    (4) Is regarded as having an impairment means--
    (i) Has a physical or mental impairment that does not substantially 
limit major life activities but is treated by the agency as constituting 
such a limitation;
    (ii) Has a physical or mental impairment that substantially limits 
major life activities only as a result of the attitudes of others toward 
such impairment; or
    (iii) Has none of the impairments defined in paragraph (1) of this 
definition but is treated by the agency as having such an impairment.
    Historic preservation programs means programs conducted by the 
agency that have preservation of historic properties as a primary 
purpose.
    Historic properties means those properties that are listed or 
eligible for listing in the National Register of Historic Places or 
properties designated as historic under a statute of the appropriate 
State or local government body.
    Qualified handicapped person means--
    (1) With respect to preschool, elementary, or secondary education 
services provided by the agency, a handicapped person who is a member of 
a class of persons otherwise entitled by statute, regulation, or agency 
policy to receive education services from the agency.
    (2) With respect to any other agency program or activity under which 
a person is required to perform services or to achieve a level of 
accomplishment, a handicapped person who meets the essential eligibility 
requirements and who can acheive the purpose of the program or activity 
without modifications in the program or activity that the agency can 
demonstrate would result in a fundamental alteration in its nature;
    (3) With respect to any other program or activity, a handicapped 
person who meets the essential eligibility requirements for 
participation in, or receipt of benefits from, that program or activity; 
and
    (4) Qualified handicapped person is defined for purposes of 
employment in 29 CFR 1613.702(f), which is made applicable to this part 
by Sec.  149.140.
    Section 504 means section 504 of the Rehabilitation Act of 1973 
(Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by the 
Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 1617), 
and the Rehabilitation, Comprehensive Services, and Developmental 
Disabilities Amendments of 1978 (Pub. L. 95-602, 92 Stat. 2955). As used 
in this part, section 504 applies only to programs or activities 
conducted by Executive agencies and not to federally assisted programs.
    Substantial impairment means a significant loss of the integrity of 
finished materials, design quality, or special character resulting from 
a permanent alteration.



Sec. Sec.  149.104-149.110  [Reserved]



Sec.  149.111  Notice.

    The agency shall make available to employees, applicants, 
participants, beneficiaries, and other interested persons such 
information regarding the provisions of this part and its applicability 
to the programs or activities conducted by the agency, and make such 
information available to them in such manner as the head of the agency 
finds necessary to apprise such persons of the protections against 
discrimination assured them by section 504 and this regulation.



Sec. Sec.  149.112-149.129  [Reserved]



Sec.  149.130  General prohibitions against discrimination.

    (a) No qualified handicapped person shall, on the basis of handicap, 
be excluded from participation in, be denied the benefits of, or 
otherwise be subjected to discrimination under any program or activity 
conducted by the agency.
    (b)(1) The agency, in providing any aid, benefit, or service, may 
not, directly or through contractual, licensing, or other arrangements, 
on the basis of handicap--
    (i) Deny a qualified handicapped person the opportunity to 
participate in or benefit from the aid, benefit, or service;
    (ii) Afford a qualified handicapped person an opportunity to 
participate in or benefit from the aid, benefit, or service that is not 
equal to that afforded others;
    (iii) Provide a qualified handicapped person with an aid, benefit, 
or service

[[Page 357]]

that is not as effective in affording equal opportunity to obtain the 
same result, to gain the same benefit, or to reach the same level of 
achievement as that provided to others;
    (iv) Provide different or separate aid, benefits, or services to 
handicapped persons or to any class of handicapped persons than is 
provided to others unless such action is necessary to provide qualified 
handicapped persons with aid, benefits, or services that are as 
effective as those provided to others;
    (v) Deny a qualified handicapped person the opportunity to 
participate as a member of planning or advisory boards; or
    (vi) Otherwise limit a qualified handicapped person in the enjoyment 
of any right, privilege, advantage, or opportunity enjoyed by others 
receiving the aid, benefit, or service.
    (2) The agency may not deny a qualified handicapped person the 
opportunity to participate in programs or activities that are not 
separate or different, despite the existence of permissibly separate or 
different programs or activities.
    (3) The agency may not, directly or through contractual or other 
arrangments, utilize criteria or methods of administration the purpose 
or effect of which would--
    (i) Subject qualified handicapped persons to discrimination on the 
basis of handicap; or
    (ii) Defeat or substantially impair accomplishment of the objectives 
of a program activity with respect to handicapped persons.
    (4) The agency may not, in determining the site or location of a 
facility, make selections the purpose or effect of which would--
    (i) Exclude handicapped persons from, deny them the benefits of, or 
otherwise subject them to discrimination under any program or activity 
conducted by the agency; or
    (ii) Defeat or substantially impair the accomplishment of the 
objectives of a program or activity with respect to handicapped persons.
    (5) The agency, in the selection of procurement contractors, may not 
use criteria that subject qualified handicapped persons to 
discrimination on the basis of handicap.
    (6) The agency may not administer a licensing or certification 
program in a manner that subjects qualified handicapped persons to 
discrimination on the basis of handicap, nor may the agency establish 
requirements for the programs or activities of licensees or certified 
entities that subject qualified handicapped persons to discrimination on 
the basis of handicap. However, the programs or activities of entities 
that are licensed or certified by the agency are not, themselves, 
covered by this part.
    (c) The exclusion of nonhandicapped persons from the benefits of a 
program limited by Federal statute or Executive order to handicapped 
persons or the exclusion of a specific class of handicapped persons from 
a program limited by Federal statute or Executive order to a different 
class of handicapped persons is not prohibited by this part.
    (d) The agency shall administer programs and activities in the most 
integrated setting appropriate to the needs of qualified handicapped 
persons.



Sec. Sec.  149.131-149.139  [Reserved]



Sec.  149.140  Employment.

    No qualified handicapped person shall, on the basis of handicap, be 
subjected to discrimination in employment under any program or activity 
conducted by the agency. The definitions, requirements, and procedures 
of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791), as 
established by the Equal Employment Opportunity Commission in 29 CFR 
part 1613, shall apply to employment in federally conducted programs or 
activities.



Sec. Sec.  149.141-149.148  [Reserved]



Sec.  149.149  Program accessibility: Discrimination prohibited.

    Except as otherwise provided in Sec.  149.150, no qualified 
handicapped person shall, because the agency's facilities are 
inaccessible to or unusable by handicapped persons, be denied the 
benefits of, be excluded from participation in, or otherwise be 
subjected to discrimination under any program or activity conducted by 
the agency.

[[Page 358]]



Sec.  149.150  Program accessibility: Existing facilities.

    (a) General. The agency shall operate each program or activity so 
that the program or activity, when viewed in its entirety, is readily 
accessible to and usable by handicapped persons. This paragraph does 
not--
    (1) Necessarily require the agency to make each of its existing 
facilities accessible to and usable by handicapped persons;
    (2) In the case of historic preservation programs, require the 
agency to take any action that would result in a substantial impairment 
of significant historic features of an historic property; or
    (3) Require the agency to take any action that it can demonstrate 
would result in a fundamental alteration in the nature of a program or 
activity or in undue financial and administrative burdens. In those 
circumstances where agency personnel believe that the proposed action 
would fundamentally alter the program or activity or would result in 
undue financial and administrative burdens, the agency has the burden of 
proving that compliance with Sec.  149.150(a) would result in such 
alteration or burdens. The decision that compliance would result in such 
alteration or burdens must be made by the agency head or his or her 
designee after considering all agency resources available for use in the 
funding and operation of the conducted program or activity, and must be 
accompanied by a written statement of the reasons for reaching that 
conclusion. If an action would result in such an alteration or such 
burdens, the agency shall take any other action that would not result in 
such an alteration or such burdens but would nevertheless ensure that 
handicapped persons receive the benefits and services of the program or 
activity.
    (b) Methods--(1) General. The agency may comply with the 
requirements of this section through such means as redesign of 
equipment, reassignment of services to accessible buildings, assignment 
of aides to beneficiaries, home visits, delivery of services at 
alternate accessible sites, alteration of existing facilities and 
construction of new facilities, use of accessible rolling stock, or any 
other methods that result in making its programs or activities readily 
accessible to and usable by handicapped persons. The agency is not 
required to make structural changes in existing facilities where other 
methods are effective in achieving compliance with this section. The 
agency, in making alterations to existing buildings, shall meet 
accessibility requirements to the extent compelled by the Architectural 
Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), and any 
regulations implementing it. In choosing among available methods for 
meeting the requirements of this section, the agency shall give priority 
to those methods that offer programs and activities to qualified 
handicapped persons in the most integrated setting appropriate.
    (2) Historic preservation programs. In meeting the requirements of 
Sec.  149.150(a) in historic preservation programs, the agency shall 
give priority to methods that provide physical access to handicapped 
persons. In cases where a physical alteration to an historic property is 
not required because of Sec.  149.150(a)(2) or (a)(3), alternative 
methods of achieving program accessibility include--
    (i) Using audio-visual materials and devices to depict those 
portions of an historic property that cannot otherwise be made 
accessible;
    (ii) Assigning persons to guide handicapped persons into or through 
portions of historic properties that cannot otherwise be made 
accessible; or
    (iii) Adopting other innovative methods.
    (c) Time period for compliance. The agency shall comply with the 
obligations established under this section by October 21, 1986, except 
that where structural changes in facilities are undertaken, such changes 
shall be made by August 22, 1989, but in any event as expeditiously as 
possible.
    (d) Transition plan. In the event that structural changes to 
facilities will be undertaken to achieve program accessibility, the 
agency shall develop, by February 23, 1987, a transition plan setting 
forth the steps necessary to complete such changes. The agency shall 
provide an opportunity to interested persons, including handicapped 
persons

[[Page 359]]

or organizations representing handicapped persons, to participate in the 
development of the transition plan by submitting comments (both oral and 
written). A copy of the transition plan shall be made available for 
public inspection. The plan shall, at a minimum--
    (1) Identify physical obstacles in the agency's facilities that 
limit the accessibility of its programs or activities to handicapped 
persons;
    (2) Describe in detail the methods that will be used to make the 
facilities accessible;
    (3) Specify the schedule for taking the steps necessary to achieve 
compliance with this section and, if the time period of the transition 
plan is longer than one year, identify steps that will be taken during 
each year of the transition period; and
    (4) Indicate the official responsible for implementation of the 
plan.



Sec.  149.151  Program accessibility: New construction and alterations.

    Each building or part of a building that is constructed or altered 
by, on behalf of, or for the use of the agency shall be designed, 
constructed, or altered so as to be readily accessible to and usable by 
handicapped persons. The definitions, requirements, and standards of the 
Architectural Barriers Act (42 U.S.C. 4151-4157), as established in 41 
CFR 101-19.600 to 101-19.607, apply to buildings covered by this 
section.



Sec. Sec.  149.152-149.159  [Reserved]



Sec.  149.160  Communications.

    (a) The agency shall take appropriate steps to ensure effective 
communication with applicants, participants, personnel of other Federal 
entities, and members of the public.
    (1) The agency shall furnish appropriate auxiliary aids where 
necessary to afford a handicapped person an equal opportunity to 
participate in, and enjoy the benefits of, a program or activity 
conducted by the agency.
    (i) In determining what type of auxiliary aid is necessary, the 
agency shall give primary consideration to the requests of the 
handicapped person.
    (ii) The agency need not provide individually prescribed devices, 
readers for personal use or study, or other devices of a personal 
nature.
    (2) Where the agency communicates with applicants and beneficiaries 
by telephone, telecommunication devices for deaf person (TDD's) or 
equally effective telecommunication systems shall be used.
    (b) The agency shall ensure that interested persons, including 
persons with impaired vision or hearing, can obtain information as to 
the existence and location of accessible services, activities, and 
facilities.
    (c) The agency shall provide signage at a primary entrance to each 
of its inaccessible facilities, directing users to a location at which 
they can obtain information about accessible facilities. The 
international symbol for accessibility shall be used at each primary 
entrance of an accessible facility.
    (d) This section does not require the agency to take any action that 
it can demonstrate would result in a fundamental alteration in the 
nature of a program or activity or in undue financial and adminstrative 
burdens. In those circumstances where agency personnel believe that the 
proposed action would fundamentally alter the program or activity or 
would result in undue financial and administrative burdens, the agency 
has the burden of proving that compliance with Sec.  149.160 would 
result in such alteration or burdens. The decision that compliance would 
result in such alteration or burdens must be made by the agency head or 
his or her designee after considering all agency resources available for 
use in the funding and operation of the conducted program or activity, 
and must be accompanied by a written statement of the reasons for 
reaching that conclusion. If an action required to comply with this 
section would result in such an alteration or such burdens, the agency 
shall take any other action that would not result in such an alteration 
or such burdens but would nevertheless ensure that, to the maximum 
extent possible, handicapped persons receive the benefits and services 
of the program or activity.

[[Page 360]]



Sec. Sec.  149.161-149.169  [Reserved]



Sec.  149.170  Compliance procedures.

    (a) Except as provided in paragraph (b) of this section, this 
section applies to all allegations of discrimination on the basis of 
handicap in programs or activities conducted by the agency.
    (b) The agency shall process complaints alleging violations of 
section 504 with respect to employment according to the procedures 
established by the Equal Employment Opportunity Commission in 29 CFR 
part 1613 pursuant to section 501 of the Rehabilitation Act of 1973 (29 
U.S.C. 791).
    (c) The Executive Director of the Commission shall be responsible 
for coordinating implementation of this section. Complaints may be sent 
to the Equal Employment Opportunity Officer, Commodity Futures Trading 
Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, 
DC 20581.
    (d) The agency shall accept and investigate all complete complaints 
for which it has jurisdiction. All complete complaints must be filed 
within 180 days of the alleged act of discrimination. The agency may 
extend this time period for good cause.
    (e) If the agency receives a complaint over which it does not have 
jurisdiction, it shall promptly notify the complainant and shall make 
reasonable efforts to refer the complaint to the appropriate government 
entity.
    (f) The agency shall notify the Architectural and Transportation 
Barriers Compliance Board upon receipt of any complaint alleging that a 
building or facility that is subject to the Architectural Barriers Act 
of 1968, as amended (42 U.S.C. 4151-4157), or section 502 of the 
Rehabilitation Act of 1973, as amended (29 U.S.C. 792), is not readily 
accessible to and usable by handicapped persons.
    (g) Within 180 days of the receipt of a complete complaint for which 
it has jurisdiction, the agency shall notify the complainant of the 
results of the investigation in a letter containing--
    (1) Findings of fact and conclusions of law;
    (2) A description of a remedy for each violation found; and
    (3) A notice of the right to appeal.
    (h) Appeals of the findings of fact and conclusions of law or 
remedies must be filed by the complainant within 90 days of receipt from 
the agency of the letter required by Sec.  149.170(g). The agency may 
extend this time for good cause.
    (i) Timely appeals shall be accepted and processed by the head of 
the agency.
    (j) The head of the agency shall notify the complainant of the 
results of the appeal within 60 days of the receipt of the request. If 
the head of the agency determines that additional information is needed 
from the complainant, he or she shall have 60 days from the date of 
receipt of the additional information to make his or her determination 
on the appeal.
    (k) The time limits cited in paragraphs (g) and (j) of this section 
may be extended with the permission of the Assistant Attorney General.
    (l) The agency may delegate its authority for conducting complaint 
investigations to other Federal agencies, except that the authority for 
making the final determination may not be delegated to another agency.

[51 FR 22889, 22896, June 23, 1986, as amended at 51 FR 22889, June 23, 
1986; 60 FR 49336, Sept. 25, 1995]



PART 150_LIMITS ON POSITIONS--Table of Contents



Sec.
150.1 Definitions.
150.2 Position limits.
150.3 Exemptions.
150.4 Aggregation of positions.
150.5 Exchange-set speculative position limits.
150.6 Responsibility of contract markets.

    Authority: 7 U.S.C. 6a, 6c, and 12a(5).

    Source: 52 FR 38923, Oct. 20, 1987, unless otherwise noted.



Sec.  150.1  Definitions.

    As used in this part--
    (a) Spot month means the futures contract next to expire during that 
period of time beginning at the close of trading on the trading day 
preceding the first day on which delivery notices can be issued to the 
clearing organization of a contract market.
    (b) Single month means each separate futures trading month, other 
than the spot month future.

[[Page 361]]

    (c) All-months means the sum of all futures trading months including 
the spot month future.
    (d) Eligible entity means a commodity pool operator; the operator of 
a trading vehicle which is excluded, or which itself has qualified for 
exclusion from the definition of the term ``pool'' or ``commodity pool 
operator,'' respectively, under Sec.  4.5 of this chapter; the limited 
partner, limited member or shareholder in a commodity pool the operator 
of which is exempt from registration under Sec.  4.13 of this chapter; a 
commodity trading advisor; a bank or trust company; a savings 
association; an insurance company; or the separately organized 
affiliates of any of the above entities:
    (1) Which authorizes an independent account controller independently 
to control all trading decisions with respect to the eligible entity's 
client positions and accounts that the independent account controller 
holds directly or indirectly, or on the eligible entity's behalf, but 
without the eligible entity's day-to-day direction; and
    (2) Which maintains:
    (i) Only such minimum control over the independent account 
controller as is consistent with its fiduciary responsibilities to the 
managed positions and accounts, and necessary to fulfill its duty to 
supervise diligently the trading done on its behalf; or
    (ii) If a limited partner, limited member or shareholder of a 
commodity pool the operator of which is exempt from registration under 
Sec.  4.13 of this chapter, only such limited control as is consistent 
with its status.
    (e) Independent account controller means a person--
    (1) Who specifically is authorized by an eligible entity, as defined 
in paragraph (d) of this section, independently to control trading 
decisions on behalf of, but without the day-to-day direction of, the 
eligible entity;
    (2) Over whose trading the eligible entity maintains only such 
minimum control as is consistent with its fiduciary responsibilities for 
managed positions and accounts to fulfill its duty to supervise 
diligently the trading done on its behalf or as is consistent with such 
other legal rights or obligations which may be incumbent upon the 
eligible entity to fulfill;
    (3) Who trades independently of the eligible entity and of any other 
independent account controller trading for the eligible entity;
    (4) Who has no knowledge of trading decisions by any other 
independent account controller; and
    (5) Who is:
    (i) Registered as a futures commission merchant, an introducing 
broker, a commodity trading advisor, or an associated person of any such 
registrant, or
    (ii) A general partner, managing member or manager of a commodity 
pool the operator of which is excluded from registration under Sec.  
4.5(a)(4) of this chapter or Sec.  4.13 of this chapter, provided that 
such general partner, managing member or manager complies with the 
requirements of Sec.  150.4(c).
    (f) Futures-equivalent means an option contract which has been 
adjusted by the previous day's risk factor, or delta coefficient, for 
that option which has been calculated at the close of trading and 
published by the applicable exchange under Sec.  16.01 of this chapter.
    (g) Long position means a long call option, a short put option or a 
long underlying futures contract.
    (h) Short position means a short call option, a long put option or a 
short underlying futures contract.
    (i) For the following commodities, the first delivery month of the 
``crop year'' is as follows:

------------------------------------------------------------------------
                 Commodity                    Beginning delivery month
------------------------------------------------------------------------
corn......................................  December.
cotton....................................  October.
oats......................................  July.
soybeans..................................  September.
soybean meal..............................  October.
soybean oil...............................  October.
wheat (spring)............................  September.
wheat (winter)............................  July.
------------------------------------------------------------------------


[52 FR 38923, Oct. 20, 1987, as amended at 53 FR 41571, Oct. 24, 1988; 
56 FR 14315, Apr. 9, 1991; 57 FR 44492, Sept. 28, 1992; 58 FR 17981, 
Apr. 7, 1993; 64 FR 24046, May 5, 1999; 81 FR 91489, Dec. 16, 2016]



Sec.  150.2  Position limits.

    No person may hold or control positions, separately or in 
combination, net long or net short, for the purchase

[[Page 362]]

or sale of a commodity for future delivery or, on a futures-equivalent 
basis, options thereon, in excess of the following:

                       Speculative Position Limits
------------------------------------------------------------------------
                                       Limits by number of contracts
------------------------------------------------------------------------
                                                   Single
             Contract               Spot month     month      All months
------------------------------------------------------------------------
                         Chicago Board of Trade
------------------------------------------------------------------------
Corn and Mini-Corn \1\...........          600       33,000       33,000
Oats.............................          600        2,000        2,000
Soybeans and Mini-Soybeans \1\...          600       15,000       15,000
Wheat and Mini-Wheat \1\.........          600       12,000       12,000
Soybean Oil......................          540        8,000        8,000
Soybean Meal.....................          720        6,500        6,500
------------------------------------------------------------------------
                       Minneapolis Grain Exchange
------------------------------------------------------------------------
Hard Red Spring Wheat............          600       12,000       12,000
------------------------------------------------------------------------
                            ICE Futures U.S.
------------------------------------------------------------------------
Cotton No. 2.....................          300        5,000        5,000
------------------------------------------------------------------------
                       Kansas City Board of Trade
------------------------------------------------------------------------
Hard Winter Wheat................          600       12,000       12,000
------------------------------------------------------------------------
\1\ For purposes of compliance with these limits, positions in the
  regular sized and mini-sized contracts shall be aggregated.


[76 FR 71684, Nov. 18, 2011]



Sec.  150.3  Exemptions.

    (a) Positions which may exceed limits. The position limits set forth 
in Sec.  150.2 of this part may be exceeded to the extent such position 
are:
    (1) Bona fide hedging transactions as defined in Sec.  1.3 of this 
chapter;
    (2) [Reserved]
    (3) Spread or arbitrage positions between single months of a futures 
contract and/or, on a futures-equivalent basis, options thereon, outside 
of the spot month, in the same crop year; provided however, That such 
spread or arbitrage positions, when combined with any other net 
positions in the single month, do not exceed the all-months limit set 
forth in Sec.  150.2.
    (b) Call for information. Upon call by the Commission or the 
Director of the Division of Enforcement, or such other employee or 
employees as the Director may designate from time to time, any person 
claiming an exemption from speculative position limits under this 
section must provide to the Commission or the Division of Enforcement 
such information as specified in the call relating to the positions 
owned or controlled by that person; trading done pursuant to the claimed 
exemption; the futures, options or cash market positions which support 
the claim of exemption; and the relevant business relationships 
supporting a claim of exemption.

[53 FR 41571, Oct. 24, 1988, as amended at 56 FR 14315, Apr. 9, 1991; 57 
FR 44492, Sept. 28, 1992; 58 FR 17982, Apr. 7, 1993; 60 FR 38193, July 
25, 1995; 67 FR 62353, Oct. 7, 2002; 81 FR 91489, Dec. 16, 2016; 82 FR 
28770, June 26, 2017; 83 FR 7997, Feb. 23, 2018]



Sec.  150.4  Aggregation of positions.

    (a) Positions to be aggregated--(1) Trading control or 10 percent or 
greater ownership or equity interest. For the purpose of applying the 
position limits set forth in Sec.  150.2, unless an exemption set forth 
in paragraph (b) of this section applies, all positions in accounts for 
which any person, by power of attorney or otherwise, directly or 
indirectly controls trading or holds a 10 percent or greater ownership 
or equity interest must be aggregated with the positions held and 
trading done by such person. For the purpose of determining the 
positions in accounts for which any person controls trading or holds a 
10 percent or greater ownership or equity interest, positions or 
ownership or equity interests held by, and trading done or

[[Page 363]]

controlled by, two or more persons acting pursuant to an expressed or 
implied agreement or understanding shall be treated the same as if the 
positions or ownership or equity interests were held by, or the trading 
were done or controlled by, a single person.
    (2) Substantially identical trading. Notwithstanding the provisions 
of paragraph (b) of this section, for the purpose of applying the 
position limits set forth in Sec.  150.2, any person that, by power of 
attorney or otherwise, holds or controls the trading of positions in 
more than one account or pool with substantially identical trading 
strategies, must aggregate all such positions (determined pro rata) with 
all other positions held and trading done by such person and the 
positions in accounts which the person must aggregate pursuant to 
paragraph (a)(1) of this section.
    (b) Exemptions from aggregation. For the purpose of applying the 
position limits set forth in Sec.  150.2, and notwithstanding the 
provisions of paragraph (a)(1) of this section, but subject to the 
provisions of paragraph (a)(2) of this section, the aggregation 
requirements of this section shall not apply in the circumstances set 
forth in this paragraph (b).
    (1) Exemption for ownership by limited partners, shareholders or 
other pool participants. Any person that is a limited partner, limited 
member, shareholder or other similar type of pool participant holding 
positions in which the person by power of attorney or otherwise directly 
or indirectly has a 10 percent or greater ownership or equity interest 
in a pooled account or positions need not aggregate the accounts or 
positions of the pool with any other accounts or positions such person 
is required to aggregate, except that such person must aggregate the 
pooled account or positions with all other accounts or positions owned 
or controlled by such person if such person:
    (i) Is the commodity pool operator of the pooled account;
    (ii) Is a principal or affiliate of the operator of the pooled 
account, unless:
    (A) The pool operator has, and enforces, written procedures to 
preclude the person from having knowledge of, gaining access to, or 
receiving data about the trading or positions of the pool;
    (B) The person does not have direct, day-to-day supervisory 
authority or control over the pool's trading decisions;
    (C) The person, if a principal of the operator of the pooled 
account, maintains only such minimum control over the commodity pool 
operator as is consistent with its responsibilities as a principal and 
necessary to fulfill its duty to supervise the trading activities of the 
commodity pool; and
    (D) The pool operator has complied with the requirements of 
paragraph (c) of this section on behalf of the person or class of 
persons; or
    (iii) Has, by power of attorney or otherwise directly or indirectly, 
a 25 percent or greater ownership or equity interest in a commodity 
pool, the operator of which is exempt from registration under Sec.  4.13 
of this chapter.
    (2) Exemption for certain ownership of greater than 10 percent in an 
owned entity. Any person with an ownership or equity interest in an 
owned entity of 10 percent or greater (other than an interest in a 
pooled account subject to paragraph (b)(1) of this section), need not 
aggregate the accounts or positions of the owned entity with any other 
accounts or positions such person is required to aggregate, provided 
that:
    (i) Such person, including any entity that such person must 
aggregate, and the owned entity (to the extent that such person is aware 
or should be aware of the activities and practices of the aggregated 
entity or the owned entity):
    (A) Do not have knowledge of the trading decisions of the other;
    (B) Trade pursuant to separately developed and independent trading 
systems;
    (C) Have and enforce written procedures to preclude each from having 
knowledge of, gaining access to, or receiving data about, trades of the 
other. Such procedures must include security arrangements, including 
separate physical locations, which would maintain the independence of 
their activities;
    (D) Do not share employees that control the trading decisions of 
either; and
    (E) Do not have risk management systems that permit the sharing of 
its

[[Page 364]]

trades or its trading strategy with employees that control the trading 
decisions of the other; and
    (ii) Such person complies with the requirements of paragraph (c) of 
this section.
    (3) Exemption for accounts held by futures commission merchants. A 
futures commission merchant or any affiliate of a futures commission 
merchant need not aggregate positions it holds in a discretionary 
account, or in an account which is part of, or participates in, or 
receives trading advice from a customer trading program of a futures 
commission merchant or any of the officers, partners, or employees of 
such futures commission merchant or of its affiliates, if:
    (i) A person other than the futures commission merchant or the 
affiliate directs trading in such an account;
    (ii) The futures commission merchant or the affiliate maintains only 
such minimum control over the trading in such an account as is necessary 
to fulfill its duty to supervise diligently trading in the account;
    (iii) Each trading decision of the discretionary account or the 
customer trading program is determined independently of all trading 
decisions in other accounts which the futures commission merchant or the 
affiliate holds, has a financial interest of 10 percent or more in, or 
controls; and
    (iv) The futures commission merchant or the affiliate has complied 
with the requirements of paragraph (c) of this section.
    (4) Exemption for accounts carried by an independent account 
controller. An eligible entity need not aggregate its positions with the 
eligible entity's client positions or accounts carried by an authorized 
independent account controller, as defined in Sec.  150.1(e), except for 
the spot month in physical-delivery commodity contracts, provided that 
the eligible entity has complied with the requirements of paragraph (c) 
of this section, and that the overall positions held or controlled by 
such independent account controller may not exceed the limits specified 
in Sec.  150.2.
    (i) Additional requirements for exemption of affiliated entities. If 
the independent account controller is affiliated with the eligible 
entity or another independent account controller, each of the affiliated 
entities must:
    (A) Have, and enforce, written procedures to preclude the affiliated 
entities from having knowledge of, gaining access to, or receiving data 
about, trades of the other. Such procedures must include security 
arrangements, including separate physical locations, which would 
maintain the independence of their activities; provided, however, that 
such procedures may provide for the disclosure of information which is 
reasonably necessary for an eligible entity to maintain the level of 
control consistent with its fiduciary responsibilities to the managed 
positions and accounts and necessary to fulfill its duty to supervise 
diligently the trading done on its behalf;
    (B) Trade such accounts pursuant to separately developed and 
independent trading systems;
    (C) Market such trading systems separately; and
    (D) Solicit funds for such trading by separate disclosure documents 
that meet the standards of Sec.  4.24 or Sec.  4.34 of this chapter, as 
applicable, where such disclosure documents are required under part 4 of 
this chapter.
    (ii) [Reserved]
    (5) Exemption for underwriting. A person need not aggregate the 
positions or accounts of an owned entity if the ownership or equity 
interest is based on the ownership of securities constituting the whole 
or a part of an unsold allotment to or subscription by such person as a 
participant in the distribution of such securities by the issuer or by 
or through an underwriter.
    (6) Exemption for broker-dealer activity. A broker-dealer registered 
with the Securities and Exchange Commission, or similarly registered 
with a foreign regulatory authority, need not aggregate the positions or 
accounts of an owned entity if the ownership or equity interest is based 
on the ownership of securities acquired in the normal course of business 
as a dealer, provided that such person does not have actual knowledge of 
the trading decisions of the owned entity.
    (7) Exemption for information sharing restriction. A person need not 
aggregate the positions or accounts of an owned

[[Page 365]]

entity if the sharing of information associated with such aggregation 
(such as, only by way of example, information reflecting the 
transactions and positions of a such person and the owned entity) 
creates a reasonable risk that either person could violate state or 
federal law or the law of a foreign jurisdiction, or regulations adopted 
thereunder, provided that such person does not have actual knowledge of 
information associated with such aggregation, and provided further that 
such person has filed a prior notice pursuant to paragraph (c) of this 
section and included with such notice a written memorandum of law 
explaining in detail the basis for the conclusion that the sharing of 
information creates a reasonable risk that either person could violate 
state or federal law or the law of a foreign jurisdiction, or 
regulations adopted thereunder. However, the exemption in this paragraph 
shall not apply where the law or regulation serves as a means to evade 
the aggregation of accounts or positions. All documents submitted 
pursuant to this paragraph shall be in English, or if not, accompanied 
by an official English translation.
    (8) Exemption for affiliated entities. After a person has filed a 
notice under paragraph (c) of this section, another person need not file 
a separate notice identifying any position or account identified in such 
notice filing, provided that:
    (i) Such other person has an ownership or equity interest of 10 
percent or greater in the person that filed the notice, or the person 
that filed the notice has an ownership or equity interest of 10 percent 
or greater in such other person, or an ownership or equity interest of 
10 percent or greater is held in such other person by a third person who 
holds an ownership or equity interest of 10 percent or greater in the 
person that has filed the notice (in any such case, the ownership or 
equity interest may be held directly or indirectly);
    (ii) Such other person complies with the conditions applicable to 
the exemption specified in such notice filing, other than the filing 
requirements; and
    (iii) Such other person does not otherwise control trading of any 
account or position identified in such notice filing.
    (iv) Upon call by the Commission, any person relying on the 
exemption in this paragraph (b)(8) shall provide to the Commission such 
information concerning the person's claim for exemption. Upon notice and 
opportunity for the affected person to respond, the Commission may 
amend, suspend, terminate, or otherwise modify a person's aggregation 
exemption for failure to comply with the provisions of this section.
    (c) Notice filing for exemption. (1) Persons seeking an aggregation 
exemption under paragraph (b)(1)(ii), (b)(2), (b)(3), (b)(4), or (b)(7) 
of this section shall file a notice with the Commission, which shall be 
effective upon submission of the notice (or earlier, as provided in 
paragraph (c)(2) of this section), and shall include:
    (i) A description of the relevant circumstances that warrant 
disaggregation; and
    (ii) A statement of a senior officer of the entity certifying that 
the conditions set forth in the applicable aggregation exemption 
provision have been met.
    (2) If a person newly acquires an ownership or equity interest in an 
owned entity of 10 percent or greater and is eligible for the 
aggregation exemption under paragraph (b)(2) of this section, the person 
may elect that a notice filed under this paragraph (c) shall be 
effective as of the date of such acquisition if such notice is filed no 
later than 60 days after such acquisition.
    (3) Upon call by the Commission, any person claiming an aggregation 
exemption under this section shall provide such information 
demonstrating that the person meets the requirements of the exemption, 
as is requested by the Commission. Upon notice and opportunity for the 
affected person to respond, the Commission may amend, suspend, 
terminate, or otherwise modify a person's aggregation exemption for 
failure to comply with the provisions of this section.
    (4) In the event of a material change to the information provided in 
any notice filed under this paragraph (c), an updated or amended notice 
shall

[[Page 366]]

promptly be filed detailing the material change.
    (5) Any notice filed under this paragraph (c) shall be submitted in 
the form and manner provided for in paragraph (d) of this section.
    (6) If a person is eligible for an aggregation exemption under 
paragraph (b)(1)(ii), (b)(2), (b)(3), (b)(4), or (b)(7) of this section, 
a failure to timely file a notice under this paragraph (c) shall not 
constitute a violation of paragraph (a)(1) of this section or any 
position limit set forth in Sec.  150.2 if such notice is filed no later 
than five business days after the person is aware, or should be aware, 
that such notice has not been timely filed.
    (d) Form and manner of reporting and submitting information or 
filings. Unless otherwise instructed by the Commission or its designees, 
any person submitting reports under this section shall submit the 
corresponding required filings and any other information required under 
this part to the Commission using the format, coding structure, and 
electronic data transmission procedures approved in writing by the 
Commission. Unless otherwise provided in this section, the notice shall 
be effective upon filing. When the reporting entity discovers errors or 
omissions to past reports, the entity shall so notify the Commission and 
file corrected information in a form and manner and at a time as may be 
instructed by the Commission or its designee.
    (e) Delegation of authority. (1) The Commission hereby delegates, 
until it orders otherwise, to the Director of the Division of 
Enforcement, or such other employee or employees as the Director may 
designate from time to time, the authority:
    (i) In paragraph (b)(8)(iv) of this section to call for additional 
information from a person claiming the exemption in paragraph (b)(8) of 
this section.
    (ii) In paragraph (c)(3) of this section to call for additional 
information from a person claiming an aggregation exemption under this 
section.
    (2) The Commission hereby delegates, until it orders otherwise, to 
the Director of the Office of Data and Technology, with the concurrence 
of the Director of the Division of Enforcement, or such other employee 
or employees as the Directors each may designate from time to time, the 
authority in paragraph (d) of this section to provide instructions or 
determine the format, coding structure, and electronic data transmission 
procedures for submitting data records and any other information 
required under this part.
    (3) The Directors of the Division of Enforcement and the Office of 
Data and Technology may submit to the Commission for its consideration 
any matter which has been delegated in this section.
    (4) Nothing in this section prohibits the Commission, at its 
election, from exercising the authority delegated in this section.

[81 FR 91490, Dec. 16, 2016, as amended at 82 FR 28770, June 26, 2017]



Sec.  150.5  Exchange-set speculative position limits.

    (a) Exchange limits. Each contract market as a condition of 
designation under part 5, appendix A, of this chapter shall be bylaw, 
rule, regulation, or resolution limit the maximum number of contracts a 
person may hold or control, separately or in combination, net long or 
net short, for the purchase or sale of a commodity for future delivery 
or, on a futures-equivalent basis, options thereon. This section shall 
not apply to a contract market for which position limits are set forth 
in Sec.  150.2 of this part or for a futures or option contract market 
on a major foreign currency, for which there is no legal impediment to 
delivery and for which there exists a highly liquid cash market. Nothing 
in this section shall be construed to prohibit a contract market from 
fixing different and separate position limits for different types of 
futures contracts based on the same commodity, or from fixing different 
position limits for different futures or for different delivery months, 
or from exempting positions which are normally known in the trade as 
``spreads, straddles, or arbitrage,'' of from fixing limits which apply 
to such positions which are different from limits fixed for other 
positions.
    (b) Levels at designation. At the time of its initial designation, a 
contract market must provide for speculative position limit levels as 
follows:

[[Page 367]]

    (1) For physical delivery contracts, the spot month limit level must 
be no greater than one-quarter of the estimated spot month deliverable 
supply, calculated separately for each month to be listed, and for cash 
settled contracts, the spot month limit level must be no greater than 
necessary to minimize the potential for manipulation or distortion of 
the contract's or the underlying commodity's price;
    (2) Individual nonspot or all-months-combined levels must be no 
greater than 1,000 contracts for tangible commodities other than energy 
products;
    (3) Individual nonspot or all-months-combined levels must be no 
greater than 5,000 contracts for energy products and nontangible 
commodities, including contracts on financial products.
    (c) Adjustments to levels. Contract markets may adjust their 
speculative limit levels as follows:
    (1) For physical delivery contracts, the spot month limit level must 
be no greater than one-quarter of the estimated spot month deliverable 
supply, calculated separately for each month to be listed, and for cash 
settled contracts, the spot month limit level must be no greater than 
necessary to minimize the potential for manipulation or distortion of 
the contract's or the underlying commodity's price; and
    (2) Individual nonspot or all-months-combined levels must be no 
greater than 10% of the average combined futures and delta-adjusted 
option month-end open interest for the most recent calendar year up to 
25,000 contracts with a marginal increase of 2.5% thereafter or be based 
on position sizes customarily held by speculative traders on the 
contract market, which shall not be extraordinarily large relative to 
total open positions in the contract, the breadth and liquidity of the 
cash market underlying each delivery month and the opportunity for 
arbitrage between the futures market and the cash market in the 
commodity underlying the futures contract.
    (d) Hedge exemption. (1) No exchange bylaw, rule, regulation, or 
resolution adopted pursuant to this section shall apply to bona fide 
hedging positions as defined by a contract market in accordance with the 
definition of bona fide hedging transactions and positions for excluded 
commodities in Sec.  1.3 of this chapter. Provided, however, that the 
contract market may limit bona fide hedging positions or any other 
positions which have been exempted pursuant to paragraph (e) of this 
section which it determines are not in accord with sound commercial 
practices or exceed an amount which may be established and liquidated in 
orderly fashion.
    (2) Traders must apply to the contract market for exemption from its 
speculative position limit rules. In considering whether to grant such 
an application for exemption, contract markets must take into account 
the factors contained in paragraph (d)(1) of this section.
    (e) Trader accountability exemption. Twelve months after a contract 
market's initial listing for trading or at any time thereafter, contract 
markets may submit for Commission approval under section 5a(a)(12) of 
the Act and Sec.  1.41(b) of this chapter a bylaw, rule, regulation, or 
resolution, substituting for the position limits required under 
paragraphs (a), (b) and (c) of this section an exchange rule requiring 
traders to be accountable for large positions as follows:
    (1) For futures and option contracts on a financial instrument or 
product having an average open interest of 50,000 contracts and an 
average daily trading volume of 100,000 contracts and a very highly 
liquid cash market, an exchange bylaw, regulation or resolution 
requiring traders to provide information about their position upon 
request by the exchange;
    (2) For futures and option contracts on a financial instrument or 
product or on an intangible commodity having an average moth-end open 
interest of 50,000 and an average daily volume of 25,000 contracts and a 
highly liquid cash market, an exchange bylaw, regulation or resolution 
requiring traders to provide information about their position upon 
request by the exchange and to consent to halt increasing further a 
trader's positions if so ordered by the exchange;
    (3) For futures and option contracts on a tangible commodity, 
including but not limited to metals, energy products,

[[Page 368]]

or international soft agricultural products, having an average month-end 
open interest of 50,000 contracts and an average daily volume of 5,000 
contracts and a liquid cash market, an exchange bylaw, regulation or 
resolution requiring traders to provide information about their position 
upon request by the exchange and to consent to halt increasing further a 
trader's positions if so ordered by the exchange, provided, however, 
such contract markets are not exempt from the requirement of paragraphs 
(b) or (c) that they adopt an exchange bylaw, regulation or resolution 
setting a spot month speculative position limit with a level no grater 
than one quarter of the estimated spot month deliverable supply;
    (4) For purposes of this paragraph, trading volume and open interest 
shall be calculated by combining the month-end futures and its related 
option contract, on a delta-adjusted basis, for all months listed during 
the most recent calendar year.
    (f) Other exemptions. Exchange speculative position limits adopted 
pursuant to this section shall not apply to any position acquired in 
good faith prior to the effective date of any bylaw, rule, regulation, 
or resolution which specifies such limit or to a person that is 
registered as a futures commission merchant or as a floor broker under 
authority of the Act except to the extent that transactions made by such 
person are made on behalf of or for the account or benefit of such 
person. In addition to the express exemptions specified in this section, 
a contract market may propose such other exemptions from the 
requirements of this section consistent with the purposes of this 
section and shall submit such rules Commission review under section 
5a(1)(12) of the Act and Sec.  1.41(b) of this chapter.
    (g) Aggregation. In determining whether any person has exceeded the 
limits established under this section, all positions in accounts for 
which such person by power of attorney or otherwise directly or 
indirectly controls trading shall be included with the positions held by 
such person; such limits upon positions shall apply to positions held by 
two or more person acting pursuant to an express or implied agreement or 
understanding, the same as if the positions were held by a single 
person.

[64 FR 24048, May 5, 1999, as amended at 83 FR 7997, Feb. 23, 2018]



Sec.  150.6  Responsibility of contract markets.

    Nothing in this part shall be construed to affect any provisions of 
the Act relating to manipulation or corners nor to relieve any contract 
market or its governing board from responsibility under section 5(4) of 
the Act to prevent manipulation and corners.

[52 FR 38923, Oct. 20, 1987, as amended at 59 FR 5528, Feb. 7, 1993]



PART 151_POSITION LIMITS FOR FUTURES AND SWAPS--Table of Contents



Sec.
151.1 Definitions.
151.2 Core Referenced Futures Contracts.
151.3 Spot months for Referenced Contracts.
151.4 Position limits for Referenced Contracts.
151.5 Bona fide hedging and other exemptions for Referenced Contracts.
151.6 Position visibility.
151.7 Aggregation of positions.
151.8 Foreign boards of trade.
151.9 Pre-existing positions.
151.10 Form and manner of reporting and submitting information or 
          filings.
151.11 Designated contract market and swap execution facility position 
          limits and accountability rules.
151.12 Delegation of authority to the Director of the Division of Market 
          Oversight.
151.13 Severability.

Appendix A to Part 151--Spot-Month Position Limits
Appendix B to Part 151--Examples of Bona Fide Hedging Transactions and 
          Positions

    Authority: 7 U.S.C. 1a, 2, 5, 6, 6a, 6c, 6f, 6g, 6t, 12a, 19, as 
amended by Title VII of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010).

    Source: 76 FR 71684, Nov. 18, 2011, unless otherwise noted.



Sec.  151.1  Definitions.

    As used in this part--
    Basis contract means an agreement, contract or transaction that is 
cash-settled based on the difference in price

[[Page 369]]

of the same commodity (or substantially the same commodity) at different 
delivery locations;
    Calendar spread contract means a cash-settled agreement, contract, 
or transaction that represents the difference between the settlement 
price in one or a series of contract months of an agreement, contract or 
transaction and the settlement price of another contract month or 
another series of contract months' settlement prices for the same 
agreement, contract or transaction.
    Commodity index contract means an agreement, contract, or 
transaction that is not a basis or any type of spread contract, based on 
an index comprised of prices of commodities that are not the same or 
substantially the same; provided that, a commodity index contract used 
to circumvent speculative position limits shall be considered to be a 
Referenced Contract for the purpose of applying the position limits of 
Sec.  151.4.
    Core Referenced Futures Contract means a futures contract that is 
listed in Sec.  151.2.
    Eligible Entity means a commodity pool operator; the operator of a 
trading vehicle which is excluded, or which itself has qualified for 
exclusion from the definition of the term ``pool'' or ``commodity pool 
operator,'' respectively, under Sec.  4.5 of this chapter the limited 
partner or shareholder in a commodity pool the operator of which is 
exempt from registration under Sec.  4.13 of this chapter; a commodity 
trading advisor; a bank or trust company; a savings association; an 
insurance company; or the separately organized affiliates of any of the 
above entities:
    (1) Which authorizes an independent account controller independently 
to control all trading decisions with respect to the eligible entity's 
client positions and accounts that the independent account controller 
holds directly or indirectly, or on the eligible entity's behalf, but 
without the eligible entity's day-to-day direction; and
    (2) Which maintains:
    (i) Only such minimum control over the independent account 
controller as is consistent with its fiduciary responsibilities to the 
managed positions and accounts, and necessary to fulfill its duty to 
supervise diligently the trading done on its behalf; or
    (ii) If a limited partner or shareholder of a commodity pool the 
operator of which is exempt from registration under Sec.  4.13 of this 
chapter, only such limited control as is consistent with its status.
    Entity means a ``person'' as defined in section 1a of the Act.
    Excluded commodity means an ``excluded commodity'' as defined in 
section 1a of the Act.
    Independent Account Controller means a person:
    (1) Who specifically is authorized by an eligible entity 
independently to control trading decisions on behalf of, but without the 
day-to-day direction of, the eligible entity;
    (2) Over whose trading the eligible entity maintains only such 
minimum control as is consistent with its fiduciary responsibilities for 
managed positions and accounts to fulfill its duty to supervise 
diligently the trading done on its behalf or as is consistent with such 
other legal rights or obligations which may be incumbent upon the 
eligible entity to fulfill;
    (3) Who trades independently of the eligible entity and of any other 
independent account controller trading for the eligible entity;
    (4) Who has no knowledge of trading decisions by any other 
independent account controller; and
    (5) Who is registered as a futures commission merchant, an 
introducing broker, a commodity trading advisor, or an associated person 
of any such registrant, or is a general partner of a commodity pool the 
operator of which is exempt from registration under Sec.  4.13 of this 
chapter.
    Intercommodity spread contract means a cash-settled agreement, 
contract or transaction that represents the difference between the 
settlement price of a Referenced Contract and the settlement price of 
another contract, agreement, or transaction that is based on a different 
commodity.
    Referenced Contract means, on a futures equivalent basis with 
respect to a particular Core Referenced Futures Contract, a Core 
Referenced Futures Contract listed in Sec.  151.2, or a futures 
contract, options contract, swap or

[[Page 370]]

swaption, other than a basis contract or commodity index contract, that 
is:
    (1) Directly or indirectly linked, including being partially or 
fully settled on, or priced at a fixed differential to, the price of 
that particular Core Referenced Futures Contract; or
    (2) Directly or indirectly linked, including being partially or 
fully settled on, or priced at a fixed differential to, the price of the 
same commodity underlying that particular Core Referenced Futures 
Contract for delivery at the same location or locations as specified in 
that particular Core Referenced Futures Contract.
    Spot month means, for Referenced Contracts, the spot month defined 
in Sec.  151.3.
    Spot-month, single-month, and all-months-combined position limits 
mean, for Referenced Contracts based on a commodity identified in Sec.  
151.2, the maximum number of contracts a trader may hold as set forth in 
Sec.  151.4.
    Spread contract means either a calendar spread contract or an 
intercommodity spread contract.
    Swap means ``swap'' as defined in section 1a of the Act and as 
further defined by the Commission.
    Swap dealer means ``swap dealer'' as that term is defined in section 
1a of the Act and as further defined by the Commission.
    Swaption means an option to enter into a swap or a physical 
commodity option.
    Trader means a person that, for its own account or for an account 
that it controls, makes transactions in Referenced Contracts or has such 
transactions made.



Sec.  151.2  Core Referenced Futures Contracts.

    (a) Agricultural commodities. Core Referenced Futures Contracts in 
agricultural commodities include the following futures contracts and 
options thereon:
    (1) Core Referenced Futures Contracts in legacy agricultural 
commodities:
    (i) Chicago Board of Trade Corn (C);
    (ii) Chicago Board of Trade Oats (O);
    (iii) Chicago Board of Trade Soybeans (S);
    (iv) Chicago Board of Trade Soybean Meal (SM);
    (v) Chicago Board of Trade Soybean Oil (BO);
    (vi) Chicago Board of Trade Wheat (W);
    (vii) ICE Futures U.S. Cotton No. 2 (CT);
    (viii) Kansas City Board of Trade Hard Winter Wheat (KW); and
    (ix) Minneapolis Grain Exchange Hard Red Spring Wheat (MWE).
    (2) Core Referenced Futures Contracts in non-legacy agricultural 
commodities:
    (i) Chicago Mercantile Exchange Class III Milk (DA);
    (ii) Chicago Mercantile Exchange Feeder Cattle (FC);
    (iii) Chicago Mercantile Exchange Lean Hog (LH);
    (iv) Chicago Mercantile Exchange Live Cattle (LC);
    (v) Chicago Board of Trade Rough Rice (RR);
    (vi) ICE Futures U.S. Cocoa (CC);
    (vii) ICE Futures U.S. Coffee C (KC);
    (viii) ICE Futures U.S. FCOJ-A(OJ);
    (ix) ICE Futures U.S. Sugar No. 11 (SB); and
    (x) ICE Futures U.S. Sugar No. 16 (SF).
    (b) Metal commodities. Core Referenced Futures Contracts in metal 
commodities include the following futures contracts and options thereon:
    (1) Commodity Exchange, Inc. Copper (HG);
    (2) Commodity Exchange, Inc. Gold (GC);
    (3) Commodity Exchange, Inc. Silver (SI);
    (4) New York Mercantile Exchange Palladium (PA); and
    (5) New York Mercantile Exchange Platinum (PL).
    (c) Energy commodities. The Core Referenced Futures Contracts in 
energy commodities include the following futures contracts and options 
thereon:
    (1) New York Mercantile Exchange Henry Hub Natural Gas (NG);
    (2) New York Mercantile Exchange Light Sweet Crude Oil (CL);
    (3) New York Mercantile Exchange New York Harbor Gasoline Blendstock 
(RB); and
    (4) New York Mercantile Exchange New York Harbor Heating Oil (HO).

[[Page 371]]



Sec.  151.3  Spot months for Referenced Contracts.

    (a) Agricultural commodities. For Referenced Contracts based on 
agricultural commodities, the spot month shall be the period of time 
commencing:
    (1) At the close of business on the business day prior to the first 
notice day for any delivery month and terminating at the end of the 
delivery period in the underlying Core Referenced Futures Contract for 
the following Referenced Contracts:
    (i) ICE Futures U.S. Cocoa (CC) contract;
    (ii) ICE Futures U.S. Coffee C (KC) contract;
    (iii) ICE Futures U.S. Cotton No. 2 (CT) contract;
    (iv) ICE Futures U.S. FCOJ-A (OJ) contract;
    (v) Chicago Board of Trade Corn (C) contract;
    (vi) Chicago Board of Trade Oats (O) contract;
    (vii) Chicago Board of Trade Rough Rice (RR) contract;
    (viii) Chicago Board of Trade Soybeans (S) contract;
    (ix) Chicago Board of Trade Soybean Meal (SM) contract;
    (x) Chicago Board of Trade Soybean Oil (BO) contract;
    (xi) Chicago Board of Trade Wheat (W) contract;
    (xii) Minneapolis Grain Exchange Hard Red Spring Wheat (MW) 
contract; and
    (xiii) Kansas City Board of Trade Hard Winter Wheat (KW) contract;
    (2) At the close of business of the first business day after the 
fifteenth calendar day of the calendar month preceding the delivery 
month if the fifteenth calendar day is a business day, or at the close 
of business of the second business day after the fifteenth day if the 
fifteenth day is a non-business day and terminating at the end of the 
delivery period in the underlying Core Referenced Futures Contract for 
the ICE Futures U.S. Sugar No. 11 (SB) Referenced Contract;
    (3) At the close of business on the sixth business day prior to the 
last trading day and terminating at the end of the delivery period in 
the underlying Core Referenced Futures Contract for the ICE Futures U.S. 
Sugar No. 16 (SF) Referenced Contract;
    (4) At the close of business on the business day immediately 
preceding the last five business days of the contract month and 
terminating at the end of the delivery period in the underlying Core 
Referenced Futures Contract for the Chicago Mercantile Exchange Live 
Cattle (LC) Referenced Contract;
    (5) On the ninth trading day prior to the last trading day and 
terminating on the last trading day for Chicago Mercantile Exchange 
Feeder Cattle (FC) contract;
    (6) On the first trading day of the contract month and terminating 
on the last trading day for the Chicago Mercantile Exchange Class III 
Milk (DA) contract; and
    (7) At the close of business on the fifth business day prior to the 
last trading day and terminating on the last trading day for the Chicago 
Mercantile Exchange Lean Hog (LH) contract.
    (b) Metal commodities. The spot month shall be the period of time 
commencing at the close of business on the business day prior to the 
first notice day for any delivery month and terminating at the end of 
the delivery period in the underlying Core Referenced Futures Contract 
for the following Referenced Contracts:
    (1) Commodity Exchange, Inc. Gold (GC) contract;
    (2) Commodity Exchange, Inc. Silver (SI) contract;
    (3) Commodity Exchange, Inc. Copper (HG) contract;
    (4) New York Mercantile Exchange Palladium (PA) contract; and
    (5) New York Mercantile Exchange Platinum (PL) contract.
    (c) Energy commodities. The spot month shall be the period of time 
commencing at the close of business of the third business day prior to 
the last day of trading in the underlying Core Referenced Futures 
Contract and terminating at the end of the delivery period for the 
following Referenced Contracts:
    (1) New York Mercantile Exchange Light Sweet Crude Oil (CL) 
contract;
    (2) New York Mercantile Exchange New York Harbor No. 2 Heating Oil 
(HO) contract;

[[Page 372]]

    (3) New York Mercantile Exchange New York Harbor Gasoline Blendstock 
(RB) contract; and
    (4) New York Mercantile Exchange Henry Hub Natural Gas (NG) 
contract.



Sec.  151.4  Position limits for Referenced Contracts.

    (a) Spot-month position limits. In accordance with the procedure in 
paragraph (d) of this section, and except as provided or as otherwise 
authorized by Sec.  151.5, no trader may hold or control a position, 
separately or in combination, net long or net short, in Referenced 
Contracts in the same commodity when such position is in excess of:
    (1) For physical-delivery Referenced Contracts, a spot-month 
position limit that shall be based on one-quarter of the estimated spot-
month deliverable supply as established by the Commission pursuant to 
paragraphs (d)(1) and (d)(2) of this section; and
    (2) For cash-settled Referenced Contracts:
    (i) A spot-month position limit that shall be based on one-quarter 
of the estimated spot-month deliverable supply as established by the 
Commission pursuant to paragraphs (d)(1) and (d)(2) of this section. 
Provided, however,
    (ii) For New York Mercantile Exchange Henry Hub Natural Gas 
Referenced Contracts:
    (A) A spot-month position limit equal to five times the spot-month 
position limit established by the Commission for the physical-delivery 
New York Mercantile Exchange Henry Hub Natural Gas Referenced Contract 
pursuant to paragraph (a)(1); and
    (B) An aggregate spot-month position limit for physical-delivery and 
cash-settled New York Mercantile Exchange Henry Hub Natural Gas 
Referenced Contracts equal to five times the spot-month position limit 
established by the Commission for the physical-delivery New York 
Mercantile Exchange Henry Hub Natural Gas Referenced Contract pursuant 
to paragraph (a)(1).
    (b) Non-spot-month position limits. In accordance with the procedure 
in paragraph (d) of this section, and except as otherwise authorized in 
Sec.  151.5, no person may hold or control positions, separately or in 
combination, net long or net short, in the same commodity when such 
positions, in all months combined (including the spot month) or in a 
single month, are in excess of:
    (1) Non-legacy Referenced Contract position limits. All-months-
combined aggregate and single-month position limits, fixed by the 
Commission based on 10 percent of the first 25,000 contracts of average 
all-months-combined aggregated open interest with a marginal increase of 
2.5 percent thereafter as established by the Commission pursuant to 
paragraph (d)(3) of this section;
    (2) Aggregate open interest calculations for non-spot-month position 
limits for non-legacy Referenced Contracts. (i) For the purpose of 
fixing the speculative position limits for non-legacy Referenced 
Contracts in paragraph (b)(1) of this section, the Commission shall 
determine:
    (A) The average all-months-combined aggregate open interest, which 
shall be equal to the sum, for 12 or 24 months of values obtained under 
paragraph (B) and (C) of this section for a period of 12 or 24 months 
prior to the fixing date divided by 12 or 24 respectively as of the last 
day of each calendar month;
    (B) The all-months-combined futures open interest of a Referenced 
Contract is equal to the sum of the month-end open interest for all of 
the Referenced Contract's open contract months in futures and option 
contracts (on a delta adjusted basis) across all designated contract 
markets; and
    (C) The all-months-combined swaps open interest is equal to the sum 
of all of a Referenced Contract's month-end open swaps positions, 
considering open positions attributed to both cleared and uncleared 
swaps, where the uncleared all-months-combined swaps open positions 
shall be the absolute sum of swap dealers' net uncleared open swaps 
positions by counterparty and by single Referenced Contract month as 
reported to the Commission pursuant to part 20 of this chapter, provided 
that, other than for the purpose of determining initial non-spot-month 
position limits, open swaps positions attributed to swaps with two swap 
dealer counterparties shall be counted once for the purpose of 
determining uncleared all-months-combined swaps open positions, provided 
further that, upon entry of an order under Sec.  20.9 of

[[Page 373]]

this chapter determining that operating swap data repositories are 
processing positional data that will enable the Commission effectively 
to conduct surveillance in swaps, the Commission shall rely on data from 
such swap data repositories to compute the all-months-combined swaps 
open interest;
    (ii) Notwithstanding the provisions of this section, for the purpose 
of determining initial non-spot-month position limits for non-legacy 
Referenced Contracts, the Commission may estimate uncleared all-months-
combined swaps open positions based on uncleared open swaps positions 
reported to the Commission pursuant to part 20 of this chapter by 
clearing organizations or clearing members that are swap dealers; and
    (3) Legacy agricultural Referenced Contract position limits. All-
months-combined aggregate and single-month position limits, fixed by the 
Commission at the levels provided below as established by the Commission 
pursuant to paragraph (d)(4) of this section:

------------------------------------------------------------------------
                 Referenced contract                    Position limits
------------------------------------------------------------------------
(i) Chicago Board of Trade Corn (C) contract........              33,000
(ii) Chicago Board of Trade Oats (O) contract.......               2,000
(iii) Chicago Board of Trade Soybeans (S) contract..              15,000
(iv) Chicago Board of Trade Wheat (W) contract......              12,000
(v) Chicago Board of Trade Soybean Oil (BO) contract               8,000
(vi) Chicago Board of Trade Soybean Meal (SM)                      6,500
 contract...........................................
(vii) Minneapolis Grain Exchange Hard Red Spring                  12,000
 Wheat (MW) contract................................
(viii) ICE Futures U.S. Cotton No. 2 (CT) contract..               5,000
(ix) Kansas City Board of Trade Hard Winter Wheat                 12,000
 (KW) contract......................................
------------------------------------------------------------------------

    (c) Netting of positions--(1) For Referenced Contracts in the spot 
month. (i) For the spot-month position limit in paragraph (a) of this 
section, a trader's positions in the physical-delivery Referenced 
Contract and cash-settled Referenced Contract are calculated separately. 
A trader cannot net any physical-delivery Referenced Contract with cash-
settled Referenced Contracts towards determining the trader's positions 
in each of the physical-delivery Referenced Contract and cash-settled 
Referenced Contracts in paragraph (a) of this section. However, a trader 
can net positions in cash-settled Referenced Contracts in the same 
commodity.
    (ii) Notwithstanding the netting provision in paragraph (c)(1)(i) of 
this section, for the aggregate spot-month position limit in New York 
Mercantile Exchange Henry Hub Natural Gas Referenced Contracts in 
paragraph (a)(2)(ii) of this section, a trader's positions shall be 
combined and the net resulting position in the physical-delivery 
Referenced Contract and cash-settled Referenced Contracts shall be 
applied towards determining the trader's aggregate position.
    (2) For the purpose of applying non-spot-month position limits, a 
trader's position in a Referenced Contract shall be combined and the net 
resulting position shall be applied towards determining the trader's 
aggregate single-month and all-months-combined position.
    (d) Establishing and effective dates of position limits--(1) Initial 
spot-month position limits for Referenced Contracts. (i) Sixty days 
after the term ``swap'' is further defined under the Wall Street 
Transparency and Accountability Act of 2010, the spot-month position 
limits for Referenced Contracts referred to in appendix A shall apply to 
all the provisions of this part.
    (2) Subsequent spot-month position limits for Referenced Contracts. 
(i) Commencing January 1st of the second calendar year after the term 
``swap'' is further defined under the Wall Street Transparency and 
Accountability Act of 2010, the Commission shall fix position limits by 
Commission order that shall supersede the initial limits established 
under paragraph (d)(1) of this section.
    (ii) In fixing spot-month position limits for Referenced Contracts, 
the Commission shall utilize the estimates of deliverable supply 
provided by a designated contract market under paragraph (d)(2)(iii) of 
this section unless

[[Page 374]]

the Commission determines to rely on its own estimate of deliverable 
supply.
    (iii) Each designated contract market shall submit to the Commission 
an estimate of deliverable supply for each Core Referenced Futures 
Contract that is subject to a spot-month position limit and listed or 
executed pursuant to the rules of the designated contract market 
according to the following schedule commencing January 1st of the second 
calendar year after the term ``swap'' is further defined under the Wall 
Street Transparency and Accountability Act of 2010:
    (A) For metal Core Referenced Futures Contracts listed in Sec.  
151.2(b), by the 31st of December and biennially thereafter;
    (B) For energy Core Referenced Futures Contracts listed in Sec.  
151.2(c), by the 31st of March and biennially thereafter;
    (C) For corn, wheat, oat, rough rice, soybean and soybean products, 
livestock, milk, cotton, and frozen concentrated orange juice Core 
Referenced Futures Contracts, by the 31st of July, and annually 
thereafter;
    (D) For coffee, sugar, and cocoa Core Referenced Futures Contracts, 
by the 30th of September, and annually thereafter.
    (iv) For purposes of estimating deliverable supply, a designated 
contract market may use any guidance adopted in the Acceptable Practices 
for Compliance with Core Principle 3 found in part 38 of the 
Commission's regulations.
    (v) The estimate submitted under paragraph (d)(2)(iii) of this 
section shall be accompanied by a description of the methodology used to 
derive the estimate along with any statistical data supporting the 
designated contract market's estimate of deliverable supply.
    (vi) The Commission shall fix and publish pursuant to paragraph (e) 
of this section, the spot-month limits by Commission order, no later 
than:
    (A) For metal Referenced Contracts listed in Sec.  151.2(b), by the 
28th of February following the submission of estimates of deliverable 
supply provided to the Commission under paragraph (d)(2)(iii)(A) of this 
section and biennially thereafter;
    (B) For energy Referenced Contracts listed in Sec.  151.2(c), by the 
31st of May following the submission of estimates of deliverable supply 
provided to the Commission under paragraph (d)(2)(iii)(B) of this 
section and biennially thereafter;
    (C) For corn, wheat, oat, rough rice, soybean and soybean products, 
livestock, milk, cotton, and frozen concentrated orange juice Referenced 
Contracts, by the 30th of September following the submission of 
estimates of deliverable supply provided to the Commission under 
paragraph (d)(2)(iii)(C) of this section and annually thereafter;
    (D) For coffee, sugar, and cocoa Referenced Contracts, by the 30th 
of November following the submission of estimates of deliverable supply 
provided to the Commission under paragraph (d)(2)(iii)(D) of this 
section and annually thereafter.
    (3) Non-spot-month position limits for non-legacy Referenced 
Contract. (i) Initial non-spot-month limits for non-legacy Referenced 
Contracts shall be fixed and published within one month after the 
Commission has obtained or estimated 12 months of values pursuant to 
paragraphs (b)(2)(i)(B), (b)(2)(i)(C), and (b)(2)(ii) of this section, 
and shall be fixed and made effective as provided in paragraph (b)(2) 
and (e) of this section.
    (ii) Subsequent non-spot-month limits for non-legacy Referenced 
Contracts shall be fixed and published within one month after two years 
following the fixing and publication of initial non-spot-month position 
limits and shall be based on the higher of 12 months average all-months-
combined aggregate open interest, or 24 months average all-months-
combined aggregate open interest, as provided for in paragraphs (b)(2) 
and (e) of this section.
    (iii) Initial non-spot-month limits for non-legacy Referenced 
Contracts shall be made effective by Commission order.
    (4) Non-spot-month legacy limits for legacy agricultural Referenced 
Contracts. The non-spot-month position limits for legacy agricultural 
Referenced Contracts shall be effective sixty days after the term 
``swap'' is further defined under the Wall Street Transparency and 
Accountability Act of 2010,

[[Page 375]]

and shall apply to all the provisions of this part.
    (e) Publication. The Commission shall publish position limits on the 
Commission's Web site at http://www.cftc.gov prior to making such limits 
effective, other than those limits specified under paragraph (b)(3) of 
this section and appendix A to this part.
    (1) Spot-month position limits shall be effective:
    (i) For metal Referenced Contracts listed in Sec.  151.2(b), on the 
1st of May after the Commission has fixed and published such limits 
under paragraph (d)(2)(vi)(A) of this section;
    (ii) For energy Referenced Contracts listed in Sec.  151.2(c), on 
the 1st of August after the Commission has fixed and published such 
limits under paragraph (d)(2)(vi)(B) of this section;
    (iii) For corn, wheat, oat, rough rice, soybean and soybean 
products, livestock, milk, cotton, and frozen concentrated orange juice 
Referenced Contracts, on the 1st of December after the Commission has 
fixed and published such limits under paragraph (d)(2)(vi)(C) of this 
section; and
    (iv) For coffee, sugar, and cocoa Referenced Contracts, on the 1st 
of February after the Commission has fixed and published such limits 
under paragraph (d)(2)(vi)(D) of this section.
    (2) The Commission shall publish month-end all-months-combined 
futures open interest and all-months-combined swaps open interest 
figures within one month, as practicable, after such data is submitted 
to the Commission.
    (3) Non-spot-month position limits established under paragraph 
(b)(2) of this section shall be effective on the 1st calendar day of the 
third calendar month immediately following publication on the 
Commission's Web site under paragraph (d)(3) of this section.
    (f) Rounding. In determining or calculating all levels and limits 
under this section, a resulting number shall be rounded up to the 
nearest hundred contracts.



Sec.  151.5  Bona fide hedging and other exemptions for Referenced Contracts.

    (a) Bona fide hedging transactions or positions. (1) Any person that 
complies with the requirements of this section may exceed the position 
limits set forth in Sec.  151.4 to the extent that a transaction or 
position in a Referenced Contract:
    (i) Represents a substitute for transactions made or to be made or 
positions taken or to be taken at a later time in a physical marketing 
channel;
    (ii) Is economically appropriate to the reduction of risks in the 
conduct and management of a commercial enterprise; and
    (iii) Arises from the potential change in the value of one or 
several--
    (A) Assets that a person owns, produces, manufactures, processes, or 
merchandises or anticipates owning, producing, manufacturing, 
processing, or merchandising;
    (B) Liabilities that a person owns or anticipates incurring; or
    (C) Services that a person provides, purchases, or anticipates 
providing or purchasing; or
    (iv) Reduces risks attendant to a position resulting from a swap 
that--
    (A) Was executed opposite a counterparty for which the transaction 
would qualify as a bona fide hedging transaction pursuant to paragraph 
(a)(1)(i) through (iii) of this section; or
    (B) Meets the requirements of paragraphs (a)(1)(i) through (iii) of 
this section.
    (v) Notwithstanding the foregoing, no transactions or positions 
shall be classified as bona fide hedging for purposes of Sec.  151.4 
unless such transactions or positions are established and liquidated in 
an orderly manner in accordance with sound commercial practices and the 
provisions of paragraph (a)(2) of this section regarding enumerated 
hedging transactions and positions or paragraphs (a)(3) or (4) of this 
section regarding pass-through swaps of this section have been 
satisfied.
    (2) Enumerated hedging transactions and positions. Bona fide hedging 
transactions and positions for the purposes of this paragraph mean any 
of the following specific transactions and positions:
    (i) Sales of Referenced Contracts that do not exceed in quantity:
    (A) Ownership or fixed-price purchase of the contract's underlying 
cash commodity by the same person; and

[[Page 376]]

    (B) Unsold anticipated production of the same commodity, which may 
not exceed one year of production for an agricultural commodity, by the 
same person provided that no such position is maintained in any 
physical-delivery Referenced Contract during the last five days of 
trading of the Core Referenced Futures Contract in an agricultural or 
metal commodity or during the spot month for other physical-delivery 
contracts.
    (ii) Purchases of Referenced Contracts that do not exceed in 
quantity:
    (A) The fixed-price sale of the contract's underlying cash commodity 
by the same person;
    (B) The quantity equivalent of fixed-price sales of the cash 
products and by-products of such commodity by the same person; and
    (C) Unfilled anticipated requirements of the same cash commodity, 
which may not exceed one year for agricultural Referenced Contracts, for 
processing, manufacturing, or use by the same person, provided that no 
such position is maintained in any physical-delivery Referenced Contract 
during the last five days of trading of the Core Referenced Futures 
Contract in an agricultural or metal commodity or during the spot month 
for other physical-delivery contracts.
    (iii) Offsetting sales and purchases in Referenced Contracts that do 
not exceed in quantity that amount of the same cash commodity that has 
been bought and sold by the same person at unfixed prices basis 
different delivery months, provided that no such position is maintained 
in any physical-delivery Referenced Contract during the last five days 
of trading of the Core Referenced Futures Contract in an agricultural or 
metal commodity or during the spot month for other physical-delivery 
contracts.
    (iv) Purchases or sales by an agent who does not own or has not 
contracted to sell or purchase the offsetting cash commodity at a fixed 
price, provided that the agent is responsible for the merchandising of 
the cash positions that is being offset in Referenced Contracts and the 
agent has a contractual arrangement with the person who owns the 
commodity or holds the cash market commitment being offset.
    (v) Anticipated merchandising hedges. Offsetting sales and purchases 
in Referenced Contracts that do not exceed in quantity the amount of the 
same cash commodity that is anticipated to be merchandised, provided 
that:
    (A) The quantity of offsetting sales and purchases is not larger 
than the current or anticipated unfilled storage capacity owned or 
leased by the same person during the period of anticipated merchandising 
activity, which may not exceed one year;
    (B) The offsetting sales and purchases in Referenced Contracts are 
in different contract months, which settle in not more than one year; 
and
    (C) No such position is maintained in any physical-delivery 
Referenced Contract during the last five days of trading of the Core 
Referenced Futures Contract in an agricultural or metal commodity or 
during the spot month for other physical-delivery contracts.
    (vi) Anticipated royalty hedges. Sales or purchases in Referenced 
Contracts offset by the anticipated change in value of royalty rights 
that are owned by the same person provided that:
    (A) The royalty rights arise out of the production, manufacturing, 
processing, use, or transportation of the commodity underlying the 
Referenced Contract, which may not exceed one year for agricultural 
Referenced Contracts; and
    (B) No such position is maintained in any physical-delivery 
Referenced Contract during the last five days of trading of the Core 
Referenced Futures Contract in an agricultural or metal commodity or 
during the spot month for other physical-delivery contracts.
    (vii) Service hedges. Sales or purchases in Referenced Contracts 
offset by the anticipated change in value of receipts or payments due or 
expected to be due under an executed contract for services held by the 
same person provided that:
    (A) The contract for services arises out of the production, 
manufacturing, processing, use, or transportation of the commodity 
underlying the Referenced Contract, which may not exceed one year for 
agricultural Referenced Contracts;
    (B) The fluctuations in the value of the position in Referenced 
Contracts

[[Page 377]]

are substantially related to the fluctuations in value of receipts or 
payments due or expected to be due under a contract for services; and
    (C) No such position is maintained in any physical-delivery 
Referenced Contract during the last five days of trading of the Core 
Referenced Futures Contract in an agricultural or metal commodity or 
during the spot month for other physical-delivery contracts.
    (viii) Cross-commodity hedges. Sales or purchases in Referenced 
Contracts described in paragraphs (a)(2)(i) through (vii) of this 
section may also be offset other than by the same quantity of the same 
cash commodity, provided that:
    (A) The fluctuations in value of the position in Referenced 
Contracts are substantially related to the fluctuations in value of the 
actual or anticipated cash position; and
    (B) No such position is maintained in any physical-delivery 
Referenced Contract during the last five days of trading of the Core 
Referenced Futures Contract in an agricultural or metal commodity or 
during the spot month for other physical-delivery contracts.
    (3) Pass-through swaps. Bona fide hedging transactions and positions 
for the purposes of this paragraph include the purchase or sales of 
Referenced Contracts that reduce the risks attendant to a position 
resulting from a swap that was executed opposite a counterparty for whom 
the swap transaction would qualify as a bona fide hedging transaction 
pursuant to paragraph (a)(2) of this section (``pass-through swaps''), 
provided that no such position is maintained in any physical-delivery 
Referenced Contract during the last five days of trading of the Core 
Referenced Futures Contract in an agricultural or metal commodity or 
during the spot month for other physical-delivery contracts unless such 
pass-through swap position continues to offset the cash market commodity 
price risk of the bona fide hedging counterparty.
    (4) Pass-through swap offsets. For swaps executed opposite a 
counterparty for whom the swap transaction would qualify as a bona fide 
hedging transaction pursuant to paragraph (a)(2) of this section (pass-
through swaps), such pass-through swaps shall also be classified as a 
bona fide hedging transaction for the counterparty for whom the swap 
would not otherwise qualify as a bona fide hedging transaction pursuant 
to paragraph (a)(2) of this section (``non-hedging counterparty''), 
provided that the non-hedging counterparty purchases or sells Referenced 
Contracts that reduce the risks attendant to such pass-through swaps. 
Provided further, that the pass-through swap shall constitute a bona 
fide hedging transaction only to the extent the non-hedging counterparty 
purchases or sells Referenced Contracts that reduce the risks attendant 
to the pass-through swap.
    (5) Any person engaging in other risk-reducing practices commonly 
used in the market which they believe may not be specifically enumerated 
in Sec.  151.5(a)(2) may request relief from Commission staff under 
Sec.  140.99 of this chapter or the Commission under section 4a(a)(7) of 
the Act concerning the applicability of the bona fide hedging 
transaction exemption.
    (b) Aggregation of accounts. Entities required to aggregate accounts 
or positions under Sec.  151.7 shall be considered the same person for 
the purpose of determining whether a person or persons are eligible for 
a bona fide hedge exemption under Sec.  151.5(a).
    (c) Information on cash market commodity activities. Any person with 
a position that exceeds the position limits set forth in Sec.  151.4 
pursuant to paragraphs (a)(2)(i)(A), (a)(2)(ii)(A), (a)(2)(ii)(B), 
(a)(2)(iii), or (a)(2)(iv) of this section shall submit to the 
Commission a 404 filing, in the form and manner provided for in Sec.  
151.10.
    (1) The 404 filing shall contain the following information with 
respect to such position for each business day the same person exceeds 
the limits set forth in Sec.  151.4, up to and through the day the 
person's position first falls below the position limits:
    (i) The date of the bona fide hedging position, an indication of 
under which enumerated hedge exemption or exemptions the position 
qualifies for bona fide hedging, the corresponding Core Referenced 
Futures Contract, the cash market commodity hedged, and the units in 
which the cash market commodity is measured;

[[Page 378]]

    (ii) The entire quantity of stocks owned of the cash market 
commodity that is being hedged;
    (iii) The entire quantity of fixed-price purchase commitments of the 
cash market commodity that is being hedged;
    (iv) The sum of the entire quantity of stocks owned of the cash 
market commodity and the entire quantity of fixed-price purchase 
commitments of the cash market commodity that is being hedged;
    (v) The entire quantity of fixed-price sale commitments of the cash 
commodity that is being hedged;
    (vi) The quantity of long and short Referenced Contracts, measured 
on a futures-equivalent basis to the applicable Core Referenced Futures 
Contract, in the nearby contract month that are being used to hedge the 
long and short cash market positions;
    (viii) The total number of long and short Referenced Contracts, 
measured on a futures equivalent basis to the applicable Core Referenced 
Futures Contract, that are being used to hedge the long and short cash 
market positions; and
    (viii) Cross-commodity hedging information as required under 
paragraph (g) of this section.
    (2) Notice filing. Persons seeking an exemption under this paragraph 
shall file a notice with the Commission, which shall be effective upon 
the date of the submission of the notice.
    (d) Information on anticipated cash market commodity activities--(1) 
Initial statement. Any person who intends to exceed the position limits 
set forth in Sec.  151.4 pursuant to paragraph (a)(2)(i)(B), 
(a)(2)(ii)(C), (a)(2)(v), (a)(2)(vi), or (a)(2)(vii) of this section in 
order to hedge anticipated production, requirements, merchandising, 
royalties, or services connected to a commodity underlying a Referenced 
Contract, shall submit to the Commission a 404A filing in the form and 
manner provided in Sec.  151.10. The 404A filing shall contain the 
following information with respect to such activities, by Referenced 
Contract:
    (i) A description of the type of anticipated cash market activity to 
be hedged; how the purchases or sales of Referenced Contracts are 
consistent with the provisions of (a)(1) of this section; and the units 
in which the cash commodity is measured;
    (ii) The time period for which the person claims the anticipatory 
hedge exemption is required, which may not exceed one year for 
agricultural commodities or one year for anticipated merchandising 
activity;
    (iii) The actual use, production, processing, merchandising (bought 
and sold), royalties and service payments and receipts of that cash 
market commodity during each of the three complete fiscal years 
preceding the current fiscal year;
    (iv) The anticipated use production, or commercial or merchandising 
requirements (purchases and sales), anticipated royalties, or service 
contract receipts or payments of that cash market commodity which are 
applicable to the anticipated activity to be hedged for the period 
specified in (d)(1)(ii) of this section;
    (v) The unsold anticipated production or unfilled anticipated 
commercial or merchandising requirements of that cash market commodity 
which are applicable to the anticipated activity to be hedged for the 
period specified in (d)(1)(ii) of this section;
    (vi) The maximum number of Referenced Contracts long and short (on 
an all-months-combined basis) that are expected to be used for each 
anticipatory hedging activity for the period specified in (d)(1)(ii) of 
this section on a futures equivalent basis;
    (vii) If the hedge exemption sought is for anticipated merchandising 
pursuant to (a)(2)(v) of this section, a description of the storage 
capacity related to the anticipated merchandising transactions, 
including:
    (A) The anticipated total storage capacity, the anticipated 
merchandising quantity, and purchase and sales commitments for the 
period specified in (d)(1)(ii) of this section;
    (B) Current inventory; and
    (C) The total storage capacity and quantity of commodity moved 
through the storage capacity for each of the three complete fiscal years 
preceding the current fiscal year; and
    (viii) Cross-commodity hedging information as required under 
paragraph (g) of this section.

[[Page 379]]

    (2) Notice filing. Persons seeking an exemption under this paragraph 
shall file a notice with the Commission. Such a notice shall be filed at 
least ten days in advance of a date the person expects to exceed the 
position limits established under this part, and shall be effective 
after that ten day period unless otherwise notified by the Commission.
    (3) Supplemental reports for 404A filings. Whenever a person intends 
to exceed the amounts determined by the Commission to constitute a bona 
fide hedge for anticipated activity in the most recent statement or 
filing, such person shall file with the Commission a statement that 
updates the information provided in the person's most recent filing at 
least ten days in advance of the date that person wishes to exceed those 
amounts.
    (e) Review of notice filings. (1) The Commission may require persons 
submitting notice filings provided for under paragraphs (c)(2) and 
(d)(2) of this section to submit such other information, before or after 
the effective date of a notice, which is necessary to enable the 
Commission to make a determination whether the transactions or positions 
under the notice filing fall within the scope of bona fide hedging 
transactions or positions described under paragraph (a) of this section.
    (2) The transactions and positions described in the notice filing 
shall not be considered, in part or in whole, as bona fide hedging 
transactions or positions if such person is so notified by the 
Commission.
    (f) Additional information from swap counterparties to bona fide 
hedging transactions. All persons that maintain positions in excess of 
the limits set forth in Sec.  151.4 in reliance upon the exemptions set 
forth in paragraphs (a)(3) and (4) of this section shall submit to the 
Commission a 404S filing, in the form and manner provided for in Sec.  
151.10. Such 404S filing shall contain the following information with 
respect to such position for each business day that the same person 
exceeds the limits set forth in Sec.  151.4, up to and through the day 
the person's position first falls below the position limit that was 
exceeded:
    (1) By Referenced Contract;
    (2) By commodity reference price and units of measurement used for 
the swaps that would qualify as a bona fide hedging transaction or 
position gross long and gross short positions; and
    (3) Cross-commodity hedging information as required under paragraph 
(g) of this section.
    (g) Conversion methodology for cross-commodity hedges. In addition 
to the information required under this section, persons who avail 
themselves of cross-commodity hedges pursuant to (a)(2)(viii) of this 
section shall submit to the Commission a form 404, 404A, or 404S filing, 
as appropriate. The first time such a form is filed where a cross-
commodity hedge is claimed, it should contain a description of the 
conversion methodology. That description should explain the conversion 
from the actual commodity used in the person's normal course of business 
to the Referenced Contract that is being used for hedging, including an 
explanation of the methodology used for determining the ratio of 
conversion between the actual or anticipated cash positions and the 
person's positions in the Referenced Contract.
    (h) Recordkeeping. Persons who avail themselves of bona fide hedge 
exemptions shall keep and maintain complete books and records concerning 
all of their related cash, futures, and swap positions and transactions 
and make such books and records, along with a list of pass-through swap 
counterparties for pass-through swap exemptions under (a)(3) of this 
section, available to the Commission upon request.
    (i) Additional requirements for pass-through swap counterparties. A 
party seeking to rely upon Sec.  151.5(a)(3) to exceed the position 
limits of Sec.  151.4 with respect to such a swap may only do so if its 
counterparty provides a written representation (e.g., in the form of a 
field or other representation contained in a mutually executed trade 
confirmation) that, as to such counterparty, the swap qualifies in good 
faith as a bona fide hedging transaction under paragraph (a)(3) of this 
section at the time the swap was executed. That written representation 
shall be retained by the parties to the swap for a period of at least 
two years following the expiration of the swap and furnished to the

[[Page 380]]

Commission upon request. Any person that represents to another person 
that the swap qualifies as a pass-through swap under paragraph (a)(3) of 
this section shall keep and make available to the Commission upon 
request all relevant books and records supporting such a representation 
for a period of at least two years following the expiration of the swap.
    (j) Financial distress exemption. Upon specific request made to the 
Commission, the Commission may exempt a person or related persons under 
financial distress circumstances for a time certain from any of the 
requirements of this part. Financial distress circumstances are 
situations involving the potential default or bankruptcy of a customer 
of the requesting person or persons, affiliate of the requesting person 
or persons, or potential acquisition target of the requesting person or 
persons. Such exemptions shall be granted by Commission order.



Sec.  151.6  Position visibility.

    (a) Visibility levels. A person holding or controlling positions, 
separately or in combination, net long or net short, in Referenced 
Contracts that equal or exceed the following levels in all months or in 
any single month (including the spot month), shall comply with the 
reporting requirements of paragraphs (b) and (c) of this section:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
(1) Visibility Levels for Metal Referenced Contracts
------------------------------------------------------------------------
(i) Commodity Exchange, Inc. Copper (HG)............               8,500
(ii) Commodity Exchange, Inc. Gold (GC).............              30,000
(iv) Commodity Exchange, Inc. Silver (SI)...........               8,500
(v) New York Mercantile Exchange Palladium (PA).....               1,500
(vi) New York Mercantile Exchange Platinum (PL).....               2,000
------------------------------------------------------------------------
(2) Visibility Levels for Energy Referenced Contracts
------------------------------------------------------------------------
(i) New York Mercantile Exchange Light Sweet Crude                50,000
 Oil (CL)...........................................
(ii) New York Mercantile Exchange Henry Hub Natural               50,000
 Gas (NG)...........................................
(iii) New York Mercantile Exchange New York Harbor                10,000
 Gasoline Blendstock (RB)...........................
(iv) New York Mercantile Exchange New York Harbor                 16,000
 No. 2 Heating Oil (HO).............................
------------------------------------------------------------------------

    (b) Statement of person exceeding visibility level. Persons meeting 
the provisions of paragraph (a) of this section, shall submit to the 
Commission a 401 filing in the form and manner provided for in Sec.  
151.10. The 401 filing shall contain the following information, by 
Referenced Contract:
    (1) A list of dates, within the applicable calendar quarter, on 
which the person held or controlled a position that equaled or exceeded 
such visibility levels; and
    (2) As of the first business Tuesday following the applicable 
calendar quarter and as of the day, within the applicable calendar 
quarter, in which the person held the largest net position (on an all 
months combined basis) in excess of the level in paragraph (a) of this 
section:
    (i) Separately by futures, options and swaps, gross long and gross 
short futures equivalent positions in all months in the applicable 
Referenced Contract(s) (using economically reasonable and analytically 
supported deltas) on a futures-equivalent basis; and
    (ii) If applicable, by commodity referenced price, gross long and 
gross short uncleared swap positions in all months basis in the 
applicable Referenced Contract(s) futures-equivalent basis (using 
economically reasonable and analytically supported deltas).
    (c) 404 filing. A person that holds a position in a Referenced 
Contract that equals or exceeds a visibility level in a calendar quarter 
shall submit to the Commission a 404 filing in the form and manner 
provided for in Sec.  151.10, and it shall contain the information 
regarding such positions as described in Sec.  151.5(c) as of the first 
business Tuesday following the applicable calendar quarter and as of the 
day, within the applicable calendar quarter, in which the person held 
the largest net position in excess of the level in all months.

[[Page 381]]

    (d) Alternative filing. With the express written permission of the 
Commission or its designees, the submission of a swaps or physical 
commodity portfolio summary statement spreadsheet in digital format, 
only insofar as the spreadsheet provides at least the same data as that 
required by paragraphs (b) or (c) of this section respectively may be 
substituted for the 401 or 404 filing respectively.
    (e) Precedence of other reporting obligations. Reporting obligations 
imposed by regulations other than those contained in this section shall 
supersede the reporting requirements of paragraphs (b) and (c) of this 
section but only insofar as other reporting obligations provide at least 
the same data and are submitted to the Commission or its designees at 
least as often as the reporting requirements of paragraphs (b) and (c) 
of this section.
    (f) Compliance date. The compliance date of this section shall be 
sixty days after the term ``swap'' is further defined under the Wall 
Street Transparency and Accountability Act of 2010. A document will be 
published in the Federal Register establishing the compliance date.



Sec.  151.7  Aggregation of positions.

    (a) Positions to be aggregated. The position limits set forth in 
Sec.  151.4 shall apply to all positions in accounts for which any 
person by power of attorney or otherwise directly or indirectly holds 
positions or controls trading and to positions held by two or more 
persons acting pursuant to an expressed or implied agreement or 
understanding the same as if the positions were held by, or the trading 
of the position were done by, a single individual.
    (b) Ownership of accounts generally. For the purpose of applying the 
position limits set forth in Sec.  151.4, except for the ownership 
interest of limited partners, shareholders, members of a limited 
liability company, beneficiaries of a trust or similar type of pool 
participant in a commodity pool subject to the provisos set forth in 
paragraph (c) of this section or in accounts or positions in multiple 
pools as set forth in paragraph (d) of this section, any person holding 
positions in more than one account, or holding accounts or positions in 
which the person by power of attorney or otherwise directly or 
indirectly has a 10 percent or greater ownership or equity interest, 
must aggregate all such accounts or positions.
    (c) Ownership by limited partners, shareholders or other pool 
participants. (1) Except as provided in paragraphs (c)(2) and (3) of 
this section, a person that is a limited partner, shareholder or other 
similar type of pool participant with an ownership or equity interest of 
10 percent or greater in a pooled account or positions who is also a 
principal or affiliate of the operator of the pooled account must 
aggregate the pooled account or positions with all other accounts or 
positions owned or controlled by that person, unless:
    (i) The pool operator has, and enforces, written procedures to 
preclude the person from having knowledge of, gaining access to, or 
receiving data about the trading or positions of the pool;
    (ii) The person does not have direct, day-to-day supervisory 
authority or control over the pool's trading decisions; and
    (iii) The pool operator has complied with the requirements of 
paragraph (h) of this section on behalf of the person or class of 
persons.
    (2) A commodity pool operator having ownership or equity interest of 
10 percent or greater in an account or positions as a limited partner, 
shareholder or other similar type of pool participant must aggregate 
those accounts or positions with all other accounts or positions owned 
or controlled by the commodity pool operator.
    (3) Each limited partner, shareholder, or other similar type of pool 
participant having an ownership or equity interest of 25 percent or 
greater in a commodity pool the operator of which is exempt from 
registration under Sec.  4.13 of this chapter must aggregate the pooled 
account or positions with all other accounts or positions owned or 
controlled by that person.
    (d) Identical trading. Notwithstanding any other provision of this 
section, for the purpose of applying the position limits set forth in 
Sec.  151.4, any person that holds or controls the trading of

[[Page 382]]

positions, by power of attorney or otherwise, in more than one account, 
or that holds or controls trading of accounts or positions in multiple 
pools with identical trading strategies must aggregate all such accounts 
or positions that a person holds or controls.
    (e) Trading control by futures commission merchants. The position 
limits set forth in Sec.  151.4 shall be construed to apply to all 
positions held by a futures commission merchant or its separately 
organized affiliates in a discretionary account, or in an account which 
is part of, or participates in, or receives trading advice from a 
customer trading program of a futures commission merchant or any of the 
officers, partners, or employees of such futures commission merchant or 
its separately organized affiliates, unless:
    (1) A trader other than the futures commission merchant or the 
affiliate directs trading in such an account;
    (2) The futures commission merchant or the affiliate maintains only 
such minimum control over the trading in such an account as is necessary 
to fulfill its duty to supervise diligently trading in the account; and
    (3) Each trading decision of the discretionary account or the 
customer trading program is determined independently of all trading 
decisions in other accounts which the futures commission merchant or the 
affiliate holds, has a financial interest of 10 percent or more in, or 
controls.
    (f) Independent Account Controller. An eligible entity need not 
aggregate its positions with the eligible entity's client positions or 
accounts carried by an authorized independent account controller, as 
defined in Sec.  151.1, except for the spot month provided in physical-
delivery Referenced Contracts, provided, however, that the eligible 
entity has complied with the requirements of paragraph (h) of this 
section, and that the overall positions held or controlled by such 
independent account controller may not exceed the limits specified in 
Sec.  151.4.
    (1) Additional requirements for exemption of Affiliated Entities. If 
the independent account controller is affiliated with the eligible 
entity or another independent account controller, each of the affiliated 
entities must:
    (i) Have, and enforce, written procedures to preclude the affiliated 
entities from having knowledge of, gaining access to, or receiving data 
about, trades of the other. Such procedures must include document 
routing and other procedures or security arrangements, including 
separate physical locations, which would maintain the independence of 
their activities; provided, however, that such procedures may provide 
for the disclosure of information which is reasonably necessary for an 
eligible entity to maintain the level of control consistent with its 
fiduciary responsibilities and necessary to fulfill its duty to 
supervise diligently the trading done on its behalf;
    (ii) Trade such accounts pursuant to separately developed and 
independent trading systems;
    (iii) Market such trading systems separately; and
    (iv) Solicit funds for such trading by separate disclosure documents 
that meet the standards of Sec.  4.24 or Sec.  4.34 of this chapter, as 
applicable where such disclosure documents are required under part 4 of 
this chapter.
    (g) Exemption for underwriting. Notwithstanding any of the 
provisions of this section, a person need not aggregate the positions or 
accounts of an owned entity if the ownership interest is based on the 
ownership of securities constituting the whole or a part of an unsold 
allotment to or subscription by such person as a participant in the 
distribution of such securities by the issuer or by or through an 
underwriter.
    (h) Notice filing for exemption. (1) Persons seeking an aggregation 
exemption under paragraph (c), (e), (f), or (i) of this section shall 
file a notice with the Commission, which shall be effective upon 
submission of the notice, and shall include:
    (i) A description of the relevant circumstances that warrant 
disaggregation; and
    (ii) A statement certifying that the conditions set forth in the 
applicable aggregation exemption provision has been met.
    (2) Upon call by the Commission, any person claiming an aggregation 
exemption under this section shall provide to

[[Page 383]]

the Commission such information concerning the person's claim for 
exemption. Upon notice and opportunity for the affected person to 
respond, the Commission may amend, suspend, terminate, or otherwise 
modify a person's aggregation exemption for failure to comply with the 
provisions of this section.
    (3) In the event of a material change to the information provided in 
the notice filed under this paragraph, an updated or amended notice 
shall promptly be filed detailing the material change.
    (4) A notice shall be submitted in the form and manner provided for 
in Sec.  151.10.
    (i) Exemption for federal law information sharing restriction. 
Notwithstanding any provision of this section, a person is not subject 
to the aggregation requirements of this section if the sharing of 
information associated with such aggregation would cause either person 
to violate Federal law or regulations adopted thereunder and provided 
that such a person does not have actual knowledge of information 
associated with such aggregation. Provided, however, that such person 
file a prior notice with the Commission detailing the circumstances of 
the exemption and an opinion of counsel that the sharing of information 
would cause a violation of Federal law or regulations adopted 
thereunder.



Sec.  151.8  Foreign boards of trade.

    The aggregate position limits in Sec.  151.4 shall apply to a trader 
with positions in Referenced Contracts executed on, or pursuant to the 
rules of a foreign board of trade, provided that:
    (a) Such Referenced Contracts settle against any price (including 
the daily or final settlement price) of one or more contracts listed for 
trading on a designated contract market or swap execution facility that 
is a trading facility; and
    (b) The foreign board of trade makes available such Referenced 
Contracts to its members or other participants located in the United 
States through direct access to its electronic trading and order 
matching system.



Sec.  151.9  Pre-existing positions.

    (a) Non-spot-month position limits. The position limits set forth in 
Sec.  151.4(b) of this chapter may be exceeded to the extent that 
positions in Referenced Contracts remain open and were entered into in 
good faith prior to the effective date of any rule, regulation, or order 
that specifies a position limit under this part.
    (b) Spot-month position limits. Notwithstanding the pre-existing 
exemption in non-spot months, a person must comply with spot month 
limits.
    (c) Pre-Dodd-Frank and transition period swaps. The initial position 
limits established under Sec.  151.4 shall not apply to any swap 
positions entered into in good faith prior to the effective date of such 
initial limits. Swap positions in Referenced Contracts entered into in 
good faith prior to the effective date of such initial limits may be 
netted with post-effective date swap and swaptions for the purpose of 
applying any position limit.
    (d) Exemptions. Exemptions granted by the Commission under Sec.  
1.47 for swap risk management shall not apply to swap positions entered 
into after the effective date of initial position limits established 
under Sec.  151.4.



Sec.  151.10  Form and manner of reporting and submitting information 
or filings.

    Unless otherwise instructed by the Commission or its designees, any 
person submitting reports under this section shall submit the 
corresponding required filings and any other information required under 
this part to the Commission as follows:
    (a) Using the format, coding structure, and electronic data 
transmission procedures approved in writing by the Commission; and
    (b) Not later than 9 a.m. Eastern Time on the next business day 
following the reporting or filing obligation is incurred unless:
    (1) A 404A filing is submitted pursuant Sec.  151.5(d), in which 
case the filing must be submitted at least ten business days in advance 
of the date that transactions and positions would be established that 
would exceed a position limit set forth in Sec.  151.4;

[[Page 384]]

    (2) A 404 filing is submitted pursuant to Sec.  151.5(c) or a 404S 
is submitted pursuant to Sec.  151.5(f), the filing must be submitted 
not later than 9 a.m. on the third business day after a position has 
exceeded the level in a Referenced Contract for the first time and not 
later than the third business day following each calendar month in which 
the person exceeded such levels;
    (3) The filing is submitted pursuant to Sec.  151.6, then the 401 or 
404, or their respective alternatives as provided for under Sec.  
151.6(d), shall be submitted within ten business days following the 
quarter in which the person holds a position in excess in the visibility 
levels provided in Sec.  151.6(a); or
    (4) A notice of disaggregation is filed pursuant to Sec.  151.7(h), 
in which case the notice shall be submitted within five business days of 
when the person claims a disaggregation exemption.
    (e) When the reporting entity discovers errors or omissions to past 
reports, the entity so notifies the Commission and files corrected 
information in a form and manner and at a time as may be instructed by 
the Commission or its designee.



Sec.  151.11  Designated contract market and swap execution facility
position limits and accountability rules.

    (a) Spot-month limits. (1) For all Referenced Contracts executed 
pursuant to their rules, swap execution facilities that are trading 
facilities and designated contract markets shall adopt, enforce, and, 
establish rules and procedures for monitoring and enforcing spot-month 
position limits set at levels no greater than those established by the 
Commission under Sec.  151.4.
    (2) For all agreements, contracts, or transactions executed pursuant 
to their rules that are not subject to the limits set forth in paragraph 
(a)(1) of this section, it shall be an acceptable practice for swap 
execution facilities that are trading facilities and designated contract 
markets to adopt, enforce, and establish rules and procedures for 
monitoring and enforcing spot-month position limits set at levels no 
greater than 25 percent of estimated deliverable supply, consistent with 
Commission guidance set forth in this title.
    (b) Non-spot-month limits--(1) Referenced Contracts. For Referenced 
Contracts executed pursuant to their rules, swap execution facilities 
that are trading facilities and designated contract markets shall adopt 
enforce, and establish rules and procedures for monitoring and enforcing 
single month and all-months limits at levels no greater than the 
position limits established by the Commission under Sec.  151.4(d)(3) or 
(4).
    (2) Non-referenced contracts. For all other agreements, contracts, 
or transactions executed pursuant to their rules that are not subject to 
the limits set forth in Sec.  151.4, except as provided in Sec.  
151.11(b)(3) and (c), it shall be an acceptable practice for swap 
execution facilities that are trading facilities and designated contract 
markets to adopt, enforce, and establish rules and procedures for 
monitoring and enforcing single-month and all-months-combined position 
limits at levels no greater than ten percent of the average delta-
adjusted futures, swaps, and options month-end all months open interest 
in the same contract or economically equivalent contracts executed 
pursuant to the rules of the designated contract market or swap 
execution facility that is a trading facility for the greater of the 
most recent one or two calendar years up to 25,000 contracts with a 
marginal increase of 2.5 percent thereafter.
    (3) Levels at designation or initial listing. Other than in 
Referenced Contracts, at the time of its initial designation or upon 
offering a new contract, agreement, or transaction to be executed 
pursuant to its rules, it shall be an acceptable practice for a 
designated contract market or swap execution facility that is a trading 
facility to provide for speculative limits for an individual single-
month or in all-months-combined at no greater than 1,000 contracts for 
physical commodities other than energy commodities and 5,000 contracts 
for other commodities, provided that the notional quantity for such 
contracts, agreements, or transactions, corresponds to a notional 
quantity per contract that is no larger than a typical cash market 
transaction in the underlying commodity.
    (4) For purposes of this paragraph, it shall be an acceptable 
practice for open

[[Page 385]]

interest to be calculated by combining the all months month-end open 
interest in the same contract or economically equivalent contracts 
executed pursuant to the rules of the designated contract market or swap 
execution facility that is a trading facility (on a delta-adjusted 
basis, as appropriate) for all months listed during the most recent one 
or two calendar years.
    (c) Alternatives. In lieu of the limits provided for under Sec.  
151.11(a)(2) or (b)(2), it shall be an acceptable practice for swap 
execution facilities that are trading facilities and designated contract 
markets to adopt, enforce, and establish rules and procedures for 
monitoring and enforcing position accountability rules with respect to 
any agreement, contract, or transaction executed pursuant to their rules 
requiring traders to provide information about their position upon 
request by the exchange and to consent to halt increasing further a 
trader's position upon request by the exchange as follows:
    (1) On an agricultural or exempt commodity that is not subject to 
the limits set forth in Sec.  151.4, having an average month-end open 
interest of 50,000 contracts and an average daily volume of 5,000 
contracts and a liquid cash market, provided, however, such swap 
execution facilities that are trading facilities and designated contract 
markets are not exempt from the requirement set forth in paragraph 
(a)(2) that they adopt a spot-month position limit with a level no 
greater than 25 percent of estimated deliverable supply; or
    (2) On a major foreign currency, for which there is no legal 
impediment to delivery and for which there exists a highly liquid cash 
market; or
    (3) On an excluded commodity that is an index or measure of 
inflation, or other macroeconomic index or measure; or
    (4) On an excluded commodity that meets the definition of section 
1a(19)(ii), (iii), or (iv) of the Act.
    (d) Securities futures products. Position limits for securities 
futures products are specified in 17 CFR part 41.
    (e) Aggregation. Position limits or accountability rules established 
under this section shall be subject to the aggregation standards of 
Sec.  151.7.
    (f) Exemptions--(1) Hedge exemptions. (i) For purposes of exempt and 
agricultural commodities, no designated contract market or swap 
execution facility that is a trading facility bylaw, rule, regulation, 
or resolution adopted pursuant to this section shall apply to any 
position that would otherwise be exempt from the applicable Federal 
speculative position limits as determined by Sec.  151.5; provided, 
however, that the designated contract market or swap execution facility 
that is a trading facility may limit bona fide hedging positions or any 
other positions which have been exempted pursuant to Sec.  151.5 which 
it determines are not in accord with sound commercial practices or 
exceed an amount which may be established and liquidated in an orderly 
fashion.
    (ii) For purposes of excluded commodities, no designated contract 
market or swap execution facility that is a trading facility by law, 
rule, regulation, or resolution adopted pursuant to this section shall 
apply to any transaction or position within the definition of bona fide 
hedging transactions and positions for excluded commodities in Sec.  1.3 
of this chapter; provided, however, that the designated contract market 
or swap execution facility that is a trading facility may limit bona 
fide hedging positions that it determines are not in accord with sound 
commercial practices or exceed an amount which may be established and 
liquidated in an orderly fashion.
    (2) Procedure. Persons seeking to establish eligibility for an 
exemption must comply with the procedures of the designated contract 
market or swap execution facility that is a trading facility for 
granting exemptions from its speculative position limit rules. In 
considering whether to permit or grant an exemption, a designated 
contract market or swap execution facility that is a trading facility 
must take into account sound commercial practices and paragraph (d)(1) 
of this section and apply principles consistent with Sec.  151.5.
    (g) Other exemptions. Speculative position limits adopted pursuant 
to this section shall not apply to:
    (1) Any position acquired in good faith prior to the effective date 
of any

[[Page 386]]

bylaw, rule, regulation, or resolution which specifies such limit;
    (2) Spread or arbitrage positions either in positions in related 
Referenced Contracts or, for contracts that are not Referenced 
Contracts, economically equivalent contracts provided that such 
positions are outside of the spot month for physical-delivery contracts; 
or
    (3) Any person that is registered as a futures commission merchant 
or floor broker under authority of the Act, except to the extent that 
transactions made by such person are made on behalf of or for the 
account or benefit of such person.
    (h) Ongoing responsibilities. Nothing in this part shall be 
construed to affect any provisions of the Act relating to manipulation 
or corners or to relieve any designated contract market, swap execution 
facility that is a trading facility, or governing board of a designated 
contract market or swap execution facility that is a trading facility 
from its responsibility under other provisions of the Act and 
regulations.
    (i) Compliance date. The compliance date of this section shall be 60 
days after the term ``swap'' is further defined under the Wall Street 
Transparency and Accountability Act of 2010. A document will be 
published in the Federal Register establishing the compliance date.
    (j) Notwithstanding paragraph (i) of this section, the compliance 
date of provisions of paragraph (b)(1) of this section as it applies to 
non-legacy Referenced Contracts shall be upon the establishment of any 
non-spot-month position limits pursuant to Sec.  151.4(d)(3). In the 
period prior to the establishment of any non-spot-month position limits 
pursuant to Sec.  151.4(d)(3) it shall be an acceptable practice for a 
designated contract market or swap execution facility to either:
    (1) Retain existing non-spot-month position limits or accountability 
rules; or
    (2) Establish non-spot-month position limits or accountability 
levels pursuant to the acceptable practice described in Sec.  
151.11(b)(2) and (c)(1) based on open interest in the same contract or 
economically equivalent contracts executed pursuant to the rules of the 
designated contract market or swap execution facility that is a trading 
facility.

[76 FR 71684, Nov. 18, 2011, as amended at 83 FR 7997, Feb. 23, 2018]



Sec.  151.12  Delegation of authority to the Director of the Division
of Market Oversight.

    (a) The Commission hereby delegates, until it orders otherwise, to 
the Director of the Division of Market Oversight or such other employee 
or employees as the Director may designate from time to time, the 
authority:
    (1) In Sec.  151.4(b) for determining levels of open interest, in 
Sec.  151.4(d)(2)(ii) to estimate deliverable supply, in Sec.  
151.4(d)(3)(ii) to fix non-spot-month limits, and in Sec.  151.4(e) to 
publish position limit levels.
    (2) In Sec.  151.5 requesting additional information or determining 
whether a filing should not be considered as bona fide hedging;
    (3) In Sec.  151.6 for accepting alternative position visibility 
filings under paragraphs (c)(2) and (d) therein;
    (4) In Sec.  151.7(h)(2) to call for additional information from a 
trader claiming an aggregation exemption;
    (5) In Sec.  151.10 for providing instructions or determining the 
format, coding structure, and electronic data transmission procedures 
for submitting data records and any other information required under 
this part.
    (b) The Director of the Division of Market Oversight may submit to 
the Commission for its consideration any matter which has been delegated 
in this section.
    (c) Nothing in this section prohibits the Commission, at its 
election, from exercising the authority delegated in this section.



Sec.  151.13  Severability.

    If any provision of this part, or the application thereof to any 
person or circumstances, is held invalid, such invalidity shall not 
affect other provisions or application of such provision to other 
persons or circumstances which can be given effect without the invalid 
provision or application.

[[Page 387]]



         Sec. Appendix A to Part 151--Spot-Month Position Limits

------------------------------------------------------------------------
                                                           Referenced
                       Contract                          contract spot-
                                                          month limit
------------------------------------------------------------------------
                    Agricultural Referenced Contracts
------------------------------------------------------------------------
ICE Futures U.S. Cocoa...............................              1,000
ICE Futures U.S. Coffee C............................                500
Chicago Board of Trade Corn..........................                600
ICE Futures U.S. Cotton No. 2........................                300
ICE Futures U.S. FCOJ-A..............................                300
Chicago Mercantile Exchange Class III Milk...........              1,500
Chicago Mercantile Exchange Feeder Cattle............                300
Chicago Mercantile Exchange Lean Hog.................                950
Chicago Mercantile Exchange Live Cattle..............                450
Chicago Board of Trade Oats..........................                600
Chicago Board of Trade Rough Rice....................                600
Chicago Board of Trade Soybeans......................                600
Chicago Board of Trade Soybean Meal..................                720
Chicago Board of Trade Soybean Oil...................                540
ICE Futures U.S. Sugar No. 11........................              5,000
ICE Futures U.S. Sugar No. 16........................              1,000
Chicago Board of Trade Wheat.........................                600
Minneapolis Grain Exchange Hard Red Spring Wheat.....                600
Kansas City Board of Trade Hard Winter Wheat.........                600
------------------------------------------------------------------------
                       Metal Referenced Contracts
------------------------------------------------------------------------
Commodity Exchange, Inc. Copper......................              1,200
New York Mercantile Exchange Palladium...............                650
New York Mercantile Exchange Platinum................                500
Commodity Exchange, Inc. Gold........................              3,000
Commodity Exchange, Inc. Silver......................              1,500
------------------------------------------------------------------------
                       Energy Referenced Contracts
------------------------------------------------------------------------
New York Mercantile Exchange Light Sweet Crude Oil...              3,000
New York Mercantile Exchange New York Harbor Gasoline              1,000
 Blendstock..........................................
New York Mercantile Exchange Henry Hub Natural Gas...              1,000
New York Mercantile Exchange New York Harbor Heating               1,000
 Oil.................................................
------------------------------------------------------------------------



Sec. Appendix B to Part 151--Examples of Bona Fide Hedging Transactions 
                              and Positions

    A non-exhaustive list of examples of bona fide hedging transactions 
or positions under Sec.  151.5 is presented below. A transaction or 
position qualifies as a bona fide hedging transaction or position when 
it meets the requirements under Sec.  151.5(a)(1) and one of the 
enumerated provisions under Sec.  151.5(a)(2). With respect to a 
transaction or position that does not fall within an example in this 
appendix , a person seeking to rely on a bona fide hedging exemption 
under Sec.  151.5 may seek guidance from the Division of Market 
Oversight.

                           1. Royalty Payments

    a. Fact Pattern: In order to develop an oil field, Company A 
approaches Bank B for financing. To facilitate the loan, Bank B first 
establishes an independent legal entity commonly known as a special 
purpose vehicle (SPV). Bank B then provides a loan to the SPV. Payments 
of principal and interest from the SPV to the Bank are based on a fixed 
price for crude oil. The SPV in turn makes a production loan to Company 
A. The terms of the production loan require Company A to provide the SPV 
with volumetric production payments (VPPs) based on the SPV's share of 
the production and the prevailing price of crude oil. Because the price 
of crude may fall, the SPV reduces that risk by entering into a NYMEX 
Light Sweet Crude Oil crude oil swap with Swap Dealer C. The swap 
requires the SPV to pay Swap Dealer C the floating price of crude oil 
and for Swap Dealer C to pay a fixed price. The notional quantity for 
the swap is equal to the expected production underlying the VPPs to the 
SPV.
    Analysis: The swap between Swap Dealer C and the SPV meets the 
general requirements for bona fide hedging transactions (Sec.  
151.5(a)(1)(i)-(iii)) and the specific requirements for royalty payments 
(Sec.  151.5(a)(2)(vi)). The VPPs that the SPV receives represent 
anticipated royalty payments from the oil field's production. The swap 
represents a substitute for transactions to be made in the physical 
marketing channel. The SPV's swap position qualifies as a hedge because 
it is

[[Page 388]]

economically appropriate to the reduction of risk. The SPV is reasonably 
certain that the notional quantity of the swap is equal to the expected 
production underlying the VPPs. The swap reduces the risk associated 
with a change in value of a royalty asset. The fluctuations in value of 
the SPV's anticipated royalties are substantially related to the 
fluctuations in value of the NYMEX Light Sweet Crude Oil Referenced 
Contract swap with Swap Dealer C. The risk-reducing position will not 
qualify as a bona fide hedge in a physical-delivery Referenced Contract 
during the spot month.
    b. Continuation of Fact Pattern: Swap Dealer C offsets the risk 
associated with the swap to the SPV by selling Referenced Contracts. The 
notional quantity of the Referenced Contracts sold by Swap Dealer C 
exactly matches the notional quantity of the swap with the SPV.
    Analysis: Because the SPV enters the swap as a bona fide hedger 
under Sec.  151.5(a)(2)(vi), the offset of the risk of the swap in a 
Referenced Contract by Swap Dealer C qualifies as a bona fide hedging 
transaction under Sec.  151.5(a)(3). As provided in Sec.  151.5(a)(3), 
the risk reducing position of Swap Dealer C does not qualify as a bona 
fide hedge in a physical-delivery Referenced Contract during the spot 
month.

                              2. Sovereigns

    a. Fact Pattern: A Sovereign induces a farmer to sell his 
anticipated production of 100,000 bushels of corn forward to User A at a 
fixed price for delivery during the expected harvest. In return for the 
farmer entering into the fixed-price forward sale, the Sovereign agrees 
to pay the farmer the difference between the market price at the time of 
harvest and the price of the fixed-price forward, in the event that the 
market price is above the price of the forward. The fixed-price forward 
sale of 100,000 bushels of corn reduces the farmer's downside price risk 
associated with his anticipated agricultural production. The Sovereign 
faces commodity price risk as it stands ready to pay the farmer the 
difference between the market price and the price of the fixed-price 
contract. To reduce that risk, the Sovereign purchases 100,000 bushels 
of Chicago Board of Trade (``CBOT'') Corn Referenced Contract call 
options.
    Analysis: Because the Sovereign and the farmer are acting together 
pursuant to an express agreement, the aggregation provisions of Sec.  
151.7 and Sec.  151.5(b) apply and they are treated as a single person. 
Taking the positions of the Sovereign and farmer jointly, the risk 
profile of the combination of the forward sale and the long call is 
approximately equivalent to the risk profile of a synthetic long 
put.\521\ A synthetic long put may be a bona fide hedge for anticipated 
production. Thus, that single person satisfies the general requirements 
for bona fide hedging transactions (Sec.  151.5(a)(1)(i)-(iii)) and 
specific requirements for anticipated agricultural production (Sec.  
151.5(a)(2)(i)(B)). The synthetic long put is a substitute for 
transactions that the farmer will make at a later time in the physical 
marketing channel after the crop is harvested. The synthetic long put 
reduces the price risk associated with anticipated agricultural 
production. The size of the hedge is equivalent to the size of the 
Sovereign's risk exposure. As provided under Sec.  151.5(a)(2)(i)(B), 
the Sovereign's risk-reducing position will not qualify as a bona fide 
hedge in a physical-delivery Referenced Contract during the last five 
trading days.
---------------------------------------------------------------------------

    \521\ Put-call parity describes the mathematical relationship 
between price of a put and call with identical strike prices and expiry.
---------------------------------------------------------------------------

                               3. Services

    a. Fact Pattern: Company A enters into a risk service agreement to 
drill an oil well with Company B. The risk service agreement provides 
that a portion of the revenue receipts to Company A depends on the value 
of the oil produced. Company A is concerned that the price of oil may 
fall resulting in lower anticipated revenues from the risk service 
agreement. To reduce that risk, Company A sells 5,000 NYMEX Light Sweet 
Crude Oil Referenced Contracts, which is equivalent to the firm's 
anticipated share of the oil produced.
    Analysis: Company A's hedge of a portion of its revenue stream from 
the risk service agreement meets the general requirements for bona fide 
hedging (Sec.  151.5(a)(1)(i)-(iii)) and the specific provisions for 
services (Sec.  151.5(a)(2)(vii)). Selling NYMEX Light Sweet Crude Oil 
Referenced Contracts is a substitute for transactions to be taken at a 
later time in the physical marketing channel once the oil is produced. 
The Referenced Contracts sold by Company A are economically appropriate 
to the reduction of risk because the total notional quantity of the 
Referenced Contracts sold by Company A equals its share of the expected 
quantity of future production under the risk service agreement. Because 
the price of oil may fall, the transactions in Referenced Contracts 
arise from a potential reduction in the value of the service that 
Company A is providing to Company B. The contract for services involves 
the production of a commodity underlying the NYMEX Exchange Light Sweet 
Crude Oil Referenced Contract. As provided under Sec.  151.5(a)(2)(vii), 
the risk reducing position will not qualify as a bona fide hedge during

[[Page 389]]

the spot month of the physical-delivery Referenced Contract.
    b. Fact Pattern: A City contracts with Firm A to provide waste 
management services. The contract requires that the trucks used to 
transport the solid waste use natural gas as a power source. According 
to the contract, the City will pay for the cost of the natural gas used 
to transport the solid waste by Firm A. In the event that natural gas 
prices rise, the City's waste transport expenses rise. To mitigate this 
risk, the City establishes a long position in NYMEX Natural Gas 
Referenced Contracts that is equivalent to the expected use of natural 
gas over the life of the service contract.
    Analysis: This transaction meets the general requirements for bona 
fide hedging transaction (Sec.  151.5(a)(1)(i)-(iii)) and the specific 
provisions for services (Sec.  151.5(a)(2)(vii)). Because the City is 
responsible for paying the cash price for the natural gas used to power 
the trucks that transport the solid waste under the services agreement, 
the long hedge is a substitute for transactions to be taken at a later 
time in the physical marketing channel. The transaction is economically 
appropriate to the reduction of risk because the total notional quantity 
of the positions Referenced Contracts purchased equals the expected use 
of natural gas over the life of the contract. The positions in 
Referenced Contracts reduce the risk associated with an increase in 
anticipated liabilities that the City may incur in the event that the 
price of natural gas increases. The service contract involves the use of 
a commodity underlying a Referenced Contract. As provided under Sec.  
151.5(a)(2)(vii), the risk reducing position will not qualify as a bona 
fide hedge during the spot month of the physical-delivery Referenced 
Contract.
    c. Fact Pattern: Natural Gas Producer A induces Pipeline Operator B 
to build a pipeline between Producer A's natural gas wells and the Henry 
Hub pipeline interconnection by entering into a fixed-price contract for 
natural gas transportation that guarantees a specified quantity of gas 
to be transported over the pipeline. With the construction of the new 
pipeline, Producer A plans to deliver natural gas to Henry Hub at a 
price differential between his gas wells and Henry Hub that is higher 
than its transportation cost. Producer A is concerned, however, that the 
price differential may decline. To lock in the price differential, 
Producer A decides to sell outright NYMEX Henry Hub Natural Gas 
Referenced Contract cash-settled futures contracts and buy an outright 
swap that NYMEX Henry Hub Natural Gas at his gas wells.
    Analysis: This transaction satisfies the general requirements for a 
bona fide hedge exemption (Sec. Sec.  151.5(a)(1)(i)-(iii)) and specific 
provisions for services (Sec.  151.5(a)(2)(vii)).\522\ The hedge 
represents a substitute for transactions to be taken in the future 
(e.g., selling natural gas at Henry Hub). The hedge is economically 
appropriate to the reduction of risk that the location differential will 
decline, provided the hedge is not larger than the quantity equivalent 
of the cash market commodity to be produced and transported. As provided 
under Sec.  151.5(a)(2)(vii), the risk reducing position will not 
qualify as a bona fide hedge during the spot month of the physical-
delivery Referenced Contract.
---------------------------------------------------------------------------

    \522\ Note that in addition to the use of Referenced Contracts, 
Producer A could have hedged this risk by using a basis contract, which 
is excluded from the definition of Referenced Contracts.
---------------------------------------------------------------------------

                         4. Lending a Commodity

    a. Fact Pattern: Bank B lends 1,000 ounces of gold to Jewelry 
Fabricator J at LIBOR plus a differential. Under the terms of the loan, 
Jewelry Fabricator J may later purchase the gold at a differential to 
the prevailing price of Commodity Exchange, Inc. (``COMEX'') Gold (i.e., 
an open-price purchase agreement embedded in the terms of the loan). 
Jewelry Fabricator J intends to use the gold to make jewelry and 
reimburse Bank B for the loan using the proceeds from jewelry sales. 
Because Bank B is concerned about its potential loss if the price of 
gold drops, it reduces the risk of a potential loss in the value of the 
gold by selling COMEX Gold Referenced Contracts with an equivalent 
notional quantity of 1,000 ounces of gold.
    Analysis: This transaction meets the general bona fide hedge 
exemption requirements (Sec. Sec.  151.5(a)(1)(i)-(iii)) and the 
specific requirements associated with owing a cash commodity (Sec.  
151.5(a)(2)(i)). Bank B's short hedge of the gold represents a 
substitute for a transaction to be made in the physical marketing 
channel. Because the total notional quantity of the amount of gold 
contracts sold is equal to the amount of gold that Bank B owns, the 
hedge is economically appropriate to the reduction of risk. Finally, the 
transactions in Referenced Contracts arise from a potential change in 
the value of the gold owned by Bank B.
    b. Fact Pattern: Silver Processor A agrees to purchase scrap metal 
from a Scrap Yard that will be processed into 5,000 ounces of silver. To 
finance the purchase, Silver Processor A borrows 5,000 ounces of silver 
from Bank B and sells the silver in the cash market. Using the proceeds 
from the sale of silver in the cash market, Silver Processor A pays the 
Scrap Yard for the scrap metal containing 5,000 ounces of silver at a 
negotiated discount from the current spot price. To

[[Page 390]]

repay Bank B, Silver Processor A may either: Provide Bank B with 5,000 
ounces of silver and an interest payment based on a differential to 
LIBOR; or repay the Bank at the current COMEX Silver settlement price 
plus an interest payment based on a differential to LIBOR (i.e., an 
open-price purchase agreement). Silver Processor A processes and refines 
the scrap to repay Bank B. Although Bank B has lent the silver, it is 
still exposed to a reduction in value if the price of silver falls. Bank 
B reduces the risk of a possible decline in the value of their silver 
asset over the loan period by selling COMEX Silver Referenced Contracts 
with a total notional quantity equal to 5,000 ounces.
    Analysis: This transaction meets the general requirements for a bona 
fide hedging transaction (Sec. Sec.  151.5(a)(1)(i)-(iii)) and specific 
provisions for owning a commodity (Sec.  151.5(a)(2)(i)). Bank B's hedge 
of the silver that it owns represents a substitute for a transaction in 
the physical marketing channel. The hedge is economically appropriate to 
the reduction of risk because the bank owns 5,000 ounces of silver. The 
hedge reduces the risk of a potential change in the value of the silver 
that it owns.

                          5. Processor Margins

    a. Fact Pattern: Soybean Processor A has a total throughput capacity 
of 100 million tons of soybeans per year. Soybean Processor A 
``crushes'' soybeans into products (soybean oil and meal). It currently 
has 20 million tons of soybeans in storage and has offset that risk 
through fixed-price forward sales of the amount of products expected to 
be produced from crushing 20 million tons of soybeans, thus locking in 
the crushing margin on 20 million tons of soybeans. Because it has 
consistently operated its plant at full capacity over the last three 
years, it anticipates purchasing another 80 million tons of soybeans 
over the next year. It has not sold the crushed products forward. 
Processor A faces the risk that the difference in price between soybeans 
and the crushed products could change such that crush products (i.e., 
the crush spread) will be insufficient to cover its operating margins. 
To lock in the crush spread, Processor A purchases 80 million tons of 
CBOT Soybean Referenced Contracts and sells CBOT Soybean Meal and 
Soybean Oil Referenced Contracts, such that the total notional quantity 
of soybean meal and oil Referenced Contracts equals the expected 
production from crushing soybeans into soybean meal and oil 
respectively.
    Analysis: These hedging transactions meet the general requirements 
for bona fide hedging transactions (Sec. Sec.  151.5(a)(1)(i)-(iii)) and 
the specific provisions for unfilled anticipated requirements and unsold 
anticipated agricultural production (Sec. Sec.  151.5(a)(2)(i)-(ii)). 
Purchases of soybean Referenced Contracts qualify as bona fide hedging 
transaction provided they do not exceed the unfilled anticipated 
requirements of the cash commodity for one year (in this case 80 million 
tons). Such transactions are a substitute for purchases to be made at a 
later time in the physical marketing channel and are economically 
appropriate to the reduction of risk. The transactions in Referenced 
Contracts arise from a potential change in the value of soybeans that 
the processor anticipates owning. The size of the permissible hedge 
position in soybeans must be reduced by any inventories and fixed-price 
purchases because they are no longer unfilled requirements. As provided 
under Sec.  151.5(a)(2)(ii)(C), the risk reduction position that is not 
in excess of the anticipated requirements for soybeans for that month 
and the next succeeding month qualifies as a bona fide hedge during the 
last five trading days provided it is not in a physical-delivery 
Referenced Contract.
    Given that Soybean Processor A has purchased 80 million tons worth 
of CBOT Soybean Referenced Contracts, it can reduce its processing risk 
by selling soybean meal and oil Referenced Contracts equivalent to the 
expected production. The sale of CBOT Soybean, Soybean Meal, and Soybean 
Oil contracts represents a substitute for transactions to be taken at a 
later time in the physical marketing channel by the soybean processor. 
Because the amount of soybean meal and oil Referenced Contracts sold 
forward by the soybean processor corresponds to expected production from 
80 million tons of soybeans, the hedging transactions are economically 
appropriate to the reduction of risk in the conduct and management of 
the commercial enterprise. These transactions arise from a potential 
change in the value of soybean meal and oil that is expected to be 
produced. The size of the permissible hedge position in the products 
must be reduced by any fixed-price sales because they are no longer 
unsold production. As provided under Sec.  151.5(a)(2)(i)(B), the risk 
reducing position does not qualify as a bona fide hedge in a physical-
delivery Referenced Contract during the last five trading days in the 
event the anticipated crushed products have not been produced.

                          6. Portfolio Hedging

    a. Fact Pattern: It is currently January and Participant A owns five 
million bushels of corn located in its warehouses. Participant A has 
entered into fixed-price forward sale contracts with several processors 
for a total of five million bushels of corn that will be delivered in 
May of this year. Participant A has separately entered into fixed-price 
purchase contracts with several merchandisers for a total of two million 
bushels of corn to be delivered in March of this year. Participant A's 
gross long cash position is equal to

[[Page 391]]

seven million bushels of corn. Because Participant A has sold forward 
five million bushels of corn, its net cash position is equal to long two 
million bushels of corn. To reduce its price risk, Participant A chooses 
to sell the quantity equivalent of two million bushels of CBOT Corn 
Referenced Contracts.
    Analysis: The cash position and the fixed-price forward sale and 
purchases are all in the same crop year. Participant A currently owns 
five million bushels of corn and has effectively sold that amount 
forward. The firm is concerned that the remaining amount--two million 
bushels worth of fixed-price purchase contracts--will fall in value. 
Because the firm's net cash position is equal to long two million 
bushels of corn, the firm is exposed to price risk. Selling the quantity 
equivalent of two million bushels of CBOT Corn Referenced Contracts 
satisfies the general requirements for bona fide hedging transactions 
(Sec. Sec.  151.5(a)(1)(i)-(iii)) and the specific provisions associated 
with owning a commodity (Sec.  151.5(a)(2)(i)).\523\ Participant A's 
hedge of the two million bushels represents a substitute to a fixed-
price forward sale at a later time in the physical marketing channel. 
The transaction is economically appropriate to the reduction of risk 
because the amount of Referenced Contracts sold does not exceed the 
quantity equivalent risk exposure (on a net basis) in the cash commodity 
in the current crop year. Lastly, the hedge arises from a potential 
change in the value of corn owned by Participant A.
---------------------------------------------------------------------------

    \523\ Participant A could also choose to hedge on a gross basis. In 
that event, Participant A would sell the quantity equivalent of seven 
million bushels of March Chicago Board of Trade Corn Referenced 
Contracts, and separately purchase the quantity equivalent of five 
million bushels of May Chicago Board of Trade Corn Referenced Contracts.
---------------------------------------------------------------------------

                      7. Anticipated Merchandising

    a. Fact Pattern: Elevator A, a grain merchandiser, owns a 31 million 
bushel storage facility. The facility currently has 1 million bushels of 
corn in storage. Based upon its historical purchasing and selling 
patterns for the last three years, Elevator A expects that in September 
it will enter into fixed-price forward purchase contracts for 30 million 
bushels of corn that it expects to sell in December. Currently the 
December corn futures price is substantially higher than the September 
corn futures price. In order to reduce the risk that its unfilled 
storage capacity will not be utilized over this period and in turn 
reduce Elevator A's profitability, Elevator A purchases the quantity 
equivalent of 30 million bushels of September CBOT Corn Referenced 
Contracts and sells 30 million bushels of December CBOT Corn Referenced 
Contracts.
    Analysis: This hedging transaction meets the general requirements 
for bona fide hedging transactions (Sec. Sec.  151.5(a)(1)(i)-(iii)) and 
specific provisions associated with anticipated merchandising (Sec.  
151.5(a)(2)(v)). The hedging transaction is a substitute for 
transactions to be taken at a later time in the physical marketing 
channel. The hedge is economically appropriate to the reduction of risk 
associated with the firm's unfilled storage capacity because: (1) The 
December CBOT Corn futures price is substantially above the September 
CBOT Corn futures price; and (2) Elevator A reasonably expects to engage 
in the anticipated merchandising activity based on a review of its 
historical purchasing and selling patterns at that time of the year. The 
risk arises from a change in the value of an asset that the firm owns. 
As provided by Sec.  151.5(a)(2)(v), the size of the hedge is equal to 
the firm's unfilled storage capacity relating to its anticipated 
merchandising activity. The purchase and sale of offsetting Referenced 
Contracts are in different months, which settle in not more than twelve 
months. As provided under Sec.  151.5(a)(2)(v), the risk reducing 
position will not qualify as a bona fide hedge in a physical-delivery 
Referenced Contract during the last 5 trading days of the September 
contract.

                        8. Aggregation of Persons

    a. Fact Pattern: Company A owns 100 percent of Company B. Company B 
buys and sells a variety of agricultural products, such as wheat and 
cotton. Company B currently owns 1 million bushels of wheat. To reduce 
some of its price risk, Company B decides to sell the quantity 
equivalent of 600,000 bushels of CBOT Wheat Referenced Contracts. After 
communicating with Company B, Company A decides to sell the quantity 
equivalent of 400,000 bushels of CBOT Wheat Referenced Contracts.
    Analysis: Because Company A owns more than 10 percent of Company B, 
Company A and B are aggregated together as one person under Sec.  151.7. 
Under Sec.  151.5(b), entities required to aggregate accounts or 
positions under Sec.  151.7 shall be considered the same person for the 
purpose of determining whether a person or persons are eligible for a 
bona fide hedge exemption under paragraph Sec.  151.5(a). The sale of 
wheat Referenced Contracts by Company A and B meets the general 
requirements for bona fide hedging transactions (Sec. Sec.  
151.5(a)(1)(i)-(iii)) and the specific provisions for owning a cash 
commodity (Sec.  151.5(a)(2)(i)). The transactions in Referenced 
Contracts by Company A and B represent a substitute for transactions to 
be taken at a later time in the physical marketing channel. The 
transactions in Referenced Contracts by Company A and B are economically 
appropriate to the reduction of

[[Page 392]]

risk because the combined total of 1,000,000 bushels of CBOT Wheat 
Referenced Contracts sold by Company A and Company B does not exceed the 
1,000,000 bushels of wheat that is owned by Company A. The risk exposure 
for Company A and B results from a potential change in the value of 
wheat.

                        9. Repurchase Agreements

    a. Fact Pattern: When Elevator A purchased 500,000 bushels of wheat 
in April it decided to reduce its price risk by selling the quantity 
equivalent of 500,000 bushels of CBOT Wheat Referenced Contracts. 
Because the price of wheat has steadily risen since April, Elevator A 
has had to make substantial maintenance margin payments. To alleviate 
its concern about further margin payments, Elevator A decides to enter 
into a repurchase agreement with Bank B. The repurchase agreement 
involves two separate contracts: A fixed-price sale from Elevator A to 
Bank B at today's spot price; and an open-priced purchase agreement that 
will allow Elevator A to repurchase the wheat from Bank B at the 
prevailing spot price three months from now. Because Bank B obtains 
title to the wheat under the fixed-price purchase agreement, it is 
exposed to price risk should the price of wheat drop. It therefore 
decides to sell the quantity equivalent of 500,000 bushels of CBOT Wheat 
Referenced Contracts.
    Analysis: Bank B's hedging transaction meets the general 
requirements for bona fide hedging transactions (Sec. Sec.  
151.5(a)(1)(i)-(iii)) and the specific provisions for owning the cash 
commodity (Sec.  151.5(a)(2)(i)). The sale of Referenced Contracts by 
Bank B is a substitute for a transaction to be taken at a later time in 
the physical marketing channel either to Elevator A or to another 
commercial party. The transaction is economically appropriate to the 
reduction of risk in the conduct and management of the commercial 
enterprise of Bank B because the notional quantity of Referenced 
Contracts sold by Bank B is not larger than the quantity of cash wheat 
purchased by Bank B. Finally, the purchase of CBOT Wheat Referenced 
Contracts reduces the risk associated with owning cash wheat.

                              10. Inventory

    a. Fact Pattern: Copper Wire Fabricator A is concerned about 
possible reductions in the price of copper. Currently it is November and 
it owns inventory of 100,000 pounds of copper and 50,000 pounds of 
finished copper wire. Currently, deferred futures prices are lower than 
the nearby futures price. Copper Wire Fabricator A expects to sell 
150,000 pounds of finished copper wire in February. To reduce its price 
risk, Copper Wire Fabricator A sells 150,000 pounds of February COMEX 
Copper Referenced Contracts.
    Analysis: The Copper Wire Fabricator A's hedging transaction meets 
the general requirements for bona fide hedging transactions (Sec. Sec.  
151.5(a)(1)(i)-(iii)) and the provisions for owning a commodity (Sec.  
151.5(a)(2)(i)(A)). The sale of Referenced Contracts represents a 
substitute for transactions to be taken at a later time. The 
transactions are economically appropriate to the reduction of risk in 
the conduct and management of the commercial enterprise because the 
price of copper could drop further. The transactions in Referenced 
Contracts arise from a possible reduction in the value of the inventory 
that it owns.



PART 155_TRADING STANDARDS--Table of Contents



Sec.
155.1 Definitions.
155.2 Trading standards for floor brokers.
155.3 Trading standards for futures commission merchants.
155.4 Trading standards for introducing brokers.
155.5-155.6 [Reserved]
155.10 Exemptions.

    Authority: 7 U.S.C. 6b, 6c, 6g, 6j and 12a, unless otherwise noted.



Sec.  155.1  Definitions.

    For purposes of this part, the term affiliated person of a futures 
commission merchant or of an introducing broker means any general 
partner, officer, director, owner of more than ten percent of the equity 
interest, associated person or employee of the futures commission 
merchant or of the introducing broker, and any relative or spouse of any 
of the foregoing persons, or any relative of such spouse, who shares the 
same home as any of the foregoing persons.

(Approved by the Office of Management and Budget under control numbers 
3038-0007 and 3038-0022)

[46 FR 63036, Dec. 30, 1981, and 48 FR 35304, Aug. 3, 1983]



Sec.  155.2  Trading standards for floor brokers.

    Each contract market shall adopt rules which shall, at a minimum, 
with respect to each member of the contract market acting as a floor 
broker:
    (a) Prohibit such member from purchasing any commodity for future 
delivery, purchasing any call option, or selling any put option, for his 
own account or for any account in which he

[[Page 393]]

has an interest, while holding an order of another person for the (1) 
purchase of any future, (2) purchase of any call option, or (3) sale of 
any put option, in the same commodity which is executable at the market 
price or at the price at which such purchase or sale can be made for the 
member's own account or any account in which he has an interest.
    (b) Prohibit such member from selling any commodity for future 
delivery, selling any call option, or purchasing any put option, for his 
own account or for any account in which he has an interest, while 
holding an order of another person for the (1) sale of any future, (2) 
sale of any call option, or (3) purchase of any put option, in the same 
commodity which is executable at the market price or at the price at 
which such sale or purchase can be made for the member's own account or 
any account in which he has an interest.
    (c) Prohibit such member from executing any transaction for any 
account of another person for which buying and/or selling orders can be 
placed or originated, or for which transactions can be executed, by such 
member without the prior specific consent of the account owner, 
regardless of whether the general authorization for such orders or 
transactions is pursuant to a written agreement, except that orders for 
such an account may be placed with another member for execution.
    (d) Prohibit such member from disclosing at any time that he is 
holding an order of another person or from divulging any order revealed 
to him by reason of his relationship to such other person, except 
pursuant to paragraph (c) of this section or at the request of an 
authorized representative of the Commission or the contract market.
    (e) Prohibit such member from taking, directly or indirectly, the 
other side of any order of another person revealed to him by reason of 
his relationship to such other person, except with such other person's 
prior consent and in conformity with contract market rules approved by 
the Commission.
    (f) Prohibit such member from making any purchase or sale which has 
been directly or indirectly prearranged.
    (g) Prohibit such member from allocating trades among accounts 
except in accordance with rules of the contract market which have been 
approved by the Commission.
    (h) Prohibit such member from withholding or withdrawing from the 
market any order or part of an order of another person for the 
convenience of another member.
    (i) Require that every execution of a transaction on the floor by 
such member be confirmed promptly with the opposite floor broker or 
floor trader; such confirmation shall identify price or premium, 
quantity, future or commodity option and respective clearing members. In 
the event a contract market cannot require prompt identification of 
respective clearing members without seriously disrupting the functions 
of its marketplace, the contract market may petition the Commission for 
exemption from this requirement. Such petition shall include:
    (1) An explanation of why the contract market cannot require the 
prompt identification of respective clearing members without seriously 
disrupting the functions of its marketplace, and
    (2) A proposed contract market rule which will insure that the 
opposite sides of every trade executed on the contract market can be 
effectively matched and will be accepted by a clearing member for 
clearance or will be otherwise sufficiently guaranteed.

The Commission may, in its discretion and upon such terms and conditions 
as it deems appropriate, grant such petition for exemption upon finding 
that the functions of the contract market may be seriously disrupted by 
requiring the prompt identification of respective clearing members and 
that the contract market appears to have adequately insured that every 
trade executed thereon can be effectively matched and will be accepted 
by a

[[Page 394]]

clearing member for clearance or will be otherwise sufficiently 
guaranteed.

(Approved by the Office of Management and Budget under control numbers 
3038-0007 and 3038-0022)

(Secs. 2(a)(1), 4c(a)-(d), 4d, 4f, 4g, 4k, 4m, 4n, 8a, 15 and 17, 
Commodity Exchange Act (7 U.S.C. 2, 4, 6c(a)-(d), 6f, 6g, 6k, 6m, 6n, 
12a, 19 and 21; 5 U.S.C. 552 and 552b))

[41 FR 56142, Dec. 23, 1976, as amended at 46 FR 54534, Nov. 3, 1981; 46 
FR 63036, Dec. 30, 1981; 47 FR 57020, Dec. 22, 1982; 59 FR 5528, Feb. 7, 
1994; 77 FR 66348, Nov. 2, 2012]



Sec.  155.3  Trading standards for futures commission merchants.

    (a) Each futures commission merchant shall, at a minimum, establish 
and enforce internal rules, procedures and controls to:
    (1) Insure, to the extent possible, that each order received from a 
customer which is executable at or near the market price is transmitted 
to the floor of the appropriate contract market before any order in any 
future or in any commodity option in the same commodity for any 
proprietary account, any other account in which an affiliated person has 
an interest, or any account for which an affiliated person may originate 
orders without the prior specific consent of the account owner, if the 
affiliated person has gained knowledge of the customer's order prior to 
the transmission to the floor of the appropriate contract market of the 
order for a proprietary account, an account in which the affiliated 
person has an interest, or an account in which the affiliated person may 
originate orders without the prior specific consent of the account 
owner; and
    (2) Prevent affiliated persons from placing orders, directly or 
indirectly, with another futures commission merchant in a manner 
designed to circumvent the provisions of paragraph (a)(1) of this 
section.
    (b) No futures commission merchant or any of its affiliated persons 
shall:
    (1) Disclose that an order of another person is being held by the 
futures commission merchant or any of its affiliated persons, unless 
such disclosure is necessary to the effective execution of such order or 
is made at the request of an authorized representative of the 
Commission, the contract market on which such order is to be executed, 
or a futures association registered with the Commission pursuant to 
section 17 of the Act; or
    (2)(i) Knowingly take, directly or indirectly, the other side of any 
order of another person revealed to the futures commission merchant or 
any of its affiliated persons by reason of their relationship to such 
other person, except with such other person's prior consent and in 
conformity with contract market rules approved by or certified to the 
Commission.
    (ii) In the case of a customer who does not qualify as an 
``institutional customer'' as defined in Sec.  1.3 of this chapter, a 
futures commission merchant must obtain the customer's prior consent 
through a signed acknowledgment, which may be accomplished in accordance 
with Sec.  1.55(d) of this chapter.
    (c) No futures commission merchant shall knowingly handle the 
account of any affiliated person of another futures commission merchant 
or of an introducing broker unless the futures commission merchant:
    (1) Receives written authorization from a person designated by such 
other futures commission merchant or introducing broker with 
responsibility for the surveillance over such account pursuant to 
paragraph (a)(2) of this section or Sec.  155.4(a)(2), respectively;
    (2) Prepares immediately upon receipt of an order for such account a 
written record of such order, including the account identification and 
order number, and records thereon, by time-stamp or other timing device, 
the date and time, to the nearest minute, the order is received; and
    (3) Transmits on a regular basis to such other futures commission 
merchant or introducing broker copies of all statements for such account 
and of all written records prepared upon the receipt of orders for such 
account pursuant to paragraph (c)(2) of this section.
    (d) No affiliated person of a futures commission merchant shall have 
an account, directly or indirectly, with another futures commission 
merchant unless:
    (1) Such affiliated person receives written authorization to 
maintain such

[[Page 395]]

an account from a person designated by the futures commission merchant 
with which such person is affiliated with responsibility for the 
surveillance over such account pursuant to paragraph (a)(2) of this 
section; and
    (2) Copies of all statements for such account and of all written 
records prepared by such other futures commission merchant upon receipt 
of orders for such account pursuant to paragraph (c)(2) of this section 
are transmitted on a regular basis to the future commission merchant 
with which such person is affiliated.

(Approved by the Office of Management and Budget under control numbers 
3038-0007 and 3038-0022)

(Secs. 2(a)(1), 4c(a)-(d), 4d, 4f, 4g, 4k, 4m, 4n, 8a, 15 and 17, 
Commodity Exchange Act (7 U.S.C. 2, 4, 6c(a)-(d), 6f, 6g, 6k, 6m, 6n, 
12a, 19 and 21; 5 U.S.C. 552 and 552b))

[41 FR 56142, Dec. 23, 1976, as amended at 44 FR 71821, Dec. 12, 1979; 
46 FR 54535, Nov. 3, 1981; 46 FR 63036, Dec. 30, 1981; 47 FR 57020, Dec. 
22, 1982; 48 FR 35304, Aug. 3, 1983; 66 FR 53523, Oct. 23, 2001; 70 FR 
5924, Feb. 4, 2005; 77 FR 66349, Nov. 2, 2012; 83 FR 7997, Feb. 23, 
2018]



Sec.  155.4  Trading standards for introducing brokers.

    (a) Each introducing broker shall, at a minimum, establish and 
enforce internal rules, procedures and controls to:
    (1) Insure, to the extent possible, that each order received from a 
customer which is executable at or near the market price is transmitted 
to the futures commission merchant carrying the account of the customer 
before any order in any future or in any commodity option in the same 
commodity for any proprietary account, any other account in which an 
affiliated person has an interest, or any account for which an 
affiliated person may originate orders without the prior specific 
consent of the account owner, if the affiliated person has gained 
knowledge of the customer's order prior to the transmission to the floor 
of the appropriate contract market of the order for a proprietary 
account, an account in which the affiliated person has an interest, or 
an account in which the affiliated person may originate orders without 
the prior specific consent of the account owner; and
    (2) Prevent affiliated persons from placing orders, directly or 
indirectly, with any futures commission merchant in a manner designed to 
circumvent the provisions of paragraph (a)(1) of this section.
    (b) No introducing broker or any of its affiliated persons shall:
    (1) Disclose that an order of another person is being held by the 
introducing broker or any of its affiliated persons, unless such 
disclosure is necessary to the effective execution of such order or is 
made at the request of an authorized representative of the Commission, 
the contract market on which such order is to be executed, or a futures 
association registered with the Commission pursuant to section 17 of the 
Act; or
    (2)(i) Knowingly take, directly or indirectly, the other side of any 
order of another person revealed to the introducing broker or any of its 
affiliated persons by reason of their relationship to such other person, 
except with such other persons's prior consent and in conformity with 
contract market rules approved by or certified to the Commission.
    (ii) In the case of a customer who does not qualify as an 
``institutional customer'' as defined in Sec.  1.3 of this chapter, an 
introducing broker must obtain the customer's prior consent through a 
signed acknowledgment, which may be accomplished in accordance with 
Sec.  1.55(d) of this chapter.
    (c) No affiliated person of an introducing broker shall have an 
account, directly or indirectly, with any futures commission merchant 
unless:
    (1) Such affiliated person receives written authorization to 
maintain such an account from a person designated by the introducing 
broker with which such person is affiliated with responsibility for the 
surveillance over such account pursuant to paragraph (a)(2) of this 
section; and
    (2) Copies of all statements for such account and of all written 
records prepared by such futures commission merchant upon receipt of 
orders for such account pursuant to Sec.  155.3(c)(2) are transmitted on 
a regular basis to the

[[Page 396]]

introducing broker with which such person is affiliated.

[48 FR 35304, Aug. 3, 1983, as amended at 66 FR 53523, Oct. 23, 2001; 70 
FR 5924, Feb. 4, 2005; 77 FR 66349, Nov. 2, 2012; 83 FR 7997, Feb. 23, 
2018]



Sec. Sec.  155.5-155.6  [Reserved]



Sec.  155.10  Exemptions.

    Except as otherwise provided in this part, the Commission may, in 
its discretion and upon such terms and conditions as it deems 
appropriate, exempt any contract market or other person from any of the 
provisions of this part.

(Approved by the Office of Management and Budget under control numbers 
3038-0007 and 3038-0022)

[41 FR 56142, Dec. 23, 1976, as amended at 46 FR 63036, Dec. 30, 1981]



PART 156_BROKER ASSOCIATIONS--Table of Contents



Sec.
156.1 Definition.
156.2 Registration of broker association.
156.3 Contract market program for enforcement.
156.4 Disclosure of Broker Association Membership.

    Authority: 7 U.S.C. 6b, 6c, 6j(d), 7a(b), and 12a.

    Source: 58 FR 31171, June 1, 1993, unless otherwise noted.



Sec.  156.1  Definition.

    For the purposes of this part, the term broker association as 
applied to each board of trade shall include two or more contract market 
members with floor trading privileges, of whom at least one is acting as 
a floor broker, who: (1) Engage in floor brokerage activity on behalf of 
the same employer, (2) have an employer and employee relationship which 
relates to floor brokerage activity, (3) share profits and losses 
associated with their brokerage or trading activity, or (4) regularly 
share a deck of orders.



Sec.  156.2  Registration of broker association.

    (a) Registration required. It shall be unlawful for any member of a 
broker association to receive or to execute an order unless the broker 
association is registered with the appropriate contract market in 
accordance with part (b) of this section.
    (b) Contract market rules required. Each contract market must adopt 
and maintain in effect rules, which have been submitted to the 
Commission pursuant to section 5a(a)(12)(A) of the Act and Commission 
Regulation 1.41, that, at a minimum, (1) define the term ``broker 
association'' to include the relationships set forth in Sec.  156.1 of 
this part, (2) prohibit conduct described in paragraph (a) of this 
section, and (3) require registration of each relationship defined by 
its rules as a broker association no later than 10 days after 
establishment of such relationship. Contract market records of 
registration shall include the following information with respect to 
each broker association, if applicable:
    (i) Name;
    (ii) Form of organization, e.g., partnership, corporation, trust, 
etc.;
    (iii) Name of each person who is a member or otherwise has a direct 
beneficial interest in the association;
    (iv) Badge symbols and numbers for all members;
    (v) Account numbers for all accounts of any member, accounts in 
which any member(s) has an interest, and any proprietary or customer 
accounts controlled by any member(s);
    (vi) Identification of all other broker associations with which each 
member is associated; and
    (vii) Individual(s) authorized to represent the association in 
connection with its registration obligations.
    Any registration information provided to the contract market which 
becomes deficient or inaccurate must be updated or corrected promptly.
    (c) Other contract market rules. (1) Each contract market may submit 
rules pursuant to section 5a(a)(12)(A) of the Act and Commission 
Regulation 1.41 that interpret when contract market members would be 
deemed to ``regularly share a deck of orders.'' In the absence of such 
rules, a contract market must make such a determination on a case-by-
case basis. The basis for a determination whether brokers ``regularly 
share a deck of orders'' must be documented.
    (2) Each contract market may adopt rules, which must be submitted to 
the

[[Page 397]]

Commission pursuant to section 5a(a)(12)(A) of the Act and Commission 
Regulation 1.41, which set forth the basis and procedures for granting 
exemptions from the registration requirement contained in paragraph (b) 
of this section for de minimis activity.



Sec.  156.3  Contract market program for enforcement.

    A contract market must, as part of its responsibilities pursuant to 
the Act and Sec.  1.51, demonstrate effective use of broker association 
registration information to monitor the trading activity of broker 
associations and their members for potential abuse and to secure 
compliance with all other contract market bylaws, rules, regulations and 
resolutions which may pertain to such associations or their members.



Sec.  156.4  Disclosure of Broker Association Membership.

    Each contract market shall make available to the public generally 
and upon request a list of all registered broker associations which 
identifies for each such association the name of each person who is a 
member or otherwise has a direct beneficial interest in the association. 
This list shall be updated at least semi-annually.

[61 FR 41498, Aug. 9, 1996]



PART 160_PRIVACY OF CONSUMER FINANCIAL INFORMATION UNDER TITLE V OF
THE GRAMM-LEACH-BLILEY ACT--Table of Contents



Sec.
160.1 Purpose and scope.
160.2 Rule of construction.
160.3 Definitions.

                  Subpart A_Privacy and Opt Out Notices

160.4 Initial privacy notice to consumers required.
160.5 Annual privacy notice to customers required.
160.6 Information to be included in privacy notices.
160.7 Form of opt out notice to consumers; opt out methods.
160.8 Revised privacy notices.
160.9 Delivering privacy and opt out notices.

                     Subpart B_Limits on Disclosures

160.10 Limits on disclosure of nonpublic personal information to 
          nonaffiliated third parties.
160.11 Limits on redisclosure and re-use of information.
160.12 Limits on sharing account number information for marketing 
          purposes.

                          Subpart C_Exceptions

160.13 Exception to opt out requirements for service providers and joint 
          marketing.
160.14 Exceptions to notice and opt out requirements for processing and 
          servicing transactions.
160.15 Other exceptions to notice and opt out requirements.

            Subpart D_Relation to Other Laws; Effective Date

160.16 Protection of Fair Credit Reporting Act.
160.17 Relation to state laws.
160.18 Effective date; transition rule.
160.19-160.29 [Reserved]
160.30 Procedures to safeguard customer records and information.

Appendix A to Part 160--Model Privacy Form
Appendix B to Part 160--Sample Clauses

    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.

    Source: 66 FR 21252, Apr. 27, 2001, unless otherwise noted.



Sec.  160.1  Purpose and scope.

    (a) Purpose. This part governs the treatment of nonpublic personal 
information about consumers by the financial institutions listed in 
paragraph (b) of this section. This part:
    (1) Requires a financial institution to provide notice to customers 
about its privacy policies and practices;
    (2) Describes the conditions under which a financial institution may 
disclose nonpublic personal information about consumers to nonaffiliated 
third parties; and
    (3) Provides a method for consumers to prevent a financial 
institution from disclosing nonpublic personal information to most 
nonaffiliated third parties by ``opting out'' of that disclosure, 
subject to the exceptions in Sec. Sec.  160.13, 160.14, and 160.15.
    (b) Scope. This part applies only to nonpublic personal information 
about

[[Page 398]]

individuals who obtain financial products or services primarily for 
personal, family, or household purposes from the institutions listed 
below. This part does not apply to information about companies or about 
individuals who obtain financial products or services primarily for 
business, commercial, or agricultural purposes. This part applies to all 
futures commission merchants, retail foreign exchange dealers, commodity 
trading advisors, commodity pool operators, introducing brokers, major 
swap participants and swap dealers that are subject to the jurisdiction 
of the Commission, regardless whether they are required to register with 
the Commission. These entities are hereinafter referred to in this part 
as ``you.'' This part does not apply to foreign (non-resident) futures 
commission merchants, retail foreign exchange dealers, commodity trading 
advisors, commodity pool operators, introducing brokers, major swap 
participants and swap dealers that are not registered with the 
Commission.

[66 FR 21252, Apr. 27, 2001, as amended at 75 FR 55450, Sept. 10, 2010; 
76 FR 43878, July 22, 2011]



Sec.  160.2  Model privacy form and examples.

    (a) Model privacy form. Use of the model privacy form in appendix A 
of this part, consistent with the instructions in appendix A, 
constitutes compliance with the notice content requirements of 
Sec. Sec.  160.6 and 160.7 of this part, although use of the model 
privacy form is not required.
    (b) Examples. The examples in this part are not exclusive. 
Compliance with an example, to the extent applicable, constitutes 
compliance with this part.

[74 FR 62974, Dec. 1, 2009]



Sec.  160.3  Definitions.

    For purposes of this part, unless the context requires otherwise:
    (a) Affiliate of a futures commission merchant, retail foreign 
exchange dealer, commodity trading advisor, commodity pool operator, 
introducing broker, major swap participant, or swap dealer means any 
company that controls, is controlled by, or is under common control with 
a futures commission merchant, retail foreign exchange dealer, commodity 
trading advisor, commodity pool operator, introducing broker, major swap 
participant, or swap dealer that is subject to the jurisdiction of the 
Commission. In addition, a futures commission merchant, retail foreign 
exchange dealer, commodity trading advisor, commodity pool operator, 
introducing broker, major swap participant, or swap dealer subject to 
the jurisdiction of the Commission will be deemed an affiliate of a 
company for purposes of this part if:
    (1) That company is regulated under title V of the GLB Act by the 
Bureau of Consumer Financial Protection or by a Federal functional 
regulator other than the Commission; and
    (2) Rules adopted by the Bureau of Consumer Financial Protection or 
another Federal functional regulator under title V of the GLB Act treat 
the futures commission merchant, retail foreign exchange dealer, 
commodity trading advisor, commodity pool operator, introducing broker, 
major swap participant, or swap dealer as an affiliate of that company.
    (b)(1) Clear and conspicuous means that a notice is reasonably 
understandable and designed to call attention to the nature and 
significance of the information in the notice.
    (2) Examples--(i) Reasonably understandable. Your notice will be 
reasonably understandable if you:
    (A) Present the information in the notice in clear, concise 
sentences, paragraphs and sections;
    (B) Use short explanatory sentences or bullet lists whenever 
possible;
    (C) Use definite, concrete, everyday words and active voice whenever 
possible;
    (D) Avoid multiple negatives;
    (E) Avoid legal and highly technical business terminology whenever 
possible; and
    (F) Avoid explanations that are imprecise and readily subject to 
different interpretations.
    (ii) Designed to call attention. Your notice is designed to call 
attention to the nature and significance of the information in it if 
you:
    (A) Use a plain-language heading to call attention to the notice;

[[Page 399]]

    (B) Use a typeface and type size that are easy to read;
    (C) Provide wide margins and ample line spacing;
    (D) Use boldface or italics for key words; and
    (E) Use distinctive type size, style and graphic devices, such as 
shading or sidebars when you combine your notice with other information.
    (iii) Notices on web sites. If you provide notice on a web page, you 
design your notice to call attention to the nature and significance of 
the information in it if you use text or visual cues to encourage 
scrolling down the page, if necessary to view the entire notice, and 
ensure that other elements on the web site, such as text, graphics, 
hyperlinks or sound, do not distract from the notice, and you either:
    (A) Place the notice on a screen that consumers frequently access, 
such as a page on which transactions are conducted; or
    (B) Place a link on a screen that consumers frequently access, such 
as a page on which transactions are conducted, that connects directly to 
the notice and is labeled appropriately to convey the importance, nature 
and relevance of the notice.
    (c) Collect means to obtain information that you organize or can 
retrieve by the name of an individual or by identifying number, symbol 
or other identifying particular assigned to the individual, irrespective 
of the source of the underlying information.
    (d) Commission means the Commodity Futures Trading Commission.
    (e) Commodity pool operator has the same meaning as in section 1a(5) 
of the Commodity Exchange Act, as amended, and includes anyone 
registered as such under the Act.
    (f) Commodity trading advisor has the same meaning as in section 
1a(6) of the Commodity Exchange Act, as amended, and includes anyone 
registered as such under the Act.
    (g) Company means any corporation, limited liability company, 
business trust, general or limited partnership, association or similar 
organization.
    (h)(1) Consumer means an individual who obtains or has obtained a 
financial product or service from you that is to be used primarily for 
personal, family or household purposes, or that individual's legal 
representative.
    (2) Examples. (i) An individual is your consumer if he or she 
provides nonpublic personal information to you in connection with 
obtaining or seeking to obtain brokerage or advisory services, whether 
or not you provide services to the individual or establish a continuing 
relationship with the individual.
    (ii) An individual is not your consumer if he or she provides you 
only with his or her name, address and general areas of investment 
interest in connection with a request for a brochure or other 
information about financial products or services.
    (iii) An individual is not your consumer if he or she has an account 
with another futures commission merchant (originating futures commission 
merchant) for which you provide clearing services for an account in the 
name of the originating futures commission merchant.
    (iv) An individual who is a consumer of another financial 
institution is not your consumer solely because you act as agent for, or 
provide processing or other services to, that financial institution.
    (v) An individual is not your consumer solely because he or she has 
designated you as trustee for a trust.
    (vi) An individual is not your consumer solely because he or she is 
a beneficiary of a trust for which you are a trustee.
    (vii) An individual is not your consumer solely because he or she is 
a participant or a beneficiary of an employee benefit plan that you 
sponsor or for which you act as a trustee or fiduciary.
    (i) Consumer reporting agency has the same meaning as in section 
603(f) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)).
    (j) Control of a company means the power to exercise a controlling 
influence over the management or policies of a company whether through 
ownership of securities, by contract, or otherwise. Any person who owns 
beneficially, either directly or through one or more controlled 
companies, more than 25 percent of the voting securities of any company 
is presumed to control

[[Page 400]]

the company. Any person who does not own more than 25 percent of the 
voting securities of a company will be presumed not to control the 
company.
    (k) Customer means a consumer who has a customer relationship with 
you.
    (l)(1) Customer relationship means a continuing relationship between 
a consumer and you under which you provide one or more financial 
products or services to the consumer that are to be used primarily for 
personal, family or household purposes.
    (2) Examples--(i) Continuing relationship. A consumer has a 
continuing relationship with you if:
    (A) You are a futures commission merchant through whom a consumer 
has opened an account, or that carries the consumer's account on a 
fully-disclosed basis, or that effects or engages in commodity interest 
transactions with or for a consumer, even if you do not hold any assets 
of the consumer.
    (B) You are a retail foreign exchange dealer with whom a consumer 
has opened an account, or that effects or engages in retail forex 
transactions with or for a consumer, even if you do not hold any assets 
of the consumer;
    (C) You are an introducing broker that solicits or accepts specific 
orders for trades;
    (D) You are a commodity trading advisor with whom a consumer has a 
contract or subscription, either written or oral, regardless of whether 
the advice is standardized, or is based on, or tailored to, the 
commodity interest or cash market positions or other circumstances or 
characteristics of the particular consumer;
    (E) You are a commodity pool operator, and you accept or receive 
from the consumer, funds, securities, or property for the purpose of 
purchasing an interest in a commodity pool;
    (F) You hold securities or other assets as collateral for a loan 
made to the consumer, even if you did not make the loan or do not effect 
any transactions on behalf of the consumer; or
    (G) You regularly effect or engage in commodity interest 
transactions with or for a consumer even if you do not hold any assets 
of the consumer.
    (ii) No continuing relationship. A consumer does not have a 
continuing relationship with you if:
    (A) You have acted solely as a ``finder'' for a futures commission 
merchant, and you do not solicit or accept specific orders for trades; 
or
    (B) You have solicited the consumer to participate in a pool or to 
direct his or her account and he or she has not provided you with funds 
to participate in a pool or entered into any agreement for you to direct 
his or her account.
    (m) Federal functional regulator means:
    (1) The Board of Governors of the Federal Reserve System;
    (2) The Office of the Comptroller of the Currency;
    (3) The Board of Directors of the Federal Deposit Insurance 
Corporation;
    (4) The Director of the Office of Thrift Supervision;
    (5) The National Credit Union Administration Board;
    (6) The Securities and Exchange Commission; and
    (7) The Commodity Futures Trading Commission.
    (n)(1) Financial institution means:
    (i) Any futures commission merchant, retail foreign exchange dealer, 
commodity trading advisor, commodity pool operator, introducing broker, 
major swap participant, or swap dealer that is registered with the 
Commission as such or is otherwise subject to the Commission's 
jurisdiction; and
    (2) Financial institution does not include:
    (i) Any person or entity, other than a futures commission merchant, 
retail foreign exchange dealer, commodity trading advisor, commodity 
pool operator, introducing broker, major swap participant, or swap 
dealer that, with respect to any financial activity, is subject to the 
jurisdiction of the Commission under the Act.
    (ii) The Federal Agricultural Mortgage Corporation or any entity 
chartered and operating under the Farm Credit Act of 1971 (12 U.S.C. 
2001 et seq.); or
    (iii) Institutions chartered by Congress specifically to engage in 
securitizations, secondary market sales (including sales of servicing 
rights) or similar transactions related to a transaction of a consumer, 
as long as such

[[Page 401]]

institutions do not sell or transfer nonpublic personal information to a 
nonaffiliated third party.
    (o)(1) Financial product or service means:
    (i) Any product or service that a futures commission merchant, 
retail foreign exchange dealer, commodity trading advisor, commodity 
pool operator, introducing broker, major swap participant, or swap 
dealer could offer that is subject to the Commission's jurisdiction; and
    (ii) Any product or service that any other financial institution 
could offer by engaging in an activity that is financial in nature or 
incidental to such a financial activity under section 4(k) of the Bank 
Holding Company Act of 1956, 12 U.S.C. 1843(k).
    (2) Financial service includes your evaluation or brokerage of 
information that you collect in connection with a request or an 
application from a consumer for a financial product or service.
    (p) Futures commission merchant has the same meaning as in section 
1a(20) of the Commodity Exchange Act, as amended, and includes any 
person registered as such under the Act.
    (q) GLB Act means the Gramm-Leach-Bliley Act (Pub. L. No. 106-102, 
113 Stat. 1338 (1999)).
    (r) Introducing broker has the same meaning as in section 1a(23) of 
the Commodity Exchange Act, as amended, and includes any person 
registered as such under the Act.
    (s) Major swap participant. The term ``major swap participant'' has 
the same meaning as in section 1a(33) of the Commodity Exchange Act, 7 
U.S.C. 1 et seq., as may be further defined by this title, and includes 
any person registered as such thereunder.
    (t)(1) Nonaffiliated third party means any person except:
    (i) Your affiliate; or
    (ii) A person employed jointly by you and any company that is not 
your affiliate, but nonaffiliated third party includes the other company 
that jointly employs the person.
    (2) Nonaffiliated third party includes any company that is an 
affiliate solely by virtue of your or your affiliate's direct or 
indirect ownership or control of the company in conducting merchant 
banking or investment banking activities of the type described in 
section 4(k)(4)(H) or insurance company investment activities of the 
type described in section 4(k)(4)(I) of the Bank Holding Company Act of 
1956, 12 U.S.C. 1843(k)(4)(H) and (I).
    (u)(1) Nonpublic personal information means:
    (i) Personally identifiable financial information; and
    (ii) Any list, description or other grouping of consumers, and 
publicly available information pertaining to them, that is derived using 
any personally identifiable financial information that is not publicly 
available information.
    (2) Nonpublic personal information does not include:
    (i) Publicly available information, except as included on a list 
described in paragraph (t)(1)(ii) of this section or when the publicly 
available information is disclosed in a manner that indicates the 
individual is or has been your consumer; or
    (ii) Any list, description or other grouping of consumers, and 
publicly available information pertaining to them, that is derived 
without using any personally identifiable financial information that is 
not publicly available information.
    (3) Examples of lists. (i) Nonpublic personal information includes 
any list of individuals' names and street addresses that is derived in 
whole or in part using personally identifiable financial information 
that is not publicly available information, such as account numbers.
    (ii) Nonpublic personal information does not include any list of 
individuals' names and addresses that contains only publicly available 
information, is not derived in whole or in part using personally 
identifiable financial information that is not publicly available 
information, and is not disclosed in a manner that indicates that any of 
the individuals on the list is a consumer of a financial institution.
    (v)(1) Personally identifiable financial information means any 
information:
    (i) A consumer provides to you to obtain a financial product or 
service from you;

[[Page 402]]

    (ii) About a consumer resulting from any transaction involving a 
financial product or service between you and a consumer; or
    (iii) You otherwise obtain about a consumer in connection with 
providing a financial product or service to that consumer.
    (2) Examples--(i) Information included. Personally identifiable 
financial information includes:
    (A) Information a consumer provides to you on an application to open 
a commodity interest trading account, to invest in a commodity pool, or 
to obtain another financial product or service;
    (B) Account balance information, payment history, overdraft history, 
margin call history, trading history, and credit or debit card purchase 
information;
    (C) The fact that an individual is or has been one of your customers 
or has obtained a financial product or service from you;
    (D) Any information about your consumer if it is disclosed in a 
manner that indicates that the individual is or has been your consumer;
    (E) Any information you collect through an Internet ``cookie'' (an 
information-collecting device from a web server); and
    (F) Information from a consumer report.
    (ii) Information not included. Personally identifiable financial 
information does not include:
    (A) A list of names and addresses of customers of an entity that is 
not a financial institution; or
    (B) Information that does not identify a consumer, such as aggregate 
information or blind data that does not contain personal identifiers 
such as account numbers, names or addresses.
    (w)(1) Publicly available information means any information that you 
reasonably believe is lawfully made available to the general public 
from:
    (i) Federal, state or local government records;
    (ii) Widely distributed media; or
    (iii) Disclosures to the general public that are required to be made 
by federal, state or local law.
    (2) Examples--(i) Reasonable belief. (A) You have a reasonable 
belief that information about your consumer is made available to the 
general public if you have confirmed, or your consumer has represented 
to you, that the information is publicly available from a source 
described in paragraphs (v)(1)(i)-(iii) of this section.
    (B) You have a reasonable belief that information about your 
consumer is made available to the general public if you have taken steps 
to submit the information, in accordance with your internal procedures 
and policies and with applicable law, to a keeper of federal, state or 
local government records that is required by law to make the information 
publicly available.
    (C) You have a reasonable belief that an individual's telephone 
number is lawfully made available to the general public if you have 
located the telephone number in the telephone book or on an internet 
listing service, or the consumer has informed you that the telephone 
number is not unlisted.
    (D) You do not have a reasonable belief that information about a 
consumer is publicly available solely because that information would 
normally be recorded with a keeper of federal, state or local government 
records that is required by law to make the information publicly 
available, if the consumer has the ability in accordance with applicable 
law to keep that information nonpublic, such as where a consumer may 
record a deed in the name of a blind trust.
    (ii) Government records. Publicly available information in 
government records includes information in government real estate 
records and security interest filings.
    (iii) Widely distributed media. Publicly available information from 
widely distributed media includes information from a telephone book, a 
television or radio program, a newspaper, or a web site that is 
available to the general public on an unrestricted basis. A web site is 
not restricted merely because an Internet service provider or a site 
operator requires a fee or password, so long as access is available to 
the general public.
    (x) Swap dealer. The term ``swap dealer'' has the same meaning as in 
section 1a(49) of the Commodity Exchange Act,

[[Page 403]]

7 U.S.C. 1 et seq., as may be further defined by this title, and 
includes any person registered as such thereunder.
    (y) You means:
    (1) Any futures commission merchant;
    (2) Any retail foreign exchange dealer;
    (3) Any commodity trading advisor;
    (4) Any commodity pool operator;
    (5) Any introducing broker;
    (6) Any major swap participant; and
    (7) Any swap dealer.
    (z) Retail foreign exchange dealer has the same meaning as in Sec.  
5.3(i)(1) of this chapter.

[66 FR 21252, Apr. 27, 2001, as amended at 75 FR 55450, Sept. 10, 2010; 
76 FR 43878, July 22, 2011]



                  Subpart A_Privacy and Opt Out Notices



Sec.  160.4  Initial privacy notice to consumers required.

    (a) Initial notice requirement. You must provide a clear and 
conspicuous notice that accurately reflects your privacy policies and 
practices to:
    (1) Customer. An individual who becomes your customer, not later 
than when you establish a customer relationship, except as provided in 
paragraph (e) of this section; and
    (2) Consumer. A consumer, before you disclose any nonpublic personal 
information about the consumer to any nonaffiliated third party, if you 
make such a disclosure other than as authorized by Sec. Sec.  160.14 and 
160.15.
    (b) When initial notice to a consumer is not required. You are not 
required to provide an initial notice to a consumer under paragraph (a) 
of this section if:
    (1) You do not disclose any nonpublic personal information about the 
consumer to any nonaffiliated third party other than as authorized by 
Sec. Sec.  160.14 and 160.15; and
    (2) You do not have a customer relationship with the consumer.
    (c) When you establish a customer relationship--(1) General rule. 
You establish a customer relationship when you and the consumer enter 
into a continuing relationship.
    (2) Examples of establishing customer relationship. You establish a 
customer relationship when the consumer:
    (i) Instructs you to execute a commodity interest transaction for 
the consumer;
    (ii) Opens a retail forex account, or opens a commodity interest 
account through an introducing broker or with a futures commission 
merchant that clears transactions for its customers through you on a 
fully-disclosed basis;
    (iii) Transmits specific orders for commodity interest transactions 
to you that you pass on to a futures commission merchant for execution, 
if you are an introducing broker;
    (iv) Enters into an advisory contract or subscription with you, 
whether in writing or orally, and whether you provide standardized, or 
individually tailored commodity trading advice based on the customer's 
commodity interest or cash market positions or other circumstances or 
characteristics, if you are a commodity trading adviser; or
    (v) Provides to you funds, securities, or property for an interest 
in a commodity pool, if you are a commodity pool operator.
    (d) Existing customers. When an existing customer obtains a new 
financial product or service from you that is to be used primarily for 
personal, family or household purposes, you satisfy the initial notice 
requirements of paragraph (a) of this section as follows:
    (1) You may provide a revised privacy notice under Sec.  160.8 that 
covers the customer's new financial product or service; or
    (2) If the initial, revised or annual notice that you most recently 
provided to that customer was accurate with respect to the new financial 
product or service, you do not need to provide a new privacy notice 
under paragraph (a) of this section.
    (e) Exceptions to allow subsequent delivery of notice. (1) You may 
provide the initial notice required by paragraph (a)(1) of this section 
within a reasonable time after you establish a customer relationship if:
    (i) Establishing the customer relationship is not at the customer's 
election;
    (ii) Providing notice not later than when you establish a customer 
relationship would substantially delay the

[[Page 404]]

customer's transaction and the customer agrees to receive the notice at 
a later time;
    (iii) A nonaffiliated financial institution establishes a customer 
relationship between you and a consumer without your prior knowledge; or
    (iv) You have established a customer relationship with a customer in 
a bulk transfer in accordance with Sec.  1.65, if you are a transferee 
futures commission merchant, retail foreign exchange dealer or 
introducing broker.
    (2) Examples of exceptions--(i) Not at customer's election. 
Establishing a customer relationship is not at the customer's election 
if you acquire the customer's commodity interest account from another 
financial institution and the customer does not have a choice about your 
acquisition.
    (ii) Substantial delay of customer's transaction. Providing notice 
not later than when you establish a customer relationship would 
substantially delay the customer's transaction when you and the 
individual agree over the telephone to enter into a customer 
relationship involving prompt delivery of the financial product or 
service.
    (iii) No substantial delay of customer's transaction. Providing 
notice not later than when you establish a customer relationship would 
not substantially delay the customer's transaction when the relationship 
is initiated in person at your office or through other means by which 
the customer may view the notice, such as on a web site.
    (f) Delivery of notice. When you are required by this section to 
deliver an initial privacy notice, you must deliver it according to the 
provisions of Sec.  160.9. If you use a short-form initial notice for 
non-customers according to Sec.  160.6(d), you may deliver your privacy 
notice as provided in section Sec.  160.6(d)(3).

[66 FR 21252, Apr. 27, 2001, as amended at 75 FR 55451, Sept. 10, 2010]



Sec.  160.5  Annual privacy notice to customers required.

    (a)(1) General rule. Except as provided by paragraph (d) of this 
section, you must provide a clear and conspicuous notice to customers 
that accurately reflects your privacy policies and practices not less 
than annually during the life of the customer relationship. Annually 
means at least once in any period of 12 consecutive months during which 
that relationship exists. You may define the 12-consecutive-month 
period, but you must apply it to the customer on a consistent basis.
    (2) Example. You provide notice annually if you define the 12-
consecutive-month period as a calendar year and provide the annual 
notice to the customer once in each calendar year following the calendar 
year in which you provided the initial notice. For example, if a 
customer opens an account on any day of year 1, you must provide an 
annual notice to that customer by December 31 of year 2.
    (b)(1) Termination of customer relationship. You are not required to 
provide an annual notice to a former customer.
    (2) Examples. Your customer becomes a former customer when:
    (i) The individual's commodity interest account is closed;
    (ii) The individual's advisory contract or subscription is 
terminated or expires; or
    (iii) The individual has redeemed all of his or her units in your 
pool.
    (c) Delivery of notice. When you are required by this section to 
deliver an annual privacy notice, you must deliver it in the manner 
provided by Sec.  160.9.
    (d) Exception to annual privacy notice requirement. (1) You are not 
required to deliver an annual privacy notice if you:
    (i) Provide nonpublic personal information to nonaffiliated third 
parties only in accordance with the provisions of Sec. Sec.  160.13, 
160.14, and 160.15 and any other exceptions adopted by the Commission 
pursuant to section 504(b) of the GLB Act; and
    (ii) Have not changed your policies and practices with regard to 
disclosing nonpublic personal information from the policies and 
practices that were disclosed to the customer under Sec.  160.6(a)(2) 
through (5) and Sec.  160.6(a)(9) in the most recent privacy notice sent 
to the customer pursuant to this part.
    (2) Delivery of annual privacy notice after you no longer meet 
requirements for exception. If you have been excepted from delivering an 
annual privacy notice pursuant to paragraph (d)(1) of this section and 
change your policies or practices in such a way that you no

[[Page 405]]

longer meet the requirements for that exception, you must comply with 
paragraph (d)(2)(i) or (ii) of this section, as applicable.
    (i) Changes preceded by a revised privacy notice. If you no longer 
meet the requirements of paragraph (d)(1) of this section because you 
change your policies or practices in such a way that Sec.  160.8 of this 
part requires you to provide a revised privacy notice, you must provide 
an annual privacy notice in accordance with the timing requirements in 
paragraph (a) of this section, treating the revised privacy notice as an 
initial privacy notice.
    (ii) Changes not preceded by a revised privacy notice. If you no 
longer meet the requirements of paragraph (d)(1) of this section because 
you change your policies or practices in such a way that Sec.  160.8 of 
this part does not require you to provide a revised privacy notice, you 
must provide an annual privacy notice within 100 days of the change in 
your policies or practices that causes you to no longer meet the 
requirements of paragraph (d)(1) of this section.

[66 FR 21252, Apr. 27, 2001, as amended at 84 FR 17345, Apr. 25, 2019]



Sec.  160.6  Information to be included in privacy notices.

    (a) General rule. The initial, annual, and revised privacy notices 
that you provide under Sec. Sec.  160.4, 160.5 and 160.8 must include 
each of the following items of information that applies to you or to the 
consumers to whom you send your privacy notice, in addition to any other 
information you wish to provide:
    (1) The categories of nonpublic personal information that you 
collect;
    (2) The categories of nonpublic personal information that you 
disclose;
    (3) The categories of affiliates and nonaffiliated third parties to 
whom you disclose nonpublic personal information, other than those 
parties to whom you disclose information under Sec. Sec.  160.14 and 
160.15;
    (4) The categories of nonpublic personal information about your 
former customers that you disclose and the categories of affiliates and 
nonaffiliated third parties to whom you disclose nonpublic personal 
information about your former customers, other than those parties to 
whom you disclose information under Sec. Sec.  160.14 and 160.15;
    (5) If you disclose nonpublic personal information to a 
nonaffiliated third party under Sec.  160.13 (and no other exception 
applies to that disclosure), a separate statement of the categories of 
information you disclose and the categories of third parties with whom 
you have contracted;
    (6) An explanation of the consumer's rights under Sec.  160.10(a) to 
opt out of the disclosure of nonpublic personal information to 
nonaffiliated third parties, including the method(s) by which the 
consumer may exercise that right at that time;
    (7) Any disclosures that you make under Sec.  603(d)(2)(A)(iii) of 
the Fair Credit Reporting Act (15 U.S.C. 1681a(d)(2)(A)(iii)) (that is, 
notices regarding the ability to opt out of disclosures of information 
among affiliates);
    (8) Your policies and practices with respect to protecting the 
confidentiality and security of nonpublic personal information; and
    (9) Any disclosure that you make under paragraph (b) of this 
section.
    (b) Description of nonaffiliated third parties subject to 
exceptions. If you disclose nonpublic personal information to third 
parties as authorized under Sec. Sec.  160.14 and 160.15, you are not 
required to list those exceptions in the initial or annual privacy 
notices required by Sec. Sec.  160.4 and 160.5. When describing the 
categories with respect to those parties, it is sufficient to state that 
you make disclosures to other nonaffiliated companies:
    (1) For your everyday business purposes, such as [include all that 
apply] to process transactions, maintain account(s), respond to court 
orders and legal investigations, or report to credit bureaus; or
    (2) As permitted by law.
    (c) Examples--(1) Categories of nonpublic personal information that 
you collect. You satisfy the requirement to categorize the nonpublic 
personal information that you collect if you list the following 
categories, as applicable:
    (i) Information from the consumer;
    (ii) Information about the consumer's transactions with you or your 
affiliates;

[[Page 406]]

    (iii) Information about the consumer's transactions with 
nonaffiliated third parties; and
    (iv) Information from a consumer reporting agency.
    (2) Categories of nonpublic personal information you disclose. (i) 
You satisfy the requirement to categorize the nonpublic personal 
information you disclose if you list the categories described in 
paragraph (e)(1) of this section, as applicable, and a few examples to 
illustrate the types of information in each category.
    (ii) If you reserve the right to disclose all of the nonpublic 
personal information about consumers that you collect, you may simply 
state that fact without describing the categories or examples of the 
nonpublic personal information you disclose.
    (3) Categories of affiliates and nonaffiliated third parties to whom 
you disclose. You satisfy the requirement to categorize the affiliates 
and nonaffiliated third parties to whom you disclose nonpublic personal 
information if you list the following categories, as applicable, and a 
few examples to illustrate the types of third parties in each category:
    (i) Financial service providers;
    (ii) Non-financial companies; and
    (iii) Others.
    (4) Disclosures under exception for service providers and joint 
marketers. If you disclose nonpublic personal information under the 
exception in Sec.  160.13 to a nonaffiliated third party to market 
products or services that you offer alone or jointly with another 
financial institution, you satisfy the disclosure requirement of 
paragraph (a)(5) of this section if you:
    (i) List the categories of nonpublic personal information you 
disclose, using the same categories and examples you used to meet the 
requirements of paragraph (a)(2) of this section, as applicable; and
    (ii) State whether the third party is:
    (A) A service provider that performs marketing services on your 
behalf or on behalf of you and another financial institution; or
    (B) A financial institution with which you have a joint marketing 
agreement.
    (5) Simplified notices. If you do not disclose, and do not wish to 
reserve the right to disclose, nonpublic personal information to 
affiliates or nonaffiliated third parties except as authorized under 
Sec. Sec.  160.14 and 160.15, you may simply state that fact, in 
addition to information you must provide under paragraphs (a)(1), 
(a)(8), (a)(9) and (b) of this section.
    (6) Confidentiality and security. You describe your policies and 
practices with respect to protecting the confidentiality and security of 
nonpublic personal information if you do both of the following:
    (i) Describe in general terms who is authorized to have access to 
the information; and
    (ii) State whether you have security practices and procedures in 
place to ensure the confidentiality of the information in accordance 
with your policy. You are not required to describe technical information 
about the safeguards you use.
    (d) Short-form initial notice with opt out notice for non-customers. 
(1) You may satisfy the initial notice requirements in Sec. Sec.  
160.4(a)(2), 160.7(b) and 160.7(c) for a consumer who is not a customer 
by providing a short-form initial notice at the same time as you deliver 
an opt out notice as required in 160.7.
    (2) A short-form initial notice must:
    (i) Be clear and conspicuous;
    (ii) State that your privacy notice is available upon request; and
    (iii) Explain a reasonable means by which the consumer may obtain 
your privacy notice.
    (3) You must deliver your short-form initial notice according to 
Sec.  160.9. You are not required to deliver your privacy notice with 
your short-form initial notice. You instead may simply provide the 
consumer a reasonable means to obtain your privacy notice. If a consumer 
who receives your short-form notice requests your privacy notice, you 
must deliver your privacy notice according to Sec.  160.9.
    (4) Examples of obtaining privacy notice. You provide a reasonable 
means by which a consumer may obtain a copy of your privacy notice if 
you:

[[Page 407]]

    (i) Provide a toll-free telephone number that the consumer may call 
to request the notice; or
    (ii) For a consumer who conducts business in person at your office, 
maintain copies of the notice on hand that you provide to the consumer 
immediately upon request.
    (e) Future disclosures. Your notice may include:
    (1) Categories of nonpublic personal information that you reserve 
the right to disclose in the future, but do not currently disclose; and
    (2) Categories of affiliates and nonaffiliated third parties to whom 
you reserve the right in the future to disclose, but to whom you do not 
currently disclose, nonpublic personal information.
    (f) Model privacy form. Pursuant to Sec.  160.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in appendix A of this part.

[66 FR 21252, Apr. 27, 2001, as amended at 74 FR 62974, Dec. 1, 2009]



Sec.  160.7  Form of opt out notice to consumers; opt out methods.

    (a)(1) Form of opt out notice. If you are required to provide an opt 
out notice under Sec.  160.10(a), you must provide a clear and 
conspicuous notice to each of your consumers that accurately explains 
the right to opt out under that section. The notice must state:
    (i) That you disclose or reserve the right to disclose nonpublic 
personal information about your consumer to a nonaffiliated third party;
    (ii) That the consumer has the right to opt out of that disclosure; 
and
    (iii) A reasonable means by which the consumer may exercise the opt 
out right.
    (2) Examples--(i) Adequate opt out notice. You provide adequate 
notice that the consumer can opt out of the disclosure of nonpublic 
personal information to a nonaffiliated third party if you:
    (A) Identify all of the categories of nonpublic personal information 
that you disclose or reserve the right to disclose, and all of the 
categories of nonaffiliated third parties to which you disclose the 
information, as described in Sec.  160.6(a)(2) and (3), and state that 
the consumer can opt out of the disclosure of that information; and
    (B) Identify the financial products or services that the consumer 
obtains from you, either singly or jointly, to which the opt out 
direction would apply.
    (ii) Reasonable means to opt out. You provide a reasonable means to 
exercise an opt out right if you:
    (A) Designate check-off boxes in a prominent position on the 
relevant forms with the opt out notice;
    (B) Include a reply form together with the opt out notice;
    (C) Provide an electronic means to opt out, such as a form that can 
be sent via electronic mail or a process at your web site, if the 
consumer agrees to the electronic delivery of information; or
    (D) Provide a toll-free telephone number that consumers may call to 
opt out.
    (iii) Unreasonable opt out means. You do not provide a reasonable 
means of opting out if:
    (A) The only means of opting out is for the consumer to write his or 
her own letter to exercise that opt out right; or
    (B) The only means of opting out as described in any notice 
subsequent to the initial notice is to use a check-off box that you 
provided with the initial notice but did not include with the subsequent 
notice.
    (iv) Specific opt out means. You may require each consumer to opt 
out through a specific means, as long as that means is reasonable for 
the consumer.
    (b) Same form as initial notice permitted. You may provide the opt 
out notice together with or on the same written or electronic form, as 
the initial notice you provide in accordance with Sec.  160.4.
    (c) Initial notice required when opt out notice delivered subsequent 
to initial notice. If you provide the opt out notice after the initial 
notice in accordance with Sec.  160.4, you must also include a copy of 
the initial notice with the opt out notice in writing, or, if the 
consumer agrees, electronically.
    (d) Joint relationships. (1) If two or more consumers jointly obtain 
a financial product or service from you, you may provide a single opt 
out notice;

[[Page 408]]

however, you must honor a request from one or more joint account holders 
for a separate opt out notice. Your opt out notice must explain how you 
will treat an opt out direction by a joint consumer.
    (2) Any of the joint consumers may exercise the right to opt out. 
You may either:
    (i) Treat an opt out direction by a joint consumer as applying to 
all of the associated joint consumers; or
    (ii) Permit each joint consumer to opt out separately.
    (3) If you permit each joint consumer to opt out separately, you 
must permit one of the joint consumers to opt out on behalf of all of 
the joint consumers.
    (4) You may not require all joint consumers to opt out before you 
implement any opt out direction.
    (5) Example. If John and Mary have a joint trading account with you 
and arrange for you to send statements to John's address, you may do any 
of the following, but you must explain in your opt out notice which opt 
out policy you will follow:
    (i) Send a single opt out notice to John's address, but you must 
accept an opt out direction from either John or Mary;
    (ii) Treat an opt out direction by either John or Mary as applying 
to the entire account. If you do so, and John opts out, you may not 
require Mary to opt out as well before implementing John's opt out 
direction; or
    (iii) Permit John and Mary to make different opt out directions. If 
you do so:
    (A) You must permit John and Mary to opt out for each other.
    (B) If both opt out, you must permit both to notify you in a single 
response (such as on a form or through a telephone call).
    (C) If John opts out and Mary does not, you may only disclose 
nonpublic personal information about Mary, but not about John, and not 
about John and Mary jointly.
    (e) Time to comply with opt out. You must comply with a consumer's 
opt out direction as soon as reasonably practicable after you receive 
it.
    (f) Continuing right to opt out. A consumer may exercise the right 
to opt out at any time.
    (g) Duration of consumer's opt out direction. (1) A consumer's 
direction to opt out under this section is effective until the consumer 
revokes it in writing, either by hard copy or, if the consumer agrees, 
electronically.
    (2) When a customer relationship terminates, the customer's opt out 
direction continues to apply to the nonpublic personal information that 
you collected during or related to that relationship. If the individual 
subsequently establishes a new customer relationship with you, the opt 
out direction that applied to the former relationship does not apply to 
the new relationship.
    (h) Delivery. When you are required by this section to deliver an 
opt out notice, you must deliver it according to Sec.  160.9.
    (i) Model privacy form. Pursuant to Sec.  160.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in appendix A of this part.

[66 FR 21252, Apr. 27, 2001, as amended at 74 FR 62974, Dec. 1, 2009]



Sec.  160.8  Revised privacy notices.

    (a) General rule. Except as otherwise authorized in this part, you 
must not, directly or through any affiliate, disclose any nonpublic 
personal information about a consumer to a nonaffiliated third party 
other than as described in the initial notice that you provided to that 
consumer under Sec.  160.4, unless:
    (1) You have provided to the consumer a clear and conspicuous 
revised notice that accurately describes your policies and practices;
    (2) You have provided to the consumer a new opt out notice;
    (3) You have given the consumer a reasonable opportunity, before you 
disclose the information to the nonaffiliated third party, to opt out of 
the disclosure; and
    (4) The consumer does not opt out.
    (b) Examples. (1) Except as otherwise permitted by Sec. Sec.  
160.13, 160.14, and 160.15, you must provide a revised notice before 
you:
    (i) Disclose a new category of nonpublic personal information to any 
nonaffiliated third party;

[[Page 409]]

    (ii) Disclose nonpublic personal information to a new category of 
nonaffiliated third party; or
    (iii) Disclose nonpublic personal information about a former 
customer to a nonaffiliated third party, if that former customer has not 
had the opportunity to exercise an opt out right regarding that 
disclosure.
    (2) A revised notice is not required if you disclose nonpublic 
personal information to a new nonaffiliated third party that you 
adequately described in your prior notice.
    (c) Delivery. When you are required to deliver a revised privacy 
notice by this section, you must deliver it according to Sec.  160.9.



Sec.  160.9  Delivering privacy and opt out notices.

    (a) How to provide notices. You must provide any privacy notices and 
opt out notices, including short-form initial notices that this part 
requires so that each consumer can reasonably be expected to receive 
actual notice in writing either in hard copy or, if the consumer agrees, 
electronically.
    (b)(1) Examples of reasonable expectation of actual notice. You may 
reasonably expect that a consumer will receive actual notice if you:
    (i) Hand-deliver a printed copy of the notice to the consumer;
    (ii) Mail a printed copy of the notice to the last known address of 
the consumer; or
    (iii) For the consumer who conducts transactions electronically, 
post the notice on the electronic site and require the consumer to 
acknowledge receipt of the notice as a necessary step to obtaining a 
particular financial service or product.
    (2) Examples of unreasonable expectation of actual notice. You may 
not, however, reasonably expect that a consumer will receive actual 
notice of your privacy policies and practices if you:
    (i) Only post a sign in your branch or office or generally publish 
advertisements of your privacy policies and practices; or
    (ii) Send the notice via electronic mail to a consumer who does not 
obtain a financial product or service from you electronically.
    (c) Annual notices only. You may reasonably expect that a consumer 
will receive actual notice of your annual privacy notice if:
    (1) The customer uses your web site to access financial products and 
services electronically and agrees to receive notices at the web site 
and you post your current privacy notice continuously in a clear and 
conspicuous manner on the web site; or
    (2) The customer has requested that you refrain from sending any 
information regarding the customer relationship, and your current 
privacy notice remains available to the customer upon request.
    (d) Oral description of notice insufficient. You may not provide any 
notice required by this part solely by orally explaining the notice, 
either in person or over the telephone.
    (e) Retention or accessibility of notices for customers. (1) For 
customers only, you must provide the initial notice required by Sec.  
160.4(a)(1), the annual notice required by Sec.  160.5(a), and the 
revised notice required by Sec.  160.8, so that the customer can retain 
them or obtain them later in writing or, if the customer agrees, 
electronically.
    (2) Examples of retention or accessibility. You provide a privacy 
notice to the customer so that the customer can retain it or obtain it 
later if you:
    (i) Hand-deliver a printed copy of the notice to the customer;
    (ii) Mail a printed copy of the notice to the last known address of 
the customer; or
    (iii) Make your current privacy notice available on a web site (or a 
link to another web site) for the customer who obtains a financial 
product or service electronically and agrees to receive the notice at 
the web site.
    (f) Joint notice with other financial institutions. You may provide 
a joint notice from you and one or more of your affiliates or other 
financial institutions, as identified in the notice, as long as the 
notice is accurate with respect to you and the other institutions.
    (g) Joint relationships. If two or more customers jointly obtain a 
financial product or service from you, you may satisfy the initial, 
annual, and revised notice requirements of paragraph (a) of this section 
by providing one notice to

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those customers jointly; however, you must honor a request by one or 
more joint account holders for a separate notice.



                     Subpart B_Limits on Disclosures



Sec.  160.10  Limits on disclosure of nonpublic personal information
to nonaffiliated third parties.

    (a)(1) Conditions for disclosure. Except as otherwise authorized in 
this part, you may not, directly or through any affiliate, disclose any 
nonpublic personal information about a consumer to a nonaffiliated third 
party unless:
    (i) You have provided to the consumer an initial notice as required 
under Sec.  160.4;
    (ii) You have provided to the consumer an opt out notice as required 
in Sec.  160.7;
    (iii) You have given the consumer a reasonable opportunity, before 
you disclose the information to the nonaffiliated third party, to opt of 
the disclosure; and
    (iv) The consumer does not opt out.
    (2) Opt out definition. Opt out means a direction by the consumer 
that you not disclose nonpublic personal information about that consumer 
to a nonaffiliated third party, other than as permitted by Sec. Sec.  
160.13, 160.14 and 160.15.
    (3) Examples of reasonable opportunity to opt out. You provide a 
consumer with a reasonable opportunity to opt out if:
    (i) By mail. You mail the notices required in paragraph (a)(1) of 
this section to the consumer and allow the consumer to opt out by 
mailing a form, calling a toll-free telephone number, or any other 
reasonable means within 30 days after the date you mailed the notices.
    (ii) By electronic means. A customer opens an on-line account with 
you and agrees to receive the notices required in paragraph (a)(1) of 
this section electronically, and you allow the customer to opt out by 
any reasonable means within 30 days after the date that the customer 
acknowledges receipt of the notices in conjunction with opening the 
account.
    (iii) Isolated transaction with consumer. For an isolated 
transaction with a consumer, you provide the consumer with a reasonable 
opportunity to opt out if you provide the notices required in paragraph 
(a)(1) of this section at the time of the transaction and request that 
the consumer decide, as a necessary part of the transaction, whether to 
opt out before completing the transaction.
    (b) Application of opt out to all consumers and all nonpublic 
personal information. (1) You must comply with this section, regardless 
of whether you and the consumer have established a customer 
relationship.
    (2) Unless you comply with this section, you may not, directly or 
through any affiliate, disclose any nonpublic personal information about 
a consumer that you have collected, regardless of whether you have 
collected it before or after receiving the direction to opt out from the 
consumer.
    (c) Partial opt out. You may allow a consumer to select certain 
nonpublic personal information or certain nonaffiliated third parties 
with respect to which the consumer wishes to opt out.



Sec.  160.11  Limits on redisclosure and reuse of information.

    (a) (1) Information you receive under an exception. If you receive 
nonpublic personal information from a nonaffiliated financial 
institution under an exception in Sec.  160.14 or Sec.  160.15, your 
disclosure and use of that information is limited as follows:
    (i) You may disclose the information to the affiliate of the 
financial institution from which you received the information;
    (ii) You may disclose the information to your affiliates, but your 
affiliates may, in turn, disclose and use the information only to the 
extent that you may disclose and use the information; and
    (iii) You may disclose and use the information pursuant to an 
exception in Sec.  160.14 or Sec.  160.15 in the ordinary course of 
business to carry out the activity covered by the exception under which 
you received the information.
    (2) Example. If you receive a customer list from a nonaffiliated 
financial institution in order to provide account-processing services 
under the exception in Sec.  160.14(a), you may disclose that 
information under any exception in Sec.  160.14 or Sec.  160.15 in the 
ordinary course

[[Page 411]]

of business in order to provide those services. For example, you could 
disclose that information in response to a properly authorized subpoena 
or in the ordinary course of business to your attorneys, accountants, 
and auditors. You could not disclose that information to a third party 
for marketing purposes or use that information for your own marketing 
purposes.
    (b)(1) Information you receive outside of an exception. If you 
receive nonpublic personal information from a nonaffiliated financial 
institution other than under an exception in Sec.  160.14 or Sec.  
160.15, you may disclose the information only:
    (i) To the affiliates of the financial institution from which you 
received the information;
    (ii) To your affiliates, but your affiliates may, in turn, disclose 
the information only to the extent that you can disclose the 
information; and
    (iii) To any other person, if the disclosure would be lawful if made 
directly to that person by the financial institution from which you 
received the information.
    (2) Example. If you obtain a customer list from a nonaffiliated 
financial institution outside of the exceptions in Sec. Sec.  160.14 and 
160.15:
    (i) You may use that list for your own purposes;
    (ii) You may disclose that list to another nonaffiliated third party 
only if the financial institution from which you purchased the list 
could have lawfully disclosed that list to that third party. That is, 
you may disclose the list in accordance with the privacy policy of the 
financial institution from which you received the list as limited by the 
opt out direction of each consumer whose nonpublic personal information 
you intend to disclose, and you may disclose the list in accordance with 
an exception in Sec. Sec.  160.14 and 160.15, such as in the ordinary 
course of business to your attorneys, accountants, or auditors.
    (c) Information you disclose under an exception. If you disclose 
nonpublic personal information to a nonaffiliated third party under an 
exception in Sec.  160.14 or Sec.  160.15, the third party may disclose 
and use that information only as follows:
    (1) The third party may disclose the information to your affiliates;
    (2) The third party may disclose the information to its affiliates, 
but its affiliates may, in turn, disclose and use the information only 
to the extent that the third party may disclose and use the information; 
and
    (3) The third party may disclose and use the information pursuant to 
an exception in Sec.  160.14 or Sec.  160.15 in the ordinary course of 
business to carry out the activity covered by the exception under which 
it received the information.
    (d) Information you disclose outside of an exception. If you 
disclose nonpublic personal information to a nonaffiliated third party 
other than under an exception in Sec.  160.14 or Sec.  160.15, the third 
party may disclose the information only:
    (1) To your affiliates;
    (2) To its affiliates, but its affiliates, in turn, may disclose the 
information only to the extent the third party can disclose the 
information; and
    (3) To any other person, if the disclosure would be lawful if you 
made it directly to that person.



Sec.  160.12  Limits on sharing account number information for
marketing purposes.

    (a) General prohibition on disclosure of account numbers. You must 
not, directly or through an affiliate, disclose, other than to a 
consumer reporting agency, an account number or similar form of access 
number or access code for a consumer's credit card account, deposit 
account or transaction account to any nonaffiliated third party for use 
in telemarketing, direct mail marketing or other marketing through 
electronic mail to the consumer.
    (b) Exceptions. Paragraph (a) of this section does not apply if you 
disclose an account number or similar form of access number or access 
code:
    (1) To your agent or service provider solely in order to perform 
marketing for your own services or products, as long as the agent or 
service provider is not authorized to directly initiate charges to the 
account; or
    (2) To a participant in a private-label credit card program or an 
affinity or similar program where the participants

[[Page 412]]

in the program are identified to the customer when the customer enters 
into the program.
    (c) Example. An account number, or similar form of access number or 
access code, does not include a number or code in an encrypted form, as 
long as you do not provide the recipient with a means to decode the 
number or code.



                          Subpart C_Exceptions



Sec.  160.13  Exception to opt out requirements for service providers
and joint marketing.

    (a) General rule. (1) The opt out requirements in Sec. Sec.  160.7 
and 160.10 do not apply when you provide nonpublic personal information 
to a nonaffiliated third party to perform services for you or functions 
on your behalf if you:
    (i) Provide the initial notice in accordance with Sec.  160.4; and
    (ii) Enter into a contractual agreement with the third party that 
prohibits the third party from disclosing or using the information other 
than to carry out the purposes for which you disclosed the information, 
including use under an exception in Sec.  160.14 or Sec.  160.15 in the 
ordinary course of business to carry out those purposes.
    (2) Example. If you disclose nonpublic personal information under 
this section to a financial institution with which you perform joint 
marketing, your contractual agreement with that institution meets the 
requirements of paragraph (a)(1)(ii) of this section if it prohibits the 
institution from disclosing or using the nonpublic personal information 
except as necessary to carry out the joint marketing or under an 
exception in Sec.  160.14 or Sec.  160.15 in the ordinary course of 
business to carry out that joint marketing.
    (b) Service may include joint marketing. The services a 
nonaffiliated third party performs for you under paragraph (a) of this 
section may include marketing of your own products or services or 
marketing of financial products or services offered pursuant to joint 
agreements between you and one or more financial institutions.
    (c) Definition of joint agreement. For purposes of this section, 
joint agreement means a written contract pursuant to which you and one 
or more financial institutions jointly offer, endorse or sponsor a 
financial product or service.



Sec.  160.14  Exceptions to notice and opt out requirements for
processing and servicing transactions.

    (a) Exceptions for processing and servicing transactions at 
consumer's request. The requirements for initial notice in Sec.  
160.4(a)(2), for the opt out in Sec. Sec.  160.7 and 160.10, and for 
initial notice in Sec.  160.13 in connection with service providers and 
joint marketing, do not apply if you disclose nonpublic personal 
information as necessary to effect, administer, or enforce a transaction 
that a consumer requests or authorizes, or in connection with:
    (1) Processing or servicing a financial product or service that a 
consumer requests or authorizes;
    (2) Maintaining or servicing the consumer's account with you, or 
with another entity as part of an extension of credit on behalf of such 
entity as part of a private label credit card program or other extension 
of credit on behalf of such entity; or
    (3) A proposed or actual securitization, secondary market sale or 
similar transaction related to a transaction of the consumer.
    (b) Necessary to effect, administer or enforce a transaction means 
that the disclosure is:
    (1) Required, or is one of the lawful or appropriate methods, to 
enforce your rights or the rights of other persons engaged in carrying 
out the financial transaction or providing the product or service; or
    (2) Required, or is a usual, appropriate or acceptable method:
    (i) To carry out the transaction or the product or service business 
of which the transaction is a part, and record, service or maintain the 
consumer's account in the ordinary course of providing the financial 
service or financial product;
    (ii) To administer or service benefits or claims relating to the 
transaction or the product or service business of which it is a part;
    (iii) To provide a confirmation, statement or other record of the 
transaction, or information on the status or

[[Page 413]]

value of the financial service or financial product to the consumer or 
the consumer's agent or broker;
    (iv) To accrue or recognize incentives or bonuses associated with 
the transaction that are provided by you or any other party;
    (v) In connection with:
    (A) The authorization, settlement, billing, processing, clearing, 
transferring, reconciling or collection of amounts charged, debited or 
otherwise paid using a debit, credit or other payment card, check or 
account number, or by other payment means;
    (B) The transfer of receivables, accounts or interests therein; or
    (C) The audit of debit, credit or other payment information.



Sec.  160.15  Other exceptions to notice and opt out requirements.

    (a) Exceptions to notice and opt out requirements. The requirements 
for initial notice in Sec.  160.4(a)(2), for the opt out in Sec. Sec.  
160.7 and 160.10, and for initial notice in Sec.  160.13 in connection 
with service providers and joint marketing do not apply when you 
disclose nonpublic personal information:
    (1) With the consent or at the direction of the consumer, provided 
that the consumer has not revoked the consent or direction;
    (2)(i) To protect the confidentiality or security or your records 
pertaining to the consumer, service, product or transaction;
    (ii) To protect against or prevent actual or potential fraud, 
unauthorized transactions, claims or other liability;
    (iii) For required institutional risk control or for resolving 
consumer disputes or inquiries;
    (iv) To persons holding a legal or beneficial interest relating to 
the consumer; or
    (v) To persons acting in a fiduciary or representative capacity on 
behalf of the consumer;
    (3) To provide information to insurance rate advisory organizations, 
guaranty funds or agencies, agencies that are rating you, persons that 
are assessing your compliance with industry standards, and your 
attorneys, accountants and auditors;
    (4) To the extent specifically permitted or required under other 
provisions of law and in accordance with the Right to Financial Privacy 
Act of 1978, 12 U.S.C. 3401 et seq., to law enforcement agencies 
(including a Federal functional regulator, the Secretary of the 
Treasury, with respect to 31 U.S.C. Chapter 53, Subchapter II (Records 
and Reports on Monetary Instruments and Transactions) and 12 U.S.C. 
Chapter 21 (Financial Recordkeeping), a State insurance authority, with 
respect to any person domiciled in that insurance authority's state that 
is engaged in providing insurance, and the Bureau of Consumer Financial 
Protection), self-regulatory organizations, or for an investigation on a 
matter related to public safety;
    (5)(i) To a consumer reporting agency in accordance with the Fair 
Credit Reporting Act, 15 U.S.C. 1681 et seq.; or
    (ii) From a consumer report reported by a consumer reporting agency;
    (6) In connection with a proposed or actual sale, merger, transfer 
or exchange of all or a portion of a business or operating unit if the 
disclosure of nonpublic personal information concerns solely consumers 
of such business or unit; or
    (7)(i) To comply with federal, state or local laws, rules and other 
applicable legal requirements;
    (ii) To comply with a properly authorized civil, criminal or 
regulatory investigation, or subpoena or summons by federal, state or 
local authorities; or
    (iii) To respond to judicial process or government regulatory 
authorities having jurisdiction over you for examination, compliance or 
other purposes as authorized by law.
    (b) Examples of consent and revocation of consent. (1) A consumer 
may specifically consent to your disclosure to a nonaffiliated mortgage 
lender of the value of the assets in the customer's account so that the 
lender can evaluate the consumer's application for a mortgage loan.
    (2) A consumer may revoke consent by subsequently exercising the 
right to opt out of future disclosures of nonpublic personal information 
as permitted under Sec.  160.7(f).

[66 FR 21252, Apr. 27, 2001, as amended at 76 FR 43879, July 22, 2011]

[[Page 414]]



            Subpart D_Relation to Other Laws; Effective Date



Sec.  160.16  Protection of Fair Credit Reporting Act.

    Nothing in this part shall be construed to modify, limit or 
supersede the operation of the Fair Credit Reporting Act, 15 U.S.C. 1681 
et seq., and no inference shall be drawn on the basis of the provisions 
of this part regarding whether information is transaction or experience 
information under section 603 of that Act.



Sec.  160.17  Relation to state laws.

    (a) In general. This part shall not be construed as superseding, 
altering or affecting any statute, regulation, order or interpretation 
in effect in any state, except to the extent that such state statute, 
regulation, order or interpretation is inconsistent with the provisions 
of this part, and then only to the extent of the inconsistency.
    (b) Greater protection under state law. For purposes of this 
section, a state statute, regulation, order or interpretation is not 
inconsistent with the provisions of this part if the protection such 
statute, regulation, order or interpretation affords any person is 
greater than the protection provided under this part, as determined by 
the Bureau of Consumer Financial Protection, after consultation with the 
Commission, on its own motion or upon the petition of any interested 
party.

[66 FR 21252, Apr. 27, 2001, as amended at 76 FR 43879, July 22, 2011]



Sec.  160.18  Effective date; compliance date; transition rule.

    (a) Effective date. This part is effective on June 21, 2001. In 
order to provide sufficient time for you to establish policies and 
systems to comply with the requirements for this part, the compliance 
date for this part is March 31, 2002.
    (b)(1) Notice requirement for consumers who are your customers on 
the effective date. By March 31, 2002, you must have provided an initial 
notice, as required by Sec.  160.4, to consumers who are your customers 
on March 31, 2002.
    (2) Example. You provide an initial notice to consumers who are your 
customers on March 31, 2002 if, by that date, you have established a 
system for providing an initial notice to all new customers and have 
mailed the initial notice to all your existing customers.
    (c) One-year grandfathering of service agreements. Until March 31, 
2003, a contract that you have entered into with a nonaffiliated third 
party to perform services for you or functions on your behalf satisfies 
the provisions of Sec.  160.13(a)(1)(ii) even if the contract does not 
include a requirement that the third party maintain the confidentiality 
of nonpublic personal information, as long as you entered into the 
agreement on or before March 31, 2002.

[66 FR 21252, Apr. 27, 2001, as amended at 66 FR 24061, 24183, May 11, 
2001; 67 FR 6790, Feb. 13, 2002]



Sec. Sec.  160.19-160.29  [Reserved]



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.

[76 FR 43879, July 22, 2011]





             Sec. Appendix A to Part 160--Model Privacy Form

    A. The Model Privacy Form

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                         B. General Instructions

                  1. How the Model Privacy Form Is Used

    (a) The model form may be used, at the option of a financial 
institution, including a group of financial institutions that use a 
common privacy notice, to meet the content requirements of the privacy 
notice and opt-out notice set forth in Sec. Sec.  160.6 and 160.7 of 
this part.
    (b) The model form is a standardized form, including page layout, 
content, format, style, pagination, and shading. Institutions seeking to 
obtain the safe harbor through use of the model form may modify it only 
as described in these Instructions.
    (c) Note that disclosure of certain information, such as assets, 
income, and information from a consumer reporting agency, may give rise 
to obligations under the Fair Credit Reporting Act [15 U.S.C. 1681-
1681x] (FCRA), such as a requirement to permit a consumer to opt out of 
disclosures to affiliates or designation as a consumer reporting agency 
if disclosures are made to nonaffiliated third parties.
    (d) The word ``customer'' may be replaced by the word ``member'' 
whenever it appears in the model form, as appropriate.

                2. The Contents of the Model Privacy Form

    The model form consists of two pages, which may be printed on both 
sides of a single sheet of paper, or may appear on two separate pages. 
Where an institution provides a long list of institutions at the end of 
the model form in accordance with Instruction C.3(a)(1), or provides 
additional information in accordance with Instruction C.3(c), and such 
list or additional information exceeds the space available on page two 
of the model form, such list or additional information may extend to a 
third page.
    (a) Page One. The first page consists of the following components:
    (1) Date last revised (upper right-hand corner).
    (2) Title.
    (3) Key frame (Why?, What?, How?).
    (4) Disclosure table (``Reasons we can share your personal 
information'').
    (5) ``To limit our sharing'' box, as needed, for the financial 
institution's opt-out information.
    (6) ``Questions'' box, for customer service contact information.
    (7) Mail-in opt-out form, as needed.
    (b) Page Two. The second page consists of the following components:
    (1) Heading (Page 2).
    (2) Frequently Asked Questions (``Who we are'' and ``What we do'').
    (3) Definitions.
    (4) ``Other important information'' box, as needed.

                 3. The Format of the Model Privacy Form

    The format of the model form may be modified only as described 
below.
    (a) Easily readable type font. Financial institutions that use the 
model form must use an easily readable type font. While a number of 
factors together produce easily readable type font, institutions are 
required to use a minimum of 10-point font (unless otherwise expressly 
permitted in these Instructions) and sufficient spacing between the 
lines of type.
    (b) Logo. A financial institution may include a corporate logo on 
any page of the notice, so long as it does not interfere with the

[[Page 422]]

readability of the model form or the space constraints of each page.
    (c) Page size and orientation. Each page of the model form must be 
printed on paper in portrait orientation, the size of which must be 
sufficient to meet the layout and minimum font size requirements, with 
sufficient white space on the top, bottom, and sides of the content.
    (d) Color. The model form must be printed on white or light color 
paper (such as cream) with black or other contrasting ink color. Spot 
color may be used to achieve visual interest, so long as the color 
contrast is distinctive and the color does not detract from the 
readability of the model form. Logos may also be printed in color.
    (e) Languages. The model form may be translated into languages other 
than English.

            C. Information Required in the Model Privacy Form

    The information in the model form may be modified only as described 
below:

1. Name of the Institution or Group of Affiliated Institutions Providing 
                               the Notice

    Insert the name of the financial institution providing the notice or 
a common identity of affiliated institutions jointly providing the 
notice on the form wherever [name of financial institution] appears.

                               2. Page One

    (a) Last revised date. The financial institution must insert in the 
upper right-hand corner the date on which the notice was last revised. 
The information shall appear in minimum 8-point font as ``rev. [month/
year]'' using either the name or number of the month, such as ``rev. 
July 2009'' or ``rev. 7/09''.
    (b) General instructions for the ``What?'' box. (1) The bulleted 
list identifies the types of personal information that the institution 
collects and shares. All institutions must use the term ``Social 
Security number'' in the first bullet.
    (2) Institutions must use five (5) of the following terms to 
complete the bulleted list: Income; account balances; payment history; 
transaction history; transaction or loss history; credit history; credit 
scores; assets; investment experience; credit-based insurance scores; 
insurance claim history; medical information; overdraft history; 
purchase history; account transactions; risk tolerance; medical-related 
debts; credit card or other debt; mortgage rates and payments; 
retirement assets; checking account information; employment information; 
wire transfer instructions.
    (c) General instructions for the disclosure table. The left column 
lists reasons for sharing or using personal information. Each reason 
correlates to a specific legal provision described in paragraph C.2(d) 
of this Instruction. In the middle column, each institution must provide 
a ``Yes'' or ``No'' response that accurately reflects its information 
sharing policies and practices with respect to the reason listed on the 
left. In the right column, each institution must provide in each box one 
of the following three (3) responses, as applicable, that reflects 
whether a consumer can limit such sharing: ``Yes'' if it is required to 
or voluntarily provides an opt-out; ``No'' if it does not provide an 
opt-out; or ``We don't share'' if it answers ``No'' in the middle 
column. Only the sixth row (``For our affiliates to market to you'') may 
be omitted at the option of the institution. See paragraph C.2(d)(6) of 
this Instruction.
    (d) Specific disclosures and corresponding legal provisions. (1) For 
our everyday business purposes. This reason incorporates sharing 
information under Sec. Sec.  160.14 and 160.15 and with service 
providers pursuant to Sec.  160.13 of this part other than the purposes 
specified in paragraphs C.2(d)(2) or C.2(d)(3) of these Instructions.
    (2) For our marketing purposes. This reason incorporates sharing 
information with service providers by an institution for its own 
marketing pursuant to Sec.  160.13 of this part. An institution that 
shares for this reason may choose to provide an opt-out.
    (3) For joint marketing with other financial companies. This reason 
incorporates sharing information under joint marketing agreements 
between two or more financial institutions and with any service provider 
used in connection with such agreements pursuant to Sec.  160.13 of this 
part. An institution that shares for this reason may choose to provide 
an opt-out.
    (4) For our affiliates' everyday business purposes--information 
about transactions and experiences. This reason incorporates sharing 
information specified in sections 603(d)(2)(A)(i) and (ii) of the FCRA. 
An institution that shares for this reason may choose to provide an opt-
out.
    (5) For our affiliates' everyday business purposes--information 
about creditworthiness. This reason incorporates sharing information 
pursuant to section 603(d)(2)(A)(iii) of the FCRA. An institution that 
shares for this reason must provide an opt-out.
    (6) For our affiliates to market to you. This reason incorporates 
sharing information specified in section 624 of the FCRA. This reason 
may be omitted from the disclosure table when: the institution does not 
have affiliates (or does not disclose personal information to its 
affiliates); the institution's affiliates do not use personal 
information in a manner that requires an opt-out; or the institution 
provides the affiliate marketing notice separately. Institutions that 
include

[[Page 423]]

this reason must provide an opt-out of indefinite duration. An 
institution not required to provide an opt-out under this subparagraph 
may elect to include this reason in the model form. Note: The CFTC's 
Regulations do not address the affiliate marketing rule.
    (7) For nonaffiliates to market to you. This reason incorporates 
sharing described in Sec. Sec.  160.7 and 160.10(a) of this part. An 
institution that shares personal information for this reason must 
provide an opt-out.
    (e) To limit our sharing: A financial institution must include this 
section of the model form only if it provides an opt-out. The word 
``choice'' may be written in either the singular or plural, as 
appropriate. Institutions must select one or more of the applicable opt-
out methods described: telephone, such as by a toll-free number; a Web 
site; or use of a mail-in opt-out form. Institutions may include the 
words ``toll-free'' before telephone, as appropriate. An institution 
that allows consumers to opt out online must provide either a specific 
Web address that takes consumers directly to the opt-out page or a 
general Web address that provides a clear and conspicuous direct link to 
the opt-out page. The opt-out choices made available to the consumer who 
contacts the institution through these methods must correspond 
accurately to the ``Yes'' responses in the third column of the 
disclosure table. In the part titled ``Please note'' institutions may 
insert a number that is 30 or greater in the space marked ``[30].'' 
Instructions on voluntary or state privacy law opt-out information are 
in paragraph C.2(g)(5) of these Instructions.
    (f) Questions box. Customer service contact information must be 
inserted as appropriate, where [phone number] or [Web site] appear. 
Institutions may elect to provide either a phone number, such as a toll-
free number, or a Web address, or both. Institutions may include the 
words ``toll-free'' before the telephone number, as appropriate.
    (g) Mail-in opt-out form. Financial institutions must include this 
mail-in form only if they state in the ``To limit our sharing'' box that 
consumers can opt out by mail. The mail-in form must provide opt-out 
options that correspond accurately to the ``Yes'' responses in the third 
column in the disclosure table. Institutions that require customers to 
provide only name and address may omit the section identified as 
``[account ].'' Institutions that require additional or different 
information, such as a random opt-out number or a truncated account 
number, to implement an opt-out election should modify the ``[account 
]'' reference accordingly. This includes institutions that require 
customers with multiple accounts to identify each account to which the 
opt-out should apply. An institution must enter its opt-out mailing 
address: in the far right of this form (see version 3); or below the 
form (see version 4). The reverse side of the mail-in opt-out form must 
not include any content of the model form.
    (1) Joint accountholder. Only institutions that provide their joint 
accountholders the choice to opt out for only one accountholder, in 
accordance with paragraph C.3(a)(5) of these Instructions, must include 
in the far left column of the mail-in form the following statement: ``If 
you have a joint account, your choice(s) will apply to everyone on your 
account unless you mark below. Apply my choice(s) only to me.'' The word 
``choice'' may be written in either the singular or plural, as 
appropriate. Financial institutions that provide insurance products or 
services, provide this option, and elect to use the model form may 
substitute the word ``policy'' for ``account'' in this statement. 
Institutions that do not provide this option may eliminate this left 
column from the mail-in form.
    (2) FCRA Section 603(d)(2)(A)(iii) opt-out. If the institution 
shares personal information pursuant to section 603(d)(2)(A)(iii) of the 
FCRA, it must include in the mail-in opt-out form the following 
statement: ``Do not share information about my creditworthiness with 
your affiliates for their everyday business purposes.''
    (3) FCRA Section 624 opt-out. If the institution incorporates 
section 624 of the FCRA in accord with paragraph C.2(d)(6) of these 
Instructions, it must include in the mail-in opt-out form the following 
statement: ``Do not allow your affiliates to use my personal information 
to market to me.''
    (4) Nonaffiliate opt-out. If the financial institution shares 
personal information pursuant to Sec.  160.10(a) of this part, it must 
include in the mail-in opt-out form the following statement: ``Do not 
share my personal information with nonaffiliates to market their 
products and services to me.''
    (5) Additional opt-outs. Financial institutions that use the 
disclosure table to provide opt-out options beyond those required by 
Federal law must provide those opt-outs in this section of the model 
form. A financial institution that chooses to offer an opt-out for its 
own marketing in the mail-in opt-out form must include one of the two 
following statements: ``Do not share my personal information to market 
to me.'' or ``Do not use my personal information to market to me.'' A 
financial institution that chooses to offer an opt-out for joint 
marketing must include the following statement: ``Do not share my 
personal information with other financial institutions to jointly market 
to me.''
    (h) Barcodes. A financial institution may elect to include a barcode 
and/or ``tagline'' (an internal identifier) in 6-point font at the 
bottom of page one, as needed for information internal to the 
institution, so long as these do not interfere with the clarity or text 
of the form.

[[Page 424]]

                               3. Page Two

    (a) General Instructions for the Questions. Certain of the Questions 
may be customized as follows:
    (1) ``Who is providing this notice?'' This question may be omitted 
where only one financial institution provides the model form and that 
institution is clearly identified in the title on page one. Two or more 
financial institutions that jointly provide the model form must use this 
question to identify themselves as required by Sec.  160.9(f) of this 
part. Where the list of institutions exceeds four (4) lines, the 
institution must describe in the response to this question the general 
types of institutions jointly providing the notice and must separately 
identify those institutions, in minimum 8-point font, directly following 
the ``Other important information'' box, or, if that box is not included 
in the institution's form, directly following the ``Definitions.'' The 
list may appear in a multi-column format.
    (2) ``How does [name of financial institution] protect my personal 
information?'' The financial institution may only provide additional 
information pertaining to its safeguards practices following the 
designated response to this question. Such information may include 
information about the institution's use of cookies or other measures it 
uses to safeguard personal information. Institutions are limited to a 
maximum of 30 additional words.
    (3) ``How does [name of financial institution] collect my personal 
information?'' Institutions must use five (5) of the following terms to 
complete the bulleted list for this question: Open an account; deposit 
money; pay your bills; apply for a loan; use your credit or debit card; 
seek financial or tax advice; apply for insurance; pay insurance 
premiums; file an insurance claim; seek advice about your investments; 
buy securities from us; sell securities to us; direct us to buy 
securities; direct us to sell your securities; make deposits or 
withdrawals from your account; enter into an investment advisory 
contract; give us your income information; provide employment 
information; give us your employment history; tell us about your 
investment or retirement portfolio; tell us about your investment or 
retirement earnings; apply for financing; apply for a lease; provide 
account information; give us your contact information; pay us by check; 
give us your wage statements; provide your mortgage information; make a 
wire transfer; tell us who receives the money; tell us where to send the 
money; show your government-issued ID; show your driver's license; order 
a commodity futures or option trade. Institutions that collect personal 
information from their affiliates and/or credit bureaus must include 
after the bulleted list the following statement: ``We also collect your 
personal information from others, such as credit bureaus, affiliates, or 
other companies.'' Institutions that do not collect personal information 
from their affiliates or credit bureaus but do collect information from 
other companies must include the following statement instead: ``We also 
collect your personal information from other companies.'' Only 
institutions that do not collect any personal information from 
affiliates, credit bureaus, or other companies can omit both statements.
    (4) ``Why can't I limit all sharing?'' Institutions that describe 
state privacy law provisions in the ``Other important information'' box 
must use the bracketed sentence: ``See below for more on your rights 
under state law.'' Other institutions must omit this sentence.
    (5) ``What happens when I limit sharing for an account I hold 
jointly with someone else?'' Only financial institutions that provide 
opt-out options must use this question. Other institutions must omit 
this question. Institutions must choose one of the following two 
statements to respond to this question: ``Your choices will apply to 
everyone on your account.'' or ``Your choices will apply to everyone on 
your account--unless you tell us otherwise.'' Financial institutions 
that provide insurance products or services and elect to use the model 
form may substitute the word ``policy'' for ``account'' in these 
statements.
    (b) General Instructions for the Definitions. The financial 
institution must customize the space below the responses to the three 
definitions in this section. This specific information must be in 
italicized lettering to set off the information from the standardized 
definitions.
    (1) Affiliates. As required by Sec.  160.6(a)(3) of this part, where 
[affiliate information] appears, the financial institution must:
    (i) If it has no affiliates, state: ``[name of financial 
institution] has no affiliates'';
    (ii) If it has affiliates but does not share personal information, 
state: ``[name of financial institution] does not share with our 
affiliates''; or
    (iii) If it shares with its affiliates, state, as applicable: ``Our 
affiliates include companies with a [common corporate identity of 
financial institution] name; financial companies such as [insert 
illustrative list of companies]; nonfinancial companies, such as [insert 
illustrative list of companies]; and others, such as [insert 
illustrative list].''
    (2) Nonaffiliates. As required by Sec.  160.6(c)(3) of this part, 
where [nonaffiliate information] appears, the financial institution 
must:
    (i) If it does not share with nonaffiliated third parties, state: '' 
[name of financial institution] does not share with nonaffiliates so 
they can market to you''; or
    (ii) If it shares with nonaffiliated third parties, state, as 
applicable: ``Nonaffiliates we

[[Page 425]]

share with can include [list categories of companies such as mortgage 
companies, insurance companies, direct marketing companies, and 
nonprofit organizations].''
    (3) Joint Marketing. As required by Sec.  160.13 of this part, where 
[joint marketing] appears, the financial institution must:
    (i) If it does not engage in joint marketing, state: ``[name of 
financial institution] doesn't jointly market''; or
    (ii) If it shares personal information for joint marketing, state, 
as applicable: ``Our joint marketing partners include [list categories 
of companies such as credit card companies].''
    (c) General instructions for the ``Other important information'' 
box. This box is optional. The space provided for information in this 
box is not limited. Only the following types of information can appear 
in this box.
    (1) State and/or international privacy law information; and/or
    (2) Acknowledgment of receipt form.


[74 FR 62975, Dec. 1, 2009]



               Sec. Appendix B to Part 160--Sample Clauses

    This appendix only applies to privacy notices provided before 
January 1, 2011. Financial institutions, including a group of financial 
holding company affiliates that use a common privacy notice, may use the 
following sample clauses, if the clause is accurate for each institution 
that uses the notice. Note that disclosure of certain information, such 
as assets, income and information from a consumer reporting agency, may 
give rise to obligations under the Fair Credit Reporting Act, such as a 
requirement to permit a consumer to opt out of disclosures to affiliates 
or designation as a consumer reporting agency if disclosures are made to 
nonaffiliated third parties.

      A-1--Categories of Information You Collect (All Institutions)

    You may use this clause, as applicable, to meet the requirement of 
Sec.  160.6(a)(1) to describe the categories of nonpublic personal 
information you collect.

                            Sample Clause A-1

    We collect nonpublic personal information about you from the 
following sources:
     Information we receive from you on applications 
or other forms;
     Information about your transactions with us, our 
affiliates or others; and
     Information we receive from a consumer reporting 
agency.

A-2--Categories of Information You Disclose (Institutions That Disclose 
                       Outside of the Exceptions)

    You may use one of these clauses, as applicable, to meet the 
requirement of Sec.  160.6(a)(2) to describe the categories of nonpublic 
personal information you disclose. You may use these clauses if you 
disclose nonpublic personal information other than as permitted by the 
exceptions in Sec. Sec.  160.13, 160.14 and 160.15.

                    Sample Clause A-2, Alternative 1

    We may disclose the following kinds of nonpublic personal 
information about you:
     Information we receive from you on applications 
or other forms, such as [provide illustrative examples, such as ``your 
name, address, Social Security number, assets and income''];
     Information about your transactions with us, our 
affiliates or others, such as [provide illustrative examples, such as 
``your account balance, payment history, parties to transactions and 
credit card usage'']; and
     Information we receive from a consumer reporting 
agency, such as [provide illustrative examples, such as ``your 
creditworthiness and credit history''].

                    Sample Clause A-2, Alternative 2

    We may disclose all of the information that we collect, as described 
[describe location in the notice, such as ``above'' or ``below''].

  A-3--Categories of Information You Disclose and Parties To Whom You 
 Disclose (Institutions That Do Not Disclose Outside of the Exceptions)

    You may use this clause, as applicable, to meet the requirements of 
Sec. Sec.  160.6(a)(2), (3) and (4) to describe the categories of 
nonpublic personal information about customers and former customers that 
you disclose and the categories of affiliates and nonaffiliated third 
parties to whom you disclose. You may use this clause if you do not 
disclose nonpublic personal information to any party, other than as is 
permitted by the exceptions in Sec. Sec.  160.14 and 160.15.

                            Sample Clause A-3

    We do not disclose any nonpublic personal information about our 
customers or former customers to anyone, except as permitted by law.

   A-4--Categories of Parties To Whom You Disclose (Institutions That 
                   Disclose Outside of the Exceptions)

    You may use this clause, as applicable, to meet the requirement of 
Sec.  160.6(a)(3) to describe the categories of affiliates and 
nonaffiliated third parties to whom you disclose

[[Page 426]]

nonpublic personal information. You may use this clause if you disclose 
nonpublic personal information other than as permitted by the exceptions 
in Sec. Sec.  160.13, 160.14 and 160.15, as well as when permitted by 
the exceptions in Sec. Sec.  160.14 and 160.15.

                            Sample Clause A-4

    We may disclose nonpublic personal information about you to the 
following types of third parties:
     Financial service providers, such as [provide 
illustrative examples, such as ``mortgage bankers''];
     Non-financial companies, such as [provide 
illustrative examples, such as ``retailers, direct marketers, airlines 
and publishers'']; and
     Others, such as [provide illustrative examples, 
such as ``non-profit organizations''].
    We may also disclose nonpublic personal information about you to 
nonaffiliated third parties as permitted by law.

             A-5--Service Provider/Joint Marketing Exception

    You may use one of these clauses, as applicable, to meet the 
requirements of Sec.  160.6(a)(5) related to the exception for service 
providers and joint marketers in Sec.  160.13. If you disclose nonpublic 
personal information under this exception, you must describe the 
categories of nonpublic personal information you disclose and the 
categories of third parties with whom you have contracted.

                    Sample Clause A-5, Alternative 1

    We may disclose the following information to companies that perform 
marketing services on our behalf or to other financial institutions with 
which we have joint marketing agreements:
     Information we receive from you on applications 
or other forms, such as [provide illustrative examples, such as ``your 
name, address, Social Security number, assets and income''];
     Information about your transactions with us, our 
affiliates, or others, such as [provide illustrative examples, such as 
``your account balance, payment history, parties to transactions and 
credit card usage'']; and
     Information we receive from a consumer reporting 
agency, such as [provide illustrative examples, such as ``your 
creditworthiness and credit history''].

                    Sample Clause A-5, Alternative 2

    We may disclose all of the information we collect, as described 
[describe location in the notice, such as ``above'' or ``below''] to 
companies that perform marketing services on our behalf or to other 
financial institutions with which we have joint marketing agreements.

A-6--Explanation of Opt Out Right (Institutions That Disclose Outside of 
                             the Exceptions)

    You may use this clause, as applicable, to meet the requirement of 
Sec.  160.6(a)(6) to provide an explanation of the consumer's right to 
opt out of the disclosure of nonpublic personal information to 
nonaffiliated third parties, including the method(s) by which the 
consumer may exercise that right. You may use this clause if you 
disclose nonpublic personal information other than as permitted by the 
exceptions in Sec. Sec.  160.13, 160.14 and 160.15.

                            Sample Clause A-6

    If you prefer that we not disclose nonpublic personal information 
about you to nonaffiliated third parties you may opt out of those 
disclosures; that is, you may direct us not to make those disclosures 
(other than disclosures permitted or required by law). If you wish to 
opt out of disclosures to nonaffiliated third parties, you may [describe 
a reasonable means of opting out, such as ``call the following toll-free 
number: (insert number)''].

          A-7--Confidentiality and Security (All Institutions)

    You may use this clause, as applicable, to meet the requirement of 
Sec.  160.6(a)(8) to describe your policies and practices with respect 
to protecting the confidentiality and security of nonpublic personal 
information.

                            Sample Clause A-7

    We restrict access to nonpublic personal information about you to 
[provide an appropriate description, such as ``those employees who need 
to know that information to provide products or services to you'']. We 
maintain physical, electronic and procedural safeguards that comply with 
federal standards to safeguard your nonpublic personal information.

[66 FR 21252, Apr. 27, 2001, as amended at 74 FR 62984, Dec. 1, 2009]



PART 162_PROTECTION OF CONSUMER INFORMATION UNDER THE FAIR CREDIT
REPORTING ACT--Table of Contents



Sec.
162.1 Purpose and scope.
162.2 Definitions.

              Subpart A_Business Affiliate Marketing Rules

162.3 Affiliate marketing opt out and exceptions.
162.4 Scope and duration of opt out.

[[Page 427]]

162.5 Contents of opt-out notice; consolidated and equivalent notices.
162.6 Reasonable opportunity to opt out.
162.7 Reasonable and simple methods of opting out.
162.8 Acceptable delivery of opt-out notices
162.9 Renewal of opt out.
162.10-162.20 [Reserved]

                        Subpart B_Disposal Rules

162.21 Proper disposal of consumer information.

                   Subpart C_Identity Theft Red Flags

162.30 Duties regarding the detection, prevention, and mitigation of 
          identity theft.
162.31 [Reserved]
162.32 Duties of card issuers regarding changes of address.

Appendix A to Part 162--Sample Clauses
Appendix B to Part 162--Interagency Guidelines on Identity Theft 
          Detection, Prevention, and Mitigation

    Authority: Sec. 1088, Pub. L. 111-203; 124 Stat. 1376 (2010).

    Source: 76 FR 43884, July 22, 2011, unless otherwise noted.



Sec.  162.1  Purpose and scope.

    (a) Purpose. The purpose of this part is to implement various 
provisions in the Fair Credit Reporting Act, 15 U.S.C. 1681, et seq. 
(``FCRA''), which provide certain protections to consumer information.
    (b) Scope. This part applies to certain consumer information held by 
the entities listed below. This part shall apply to futures commission 
merchants, retail foreign exchange dealers, commodity trading advisors, 
commodity pool operators, introducing brokers, major swap participants 
and swap dealers, regardless of whether they are required to register 
with the Commission. This part does not apply to foreign futures 
commission merchants, foreign retail foreign exchange dealers, commodity 
trading advisors, commodity pool operators, introducing brokers, major 
swap participants and swap dealers unless such entity registers with the 
Commission. Nothing in this part modifies limits or supersedes the 
requirements set forth in part 160 of this title.
    (c) Examples. The examples in this part are not exclusive. 
Compliance with an example, to the extent applicable, constitutes 
compliance with this part. Examples in a section illustrate only the 
issue described in the section and do not illustrate any other issue 
that may arise in this part.



Sec.  162.2  Definitions.

    (a) Affiliate. The term ``affiliate'' for the purposes of this part 
means any person that is related by common ownership or common corporate 
control with a covered affiliate.
    (b) Clear and conspicuous. The term ``clear and conspicuous'' means 
reasonably understandable and designed to call attention to the nature 
and significance of the information presented in the notice.
    (c) Common ownership or common corporate control. The term ``common 
ownership or common corporate control'' for the purposes of this part 
means the power to exercise a controlling influence over the management 
or policies of a company whether through ownership of securities, by 
contract, or otherwise. Any person who owns beneficially, either 
directly or through one or more controlled companies, more than 25 
percent of the voting securities of any company is presumed to control 
the company. Any person who does not own more than 25 percent of the 
voting securities of a company will be presumed not to control the 
company.
    (d) Company. The term ``company'' means any corporation, limited 
liability company, business trust, general or limited partnership, 
association, or similar organization.
    (e) Concise--(1) In general. The term ``concise'' means a reasonably 
brief expression or statement.
    (2) Combination with other required disclosures. A notice required 
by this part may be concise even if it is combined with other 
disclosures required or authorized by Federal or state law.
    (f) Consumer. Except as otherwise provided, the term ``consumer'' 
means an individual person. The term consumer does not include market 
makers, floor brokers, locals, or individual persons whose information 
is not collected to determine eligibility for personal, family, or 
household purposes.
    (g) Consumer information. The term ``consumer information'' means 
any record about an individual, whether in paper, electronic, or other 
form, that is

[[Page 428]]

a consumer report or is derived from a consumer report (as defined in 
section 603(d)(2) of the FCRA). Consumer information also means a 
compilation of such records. Consumer information does not include 
information that does not identify individuals, such as aggregate 
information or blind data.
    (h) Covered affiliate. The term ``covered affiliate'' means a 
futures commission merchant, retail foreign exchange dealer, commodity 
trading advisor, commodity pool operator, introducing broker, major swap 
participant or swap dealer, which is subject to the jurisdiction of the 
Commission.
    (i) Dispose or Disposal--(1) In general. The terms ``dispose'' or 
``disposal'' means:
    (i) The discarding or abandonment of consumer information; or
    (ii) The sale, donation, or transfer of any medium, including 
computer equipment, upon which consumer information is stored.
    (2) Sale, donation, or transfer of consumer information. The sale, 
donation, or transfer of consumer information is not considered disposal 
for the purposes of subpart B.
    (j) Dodd-Frank Act. The term ``Dodd-Frank Act'' means the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, 124 
Stat. 1376 (2010)).
    (k) Eligibility information. The term ``eligibility information'' 
means any information that would be a consumer report if the exclusions 
from the definition of ``consumer report'' in section 603(d)(2)(A) of 
the FCRA did not apply. Examples of the type of information that would 
fall within the definition of eligibility information include an 
affiliate's own transaction or experience information, such as 
information about a consumer's account history with that affiliate, and 
other information, such as information from credit bureau reports or 
applications. Eligibility information does not include aggregate or 
blind data that does not contain personal identifiers such as account 
numbers, names, or addresses.
    (l) FCRA. The term ``FCRA'' means the Fair Credit Reporting Act (15 
U.S.C. 1681 et seq.).
    (m) Financial product or service. The term ``financial product or 
service'' means any product or service that a futures commission 
merchant, retail foreign exchange dealer, commodity trading advisor, 
commodity pool operator, introducing broker, major swap participant or 
swap dealer could offer that is subject to the Commission's 
jurisdiction.
    (n) GLB Act. The term ``GLB Act'' means the Gramm-Leach-Bliley Act 
(Pub. L. 106-102, 113 Stat. 1338 (1999)).
    (o) Major swap participant. The term ``major swap participant'' has 
the same meaning as in section 1a(33) of the Commodity Exchange Act, 7 
U.S.C. 1 et seq., as may be further defined by this title, and includes 
any person registered as such thereunder.
    (p) Person. The term ``person'' means any individual, partnership, 
corporation, trust, estate, cooperative, association, or other entity.
    (q) Pre-existing business relationship. The term ``pre-existing 
business relationship'' means a relationship between a person, or a 
person's licensed agent, and a consumer based on--
    (1) A financial contract between the person and the consumer which 
is in force on the date on which the consumer is sent a solicitation by 
this part;
    (2) The purchase, rental, or lease by the consumer of a persons' 
services or a financial transaction (including holding an active account 
or policy in force or having another continuing relationship) between 
the consumer and the person, during the 18-month period immediately 
preceding the date on which the consumer is sent a solicitation covered 
by this part; or
    (3) An inquiry or application by the consumer regarding a financial 
product or service offered by that person during the three-month period 
immediately preceding the date on which the consumer is sent a 
solicitation covered by this part.
    (r) Solicitation--(1) In general. The term ``solicitation'' means 
the marketing of a financial product or service initiated by an 
affiliate to a particular consumer that is--
    (i) Based on eligibility information communicated to that covered 
affiliate by an affiliate that has or previously

[[Page 429]]

had the pre-existing business relationship with a consumer as described 
in this part; and
    (ii) Intended to encourage the consumer to purchase or obtain such 
financial product or service. A solicitation does not include marketing 
communications that are directed at the general public.
    (2) Examples. Examples of what communications constitute 
solicitations include communications such as a telemarketing 
solicitation, direct mail, or e-mail, when those communications are 
directed to a specific consumer based on eligibility information. A 
solicitation does not include communications that are directed at the 
general public without regard to eligibility information, even if those 
communications are intended to encourage consumers to purchase financial 
products and services from the affiliate initiating the communications.
    (s) Swap dealer. The term ``swap dealer'' has the same meaning as in 
section 1a(49) of the Commodity Exchange Act, 7 U.S.C. 1 et seq., as may 
be further defined by this title, and includes any person registered as 
such thereunder.



              Subpart A_Business Affiliate Marketing Rules



Sec.  162.3  Affiliate marketing opt out and exceptions.

    (a) Initial notice and opt out. A covered affiliate may not use 
eligibility information about a consumer that the covered affiliate 
receives from an affiliate with the consumer to make a solicitation for 
marketing purposes to such consumer unless--
    (1) It is clearly and conspicuously disclosed to the consumer in 
writing or if the consumer agrees, electronically, in a concise notice 
that the person may use shared eligibility information about that 
consumer received from an affiliate to make solicitations for marketing 
purposes to such consumer;
    (2) The consumer is provided a reasonable opportunity and a 
reasonable and simple method to opt out, or prohibit the covered 
affiliate from using eligibility information to make solicitations for 
marketing purposes to the consumer; and
    (3) The consumer has not opted out.
    (b) Persons responsible for satisfying the notice requirement. The 
notice required by this section must be provided:
    (1) By an affiliate that has or previously had a pre-existing 
business relationship with a consumer; or
    (2) As part of a joint notice from two or more members of an 
affiliated group of companies, provided that at least one of the 
affiliates on the joint notice has or previously had a pre-existing 
business relationship with the consumer.
    (c) Exceptions. These proposed regulations would not apply to the 
following covered affiliate:
    (1) A covered affiliate that has a pre-existing business 
relationship with a consumer;
    (2) Communications between an employer and employee-consumer (or his 
or her beneficiary) in connection with an employee benefit plan;
    (3) A covered affiliate that is currently providing services to the 
consumer;
    (4) If the consumer initiated the communication with the covered 
affiliate by oral, electronic, or written means;
    (5) If the consumer authorized or requested the covered affiliate's 
solicitation; or
    (6) If compliance by a person with these regulations would prevent 
that person's compliance with state insurance laws pertaining to unfair 
discrimination.
    (d) Making solicitations--(1) When a solicitation occurs. A covered 
affiliate makes a solicitation for marketing purposes if the person--
    (i) Receives eligibility information from an affiliate;
    (ii) Uses that eligibility information to do one or more of the 
following:
    (A) Identify the consumer or type of consumer to receive a 
solicitation;
    (B) Establish criteria used to select the consumer to receive a 
solicitation about the covered affiliate's financial products or 
services; or
    (C) Decide which of the services or contracts to market to the 
consumer or tailor the solicitation to that consumer; and
    (iii) As a result of the covered affiliate's use of the eligibility 
information, the consumer is provided a solicitation.

[[Page 430]]

    (2) Receipt of eligibility information. A covered affiliate may 
receive eligibility information from an affiliate in various ways, 
including when the affiliate places that information into a common 
database that the covered affiliate may access.
    (3) Service providers. Except as provided in paragraph (d)(5) of 
this section, a covered affiliate receives or uses an affiliate's 
eligibility information if a service provider acting on the covered 
affiliate's behalf (regardless of whether such service provider is a 
third party or an affiliate of the covered affiliate) receives or uses 
that information in the manner described in paragraph (d)(1)(i) or 
(d)(1)(ii) of this section. All relevant facts and circumstances will 
determine whether a service provider is acting on behalf of a covered 
affiliate when it receives or uses an affiliate's eligibility 
information in connection with marketing the covered affiliate's 
financial products or services.
    (4) Use by an affiliate of its own eligibility information. Unless a 
covered affiliate uses eligibility information that the covered 
affiliate receives from an affiliate in the manner described in 
paragraph (d)(2) of this section, the covered affiliate does not make a 
solicitation subject to this subpart:
    (i) Uses its own eligibility information that it obtained in 
connection with a pre-existing business relationship it has or 
previously had with the consumer to market the covered affiliate's 
financial products or services to the consumer; or
    (ii) Directs its service provider to use the affiliate's own 
eligibility information that it obtained in connection with a pre-
existing business relationship it has or previously had with the 
consumer to market the covered affiliate's financial products or 
services to the consumer, and the covered affiliate does not communicate 
directly with the service provider regarding that use.
    (5) Use of eligibility information by a service provider--(i) In 
general. A covered affiliate does not make a solicitation subject to 
this subpart if a service provider (including an affiliated or third-
party service provider that maintains or accesses a common database that 
the covered affiliate may access) receives eligibility information from 
an affiliate that has or previously had a pre-existing business 
relationship with the consumer and uses that eligibility information to 
market the covered affiliate's financial products or services to the 
consumer, so long as--
    (A) The affiliate controls access to and use of its eligibility 
information by the service provider (including the right to establish 
the specific terms and conditions under which the service provider may 
use such information to market the covered affiliate's financial 
products or services);
    (B) The affiliate establishes specific terms and conditions under 
which the service provider may access and use such affiliate's 
eligibility information to market the covered affiliate's financial 
products and services (or those of affiliates generally) to the 
consumer, such as the identity of the affiliated companies whose 
financial products or services may be marketed to the consumer by the 
service provider, the types of financial products or services of 
affiliated companies that may be marketed, and the number of times the 
consumer may receive marketing materials, and periodically evaluates the 
service provider's compliance with those terms and conditions;
    (C) The affiliate requires the service provider to implement 
reasonable policies and procedures designed to ensure that the service 
provider uses such affiliate's eligibility information in accordance 
with the terms and conditions established by such affiliate relating to 
the marketing of the covered affiliate's financial products or services;
    (D) The affiliate is identified on or with the marketing materials 
provided to the consumer; and
    (E) The covered affiliate does not directly use its affiliate's 
eligibility information in the manner described in paragraph (b)(1)(ii) 
of this section.
    (ii) Writing requirements. (A) The requirements of paragraphs 
(b)(5)(i)(A) and (C) of this section must be set forth in a written 
agreement between the affiliate that has or previously had a pre-
existing business relationship with the consumer and the service 
provider; and
    (B) The specific terms and conditions established by the affiliate 
as provided

[[Page 431]]

in paragraph (b)(5)(i)(B) of this section must be set forth in writing.
    (e) Relation to affiliate-sharing notice and opt out. Nothing in 
this rulemaking will limit the responsibility of a covered affiliate to 
comply with the notice and opt-out provisions under other privacy rules 
under the FCRA, the GLB Act or the CEA.



Sec.  162.4  Scope and duration of opt out.

    (a) Scope of opt-out election--(1) In general. The consumer's 
election to opt out prohibits any covered affiliate subject to the scope 
of the opt-out notice from using eligibility information received from 
another affiliate to make solicitations to the consumer.
    (2) Continuing relationship--(i) In general. If the consumer 
establishes a continuing relationship with a covered affiliate or its 
affiliate, an opt-out notice may apply to eligibility information 
obtained in connection with--
    (A) A single continuing relationship or multiple continuing 
relationships that the consumer establishes with a covered affiliate or 
its affiliates, including continuing relationships established 
subsequent to delivery of the opt-out notice, so long as the notice 
adequately describes the continuing relationships covered by the opt 
out; or
    (B) Any other transaction between the consumer and the covered 
affiliate or its affiliates as described in the notice.
    (ii) Examples of a continuing relationship. A consumer has a 
continuing relationship with a covered affiliate or its affiliate if:
    (A) The covered affiliate is a futures commission merchant through 
whom a consumer has opened an account, or that carries the consumer's 
account on a fully-disclosed basis, or that effects or engages in 
commodity interest transactions with or for a consumer, even if the 
covered affiliate does not hold any assets of the consumer;
    (B) The covered affiliate is an introducing broker that solicits or 
accepts specific orders for trades;
    (C) The covered affiliate is a commodity trading advisor with whom a 
consumer has a contract or subscription, either written or oral, 
regardless of whether the advice is standardized, or is based on, or 
tailored to, the commodity interest or cash market positions or other 
circumstances or characteristics of the particular consumer;
    (D) The covered affiliate is a commodity pool operator, and accepts 
or receives from the consumer, funds, securities, or property for the 
purpose of purchasing an interest in a commodity pool;
    (E) The covered affiliate is a major swap participant that holds 
securities or other assets as collateral for a loan made to the 
consumer, even if the covered affiliate did not make the loan or do not 
affect any transactions on behalf of the consumer; or
    (F) The covered affiliate is a swap dealer that regularly effects or 
engages in swap transactions with or for a consumer even if the covered 
affiliate does not hold any assets of the consumer.
    (3) No continuing relationship--(i) In general. If there is no 
continuing relationship between a consumer and the covered affiliate or 
its affiliate, and the covered affiliate or its affiliate obtain 
eligibility information about a consumer in connection with a 
transaction with the consumer, such as an isolated transaction or a 
credit application that is denied, an opt-out notice provided to the 
consumer only applies to eligibility information obtained in connection 
with that transaction.
    (ii) Examples of no continuing relationship. A consumer does not 
have a continuing relationship with a covered affiliate or its affiliate 
if:
    (A) The covered affiliate has acted solely as a ``finder'' for a 
futures commission merchant, and the covered affiliate does not solicit 
or accept specific orders for trades; or
    (B) The covered affiliate has solicited the consumer to participate 
in a pool or to direct his or her account and he or she has not provided 
the covered affiliate with funds to participate in a pool or entered 
into any agreement with the covered affiliate to direct his or her 
account.
    (4) Menu of alternatives. A consumer may be given the opportunity to 
choose from a menu of alternatives when electing to prohibit 
solicitations, such as by electing to prohibit solicitations from 
certain types of affiliates covered by the opt-out notice but not other 
types of affiliates covered by the

[[Page 432]]

notice, electing to prohibit solicitations based on certain types of 
eligibility information but not other types of eligibility information, 
or electing to prohibit solicitations by certain methods of delivery but 
not other methods of delivery. However, one of the alternatives must 
allow the consumer to prohibit all solicitations from all of the 
affiliates that are covered by the notice.
    (5) Special rule for a notice following termination of all 
continuing relationships. A consumer must be given a new opt-out notice 
if, after all continuing relationships with the covered affiliate or its 
affiliate(s) are terminated, the consumer subsequently establishes 
another continuing relationship with the covered affiliate or its 
affiliate(s) and the consumer's eligibility information is to be used to 
make a solicitation. The new opt-out notice must apply, at a minimum, to 
eligibility information obtained in connection with the new continuing 
relationship. Consistent with paragraph b of this section, the 
consumer's decision not to opt out after receiving the new opt-out 
notice would not override a prior opt-out election by the consumer that 
applies to eligibility information obtained in connection with a 
terminated relationship, regardless of whether the new opt-out notice 
applies to eligibility information obtained in connection with the 
terminated relationship.
    (b) Duration of opt-out election. An opt-out election must be 
effective for a period of at least five years beginning when the 
consumer's opt-out election is received and implemented, unless the 
consumer subsequently revokes the opt-out election in writing or, if the 
consumer agrees, electronically. An opt-out election may be established 
for a period of more than five years or for an indefinite period unless 
revoked.
    (c) Time period in which a consumer can opt out. A consumer may opt 
out at any time.
    (d) No effect on opt-out period. An opt-out period may not be 
shortened by sending a renewal notice to the consumer before expiration 
of the opt-out period, even if the consumer does not renew the opt out.



Sec.  162.5  Contents of opt-out notice; consolidated and equivalent notices.

    (a) Contents of the opt-out notice--(1) In general. An opt-out 
notice must be in writing, be clear and conspicuous, as well as concise, 
and must accurately disclose the following:
    (i) (A) The name of the affiliate that has or previously had a pre-
existing business relationship with a consumer, which is providing the 
notice; or
    (B) If jointly provided jointly by multiple affiliates and each 
affiliate shares a common name, then the notice may indicate that it is 
being provided by multiple companies with the same name or multiple 
companies in the same group or family of companies. If the affiliates 
providing the notice do not share a common name, then the notice must 
either separately identify each affiliate by name or identify each of 
the common names used by those affiliates;
    (ii) The list of affiliates or types of affiliates whose use of 
eligibility information is covered by the notice, which may include 
companies that become affiliates after the notice is provided to the 
consumer;
    (iii) A general description of the types of eligibility information 
that may be used to make solicitations to the consumer;
    (iv) A statement that the consumer may elect to limit the use of 
eligibility information to make solicitations to the consumer;
    (v) A statement that the consumer's election will apply for the 
specified period of time and, if applicable, that the consumer will be 
allowed to renew the election once that period expires;
    (vi) If the notice is provided to consumers who have previously 
elected to opt out, that such consumer does not need to act again until 
the consumer receives a renewal notice; and
    (vii) A reasonable and simple method for the consumer to opt out.
    (2) Specifying length of time period. If consumer is granted an opt-
out period longer than a five-year duration, the opt-out notice must 
specify the length of the opt-out period.
    (3) No revised notice for extension of opt-out period. The duration 
of an opt-out period may be increased for a period longer than the 
period specified in

[[Page 433]]

the opt-out notice without having to provide a revised notice of the 
increase to the consumer.
    (b) Joint relationships. (1) If two or more consumers jointly obtain 
a financial product or service, a single opt-out notice may be provided 
to joint consumers.
    (2) Any of the joint consumers may exercise the right to opt out on 
behalf of each joint consumer.
    (3) The opt-out election notice must explain how an opt-out election 
by a joint consumer will be treated. That is, the notice should specify 
whether an opt-out election by a joint consumer will be treated as 
applying to all of the associated joint consumers, or as applying to 
each joint consumer separately.
    (4) If the opt-out election notice provides that each joint consumer 
is permitted to opt out separately, one of the joint consumers must be 
permitted to opt out on behalf of all of the joint consumers and the 
joint consumer must be permitted to exercise his or her separate rights 
to opt out in a single response.
    (5) A covered affiliate cannot require all joint consumers to opt 
out before implementing any opt-out election.
    (c) Alternative contents. If the consumer is afforded a broader 
right to opt out of receiving marketing than is required by this 
subpart, the requirements of this section may be satisfied by providing 
the consumer with a clear, conspicuous, and concise notice that 
accurately discloses the consumer's opt-out rights.
    (d) Coordinated and consolidated consumer notices. A notice required 
by this subpart may be coordinated and consolidated with any other 
notice or disclosure required to be issued under any other provision of 
law by the covered affiliate providing the notice, including but not 
limited to notices in the FCRA or the GLB Act privacy notices.
    (e) Equivalent notices. A notice or disclosure that is equivalent to 
the notice required by this part in terms of content, and that is 
provided to a consumer together with a notice required by any other 
provision of law, satisfies the requirements of this section.
    (f) Model notices. Model notices are provided in appendix A of this 
part. These notices were meant to facilitate compliance with this 
subpart; provided, however, that nothing herein shall be interpreted to 
require persons subject to this part to use the model notices.



Sec.  162.6  Reasonable opportunity to opt out.

    (a) In general. A covered affiliate must not use eligibility 
information about a consumer that the covered affiliate receives from an 
affiliate to make a solicitation to such consumer about the covered 
affiliate's financial products or services, unless the consumer is 
provided a reasonable opportunity to opt out, as required by this 
subpart.
    (b) Examples. A reasonable opportunity to opt out under this subpart 
is:
    (1) If the opt-out notice is mailed to the consumer, the consumer 
has 30 days from the date the notice is mailed to opt out.
    (2) If the opt-out notice is sent via electronic means to the 
consumer, the consumer has 30 days from the date the consumer 
acknowledges receipt to elect to opt out by any reasonable method.
    (3) If the opt-out notice is sent via e-mail (where the consumer has 
agreed to receive disclosures by e-mail), the consumer is given 30 days 
after the e-mail is sent to elect to opt out by any reasonable method.
    (4) If the opt-out notice provided to the consumer at the time of an 
electronic transaction, the consumer is required to decide, as a 
necessary part of proceeding with the transaction, whether to opt out 
before completing the transaction.
    (5) If the opt-out notice is provided during an in-person 
transaction, the consumer is required to decide, as a necessary part of 
completing the transaction, whether to opt out through a simple process.
    (6) If the opt-out notice is provided in conjunction with other 
privacy notices required by law, the consumer is allowed to exercise the 
opt-out election within a reasonable period of time and in the same 
manner as the opt out under that privacy notice.

[[Page 434]]



Sec.  162.7  Reasonable and simple methods of opting out.

    (a) In general. A covered affiliate shall be prohibited from using 
eligibility information about a consumer received from an affiliate to 
make a solicitation to the consumer about the covered affiliate's 
financial products or services, unless the consumer is provided a 
reasonable and simple method to opt out, as required by this subpart.
    (b) Examples. Reasonable and simple methods of opting out include:
    (1) Designating a check-off box in a prominent position on an opt-
out election form;
    (2) Including a reply form and a self-addressed envelope (in a 
mailing);
    (3) Providing an electronic means, if the consumer agrees, that can 
be electronically mailed or processed through an Internet Web site;
    (4) Providing a toll-free telephone number; or
    (5) Exercising an opt-out election through whatever means are 
acceptable under a consolidated privacy notice required under other 
laws.
    (c) Specific opt-out method. Each consumer may be required to opt 
out through a specific method, as long as that method is acceptable 
under this subpart.



Sec.  162.8  Acceptable delivery methods of opt-out notices.

    (a) In general. The opt-out notice must be provided so that each 
consumer can reasonably be expected to receive actual notice.
    (b) Electronic notices. For opt-out notices provided electronically, 
the notice may be provided in compliance with either the electronic 
disclosure provisions in Sec.  1.4 of this title or the provisions in 
section 101 of the Electronic Signatures in Global and National Commerce 
Act, 15 U.S.C. 7001 et seq.



Sec.  162.9  Renewal of opt out.

    (a) Renewal notice and opt-out requirement--(1) In general. Since 
the FCRA provides that opt-out elections can expire in a period of no 
less than five years, an affiliate that has or previously had a pre-
existing business relationship with a consumer must provide a renewal 
notice to the consumer after such time in order to allow its affiliates 
to make solicitations. After the opt-out election period expires, its 
affiliates may make solicitations unless:
    (i) The consumer has been given a renewal notice that complies with 
the requirements of this section and Sec. Sec.  162.6 through 162.8 of 
this subpart, and a reasonable opportunity and a reasonable and simple 
method to renew the opt-out election, and the consumer does not renew 
the opt out; or
    (ii) An exception in Sec. 162.3(c) of this subpart applies.
    (2) Renewal period. Each opt-out renewal must be effective for a 
period of at least five years as provided in Sec.  162.4(b) of this 
subpart.
    (3) Affiliates who may provide the renewal notice. The notice 
required by this paragraph must be provided:
    (i) By the affiliate that provided the previous opt-out notice, or 
its successor; or
    (ii) As part of a joint renewal notice from two or more members of 
an affiliated group of companies, or their successors, that jointly 
provided the previous opt-out notice.
    (b) Contents of renewal or extension notice. The contents of the 
renewal notice must include all of the same contents of the initial 
notices, but also must include:
    (1) A statement that the consumer previously elected to limit the 
use of certain information to make solicitations to the consumer;
    (2) A statement that the consumer may elect to renew the consumer's 
previous election; and
    (3) If applicable, a statement that the consumer's election to renew 
will apply for a specified period of time stated in the notice and that 
the consumer will be allowed to renew the election once that period 
expires.
    (c) Timing of renewal notice. Renewal notices must be provided in a 
reasonable period of time before the expiration of the opt-out election 
period or any time after the expiration of the opt-out period, but 
before solicitations that would have been prohibited by the expired opt-
out election are made to the consumer.
    (d) No effect on opt-out period. An opt-out period may not be 
shortened by

[[Page 435]]

sending a renewal notice to the consumer before the expiration of the 
opt-out period, even if the consumer does not renew the opt-out 
election.



Sec. Sec.  162.10-162.20  [Reserved]



                        Subpart B_Disposal Rules



Sec.  162.21  Proper disposal of consumer information.

    (a) In general. Any covered affiliate must adopt must adopt 
reasonable, written policies and procedures that address administrative, 
technical, and physical safeguards for the protection of consumer 
information. These written policies and procedures must be reasonably 
designed to:
    (1) Insure the security and confidentiality of consumer information;
    (2) Protect against any anticipated threats or hazards to the 
security or integrity of consumer information; and
    (3) Protect against unauthorized access to or use of consumer 
information that could result in substantial harm or inconvenience to 
any consumer.
    (b) Standard. Any covered affiliate under this part who maintains or 
otherwise possesses consumer information for a business purpose must 
properly dispose of such information by taking reasonable measures to 
protect against unauthorized access to or use of the information in 
connection with its disposal.
    (c) Examples. The following examples are ``reasonable'' disposal 
measures for the purposes of this subpart--
    (1) Implementing and monitoring compliance with policies and 
procedures that require the burning, pulverizing, or shredding of papers 
containing consumer information so that the information cannot 
practicably be read or reconstructed;
    (2) Implementing and monitoring compliance with policies and 
procedures that require the destruction or erasure of electronic media 
containing consumer information so that the information cannot 
practically be read or reconstructed; and
    (3) After due diligence, entering into and monitoring compliance 
with a written contract with another party engaged in the business of 
record destruction to dispose of consumer information in a manner that 
is consistent with this rule.
    (d) Relation to other laws. Nothing in this section shall be 
construed:
    (1) To require a person to maintain or destroy any record pertaining 
to a consumer that is imposed under Sec. 1.31 or any other provision of 
law; or
    (2) To alter or affect any requirement imposed under any other 
provision of law to maintain or destroy such a record.



                   Subpart C_Identity Theft Red Flags

    Source: 78 FR 23661, Apr. 19, 2013, unless otherwise noted.



Sec.  162.30  Duties regarding the detection, prevention, and 
mitigation of identity theft.

    (a) Scope of this subpart. This section applies to financial 
institutions or creditors that are subject to administrative enforcement 
of the FCRA by the Commission pursuant to Sec. 621(b)(1) of the FCRA, 15 
U.S.C. 1681s(b)(1).
    (b) Special definitions for this subpart. For purposes of this 
section, and appendix B to this part, the following definitions apply:
    (1) Account means a continuing relationship established by a person 
with a financial institution or creditor to obtain a product or service 
for personal, family, household or business purposes. Account includes 
an extension of credit, such as the purchase of property or services 
involving a deferred payment.
    (2) The term board of directors includes:
    (i) In the case of a branch or agency of a foreign bank, the 
managing official in charge of the branch or agency; and
    (ii) In the case of any other creditor that does not have a board of 
directors, a designated senior management employee.
    (3) Covered account means:
    (i) An account that a financial institution or creditor offers or 
maintains, primarily for personal, family, or household purposes, that 
involves or is designed to permit multiple payments or transactions, 
such as a margin account; and

[[Page 436]]

    (ii) Any other account that the financial institution or creditor 
offers or maintains for which there is a reasonably foreseeable risk to 
customers or to the safety and soundness of the financial institution or 
creditor from identity theft, including financial, operational, 
compliance, reputation, or litigation risks.
    (4) Credit has the same meaning in Sec. 603(r)(5) of the FCRA, 15 
U.S.C. 1681a(r)(5).
    (5) Creditor has the same meaning as in 15 U.S.C. 1681m(e)(4), and 
includes any futures commission merchant, retail foreign exchange 
dealer, commodity trading advisor, commodity pool operator, introducing 
broker, swap dealer, or major swap participant that regularly extends, 
renews, or continues credit; regularly arranges for the extension, 
renewal, or continuation of credit; or in acting as an assignee of an 
original creditor, participates in the decision to extend, renew, or 
continue credit.
    (6) Customer means a person that has a covered account with a 
financial institution or creditor.
    (7) Financial institution has the same meaning as in 15 U.S.C. 
1681a(t) and includes any futures commission merchant, retail foreign 
exchange dealer, commodity trading advisor, commodity pool operator, 
introducing broker, swap dealer, or major swap participant that directly 
or indirectly holds a transaction account belonging to a consumer.
    (8) Identifying information means any name or number that may be 
used, alone or in conjunction with any other information, to identify a 
specific person, including any--
    (i) Name, Social Security number, date of birth, official State or 
government issued driver's license or identification number, alien 
registration number, government passport number, employer or taxpayer 
identification number;
    (ii) Unique biometric data, such as fingerprint, voice print, retina 
or iris image, or other unique physical representation;
    (iii) Unique electronic identification number, address, or routing 
code; or
    (iv) Telecommunication identifying information or access device (as 
defined in 18 U.S.C. 1029(e)).
    (9) Identity theft means a fraud committed or attempted using the 
identifying information of another person without authority.
    (10) Red Flag means a pattern, practice, or specific activity that 
indicates the possible existence of identity theft.
    (11) Service provider means a person that provides a service 
directly to the financial institution or creditor.
    (c) Periodic identification of covered accounts. Each financial 
institution or creditor must periodically determine whether it offers or 
maintains covered accounts. As a part of this determination, a financial 
institution or creditor shall conduct a risk assessment to determine 
whether it offers or maintains covered accounts described in paragraph 
(b)(3)(ii) of this section, taking into consideration:
    (1) The methods it provides to open its accounts;
    (2) The methods it provides to access its accounts; and
    (3) Its previous experiences with identity theft.
    (d) Establishment of an Identity Theft Prevention Program--(1) 
Program requirement. Each financial institution or creditor that offers 
or maintains one or more covered accounts must develop and implement a 
written Identity Theft Prevention Program that is designed to detect, 
prevent, and mitigate identity theft in connection with the opening of a 
covered account or any existing covered account. The Identity Theft 
Prevention Program must be appropriate to the size and complexity of the 
financial institution or creditor and the nature and scope of its 
activities.
    (2) Elements of the Identity Theft Prevention Program. The Identity 
Theft Prevention Program must include reasonable policies and procedures 
to:
    (i) Identify relevant Red Flags for the covered accounts that the 
financial institution or creditor offers or maintains, and incorporate 
those Red Flags into its Identity Theft Prevention Program;
    (ii) Detect Red Flags that have been incorporated into the Identity 
Theft

[[Page 437]]

Prevention Program of the financial institution or creditor;
    (iii) Respond appropriately to any Red Flags that are detected 
pursuant to paragraph (d)(2)(ii) of this section to prevent and mitigate 
identity theft; and
    (iv) Ensure the Identity Theft Prevention Program (including the Red 
Flags determined to be relevant) is updated periodically, to reflect 
changes in risks to customers and to the safety and soundness of the 
financial institution or creditor from identity theft.
    (e) Administration of the Identity Theft Prevention Program. Each 
financial institution or creditor that is required to implement an 
Identity Theft Prevention Program must provide for the continued 
administration of the Identity Theft Prevention Program and must:
    (1) Obtain approval of the initial written Identity Theft Prevention 
Program from either its board of directors or an appropriate committee 
of the board of directors;
    (2) Involve the board of directors, an appropriate committee 
thereof, or a designated employee at the level of senior management in 
the oversight, development, implementation and administration of the 
Identity Theft Prevention Program;
    (3) Train staff, as necessary, to effectively implement the Identity 
Theft Prevention Program; and
    (4) Exercise appropriate and effective oversight of service provider 
arrangements.
    (f) Guidelines. Each financial institution or creditor that is 
required to implement an Identity Theft Prevention Program must consider 
the guidelines in appendix B of this part and include in its Identity 
Theft Prevention Program those guidelines that are appropriate.



Sec.  162.31  [Reserved]



Sec.  162.32  Duties of card issuers regarding changes of address.

    (a) Scope. This section applies to a person described in Sec.  
162.30(a) that issues a debit or credit card (card issuer).
    (b) Definition of cardholder. For purposes of this section, a 
cardholder means a consumer who has been issued a credit or debit card.
    (c) Address validation requirements. A card issuer must establish 
and implement reasonable policies and procedures to assess the validity 
of a change of address if it receives notification of a change of 
address for a consumer's debit or credit card account and, within a 
short period of time afterwards (during at least the first 30 days after 
it receives such notification), the card issuer receives a request for 
an additional or replacement card for the same account. Under these 
circumstances, the card issuer may not issue an additional or 
replacement card, until, in accordance with its reasonable policies and 
procedures and for the purpose of assessing the validity of the change 
of address, the card issuer:
    (1)(i) Notifies the cardholder of the request:
    (A) At the cardholder's former address; or
    (B) By any other means of communication that the card issuer and the 
cardholder have previously agreed to use; and
    (ii) Provides to the cardholder a reasonable means of promptly 
reporting incorrect address changes; or
    (2) Otherwise assesses the validity of the change of address in 
accordance with the policies and procedures the card issuer has 
established pursuant to Sec.  162.30.
    (d) Alternative timing of address validation. A card issuer may 
satisfy the requirements of paragraph (c) of this section if it 
validates an address pursuant to the methods in paragraph (c)(1) or 
(c)(2) of this section when it receives an address change notification, 
before it receives a request for an additional or replacement card.
    (e) Form of notice. Any written or electronic notice that the card 
issuer provides under this paragraph must be clear and conspicuous and 
provided separately from its regular correspondence with the cardholder.



[[Page 438]]



               Sec. Appendix A to Part 162--Sample Clauses

    A. Although use of the model forms is not required, use of the model 
forms in this appendix (as applicable) complies with the requirement in 
section 624 of the FCRA for clear, conspicuous, and concise notices.
    B. Certain changes may be made to the language or format of the 
model forms without losing the protection from liability afforded by use 
of the model forms. These changes may not be so extensive as to affect 
the substance, clarity, or meaningful sequence of the language in the 
model forms. Persons making such extensive revisions will lose the safe 
harbor that this appendix provides. Acceptable changes include, for 
example:
    1. Rearranging the order of the references to ``your income'', 
``your account history'', and ``your credit score''.
    2. Substituting other types of information for ``income'', ``account 
history'', or ``credit score'' for accuracy, such as ``payment 
history'', ``credit history'', or ``claims history''.
    3. Substituting a clearer and more accurate description of the 
affiliates providing or covered by the notice for phrases such as ``the 
[ABC] group of companies,'' including without limitation a statement 
that the entity providing the notice recently purchased the consumer's 
account.
    4. Substituting other types of affiliates covered by the notice for 
``commodity advisor'', ``futures clearing merchant'', or ``swap dealer'' 
affiliates.
    5. Omitting items that are not accurate or applicable. For example, 
if a person does not limit the duration of the opt-out period, the 
notice may omit information about the renewal notice.
    6. Adding a statement informing consumers how much time they have to 
opt out before shared eligibility information may be used to make 
solicitations to them.
    7. Adding a statement that the consumer may exercise the right to 
opt out at any time.
    8. Adding the following statement, if accurate: ``If you previously 
opted out, you do not need to do so again.''
    9. Providing a place on the form for the consumer to fill in 
identifying information, such as his or her name and address.
     A-1 Model Form for Initial Opt-out notice 
(Single-Affiliate Notice)
     A-2 Model Form for Initial Opt-out notice (Joint 
Notice)
     A-3 Model Form for Renewal Notice (Single-
Affiliate Notice)
     A-4 Model Form for Renewal Notice (Joint Notice)
     A-5 Model Form for Voluntary ``No Marketing'' 
Notice

   A-1 Model Form for Initial Opt-Out Notice (Single-Affiliate Notice)

          [Your Choice To Limit Marketing]/[Marketing Opt Out]

--[Name of Affiliate] is providing this notice.
--[Optional: Federal law gives you the right to limit some but not all 
marketing from our affiliates. Federal law also requires us to give you 
this notice to tell you about your choice to limit marketing from our 
affiliates.]
--You may limit our affiliates in the [ABC] group of companies, such as 
our [commodity advisor, futures clearing merchant, and swap dealer] 
affiliates, from marketing their financial products or services to you 
based on your personal information that we collect and share with them. 
This information includes your [income], your [account history with us], 
and your [credit score].
--Your choice to limit marketing offers from our affiliates will apply 
[until you tell us to change your choice]/[for x years from when you 
tell us your choice]/[for at least 5 years from when you tell us your 
choice]. [Include if the opt-out period expires.] Once that period 
expires, you will receive a renewal notice that will allow you to 
continue to limit marketing offers from our affiliates for [another x 
years]/[at least another 5 years].
--[Include, if applicable, in a subsequent notice, including an annual 
notice, for consumers who may have previously opted out.] If you have 
already made a choice to limit marketing offers from our affiliates, you 
do not need to act again until you receive the renewal notice.

    To limit marketing offers, contact us [include all that apply]:

--By telephone: 1-877--
--On the Web: www.--.com
--By mail: check the box and complete the form below, and send the form 
to:
--[Company name]
--[Company address]
__Do not allow your affiliates to use my personal information to market 
to me.

        A-2 Model Form for Initial Opt-Out Notice (Joint Notice)

          [Your Choice to Limit Marketing]/[Marketing Opt Out]

--The [ABC group of companies] is providing this notice.
--[Optional: Federal law gives you the right to limit some but not all 
marketing from the [ABC] companies. Federal law also requires us to give 
you this notice to tell you about your choice to limit marketing from 
the [ABC] companies.]
--You may limit the [ABC companies], such as the [ABC commodity advisor, 
futures

[[Page 439]]

clearing merchant, and swap dealer] affiliates, from marketing their 
financial products or services to you based on your personal information 
that they receive from other [ABC] companies. This information includes 
your [income], your [account history], and your [credit score].
--Your choice to limit marketing offers from the [ABC] companies will 
apply [until you tell us to change your choice]/[for x years from when 
you tell us your choice]/[for at least 5 years from when you tell us 
your choice]. [Include if the opt-out period expires.] Once that period 
expires, you will receive a renewal notice that will allow you to 
continue to limit marketing offers from the [ABC] companies for [another 
x years]/[at least another 5 years].
-[Include, if applicable, in a subsequent notice, including an annual 
notice, for consumers who may have previously opted out.] If you have 
already made a choice to limit marketing offers from the [ABC] 
companies, you do not need to act again until you receive the renewal 
notice.

To limit marketing offers, contact us
[include all that apply]:

By telephone: 1-877--
On the Web: www.--.com
By mail: check the box and complete the form below, and send the form 
to:
[Company name]
[Company address]
__ Do not allow any company [in the ABC group of companies] to use my 
personal information to market to me.

       A-3 Model Form for Renewal Notice (Single-Affiliate Notice)

 [Renewing Your Choice To Limit Marketing]/[Renewing Your Marketing Opt 
                                  Out]

-[Name of Affiliate] is providing this notice.
-[Optional: Federal law gives you the right to limit some but not all 
marketing from our affiliates. Federal law also requires us to give you 
this notice to tell you about your choice to limit marketing from our 
affiliates.]
-You previously chose to limit our affiliates in the [ABC] group of 
companies, such as our [commodity advisor, futures clearing merchant, 
and swap dealer] affiliates, from marketing their financial products or 
services to you based on your personal information that we share with 
them. This information includes your [income], your [account history 
with us], and your [credit score].
-Your choice has expired or is about to expire.

To renew your choice to limit marketing for [x] more years, contact us 
[include all that apply]:

By telephone: 1-877--
On the Web: www.--.com
By mail: check the box and complete the form below, and send the form 
to:
[Company name]
[Company address]
__Renew my choice to limit marketing for [x] more years.

            A-4 Model Form for Renewal Notice (Joint Notice)

 [Renewing Your Choice To Limit Marketing]/[Renewing Your Marketing Opt 
                                  Out]

-The [ABC group of companies] is providing this notice.
-[Optional: Federal law gives you the right to limit some but not all 
marketing from the [ABC] companies. Federal law also requires us to give 
you this notice to tell you about your choice to limit marketing from 
the [ABC] companies.]
-You previously chose to limit the [ABC companies], such as the [ABC 
commodity advisor, futures clearing merchant, and swap dealer] 
affiliates, from marketing their financial products or services to you 
based on your personal information that they receive from other [ABC] 
companies. This information includes your [income], your [account 
history], and your [credit score].
-Your choice has expired or is about to expire.

To renew your choice to limit marketing for [x] more years, contact us 
[include all that apply]:

By telephone: 1-877--
On the Web: www.--.com
By mail: check the box and complete the form below, and send the form 
to:
[Company name]
[Company address]
__ Renew my choice to limit marketing for [x] more years.

          A-5 Model Form for Voluntary ``No Marketing'' Notice

                     [Your Choice To Stop Marketing]

-[Name of Affiliate] is providing this notice.
You may choose to stop all marketing from us and our affiliates.

To stop all marketing offers, contact us [include all that apply]:

By telephone: 1-877--
On the Web: www.--.com
By mail: check the box and complete the form below, and send the form 
to:
[Company name]
[Company address]
__ Do not market to me.

[[Page 440]]



 Sec. Appendix B to Part 162--Interagency Guidelines on Identity Theft 
                  Detection, Prevention, and Mitigation

    Section 162.30 requires each financial institution or creditor that 
offers or maintains one or more covered accounts, as defined in Sec.  
162.30(b)(3), to develop and provide for the continued administration of 
a written Identity Theft Prevention Program to detect, prevent, and 
mitigate identity theft in connection with the opening of a covered 
account or any existing covered account. These guidelines are intended 
to assist financial institutions and creditors in the formulation and 
maintenance of an Identity Theft Prevention Program that satisfies the 
requirements of Sec.  162.30.

                I. The Identity Theft Prevention Program

    In designing its Identity Theft Prevention Program, a financial 
institution or creditor may incorporate, as appropriate, its existing 
policies, procedures, and other arrangements that control reasonably 
foreseeable risks to customers or to the safety and soundness of the 
financial institution or creditor from identity theft.

                   II. Identifying Relevant Red Flags

    (a) Risk factors. A financial institution or creditor should 
consider the following factors in identifying relevant Red Flags for 
covered accounts, as appropriate:
    (1) The types of covered accounts it offers or maintains;
    (2) The methods it provides to open its covered accounts;
    (3) The methods it provides to access its covered accounts; and
    (4) Its previous experiences with identity theft.
    (b) Sources of Red Flags. Financial institutions and creditors 
should incorporate relevant Red Flags from sources such as:
    (1) Incidents of identity theft that the financial institution or 
creditor has experienced;
    (2) Methods of identity theft that the financial institution or 
creditor has identified that reflect changes in identity theft risks; 
and
    (3) Applicable supervisory guidance.
    (c) Categories of Red Flags. The Identity Theft Prevention Program 
should include relevant Red Flags from the following categories, as 
appropriate. Examples of Red Flags from each of these categories are 
appended as Supplement A to this Appendix B.
    (1) Alerts, notifications, or other warnings received from consumer 
reporting agencies or service providers, such as fraud detection 
services;
    (2) The presentation of suspicious documents;
    (3) The presentation of suspicious personal identifying information, 
such as a suspicious address change;
    (4) The unusual use of, or other suspicious activity related to, a 
covered account; and
    (5) Notice from customers, victims of identity theft, law 
enforcement authorities, or other persons regarding possible identity 
theft in connection with covered accounts held by the financial 
institution or creditor.

                        III. Detecting Red Flags

    The Identity Theft Prevention Program's policies and procedures 
should address the detection of Red Flags in connection with the opening 
of covered accounts and existing covered accounts, such as by:
    (a) Obtaining identifying information about, and verifying the 
identity of, a person opening a covered account; and
    (b) Authenticating customers, monitoring transactions, and verifying 
the validity of change of address requests, in the case of existing 
covered accounts.

              IV. Preventing and Mitigating Identity Theft

    The Identity Theft Prevention Program's policies and procedures 
should provide for appropriate responses to the Red Flags the financial 
institution or creditor has detected that are commensurate with the 
degree of risk posed. In determining an appropriate response, a 
financial institution or creditor should consider aggravating factors 
that may heighten the risk of identity theft, such as a data security 
incident that results in unauthorized access to a customer's account 
records held by the financial institution or creditor, or third party, 
or notice that a customer has provided information related to a covered 
account held by the financial institution or creditor to someone 
fraudulently claiming to represent the financial institution or creditor 
or to a fraudulent Internet Web site. Appropriate responses may include 
the following:
    (a) Monitoring a covered account for evidence of identity theft;
    (b) Contacting the customer;
    (c) Changing any passwords, security codes, or other security 
devices that permit access to a covered account;
    (d) Reopening a covered account with a new account number;
    (e) Not opening a new covered account;
    (f) Closing an existing covered account;
    (g) Not attempting to collect on a covered account or not selling a 
covered account to a debt collector;
    (h) Notifying law enforcement; or
    (i) Determining that no response is warranted under the particular 
circumstances.

[[Page 441]]

            V. Updating the Identity Theft Prevention Program

    Financial institutions and creditors should update the Identity 
Theft Prevention Program (including the Red Flags determined to be 
relevant) periodically, to reflect changes in risks to customers or to 
the safety and soundness of the financial institution or creditor from 
identity theft, based on factors such as:
    (a) The experiences of the financial institution or creditor with 
identity theft;
    (b) Changes in methods of identity theft;
    (c) Changes in methods to detect, prevent, and mitigate identity 
theft;
    (d) Changes in the types of accounts that the financial institution 
or creditor offers or maintains; and
    (e) Changes in the business arrangements of the financial 
institution or creditor, including mergers, acquisitions, alliances, 
joint ventures, and service provider arrangements.

   VI. Methods for Administering the Identity Theft Prevention Program

    (a) Oversight of Identity Theft Prevention Program. Oversight by the 
board of directors, an appropriate committee of the board, or a 
designated senior management employee should include:
    (1) Assigning specific responsibility for the Identity Theft 
Prevention Program's implementation;
    (2) Reviewing reports prepared by staff regarding compliance by the 
financial institution or creditor with Sec.  162.30; and
    (3) Approving material changes to the Identity Theft Prevention 
Program as necessary to address changing identity theft risks.
    (b) Reports. (1) In general. Staff of the financial institution or 
creditor responsible for development, implementation, and administration 
of its Identity Theft Prevention Program should report to the board of 
directors, an appropriate committee of the board, or a designated senior 
management employee, at least annually, on compliance by the financial 
institution or creditor with Sec.  162.30.
    (2) Contents of report. The report should address material matters 
related to the Identity Theft Prevention Program and evaluate issues 
such as: The effectiveness of the policies and procedures of the 
financial institution or creditor in addressing the risk of identity 
theft in connection with the opening of covered accounts and with 
respect to existing covered accounts; service provider arrangements; 
significant incidents involving identity theft and management's 
response; and recommendations for material changes to the Identity Theft 
Prevention Program.
    (c) Oversight of service provider arrangements. Whenever a financial 
institution or creditor engages a service provider to perform an 
activity in connection with one or more covered accounts the financial 
institution or creditor should take steps to ensure that the activity of 
the service provider is conducted in accordance with reasonable policies 
and procedures designed to detect, prevent, and mitigate the risk of 
identity theft. For example, a financial institution or creditor could 
require the service provider by contract to have policies and procedures 
to detect relevant Red Flags that may arise in the performance of the 
service provider's activities, and either report the Red Flags to the 
financial institution or creditor, or to take appropriate steps to 
prevent or mitigate identity theft.

                VII. Other Applicable Legal Requirements

    Financial institutions and creditors should be mindful of other 
related legal requirements that may be applicable, such as:
    (a) For financial institutions and creditors that are subject to 31 
U.S.C. 5318(g), filing a Suspicious Activity Report in accordance with 
applicable law and regulation;
    (b) Implementing any requirements under 15 U.S.C. 1681c-1(h) 
regarding the circumstances under which credit may be extended when the 
financial institution or creditor detects a fraud or active duty alert;
    (c) Implementing any requirements for furnishers of information to 
consumer reporting agencies under 15 U.S.C. 1681s-2, for example, to 
correct or update inaccurate or incomplete information, and to not 
report information that the furnisher has reasonable cause to believe is 
inaccurate; and
    (d) Complying with the prohibitions in 15 U.S.C. 1681m on the sale, 
transfer, and placement for collection of certain debts resulting from 
identity theft.

                       Supplement A to Appendix B

    In addition to incorporating Red Flags from the sources recommended 
in section II(b) of the Guidelines in Appendix B of this part, each 
financial institution or creditor may consider incorporating into its 
Identity Theft Prevention Program, whether singly or in combination, Red 
Flags from the following illustrative examples in connection with 
covered accounts:

   Alerts, Notifications or Warnings From a Consumer Reporting Agency

    1. A fraud or active duty alert is included with a consumer report.
    2. A consumer reporting agency provides a notice of credit freeze in 
response to a request for a consumer report.
    3. A consumer reporting agency provides a notice of address 
discrepancy, as defined in Sec. 603(f) of the Fair Credit Reporting Act 
(15 U.S.C. 1681a(f)).

[[Page 442]]

    4. A consumer report indicates a pattern of activity that is 
inconsistent with the history and usual pattern of activity of an 
applicant or customer, such as:
    a. A recent and significant increase in the volume of inquiries;
    b. An unusual number of recently established credit relationships;
    c. A material change in the use of credit, especially with respect 
to recently established credit relationships; or
    d. An account that was closed for cause or identified for abuse of 
account privileges by a financial institution or creditor.

                          Suspicious Documents

    5. Documents provided for identification appear to have been altered 
or forged.
    6. The photograph or physical description on the identification is 
not consistent with the appearance of the applicant or customer 
presenting the identification.
    7. Other information on the identification is not consistent with 
information provided by the person opening a new covered account or 
customer presenting the identification.
    8. Other information on the identification is not consistent with 
readily accessible information that is on file with the financial 
institution or creditor, such as a signature card or a recent check.
    9. An application appears to have been altered or forged, or gives 
the appearance of having been destroyed and reassembled.

               Suspicious Personal Identifying Information

    10. Personal identifying information provided is inconsistent when 
compared against external information sources used by the financial 
institution or creditor. For example:
    a. The address does not match any address in the consumer report; or
    b. The Social Security Number (SSN) has not been issued, or is 
listed on the Social Security Administration's Death Master File.
    11. Personal identifying information provided by the customer is not 
consistent with other personal identifying information provided by the 
customer. For example, there is a lack of correlation between the SSN 
range and date of birth.
    12. Personal identifying information provided is associated with 
known fraudulent activity as indicated by internal or third-party 
sources used by the financial institution or creditor. For example:
    a. The address on an application is the same as the address provided 
on a fraudulent application; or
    b. The phone number on an application is the same as the number 
provided on a fraudulent application.
    13. Personal identifying information provided is of a type commonly 
associated with fraudulent activity as indicated by internal or third-
party sources used by the financial institution or creditor. For 
example:
    a. The address on an application is fictitious, a mail drop, or a 
prison; or
    b. The phone number is invalid, or is associated with a pager or 
answering service.
    14. The SSN provided is the same as that submitted by other persons 
opening an account or other customers.
    15. The address or telephone number provided is the same as or 
similar to the address or telephone number submitted by an unusually 
large number of other persons opening accounts or by other customers.
    16. The person opening the covered account or the customer fails to 
provide all required personal identifying information on an application 
or in response to notification that the application is incomplete.
    17. Personal identifying information provided is not consistent with 
personal identifying information that is on file with the financial 
institution or creditor.
    18. For financial institutions or creditors that use challenge 
questions, the person opening the covered account or the customer cannot 
provide authenticating information beyond that which generally would be 
available from a wallet or consumer report.

 Unusual Use of, or Suspicious Activity Related to, the Covered Account

    19. Shortly following the notice of a change of address for a 
covered account, the institution or creditor receives a request for a 
new, additional, or replacement means of accessing the account or for 
the addition of an authorized user on the account.
    20. A new revolving credit account is used in a manner commonly 
associated with known patterns of fraud. For example:
    a. The majority of available credit is used for cash advances or 
merchandise that is easily convertible to cash (e.g., electronics 
equipment or jewelry); or
    b. The customer fails to make the first payment or makes an initial 
payment but no subsequent payments.
    21. A covered account is used in a manner that is not consistent 
with established patterns of activity on the account. There is, for 
example:
    a. Nonpayment when there is no history of late or missed payments;
    b. A material increase in the use of available credit;
    c. A material change in purchasing or spending patterns;
    d. A material change in electronic fund transfer patterns in 
connection with a deposit account; or
    e. A material change in telephone call patterns in connection with a 
cellular phone account.
    22. A covered account that has been inactive for a reasonably 
lengthy period of time is used (taking into consideration the type of

[[Page 443]]

account, the expected pattern of usage and other relevant factors).
    23. Mail sent to the customer is returned repeatedly as 
undeliverable although transactions continue to be conducted in 
connection with the customer's covered account.
    24. The financial institution or creditor is notified that the 
customer is not receiving paper account statements.
    25. The financial institution or creditor is notified of 
unauthorized charges or transactions in connection with a customer's 
covered account.

   Notice From Customers, Victims of Identity Theft, Law Enforcement 
   Authorities, or Other Persons Regarding Possible Identity Theft in 
 Connection With Covered Accounts Held by the Financial Institution or 
                                Creditor

    26. The financial institution or creditor is notified by a customer, 
a victim of identity theft, a law enforcement authority, or any other 
person that it has opened a fraudulent account for a person engaged in 
identity theft.

[78 FR 23660, Apr. 19, 2013]



PART 165_WHISTLEBLOWER RULES--Table of Contents



Sec.
165.1 General.
165.2 Definitions.
165.3 Procedures for submitting original information.
165.4 Confidentiality.
165.5 Requirements for consideration of an award.
165.6 Whistleblowers ineligible for an award.
165.7 Procedures for award applications in Commission actions and 
          related actions, and Commission award determinations.
165.8 Amount of award.
165.9 Criteria for determining amount of award.
165.10 Contents of record for award determination.
165.11 Awards based upon related actions.
165.12 Payment of awards from the Fund, financing of customer education 
          initiatives, and deposits and credits to the Fund.
165.13 Appeals.
165.14 Procedures applicable to the payment of awards.
165.15 Administering the whistleblower program.
165.16 No immunity.
165.17 Awards to whistleblowers who engage in culpable conduct.
165.18 Staff communications with whistleblowers from represented 
          entities.
165.19 Nonenforceability of certain provisions waiving rights and 
          remedies or requiring arbitration of disputes.
165.20 Whistleblower anti-retaliation protections.

Appendix A to Part 165--Guidance With Respect to the Protection of 
          Whistleblowers Against Retaliation
Appendix B to Part 165--Form TCR and Form WP-APP

    Authority: 7 U.S.C. 2, 5, 9, 12a(5), 13a, 13a-1, 13b, and 26.

    Source: 76 FR 53200, Aug. 25, 2011, unless otherwise noted.



Sec.  165.1  General.

    Section 23 of the Commodity Exchange Act, entitled ``Commodity 
Whistleblower Incentives and Protection,'' requires the Commission to 
pay awards, subject to certain limitations and conditions, to 
whistleblowers who voluntarily provide the Commission with original 
information about violations of the Commodity Exchange Act. This part 
165 describes the whistleblower program that the Commission intends to 
establish to implement the provisions of Section 23, and explains the 
procedures the whistleblower will need to follow in order to be eligible 
for an award. Whistleblowers should read these procedures carefully, 
because the failure to take certain required steps within the time 
frames described in this part may result in disqualification from 
receiving an award. Unless expressly provided for in this part, no 
person is authorized to make any offer or promise, or otherwise to bind 
the Commission with respect to the payment of any award or the amount 
thereof.



Sec.  165.2  Definitions.

    As used in this part:
    (a) Action. The term ``action'' generally means a single captioned 
judicial or administrative proceeding. Notwithstanding the foregoing:
    (1) For purposes of making an award under Sec.  165.7, the 
Commission will treat as a Commission action two or more administrative 
or judicial proceedings brought by the Commission if these proceedings 
arise out of the same nucleus of operative facts; or
    (2) For purposes of determining the payment on an award under Sec.  
165.14, the Commission will deem as part of the Commission action upon 
which the

[[Page 444]]

award was based any subsequent Commission proceeding that, individually, 
results in a monetary sanction of $1,000,000 or less, and that arises 
out of the same nucleus of operative facts.
    (b) Aggregate amount. The phrase ``aggregate amount'' means the 
total amount of an award granted to one or more whistleblowers pursuant 
to Sec.  165.8.
    (c) Analysis. The term ``analysis'' means the whistleblower's 
examination and evaluation of information that may be generally 
available, but which reveals information that is not generally known or 
available to the public.
    (d) Collected by the Commission. The phrase ``collected by the 
Commission'' refers to any funds received, and confirmed by the U.S. 
Department of the Treasury, in satisfaction of part or all of a civil 
monetary penalty, disgorgement obligation, or fine owed to the 
Commission.
    (e) Covered judicial or administrative action. The phrase ``covered 
judicial or administrative action'' means any judicial or administrative 
action brought by the Commission under the Commodity Exchange Act whose 
successful resolution results in monetary sanctions exceeding 
$1,000,000.
    (f) Fund. The term ``Fund'' means the Commodity Futures Trading 
Commission Customer Protection Fund.
    (g) Independent knowledge. The phrase ``independent knowledge'' 
means factual information in the whistleblower's possession that is not 
generally known or available to the public. The whistleblower may gain 
independent knowledge from the whistleblower's experiences, 
communications and observations in the whistleblower's personal business 
or social interactions. The Commission will not consider the 
whistleblower's information to be derived from the whistleblower's 
independent knowledge if the whistleblower obtained the information:
    (1) From sources generally available to the public such as corporate 
filings and the media, including the Internet;
    (2) Through a communication that was subject to the attorney-client 
privilege, unless the disclosure is otherwise permitted by the 
applicable federal or state attorney conduct rules;
    (3) In connection with the legal representation of a client on whose 
behalf the whistleblower, or the whistleblower's employer or firm, have 
been providing services, and the whistleblower seek to use the 
information to make a whistleblower submission for the whistleblower's 
own benefit, unless disclosure is authorized by the applicable federal 
or state attorney conduct rules;
    (4) Because the whistleblower was an officer, director, trustee, or 
partner of an entity and another person informed the whistleblower of 
allegations of misconduct, or the whistleblower learned the information 
in connection with the entity's processes for identifying, reporting, 
and addressing possible violations of law;
    (5) Because the whistleblower was an employee whose principal duties 
involved compliance or internal audit responsibilities; or
    (6) By a means or in a manner that is determined by a United States 
court to violate applicable Federal or state criminal law.
    (7) Exceptions. Paragraphs (g)(4) and (5) of this section shall not 
apply if:
    (i) The whistleblower has a reasonable basis to believe that 
disclosure of the information to the Commission is necessary to prevent 
the relevant entity from engaging in conduct that is likely to cause 
substantial injury to the financial interest or property of the entity 
or investors;
    (ii) The whistleblower has a reasonable basis to believe that the 
relevant entity is engaging in conduct that will impede an investigation 
of the misconduct; or
    (iii) At least 120 days have elapsed since the whistleblower 
provided the information to the relevant entity's audit committee, chief 
legal officer, chief compliance officer (or their equivalents), or the 
whistleblower's supervisor, or since the whistleblower received the 
information, if the whistleblower received it under circumstances 
indicating that the entity's audit committee, chief legal officer, chief 
compliance officer (or their equivalents), or the whistleblower's 
supervisor was already aware of the information.
    (h) Independent analysis. The phrase ``independent analysis'' means 
the

[[Page 445]]

whistleblower's own analysis, whether done alone or in combination with 
others.
    (i) Information that led to successful enforcement. The Commission 
will consider that the whistleblower provided original information that 
led to the successful enforcement of a judicial or administrative 
action, or related action, in the following circumstances:
    (1) The whistleblower gave the Commission original information that 
was sufficiently specific, credible, and timely to cause the Commission 
staff to commence an examination, open an investigation, reopen an 
investigation that the Commission had closed, or to inquire concerning 
different conduct as part of a current examination or investigation, and 
the Commission brought a successful judicial or administrative action 
based in whole or in part on conduct that was the subject of the 
whistleblower's original information; or
    (2) The whistleblower gave the Commission original information about 
conduct that was already under examination or investigation by the 
Commission, the Congress, any other authority of the federal government, 
a state Attorney General or securities regulatory authority, any 
registered entity, registered futures association, or self-regulatory 
organization (as defined in section 3(a) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78c(a)), foreign futures authority, or the Public 
Company Accounting Oversight Board (except in cases where the 
whistleblower was an original source of this information as defined in 
paragraph (l) of this section), and the whistleblower's submission 
significantly contributed to the success of the action.
    (3) The whistleblower reported original information through an 
entity's internal whistleblower, legal, or compliance procedures for 
reporting allegations of possible violations of law before or at the 
same time the whistleblower reported them to the Commission; the entity 
later provided the whistleblower's information to the Commission, or 
provided results of an audit or investigation initiated in whole or in 
part in response to information the whistleblower reported to the 
entity; and the information the entity provided to the Commission 
satisfies either paragraph (i)(1) or (2) of this section. Under this 
paragraph (i)(3), the whistleblower must also submit the same 
information to the Commission in accordance with the procedures set 
forth in Sec.  165.3 within 180 days of providing it to the entity.
    (j) Monetary sanctions. The phrase ``monetary sanctions,'' when used 
with respect to any judicial or administrative action, or related 
action, means--
    (1) Any monies, including penalties, disgorgement, restitution, and 
interest ordered to be paid; and
    (2) Any monies deposited into a disgorgement fund or other fund 
pursuant to section 308(b) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7246(b)) as a result of such action or any settlement of such action.
    (k) Original information. The phrase ``original information'' means 
information that--
    (1) Is derived from the independent knowledge or independent 
analysis of a whistleblower;
    (2) Is not already known to the Commission from any other source, 
unless the whistleblower is the original source of the information;
    (3) Is not exclusively derived from an allegation made in a judicial 
or administrative hearing, in a governmental report, hearing, audit, or 
investigation, or from the news media, unless the whistleblower is a 
source of the information; and
    (4) Is submitted to the Commission for the first time after July 21, 
2010 (the date of enactment of the Wall Street Transparency and 
Accountability Act of 2010).
    (5) Original information shall not lose its status as original 
information solely because the whistleblower submitted such information 
prior to October 24, 2011, provided such information was submitted after 
July 21, 2010, the date of enactment of the Wall Street Transparency and 
Accountability Act of 2010. In order to be eligible for an award, a 
whistleblower who submits original information to the Commission after 
July 21, 2010, but prior to October 24, 2011, must comply with the 
procedure set forth in Sec.  165.3(d).
    (l) Original source. The whistleblower must satisfy the 
whistleblower's status

[[Page 446]]

as the original source of information to the Commission's satisfaction.
    (1) Information obtained from another source. The Commission will 
consider the whistleblower to be an ``original source'' of the same 
information that the Commission obtains from another source if the 
information the whistleblower provide satisfies the definition of 
original information and the other source obtained the information from 
the whistleblower or the whistleblower's representative.
    (i) In order to be considered an original source of information that 
the Commission receives from Congress, any other federal, state or local 
authority, a foreign futures authority, any registered entity, 
registered futures association, or any self-regulatory organization (as 
defined in section 3(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a)), the whistleblower must have voluntarily given such 
authorities the information within the meaning of this part. In 
determining whether the whistleblower is the original source of 
information, the Commission may seek assistance and confirmation from 
one of the other entities or authorities described in this paragraph 
(l)(1)(i).
    (ii) In the event that the whistleblower claims to be the original 
source of information that an authority or another entity, other than as 
set forth in paragraph (l)(1)(i) of this section, provided to the 
Commission, the Commission may seek assistance and confirmation from 
such authority or other entity.
    (2) Information first provided to another authority or person. If 
the whistleblower provides information to Congress, any other federal, 
state, or local authority, a foreign futures authority, a registered 
entity, a registered futures association, a self-regulatory organization 
(as defined in section 3(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a)), or to any of the persons described in paragraphs (g)(4) 
and (5) of this section, and the whistleblower, within 180 days, makes a 
submission to the Commission pursuant to Sec.  165.3, as the 
whistleblower must do in order for the whistleblower to be eligible to 
be considered for an award, then, for purposes of evaluating the 
whistleblower's claim to an award under Sec.  165.7, the Commission will 
consider that the whistleblower provided original information as of the 
date of the whistleblower's original disclosure, report, or submission 
to one of these other authorities or persons. The whistleblower must 
establish the whistleblower's status as the original source of such 
information, as well as the effective date of any prior disclosure, 
report, or submission, to the Commission's satisfaction. The Commission 
may seek assistance and confirmation from the other authority or person 
in making this determination.
    (3) Information already known by the Commission. If the Commission 
already knows some information about a matter from other sources at the 
time the whistleblower makes the whistleblower's submission, and the 
whistleblower is not an original source of that information, as 
described above, the Commission will consider the whistleblower an 
``original source'' of any information the whistleblower separately 
provides that is original information that materially adds to the 
information that the Commission already possesses.
    (m) Related action. The phrase ``related action,'' when used with 
respect to any judicial or administrative action brought by the 
Commission under the Commodity Exchange Act, means any judicial or 
administrative action brought by an entity listed in Sec.  165.11(a) 
that is based upon the original information voluntarily submitted by a 
whistleblower to the Commission pursuant to Sec.  165.3 that led to the 
successful resolution of the Commission action.
    (n) Successful resolution. The phrase ``successful resolution,'' 
when used with respect to any judicial or administrative action brought 
by the Commission under the Commodity Exchange Act, includes any 
settlement of such action or final judgment in favor of the Commission. 
It shall also have the same meaning as ``successful enforcement.''
    (o) Voluntary submission or voluntarily submitted. (1) The phrase 
``voluntary submission'' or ``voluntarily submitted'' within the context 
of submission of original information to the

[[Page 447]]

Commission under this part, shall mean the provision of information made 
prior to any request from the Commission, Congress, any other federal or 
state authority, the Department of Justice, a registered entity, a 
registered futures association, or a self-regulatory organization (as 
defined in section 3(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a)) to the whistleblower or anyone representing the 
whistleblower (such as an attorney) about a matter to which the 
information in the whistleblower's submission is relevant. If the 
Commission or any of these other authorities makes a request, inquiry, 
or demand to the whistleblower or the whistleblower's representative 
first, the whistleblower's submission will not be considered voluntary, 
and the whistleblower will not be eligible for an award, even if the 
whistleblower's response is not compelled by subpoena or other 
applicable law. For purposes of this paragraph (o), the whistleblower 
will be considered to have received a request, inquiry or demand if 
documents or information from the whistleblower is within the scope of a 
request, inquiry, or demand that the whistleblower's employer receives, 
unless, after receiving the documents or information from the 
whistleblower, the whistleblower's employer fails to provide the 
whistleblower's documents or information to the requesting authority in 
a timely manner.
    (2) In addition, the whistleblower's submission will not be 
considered voluntary if the whistleblower is under a pre-existing legal 
or contractual duty to report the violations that are the subject of the 
whistleblower's original information to the Commission, Congress, any 
other federal or state authority, the Department of Justice, a 
registered entity, a registered futures association, or a self-
regulatory organization (as defined in section 3(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a)), or a duty that arises out of a 
judicial or administrative order.
    (p) Whistleblower(s). (1) The term ``whistleblower'' or 
``whistleblowers'' means any individual, or two (2) or more individuals 
acting jointly, who provides information relating to a potential 
violation of the Commodity Exchange Act to the Commission, in the manner 
established by Sec.  165.3. A company or another entity is not eligible 
to be a whistleblower.
    (2) Prohibition against retaliation. The anti-retaliation 
protections under Section 23(h) of the Commodity Exchange Act apply 
whether or not the whistleblower satisfies the requirements, procedures 
and conditions to qualify for an award. For purposes of the anti-
retaliation protections afforded by Section 23(h)(1)(A)(i) of the 
Commodity Exchange Act, the whistleblower is a whistleblower if:
    (i) The whistleblower possess a reasonable belief that the 
information the whistleblower is providing relates to a possible 
violation of the CEA, or the rules or regulations thereunder, that has 
occurred, is ongoing, or is about to occur; and
    (ii) The whistleblower provides that information in a manner 
described in Sec.  165.3.

[76 FR 53200, Aug. 25, 2011, as amended at 82 FR 24497, May 30, 2017]



Sec.  165.3  Procedures for submitting original information.

    (a) A whistleblower will need to submit the whistleblower's 
information to the Commission. A whistleblower may submit the 
whistleblower's information:
    (1) By completing and submitting a Form TCR online and submitting it 
electronically through the Commission's Web site at http://www.cftc.gov, 
or the Commission's Whistleblower Program Web site at 
www.whistleblower.gov; or
    (2) By completing the Form TCR and mailing or faxing the form to the 
Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, 
DC 20581, Fax (202) 418-5975.
    (b) Further, to be eligible for an award, the whistleblower must 
declare under penalty of perjury at the time the whistleblower submits 
the whistleblower's information pursuant to paragraph (a)(1) or (2) of 
this section that the whistleblower's information is true and correct to 
the best of the whistleblower's knowledge and belief.

[[Page 448]]

    (c) Notwithstanding paragraph (b) of this section, if the 
whistleblower submitted the whistleblower's original information to the 
Commission anonymously, then the whistleblower's identity must be 
disclosed to the Commission and verified in a form and manner acceptable 
to the Commission consistent with the procedure set forth in Sec.  
165.7(c) prior to Commission's payment of any award.
    (d) If the whistleblower submitted original information in writing 
to the Commission after July 21, 2010 (the date of enactment of the Wall 
Street Transparency and Accountability Act of 2010) but before the 
effective date of these rules, the whistleblower will be eligible for an 
award only in the event that the whistleblower provided the original 
information to the Commission in a format or manner other than that 
described in paragraph (a) of this section, the whistleblower submits a 
completed Form TCR within 120 days of the effective date of these rules 
and otherwise follows the procedures set forth above in paragraphs (a) 
and (b) of this section.

[76 FR 53200, Aug. 25, 2011, as amended at 82 FR 24497, May 30, 2017]



Sec.  165.4  Confidentiality.

    (a) In general. Section 23(h)(2) of the Commodity Exchange Act 
requires that the Commission not disclose information that could 
reasonably be expected to reveal the identity of a whistleblower, except 
that the Commission may disclose such information in the following 
circumstances, in accordance with the Privacy Act of 1974 (5 U.S.C. 
552a):
    (1) When disclosure is required to a defendant or respondent in 
connection with a public proceeding that the Commission institutes or in 
another public proceeding that is filed by an authority to which the 
Commission provides the information, as described in paragraph (a)(2) of 
this section; or
    (2) When the Commission determines that it is necessary to 
accomplish the purposes of the Commodity Exchange Act and to protect 
customers, it may provide whistleblower information, without the loss of 
its status as confidential whistleblower information in the hands of the 
Commission, to: The Department of Justice; an appropriate department or 
agency of the Federal Government, acting within the scope of its 
jurisdiction; a registered entity, registered futures association, or a 
self-regulatory organization (as defined in section 3(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)); a State attorney 
general in connection with a criminal investigation; any appropriate 
State department or agency, acting within the scope of its jurisdiction; 
or a foreign futures authority; and, as set forth in section 23(h)(2)(C) 
of the Commodity Exchange Act, each such entity is required to maintain 
the information as confidential in accordance with the requirements of 
section 23(h)(2)(A) of the Commodity Exchange Act.
    (3) The Commission may make disclosures in accordance with the 
Privacy Act of 1974 (5 U.S.C. 552a).
    (b) Anonymous whistleblowers. A whistleblower may anonymously submit 
information to the Commission, however, the whistleblower must follow 
the procedures in Sec.  165.3(c) for submitting original information 
anonymously. Such whistleblower who anonymously submits information to 
the Commission must also follow the procedures in Sec.  165.7(c) in 
submitting to the Commission an application for a whistleblower award.

[76 FR 53200, Aug. 25, 2011, as amended at 82 FR 24497, May 30, 2017]



Sec.  165.5  Requirements for consideration of an award.

    (a) Subject to the eligibility requirements described in this part, 
the Commission will pay an award to one or more whistleblowers who:
    (1) Provide a voluntary submission to the Commission;
    (2) That contains original information; and
    (3) That leads to the successful resolution of a covered judicial or 
administrative action or successful enforcement of a Related Action or 
both; and
    (b) In order to be eligible, the whistleblower must:
    (1) Have voluntarily provided the Commission original information in 
the form and manner that the Commission requires in Sec.  165.3;

[[Page 449]]

    (2) Have submitted a claim in response to a Notice of Covered Action 
or a final judgment in a Related Action or both;
    (3) Provide the Commission, upon its staff's request, certain 
additional information, including:
    (i) Explanations and other assistance, in the manner and form that 
staff may request, in order that the staff may evaluate the use of the 
information submitted related to the whistleblower's application for an 
award;
    (ii) All additional information in the whistleblower's possession 
that is related to the subject matter of the whistleblower's submission 
related to the whistleblower's application for an award; and
    (iii) Testimony or other evidence acceptable to the staff relating 
to the whistleblower's eligibility for an award; and
    (4) If requested by the Whistleblower Office, enter into a 
confidentiality agreement in a form acceptable to the Whistleblower 
Office, including a provision that a violation of the confidentiality 
agreement may lead to the whistleblower's ineligibility to receive an 
award.
    (c) The Commission may, in its sole discretion, waive any procedural 
requirements based upon a showing of extraordinary circumstances.

[82 FR 24498, May 30, 2017]



Sec.  165.6  Whistleblowers ineligible for an award.

    (a) No award under Sec.  165.7 shall be made:
    (1) To any whistleblower who is, or was at the time the 
whistleblower acquired the original information submitted to the 
Commission, a member, officer, or employee of: the Commission; the Board 
of Governors of the Federal Reserve System; the Office of the 
Comptroller of the Currency; the Board of Directors of the Federal 
Deposit Insurance Corporation; the Director of the Office of Thrift 
Supervision; the National Credit Union Administration Board; the 
Securities and Exchange Commission; the Department of Justice; a 
registered entity; a registered futures association; a self-regulatory 
organization (as defined in section 3(a) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78c(a)); or a law enforcement organization;
    (2) To any whistleblower who is convicted of a criminal violation 
related to the judicial or administrative action for which the 
whistleblower otherwise could receive an award under Sec.  165.7;
    (3) To any whistleblower who submits information to the Commission 
that is based on the facts underlying the covered judicial or 
administrative action submitted previously by another whistleblower;
    (4) To any whistleblower who acquired the information the 
whistleblower gave the Commission from any of the individuals described 
in paragraphs (a)(1), (2), (3) or (6) of this section;
    (5) To any whistleblower who, in the whistleblower's submission, the 
whistleblower's other dealings with the Commission, or the 
whistleblower's dealings with another authority in connection with a 
related action, knowingly and willfully makes any false, fictitious, or 
fraudulent statement or representation, or uses any false writing or 
document, knowing that it contains any false, fictitious, or fraudulent 
statement or entry, or omitted any material fact, where, in the absence 
of such fact, other statements or representations made by the 
whistleblower would be misleading;
    (6) To any whistleblower who acquired the original information 
reported to the Commission as a result of the whistleblower's role as a 
member, officer or employee of either a foreign regulatory authority or 
law enforcement organization;
    (7) To any whistleblower who is, or was at the time the 
whistleblower acquired the original information submitted to the 
Commission, a member, officer, or employee of a foreign regulatory 
authority or law enforcement organization; or
    (8) To any whistleblower who acquired the original information the 
whistleblower gave the Commission from any other person with the intent 
to evade any provision of these rules.
    (b) Notwithstanding a whistleblower's ineligibility for an award for 
any reason set forth in paragraph (a) of this section, the whistleblower 
will remain eligible for the anti-retaliation

[[Page 450]]

protections set forth in Section 23(h)(1) of the Commodity Exchange Act.

[76 FR 53200, Aug. 25, 2011, as amended at 82 FR 24498, May 30, 2017]



Sec.  165.7  Procedures for award applications in Commission actions
and related actions, and Commission award determinations.

    (a) Whenever a Commission judicial or administrative action results 
in monetary sanctions totaling more than $1,000,000 (i.e., a covered 
judicial or administrative action) the Commission will publish on the 
Commission's Web site a ``Notice of Covered Action.'' Such Notice of 
Covered Action will be published subsequent to the entry of a final 
judgment or order that alone, or collectively with other judgments or 
orders previously entered in the Commission covered administrative or 
judicial action, exceeds $1,000,000 in monetary sanctions. The 
Commission will not contact whistleblower claimants directly as to 
Notices of Covered Actions; prospective claimants should monitor the 
Commission Web site for such Notices. A whistleblower claimant will have 
90 days from the date of the Notice of Covered Action to file a claim 
for an award based on that action, or the claim will be barred.
    (b)(1) To file a claim for a whistleblower award, the whistleblower 
must file Form WB-APP, Application for Award for Original Information 
Provided Pursuant to Section 23 of the Commodity Exchange Act. The 
whistleblower must sign this form as the claimant and submit it to the 
Commission by mail or fax to Commodity Futures Trading Commission, Three 
Lafayette Centre, 1155 21st Street NW., Washington, DC 20581, Fax (202) 
418-5975, or by completing and submitting the Form WB-APP online and 
submitting it electronically through the Commission's Web site at 
https://www.cftc.gov or the Commission's Whistleblower Program Web site 
at https://www.whistleblower.gov.
    (2) The Form WB-APP, including any attachments, must be received by 
the Commission within 90 calendar days of the date of the Notice of 
Covered Action or 90 calendar days following the date of a final 
judgment in a Related Action (or if the final judgment in a Related 
Action was issued prior to the action meeting the definition of Related 
Action, within 90 calendar days following the date the action satisfied 
the definition of Related Action, except in the circumstances described 
in paragraph (b)(3)(ii) of this section). One Form WB-APP may be filed 
in response to both a Notice of Covered Action and final judgment in a 
Related Action if the relevant time periods are applicable.
    (3) If a covered judicial or administrative action and Related 
Action have different final judgment dates or if there is no covered 
judicial or administrative action connected to a Related Action, a 
claimant, who wishes to file a claim for an award in both a covered 
judicial or administrative action and a Related Action, or in a Related 
Action that does not have a connected covered judicial or administrative 
action, must follow one of the following procedures depending on that 
claimant's particular situation.
    (i) If a final judgment imposing monetary sanctions in a Related 
Action has not been entered at the time the claimant submits a claim for 
an award in connection with a covered judicial or administrative action, 
the claimant must submit the claim for the Related Action on Form WB-APP 
within ninety (90) calendar days following the date of issuance of a 
final judgment in the Related Action.
    (ii) If a final judgment in a Related Action has been entered and a 
Notice of Covered Action for a related covered judicial or 
administrative action has not been published, a claimant for an award in 
both the covered judicial or administrative action and Related Action 
may submit the claims for both the Related Action and the covered 
judicial or administrative action within ninety (90) days of the date of 
the Notice of Covered Action. The claims may be submitted on the same 
Form WB-APP.
    (iii) If there is a final judgment in a Related Action that relates 
to a judicial or administrative action brought by the Commission under 
the Commodity Exchange Act that is not a covered judicial or 
administrative action, and therefore there is no Notice of Covered 
Action, a claimant for an award in

[[Page 451]]

connection with the Related Action must submit the claim in connection 
with the Related Action on Form WB-APP within ninety (90) calendar days 
following either:
    (A) The date of issuance of a final judgment in the Related Action, 
if that date is after the date of issuance of the final judgment in the 
related Commission judicial or administrative action; or
    (B) The date of issuance of the final judgment in the related 
Commission judicial or administrative action, i.e., the date the Related 
Action becomes a Related Action, if the date of issuance of the final 
judgment in the Related Action precedes the final judgment in the 
related Commission judicial or administrative action.
    (c) If the whistleblower provided the whistleblower's original 
information to the Commission anonymously pursuant to Sec. Sec.  165.3 
and 165.4 and:
    (1) The whistleblower is making the whistleblower's claim for a 
whistleblower award on a disclosed basis, the whistleblower must 
disclose the whistleblower's identity on the Form WB-APP. The 
whistleblower's identity must be verified in a form and manner that is 
acceptable to the Commission prior to the payment of any award; or
    (2) The whistleblower is making the whistleblower's claim for a 
whistleblower award on an anonymous basis, the whistleblower must be 
represented by counsel. The whistleblower must provide the 
whistleblower's counsel with a completed Form WB-APP that is signed by 
the whistleblower by no later than the date upon which the 
whistleblower's counsel submits to the Commission a copy of the Form WB-
APP that does not disclose the whistleblower's identity and is signed 
solely by the whistleblower's counsel. In addition, the whistleblower's 
counsel must retain the signed original of the whistleblower's Form WB-
APP in counsel's records. Upon request of the Commission staff, 
whistleblower's counsel must produce to the Commission the 
whistleblower's signed original WB-APP and the whistleblower's identity 
must be verified in a form and manner that is acceptable to the 
Commission prior to the payment of any award.
    (d) A claimant may withdraw a Form WB-APP by submitting a written 
request to the Whistleblower Office at any time during the review 
process.
    (e)(1) The Whistleblower Office may issue a Proposed Final 
Disposition for award applications that do not relate to a Notice of 
Covered Action, a final judgment in a Related Action, or a previously 
filed Form TCR without presentation of the award claim to the staff 
designated by the Director of the Division of Enforcement under Sec.  
165.15(a)(2) (``Claims Review Staff''). In such instances, the 
Whistleblower Office will inform the award claimant in writing that the 
claim does not relate to a Notice of Covered Action, a final judgment in 
a Related Action, or a previously filed Form TCR and will be rejected 
unless the claimant provides additional information. The claimant will 
have 30 days from the date of the written notice to respond and to 
correct the identified deficiencies. If the claimant does not respond in 
30 days or if the response does not include information showing that the 
WB-APP relates to a Notice of Covered Action, a final judgment in a 
Related Action, or a previously filed Form TCR the Whistleblower Office 
will issue a Proposed Final Disposition. The claimant's failure to 
submit a timely response to the written notice from the Whistleblower 
Office will constitute a failure to exhaust administrative remedies, and 
the claimant will be prohibited from pursuing an appeal under Sec.  
165.13.
    (2) The Whistleblower Office will notify the Claims Review Staff of 
any Proposed Final Disposition under this paragraph (e). Within thirty 
(30) calendar days thereafter, any member of the Claims Review Staff may 
request that the Proposed Final Disposition be reviewed by the Claims 
Review Staff. If no member of the Claims Review Staff requests such a 
review within the 30-day period, then the Proposed Final Disposition 
will become the Final Order of the Commission. In the event that a 
member of the Claims Review Staff requests a review, the Claims Review 
Staff will review the record that the Whistleblower Office relied upon 
in making its determination and either remand to the Whistleblower 
Office for further action or issue a Final Order of

[[Page 452]]

the Commission, which could consist of the Proposed Final Disposition.
    (f)(1) In connection with each individual covered judicial or 
administrative action or final judgment in a Related Action, for which 
an award application is submitted, once the time for filing any appeals 
of the covered judicial or administrative action or the final judgment 
in the Related Action has expired (or, where an appeal is filed of the 
covered judicial or administrative action, or the final judgment in a 
Related Action, as applicable, and concluded), the Claims Review Staff 
designated under Sec.  165.15(a)(2) will evaluate all timely 
whistleblower award claims submitted on Form WB-APP in response to a 
Notice of Covered Action, referenced in paragraph (a) of this section, 
or final judgment in a Related Action in accordance with the criteria 
set forth in this part.
    (2) The Whistleblower Office may require that the claimant provide 
additional information relating to the claimant's eligibility for an 
award or satisfaction of any of the conditions for an award, as set 
forth in Sec.  165.5(b)(2). The Whistleblower Office may also request 
additional information from the claimant in connection with the claim 
for an award in a Related Action to demonstrate that the claimant 
directly (or through the Commission) voluntarily provided the 
governmental agency, regulatory authority or self-regulatory 
organization the original information that led to the Commission's 
successful covered action, and that the information provided by the 
claimant led to the successful enforcement of the Related Action. The 
Whistleblower Office may also, in its discretion, seek assistance and 
confirmation from the other agency in making this determination.
    (g)(1) Following Claims Review Staff evaluation, the Claims Review 
Staff will issue a Preliminary Determination setting forth a preliminary 
assessment as to whether the claim should be granted or denied and, if 
granted, setting forth the proposed award percentage amount. The 
Whistleblower Office will send a copy of the Preliminary Determination 
to the claimant.
    (2) The claimant may contest the Preliminary Determination made by 
the Claims Review Staff by submitting a written response to the 
Whistleblower Office setting forth the grounds for the claimant's 
objection to either the denial of an award or the proposed amount of an 
award. The response must be in the form and manner that the 
Whistleblower Office shall require. The claimant may also include 
documentation or other evidentiary support for the grounds advanced in 
the claimant's response. The claimant may also request a meeting with 
the Whistleblower Office within the timeframes provided in this 
paragraph (g), however such meetings are not required, and the 
Whistleblower Office may in its sole discretion deny the request.
    (i) Before determining whether to contest a Preliminary 
Determination, the claimant may, within thirty (30) days of the date of 
the Preliminary Determination, request that the Whistleblower Office 
make available for the claimant's review the materials from among those 
set forth in Sec.  165.10 that formed the basis of the Claims Review 
Staff's Preliminary Determination.
    (ii) If the claimant decides to contest the Preliminary 
Determination, the claimant must submit the claimant's written response 
and supporting materials setting forth the grounds for the claimant's 
objection to either the denial of an award or the proposed amount of an 
award within sixty (60) calendar days of the date of the Preliminary 
Determination, or if a request to review materials used to make a 
Preliminary Determination is made pursuant to paragraph (g)(2)(i) of 
this section, then within sixty (60) calendar days of the Whistleblower 
Office making those materials available for the claimant's review. The 
claimant also may request a meeting with the Whistleblower Office within 
those same sixty (60) calendar days. However, such meetings are not 
required and the Whistleblower Office may in its sole discretion decline 
the request.
    (h) If the claimant fails to submit a timely response pursuant to 
paragraph (g) of this section, then the Preliminary Determination will 
become the Final Order of the Commission (except where the Preliminary 
Determination recommended an award, in which case the Preliminary 
Determination will be

[[Page 453]]

deemed a Proposed Final Determination for purposes of paragraph (j) of 
this section). The claimant's failure to submit a timely response 
contesting a Preliminary Determination will constitute a failure to 
exhaust administrative remedies, and the claimant will be prohibited 
from pursuing an appeal under Sec.  165.13.
    (i) If the claimant submits a timely response under paragraph (g) of 
this section, then the Claims Review Staff will consider the issues and 
grounds advanced in the claimant's response, along with any supporting 
documentation the claimant provided, and will make its Proposed Final 
Determination.
    (j) The Whistleblower Office will notify the Commission of each 
Proposed Final Determination. Within thirty (30) calendar days 
thereafter, any Commissioner may request that the Proposed Final 
Determination be reviewed by the Commission. If no Commissioner requests 
such a review within the 30-day period, then the Proposed Final 
Determination will become the Final Order of the Commission. In the 
event a Commissioner requests a review, the Commission will review the 
record that the staff relied upon in making its determinations, 
including the claimant's submissions to the Whistleblower Office, and 
issue its Final Order.
    (k) A Preliminary Determination, Proposed Final Disposition, or a 
Proposed Final Determination may be issued only after a review for legal 
sufficiency by the Office of the General Counsel.
    (l) The Office of the Secretariat will serve the claimant with the 
Final Order of the Commission.

[76 FR 53200, Aug. 25, 2011, as amended at 82 FR 24498, May 30, 2017]



Sec.  165.8  Amount of award.

    If all of the conditions are met for a whistleblower award in 
connection with a covered judicial or administrative action or a related 
action, the Commission will then decide the amount of the award pursuant 
to the procedure set forth in Sec.  165.7.
    (a) Whistleblower awards shall be in an aggregate amount equal to--
    (1) Not less than 10 percent, in total, of what has been collected 
of the monetary sanctions imposed in the covered judicial or 
administrative action or related actions; and
    (2) Not more than 30 percent, in total, of what has been collected 
of the monetary sanctions imposed in the covered judicial or 
administrative action or related actions.
    (b) If the Commission makes awards to more than one whistleblower in 
connection with the same action or related action, the Commission will 
determine an individual percentage award for each whistleblower, but in 
no event will the total amount awarded to all whistleblowers as a group 
be less than 10 percent or greater than 30 percent of the amount the 
Commission or the other authorities collect.



Sec.  165.9  Criteria for determining amount of award.

    The determination of the amount of an award shall be in the 
discretion of the Commission. This discretion shall be exercised as 
prescribed by Sec.  165.7.
    (a) In determining the amount of an award, the Commission shall take 
into consideration--
    (1) The significance of the information provided by the 
whistleblower to the success of the covered judicial or administrative 
action or related action;
    (2) The degree of assistance provided by the whistleblower and any 
legal representative of the whistleblower in a covered judicial or 
administrative action or related action;
    (3) The programmatic interest of the Commission in deterring 
violations of the Commodity Exchange Act by making awards to 
whistleblowers who provide information that leads to the successful 
enforcement of such laws;
    (4) Whether the award otherwise enhances the Commission's ability to 
enforce the Commodity Exchange Act, protect customers, and encourage the 
submission of high quality information from whistleblowers; and
    (5) Potential adverse incentives from oversize awards.
    (b) Factors that may increase the amount of a whistleblower's award. 
In determining whether to increase the amount of an award, the 
Commission will consider the following factors,

[[Page 454]]

which are not listed in order of importance.
    (1) Significance of the information provided by the whistleblower. 
The Commission will assess the significance of the information provided 
by a whistleblower to the success of the Commission action or related 
action. In considering this factor, the Commission may take into 
account, among other things:
    (i) The nature of the information provided by the whistleblower and 
how it related to the successful enforcement action, including whether 
the reliability and completeness of the information provided to the 
Commission by the whistleblower resulted in the conservation of 
Commission resources; and
    (ii) The degree to which the information provided by the 
whistleblower supported one or more successful claims brought in the 
Commission action or related action.
    (2) Assistance provided by the whistleblower. The Commission will 
assess the degree of assistance provided by the whistleblower and any 
legal representative of the whistleblower in the Commission action or 
related action. In considering this factor, the Commission may take into 
account, among other things:
    (i) Whether the whistleblower provided ongoing, extensive, and 
timely cooperation and assistance by, for example, helping to explain 
complex transactions, interpreting key evidence, or identifying new and 
productive lines of inquiry;
    (ii) The timeliness of the whistleblower's initial report to the 
Commission or to an internal compliance or reporting system of business 
organizations committing, or impacted by, the violations of the 
Commodity Exchange Act, where appropriate;
    (iii) The resources conserved as a result of the whistleblower's 
assistance;
    (iv) Whether the whistleblower appropriately encouraged or 
authorized others to assist the staff of the Commission who might 
otherwise not have participated in the investigation or related action;
    (v) The efforts undertaken by the whistleblower to remediate the 
harm caused by the violations of the Commodity Exchange Act, including 
assisting the authorities in the recovery of the fruits and 
instrumentalities of the violations; and
    (vi) Any unique hardships experienced by the whistleblower as a 
result of his or her reporting and assisting in the enforcement action.
    (3) Law enforcement interest. The Commission will assess its 
programmatic interest in deterring violations of the Commodity Exchange 
Act by making awards to whistleblowers who provide information that 
leads to the successful enforcement of such laws. In considering this 
factor, the Commission may take into account, among other things:
    (i) The degree to which an award enhances the Commission's ability 
to enforce the commodity laws;
    (ii) The degree to which an award encourages the submission of high 
quality information from whistleblowers by appropriately rewarding 
whistleblower submissions of significant information and assistance, 
even in cases where the monetary sanctions available for collection are 
limited or potential monetary sanctions were reduced or eliminated by 
the Commission because an entity self-reported a commodities violation 
following the whistleblower's related internal disclosure, report, or 
submission;
    (iii) Whether the subject matter of the action is a Commission 
priority, whether the reported misconduct involves regulated entities or 
fiduciaries, whether the whistleblower exposed an industry-wide 
practice, the type and severity of the commodity violations, the age and 
duration of misconduct, the number of violations, and the isolated, 
repetitive, or ongoing nature of the violations;
    (iv) The dangers to market participants or others presented by the 
underlying violations involved in the enforcement action, including the 
amount of harm or potential harm caused by the underlying violations, 
the type of harm resulting from or threatened by the underlying 
violations, and the number of individuals or entities harmed; and
    (v) The degree, reliability and effectiveness of the whistleblower's 
assistance, including the consideration of the whistleblower's complete, 
timely truthful assistance to the Commission and criminal authorities.

[[Page 455]]

    (4) Participation in internal compliance systems. The Commission 
will assess whether, and the extent to which, the whistleblower and any 
legal representative of the whistleblower participated in internal 
compliance systems. In considering this factor, the Commission may take 
into account, among other things:
    (i) Whether, and the extent to which, a whistleblower reported the 
possible Commodity Exchange Act violations through internal 
whistleblower, legal or compliance procedures before, or at the same 
time as, reporting them to the Commission; and
    (ii) Whether, and the extent to which, a whistleblower assisted any 
internal investigation or inquiry concerning the reported Commodity 
Exchange Act violations.
    (c) Factors that may decrease the amount of a whistleblower's award. 
In determining whether to decrease the amount of an award, the 
Commission will consider the following factors, which are not listed in 
order of importance.
    (1) Culpability. The Commission will assess the culpability or 
involvement of the whistleblower in matters associated with the 
Commission's action or related actions. In considering this factor, the 
Commission may take into account, among other things:
    (i) The whistleblower's role in the Commodity Exchange Act 
violations;
    (ii) The whistleblower's education, training, experience, and 
position of responsibility at the time the violations occurred;
    (iii) Whether the whistleblower acted with scienter, both generally 
and in relation to others who participated in the violations;
    (iv) Whether the whistleblower financially benefitted from the 
violations;
    (v) Whether the whistleblower is a recidivist;
    (vi) The egregiousness of any wrongdoing committed by the 
whistleblower; and
    (vii) Whether the whistleblower knowingly interfered with the 
Commission's investigation of the violations or related enforcement 
actions.
    (2) Unreasonable reporting delay. The Commission will assess whether 
the whistleblower unreasonably delayed reporting the Commodity Exchange 
Act violations. In considering this factor, the Commission may take into 
account, among other things:
    (i) Whether the whistleblower was aware of the relevant facts but 
failed to take reasonable steps to report or prevent the violations from 
occurring or continuing;
    (ii) Whether the whistleblower was aware of the relevant facts but 
only reported them after learning about a related inquiry, 
investigation, or enforcement action; and
    (iii) Whether there was a legitimate reason for the whistleblower to 
delay reporting the violations.
    (3) Interference with internal compliance and reporting systems. The 
Commission will assess, in cases where the whistleblower interacted with 
his or her entity's internal compliance or reporting system, whether the 
whistleblower undermined the integrity of such system. In considering 
this factor, the Commission will take into account whether there is 
evidence provided to the Commission that the whistleblower knowingly:
    (i) Interfered with an entity's established legal, compliance, or 
audit procedures to prevent or delay detection of the reported Commodity 
Exchange Act violation;
    (ii) Made any material false, fictitious, or fraudulent statements 
or representations that hindered an entity's efforts to detect, 
investigate, or remediate the reported Commodity Exchange Act 
violations; or
    (iii) Provided any false writing or document knowing the writing or 
document contained any false, fictitious or fraudulent statements or 
entries that hindered an entity's efforts to detect, investigate, or 
remediate the reported Commodity Exchange Act violations.
    (d) The Commission shall not take into consideration the balance of 
the Fund in determining the amount of an award.

[76 FR 53200, Aug. 25, 2011, as amended at 82 FR 24500, May 30, 2017]



Sec.  165.10  Contents of record for award determination.

    (a) The following items constitute the record upon which the award 
determination under Sec.  165.7 shall be made:

[[Page 456]]

    (1) The whistleblower's Form TCR, ``Tip, Complaint or Referral,'' 
including related attachments, and other documentation provided by the 
whistleblower to the Commission;
    (2) The whistleblower's Form WB-APP, ``Application for Award for 
Original Information Provided Pursuant to Section 23 of the Commodity 
Exchange Act,'' and related attachments;
    (3) The complaint, notice of hearing, answers and any amendments 
thereto;
    (4) The final judgment, consent order, or administrative speaking 
order;
    (5) The transcript of the related administrative hearing or civil 
injunctive proceeding, including any exhibits entered at the hearing or 
proceeding;
    (6) Any other documents that appear on the docket of the proceeding;
    (7) Sworn declarations (including attachments) from the Commission's 
Division of Enforcement staff regarding any matters relevant to the 
award determination;
    (8) With respect to an award claim involving a Related Action, any 
statements or other information that an entity provides or identifies in 
connection with an award determination, provided the entity has 
authorized the Commission to share the information with the claimant. 
(Neither the Commission nor the Claims Review Staff may rely upon 
information that the entity has not authorized the Commission to share 
with the applicant); and
    (9) Any other documents or materials including sworn declarations 
from third-parties that are received or obtained by the Whistleblower 
Office to assist the Commission resolve the applicant's award 
application, including information related to the claimant's 
eligibility. (Neither the Commission nor the Claims Review Staff may 
rely upon information that a third party has not authorized the 
Commission to share with the claimant).
    (b) The rules in this part do not entitle a claimant to obtain from 
the Commission any materials (including any pre-decisional or internal 
deliberative process materials that are prepared to assist the 
Commission or Claims Review Staff in deciding the claim) other than 
those listed in paragraph (a) of this section. The Whistleblower Office 
may make redactions as necessary to comply with any statutory 
restrictions, to protect the Commission's law enforcement and regulatory 
functions, and to comply with requests for confidential treatment from 
other law enforcement and regulatory authorities.

[76 FR 53200, Aug. 25, 2011, as amended at 82 FR 24500, May 30, 2017]



Sec.  165.11  Awards based upon related actions.

    (a) Provided that a whistleblower or whistleblowers comply with the 
requirements in Sec. Sec.  165.3, 165.5 and 165.7, and pursuant to Sec.  
165.8, the Commission may grant an award based on the amount of monetary 
sanctions collected in a ``Related Action'' or ``Related Actions'', 
where:
    (1) A ``Related Action'' is a judicial or administrative action that 
is brought by:
    (i) The Department of Justice;
    (ii) An appropriate department or agency of the Federal Government, 
acting within the scope of its jurisdiction;
    (iii) A registered entity, registered futures association, or self-
regulatory organization (as defined in section 3(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a));
    (iv) A State criminal or appropriate civil agency, acting within the 
scope of its jurisdiction; or
    (v) A foreign futures authority; and
    (2) The ``Related Action'' is based on the original information that 
the whistleblower voluntarily submitted to the Commission and led to a 
successful resolution of the Commission judicial or administrative 
action.
    (b) The Commission will not make an award to a claimant for a final 
judgment in a Related Action if the claimant has already been granted an 
award by the Securities and Exchange Commission (SEC) for that same 
action pursuant to its whistleblower award program under section 21F of 
the Securities Exchange Act (15 U.S.C. 78a et seq.). If the SEC has 
previously denied

[[Page 457]]

an award to the claimant for a judgment in a Related Action, the 
whistleblower will be precluded from relitigating any issues before the 
Commission that the SEC resolved against the claimant as part of the 
award denial.

[82 FR 24500, May 30, 2017]



Sec.  165.12  Payment of awards from the Fund, financing of customer
education initiatives, and deposits and credits to the Fund.

    (a) The Commission shall pay awards to whistleblowers from the Fund.
    (b) The Commission shall deposit into or credit to the Fund:
    (1) Any monetary sanctions collected by the Commission in any 
covered judicial or administrative action that is not otherwise 
distributed, or ordered to be distributed, to victims of a violation of 
the Commodity Exchange Act underlying such action, unless the balance of 
the Fund at the time the monetary sanctions are collected exceeds 
$100,000,000. In the event the Fund's value exceeds $100,000,000, any 
monetary sanctions collected by the Commission in a covered judicial or 
administrative action that is not otherwise distributed, or ordered to 
be distributed, to victims of violations of the Commodity Exchange Act 
or the rules and regulations thereunder underlying such action, shall be 
deposited into the general fund of the U.S. Treasury.
    (2) In the event that the amounts deposited into or credited to the 
Fund under paragraph (b)(1) of this section are not sufficient to 
satisfy an award made pursuant to Sec.  165.7, then, pursuant to Section 
23(g)(3)(B) of the Commodity Exchange Act;
    (i) An amount equal to the unsatisfied portion of the award;
    (ii) Shall be deposited into or credited to the Fund;
    (iii) From any monetary sanction collected by the Commission in any 
judicial or administrative action brought by the Commission under the 
Commodity Exchange Act, regardless of whether it qualifies as a 
``covered judicial or administrative action''; provided, however, that 
such judicial or administrative action is based on information provided 
by a whistleblower.
    (c) Office of Customer Education and Outreach. The Commission shall 
undertake and maintain customer education initiatives through its Office 
of Customer Education and Outreach. The initiatives shall be designed to 
help customers protect themselves against fraud or other violations of 
the Commodity Exchange Act, or the rules or regulations thereunder. The 
Commission shall fund the initiatives and may utilize funds deposited 
into the Fund during any fiscal year in which the beginning (October 1) 
balance of the Fund is greater than $10,000,000. The Commission shall 
budget, on an annual basis, the amount used to finance customer 
education initiatives, taking into consideration the balance of the 
Fund.

[76 FR 53200, Aug. 25, 2011, as amended at 82 FR 24500, May 30, 2017]



Sec.  165.13  Appeals.

    (a) Any Final Order of the Commission relating to a whistleblower 
award determination, including whether, to whom, or in what amount to 
make whistleblower awards, may be appealed to the appropriate court of 
appeals of the United States not more than 30 days after the Final Order 
of the Commission is issued, provided that administrative remedies have 
been exhausted.
    (b) The record on appeal shall consist of:
    (1) The Contents of Record for Award Determinations, as set forth in 
Sec.  165.10. The record on appeal shall not include any pre-decisional 
or internal deliberative process materials that are prepared to assist 
the Commission or the Claims Review Staff in deciding the claim 
(including staff's draft Preliminary Determination or any Proposed Final 
Determination or staff's draft final determination); and
    (2) The Preliminary Determination and the Final Order of the 
Commission, as set forth in Sec.  165.7.

[82 FR 24500, May 30, 2017]



Sec.  165.14  Procedures applicable to the payment of awards.

    (a) A recipient of a whistleblower award is entitled to payment on 
the award only to the extent that the monetary sanction upon which the 
award is based is collected in the Commission

[[Page 458]]

judicial or administrative action or in a related action.
    (b) Payment of a whistleblower award for a monetary sanction 
collected in a Commission action or related action shall be made within 
a reasonable time following the later of:
    (1) The date on which the monetary sanction is collected; or
    (2) The completion of the appeals process for all whistleblower 
award claims arising from:
    (i) The Notice of Covered Action, in the case of any payment of an 
award for a monetary sanction collected in a covered judicial or 
administrative action; or
    (ii) The related action, in the case of any payment of an award for 
a monetary sanction collected in a related action.
    (c) If there are insufficient amounts available in the Fund to pay 
the entire amount of an award payment within a reasonable period of time 
from the time for payment specified by paragraph (b) of this section, 
then subject to the following terms, the balance of the payment shall be 
paid when amounts become available in the Fund, as follows:
    (1) Where multiple whistleblowers are owed payments from the Fund 
based on awards that do not arise from the same Notice of Covered Action 
(or related action), priority in making these payments will be 
determined based upon the date that the Final Order of the Commission is 
made. If two or more of these Final Orders of the Commission are entered 
on the same date, then those whistleblowers owed payments will be paid 
on a pro rata basis until sufficient amounts become available in the 
Fund to pay their entire payments.
    (2) Where multiple whistleblowers are owed payments from the Fund 
based on awards that arise from the same Notice of Covered Action (or 
related action), they will share the same payment priority and will be 
paid on a pro rata basis until sufficient amounts become available in 
the Fund to pay their entire payments.



Sec.  165.15  Administering the whistleblower program.

    (a) Specific authorities--(1) Payments, deposits, and credits. The 
Executive Director is authorized to deposit into or credit collected 
monetary sanctions to the Fund, and to make payment of awards therefrom, 
with the concurrence of the General Counsel and the Director of the 
Division of Enforcement, or of their respective designees.
    (2) Designation of claims review staff. The Claims Review Staff 
referenced in Sec.  165.7 shall be composed of no fewer than three and 
no more than five staff members from any of the Commission's Offices or 
Divisions (except the Office of General Counsel) who have not had direct 
involvement in the underlying enforcement action, as designated by the 
Director of the Division of Enforcement in consultation with the 
Executive Director. The Claims Review Staff will always include at least 
one staff member who does not work in the Division of Enforcement.
    (3) Disclosure of whistleblower identifying information. The 
Director of the Division of Enforcement is authorized on behalf of the 
Commission to exercise its discretion to disclose whistleblower 
identifying information under Sec.  165.4(a).
    (b) General authority to administer the program. The Director of the 
Division of Enforcement shall have general authority to administer the 
whistleblower program except as otherwise provided under this part.

[82 FR 24501, May 30, 2017]



Sec.  165.16  No immunity.

    The Commodity Whistleblower Incentives and Protections provisions 
set forth in Section 23(h) of Commodity Exchange Act and this part 165 
do not provide individuals who provide information to the Commission 
with immunity from prosecution. The fact that an individual may become a 
whistleblower and assist in Commission investigations and enforcement 
actions does not preclude the Commission from bringing an action against 
the whistleblower based upon the whistleblower's own conduct in 
connection with violations of the Commodity Exchange Act and the 
Commission's regulations. If such

[[Page 459]]

an action is determined to be appropriate, however, the Commission's 
Division of Enforcement will take the whistleblower's cooperation into 
consideration in accordance with its sanction recommendations to the 
Commission.



Sec.  165.17  Awards to whistleblowers who engage in culpable conduct.

    In determining whether the required $1,000,000 threshold has been 
satisfied for purposes of making any award, the Commission will not take 
into account any monetary sanctions that the whistleblower is ordered to 
pay, or that is ordered against any entity whose liability is based 
primarily on conduct that the whistleblower principally directed, 
planned, or initiated. Similarly, if the Commission determines that a 
whistleblower is eligible for an award, any amounts that the 
whistleblower or such an entity pay in sanctions as a result of the 
action or related actions will not be included within the calculation of 
the amounts collected for purposes of making payments pursuant to Sec.  
165.14.



Sec.  165.18  Staff communications with whistleblowers from represented
entities.

    If the whistleblower is a whistleblower who is a director, officer, 
member, agent, or employee of an entity that has counsel, and the 
whistleblower has initiated communication with the Commission relating 
to a potential violation of the Commodity Exchange Act, the Commission's 
staff is authorized to communicate directly with the whistleblower 
regarding the subject of the whistleblower's communication without 
seeking the consent of the entity's counsel.



Sec.  165.19  Nonenforceability of certain provisions waiving rights 
and remedies or requiring arbitration of disputes.

    (a) Non-waiver. The rights and remedies provided for in this part 
may not be waived by any agreement, policy, form, or condition of 
employment, including by a predispute arbitration agreement. No 
predispute arbitration agreement shall be valid or enforceable if the 
agreement requires arbitration of a dispute arising under this part.
    (b) Protected communications. No person may take any action to 
impede an individual from communicating directly with the Commission's 
staff about a possible violation of the Commodity Exchange Act, 
including by enforcing, or threatening to enforce, a confidentiality 
agreement or predispute arbitration agreement with respect to such 
communications.

[82 FR 24501, May 30, 2017]



Sec.  165.20  Whistleblower anti-retaliation protections.

    (a) In general. No employer may discharge, demote, suspend, directly 
or indirectly threaten or harass, or in any other manner discriminate 
against, a whistleblower in the terms and conditions of employment 
because of any lawful act done by the whistleblower--
    (1) In providing information to the Commission in accordance with 
this part; or
    (2) In assisting in any investigation or judicial or administrative 
action of the Commission based upon or related to such information.
    (b) Anti-retaliation enforcement. Section 23(h)(1)(A) of the 
Commodity Exchange Act (7 U.S.C. 26(h)(1)), including the rules in this 
part promulgated thereunder, shall be enforceable in an action or 
proceeding brought by the Commission including where retaliation is in 
response to a whistleblower providing information to the Commission 
after reporting the information through internal whistleblower, legal or 
compliance procedures.
    (c) Protections apply regardless of non-qualification. The anti-
retaliation protections apply whether or not the whistleblower satisfies 
the requirements, procedures, and conditions to qualify for an award.

[82 FR 24501, May 30, 2017]



Sec. Appendix A to Part 165--Guidance With Respect to the Protection of 
                   Whistleblowers Against Retaliation

    (a) In general. Section 23(h)(1) of Commodity Exchange Act prohibits 
employers from engaging in retaliation against whistleblowers. A 
violation of this provision could be addressed by a Commission 
enforcement action, or a lawsuit by an individual. Section

[[Page 460]]

23(h)(1)(B) provides for a federal cause of action brought by the 
whistleblower against the employer, which must be filed in the 
appropriate district court of the United States within two (2) years of 
the employer's retaliatory act, and potential relief for prevailing 
whistleblowers, including reinstatement, back pay, and compensation for 
other expenses, including reasonable attorney's fees.
    (b) Enforcement--(1) Private cause of action. (i) An individual who 
alleges discharge, demotion, suspension, direct or indirect threats or 
harassment, or any other manner of discrimination in violation of 
section 23(h)(1)(A) of the Commodity Exchange Act may bring an action 
under section 23(h)(1)(B) of the Commodity Exchange Act in the 
appropriate district court of the United States for the relief provided 
in section 23(h)(1)(C) of the Commodity Exchange Act, unless the 
individual who is alleging discharge or other discrimination in 
violation of section 23(h)(1)(A) of the Commodity Exchange Act is an 
employee of the Federal Government, in which case the individual shall 
only bring an action under section 1221 of title 5, United States Code.
    (ii) Subpoenas. A subpoena requiring the attendance of a witness at 
a trial or hearing conducted under section 23(h)(1)(B)(ii) of the 
Commodity Exchange Act may be served at any place in the United States.
    (iii) Statute of limitations. A private cause of action under 
section 23(h)(1)(B) of the Commodity Exchange Act may not be brought 
more than 2 years after the date on which the violation reported in 
section 23(h)(1)(A) of the Commodity Exchange Act is committed.
    (iv) Relief. Relief for an individual prevailing in an action 
brought under section 23(h)(1)(B) of the Commodity Exchange Act shall 
include--
    (A) Reinstatement with the same seniority status that the individual 
would have had, but for the discrimination;
    (B) The amount of back pay otherwise owed to the individual, with 
interest; and
    (C) Compensation for any special damages sustained as a result of 
the discharge or discrimination, including litigation costs, expert 
witness fees, and reasonable attorney's fees.
    (2) Commission authority to bring action. The Commission may bring 
an enforcement action against an employer that retaliates against a 
whistleblower by discharge, demotion, suspension, direct or indirect 
threats or harassment, or any other manner of discrimination.

[82 FR 24501, May 30, 2017]

[[Page 461]]



          Sec. Appendix B to Part 165--Form TCR and Form WP-APP
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                          Submission Procedures

    Questions concerning this form may be directed to Commodity Futures 
Trading Commission, Whistleblower Office, Three Lafayette Centre, 1155 
21st Street NW., Washington, DC 20581.
     If you are submitting information for the CFTC's 
whistleblower award program, you must submit your information using this 
Form TCR.
     You may submit this form electronically, through 
the Web portal found on the CFTC's Web site at http://
www.whistleblower.gov. You may also print this form and submit it by 
mail to Commodity Futures Trading Commission, Whistleblower Office, 
Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581, or 
by facsimile to (202) 418-5975.
     You have the right to submit information 
anonymously. If you do not submit anonymously, please note that the CFTC 
is required by law to maintain the confidentiality of any information 
which could reasonably identify you, and will only reveal such 
information in limited and specifically-defined circumstances. See 7 
U.S.C. 26(h)(2); 17 CFR 165.4. However, in order to receive a 
whistleblower award, you will need to be identified to select CFTC staff 
for a final eligibility determination, and in unusual circumstances, you 
may need to be identified publicly for trial. You should therefore 
provide some means for the CFTC's staff to contact you, such as a 
telephone number or an email address.

                  Instructions for Completing Form TCR

                                 General

    All references to ``you'' and ``your'' are intended to mean the 
complainant.

                    Section A: Tell Us About Yourself

    Questions 1-14: Please provide the following information about 
yourself:
[ballot] last name, first name and middle initial;
[ballot] complete address, including city, state and zip code;
[ballot] telephone number and, if available, an alternate number where 
          you can be reached;
[ballot] your email address (to facilitate communications, we strongly 
          encourage you to provide an email address, especially if you 
          are filing anonymously);
[ballot] your preferred method of communication; and
[ballot] your occupation.

                 Section B: Your Attorney's Information

    Complete this section only if you are represented by an attorney in 
this matter.
    Questions 1-10: Provide the following information about your 
attorney:
[ballot] attorney's name;
[ballot] firm name;
[ballot] complete address, including city, state and zip code;
[ballot] telephone number and fax number; and
[ballot] email address.

            Section C: Tell Us Who You Are Complaining About

    Question 1-2: Choose one of the following that best describes the 
individual's profession or the type of entity to which your complaint 
relates:
    For Individuals: accountant, analyst, associated person, attorney, 
auditor, broker, commodity trading advisor,

[[Page 473]]

commodity pool operator, compliance officer, employee, executing broker, 
executive officer or director, financial planner, floor broker, floor 
trader, trader, unknown or other (specify).
    For Entities: bank, commodity pool, commodity pool operator, 
commodity trading advisor, futures commission merchant, hedge fund, 
introducing broker, major swap participant, retail foreign exchange 
dealer, swap dealer, unknown or other (specify).
Questions 3-12: For each individual and/or entity, provide the following 
    information, if known:
[ballot] full name;
[ballot] complete address, including city, state and zip code;
[ballot] telephone number;
[ballot] email address; and
[ballot] internet address, if applicable.
    Questions 13: If the firm or individual you are complaining about 
has custody or control of your investment, identify whether you have had 
difficulty contacting that firm or individual.
    Question 14: Identify if you are, or were, associated with the 
individual or firm you are complaining about. If yes, describe how you 
are, or were, associated with the individual or firm you are complaining 
about.
    Question 15: Identify the initial form of contact between you and 
the person against whom you are filing this complaint.

                 Section D: Tell Us About Your Complaint

    Question 1: State the date (mm/dd/yyyy) that the alleged conduct 
occurred or began.
    Question 2: Identify if the conduct is on-going.
    Question 3: Choose the option that you believe best describes the 
nature of your complaint. If you are alleging more than one violation, 
please list all that you believe may apply.
    Question 4: Select the type of product or instrument you are 
complaining about.
    Question 5: If applicable, please name the product or instrument. If 
yes, please describe.
    Question 6: Identify whether you have suffered a monetary loss. If 
yes, please describe.
    Question 7: Identify if the individual or firm you are complaining 
about acknowledged their fault.
    Question 8: Indicate whether you have taken any other action 
regarding your complaint, including whether you complained to the CFTC, 
another regulator, a law enforcement agency, or any other agency or 
organization, or initiated legal action, mediation, arbitration or any 
other action.
    If you answered yes, provide details, including the date on which 
you took the action(s) described, the name of the person or entity to 
whom you directed any report or complaint, and contact information for 
the person or entity, if known, and the complete case name, case number 
and forum of any legal action you have taken.
    Question 9: State in detail all facts pertinent to the alleged 
violation. Explain why you believe the facts described constitute a 
violation of the Commodity Exchange Act.
    Question 10: Describe all supporting materials in your possession 
and the availability and location of any additional supporting materials 
not in your possession.

                    Section E: Whistleblower Program

    Question 1: Describe how you obtained the information that supports 
your allegations. If any information was obtained from an attorney or in 
a communication where an attorney was present, identify such information 
with as much particularity as possible. In addition, if any information 
was obtained from a public source, identify the source with as much 
particularity as possible.
    Question 2: Identify any documents or other information in your 
submission on this Form TCR that you believe could reasonably be 
expected to reveal your identity. Explain the basis for your belief that 
your identity would be revealed if the documents or information were 
disclosed to a third party.
    Question 3: State whether you or your attorney have had any prior 
communication(s) with the CFTC concerning this matter.
    If you answered ``yes'', identify the CFTC staff member(s) with whom 
you or your attorney communicated.

[[Page 474]]

    Question 4: Indicate whether you or your attorney have provided the 
information you are providing to the CFTC to any other agency or 
organization, or whether any other agency or organization has requested 
the information or related information from you.
    If you answered ``yes'', provide details and the name and contact 
information of the point of contact at the other agency or organization, 
if known.
    Question 5: Indicate whether your complaint relates to an entity of 
which you are, or were in the past, an officer, director, counsel, 
employee, consultant or contractor.
    If you answered ``yes'', state whether you have reported this 
violation to your supervisor, compliance office, whistleblower hotline, 
ombudsman, or any other available mechanism at the entity for reporting 
violations. Please provide details, including the date on which you took 
the action.
    Question 6: Indicate whether you have taken any other action 
regarding your complaint, including whether you complained to the CFTC, 
another regulator, a law enforcement agency, or any other agency or 
organization, or initiated legal action, mediation, arbitration or any 
other action.
    If you answered ``yes'', provide details, including the date on 
which you took the action(s) described, the name of the person or entity 
to whom you directed any report or complaint, and contact information 
for the person or entity, if known, and the complete case name, case 
number and forum of any legal action you have taken.
    Question 7: Provide any additional information you think may be 
relevant.

 Section F: Whistleblower Eligibility Requirements and Other Information

    Question 1: State whether you are currently, or were at the time 
that you acquired the original information that you are submitting to 
the CFTC, a member, officer or employee of: The CFTC; the Board of 
Governors of the Federal Reserve System; the Office of the Comptroller 
of the Currency; the Board of Directors of the Federal Deposit Insurance 
Corporation; the Director of the Office of Thrift Supervision; the 
National Credit Union Administration Board; the Securities and Exchange 
Commission; the Department of Justice; a registered entity; a registered 
futures association; a self-regulatory organization (as defined in 3(a) 
of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)); a law 
enforcement organization; or a foreign regulatory authority or law 
enforcement organization.
    Question 2: State whether you are providing the information pursuant 
to a cooperation agreement with the CFTC or with another agency or 
organization.
    Question 3: State whether you are providing this information before 
you (or anyone representing you) received any request, inquiry or demand 
that relates to the subject matter of this submission (i) from the CFTC, 
(ii) in connection with an investigation, inspection or examination by 
any registered entity, registered futures association or self-regulatory 
organization (as defined in 3(a) of the Securities Exchange Act of 1934 
(15 U.S.C. 78c(a)), or (iii) in connection with an investigation by the 
Congress, or any other federal or state authority.
    Question 4: State whether you are currently a subject or target of a 
criminal investigation, or whether you have been convicted of a criminal 
violation, in connection with the information you are submitting to the 
CFTC.
    Question 5: State whether you acquired the information you are 
providing to the CFTC from any individual described in Questions 1 
through 4 of this section.
    Question 6: If you answered yes to any of Questions 1 through 5, 
please provide details.

        Section G: Privacy Notice and Whistleblower's Declaration

    You must sign this Declaration if you are submitting this 
information pursuant to the CFTC whistleblower program and wish to be 
considered for an award. If you are submitting your information using 
the electronic version of Form TCR through the CFTC's web portal, you 
must check the box to agree with the declaration. If you are submitting 
your information anonymously, you must still sign this

[[Page 475]]

Declaration (using the term ``anonymous'') or check the box as 
appropriate, and, if you are represented by an attorney, you must 
provide your attorney with the original of this signed form, or maintain 
a copy for your own records.

                    Section H: Counsel Certification

    If you are submitting this information pursuant to the CFTC 
whistleblower program and you are doing so anonymously through an 
attorney, your attorney must sign the Counsel Certification Section. If 
your attorney is submitting your information using the electronic 
version of Form TCR through the CFTC's web portal, he/she must check the 
box to agree with the certification. If you are represented in this 
matter but you are not submitting your information pursuant to the CFTC 
whistleblower program, your attorney does not need to sign this 
Certification or check the box.

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                          Privacy Act Statement

    This notice is given under the Privacy Act of 1974. The Privacy Act 
requires that the Commodity Futures Trading Commission (CFTC) inform 
individuals of the following when asking for information. The 
solicitation of this information is authorized under the Commodity 
Exchange Act, 7 U.S.C. 1 et seq. The information provided will enable 
the CFTC to determine the whistleblower award claimant's eligibility for 
payment of an award pursuant to Section 23 of the Commodity Exchange Act 
and Part 165 of the CFTC's regulations. This information will be used to 
investigate and prosecute violations of the Commodity Exchange Act and 
the CFTC's regulations. This information may be disclosed to federal, 
state, local or foreign agencies or other authorities responsible for 
investigating, prosecuting, enforcing or implementing laws, rules or 
regulations implicated by the information consistent with the 
confidentiality requirements set forth in Section 23 of the Commodity 
Exchange Act and Part 165 of the CFTC's regulations. The information 
will be maintained and additional disclosures may be made in accordance 
with System of Records Notices CFTC-49, ``Whistleblower Records'' 
(exempted), CFTC-10, ``Investigatory Records'' (exempted), and CFTC-16, 
``Enforcement Case Files.'' The CFTC requests the last four digits of 
the claimant's Social Security Number for use as an individual 
identifier to administer and manage the whistleblower award program. 
Executive Order 9397 (November 22, 1943) allows federal agencies to use 
the Social Security Number as an individual identifier. Furnishing the 
information is voluntary. However, if an individual is providing 
information for the whistleblower award program, not providing required 
information may result in the individual not being eligible for award 
consideration.
    Questions concerning this form may be directed to Commodity Futures 
Trading Commission, Whistleblower Office, Three Lafayette Centre, 1155 
21st Street NW., Washington, DC 20581.

                          Submission Procedures

     This form must be used by persons making a claim 
for a whistleblower

[[Page 481]]

award in connection with information provided to the CFTC, or to another 
agency or organization in a related action. In order to be deemed 
eligible for an award, you must meet all the requirements set forth in 
Section 23 of the Commodity Exchange Act and Part 165 of the CFTC's 
regulations.
     You must sign the Form WB-APP as the claimant. If 
you wish to submit the Form WB-APP anonymously, you must do so through 
an attorney, your attorney must sign the Counsel Certification Section 
of the Form WB-APP that is submitted to the CFTC, and you must give your 
attorney your original signed Form WB-APP so that it can be produced to 
the CFTC upon request.
     During the whistleblower award claim process, 
your identity must be verified in a form and manner that is acceptable 
to the CFTC prior to the payment of any award.
    [cir] If you are filing your claim in connection with information 
that you provided to the CFTC, then your Form WB-APP, and any 
attachments thereto, must be received by the CFTC within ninety (90) 
days of the date of the Notice of Covered Action, or the date of a final 
judgment in a related action to which the claim relates.
    [cir] If you are filing your claim in connection with information 
that you provided to another agency or organization in a related action, 
then your Form WB-APP, and any attachments thereto, must be received by 
the CFTC as follows:
     If a final order imposing monetary sanctions has 
been entered in a related action at the time that you submit your claim 
for an award in connection with a CFTC action, you may submit your claim 
for an award in that related action on the same Form WB-APP that you use 
for the CFTC action.
     If a final order imposing monetary sanctions in a 
related action has not been entered at the time that you submit your 
claim for an award in connection with a CFTC action, you must submit 
your claim on Form WB-APP within ninety (90) days of the issuance of a 
final order imposing sanctions in the related action.
     If a final order imposing monetary sanctions in a 
related action relates to a judicial or administrative action brought by 
the Commission under the Commodity Exchange Act that is not a covered 
judicial or administrative action, and therefore there would not be a 
Notice of Covered Action, you must submit your claim on Form WB-APP for 
an award in connection with the related action within ninety (90) 
calendar days following either (1) the date of issuance of a final order 
in the related action, if that date is after the date of issuance of the 
final judgment in the related Commission judicial or administrative 
action; or (2) the date of issuance of the final judgment in the related 
Commission judicial or administrative action, i.e., the date the related 
action becomes a related action, if the date of issuance of the final 
order in the related action precedes the final judgment in the related 
Commission judicial or administrative action.
     To submit your Form WB-APP, you may print it and 
either submit it by mail to Commodity Futures Trading Commission, 
Whistleblower Office, Three Lafayette Centre, 1155 21st Street NW., 
Washington, DC 20581, or by facsimile to (202) 418-5975. You also may 
submit this form electronically, through the web portal found on the 
CFTC's Web site at http://www.cftc.gov, which is also accessible from 
the CFTC Whistleblower Program Web site at www.whistleblower.gov.

                 Instructions for Completing Form WB-APP

                                 General

    All references to ``you'' and ``your'' are intended to mean the 
whistleblower award claimant.

                    Section A: Tell Us About Yourself

Questions 1-3: Please provide the following information about yourself:
     last name, first name, middle initial and the 
last four digits of your Social Security Number;
     complete address, including city, state and zip 
code;
     telephone number and, if available, an alternate 
number where you can be reached; and

[[Page 482]]

     your email address (to facilitate communications, 
we strongly encourage you to provide an email address, especially if you 
are making your claim anonymously).

                 Section B: Your Attorney's Information

    Complete this section only if you are represented by an attorney in 
this matter.Questions 1-4: Provide the following information about your 
attorney:
     attorney's name;
     firm name;
     complete address, including city, state and zip 
code;
     telephone number and fax number; and
     email address.

             Section C: Tell Us About Your Tip or Complaint

    Question 1a: Indicate the manner in which you submitted your 
original information to the CFTC.
    Question 1b: Provide the date on which you submitted your original 
information to the CFTC.
    Question 2a: State whether you filed a CFTC Form TCR.
    Question 2b: If you filed a CFTC Form TCR, provide the Form's 
number.
    Question 2c: If you filed a CFTC Form TCR, provide the date on which 
you filed the Form.
    Question 3: Provide the name(s) of the individual(s) and/or 
entity(s) to which your tip or complaint relates.

                   Section D: Notice of Covered Action

    The process for making a claim for a whistleblower award for a CFTC 
action begins with the publication of a ``Notice of Covered Action'' on 
the CFTC's Web site. This Notice is published whenever a judicial or 
administrative action brought by the CFTC results in the imposition of 
monetary sanctions exceeding $1,000,000. The Notice is published on the 
CFTC's Web site subsequent to the entry of a final judgment or order in 
the action that by itself, or collectively with other judgments or 
orders previously entered in the action, exceeds the $1,000,000 
threshold required for a whistleblower to be potentially eligible for an 
award. The CFTC will not contact whistleblower claimants directly as to 
Notices of Covered Actions; prospective claimants should monitor the 
CFTC Web site for such Notices.
    Question 1: Provide the date of the Notice of Covered Action to 
which this claim relates.
    Question 2: Provide the notice number of the Notice of Covered 
Action.
    Question 3a: Provide the case name referenced in the Notice of 
Covered Action.
    Question 3b: Provide the case number referenced in the Notice of 
Covered Action.

             Section E: Claims Pertaining to Related Actions

    Question 1: Provide the name of the agency or organization to which 
you provided your information.
    Question 2: Provide the name and contact information for your point 
of contact at the agency or organization, if known.
    Question 3a: Provide the date on which you provided your information 
to the agency or organization referenced in Question 1 of this section.
    Question 3b: Provide the date on which the agency or organization 
referenced in Question 1 of this section filed the related action that 
was based upon the information that you provided.
    Question 4a: Provide the case name of the related action.
    Question 4b: Provide the case number of the related action.

        Section F: Eligibility Requirements and Other Information

    Question 1: State whether you are currently, or were at the time 
that you acquired the original information that you submitted to the 
CFTC, a member, officer or employee of: The CFTC; the Board of Governors 
of the Federal Reserve System; the Office of the Comptroller of the 
Currency; the Board of Directors of the Federal Deposit Insurance 
Corporation; the Director of the Office of Thrift Supervision; the 
National Credit Union Administration Board; the Securities and Exchange 
Commission; the Department of Justice; a registered entity; a registered 
futures association; a self-regulatory

[[Page 483]]

organization; a law enforcement organization; or a foreign regulatory 
authority or law enforcement organization.
    Question 2: State whether you provided the information that you 
submitted to the CFTC pursuant to a cooperation agreement with the CFTC, 
or with any other agency or organization.
    Question 3: State whether you provided this information before you 
(or anyone representing you) received any request, inquiry or demand 
that relates to the subject matter of your submission (i) from the CFTC, 
(ii) in connection with an investigation, inspection or examination by 
any registered entity, registered futures association or self-regulatory 
organization, or (iii) in connection with an investigation by the 
Congress, or any other federal or state authority.
    Question 4: State whether you are currently a subject or target of a 
criminal investigation, or whether you have been convicted of a criminal 
violation, in connection with the information that you submitted to the 
CFTC and upon which your application for an award is based.
    Question 5: State whether you acquired the information that you 
provided to the CFTC from any individual described in Questions 1 
through 4 of this section.
    Question 6: If you answered yes to any of Questions 1 through 5 of 
this section, please provide details.

                     Section G: Entitlement to Award

    This section is optional. Use this section to explain the basis for 
your belief that you are entitled to an award in connection with your 
submission of information to the CFTC, or to another agency in 
connection with a related action. Specifically, address why you believe 
that you voluntarily provided the CFTC with original information that 
led to the successful enforcement of a judicial or administrative action 
filed by the CFTC, or a related action. Refer to Sec.  165.9 of the 
CFTC's regulations for further information concerning the relevant award 
criteria.
    Section 23(c)(1)(B) of the Commodity Exchange Act and Sec.  165.9(a) 
of the CFTC's regulations require the CFTC to consider the following 
factors in determining the amount of an award: (1) The significance of 
the information provided by a whistleblower to the success of the CFTC 
action or related action; (2) the degree of assistance provided by the 
whistleblower and any legal representative of the whistleblower in the 
CFTC action or related action; (3) the programmatic interest of the CFTC 
in deterring violations of the Commodity Exchange Act (including 
regulations under the Act) by making awards to whistleblowers who 
provide information that leads to the successful enforcement of such 
laws; (4) whether the award otherwise enhances the CFTC's ability to 
enforce the Commodity Exchange Act, protect customers, and encourage the 
submission of high quality information from whistleblowers; and (5) 
potential adverse incentives from oversize awards. Address these factors 
in your response as well.

                    Section H: Claimant's Declaration

    You must sign this Declaration if you are submitting this claim 
pursuant to the CFTC whistleblower program and wish to be considered for 
an award. If you are submitting your claim anonymously, you must do so 
through an attorney, and you must provide your attorney with your 
original signed Form WB-APP.

                    Section I: Counsel Certification

    If you are submitting this claim pursuant to the CFTC whistleblower 
program anonymously, you must do so through an attorney, and your 
attorney must sign the Counsel Certification Section.

[82 FR 24501, May 30, 2017]



PART 166_CUSTOMER PROTECTION RULES--Table of Contents



Sec.
166.1 Definitions.
166.2 Authorization to trade.
166.3 Supervision.
166.4 Branch offices.
166.5 Dispute settlement procedures.

    Authority: 7 U.S.C. 1a, 2, 6b, 6c, 6d, 6g, 6h, 6k, 6l, 6o, 7, 12a, 
21, and 23, as amended by the Commodity Futures Modernization Act of 
2000, appendix E of Pub. L. 106-554, 114 Stat. 2763 (2000).

[[Page 484]]



Sec.  166.1  Definitions.

    (a) The term Commission registrant as used in this part means any 
person who is registered or required to be registered with the 
Commission pursuant to the Act or any rule, regulation, or order 
thereunder.
    (b) [Reserved]
    (c) The term customer as used in this part means any person trading, 
intending to trade, or receiving or seeking advice concerning any 
commodity interest, including any existing or prospective client or 
subscriber of a commodity trading advisor or existing or prospective 
participant in a commodity pool, but the term does not include a person 
who is acting in the capacity of a Commission registrant with respect to 
the trade.
    (d) The term commodity account as used in this part means the 
account of a customer in which any commodity interest is, or is intended 
to be, traded.

[43 FR 31886, July 24, 1978, as amended at 46 FR 54535, Nov. 3, 1981; 52 
FR 29003, Aug. 5, 1987; 72 FR 63979, Nov. 14, 2007]



Sec.  166.2  Authorization to trade.

    No futures commission merchant, retail foreign exchange dealer, 
introducing broker or any of their associated persons may directly or 
indirectly effect a transaction in a commodity interest for the account 
of any customer unless before the transaction the customer, or person 
designated by the customer to control the account:
    (a) With respect to a commodity interest as defined in any paragraph 
of the commodity interest definition in Sec.  1.3 of this chapter, 
specifically authorized the futures commission merchant, retail foreign 
exchange dealer, introducing broker or any of their associated persons 
to effect the transaction (a transaction is ``specifically authorized'' 
if the customer or person designated by the customer to control the 
account specifies--
    (1) The precise commodity interest to be purchased or sold; and
    (2) The exact amount of the commodity interest to be purchased or 
sold); or
    (b) With respect to a commodity interest as defined in paragraph (1) 
or (2) of the commodity interest definition in Sec.  1.3 of this 
chapter, authorized in writing the futures commission merchant, 
introducing broker or any of their associated persons to effect 
transactions in commodity interests for the account without the 
customer's specific authorization; Provided, however, That if any such 
futures commission merchant, introducing broker or any of their 
associated persons is also authorized to effect transactions in foreign 
futures or foreign options without the customer's specific 
authorization, such authorization must be expressly documented.

[75 FR 55451, Sept. 10, 2010, as amended at 77 FR 66349, Nov. 2, 2012; 
83 FR 7997, Feb. 23, 2018]



Sec.  166.3  Supervision.

    Each Commission registrant, except an associated person who has no 
supervisory duties, must diligently supervise the handling by its 
partners, officers, employees and agents (or persons occupying a similar 
status or performing a similar function) of all commodity interest 
accounts carried, operated, advised or introduced by the registrant and 
all other activities of its partners, officers, employees and agents (or 
persons occupying a similar status or performing a similar function) 
relating to its business as a Commission registrant.

[48 FR 35304, Aug. 3, 1983]



Sec.  166.4  Branch offices.

    Each branch office of each Commission registrant must use the name 
of the firm of which it is a branch for all purposes, and must hold 
itself out to the public under such name. The act, omission or failure 
of any person acting for the branch office, within the scope of his 
employment or office, shall be deemed the act, omission or failure of 
the Commission registrant as well as of such person.

[48 FR 35304, Aug. 3, 1983]



Sec.  166.5  Dispute settlement procedures.

    (a) Definitions. (1) The term claim or grievance as used in this 
section shall mean any dispute that:
    (A) Arises out of any transaction executed on or subject to the 
rules of a designated contract market,

[[Page 485]]

    (B) Is executed or effected through a member of such facility, a 
participant transacting on or through such facility or an employee of 
such facility, and
    (C) Does not require for adjudication the presence of essential 
witnesses or third parties over whom the facility does not have 
jurisdiction and who are not otherwise available.
    (ii) Arises out of any retail forex transaction (as defined in Sec.  
5.1(m) of this chapter).
    (2) The term customer as used in this section includes any person 
for or on behalf of whom a member of a designated contract market, or a 
participant transacting on or through such designated contract market, 
effects a transaction on such contract market, except another member of 
or participant in such designated contract market. Provided, however, a 
person who is an ``eligible contract participant'' as defined in section 
1a(18) of the Act shall not be deemed to be a customer within the 
meaning of this section.
    (3) The term Commission registrant as used in this section means a 
person registered under the Act as a futures commission merchant, retail 
foreign exchange dealer, introducing broker, floor broker, commodity 
pool operator, commodity trading advisor, or associated person.
    (b) Voluntariness. The use by customers of dispute settlement 
procedures shall be voluntary as provided in paragraphs (c) and (g) of 
this section.
    (c) Customers. No Commission registrant shall enter into any 
agreement or understanding with a customer in which the customer agrees, 
prior to the time a claim or grievance arises, to submit such claim or 
grievance to any settlement procedure except as follows:
    (1) Signing the agreement must not be made a condition for the 
customer to utilize the services offered by the Commission registrant.
    (2) If the agreement is contained as a clause or clauses of a 
broader agreement, the customer must separately endorse the clause or 
clauses containing the cautionary language and provisions specified in 
this section. A futures commission merchant or introducing broker may 
obtain such endorsement as provided in Sec.  1.55(d) of this chapter for 
the following classes of customers only:
    (i) A plan defined as a government plan or church plan in section 
3(32) or section 3(33) of title I of the Employee Retirement Income 
Security Act of 1974 or a foreign person performing a similar role or 
function subject as such to comparable foreign regulation; and
    (ii) A person who is a ``qualified eligible participant'' or a 
``qualified eligible client'' as defined in Sec.  4.7 of this chapter.
    (3) The agreement may not require any customer to waive the right to 
seek reparations under section 14 of the Act and part 12 of this 
chapter. Accordingly, such customer must be advised in writing that he 
or she may seek reparations under section 14 of the Act by an election 
made within 45 days after the Commission registrant notifies the 
customer that arbitration will be demanded under the agreement. This 
notice must be given at the time when the Commission registrant notifies 
the customer of an intention to arbitrate. The customer must also be 
advised that if he or she seeks reparations under section 14 of the Act 
and the Commission declines to institute reparations proceedings, the 
claim or grievance will be subject to the pre-existing arbitration 
agreement and must also be advised that aspects of the claim or 
grievance that are not subject to the reparations procedure (i.e., do 
not constitute a violation of the Act or rules thereunder) may be 
required to be submitted to the arbitration or other dispute settlement 
procedure set forth in the pre-existing arbitration agreement.
    (4) The agreement must advise the customer that, at such time as he 
or she may notify the Commission registrant that he or she intends to 
submit a claim to arbitration, or at such time as such person notifies 
the customer of its intent to submit a claim to arbitration, the 
customer will have the opportunity to elect a qualified forum for 
conducting the proceeding.
    (5) Election of forum. (i) Within ten business days after receipt of 
notice from the customer that he or she intends to submit a claim to 
arbitration, or at the time a Commission registrant notifies the 
customer of its intent to

[[Page 486]]

submit a claim to arbitration, the Commission registrant must provide 
the customer with a list of organizations whose procedures meet 
Acceptable Practices established by the Commission for dispute 
resolution, together with a copy of the rules of each forum listed. The 
list must include:
    (A) The designated contract market, if applicable and if available, 
upon which the transaction giving rise to the dispute was executed or 
could have been executed;
    (B) A registered futures association; and
    (C) At least one other organization that will provide the customer 
with the opportunity to select the location of the arbitration 
proceeding from among several major cities in diverse geographic regions 
and that will provide the customer with the choice of a panel or other 
decision-maker composed of at least one or more persons, of which at 
least a majority are not members or associated with a member of the 
designated contract market, if applicable, or employee thereof, and that 
are not otherwise associated with the designated contract market (mixed 
panel), if applicable: Provided, however, that the list of qualified 
organizations provided by a Commission registrant that is a floor broker 
need not include a registered futures association unless a registered 
futures association has been authorized to act as a decision-maker in 
such matters.
    (ii) The customer shall, within forty-five days after receipt of 
such list, notify the opposing party of the organization selected. A 
customer's failure to provide such notice shall give the opposing party 
the right to select an organization from the list.
    (6) Fees. The agreement must acknowledge that the Commission 
registrant will pay any incremental fees that may be assessed by a 
qualified forum for provision of a mixed panel, unless the arbitrators 
in a particular proceeding determine that the customer has acted in bad 
faith in initiating or conducting that proceeding.
    (7) Cautionary Language. The agreement must include the following 
language printed in large boldface type:

    Three Forums Exist for the Resolution of Commodity Disputes: Civil 
Court litigation, reparations at the Commodity Futures Trading 
Commission (CFTC) and arbitration conducted by a self-regulatory or 
other private organization.
    The CFTC recognizes that the opportunity to settle disputes by 
arbitration may in some cases provide many benefits to customers, 
including the ability to obtain an expeditious and final resolution of 
disputes without incurring substantial costs. The CFTC requires, 
however, that each customer individually examine the relative merits of 
arbitration and that your consent to this arbitration agreement be 
voluntary.
    By signing this agreement, you: (1) May be waiving your right to sue 
in a court of law; and (2) are agreeing to be bound by arbitration of 
any claims or counterclaims which you or [name] may submit to 
arbitration under this agreement. You are not, however, waiving your 
right to elect instead to petition the CFTC to institute reparations 
proceedings under Section 14 of the Commodity Exchange Act with respect 
to any dispute that may be arbitrated pursuant to this agreement. In the 
event a dispute arises, you will be notified if [name] intends to submit 
the dispute to arbitration. If you believe a violation of the Commodity 
Exchange Act is involved and if you prefer to request a section 14 
``Reparations'' proceeding before the CFTC, you will have 45 days from 
the date of such notice in which to make that election.
    You need not sign this agreement to open or maintain an account with 
[name]. See 17 CFR 166.5.

    (d) Enforceability. A dispute settlement procedure may require 
parties utilizing such procedure to agree, under applicable state law, 
submission agreement or otherwise, to be bound by an award rendered in 
the procedure, provided that the agreement to submit the claim or 
grievance to the procedure was made in accordance with paragraph (c) or 
(g) of this section or that the agreement to submit the claim or 
grievance was made after the claim or grievance arose. Any award so 
rendered shall be enforceable in accordance with applicable law.
    (e) Time limits for submission of claims. The dispute settlement 
procedure established by a designated contract market shall not include 
any unreasonably short limitation period foreclosing submission of 
customers' claims or grievances or counterclaims.
    (f) Counterclaims. A procedure established by a designated contract 
market under the Act for the settlement of customers' claims or 
grievances against a member or employee thereof

[[Page 487]]

may permit the submission of a counterclaim in the procedure by a person 
against whom a claim or grievance is brought. The designated contract 
market may permit such a counterclaim where the counterclaim arises out 
of the transaction or occurrence that is the subject of the customer's 
claim or grievance and does not require for adjudication the presence of 
essential witnesses, parties, or third persons over whom the designated 
contract market does not have jurisdiction. Other counterclaims arising 
out of a transaction subject to the Act and rules promulgated thereunder 
for which the customer utilizes the services of the registrant may be 
permissible where the customer and the registrant have agreed in advance 
to require that all such submissions be included in the proceeding, and 
if the aggregate monetary value of the counterclaims is capable of 
calculation.
    (g) Eligible contract participants. A person who is an ``eligible 
contract participant'' as defined in section 1a(12) of the Act may 
negotiate any term of an agreement or understanding with a Commission 
registrant in which the eligible contract participant agrees, prior to 
the time a claim or grievance arises, to submit such claim or grievance 
to any settlement procedure provided for in the agreement.

[66 FR 42287, Aug. 10, 2001, as amended at 75 FR 55451, Sept. 10, 2010; 
77 FR 66349, Nov. 2, 2012]



PART 170_REGISTERED FUTURES ASSOCIATIONS--Table of Contents



  Subpart A_Standards Governing Commission Review of Applications for 
    Registration as a Futures Association Under Section 17 of the Act

Sec.
170.1 Demonstration of purposes (section 17(b)(1) of the Act).
170.2 Membership restrictions (section 17(b)(2) of the Act).
170.3 Fair and equitable representation of members (section 17(b)(5) of 
          the Act).
170.4 Allocation of dues (section 17(b)(6) of the Act).
170.5 Prevention of fraudulent and manipulative practices (section 
          17(b)(7) of the Act).
170.6 Disciplinary proceedings (sections 17(b)(8) and (b)(9) of the 
          Act).
170.7 Membership denial (section 17(b)(9) of the Act).
170.8 Settlement of customer disputes (section 17(b)(10) of the Act).
170.9 General standard.
170.10 Proficiency examinations (sections 4p and 17(p) of the Act).

Subpart B_Registration Statement of Futures Associations to be Submitted 
                            to the Commission

170.11 Form of registration statement; review of registration statement.
170.12 Delegation of Authority to Director of the Division of Swap 
          Dealer and Intermediary Oversight.

        Subpart C_Membership in a Registered Futures Association

170.15 Futures commission merchants.
170.16 Swap dealers and major swap participants.
170.17 Introducing brokers, commodity pool operators, and commodity 
          trading advisors.

    Authority: 7 U.S.C. 6d, 6m, 6p, 6s, 12a, and 21.

    Source: 44 FR 20651, Apr. 6, 1979, unless otherwise noted.



  Subpart A_Standards Governing Commission Review of Applications for 
    Registration as a Futures Association Under Section 17 of the Act



Sec.  170.1  Demonstration of purposes (section 17(b)(1) of the Act).

    A futures association must demonstrate that it will be able to carry 
out the purposes of section 17 of the Act. Since a basic purpose of a 
futures association is to regulate the practices of its members, an 
association should demonstrate that it will require its members to 
adhere to regulatory requirements governing their business practices at 
least as stringent as those imposed by the Commission. For example, the 
association should be prepared to establish and maintain in accordance 
with Sec.  1.52 of this chapter, a financial compliance program for 
those members of the association who are futures commission merchants.

[[Page 488]]



Sec.  170.2  Membership restrictions (section 17(b)(2) of the Act).

    If it appears to the Commission to be necessary or appropriate in 
the public interest and to carry out the purposes of section 17 of the 
Act, a futures association may restrict its membership to individuals 
registered by the Commission in a particular capacity or to individuals 
doing business in a particular geographical region or to firms having a 
particular level of capital assets or which engage in a specified amount 
of business per year.

[48 FR 35305, Aug. 3, 1983]



Sec.  170.3  Fair and equitable representation of members
(section 17(b)(5) of the Act).

    A futures association must assure fair and equitable representation 
of the views and interests of all association members in the procedures 
providing for the adoption, amendment or repeal of any association rule, 
in an association's procedure for the selection of association officers 
and directors and in all other phases of the association's affairs and 
activities, including disciplinary and membership hearings. No single 
group or class of association members shall dominate or otherwise 
exercise disproportionate influence on any governing board of an 
association or on any disciplinary or membership panel of such an 
association. Non-members of the association shall be represented 
wherever practicable on any board or hearing panel of the association.



Sec.  170.4  Allocation of dues (section 17(b)(6) of the Act).

    Dues imposed on members of a futures association must be allocated 
equitably among members and may not be structured in a manner 
constituting a barrier to entry of any person seeking to engage in 
commodity-related business activities.



Sec.  170.5  Prevention of fraudulent and manipulative practices
(section 17(b)(7) of the Act).

    A futures association must establish and maintain a program for the 
protection of customers and option customers, including the adoption of 
rules to protect customers and option customers and customer funds and 
to promote fair dealing with the public. These rules shall set forth the 
ethical standards for members of the association in their business 
dealings with the public. An applicant association must also demonstrate 
its capability to foster a professional atmosphere among its members, 
including an acceptance of an adherence to the ethical standards, and to 
monitor and enforce compliance with the customer and option customer 
protection program and rules.

(Secs. 2(a)(1), 4c(a)-(d), 4d, 4f, 4g, 4k, 4m, 4n, 8a, 15 and 17, 
Commodity Exchange Act (7 U.S.C. 2, 4, 6c(a)-(d), 6d, 6f, 6g, 6k, 6m, 
6n, 12a, 19 and 21; 5 U.S.C. 552 and 552b))

[47 FR 57020, Dec. 22, 1982]



Sec.  170.6  Disciplinary proceedings (sections 17(b)(8) and
(b)(9) of the Act).

    A futures association must provide a fair and orderly procedure with 
respect to disciplinary actions brought against association members or 
persons associated with members. These rules governing such disciplinary 
actions shall contain, at a minimum, the procedural safeguards contained 
in section 17(b)(9) of the Act. In addition, an association, in 
disciplining its members should demonstrate that it will:
    (a) Take vigorous action against those who engage in activities in 
violation of association rules;
    (b) Conduct proceedings in a manner consistent with the fundamental 
elements of due process; and
    (c) Impose discipline which is fair and has a reasonable basis in 
fact.

(Approved by the Office of Management and Budget under control number 
3038-0022)

[44 FR 20651, Apr. 6, 1979, as amended at 46 FR 63036, Dec. 30, 1981]



Sec.  170.7  Membership denial (section 17(b)(9) of the Act).

    A futures association must provide a fair and orderly procedure for 
processing membership applications and for affording any person to be 
denied membership an opportunity to submit evidence in response to the 
grounds for denial stated by the association. The procedures governing 
denials of membership in the association shall contain, at

[[Page 489]]

a minimum, the procedural safeguards contained in section 17(b)(9) of 
the Act.

(Approved by the Office of Management and Budget under control number 
3038-0022)

[44 FR 20651, Apr. 6, 1979, as amended at 46 FR 63036, Dec. 30, 1981]



Sec.  170.8  Settlement of customer disputes
(section 17(b)(10) of the Act).

    A futures association must be able to demonstrate its capacity to 
promulgate rules and to conduct proceedings that provide a fair, 
equitable and expeditious procedure, through arbitration or otherwise, 
for the voluntary settlement of a customer's claim or grievance brought 
against any member of the association or any employee of a member of the 
association. Such rules shall conform to and be consistent with section 
17(b)(10) of the Act and be consistent with the guidelines and 
acceptable practices for dispute resolution found within appendix A and 
appendix B to part 38 of this chapter.

[66 FR 42288, Aug. 10, 2001]



Sec.  170.9  General standard.

    An applicant seeking registration as a futures association by the 
Commission must demonstrate the association's ability to comply with 
standards and requirements set forth in this part. The applicant must 
also demonstrate its ability to satisfy the provisions of section 17 of 
the Act as well as other applicable legal considerations, including that 
the association will promote fair and open competition among its members 
and will conduct its affairs consistent with the public interest to be 
protected by the antitrust laws. The Commission shall not register an 
applicant association unless the Commission finds that the applicant has 
satisfied the conditions and requirements of section 17 of the Act and 
of this part and that registration will be in the public interest.



Sec.  170.10  Proficiency examinations 
(sections 4p and 17(p) of the Act).

    A futures association may prescribe different training standards and 
proficiency examinations for persons registered in more than one 
capacity: Provided, That nothing contained in the Act or these 
regulations, including any exemption from registration for persons 
registered in another capacity, shall be deemed to preclude the 
establishment of training standards and a proficiency examination 
requirement for functions performed in such other capacity.

[48 FR 35305, Aug. 3, 1983]



Subpart B_Registration Statement of Futures Associations to be 
Submitted to the Commission



Sec.  170.11  Form of registration statement; review of 
registration statement.

    (a) Any association seeking registration by the Commission as a 
futures association must file with the Commission a letter requesting 
that the association be registered by the Commission as a futures 
association and accompany the letter with the following: (1) The 
constitution, charter or articles of incorporation of the association, 
(2) the bylaws of the association, (3) any other rules, resolutions or 
regulations of the association corresponding to the foregoing, (4) a 
detailed description of the association's organization, membership and 
rules of procedure and (5) a detailed statement of the association's 
capability to comply with the provisions of section 17 of the Act and 
this part. This letter and the accompanying information shall be 
considered as the registration statement of the association. This letter 
and the accompanying information shall be filed with the Secretariat of 
the Commission at Three Lafayette Centre, 1155 21st Street, NW., 
Washington, DC 20581.
    (b) At any time after an applicant's registration statement has been 
filed, the applicant association shall submit to the Commission any 
supporting or additional information concerning the application of the 
association as the Commission may request.
    (c) If it appears to the Commission, after reviewing any 
registration statement filed by an applicant association, that the 
applicant has not satisfied the requirements for registration set forth 
in section 17 of the Act or of this part, the Commission may, in its 
discretion, notify the applicant in writing to that effect. Such notice 
shall specify those

[[Page 490]]

requirements of section 17 or of this part which do not appear to have 
been satisfied and shall afford the applicant a period of at least 60 
days in which to respond to the Commission's notice by demonstrating or 
achieving compliance with the requirements specified by the Commission 
or otherwise. An applicant may withdraw its registration statement from 
Commission consideration at any time within such 60 day period.

(Approved by the Office of Management and Budget under control number 
3038-0022)

[44 FR 20651, Apr. 6, 1979, as amended at 46 FR 63036, Dec. 30, 1981; 60 
FR 49336, Sept. 25, 1995]



Sec.  170.12  Delegation of Authority to Director of the Division of
Swap Dealer and Intermediary Oversight.

    The Commission hereby delegates, until the Commission orders 
otherwise, to the Director of the Division of Swap Dealer and 
Intermediary Oversight the authority to take any of the actions 
enumerated in Sec. Sec.  170.11 (b) and (c). Notwithstanding the 
provisions of this section, if the Director believes it appropriate, he 
may submit the matter to the Commission for its consideration.

[44 FR 20651, Apr. 6, 1979, as amended at 67 FR 62353, Oct. 7, 2002; 78 
FR 22419, Apr. 16, 2013]



        Subpart C_Membership in a Registered Futures Association



Sec.  170.15  Futures commission merchants.

    (a) Except as provided in paragraph (b) of this section, each person 
registered as a futures commission merchant must become and remain a 
member of at least one futures association that is registered under 
section 17 of the Act and that provides for the membership therein of 
such futures commission merchant, unless no such futures association is 
so registered.
    (b) The requirements of paragraph (a) of this section shall not 
apply to a futures commission merchant registered in accordance with 
Sec.  3.10(a)(3) of this chapter.

[66 FR 43083, Aug. 17, 2001, as amended at 72 FR 2615, Jan. 22, 2007]



Sec.  170.16  Swap dealers and major swap participants.

    Each person registered as a swap dealer or major swap participant 
must become and remain a member of at least one futures association that 
is registered under section 17 of the Act and that provides for the 
membership therein of such swap dealer or major swap participant, as the 
case may be, unless no such futures association is so registered.

[77 FR 2629, Jan. 19, 2012]



Sec.  170.17  Introducing brokers, commodity pool operators, and 
commodity trading advisors.

    Each person registered as an introducing broker, commodity pool 
operator, or commodity trading advisor must become and remain a member 
of at least one futures association that is registered under Section 17 
of the Act and that provides for the membership therein of introducing 
brokers, commodity pool operators, or commodity trading advisors, as the 
case may be, unless no such futures association is so registered; 
provided, however that a person registered as a commodity trading 
advisor shall not be required to become or remain a member of such a 
futures association, solely in respect of its registration as a 
commodity trading advisor, if such person is eligible for the exemption 
from registration as such pursuant to Sec.  4.14(a)(9) of this chapter.

[80 FR 55029, Sept. 14, 2015]



PART 171_RULES RELATING TO REVIEW OF NATIONAL FUTURES ASSOCIATION
DECISIONS IN DISCIPLINARY, MEMBERSHIP DENIAL, REGISTRATION AND MEMBER
RESPONSIBILITY ACTIONS--Table of Contents



                      Subpart A_General Provisions

Sec.
171.1 Scope of rules.
171.2 Definitions.
171.3 Business address; hours.
171.4 Computation of time.
171.5 Extension of time.
171.6 Ex parte communications.
171.7 [Reserved]
171.8 Filing with the Proceedings Clerk.
171.9 Service.

[[Page 491]]

171.10 Motions.
171.11 Sanctions.
171.12 Settlement.
171.13 Practice before the Commission.
171.14 Waiver of rules.

Subpart B_Notice and Effective Date of Final Decisions in Disciplinary, 
               Membership Denial and Registration Actions

171.20 [Reserved]
171.21 Notice of final decision.
171.22 Effective date of final decisions in disciplinary, membership 
          denial and registration actions.
171.23 Notice of appeal.
171.24 Submission of the record.
171.25 Appeal brief.
171.26 Answering brief.
171.27 Limited participation by interested persons.
171.28 Participation by Commission staff.

    Subpart C_Commission Review of Final Decisions in Disciplinary, 
               Membership Denial and Registration Actions

171.30 Scope of review.
171.31 Commission review in the absence of an appeal.
171.32 Oral argument.
171.33 Final decision by the Commission.
171.34 Standards of review.

    Subpart D_Commission Review of Decisions by the National Futures 
              Association In Member Responsibility Actions

171.40 Notice of the commencement of a member responsibility action.
171.41 Petition for a stay of effective date of a member responsibility 
          action pending a hearing by the National Futures Association.
171.42 Notice of a final decision of the National Futures Association in 
          a member responsibility action.
171.43 Petition for a stay of the effective date of a final decision of 
          the National Futures Association in a member responsibility 
          action.
171.44 Notice of appeal.
171.45 General procedures.
171.46 Standards of review.

                    Subpart E_Delegation of Functions

171.50 Delegation to the General Counsel.

    Authority: 7 U.S.C. 4a, 12a and 21, unless otherwise noted.

    Source: 55 FR 41068, Oct. 9, 1990, unless otherwise noted.



                      Subpart A_General Provisions



Sec.  171.1  Scope of rules.

    (a) Matters included. Unless specifically excluded by subsection 
(b), this part governs review by the Commission, pursuant to sections 
17(h), (i) and (o) of the Commodity Exchange Act (``Act''), as amended, 
of any disciplinary action, membership denial action, registration 
action or member responsibility action taken by the National Futures 
Association or any registered futures association. Unless specifically 
indicated, references in this part to the National Futures Association 
shall also include any other registered futures association.
    (b) Matters excluded. The Commission will not review under these 
rules the following decisions by the National Futures Association:
    (1) A decision in a disciplinary action if the party aggrieved by 
the decision knowingly failed to pursue the right to appeal an adverse 
decision to the Appeals Committee of the National Futures Association 
and there are no extraordinary circumstances that otherwise warrant 
Commission consideration of the aggrieved party's appeal;
    (2) A decision in an arbitration action brought pursuant to section 
17(b)(10) of the Act or any rule of the National Futures Association;
    (3) Suspension of a member based solely on that member's failure to 
pay National Futures Association dues;
    (4) A decision to disqualify any member for service on the National 
Futures Association Board of Directors, Business Conduct Committees, 
Hearing Committee or arbitration panels pursuant to the standards for 
service adopted by the National Futures Association to implement 
Commission rule 1.63;
    (5) Suspension of a member or a person associated with a member 
based solely on that person's failure to pay an arbitration award or a 
settlement agreement resulting from an arbitration action brought 
pursuant to section 17(b)(10) of the Act or rules and regulations of the 
National Futures Association, or a settlement agreement resulting from a 
mediation proceeding sponsored by the National Futures Association, 
unless there are extraordinary circumstances that involve

[[Page 492]]

something more than the ministerial application of a predetermined 
sanction, or raise a colorable claim that the National Futures 
Assocaition has acted arbitrarily.
    (c) Appeals from excluded decisions. If the General Counsel, or any 
employee under the General Counsel's supervision as the General Counsel 
may designate, determines that a notice of appeal submitted to the 
Commission is from a decision that is excluded from review under this 
part, the notice of appeal may be stricken and ordered to be returned to 
the aggrieved party who submitted it.
    (d) Applicability of these part 171 rules. Unless otherwise ordered, 
these rules will apply in their entirety to all appeals and matters 
relating thereto filed on or after October 31, 1990. Any part 171 
proceeding commenced prior to October 31, 1990 continues to be governed 
by the procedures established in former subpart F of part 3 of the 
Commission's regulations, if applicable, or by the procedures 
established for that proceeding by Commission order. Parties to any 
proceeding pending on October 31, 1990 may, within 30 days after October 
31, 1990 by written stipulation executed by all parties, and filed with 
the Proceedings Clerk before the Commission's final decision is 
rendered, elect to have the matter governed by the provisions of these 
part 171 rules.

[55 FR 41068, Oct. 9, 1990, as amended at 70 FR 2352, Jan. 13, 2005; 78 
FR 1145, Jan. 8, 2013]



Sec.  171.2  Definitions.

    For purposes of this part:
    (a) Commission decisional employee includes any member of the 
Commission staff who participates in, or may be reasonably expected to 
participate in, the decisionmaking process in any proceeding under this 
part. It does not include Commissioners or members of their personal 
staff.
    (b) Disciplinary action includes any proceeding brought by the 
National Futures Association to enforce its rules that may result in 
expulsion, suspension, censure, bar from association with a member, fine 
in excess of $100 or any comparable sanction being imposed on a member 
or a person associated with a member.
    (c) Ex parte communication shall include any communication, whether 
written or oral, which is both (1) not preceded by reasonable notice to 
all parties to a proceeding, and (2) not made on the public record. It 
shall not include requests made to the Commission's Opinions Section or 
Office of Proceedings for status reports or for an interpretation of 
these rules.
    (d) Final Decision means the decision that terminates the proceeding 
before the National Futures Association on the action that is the 
subject of the notice of appeal filed with the Commission.
    (e) To mail means to place in the United States mail (or to deliver 
to an overnight delivery service of established reliability) a properly 
addressed and post-paid document. Unless otherwise provided, documents 
filed and served by mail must be sent by no less expeditious means than 
first class United States mail.
    (f) Member includes any person admitted to membership by the 
National Futures Association.
    (g) Member Responsibility Action includes any action in which, based 
on a finding by the National Futures Association that there is reason to 
believe that summary action is necessary to protect the commodity 
futures markets, customers or other members of the association, a member 
or person associated with a member may be summarily suspended from 
membership or association with a member, required to restrict operations 
or otherwise directed to take remedial action.
    (h) Membership denial action includes any proceeding brought by the 
National Futures Association to (1) determine whether an applicant 
should be admitted to membership or be permitted to be associated with a 
member, (2) determine whether an applicant should be admitted to 
membership or be permitted to be associated with a member on a 
conditional basis, or (3) determine whether to revoke or restrict the 
membership or association status of any person who is a member or is 
associated with a member.

[[Page 493]]

    (i) Party includes any person who has been the subject of a 
disciplinary action, membership denial action, or registration action by 
the National Futures Association; the National Futures Association 
itself; any person granted permission to participate as a party pursuant 
to Sec.  171.27 of these rules; and any Division of the Commission that 
files a Notice of Appearance pursuant to Sec.  171.28 of these rules.
    (j) Person associated with a member includes any person permitted to 
register as an associate of a member by the National Futures 
Association.
    (k) Record of the proceeding shall include the order appealed from, 
the findings or report on which the order is based, the pleadings, 
evidence and proceedings before the National Futures Association 
decisonmaker and a copy of any rule of the National Futures Association 
that is material to the order.
    (l) Registration action includes any proceeding brought by the 
National Futures Association, pursuant to authority delegated by the 
Commission, to grant, condition, deny, suspend, restrict, or revoke the 
registration of any person.
    (m) Rule of the National Futures Association includes any article of 
incorporation, bylaw, rule, regulation, resolution or written 
interpretation of stated policy of the National Futures Association.



Sec.  171.3  Business address; hours.

    The principal office of the Commission is located at Three Lafayette 
Centre, 1155 21st Street, NW., Washington, DC 20581. It is open each 
day, except Saturdays, Sundays, and legal public holidays, from 8:15 
a.m. until 4:45 p.m., eastern standard time or eastern daylight savings 
time, whichever is currently in effect in Washington, DC.

[55 FR 41068, Oct. 9, 1990, as amended at 60 FR 49336, Sept. 25, 1995]



Sec.  171.4  Computation of time.

    (a) In general. In computing any period of time prescribed by these 
rules or allowed by the Commission, the day of the act, event, or 
default from which the designated period of time begins to run is not to 
be included. The last day of the period so computed is to be included 
unless it is a Saturday, a Sunday, or a legal holiday. In the latter 
circumstances, the period runs until the end of the next day which is 
not a Saturday, a Sunday, or a legal holiday. Intermediate Saturdays, 
Sundays, and legal holidays shall be included in the computation unless 
the period of time prescribed or allowed is less than seven (7) days.
    (b) Date of service of orders. In computing any period of time 
involving the date of service of an order, the date of service shall be 
the date the order is mailed or hand delivered by the Proceedings Clerk, 
which, unless otherwise indicated, shall be the date stamped on the 
order by the Proceedings Clerk.



Sec.  171.5  Extension of time.

    (a) In general. Except as otherwise provided by these rules, for 
good cause shown, on its own motion or the motion of a party, the 
Commission may at any time extend or shorten the time prescribed by the 
rules for filing any document. In any instance in which a specific time 
period is not prescribed in this part for an action to be taken 
concerning any matter, the Commission may establish a time for that 
action.
    (b) Filing of motion. Absent extraordinary circumstances, when the 
time period that has been prescribed for an action to be taken 
concerning any matter exceeds seven days, requests for extension of that 
time period shall be filed at least five days prior to the expiration of 
the time period provided and shall include an explanation of the facts 
and circumstances that justify the extension.



Sec.  171.6  Ex parte communications.

    (a) Prohibition of ex parte communications. (1) No party to a 
proceeding before the Commission under these rules and no person outside 
the Commission who has a direct or indirect interest (pecuniary or 
otherwise) in the outcome of the proceeding or might be aggrieved by the 
outcome of the proceeding shall make or knowingly cause to be made an ex 
parte communication relevant to the merits of the proceeding subject to 
these rules to a Commissioner, member of the personal staff of a 
Commissioner or Commission decisional employee.

[[Page 494]]

    (2) No Commissioner, member of the personal staff of a Commissioner 
or Commission decisional employee shall make or knowingly cause to be 
made to a party to a proceeding subject to these rules or to any person 
outside the Commission who has a direct or indirect interest (pecuniary 
or otherwise) in the outcome of the proceeding or might be aggrieved by 
the outcome of the proceeding, an ex parte communication relevant to the 
merits of the proceeding subject to these rules.
    (b) Procedure for handling. Any Commissioner, member of a 
Commissioner's personal staff or Commission decisional employee who 
receives, or who makes or knowingly causes to be made, an ex parte 
communication prohibited by paragraph (a) of this section shall:
    (1) Place on the public record of the proceeding:
    (i) All such written communications;
    (ii) Memoranda stating the substance of all such oral 
communications; and
    (iii) All written responses, and memoranda stating the substance of 
all oral responses, to the materials described in paragraphs (b)(1)(i) 
and (b)(1)(ii) of this section; and
    (2) Promptly give written notice of such communications and 
responses thereto to all parties to the proceedings to which the 
communication or responses relate.
    (c) Sanctions. (1) Upon receipt of an ex parte communication 
knowingly made or knowingly caused to be made by a party in violation of 
the prohibition contained in paragraph (a)(1) of this section, the 
Commission may, to the extent consistent with the interests of justice 
and the policies of the Act, require the party to show cause why his 
claim or interest in the proceeding should not be dismissed, denied, 
disregarded, or otherwise adversely affected on account of such 
violation.
    (2) Any Commissioner, member of a Commissioner's personal staff or 
Commission decisional employee who knowingly makes or knowingly causes 
to be made, or who knowingly solicits or knowingly causes the 
solicitation of, an ex parte communication which violates the 
prohibitions contained in paragraph (a)(2) of this section may be deemed 
to have engaged in conduct of the type proscribed by 17 CFR 140.735-
3(b)(3).
    (d) Applicability of prohibitions and sanctions against ex parte 
communications. (1)(i) The prohibitions of this section shall begin to 
apply at the time that a copy of a notice of appeal has been filed with 
the Proceedings Clerk in accordance with Sec.  171.23 or Sec.  171.44 of 
this part; or a petition for stay or for an emergency effective date has 
been filed in accordance with Sec.  171.22, Sec.  171.41 or Sec.  171.43 
of this part. The prohibitions of this section shall remain in effect 
until a final order has been entered in the proceeding which is no 
longer subject to review by the Commission or to review by any court.
    (ii) The Commission may, by specific order entered in a particular 
proceeding, determine that these prohibitions shall commence from some 
date prior, or shall continue until a date subsequent, to the times 
specified in paragraph (d)(1)(i) of this section.
    (2) The sanctions in paragraph (c)(1) of this section shall not 
apply to a person making a prohibited communication (or causing it to be 
made) absent evidence that the person acted with actual or constructive 
knowledge that the person receiving the communication was a 
Commissioner, member of the personal staff of a Commissioner or a 
Commission decisional employee.



Sec.  171.7  [Reserved]



Sec.  171.8  Filing with the Proceedings Clerk.

    (a) How to file. Any document that is required by this part to be 
filed with the Proceedings Clerk shall be filed by delivering it in 
person or by first-class mail or a more expeditious form of United 
States mail, or by overnight or similar commercial delivery service to: 
Proceedings Clerk, Office of Proceedings, Three Lafayette Centre, 1155 
21st Street NW., Washington, DC 20581; or faxing the document to (202) 
418-5532 or emailing it to [email protected]. To be timely filed 
under this part, a document must be delivered or mailed to the 
Proceedings Clerk within the time prescribed for filing.
    (b) Proof of filing. Proof of filing shall be made by attaching to 
the document

[[Page 495]]

for filing an affidavit of filing executed by any person 18 years of age 
or older or a proof of filing executed by an attorney-at-law qualified 
for practice before the Commission. The proof of filing shall certify 
that the attached document was delivered by hand to the Proceedings 
Clerk or deposited in the United States mail, with first-class postage 
prepaid (or delivered to an overnight delivery service of established 
reliability), addressed to the Proceedings Clerk, Office of Proceedings, 
Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581, on 
the date specified in the affidavit.
    (c) Formalities of filing--(1) Number of copies. Unless otherwise 
provided, any person filing a document with the Proceedings Clerk shall 
provide two conformed copies in addition to the original.
    (2) Title page. All documents filed with the Proceedings Clerk shall 
include, at the head thereof, or on a title page, the name of the 
Commission, the title of the proceeding, the docket number (if one has 
been assigned by the Proceedings Clerk), the subject of the particular 
document and the name of the person on whose behalf the document is 
being filed.
    (3) Paper, spacing, type. All documents filed with the Proceedings 
Clerk shall be typewritten, must be on one grade of good white paper no 
less than 8 or more than 8\1/2\ inches wide and no less than 10\1/2\ or 
more than 11\1/2\ inches long, and must be bound on the top only. They 
must be double-spaced, except for long quotations (3 or more lines) and 
footnotes which should be single-spaced.
    (4) Signature--(i) By whom. All documents filed with the Proceedings 
Clerk shall be signed personally in ink:
    (A) By the person or persons on whose behalf they are tendered for 
filing;
    (B) By a general partner, officer or director of a partnership, 
corporation, association, or other legal entity; or
    (C) By an attorney-at-law having authority with respect thereto. The 
Proceedings Clerk may require appropriate evidence of the authority of a 
person subscribing a document on behalf of another person.
    (ii) Effect. The signature on any document of any person acting 
either for himself or as attorney or agent for another constitutes 
certification by him that:
    (A) He has read the document subscribed and knows the contents 
thereof;
    (B) If executed in any representative capacity, it was done with 
full power and authority to do so;
    (C) To the best of his knowledge, information, and belief, every 
statement contained in the document is true and not misleading; and
    (D) The document is not being interposed for delay.

[55 FR 41068, Oct. 9, 1990, as amended at 60 FR 49336, Sept. 25, 1995; 
78 FR 12937, Feb. 26, 2013]



Sec.  171.9  Service.

    (a) General requirements. Unless otherwise provided, all documents 
filed with the Proceedings Clerk must be served upon all parties on the 
same day.
    (b) Manner of service. Service may be made by personal delivery 
(effective upon receipt), mail (effective upon deposit), facsimile 
(effective upon receipt) or electronic mail (effective upon receipt). 
When service is effected by mail, the time within which the person 
served may respond thereto shall be increased by five days. Parties who 
consent to accepting service of documents by electronic means in the 
underlying NFA action also consent to accepting service by the same 
means in proceedings under this part 171.
    (c) Proof of service. Proof of service shall be made by filing with 
the Proceedings Clerk, at the same time as the relevant document is 
filed, an affidavit of service executed by a person 18 years of age or 
older or a certificate of service executed by an attorney qualified to 
practice before the Commission. The proof of service shall state that 
service has been made and identify the person served, the date of 
service and the manner of service.
    (d) Designation of person to receive service. The first document 
filed in a proceeding by or on behalf of any party must state on the 
first page the name, postal address and telephone number of the person 
authorized to receive service for the party of all documents filed in 
the proceeding. Thereafter, service

[[Page 496]]

of documents shall be made upon the person authorized unless service on 
a different authorized person or on the party himself is authorized by 
the Commission, or unless pursuant to Sec.  171.8 the person authorized 
is changed by the party upon due notice to all other parties. Parties 
shall file and serve notification of any changes in the information 
provided pursuant to this subparagraph as soon as practicable after the 
change occurs.
    (e) Service of orders and decisions. A copy of all notices, rulings, 
opinions and orders of the Commission shall be served on each of the 
parties by the Proceedings Clerk. Service will be deemed complete upon 
deposit in the mail.

[55 FR 41068, Oct. 9, 1990, as amended at 72 FR 42277, Aug. 2, 2007]



Sec.  171.10  Motions.

    (a) In general. An application for a form of relief not otherwise 
specifically provided for in this part shall be made by a written 
motion, filed with the Proceedings Clerk. The motion shall state the 
relief sought, basis for the relief and the authority relied upon.
    (b) Answers to motions. Unless otherwise provided, a party may file 
a written response to a motion within five days after service of the 
motion.
    (c) Motions for procedural orders. Motions for procedural orders, 
including motions for extensions of time, may be acted on at any time, 
without awaiting a response thereto. Any party adversely affected by 
such action may request reconsideration, vacation or modification of the 
action.
    (d) Dilatory motions. Frivolous or repetitive motions dealing with 
the same subject matter shall not be permitted.



Sec.  171.11  Sanctions.

    In the event a party fails to fulfill his obligations under these 
Rules, the Commission may impose appropriate sanctions including 
dismissal of the appeal or summary reversal of the decision under 
appeal. Sanctions may be imposed on the motion of a party or on the 
Commission's own motion.



Sec.  171.12  Settlement.

    At any time before the Commission has reached a final determination 
in a proceeding, the parties may request dismissal of the appeal based 
on a settlement agreement. If, in its view, the settlement is consistent 
with the public interest, the Commission will dismiss the proceeding.



Sec.  171.13  Practice before the Commission.

    (a) Practice--(1) By non-attorneys. An individual may appear pro se 
(on his own behalf); a general partner may represent the partnership; a 
bona fide officer of a corporation, trust or association may represent 
the corporation, trust or association.
    (2) By attorneys. An attorney-at-law who is admitted to practice 
before the highest court in any State or territory, or of the District 
of Columbia, who has not been suspended or disbarred from appearance and 
practice before the Commission in accordance with the provisions of part 
14 of this chapter may represent parties as an attorney in proceedings 
before the Commission.
    (b) Debarment of counsel or representative during the course of a 
proceeding. Whenever, while a proceeding is pending before the 
Commission, the Commission finds that a person acting as counsel or 
representative for any party to the proceeding is guilty of contemptuous 
conduct, the Commission may order that such person be precluded from 
further acting as counsel or representative in a proceeding subject to 
these rules. The Commission may suspend the proceedings for a reasonable 
time for the purpose of enabling the party to obtain other counsel or 
representative.
    (c) Withdrawal from representation. Withdrawal from representation 
of a party will be only by leave of the Commission. Such leave to 
withdraw may be subject to conditions including submission of an 
affidavit averring that the party represented has actual knowledge of 
the withdrawal and providing the name and address of a successor counsel 
(or representative) or a statement that the represented party has 
determined to proceed pro se. If the party proceeds pro se, the 
statement shall include the address where the party can thereafter be 
served.

[[Page 497]]



Sec.  171.14  Waiver of rules.

    To prevent undue hardship on any party or for other good cause 
shown, the Commission may waive any rule in this part in a particular 
case and may order proceedings in accordance with its direction. Such an 
order shall be based upon a determination that no party will be 
prejudiced thereby and that the ends of justice will be served. 
Reasonable notice will be given to all parties of any action taken 
pursuant to this paragraph.



Subpart B_Notice and Effective Date of Final Decisions in Disciplinary, 
               Membership Denial and Registration Actions



Sec.  171.20  [Reserved]



Sec.  171.21  Notice of final decision.

    (a) When required. The National Futures Association shall promptly 
serve all parties, as well as the Proceedings Clerk and the Secretary of 
the Commission, with a written notice of any final decision in a 
disciplinary action, membership denial action or registration action 
subject to these rules. The notice may be contained in the written 
decision issued by the National Futures Association.
    (b) Content of the notice. At a minimum, the notice shall provide 
the following information:
    (1) The names of the parties to the proceeding;
    (2) The date the notice was served and the effective date of the 
decision;
    (3) A statement informing the parties of their right to appeal the 
decision to the Commission pursuant to Sec.  171.28 as well as their 
right to seek a stay of the effective date of the decision pursuant to 
Sec.  171.27.
    (4) For a disciplinary action:
    (i) A statement setting forth the relevant acts of practices engaged 
in or omitted by the parties to the proceeding;
    (ii) A statement setting forth the specific rule or rules of the 
association violated by the relevant acts or practices or omissions to 
act of the parties to the proceeding;
    (iii) A statement setting forth the penalty imposed and the basis 
for its imposition.
    (5) For a membership action:
    (i) The specific grounds for the denial, bar, expulsion, or 
restriction;
    (ii) The findings made concerning those grounds;
    (iii) An explanation of the result reached in light of the grounds 
for ineligibility found and the findings made.
    (6) For a registration action:
    (i) The statutory disqualification at issue;
    (ii) The findings made concerning the statutory disqualification;
    (iii) An explanation of the result reached in light of the statutory 
disqualification shown and the findings made.
    (c) Effect of inadequate notice. (1) If the National Futures 
Association issues a notice of a final decision subject to these rules 
that is not substantially consistent with the requirements of this 
section, and the record does not establish that the errors therein are 
harmless, the notice may be stricken. The Commission may act on its own 
motion or on the motion of a party.
    (2) When a notice is struck, the final decision of the National 
Futures Association shall not be effective until a proper notice is 
served.



Sec.  171.22  Effective date of final decisions in disciplinary,
membership denial and registration actions.

    (a) General rule. A final decision of the National Futures 
Association in a disciplinary action, membership denial action or 
registration action shall be effective thirty days after service of the 
notice described in Sec.  171.21.
    (b) Petitions for stay pending review or for an emergency effective 
date--(1) Stay pending review. Within ten days of service of the notice 
described in Sec.  171.21, any aggrieved party may seek from the 
Commission a stay pending consideration of the merits of an appeal by 
filing and serving an appropriate petition. The mere filing of such a 
petition shall not stay the effective date of the decision. The burden 
of persuasion shall rest with the party seeking the stay. If the 
Commission does not grant the petition prior to the effective date of 
the decision under review, it shall be

[[Page 498]]

deemed denied. All petitions for stay must be accompanied by a notice of 
appeal.
    (2) Emergency effective date. Within ten days of service of the 
notice described in Sec.  171.21, the National Futures Association may 
seek from the Commission an order establishing an emergency effective 
date for the decision by filing and serving an appropriate petition. The 
mere filing of such a petition shall not alter the effective date of the 
decision. The burden of persuasion rests with the National Futures 
Association. If the Commission does not grant the petition by the date 
specified as the emergency effective date, it shall be deemed denied.
    (3) Contents of petition for stay and petition for an emergency 
effective date. A petition for stay or for an emergency effective date 
shall be in writing. Material factual allegations shall be supported by 
an affidavit or other sworn statement unless the parties stipulate that 
the material facts are not in dispute.
    (4) Response. Within five days of the service of the petition, a 
party may file in opposition to the petition. Material factual 
allegations shall be supported by an affidavit or other sworn statement 
unless the parties stipulate that the material facts are not in dispute.
    (c) Standards for determining petitions for a stay or an emergency 
effective date petition. In reviewing petitions filed under this 
seciton, the Commission shall consider:
    (1) The likelihood that a challenge to the merits of the decision 
will be successful; and
    (2) The likelihood that the denial of the petition would result in 
irreparable harm to the petitioner; and
    (3) The effect a grant of the petition would have on the opposing 
party; and
    (4) The effect a grant or denial of the petition would have on the 
public interest.
    (d) Expedited consideration. If, in its view, it is necessary to 
protect the petitioner's right to a meaningful determination of the 
issues raised in the petition, the Commission may act upon a petition 
for a stay or for an emergency effective date prior to its receipt of an 
opposing party's response. Any party aggrieved by such expedited 
consideration may seek reconsideration within seven days of service of 
the decision.



Sec.  171.23  Notice of appeal.

    (a) Time to file. Any party aggrieved by the final decision of the 
National Futures Association in a disciplinary, membership denial or 
registration action may, within thirty days of the National Futures 
Association's service of the notice described in Sec.  171.21, file a 
notice of appeal with the Proceedings Clerk. The filing of such a notice 
shall not stay the effective date of the decision.
    (b) Contents. The notice of appeal shall consist of a brief 
statement indicating that the party is requesting Commission review of 
an action of the National Futures Association. It should identify:
    (1) The name and address of the person appealing and, if 
represented, the name and address of his representative;
    (2) The case name and docket number of the National Futures 
Association proceeding; and
    (3) The date of the decision.
    (c) Filing fee. Each notice of appeal must be accompanied by a 
nonrefundable filing fee of $100. This amount may be paid by check, bank 
draft or money order, payable to the Commodity Futures Trading 
Commission.
    (d) Defective notices of appeal. Notices of appeal that are untimely 
or not accompanied by the filing fee shall not be accepted by the 
Proceedings Clerk absent a showing, by motion, of excusable neglect.



Sec.  171.24  Submission of the record.

    Within thirty days after service of a notice of appeal, the National 
Futures Association shall file with the Proceedings Clerk two copies of 
the record of the proceeding (as defined by Sec.  171.2(k)). The record 
shall be bound as a unit, chronologically indexed and tabbed, and 
certified as correct by a duly authorized official, agent or employee of 
the National Futures Asssociation. The National Futures Association 
shall serve on the party appealing, in lieu of the record, a copy of the 
index of the record and a copy of any document in the record not 
previously served on the party appealing. If the party appealing objects 
to the

[[Page 499]]

materials included or excluded in preparing the record, he shall file 
his objections with his brief on appeal. The Commission may, at any 
time, direct that an omission or misstatement be corrected and, if 
necessary, that a supplemental record be prepared and filed.



Sec.  171.25  Appeal brief.

    (a) Time to file. Any person who has filed a notice of appeal in 
accordance with the provisions of Sec.  171.23, shall perfect the appeal 
by filing an appeal brief with the Proceedings Clerk within thirty days 
after service of the record by the National Futures Association. The 
Commission may dismiss any appeal for which an appeal brief is not 
timely filed.
    (b) Contents. Each appeal brief submitted to the Commission pursuant 
to this section shall include, in the order indicated:
    (1) A statement of the issues presented for review;
    (2) A statement of the case. The statement shall indicate briefly 
the nature of the case and include a full description of the action 
being challenged. There shall follow a clear and concise statement of 
all facts relevant to the consideration of the appeal with appropriate 
citations to the record;
    (3) An argument. The argument shall contain the contentions of the 
appellant with respect to the issues presented and the reasons 
supporting those contentions. It shall cite specifically to the relevant 
authorities and to those parts of the record that support appellant's 
contentions; and
    (4) A conclusion stating the precise relief sought.
    (c) Length of appeal brief. Without prior leave of the Commission, 
the appeal brief may not exceed thirty five pages, exclusive of any 
table of contents, table of cases, index and appendix containing 
transcripts of testimony, exhibits, rules, regulations or similar 
materials.



Sec.  171.26  Answering brief.

    (a) Time for filing answering brief. Within thirty days after 
service of the appeal brief, the National Futures Association shall file 
with the Proceedings Clerk an answering brief.
    (b) Contents of answering brief. The contents of the answering brief 
generally shall be consistent with those set forth in Sec.  171.25(b) 
but may omit a statement of the issues and a statement of the case if 
the National Futures Association does not dispute the issues or the 
statement of the case contained in the appeal brief.
    (c) Length of the answering brief. Without prior leave of the 
Commission, the answering brief may not exceed thirty five pages, 
exclusive of any table of contents, table of cases, index and appendix 
containing transcripts of testimony, exhibits, statutes, rules, 
regulations or similar materials.



Sec.  171.27  Limited participation by interested persons.

    (a) Upon motion of any interested person or, on its own motion, the 
Commission may permit, or solicit, limited participation in the 
proceeding by such interested person. A motion for leave to participate 
in the proceeding shall be filed promptly, shall identify the interest 
of that person and shall show why participation in the proceeding by 
that person would serve the public interest. If the Commission 
determines that participation would serve the public interest, it shall 
by order establish a supplementary briefing schedule for the interested 
person and the parties to the proceeding.
    (b) For purposes of this subsection, interested person shall include 
parties and any other persons who might be adversely affected or 
aggrieved by the outcome of a proceeding; their officers, agents, 
employees, associates, affiliates, attorneys, accountants or other 
representatives; and any other person having a direct or indirect 
pecuniary or other interest in the outcome of a proceeding.



Sec.  171.28  Participation by Commission staff.

    The Division of Enforcement, the Division of Swap Dealer and 
Intermediary Oversight and the Division of Clearing and Risk or the 
Division of Market Oversight may participate in any proceeding by filing 
a notice of appearance. Such a notice shall be filed and served on or 
before the twentieth day following the date of service of its

[[Page 500]]

brief by the National Futures Association. The Commission shall by order 
establish a supplementary briefing schedule for the Commission staff and 
other parties to the proceeding. If it concludes that participation of 
the Commission staff will not serve the public interest, the Commission 
shall prohibit further participation.

[55 FR 41068, Oct. 9, 1990, as amended at 67 FR 62353, Oct. 7, 2002; 78 
FR 22419, Apr. 16, 2013]



    Subpart C_Commission Review of Final Decisions in Disciplinary, 
               Membership Denial and Registration Actions



Sec.  171.30  Scope of review.

    On review, the Commission may, in its discretion and after 
appropriate consideration of the notice given to the parties, consider 
sua sponte any issues arising from the record before it and may base its 
determination thereon. The Commission may also limit its consideration 
to those issues specifically raised in the parties' briefs, treating all 
other issues as waived.



Sec.  171.31  Commission review in the absence of an appeal.

    (a) Request by Commission staff. At any time prior to the effective 
date of a final decision of the National Futures Association in a 
disciplinary, membership denial or registration action, the Division of 
Enforcement, the Division of Swap Dealer and Intermediary Oversight and 
the Division of Clearing and Risk or the Division of Market Oversight 
may file and serve a memorandum requesting the Commission to institute 
review of the National Futures Association proceeding. The filing of 
such a memorandum shall stay the effective date of the decision at issue 
for twenty days.
    (b) Response by the National Futures Association. The National 
Futures Association may file a response to the memorandum of the 
Commission staff within fifteen days of the service of the memorandum.
    (c) Commission determination of staff request. To preserve the 
status quo while it determines whether review is apropriate, the 
Commission may extend the stay of the effective date of the decision at 
issue for an additional 30 days. If the Commission decides to take 
review, the effective date of the decision at issue shall be stayed 
pending the decision of the Commission, unless otherwise ordered. The 
Commission shall by order establish the procedure for submission of both 
the record of the proceeding and the briefs of the parties to the 
proceeding.
    (d) Commission review on its own motion. At any time prior to the 
effective date of a final decision of the National Futures Association 
in a disciplinary, membership denial or registration action, the 
Commission may take review of a decision by issuing an appropriate 
order. If the Commission determines that it is appropriate to take 
review on its own motion, it shall by order establish the procedure for 
submission of both the record of the proceeding and the briefs of the 
parties.

[55 FR 41068, Oct. 9, 1990, as amended at 67 FR 62353, Oct. 7, 2002; 78 
FR 22419, Apr. 16, 2013]



Sec.  171.32  Oral argument.

    (a) On motion of Commission. On its own motion, the Commission may, 
in its discretion, hear oral argument in a proceeding.
    (b) On request of party. Any party may file with the Proceedings 
Clerk a request in writing for the opportunity to present oral argument 
before the Commission, which the Commission may, in its discretion, 
grant or deny. A request under this paragraph must be filed concurrently 
with the party's brief.
    (c) Reporting and transcription. Oral argument before the Commission 
will be recorded and transcribed unless the Commission directs 
otherwise. In the event the Commission affords the parties the 
opportunity to present oral argument before the Commission, the oral 
argument will proceed in accordance with the provisions of Sec.  
10.103(b) of this chapter.



Sec.  171.33  Final decision by the Commission.

    (a) Opinion and order. Upon review, the Commission may affirm, 
modify, set aside, or remand for further proceedings, in whole or in 
part, the decision of the National Futures Association. The Commission's 
decision will be

[[Page 501]]

contained in its opinion and order which will be based upon the record 
before it, including the record of the registered futures association 
proceeding, briefs submitted to the Commission by the parties and any 
oral argument made in accordance with Sec.  171.32. Except as provided 
in paragraph (b) of this section, the opinion and order will constitute 
the final decision of the Commission, effective upon service on the 
parties. In the event the Commission is equally divided as to its 
decision, the decision of the National Futures Association shall be 
affirmed without a Commission opinion.
    (b) Order of summary affirmance. If the Commission finds that the 
result reached in the decision of the National Futures Association is 
substantially correct and that none of the arguments on appeal made by 
the appellant raise important questions of law or policy, the Commission 
may, by appropriate order, summarily affirm the decision without 
opinion. The decision of the National Futures Association shall 
constitute the Commission's final decision, effective upon service. 
Unless the Commission expressly indicates otherwise in its order, an 
order of summary affirmance does not reflect a Commission determination 
to adopt the rationale of the National Futures Association, and neither 
the order of summary affirmance nor the underlying order shall serve as 
Commission precedent in other proceedings.



Sec.  171.34  Standards of review.

    (a) Disciplinary actions. In reviewing a final decision of the 
National Futures Association in a disciplinary action, the Commission 
shall affirm the order of the National Futures Association, unless the 
Commission finds that:
    (1) The proceedings were not conducted in a manner consistent with 
fundamental fairness;
    (2) The proceedings were not conducted in a manner consistent with 
the rules of the National Futures Association;
    (3) The weight of the evidence does not support the findings of the 
National Futures Association concerning the relevant acts or practices 
engaged in or omitted;
    (4) The determination that the acts or practices engaged in or 
omitted violated rules of the National Futures Association does not rest 
on a reasonable interpretation of the rules at issue;
    (5) The National Futures Association's application of its rules is 
not consistent with the purposes of the Act;
    (6) The National Futures Association's choice of sanction is 
excessive or oppressive in light of the violations found having due 
regard for the public interest.
    (b) Membership denial actions. In reviewing a final decision of the 
National Futures Association in a membership denial action, the 
Commission shall affirm the order of the National Futures Association, 
unless the Commission finds that:
    (1) The proceedings were not conducted in a manner consistent with 
fundamental fairness;
    (2) The proceedings were not conducted in a manner consistent with 
the rules of the National Futures Association;
    (3) The weight of the evidence does not support the findings made or 
adopted in the final decision;
    (4) The conclusion of the National Futures Association is not 
consistent with the purposes of the Act.
    (c) Registration actions. In reviewing a decision of the National 
Futures Association in a registration action, the Commission shall 
affirm the order of the National Futures Association unless the 
Commission finds that:
    (1) The proceedings were not conducted in a manner consistent with 
fundamental fairness;
    (2) The proceedings were not conducted in a manner consistent with 
the rules of the National Futures Association;
    (3) The weight of the evidence does not support the findings made or 
adopted in the final decision;
    (4) The conclusion of the National Futures Association is not 
consistent with the purposes of the Act.

[[Page 502]]



    Subpart D_Commission Review of Decisions by the National Futures 
              Association In Member Responsibility Actions



Sec.  171.40  Notice of the commencement of a member responsibility
action.

    The notice of a Member Responsibility Action provided by the 
National Futures Association pursuant to its rules shall advise the 
affected parties of their right to petition the Commission pursuant to 
Sec.  171.41 to stay the effective date of the action pending a hearing 
before the National Futures Association on the factual issues relevant 
to the suspension, restriction or remedial action ordered.



Sec.  171.41  Petition for a stay of effective date of a member
responsibility action pending a hearing by the National Futures
Association.

    (a) Time to file. Within ten days after the National Futures 
Association serves the notice required by Sec.  171.40, any party 
aggrieved by the National Futures Association's determination that the 
member responsibility action should be effective prior to the 
opportunity for a hearing on the factual issues relevant to the 
suspension, restriction or remedial action imposed may petition the 
Commission to stay its effectiveness pending completion of further 
proceedings by the National Futures Association. The burden of 
persuasion shall rest with the party seeking the stay.
    (b) Content. A petition for stay shall meet the content requirements 
set forth in Sec.  171.22(b)(3).
    (c) Response. A response may be filed by the National Futures 
Association in accordance with Sec.  171.22(b)(4).
    (d) Standards for granting petition for stay. In reviewing petitions 
to stay the effectiveness of the member responsibility action pending 
completion of further proceedings, the Commission shall consider:
    (1) Whether, in the circumstances presented, the notice and 
opportunity for a hearing provided by the National Futures Association 
are consistent with principles of fundamental fairness; and
    (2) The likelihood that the denial of the petition would result in 
irreparable harm to petitioner; and
    (3) The effect a grant of the petition would have on the interests 
of the National Futures Association; and
    (4) The effect a grant or denial of the petition would have on the 
public interest.
    (e) If the suspension, restriction or remedial action imposed by the 
National Futures Assocation in a member responsibility action is 
effective at the time a petition for a stay is filed with the 
Commission, the Commission shall not delay its decision on the petition 
to await the receipt of the National Futures Association's response. If 
the action is not effective at the time the petition is filed, the 
Commission will not act upon the petition prior to the receipt of a 
response from the National Futures Association unless, in its view, 
expedited action on the petition is necessary to protect petitioner's 
right to a meaningful determination of the right to a stay. If the 
Commission grants the petition prior to the receipt of the response of 
the National Futures Association, the association may seek 
reconsideration of the Commission's action within seven days of service 
of the decision.
    (f) Proceedings following Commission disposition. If the petition 
for a stay is denied, the National Futures Association shall continue 
its action in accordance with the applicable rules of the association. 
If the petition for a stay is granted, the action shall be remanded to 
the National Futures Association for further proceedings as provided in 
the Commission's decision. Unless otherwise ordered by the Commission, a 
stay issued pursuant to this section shall not deprive the National 
Futures Association of the authority, after conducting a hearing under 
the appropriate rules of the association, to make the suspension, 
restriction or remedial action ordered in the member responsibility 
action immediately effective at the time a final decision is issued.

[[Page 503]]



Sec.  171.42  Notice of a final decision of the National Futures
Association in a member responsibility action.

    (a) When required. The National Futures Association shall promptly 
serve all parties, as well as the Proceeding Clerk and Secretary of the 
Commission, with a written notice of any final decision in a member 
responsibility action. The notice may be contained in the written 
decision issued by the National Futures Association. If the National 
Futures Association determines that the decision shall be effective upon 
issuance, in addition to serving a written notice, it shall also contact 
the parties and the Proceedings Clerk by telephone to inform them of its 
determination.
    (b) Contents of the written notice. At a minimum, the notice shall 
provide the following information:
    (1) The name of the parties to the proceeding;
    (2) The date the notice was served and the effective date of the 
decision;
    (3) A statement informing the parties of their right to appeal the 
decision to the Commission pursuant to Sec.  171.44 as well as their 
right to seek a stay of the decision pending Commission consideration of 
their appeal pursuant to Sec.  171.43;
    (4) A description of the action taken and the reasons for the 
action;
    (5) Findings of fact and conclusions of law on all issues relevant 
to its decision;
    (6) A determination of the appropriate relief based on the findings 
and conclusions.



Sec.  171.43  Petition for a stay of the effective date of a final
decision of the National Futures Association in a member responsibility 
action.

    (a) Filing the petition. Within ten days of the service of the 
notice described in Sec.  171.42, any aggrived party may seek from the 
Commission a stay of the effective date of the decision of the National 
Futures Association pending consideration of the merits of an appeal by 
filing and serving an appropriate petition. The mere filing of such a 
petition shall not stay the effective date of the decision. The burden 
of persuasion shall rest with the party seeking the stay.
    (b) Contents. A petition for a stay shall be in writing. Material 
factual allegations shall be supported by an affidavit or other sworn 
statement unless the parties stipulate that the material facts are not 
in dispute.
    (c) Response. Within five days of the service of the petition, the 
National Futures Association may file an opposition to the petition. 
Material factual allegations shall be supported by an affidavit or other 
sworn statement unless the parties stipulate that the material facts are 
not in dispute.
    (d) Standards for determining petitions for a stay. In reviewing 
petitions filed under this section, the Commission shall consider:
    (1) The likelihood that petitioner's challenge to the merits of the 
decision will be successful; and
    (2) The likelihood that the denial of the petition would result in 
irreparable harm to the petitioner; and
    (3) The effect a grant of the petition would have on the National 
Futures Association; and
    (4) The effect a grant or denial of the petition would have on the 
public interest.
    (e) Expedited consideration. If the suspension, restriction or 
remedial action imposed by the National Futures Association in a member 
responsibility action is effective at the time a petition for a stay is 
filed with the Commission, the Commission shall not delay its decision 
on the petition to await the receipt of the National Futures 
Association's response. If the decision is not effective at the time the 
petition is filed, the Commission will not act upon the petition prior 
to the receipt of a response from the National Futures Association 
unless, in its view, expedited action on the petition is necessary to 
protect petitioner's right to a meaningful determination of the right to 
a stay. If the Commission grants the petition prior to the receipt of 
the response of the National Futures Association, the association may 
seek reconsideration of the Commission's action within seven days of 
service of the decision.

[[Page 504]]



Sec.  171.44  Notice of appeal.

    (a) Time to file. Any party aggrieved by a final decision of the 
National Futures Association in a member responsibility action may, 
within thirty days of the service of the notice described in Sec.  
171.42, file with the Proceedings Clerk and serve on the National 
Futures Association a notice of appeal. The filing of such a notice 
shall not stay the effective date of the decision.
    (b) Contents. The notice of appeal shall meet the content 
requirements of Sec.  171.23(b).
    (c) Filing fee. Each notice of appeal must be accompanied by a 
nonrefundable filing fee of $100. This amount may be paid by check, bank 
draft or money order, payable to the Commodity Futures Trading 
Commission.
    (d) Defective notices of appeal. Notices of appeal that are untimely 
or not accompanied by the filing fee shall not be accepted by the 
Proceedings Clerk absent a showing, by motion, of excusable neglect.



Sec.  171.45  General procedures.

    The following procedural rules applicable to review of decisions of 
the National Futures Association in disciplinary, membership denial and 
registration actions shall also apply to the review of decisions of the 
National Futures Association in member responsibility actions:
    (a) Section 171.24 Submission of the Record.
    (b) Section 171.25 Appeal Brief.
    (c) Section 171.26 Answering Brief.
    (d) Section 171.27 Limited Participation By Interested Persons.
    (e) Section 171.28 Participation By Commission Staff.
    (f) Section 171.30 Scope of Review.
    (g) Section 171.31 Commission Review In the Absence of An Appeal.
    (h) Section 171.32 Oral Argument.
    (i) Section 171.33 Final Decision By the Commission.



Sec.  171.46  Standards of review.

    In reviewing the decision of the National Futures Association in a 
member responsibility action, the Commission shall consider whether:
    (a) The proceedings were conducted in a manner consistent with 
fundamental fairness;
    (b) The proceedings were conducted in a manner consistent with the 
rules of the National Futures Association;
    (c) The weight of the evidence supports the findings of the National 
Futures Association concerning the reasons for the action;
    (d) The determination that summary action is necessary to protect 
the commodity futures markets, customers, or members of the National 
Futures Association rests on a reasonable interpretation of the NFA 
rules at issue;
    (e) The National Futures Association's application of its rules is 
consistent with the purposes of the Act;
    (f) In light of the findings of the National Futures Association 
concerning the reasons for the action and the public interest, the 
suspension, restriction or remedial action imposed by the National 
Futures Association is not excessive, oppressive or an abuse of 
discretion.



                    Subpart E_Delegation of Functions



Sec.  171.50  Delegation to the General Counsel.

    (a) The Commission hereby delegates, until it orders otherwise, to 
the General Counsel, or any employee under the General Counsel's 
supervision as the General Counsel may designate, the authority:
    (1) To waive or modify any of the requirements of Sec. Sec.  171.25, 
171.26, 171.27 and to waive or modify any requirement of the part 171 
Rules insofar as it pertains to changes in the time permitted for 
filing, or the form, execution, service and filing of documents;
    (2) To enter orders under Sec. Sec.  171.10, 171.12, 171.21 and 
171.31(c);
    (3) To decline to accept any notice of appeal, or petition for stay 
pending review, of matters specified in Sec.  171.1(b) and to so notify 
the appellant and the registered futures association;
    (4) To stay the effective date of a decision of the National Futures 
Association in a disciplinary, membership denial or registration action, 
or a decision relating to such actions issued by the Commission pursuant 
to these rules, for a reasonable period of time, not to exceed 10 days, 
when such a stay is necessary to allow the Commission

[[Page 505]]

to consider a petition to stay the effective date of such a decision or 
a motion for similar relief;
    (5) To decline to accept any document which has not been filed or 
perfected as specified in these rules;
    (6) To determine motions seeking permission to participate in a 
proceeding under Sec.  171.27 and to establish the related briefing 
schedule;
    (7) To establish briefing schedules under Sec.  171.28; and
    (8) To enter any order which, in his judgment, will facilitate or 
expedite Commission review of a decision by the National Futures 
Association in a disciplinary, membership denial or registration action.
    (b) Within seven days after service of a ruling issued pursuant to 
paragraph (a) of this section, a party may file with the Proceedings 
Clerk a petition for Commission reconsideration of the ruling. Unless 
the Commission orders otherwise, the filing of a petition for 
reconsideration will not operate to stay the effective date of such 
ruling.
    (c) The General Counsel, or his designee, may submit to the 
Commission for its consideration any matter which has been delegated 
pursuant to paragraph (a) of this section.
    (d) Nothing in this section will be deemed to prohibit the 
Commission, at its election, from exercising the authority delegated to 
the General Counsel, or his designee, under this section.

[55 FR 41068, Oct. 9, 1990, as amended at 64 FR 46271, Aug. 25, 1999; 78 
FR 1145, Jan. 8, 2013]



PART 180_PROHIBITION AGAINST MANIPULATION--Table of Contents



Sec.
180.1 Prohibition on the employment, or attempted employment, of 
          manipulative and deceptive devices.
180.2 Prohibition on price manipulation.

    Authority: 7 U.S.C. 6c(a), 9, 12(a)(5) and 15, as amended by Title 
VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, 
Pub. L. 111-203, 124 Stat. 1376 (2010); 5 U.S.C. 552 and 552(b), unless 
otherwise noted.

    Source: 76 FR 41410, July 14, 2011, unless otherwise noted.



Sec.  180.1  Prohibition on the employment, or attempted employment,
of manipulative and deceptive devices.

    (a) It shall be unlawful for any person, directly or indirectly, in 
connection with any swap, or contract of sale of any commodity in 
interstate commerce, or contract for future delivery on or subject to 
the rules of any registered entity, to intentionally or recklessly:
    (1) Use or employ, or attempt to use or employ, any manipulative 
device, scheme, or artifice to defraud;
    (2) Make, or attempt to make, any untrue or misleading statement of 
a material fact or to omit to state a material fact necessary in order 
to make the statements made not untrue or misleading;
    (3) Engage, or attempt to engage, in any act, practice, or course of 
business, which operates or would operate as a fraud or deceit upon any 
person; or,
    (4) Deliver or cause to be delivered, or attempt to deliver or cause 
to be delivered, for transmission through the mails or interstate 
commerce, by any means of communication whatsoever, a false or 
misleading or inaccurate report concerning crop or market information or 
conditions that affect or tend to affect the price of any commodity in 
interstate commerce, knowing, or acting in reckless disregard of the 
fact that such report is false, misleading or inaccurate. 
Notwithstanding the foregoing, no violation of this subsection shall 
exist where the person mistakenly transmits, in good faith, false or 
misleading or inaccurate information to a price reporting service.
    (b) Nothing in this section shall be construed to require any person 
to disclose to another person nonpublic information that may be material 
to the market price, rate, or level of the commodity transaction, except 
as necessary to make any statement made to the other person in or in 
connection with the transaction not misleading in any material respect.
    (c) Nothing in this section shall affect, or be construed to affect, 
the applicability of Commodity Exchange Act section 9(a)(2).

[[Page 506]]



Sec.  180.2  Prohibition on price manipulation.

    It shall be unlawful for any person, directly or indirectly, to 
manipulate or attempt to manipulate the price of any swap, or of any 
commodity in interstate commerce, or for future delivery on or subject 
to the rules of any registered entity.



PART 190_BANKRUPTCY--Table of Contents



Sec.
190.01 Definitions.
190.02 Operation of the debtor's estate subsequent to the filing date 
          and prior to the primary liquidation date.
190.03 Operation of the debtor's estate subsequent to the primary 
          liquidation date.
190.04 Operation of the debtor's estate--general.
190.05 Making and taking delivery on commodity contracts.
190.06 Transfers.
190.07 Calculation of allowed net equity.
190.08 Allocation of property and allowance of claims.
190.09 Member property.
190.10 General.

Appendix A to Part 190--Bankruptcy Forms
Appendix B to Part 190--Special Bankruptcy Distributions

    Authority: 7 U.S.C. 1a, 2, 4a, 6c, 6d, 6g, 7a, 12, 19, and 24, and 
11 U.S.C. 362, 546, 548, 556, and 761-766, unless otherwise noted.

    Source: 48 FR 8739, Mar. 1, 1983, unless otherwise noted.



Sec.  190.01  Definitions.

    For purposes of this part:
    (a)(1) Account class means each of the following types of customer 
accounts which must be recognized as a separate class of account by the 
trustee: futures accounts, foreign futures accounts, leverage accounts, 
delivery accounts as defined in Sec.  190.05(a)(2) of this part, and 
cleared swaps accounts.
    (2)(i) To the extent that the equity balance, as defined in Sec.  
190.07 of this part, of a customer in a commodity option, as defined in 
Sec.  1.3 of this chapter, may be commingled with the equity balance of 
such customer in any domestic commodity futures contract pursuant to 
regulations under the Act, the aggregate shall be treated for purposes 
of this part as being held in a futures account.
    (ii) To the extent that such equity balance of a customer in a 
commodity option may be commingled with the equity balance of such 
customer in any cleared swaps account pursuant to regulations under this 
act, the aggregate shall be treated for purposes of this part as being 
held in a cleared swaps account.
    (iii) If positions or transactions in commodity contracts that would 
otherwise belong to one account class (and the money, securities, or 
other property margining, guaranteeing, or securing such positions or 
transactions), are, pursuant to a Commission rule, regulation, or order 
(or a derivatives clearing organization rule approved in accordance with 
Sec.  39.15(b)(2) of this chapter), held separately from other positions 
and transactions in that account class, and are commingled with 
positions or transactions in commodity contracts of another account 
class (and the money, securities, or other property margining, 
guaranteeing, or securing such positions or transactions), then the 
former positions (and the relevant money, securities, or other property) 
shall be treated, for purposes of this part, as being held in an account 
of the latter account class.
    (b) Allowed net equity means the amount calculated as allowed net 
equity in accordance with Sec.  190.07(a).
    (c) Bankruptcy Code means, except as the context of the regulations 
in this part otherwise requires, those provisions of the Bankruptcy 
Reform Act of 1978, as amended from time to time, relating to ordinary 
bankruptcies (chapters 1 through 5) and to liquidations (chapter 7 with 
the exception of subchapter III), together with the Federal rules of 
bankruptcy procedure relating thereto.
    (d) Business day means weekdays, not including Federal holidays.
    (e) Calendar day. A calendar day includes the time from midnight to 
midnight.
    (f) Clearing organization shall have the same meaning as that set 
forth in section 761(2) of the Bankruptcy Code.
    (g) Commodity broker means any person who is registered or required 
to register as a futures commission merchant under the Commodity 
Exchange

[[Page 507]]

Act including a person registered or required to be registered as such 
under Parts 32 and 33 of this chapter, and a ``commodity options 
dealer,'' ``foreign futures commission merchant,'' ``clearing 
organization,'' and ``leverage transaction merchant'' with respect to 
which there is a ``customer'' as those terms are defined in this 
section, but excluding a person registered as a futures commission 
merchant under section 4f(a)(2) of the Commodity Exchange Act.
    (h) Commodity contract shall have the same meaning, subject to 
paragraph (nn) of this section, as that set forth in section 761(4) of 
the Bankruptcy Code.
    (i) Commodity options dealer shall have the same meaning as that set 
forth in section 761(6) of the Bankruptcy Code.
    (j) Court means the bankruptcy court having jurisdiction over the 
debtor's estate.
    (k) Cover shall have the same meaning as that set forth in Sec.  
1.17(j) of this chapter.
    (l) Customer shall have the same meaning as that set forth in 
section 761(9) of the Bankruptcy Code. To the extent not otherwise 
included, customer shall include the owner of a portfolio margining 
account carried as a futures account or cleared swaps customer account.
    (m) Customer claim of record means a customer claim which is 
determinable solely by reference to the records of the debtor.
    (n) Customer class means each of the following two classes of 
customers which must be recognized by the trustee: public customers and 
non-public customers.
    (o) Customer property, customer estate are used interchangeably to 
mean the property subject to pro rata distribution in a commodity broker 
bankruptcy which is entitled to the priority set forth in section 766(h) 
of the Bankruptcy Code and includes certain cash, securities, and other 
property as set forth in Sec.  190.08(a).
    (p) Dealer option means an option granted, offered or sold pursuant 
to section 4c(d) of the Act and the Commission's regulations thereunder.
    (q) Debtor means an individual, association, partnership, 
corporation, or trust with respect to which a proceeding is commenced 
under subchapter IV of chapter 7 of the Bankruptcy Code.
    (r) Equity means the amount calculated as equity in accordance with 
Sec.  190.07(b)(1).
    (s) Filing date means the date a petition commencing a proceeding 
under the Bankruptcy Code is filed.
    (t) Final net equity determination date means the latest of
    (1) The day immediately following the day on which all commodity 
contracts held by or for the account of customers of the debtor have 
been transferred, liquidated or satisfied by exercise or delivery,
    (2) The day immediately following the day on which all property 
other than commodity contracts held for the account of customers has 
been transferred, returned or liquidated,
    (3) The bar date for filing customer proofs of claim, or
    (4) The day following the disposition of all disputed claims.
    (u) Foreign future shall have the same meaning as that set forth in 
section 761(11) of the Bankruptcy Code.
    (v) Foreign futures commission merchant shall have the same meaning 
as that set forth in section 761(12) of the Bankruptcy Code.
    (w) Funded balance means the amount calculated as funded balance in 
accordance with Sec.  190.07(c).
    (x) House account means any commodity contract account owned by the 
debtor.
    (y) In-the-money amount means:
    (1) With respect to a call option, the amount by which the value of 
the physical commodity or the contract for sale of a commodity for 
future delivery which is the subject of the option exceeds the strike 
price of the option; and
    (2) With respect to a put option, the amount by which the value of 
the physical commodity or the contract for sale of a commodity for 
future delivery which is the subject of the option is exceeded by the 
strike price of the option.
    (z) Joint account means any commodity contract account held by more 
than one person and includes any account of a commodity pool which is 
not a legal entity.

[[Page 508]]

    (aa) Leverage transaction merchant shall have the same meaning as 
that set forth in section 761(14) of the Bankruptcy Code.
    (bb) Net equity means the amount calculated as net equity in 
accordance with Sec.  190.07(b).
    (cc) Non-public customer means any person enumerated in the 
definition of Proprietary Account in Sec.  1.3 or Sec.  31.4(e) of this 
chapter, any person excluded from the definition of ``foreign futures or 
foreign options customer'' in the proviso to section 30.1(c) of this 
chapter, or any person enumerated in the definition of Cleared Swaps 
Proprietary Account in Sec.  22.1 of this chapter, in each case, if such 
person is defined as a ``customer'' under paragraph (k) of this section.
    (dd) Open commodity contract means a commodity contract which has 
been established in fact and which has not expired, been redeemed, been 
fulfilled by delivery or exercise, or been offset by another commodity 
contract.
    (ee) Order for relief means the filing of the petition in bankruptcy 
in a voluntary case and the adjudication of bankruptcy in an involuntary 
case.
    (ff) Premium means the amount agreed upon between the purchaser and 
seller, or their agents, for the purchase or sale of a commodity option.
    (gg) Primary liquidation date means the first business day 
immediately following the day on which all commodity contracts have been 
liquidated or transferred which are not being held open for later 
transfer in accordance with Sec.  190.03.
    (hh) Principal contract means a contract which is not traded on a 
designated contract market, and includes leverage contracts and dealer 
options, but does not include:
    (1) Transactions executed off the floor of a designated contract 
market pursuant to rules approved by the Commission or rules which the 
designated contract market is required to enforce, or pursuant to rules 
of a foreign board of trade located outside the United States, its 
territories or possessions; or
    (2) Cleared swaps contracts.
    (ii) Public customer means any person defined as a customer under 
paragraph (k) of this section except a non-public customer.
    (jj) Security shall have the same meaning as that set forth in 
section 101(36) of the Bankruptcy Code.
    (kk) Short term obligation means any security, note, or other 
obligation with a duration or maturity date of 180 days or less.
    (ll) Specifically identifiable property means:
    (1) With respect to the following property received, acquired, or 
held by or for the account of the debtor from or for the account of a 
customer to margin, guarantee or secure an open commodity contract:
    (i) Any security which as of the filing date is:
    (A) Held for the account of a customer;
    (B) Registered in such customer's name;
    (C) Not transferable by delivery; and
    (D) Not a short term obligation; or
    (ii) Any warehouse receipt, bill of lading or other document of 
title which as of the filing date:
    (A) Can be identified on the books and records of the debtor as held 
for the account of a particular customer; and
    (B) Is not in bearer form and is not otherwise transferable by 
delivery.
    (2) With respect to open commodity contracts, and except as 
otherwise provided in paragraph (kk)(7) of this section, any such 
contract which:
    (i) As of the filing date is identified on the books and records of 
the debtor as held for the account of a particular customer;
    (ii) Is a bona fide hedging position or transaction as defined in 
Sec.  1.3 of this chapter or is a commodity option transaction which has 
been determined by the registered entity to be economically appropriate 
to the reduction of risks in the conduct and management of a commercial 
enterprise pursuant to rules which have been approved by the Commission 
pursuant to section 5c(c) of the Commodity Exchange Act; and
    (iii) Is in an account designated in the accounting records of the 
debtor as a hedging account in accordance with Sec.  190.04(e)(1).
    (3) With respect to warehouse receipts, bills of lading or other 
documents of title, or physical commodities received, acquired, or held 
by or for the

[[Page 509]]

account of the debtor for the purpose of making or taking delivery or 
exercise from or for the account of a customer, any such document of 
title or commodity which as of the entry of the order for relief can be 
identified on the books and records of the debtor as received from or 
for the account of a particular customer as held specifically for the 
purpose of delivery or exercise.
    (4) Any cash or other property deposited prior to the entry of the 
order for relief to pay for the taking of physical delivery on a long 
commodity contract or for payment of the strike price upon exercise of a 
short put or a long call option contract on a physical commodity, which 
cannot be settled in cash, in excess of the amount necessary to margin 
such commodity contract prior to the notice date or exercise date, which 
cash or other property is identified on the books and records of the 
debtor as received from or for the account of a particular customer on 
or after three calendar days before the first notice date or three 
calendar days before the exercise date specifically for the purpose of 
payment of the notice price upon taking delivery or the strike price 
upon exercise, respectively, and such customer takes delivery or 
exercises the option in accordance with the applicable designated 
contract market rules.
    (5) The cash price tendered for any property deposited prior to the 
entry of the order for relief to make physical delivery on a short 
commodity contract or for exercise of a long put or a short call option 
contract on a physical commodity, which cannot be settled in cash, to 
the extent it exceeds the amount necessary to margin such contract prior 
to the notice date or exercise date, which property is identified on the 
books and records of the debtor as received from or for the account of a 
particular customer on or after three calendar days before the first 
notice date or three calendar days before the exercise date specifically 
for the purpose of a delivery or exercise, respectively, and such 
customer makes delivery or exercises the option in accordance with the 
applicable contract market rules.
    (6) Notwithstanding paragraph (kk)(1) of this section, fully paid, 
non-exempt securities identified on the books and records of the debtor 
as held by the debtor for or on behalf of the commodity contract account 
of a particular customer for which, according to such books and records 
as of the filing date, no open commodity contracts were held in the same 
capacity.
    (7) Open commodity contracts transferred in accordance with the 
provisions of Sec.  190.06.
    (8) Except as is otherwise specified in this paragraph (kk), no 
customer property may be treated as specifically identifiable property.
    (9) Notwithstanding any other provision of this paragraph (kk), 
security futures products, and any money, securities or property held to 
margin, guarantee or secure such products, or accruing as a result of 
such products, shall not be considered specifically identifiable 
property for the purposes of Subchapter IV of the Bankruptcy Code or 
this part 190, if held in a securities account.
    (mm) Strike price means the price per unit multiplied by the total 
number of units at which a person may purchase or sell the physical 
commodity or the contract of sale of a commodity for future delivery 
which is the subject of a commodity option.
    (nn) Trustee means, as appropriate, the trustee in bankruptcy 
apointed to administer the debtor's estate and any interim or successor 
trustee.
    (oo) Leverage contract shall have the same meaning as that set forth 
in Sec.  31.4(w) of this chapter.
    (pp) Cleared Swap. This term shall have the same meaning as set 
forth in Sec.  22.1 of this chapter.

(Secs. 2(a), 4c, 4d, 4g, 5, 5a, 8a, 15, 19 and 20 of the Commodity 
Exchange Act, as amended by the Futures Trading Act of 1982, Pub. L. 97-
444, 96 Stat. 2294 (1983), 7 U.S.C. 2 and 4a, 6c, 6d, 6g, 7, 7a, 12a, 
19, 23 and 24 (1976 & Supp. V. 1981 and Pub. L. 97-444); secs. 761-766 
of the Bankruptcy Reform Act of 1978, as amended by the Bankruptcy Act 
Amendments, Pub. L. 97-222, 96 Stat. 235 (1982), 11 U.S.C. 761-766 
(Supp. V. 1981 as amended by Pub. L. 97-222))

[48 FR 8739, Mar. 1, 1983; 48 FR 15122, 15123, Apr. 7, 1983, as amended 
at 48 FR 28980, June 24, 1983; 49 FR 5541, Feb. 13, 1984, 50 FR 34617, 
Sept. 6, 1985; 59 FR 5704, Feb. 8, 1994; 66 FR 20745, Apr. 25, 2001; 67 
FR 58298, Sept. 13, 2002; 75 FR 17302, Apr. 6, 2010; 77 FR 6378, Feb. 7, 
2012; 78 FR 66637, Nov. 6, 2013]

[[Page 510]]



Sec.  190.02  Operation of the debtor's estate subsequent to the
filing date and prior to the primary liquidation date.

    Subsequent to the filing date and prior to the primary liquidation 
date, the debtor's estate shall be operated as follows:
    (a) Notices to the Commission and Designated Self-Regulatory 
Organizations--(1) General. Each commodity broker which files a petition 
in bankruptcy shall, at or before the time of such filing, and each 
commodity broker against which such a petition is filed shall, as soon 
as possible, but no later than one calendar day after the receipt of 
notice of such filing, notify the Commission and such broker's 
designated self-regulatory organization, if any, in accordance with 
Sec.  190.10(a) of the filing date, the court in which the proceeding 
has been filed, and the docket number assigned to that proceeding by the 
court.
    (2) Of transfers under section 764(b) of the Bankruptcy Code. As 
soon as possible, but in no event later than the close of business on 
third calendar day after the order for relief, the trustee, the 
applicable self-regulatory organization, or the commodity broker must 
notify the Commission in accordance with Sec.  190.10(a) whether such 
entity or organization intends to transfer or to apply to transfer open 
commodity contracts on behalf of the commodity broker in accordance with 
section 764(b) of the Bankruptcy Code and Sec.  190.06 (e) or (f).
    (b) Notices to customers--(1) Specifically identifiable property 
other than commodity contracts. The trustee must use its best efforts to 
promptly, but in no event later than two calendar days after entry of 
the order for relief, commence to publish in a daily newspaper or 
newspapers of general circulation approved by the court serving the 
location of each branch office of the commodity broker, for two 
consecutive days a notice to customers stating that all specifically 
identifiable property of customers other than open commodity contracts 
which has not otherwise been liquidated will be liquidated commencing on 
the sixth calendar day after the second publication date if the customer 
has not instructed the trustee in writing on or before the fifth 
calendar day after the second publication date to return such property 
pursuant to the terms for distribution of specifically identifiable 
property contained in Sec.  190.08(d)(1) and, on the seventh calendar 
day after such second publication date, if such property has not been 
returned in accordance with such terms on or prior to that date. Such 
notice must describe specifically identifiable property in accordance 
with the definition in this part and must specify the terms upon which 
that property may be returned. Publication of the form of notice set 
forth in the appendix to this part will constitute sufficient notice for 
purposes of this paragraph (b)(1).
    (2) Request for instructions regarding transfer of open commodity 
contracts. The trustee must use its best efforts to request promptly, 
but in no event later than two calendar days after entry of an order for 
relief, customer instructions concerning the transfer or liquidation of 
the specifically identifiable open commodity contracts, if any, not 
required to be liquidated under paragraph (f)(1) of this section. The 
request for customer instructions required by this paragraph (b)(2) must 
state that the trustee is required to liquidate any such commodity 
contract for which transfer instructions have not been received on or 
before the seventh calendar day after entry of the order for relief, at 
an hour specified by the trustee, and any such commodity contract for 
which instructions have been received which has not been transferred in 
accordance with Sec.  190.08(d)(2) on or before the seventh calendar day 
after entry of the order for relief. A form of notice is set forth in 
the appendix to this part.
    (3) Involuntary cases. Prior to entry of an order for relief, and 
upon leave of the court, the trustee appointed in an involuntary 
proceeding may notify customers of the commencement of such proceeding 
and may request customer instructions with respect to the return, 
liquidation or transfer of specifically identifiable property, including 
open commodity contracts.
    (4) Notice of bankruptcy and request for proof of customer claim. 
The trustee must promptly notify each customer of

[[Page 511]]

record in writing that an order for relief has been entered and must 
instruct each such customer to file a proof of customer claim containing 
the information specified in paragraph (d) of this section. Such notice 
may be given separately from the notices required by paragraphs (b) (1) 
and (3) of this section.
    (c) Disposition of customer instructions in the event of a transfer 
pursuant to section 764(b) of the Bankruptcy Code. If the debtor's open 
commodity contracts have been, or are to be, transferred in accordance 
with section 764(b) of the Bankruptcy Code and Sec.  190.06, customer 
instructions previously received by the trustee with respect to open 
commodity contracts, or with respect to specifically identifiable 
property which is to be transferred with such contracts, shall be 
transmitted to the transferee of such contracts or property who shall 
comply therewith to the extent practicable.
    (d) Proof of customer claim. The trustee shall cause the proof of 
customer claim form referred to in paragraph (b)(4) of this section to 
set forth the bar date for its filing and to request that customers 
provide, to the extent reasonably possible, information sufficient to 
determine a customer's claim in accordance with the regulations 
contained in this part, including in the discretion of the trustee:
    (1) The class of commodity contract account upon which each claim is 
based;
    (2) The number of accounts held by each claimant, and the capacity 
in which they are held;
    (3) The equity as of the filing date of each account based on 
commodity contract transactions in that account;
    (4) Whether each account is a public or a non-public customer 
account;
    (5) Whether any account is a discretionary account;
    (6) A description of all claims against the debtor not based upon a 
commodity contract account of the claimant;
    (7) A description of all claims of the debtor against the claimant 
not included in the equity of a commodity contract account of the 
claimant;
    (8) A description of any deposits of money, securities or property 
with the debtor made by the claimant indicating the portion of such, if 
any, which was contained in the information provided in paragraph (d)(3) 
of this section and identifying any such property which would be 
specifically identifiable property as defined in Sec.  190.01(kk);
    (9) Whether the claimant is or was an ``affiliate,'' ``insider,'' or 
``relative'' of the debtor as these terms are defined by sections 101 
(2), (25), and (34), respectively, of the Bankruptcy Code;
    (10) The amount of the claimant's percentage interest in any joint 
account;
    (11) Whether the claimant's positions in security futures products 
are held in a futures account or a securities account, as these terms 
are defined in Sec.  1.3 of this chapter;
    (12) Whether the claimant wishes to receive payment in kind, to the 
extent possible, for any claim for securities; and
    (13) Copies of any documents which support the information contained 
in the proof of customer claim, including without limitation, customer 
confirmations, account statements, and statements of purchase or sale.

A proof of claim form which may be used by the trustee is set forth in 
the appendix to this part.
    (e) Transfers--(1) All cases. The trustee for a commodity broker 
must immediately use its best efforts to effect a transfer in accordance 
with Sec.  190.06 (e) and (f) no later than the seventh calendar day 
after the order for relief of the open commodity contracts and equity 
held by the commodity broker for or on behalf of its customers.
    (2) Involuntary cases. A commodity broker against which an 
involuntary petition in bankruptcy is filed, or the trustee if a trustee 
has been appointed in such case, must use its best efforts to effect a 
transfer in accordance with Sec.  190.06 (e) and (f) of all open 
commodity contracts and equity held by the commodity broker for or on 
behalf of its customers and such other property as the Commission in its 
discretion may authorize, on or before the seventh calendar day after 
the filing date, and immediately cease doing business: Provided, 
however, That the

[[Page 512]]

commodity broker may trade for liquidation only, unless otherwise 
directed by the Commission, by any applicable self-regulatory 
organization or by the court: And, Provided further, That if the 
commodity broker demonstrates to the Commission within such period that 
it was in compliance with the segregation and financial requirements of 
this chapter on the filing date, and the Commission determines, in its 
sole discretion, that such transfer or liquidation is neither 
appropriate nor in the public interest, the commodity broker may 
continue in business subject to applicable provisions of the Bankruptcy 
Code and of this chapter.
    (f) Liquidation or offset. After entry of the order for relief and 
subject to paragraph (e) of this section, which requires the trustee to 
attempt to make certain transfers permitted by Sec.  190.06 and section 
764(b) of the Bankruptcy Code, the following commodity contracts and 
other property held by or for the account of a debtor must be liquidated 
or offset by the trustee promptly and in an orderly manner, subject to 
limit moves and to applicable procedures under the Bankruptcy Code:
    (1) Open commodity contracts. All open commodity contracts except:
    (i) Dealer option contracts, if the dealer option grantor is not the 
debtor, which cannot be transferred on or before the seventh calendar 
day after the order for relief; and
    (ii) Specifically identifiable commodity contracts as defined in 
Sec.  190.01(kk)(2) for which an instruction prohibiting liquidation is 
noted prominently in the accounting records of the debtor and timely 
received under paragraph (b)(2) of this section. Notwithstanding the 
foregoing, an open commodity contract must be offset if: such contract 
is a futures contract or a Cleared Swaps contract which cannot be 
settled in cash and which would otherwise remain open either beyond the 
last day of trading (if applicable), or the first day on which notice of 
intent to deliver may be tendered with respect thereto, whichever occurs 
first; such contract is a long option on a physical commodity which 
cannot be settled in cash and would be automatically exercised, has 
value and would remain open beyond the last day for exercise; such 
contract is a short option on a physical commodity which cannot be 
settled in cash; or, as otherwise specified in these rules.
    (2) Specifically identifiable property other than open commodity 
contracts. Specifically identifiable property other than open commodity 
contracts to the extent that:
    (i) The fair market value of such property is less than 90% of its 
fair market value on the date of entry of the order for relief; or
    (ii) The trustee has not received instructions to return, or has not 
returned, such property upon the terms contained in Sec.  190.08(d)(1) 
on or before the end of the period set forth in paragraph (b)(1) of this 
section.
    (3) All other property. All other property not required to be 
transferred or returned pursuant to customer instructions which has not 
been liquidated in accordance with paragraphs (f)(1) and (f)(2) of this 
section.
    (g) Treatment of open commodity contracts--(1) Margin payments by 
the trustee. Prior to the primary liquidation date, the trustee may make 
variation and maintenance margin payments to a commodity broker carrying 
the account of the debtor, as appropriate, pending liquidation of any 
open commodity contracts required to be liquidated under paragraph 
(f)(1) of this section, whether or not such contracts are specifically 
identifiable to a particular customer: Provided, That:
    (i) No payments may be made on behalf of accounts which are in 
deficit,
    (ii) No payments may be made on behalf of non-public customers or 
the debtor from funds which are segregated for the benefit of public 
customers,
    (iii) The trustee must make margin payments if payments of margin 
are received from customers after bankruptcy in response to margin 
calls, and
    (iv) No payments need be made to restore initial margin.
    (2) Margin calls. The trustee, or in the case of an involuntary 
bankruptcy, the commodity broker against which the petition is filed or 
the trustee if a trustee has been appointed, must issue margin calls 
with respect to any account in which the funded balance less the value 
on the date of return or

[[Page 513]]

transfer of any property previously returned or transferred does not 
equal or exceed:
    (i) 100% of the maintenance margin requirements of the applicable 
designated contact market or swap execution facility, if any, with 
respect to the open commodity contracts in such account; or
    (ii) If there are no such maintenance margin requirements, 100% of 
the clearing organization margin requirements applicable to the open 
commodity contracts in such account; or
    (iii) If there are no maintenance margin requirements or clearing 
organization margin requirements, then 50% of the initial margin 
applicable to the open commodity contracts in such account;

Provided, That no margin calls need be made by the trustee to restore 
initial margin. A margin call for such accounts should be made as soon 
as possible following the order for relief and the trustee shall be 
authorized, but not obligated, to liquidate any account for which such 
margin call is not met within a reasonable time as defined in Sec.  
190.04(e)(4): Provided, That the trustee must immediately liquidate any 
account which is in deficit.
    (3) Margin payments by the customer. The full amount of any margin 
payment by a customer in response to a margin call under paragraph 
(g)(2) of this section must be credited to the funded balance of the 
particular account for which it was made.

[48 FR 8739, Mar. 1, 1983, as amended at 67 FR 58298, Sept. 13, 2002; 77 
FR 6378, 6379, Feb. 7, 2012]



Sec.  190.03  Operation of the debtor's estate subsequent to the
primary liquidation date.

    Subsequent to the primary liquidation date, accounts which contain 
open commodity contracts not required to be liquidated under Sec.  
190.02 (f)(1) shall be operated by the trustee as follows:
    (a) Operation of accounts held open for transfer--(1) Establishment 
of transfer accounts. On the primary liquidation date, the trustee must 
generate a new statement of account for each class of account of a 
customer which contains a commodity contract not required to be 
liquidated under Sec.  190.02(f)(1). The opening balance of such 
statement must be equal to its funded balance, less the value on the 
date of its transfer or return of any property transferred or returned 
with respect to the net equity claim for such account prior to the 
primary liquidation date.
    (2) Accounting for transfer accounts. The opening balance of any 
statement generated on the primary liquidation date in accordance with 
paragraph (a)(1) of this section must be adjusted for operations on or 
subsequent to the primary liquidation date in the same manner as the 
equity in a commodity contract account maintained for or on behalf of a 
customer would adjusted in the ordinary course of business prior to the 
filing date: Provided, however, That such statement of account must also 
be adjusted to reflect certain adjustments to the funded balance in 
accordance with Sec.  190.07(c)(2), such that the balance in that 
account will always be equal to the funded balance of the claimant's net 
equity claim adjusted for corrections and subsequent operations less the 
value on the date of transfer or return of any property transferred or 
returned with respect to that claim prior to the primary liquidation 
date.
    (3) Margin calls. The trustee must promptly issue margin calls with 
respect to any account referred to under paragraph (a)(1) of this 
section in which the balance does not equal or exceed 100% of the 
maintenance margin requirements of the applicable designated contact 
market or swap execution facility, if any, with respect to the open 
commodity contracts in such account, or if there are no such maintenance 
margin requirements, 100% of the clearing organization's initial margin 
requirements applicable to the open commodity contracts in such account, 
or if there are no such maintenance margin requirements or clearing 
organization initial margin requirements, then 50% of the customer 
initial margin applicable to the commodity contracts in such account: 
Provided, That no margin calls need be made to restore customer initial 
margin.
    (4) Margin payments. The trustee may make variation or maintenance 
margin payments to the broker carrying any account referred to in 
paragraph (a)(1) of this section as appropriate if such

[[Page 514]]

payments do not exceed the balance of the statement of account generated 
under paragraph (a)(1) of this section with respect to which such 
contracts are credited. Any customer for which commodity contracts 
remain open subsequent to the primary liquidation date will not be 
relieved of the obligation to make margin payments by reason of the 
bankruptcy of the commodity broker: Provided, That the full amount of 
any margin payment made by a customer subsequent to the primary 
liquidation date must be credited to the account referred to in 
paragraph (a)(1) of this section for which it was made.
    (5) Distribution. No distribution of equity may be made to or on 
behalf of customers by the trustee with respect to an account 
established in accordance with paragraph (a)(1) of this section, except 
pursuant to paragraph (a)(4) of this section and to Sec.  190.08(d).
    (b) Liquidation of open commodity contracts. Commodity contracts 
held open by the trustee in accordance with paragraph (a)(1) of this 
section must be liquidated promptly and in an orderly manner, if:
    (1) Any payment of margin would result in a deficit in the account 
in which they are held;
    (2) The customer for, or on whose behalf, the account is held fails 
to meet a margin call within a reasonable time;
    (3) The trustee has received no customer instructions with respect 
to such contract by the sixth calendar day after entry of the order for 
relief;
    (4) The commodity contract has not been transferred in accordance 
with Sec.  190.08(d)(2) on or before the seventh calendar day after 
entry of the order for relief; or
    (5) The commodity contract would otherwise remain open (e.g., 
because it cannot be settled in cash) beyond the last day of trading in 
such contract (if applicable) or the first day on which notice of 
delivery may be tendered with respect to such contract, whichever occurs 
first.
    (c) Liquidation of specifically identifiable property other than 
open commodity contracts. All specifically identifiable property other 
than open commodity contracts which have not been liquidated prior to 
the primary liquidation date, and for which no customer instructions 
have been timely received must be liquidated, to the extent reasonably 
possible, no later than the sixth calendar day after final publication 
of the notice referred to in Sec.  190.02(b)(1). All other specifically 
identifiable property must be liquidated or returned, to the extent 
reasonably possible, no later than the seventh calendar day after final 
publication of such notice.

[48 FR 8739, Mar. 1, 1983, as amended at 77 FR 6378, 6380, Feb. 7, 2012]



Sec.  190.04  Operation of the debtor's estate--general.

    (a) Compliance with the Act and regulations. Except as specifically 
provided otherwise in this part, the trustee shall comply with all of 
the provisions of the Act and of the regulations thereunder as if it 
were the debtor.
    (b) Computation of funded balance. Using the information available, 
the trustee must compute a funded balance for each customer account 
which contains open commodity contracts as of the close of business each 
day subsequent to the order for relief until the final liquidation date. 
Such computation must be completed prior to noon on the next business 
day.
    (c) Records--(1) Maintenance. Subject to the requirements of the 
Bankruptcy Code, records of the computations required by this part shall 
be maintained in accordance with Sec.  1.31 of this chapter by the 
trustee for the greater of the period required by Sec.  1.31 of this 
chapter or for a period of one year after the close of the bankruptcy 
proceeding for which they were compiled.
    (2) Accessibility. The records required to be maintained by 
paragraph (c)(1) of this section shall be available during business 
hours to the Court, parties in interest, the Commission and the U.S. 
Department of Justice. At any time on or after the filing date, the 
commodity broker, or the trustee if a trustee has been appointed, shall 
be required to give the Commission and the U.S. Department of Justice 
immediate access to all records of the debtor, including records 
required to be retained in accordance with Sec.  1.31 of this chapter 
and all other records of the commodity broker, whether or not the Act or 
this

[[Page 515]]

chapter would require such records to be maintained by the commodity 
broker.
    (d) Liquidation--(1) Order of Liquidation--(i) In the Market. 
Liquidation of open commodity contracts held for a house account or 
customer account by or on behalf of a commodity broker which is a debtor 
shall be accomplished pursuant to the rules of a clearing organization, 
a designated contract market, or a swap execution facility, as 
applicable. Such rules shall ensure that the process for liquidating 
open commodity contracts, whether for the house account or the customer 
account, results in competitive pricing, to the extent feasible under 
market conditions at the time of liquidation. Such rules must be 
submitted to the Commission for approval, pursuant to section 5c(c) of 
the Act, and be approved by the Commission. Alternatively, such rules 
must otherwise be submitted to and approved by the Commission (or its 
delegate pursuant to Sec.  190.10(d) of this part) prior to their 
application.
    (ii) Book entry. Notwithstanding paragraph (d)(1) of this section, 
in appropriate cases, upon application by the trustee or the affected 
clearing organization, the Commission may permit open commodity 
contracts to be liquidated, or settlement on such contracts to be made, 
by book entry. Such book entry shall offset open commodity contracts, 
whether matched or not matched on the books of the commodity broker, 
using the settlement price for such commodity contracts as determined by 
the clearing organization. Such settlement price shall be determined by 
the rules of the clearing organization, which shall ensure that such 
settlement price is established in a competitive manner, to the extent 
feasible under market conditions at the time of liquidation. Such rules 
must be submitted to the Commission for approval pursuant to section 
5c(c) of the Act, and be approved by the Commission. Alternatively, such 
rules must otherwise be approved by the Commission (or its delegate 
pursuant to Sec.  190.10(d) of this part) prior to their application.
    (2) Liquidation only. Nothing in this part shall be interpreted to 
permit the trustee to purchase or sell new commodity contracts for 
customers of the debtor except to offset open commodity contracts or to 
transfer any transferable notice received by the debtor or the trustee 
under any commodity contract: Provided, however, That the trustee may, 
in its discretion and with approval of the Commission, cover uncovered 
inventory or commodity contracts of the debtor which cannot be 
liquidated immediately because of price limits or other market 
conditions, or may take an offsetting position in a new month or at a 
strike price for which limits have not been reached.
    (3) Exception to Liquidation Only. Notwithstanding paragraph (d)(2) 
of this section, the trustee may, with the written permission of the 
Commission, operate the business of the debtor in the ordinary course, 
including the purchase or sale of new commodity contracts on behalf of 
the customers of the debtor under appropriate circumstances, as 
determined by the Commission.
    (e) Other matters--(1) Determination as to bona fide hedges. In 
determining which commodity contracts are eligible to be held open for 
transfer pursuant to customer instruction, the trustee may rely on the 
designation in the accounting records of the commodity broker that the 
account for or on behalf of which the contract is held is a hedging 
account. Commodity contracts maintained in a hedging account may be 
treated by the trustee as specifically identifiable.
    (2) Disbursements. The trustee shall make no disbursements to 
customers prior to final distribution except with approval of the court 
or in accordance with Sec.  190.08(d).
    (3) Investment. The trustee shall promptly invest the equity 
resulting from the liquidation of commodity contracts, and the proceeds 
of the liquidation of specifically identifiable property, in obligations 
of the United States and obligations fully guaranteed as to principal 
and interest by the United States, and may similarly invest any customer 
equity in accounts which remain open in accordance with Sec.  190.03: 
Provided, That such obligations are maintained in a depository located

[[Page 516]]

in the United States, its territories or possessions.
    (4) Margin calls--reasonable time. Except as otherwise provided in 
this part, a reasonable time for meeting margin calls made by the 
trustee shall be deemed to be one hour, or such greater period not to 
exceed one business day, as the trustee may determine in its sole 
discretion.
    (5) Management of Long Option Contracts. Subject to the applicable 
liquidation provisions the trustee must use its best efforts to assure 
that a long option contract with value does not expire worthless.

(Secs. 2(a), 4c, 4d, 4g, 5, 5a, 8a, 15, 19 and 20 of the Commodity 
Exchange Act, as amended by the Futures Trading Act of 1982, Pub. L. 97-
444, 96 Stat. 2294 (1983), 7 U.S.C. 2 and 4a, 6c, 6d, 6g, 7, 7a, 12a, 
19, 23 and 24 (1976 & Supp. V. 1981 and Pub. L. 97-444); secs. 761-766 
of the Bankruptcy Reform Act of 1978, as amended by the Bankruptcy Act 
Amendments, Pub. L. 97-222, 96 Stat. 235 (1982), 11 U.S.C. 761-766 
(Supp. V. 1981 as amended by Pub. L. 97-222))

[48 FR 8739, Mar. 1, 1983, as amended at 48 FR 28980, June 24, 1983; 75 
FR 44893, July 30, 2010; 77 FR 6380, Feb. 7, 2012]



Sec.  190.05  Making and taking delivery on commodity contracts.

    (a) General. (1) In the event that the trustee is unable to 
liquidate an open commodity contract subject to physical delivery or an 
option on a physical commodity, which cannot be settled in cash, prior 
to the last day of trading in that contract as required by Sec. Sec.  
190.02(f)(1) and 190.03(b)(5), the trustee must use its best efforts to 
prevent property which is to be delivered for or on behalf of a customer 
to fulfill that contract, or property for which delivery is being taken 
with respect to a customer pursuant to that contract, from becoming part 
of the debtor's estate.
    (2) Delivery account shall mean any account prominently designated 
as such in the records of the debtor which contains only the 
specifically identifiable property associated with delivery set forth in 
Sec.  190.01(kk) (3), (4), and (5), except that with respect to Sec.  
190.01(kk) (4) and (5), delivery need not be made or taken and exercise 
need not be effected for such property to be included in a delivery 
account.
    (3) The portion of the price or the proceeds of a commodity contract 
upon delivery which is not specifically identifiable property under 
Sec.  190.01(kk) (4) and (5) must be distributed pro rata under section 
766(h) of the Code.
    (b) Rules for deliveries on behalf of a customer of a debtor. Except 
in the case of a commodity contract which is settled in cash, each 
designated contract market, swap execution facility, or clearing 
organization shall adopt, maintain in effect and enforce rules which 
have been submitted in accordance with section 5c(c) of the Act for 
approval by the Commission, which:
    (1) Permit the making and taking of delivery to fulfill a commodity 
contract for a physical commodity or an option on a physical commodity, 
which has not become part of the debtor's estate on the date of the 
entry of the order for relief but with respect to which commodity 
contract:
    (i) Trading has ceased on the date of the entry of the order for 
relief;
    (ii) Notice of delivery has been tendered on or before the date of 
the entry of the order for relief; or,
    (iii) Trading ceases before it can be liquidated by the trustee, to 
be effected directly between the customer of the debtor and the person 
identified by the clearing organization as the party to whom delivery 
should be made or from whom delivery should be taken by such customer of 
the debtor without intervention of the trustee and without including 
such physical commodity or the payment for such physical commodity in 
any bankruptcy distribution: Provided, however, That a customer shall 
not be relieved of his obligation to make or take delivery for the sole 
reason that delivery must be made or taken from a commodity broker which 
is a debtor; and
    (2) Recognize that the equity of a customer of the debtor in a 
commodity contract upon which delivery is made or taken must be included 
in the net equity claim of that customer and, as such, can only be 
distributed pro rata at the time of, and as part of, any distributions 
to customers made by the trustee.
    (c) Delivery made or taken within the debtor's estate. (1) Any 
property in a delivery account which is part of the

[[Page 517]]

debtor's estate on the date of the order for relief may be returned 
under the terms set forth in Sec.  190.08(d)(1)(ii).
    (2) If the property to be delivered is part of the debtor's estate 
on the date of the order for relief and a customer of the debtor is 
required to make delivery, the trustee must make delivery in the same 
manner as if no bankruptcy had occurred and the party by whom delivery 
is taken must pay the full notice price or strike price for delivery.
    (3) If delivery is to be made or taken on behalf of a house account 
the trustee must either make or take delivery, as the case may be, on 
behalf of the debtor's estate: Provided, That if the trustee, at any 
time, takes delivery of a physical commodity, the trustee must convert 
that physical commodity to cash as promptly as possible.

(Secs. 2(a), 4c, 4d, 4g, 5, 5a, 8a, 15, 19 and 20 of the Commodity 
Exchange Act, as amended by the Futures Trading Act of 1982, Pub. L. 97-
444, 96 Stat. 2294 (1983), 7 U.S.C. 2 and 4a, 6c, 6d, 6g, 7, 7a, 12a, 
19, 23 and 24 (1976 & Supp. V. 1981 and Pub. L. 97-444); secs. 761-766 
of the Bankruptcy Reform Act of 1978, as amended by the Bankruptcy Act 
Amendments, Pub. L. 97-222, 96 Stat. 235 (1982), 11 U.S.C. 761-766 
(Supp. V. 1981 as amended by Pub. L. 97-222))

[48 FR 8739, Mar. 1, 1983, as amended at 48 FR 28980, June 24, 1983; 59 
FR 5704, Feb. 8, 1994; 77 FR 6381, Feb. 7, 2012]



Sec.  190.06  Transfers.

    (a) Transfer rules. No clearing organization or other self-
regulatory organization may adopt, maintain in effect or enforce rules 
which:
    (1) Are inconsistent with the provisions of this part;
    (2) Interfere with the acceptance by its members of open commodity 
contracts and the equity margining or securing such contracts from 
futures commission merchants, or persons which are required to be 
registered as futures com-mission merchants, which are required to 
transfer accounts pursuant to Sec.  1.17(a)(4) of this chapter; or
    (3) Prevent the acceptance by its members of transfers of open 
commodity contracts and the equity margining or securing such contracts 
from futures commission merchants with respect to which a petition in 
bankruptcy has been filed, if such transfers have been approved by the 
Commission. Provided, however, that this paragraph shall not limit the 
exercise of any contractual right of a clearing organization or other 
registered entity to liquidate open commodity contracts.
    (b) Notice. Unless notice has been filed pursuant to Sec.  1.65(b) 
of this chapter, if a futures commission merchant, or a person required 
to be registered as a futures commission merchant, intends to transfer 
commodity contracts held by or for a commodity broker from or for the 
account of a customer to another person registered as a futures 
commission merchant after a petition in bankruptcy has been filed by or 
against such commodity broker, the transferor must notify the Commission 
no later than is required under Sec.  190.02(a)(2).
    (c) Financial requirements for transferees. (1) No transfer may be 
made which would cause the transferee to be in violation of the minimum 
financial requirements set forth in this chapter.
    (2) A transferee may accept a transfer of open commodity contracts 
even though the money, securities and other property eligible for 
transfer under the regulations contained in this part is insufficient to 
fully margin such positions, if the transferee agrees to accept the 
transfer subject to any loss due to the failure to recover such 
deficiency from the customers whose contracts it has accepted or from 
the estate of the debtor.
    (3) The transferee of a commodity contract for which notice is given 
under Sec.  190.06(b)(2) must keep that contract open one business day 
after its receipt, unless the customer for whom the transfer is made 
fails to respond within a reasonable time to a margin call for the 
difference between the margin transferred with such contract and the 
margin which such transferee would require with respect to a similar 
commodity contract held for the account of a customer in the ordinary 
course of business.
    (4) No commission may be collected by the transferor with respect to 
the transfer of an open commodity contract for which notice is given 
under Sec.  190.06(b)(2).
    (d) Customer instructions--(1) Customer instructions. A commodity 
broker must provide an opportunity for each customer to specify when 
undertaking its

[[Page 518]]

first hedging contract whether, in the event of bankruptcy, such 
customer prefers that open commodity contracts held in a hedging account 
be liquidated by the trustee without seeking customer instructions. Such 
commodity broker may obtain evidence of the customer instructions as 
provided in Sec.  1.55(d) of this chapter.
    (2) Record of customer instructions. Each futures commission 
merchant must indicate prominently in the accounting records in which it 
maintains open trade balances any customer accounts which are hedging 
accounts for which the customer has not specified that it prefers open 
contracts to be liquidated in bankruptcy by the trustee without 
instruction.
    (e) Eligibility for transfer under section 764(b) of the Bankruptcy 
Code--(1) Accounts eligible for transfer. Subject to the requirements of 
paragraph (e)(2) of this section, all accounts are eligible for transfer 
after the filing date pursuant to section 764(b) of the Bankruptcy Code, 
except:
    (i) House accounts or the accounts of general partners of the debtor 
if the debtor is a partnership;
    (ii) Leverage accounts, if the debtor is the leverage transaction 
merchant with respect to such accounts;
    (iii) Dealer option accounts, if the debtor is the dealer option 
grantor with respect to such accounts; or
    (iv) Accounts which are in deficit.
    (2) Amount of equity which may be transferred. In no case may money, 
securities or property be transferred in respect of any eligible account 
if the value of such money, securities or property would exceed the 
funded balance of such account based on available information as of the 
calendar day immediately preceding transfer less the value on the date 
of return or transfer of any property previously returned or transferred 
with respect thereto.
    (f) Special rules for transfers under section 764(b) of the 
Bankruptcy Code--(1) Dealer options--(i) Eligibility for transfer. Prior 
to exercise, any dealer option contract held by or for the account of a 
debtor which is a futures commission merchant from or for the account of 
a customer may be transferred even if the funded balance available for 
transfer which is attributable to such contract does not equal 100% of 
the portion of the purchase price required to be segregated with respect 
to such contract: Provided, That a dealer option contract will be 
eligible for transfer only if any deficiency in the funded balance of 
the customer account in which it is held is not due to amounts owed by 
such customer to the debtor; and, Provided further, That the transferee 
of any dealer option contract need not segregate more than an amount 
equal to that portion of the purchase price due the grantor which is 
transferred with the contract which should be equal to the grantor's 
funded balance in the portion of the purchase price segregated less any 
reasonable reserve established by the trustee for the nonrecovery of 
overpayments.
    (ii) Obligation of the dealer option grantor. In the event of the 
transfer of a dealer option contract pursuant to this section, the 
failure of the debtor futures commission merchant to segregate 100% of 
the purchase price due the grantor for such contract, or the failure of 
the dealer option grantor to collect 100% of such purchase price due the 
grantor, shall not excuse the dealer option grantor from its obligation 
to perform such contract in full upon its exercise, without any setoff 
or set aside for the premium deficiency.
    (2) Clearing organizations. Commodity contracts held by a clearing 
organization which is a debtor may not be transferred.
    (3) Partial transfers--(i) Of the customer estate. If all eligible 
customer accounts held by a debtor cannot be transferred under this 
section, a partial transfer may nonetheless be made. The Commission will 
not disapprove such a transfer for the sole reason that it was a partial 
transfer if it would prefer the transfer of accounts, the liquidation of 
which could adversely affect the market or the bankrupt estate. Any 
dealer option contract held by or for the account of a debtor which is a 
futures commission merchant from or for the account of a customer which 
has not previously been transferred, and is eligible for transfer, must 
be transferred on or before the seventh calendar day after entry of the 
order for relief.

[[Page 519]]

    (ii) Of a customer account. If all of a customer's open commodity 
contracts cannot be transferred under this section, a partial transfer 
of contracts may be made. A partial transfer may be effected by 
liquidating that portion of the open commodity contracts held by a 
customer which represents sufficient equity to permit the transfer of 
the remainder. If any commodity contracts to be transferred in a partial 
transfer are part of a spread or straddle, both sides of such spread or 
straddle must be transferred or neither side may be transferred.
    (g) Prohibition on avoidance of transfers under section 764(b) of 
the Bankruptcy Code--(1) Pre-relief transfers. Notwithstanding the 
provisions of paragraph (e) of this section, the following transfers may 
not be avoided by a trustee:
    (i) The transfer of commodity contract accounts prior to the entry 
of the order for relief in compliance with Sec.  1.17(a)(4) of this 
chapter unless such transfer is disapproved by the Commission; or
    (ii) The transfer prior to the order for relief by a public 
customer, including a transfer by a public customer which is a commodity 
broker, of commodity contract accounts held from or for the account of 
such customer by or on behalf of the debtor unless:
    (A) The customer acted in collusion with the debtor or its 
principals to obtain a greater share of the bankrupt estate than that to 
which it would be entitled in a bankruptcy distribution; or
    (B) The transfer is disapproved by the Commission.
    (iii) The transfer prior to the order for relief by a clearing 
organization of one or more accounts held for or on behalf of customers 
of the debtor, provided that (I) the money, securities, or other 
property accompanying such transfer did not exceed the funded balance of 
each account based on available information as of the close of business 
on the business day immediately preceding such transfer less the value 
on the date of return or transfer of any property previously returned or 
transferred thereto, and (II) the transfer is not disapproved by the 
Commission.
    (2) Post-relief transfers. On or after the entry of the order for 
relief, the following transfers to one or more transferees may not be 
avoided by the trustee:
    (i) The transfer of a customer account eligible to be transferred 
under paragraph (e) or (f) of this section made by the trustee of the 
commodity broker or by any self-regulatory organization of the commodity 
broker:
    (A) On or before the seventh calendar day after the entry of the 
order for relief; and
    (B) The Commission is notified in accordance with Sec.  190.02(a)(2) 
prior to the transfer and does not disapprove the transfer; or
    (ii) The transfer of a customer account at the direction of the 
Commission on or before the seventh calendar day after the order for 
relief upon such terms and conditions as the Commission may deem 
appropriate and in the public interest.
    (3) Withdrawals prior to bankruptcy. The withdrawal or settlement of 
a commodity contract account by a public customer including a public 
customer which is a commodity broker, prior to the filing date may not 
be avoided by a trustee unless:
    (i) The customer making the withdrawal or settlement acted in 
collusion with the debtor or its principals to obtain a greater share of 
the bankruptcy estate than that to which such customer would be entitled 
in a bankruptcy distribution; or
    (ii) The withdrawal or settlement is disapproved by the Commission.
    (h) Commission action. Notwithstanding any other provision of this 
section, in appropriate cases and to protect the public interest, the 
Commission may:
    (1) Prohibit the transfer of customer accounts; or
    (2) Permit transfers of accounts which do not comply with the 
requirements of this section.

[48 FR 8739, Mar. 1, 1983; 48 FR 15122, 15123, Apr. 7, 1983; 58 FR 
17505, Apr. 5, 1993; 77 FR 6378, 6381, Feb. 7, 2012]



Sec.  190.07  Calculation of allowed net equity.

    Allowed net equity shall be computed as follows:
    (a) Allowed claim. The allowed net equity claim of a customer shall 
be equal

[[Page 520]]

to the aggregate of the funded balances of such customer's net equity 
claim for each account class plus or minus the adjustments specified in 
paragraph (d) of this section.
    (b) Net equity. Net equity means the total claim of a customer 
against the estate of the debtor based on the commodity contracts held 
by the debtor for or on behalf of such customer less any indebtedness of 
the customer to the debtor. Net equity shall be calculated as follows:
    (1) Step 1--Equity determination. Determine the equity balance of 
each customer account by computing, with respect to such account, the 
sum of:
    (i) The ledger balance;
    (ii) The open trade balance; and
    (iii) The current realizable market value, determined as of the 
close of the market on the last preceding market day, of any securities 
or other property held by or for the debtor from or for such account, 
plus accrued interest, if any.
    (A) For the purposes of this paragraph (b)(1), the ledger balance of 
a customer account shall be calculated by adding:
    (1) Cash deposited to purchase, margin, guarantee, secure, or settle 
a commodity contract;
    (2) Except as is otherwise provided in this chapter, the cash 
proceeds of such cash, or of securities or other property referred to in 
paragraph (b)(1) of this section held from or for the customer by or for 
the account of the commodity broker; and
    (3) Gains realized on trades, and
    (B) Subtracting from the result:
    (1) Losses realized on trades;
    (2) Disbursements to or on behalf of the customer; and
    (3) The normal costs attributable to the payment of commissions, 
brokerage, interest, taxes, storage, transaction fees, insurance and 
other costs and charges lawfully incurred in connection with the 
purchase, sale, exercise, or liquidation of any commodity contract in 
such account. For purposes of this paragraph (b)(1), the open trade 
balance of a customer's account shall be computed by subtracting the 
unrealized loss in value of the open commodity contracts held by or for 
such account from the unrealized gain in value of the open commodity 
contracts held by or for such account. In calculating the ledger balance 
or open trade balance of any customer, exclude any security futures 
products, any gains or losses realized on trades in such products, any 
property received to margin, guarantee or secure such products 
(including interest thereon or the proceeds thereof), to the extent any 
of the foregoing are held in a securities account, and any disbursements 
to or on behalf of such customer in connection with such products or 
such property held in a securities account.
    (2) Step 2--Customer determination (aggregation). Aggregate the 
credit and debit equity balances of all accounts of the same class held 
by a customer in the same capacity. Paragraphs (b)(2)(i) through 
(b)(2)(xiii) of this section prescribe which accounts must be treated as 
being held in the same capacity and which accounts must be treated as 
being held in a separate capacity.
    (i) Except as otherwise provided in this paragraph (b)(2), all 
accounts which are maintained with a debtor in a person's name and 
which, under this paragraph (b)(2), are deemed to be held by that person 
in its individual capacity shall be deemed to be held in the same 
capacity.
    (ii) An account maintained with a debtor by a guardian, custodian, 
or conservator for the benefit of a ward, or for the benefit of a minor 
under the Uniform Gift to Minors Act, shall be deemed to be held in a 
separate capacity from accounts held by such guardian, custodian or 
conservator in its individual capacity.
    (iii) An account maintained with a debtor in the name of an executor 
or administrator of an estate shall be deemed to be held in a separate 
capacity from accounts held by such executor or administrator in its 
individual capacity.
    (iv) Subject to paragraph (b)(2)(iii) of this section, an account 
maintained with a debtor in the name of a decedent, in the name of the 
decedent's estate, or in the name of the executor or administrator of 
such estate shall be deemed to be accounts held in the same capacity.
    (v) An account maintained with a debtor by a trustee shall be deemed 
to

[[Page 521]]

be held in the individual capacity of the grantor of the trust unless 
the trust is created by a valid written instrument for a purpose other 
than avoidance of an offset under the regulations contained in this 
part. A trust account which is not deemed to be held in the individual 
capacity of its grantor under paragraph (b)(2)(v) of this section shall 
be deemed to be held in a separate capacity from accounts held in an 
individual capacity by the trustee, by the grantor or any successor in 
interest of the grantor, or by any trust beneficiary, and from accounts 
held by any other trust.
    (vi) An account maintained with a debtor by a corporation, 
partnership, or unincorporated association shall be deemed to be held in 
a separate capacity from accounts held by the shareholders, partners or 
members of such corporation, partnership or unincorporated association, 
if such entity was created for purposes other than avoidance of an 
offset under the regulations contained in this part.
    (vii) A hedging account of a person shall be deemed to be held in 
the same capacity as a speculative account of such person.
    (viii) Subject to paragraph (b)(2)(ix) of this section, the futures 
accounts, leverage accounts, options accounts, foreign futures accounts, 
delivery accounts (as defined in Sec.  190.05(a)(2)), and cleared swaps 
accounts of the same person shall not be deemed to be held in separate 
capacities: Provided, however, that such accounts may be aggregated only 
in accordance with paragraph (b)(3) of this section.
    (ix) An omnibus customer account of a futures commission merchant 
maintained with a debtor shall be deemed to be held in a separate 
capacity from the house account and any other omnibus customer account 
of such futures commission merchant.
    (x) A joint account maintained with the debtor shall be deemed to be 
held in a separate capacity from any account held in an individual 
capacity by the participants in such account, from any account held in 
an individual capacity by a commodity pool operator or commodity trading 
advisor for such account, and from any other joint account: Provided, 
however, That if such account is not transferred in accordance with 
Sec.  190.06, it shall be deemed to be held in the same capacity as any 
other joint account held by identical participants and a participant's 
percentage interest therein shall be deemed to be held in the same 
capacity as any account held in an individual capacity by such 
participant.
    (xi) An account maintained with a debtor in the name of a plan 
which, on the filing date, has in effect a registration statement in 
accordance with the requirements of section 1031 of the Employee 
Retirement Income Security Act of 1974 and the regulations thereunder 
shall be deemed to be held in a separate capacity from an account held 
in an individual capacity by the plan administrator, any employer, 
employee, participant, or beneficiary with respect to such plan.
    (xii) Except as otherwise provided in this section, an account 
maintained with a debtor by an agent or nominee for a principal or a 
beneficial owner shall be deemed to be an account held in the individual 
capacity of such principal or beneficial owner.
    (xiii) With respect to the cleared swaps account class, each 
individual customer account within each omnibus customer account 
referred to in paragraph (ix) of this section shall be deemed to be held 
in a separate capacity from each other such individual customer account; 
subject to the provisions of paragraphs (b)(2)(i) through (xii) of this 
paragraph (b)(2).
    (xiv) Accounts held by a customer in separate capacities shall be 
deemed to be accounts of different customers. The burden of proving that 
an account is held in a separate capacity shall be upon the customer.
    (3) Step 3--Setoffs. (i) The net equity of one customer account may 
not be offset against the net equity of any other customer.
    (ii) Any obligation which is not required to be included in 
computing the equity of a customer under paragraph (b)(1) of this 
section, but which is owed by such customer to the debtor must be 
deducted from any obligation not required to be included in computing 
the equity of a customer which is owed by such debtor to the customer. 
If the former amount exceeds the latter, the

[[Page 522]]

excess must be deducted from the equity balance of the customer obtained 
after performing the preceding calculations required by paragraph (b) of 
this section: Provided, That if the customer owns more than two classes 
of accounts the excess must be offset against each positive equity 
balance in the same proportion as that positive equity balance bears to 
the total of all positive equity balances of accounts of different 
classes held by such customer.
    (iii) A negative equity balance obtained with respect to one 
customer account class must be set off against a positive equity balance 
in any other account class of such customer held in the same capacity: 
Provided, That if a customer owns more than two classes of accounts such 
balance must be offset against each positive equity balance in the same 
proportion as that positive equity balance bears to the total of all 
positive equity balances in accounts of different classes held by such 
customer.
    (iv) To the extent any indebtedness of the debtor to the customer 
which is not required to be included in computing the equity of such 
customer under paragraph (b)(1) of this section exceeds such 
indebtedness of the customer to the debtor, the customer claim therefor 
will constitute a general creditor's claim rather than a customer 
property claim, and the net equity therefor shall be separately 
calculated.
    (v) The rules pertaining to separate capacities and permitted 
setoffs contained in this section must be applied subsequent to the 
entry of an order for relief; prior to the filing date, the provisions 
of Sec.  1.22 of this chapter and of sections 4d(a)(2) and 4d(f) of the 
Act (and, in each case, the regulations promulgated thereunder) shall 
govern what setoffs are permitted.
    (4) Step 4--Correction for distributions. The value on the date of 
transfer or distribution of any property transferred or distributed 
subsequent to the filing date and prior to the primary liquidation data 
with respect to each class of account held by a customer must be added 
to the equity obtained for that customer for accounts of that class 
after performing the steps contained in paragraphs (b)(1)-(3) of this 
section: Provided, however, That if all accounts for which there are 
customer claims of record and 100% of the equity pertaining thereto are 
transferred in accordance with Sec.  190.06 and section 764(b) of the 
Bankruptcy Code, net equity shall be computed based solely upon those 
customer claims, if any, filed subsequent to bankruptcy which are not 
claims of record on the filing date.
    (5) Step 5--Correction for subsequent events. Compute any 
adjustments to Steps 1 through 4 of this paragraph (b) required to 
correct misestimates or errors including, without limitation, 
corrections for subsequent events such as the liquidation of 
unliquidated claims at a value different from the estimated value 
previously used in computing net equity.
    (6) Step 6--Net equity of accounts which remain open subsequent to 
the primary liquidation date. If the accounts of a customer contain 
commodity contracts which remain open subsequent to the primary 
liquidation date, the trustee must adjust the net equity obtained for 
that customer pursuant to the steps contained in paragraphs (b) (1) 
through (5) of this section as provided in paragraphs (d)(1) and (d)(2) 
of this section.
    (c) Calculation of funded balance. ``Funded balance'' means a 
customer's pro rata share of the customer estate with respect to each 
account class available as of the primary liquidation date for 
distribution to customers of the same class.
    (1) The funded balance of any customer claim shall be computed by:
    (i) Multiplying the ratio of the amount of the net equity claim less 
the amounts referred to in paragraph (c)(1)(ii) of this section of such 
customer for any account class bears to the sum of the net equity claims 
less the amounts referred to in paragraph (c)(1)(ii) of this section of 
all customers for accounts of that class by the sum of:
    (A) The value of the money, securities or property segregated on 
behalf of all accounts of the same class less the amounts referred to in 
paragraph (c)(1)(ii) of this section;

[[Page 523]]

    (B) The value of any money, securities or property which must be 
allocated under Sec.  190.08 to customer accounts of the same class; and
    (C) The amount of any add-back required under paragraph (b)(4) of 
this section; and
    (ii) Then adding 100% of any margin payment made between the entry 
of the order for relief and the primary liquidation date.
    (2) Corrections to funded balance. The funded balance must be 
adjusted, as of the primary liquidation date, to correct for subsequent 
events including, without limitation:
    (i) Added claimants;
    (ii) Disallowed claims;
    (iii) Liquidation of unliquidated claims at a value other than their 
estimated value;
    (iv) Recovery of property; and
    (v) Deficits generated by the continued operation of accounts after 
the primary liquidation date which cannot be fully adjusted under 
paragraph (d) of this section.
    (d) Adjustments to funded balance for operations subsequent to the 
primary liquidation date. If accounts of a customer contain commodity 
contracts which remain open subsequent to the primary liquidation date, 
the funded balance for each class must be adjusted until liquidation or 
transfer of all such open commodity contracts of that customer of the 
same class, as follows:
    (1) Unrealized and realized gains and any receipts of margin with 
respect thereto must be added to the funded balance;
    (2) Unrealized and realized losses, and the normal costs 
attributable to the payment of commissions, brokerage, interest, taxes, 
storage, transaction fees and other costs and charges lawfully incurred 
with respect to the maintenance or liquidation of such open commodity 
contracts, and any distributions must be subtracted from the funded 
balance; and
    (3) Subject to claims against the trustee for failure to liquidate, 
any deficit which is not recovered from the customer on whose behalf it 
is incurred must be charged against the funded balance of each account 
which remained open on the date the deficit occurred in the same 
proportion as the funded balance of each account bears to all the funded 
balances of all accounts which remained open on that date.
    (e) Valuation. In computing net equity, commodity contracts and 
other property held by or for a commodity broker must be valued as 
provided in this paragraph (e): Provided, however, that for all 
commodity contracts other than those listed in paragraph (e)(1) of this 
section, if identical commodity contracts, securities, or other property 
are liquidated on the same date, but cannot be liquidated at the same 
price, the trustee may use the weighted average of the liquidation 
prices in computing the net equity of each customer holding such 
contracts, securities, or property.
    (1) Commodity Contracts. Unless otherwise specified in this 
paragraph (e), the value of an open commodity contract shall be equal to 
the settlement price as calculated by the clearing organization pursuant 
to its rules: Provided, that such rules must either be submitted to the 
Commission, pursuant to section 5c(c)(4) of the Act and be approved by 
the Commission, or such rules must be otherwise approved by the 
Commission (or its delegate pursuant to Sec.  190.10(d) of this part) 
prior to their application; Provided, further, that if such contract is 
transferred its value shall be determined as of the end of the 
settlement cycle in which it is transferred; and Provided, finally, that 
if such contract is liquidated, its value shall be equal to the net 
proceeds of liquidation.
    (2) Principal contracts. The valuation date of principal contracts 
which are not transferred shall be the date of the order for relief 
unless there is specific property which constitutes cover by the 
principal for the principal contract in which case it shall be the date 
of liquidation of the cover. For purposes of valuing contracts for which 
there is no established secondary market:
    (i) Cash price series approved by Commission. The market value of 
the physical commodity which is the subject of a principal contract 
shall be computed using a cash price series approved by the Commission 
for use by the dealer option grantor, in the case of dealer options, and 
by the leverage transaction

[[Page 524]]

merchant, in the case of leverage contracts.
    (ii) No cash price series approved by Commission. If no applicable 
cash price series has been submitted to the Commission, or if such a 
cash price series has been submitted, but has not been approved by the 
Commission, the market value of the physical commodity which is the 
subject of a principal contract shall be equal to the lesser of:
    (A) The market value of the physical commodity as of the close of 
business on the local cash market most proximate to the debtor's 
principal place of business; or
    (B) The spot month settlement price on a designated contract market 
which trades contracts in that physical commodity most proximate to the 
debtor's principal place of business: Provided, That where there is more 
than one local market as described in paragraphs (e)(2)(ii) (A) or (B) 
of this section, the trustee should use the most active market.
    (iii) Special rule for valuing dealer options. A dealer option which 
is in-the-money will be deemed to have been exercised for purposes of 
determining its value which shall be equal to the greater of:
    (A) The in-the-money amount; or
    (B) The premium paid for such option divided by the number of days 
contained in the option period and multiplied by the number of days 
remaining in such period on the liquidation date: Provided, That in the 
trustee's sole discretion, the trustee may reduce such value to an 
amount which does not exceed the average of the premiums recently paid 
for similar options granted by the same grantor.

Any time value not reflected in this computation claimed by a customer 
must be treated as a general creditor's claim.
    (iv) Special rule for valuing leverage contracts. Notwithstanding 
paragraphs (e)(2) (i) and (ii) of this section, if the records of the 
debtor are not sufficient to substantiate customer claims for profits 
and to identify the owners of contracts with losses, the liquidation 
value of a leverage contract shall be deemed to be an amount equal to 
the total deposit made by a customer in respect to such contract.
    (3) Bucketed contracts. The value of a commodity contract which has 
not been established in fact shall be deemed to be equal to the value of 
the total deposit made by a customer in respect to such contract.
    (4) Securities. The value of a listed security shall be equal to the 
closing price for such security on the exchange upon which it is traded. 
The value of all securities not traded on an exchange shall be equal in 
the case of a long position, to the average of the bid prices for long 
positions, and in the case of a short position, to the average of the 
asking prices for the short positions. If liquidated prior to the 
primary liquidation date, the value of such security shall be equal to 
the net proceeds of its liquidation. Securities which are not publicly 
traded shall be valued by the trustee, subject to approval of the court, 
using such professional assistance as the trustee deems necessary in its 
sole discretion under the circumstances.
    (5) Property. Cash commodities held in inventory, as collateral or 
otherwise, shall be valued at their fair market value. Subject to the 
other provisions of this paragraph (e), all other property shall be 
valued by the trustee subject to approval by the court, using such 
professional assistance as the trustee deems necessary in its sole 
discretion under the circumstances: Provided, however, That if such 
property is sold, its value for purposes of the calculations required by 
this part shall be the net proceeds of such sale: Provided further, That 
the sale is made in compliance with all applicable statutes, rules and 
orders of any court or governmental entity with jurisdiction thereover.

[48 FR 8739, Mar. 1, 1983; 48 FR 15122, 15123, Apr. 7, 1983, as amended 
at 67 FR 58298, Sept. 13, 2002; 69 FR 41427, July 9, 2004; 75 FR 17303, 
Apr. 6, 2010; 77 FR 6378, 6381, Feb. 7, 2012]



Sec.  190.08  Allocation of property and allowance of claims.

    The property of the debtor's estate must be allocated among account 
classes and between customer classes as provided in this section, except 
for special distributions required under appendix B to this part. The 
property so

[[Page 525]]

allocated will constitute a separate estate of the customer class and 
the account class to which it is allocated, and will be designated by 
reference to such customer class and account class.
    (a) Scope of customer property. (1) Customer property includes the 
following:
    (i) All cash, securities, or other property or the proceeds of such 
cash, securities or other property received, acquired, or held by or for 
the account of the debtor, from or for the account of a customer, 
including a non-public customer, which is:
    (A) Property received, acquired or held to margin, guarantee, 
secure, purchase or sell a commodity contract;
    (B) Open commodity contracts;
    (C) Warehouse receipts, bills of lading, or other documents of title 
or property held or acquired by the debtor to fulfill a commodity 
contract;
    (D) Profits or contractual rights accruing to a customer as the 
result of a commodity contract;
    (E) The full proceeds of a letter of credit if such letter of credit 
was received, acquired or held to margin, guarantee, secure, purchase or 
sell a commodity contract;
    (F) To the extent not otherwise included, securities held in a 
portfolio margining account carried as a futures account or a cleared 
swaps customer account;
    (G) Property hypothecated under Sec.  1.30 of this chapter to the 
extent that the value of such property exceeds the proceeds of any loan 
of margin made with respect thereto, and
    (ii) All cash, securities, or other property which:
    (A) Is segregated on the filing date;
    (B) Is a security owned by the debtor to the extent there are 
customer claims for securities of the same class and series of an 
issuer;
    (C) Is specifically identifiable to a customer;
    (D) Is property of a type described in paragraph (a)(1)(i)(A) of 
this section which has been withdrawn and subsequently is recovered by 
the avoidance powers of the trustee;
    (E) Represents recovery of any debit balance, margin deficit, or 
other claim of the debtor against a customer account;
    (F) Was unlawfully converted but is part of the debtor's estate;
    (G) Is property of the debtor that any applicable law, rule, 
regulation, or order requires to be set aside for the benefit of 
customers, unless including such property in the customer estate would 
not significantly increase the customer estate;
    (H) Is property of the debtor's estate recovered by the Commission 
in any proceeding brought against the principals, agents, or employees 
of the debtor;
    (I) Is proceeds from the investment of customer property by the 
trustee pending final distribution; or
    (J) Is cash, securities or other property of the debtor's estate, 
including the debtor's trading or operating accounts and commodities of 
the debtor held in inventory, but only to the extent that the property 
enumerated in paragraphs (a)(1)(i)(E) and (a)(1)(ii)(A) through 
(a)(1)(ii)(H) of this section is insufficient to satisfy in full all 
claims of public customers.
    (2) Customer property will not include:
    (i) Claims against the debtor for damages for any wrongdoing of the 
debtor, including claims for misrepresentation or fraud, or for any 
violation of the Act or of the regulations thereunder;
    (ii) Other claims for property which are not based upon property 
received, acquired or held by or for the account of the debtor, from or 
for the account of the customer;
    (iii) Forward contracts;
    (iv) Property delivered to or from a customer to or by another 
customer to fulfill a commodity contract held for or on behalf of either 
customer by the debtor if such delivery is effected pursuant to Sec.  
190.05 by a commodity broker other than the debtor;
    (v) Property deposited by a customer with a commodity broker after 
the entry of an order for relief which is not necessary to meet the 
maintenance margin requirements applicable to the accounts of such 
customer;
    (vi) Property hypothecated pursuant to Sec.  1.30 of this chapter to 
the extent of the loan of margin with respect thereto; and

[[Page 526]]

    (vii) Money, securities or property held to margin, guarantee or 
secure security futures products, or accruing as a result of such 
products, if held in a securities account.
    (b) Allocation of property between customer classes. No portion of 
the customer estate may be allocated to pay non-public customer claims 
until all public customer claims have been satisfied in full. Any 
property segregated on behalf of non-public customers must be treated 
initially as part of the public customer estate and allocated under 
paragraph (c)(2) of this section.
    (c) Allocation of property among account classes--(1) Segregated 
property. Subject to paragraph (b) of this section, property held by or 
for the account of a customer, which is segregated on behalf of a 
specific account class, or readily traceable on the filing date to 
customers of such account class, must be allocated to the customer 
estate of the account class for which it is segregated or to which it is 
readily traceable.
    (2) All other property. Money, securities and property received from 
or for the account of customers on behalf of any account class which is 
recovered on behalf of the customer estate and which cannot be allocated 
in accordance with paragraph (c)(1) of this section, must be allocated 
as of the primary liquidation date in the following order:
    (i) To the estate of the account class for which, after the 
allocation required in paragraph (c)(1) of this section, the percentage 
of each public customer net equity claim which is funded is the lowest, 
until the funded percentage of net equity claims of such class equals 
the percentage of each public customer's net equity claim which is 
funded for the account class with the next lowest percentage of the 
funded claims; and then
    (ii) To the estate of the two account classes referred to in 
paragraph (c)(2)(i) of this section so that the percentage of the net 
equity claims which are funded for each class remains equal until the 
percentage of each public customer net equity claim which is funded 
equals the percentage of each public customer net equity claim which is 
funded for the account class with the next lowest percentage of funded 
claims, and so forth, until the percentage of each public customer net 
equity claim which is funded is equal for all classes of accounts; and 
then,
    (iii) Among account classes in the same proportion as the public 
customer net equity claims for each such account class bears to the 
total of public customer net equity claims of all account classes until 
the public customer claims of each account class are paid in full; and, 
thereafter,
    (iv) To the non-public customer estate for each account class in the 
same order as is prescribed in paragraphs (c)(2) (i) to (iii) of this 
section for the allocation of the customer estate among account classes.
    (d) Distribution of customer property--(1) Return or transfer of 
specifically identifiable property other than a commodity contract. 
Specifically identifiable property other than an open commodity contract 
not required to be liquidated under Sec.  190.02(f)(2) may be returned 
or transferred on behalf of the customer to which it is identified:
    (i) If it is margining an open commodity contract, only if cash is 
first deposited with the trustee in an amount equal to the greater of 
the full fair market value of such property on the return date or the 
balance due on the return date on any loan by the debtor to the customer 
for which such property constitutes security; or
    (ii) If it is not so margining an open contract, at the option of 
the customer, either pursuant to the terms of paragraph (d)(1)(i) of 
this section, or pursuant to the following terms: such customer first 
deposits cash with the trustee in an amount equal to the amount by which 
the greater of the value of the specifically identifiable property to be 
transferred or returned on the date of such transfer or return or the 
balance due on the return date on any loan by the debtor to the customer 
for which such property constitutes security, together with any other 
disbursements made, or to be made, to such customer, plus a reasonable 
reserve in the trustee's sole discretion, exceeds the estimated 
aggregate of the funded balances for each class of account of such 
customer less the

[[Page 527]]

value on the date of its transfer or return of any property transferred 
or returned prior to the primary liquidation date with respect to the 
customer's net equity claim for such account; Provided, That adequate 
security for the nonrecovery of any overpayments by the trustee is 
provided to the debtor's estate by the customer.
    (2) Transfers of specifically identifiable commodity contracts under 
section 766 of the Bankruptcy Code. Any specifically identifiable 
commodity contract which is not required to be liquidated under Sec.  
190.02(f)(1) or Sec.  190.03(b), and which is not otherwise liquidated, 
may be transferred on behalf of a customer: Provided, That such customer 
must first deposit cash with the trustee in an amount equal to the 
amount by which the equity to be transferred to margin such contract 
together with any other transfers or returns of specifically 
identifiable property or disbursements made, or to be made, to such 
customer, plus a reasonable reserve in the trustee's sole discretion, 
exceeds the estimated aggregate of the funded balances for each class of 
account of such customer less the value on the date of its transfer or 
return of any property transferred or returned prior to the primary 
liquidation date with the respect to the customer's net equity claim for 
such account: and, Provided further, That adequate security for the 
nonrecovery of any overpayments by the trustee is provided to the 
debtor's estate by the customer.
    (3) Distribution in kind of specifically identifiable securities. If 
any securities of a customer would have been specifically identifiable 
under Sec.  190.01(kk)(6) if that customer had had no open commodity 
contracts, the customer may request that the trustee purchase or 
otherwise obtain the largest whole number of like-kind securities, with 
a fair market value (inclusive of transaction costs) which does not 
exceed that portion of such customer's allowed net equity claim that 
constitutes a claim for securities, if like-kind securities can be 
purchased in a fair and orderly manner.
    (4) Proof of customer claim. No distribution shall be made pursuant 
to paragraphs (d)(1) and (d)(3) of this section prior to receipt of a 
completed proof of customer claim as described in Sec.  190.02(d).
    (5) No differential distributions. No further disbursements may be 
made to customers for whom transfers have been made pursuant to Sec.  
190.06 and paragraph (d)(2) of this section, until a percentage of each 
net equity claim equivalent to the percentage distributed to such 
customers is distributed to all public customers. Partial distributions, 
other than the transfers referred to in Sec.  190.06 and paragraph 
(d)(2) of this section, made prior to the final net equity determination 
date must be made pursuant to a preliminary plan of distribution 
approved by the court, upon notice to the parties and to all customers, 
which plan requires adequate security to the debtor's estate for the 
nonrecovery of any overpayments by the trustee and distributes an equal 
percentage of net equity to all public customers.
    (6) Margin payments. The trustee may make margin payments on behalf 
of any account which do not exceed the funded balance of that account.

[48 FR 8739, Mar. 1, 1983; 48 FR 15122, Apr. 1, 1983, as amended at 59 
FR 17471, Apr. 13, 1994; 67 FR 58298, Sept. 13, 2002; 78 FR 66637, Nov. 
6, 2013]



Sec.  190.09  Member property.

    (a) Member property. ``Member property'' means, in connection with a 
clearing organization bankruptcy, the property which may be used to pay 
that portion of the net equity claim of a member which is based on its 
house account.
    (b) Scope of member property. Member property shall include all 
money, securities and property received, acquired, or held by a clearing 
organization to margin, guarantee or secure, on behalf of a clearing 
member, the proprietary account, as defined in Sec.  1.3 of this 
chapter, any account not belonging to a foreign futures or foreign 
options customer pursuant to the proviso in Sec.  30.1(c) of this 
chapter, and any Cleared Swaps Proprietary Account, as defined in Sec.  
22.1 of this chapter: Provided, however, that any guaranty deposit or 
similar payment or deposit made by such member and any capital stock, or 
membership of such member in the clearing organization shall also

[[Page 528]]

be included in member property after payment in full, in each case in 
accordance with the by-laws or rules of the clearing organization, of 
that portion of:
    (1) The net equity claim of the member based on its customer 
account; and
    (2) Any obligations due to the clearing organization which may be 
paid therefrom, including any obligations due from the clearing 
organization to the customers of other members.

[48 FR 8739, Mar. 1, 1983, as amended at 77 FR 6382, Feb. 7, 2012; 78 FR 
72524, Dec. 2, 2013]



Sec.  190.10  General.

    (a) Notices. Unless instructed otherwise by the Commission, all 
mandatory or discretionary notices to be given to the Commission under 
this part shall be directed by electronic mail to 
[email protected], with a copy sent by overnight mail to 
Director, Division of Clearing and Risk, Commodity Futures Trading 
Commission, Three Lafayette Centre, 1155 21st Street NW., Washington, DC 
20581. For purposes of this part, notice to the Commission shall be 
deemed to be given only upon actual receipt.
    (b) Request for exemption from time limit. (1) A trustee or any 
other person charged with the management of a commodity broker which has 
filed a petition in bankruptcy, or against which such a petition has 
been filed, may for good cause shown request from the Commission an 
exemption from, or extension of, any time limit prescribed by this part 
190: Provided, That no such exemption or extension will be granted for 
any time period established by the Bankruptcy Code, as amended, 11 
U.S.C. 101 et seq.
    (2) Such a request shall be made ex parte and by any means of 
communication, written or oral: Provided, That an oral request shall be 
confirmed in writing within one business day and such confirmation shall 
contain all the information required by paragraph (b)(3) of this 
section. Any such request shall be directed to the person as provided in 
paragarph (a) of this section, and at the address provided therein.
    (3) Such a request shall state the particular provision of the part 
190 rules with respect to which the exemption or extension is sought, 
the reason for the requested exemption or extension, the amount of time 
sought if the request is for an extension, and the reason why such 
exemption or extension would not be contrary to the purposes of the 
Bankruptcy Code and the Commission's part 190 regulations promulgated 
thereunder.
    (4) The Director of the Division of Clearing and Risk, or such 
members of the Commission's staff acting under his direction as he may 
designate, on the basis of the information provided in any such request, 
shall determine, after consultation with the Director of the Division of 
Swap Dealer and Intermediary Oversight, or such member of the 
Commission's staff under his direction as he may designate, unless 
exigent circumstances require immediate action precluding such prior 
consultation., whether to grant, deny or otherwise respond to a request, 
and shall communicate that determination by the most appropriate means 
to the person making the request and to the bankruptcy court with 
jurisdiction over the case.
    (c) Disclosure statement for non-cash margin. (1) Except as provided 
in Sec.  1.65 of this chapter, no commodity broker (other than a 
clearing organization) may accept property other than cash from or for 
the account of a customer, other than a customer specified in Sec.  
1.55(f) of this chapter, to margin, guarantee, or secure a commodity 
contract unless the commodity broker first furnishes the customer with 
the disclosure statement set forth in paragraph (c)(2) of this section 
in boldface print in at least 10 point type which may be provided as 
either a separate, written document or incorporated into the customer 
agreement, or with another statement approved under Sec.  1.55(c) of 
this chapter and set forth in appendix A to Sec.  1.55 which the 
Commission finds satisfies this requirement.
    (2) The disclosure statement required by paragraph (c)(1) of this 
section is as follows:

    THIS STATEMENT IS FURNISHED TO YOU BECAUSE RULE 190.10 (c) OF THE 
COMMODITY FUTURES TRADING COMMISSION REQUIRES IT FOR REASONS OF FAIR 
NOTICE UNRELATED TO THIS COMPANY'S CURRENT FINANCIAL CONDITION.

[[Page 529]]

    1. YOU SHOULD KNOW THAT IN THE UNLIKELY EVENT OF THIS COMPANY'S 
BANKRUPTCY, PROPERTY, INCLUDING PROPERTY SPECIFICALLY TRACEABLE TO YOU, 
WILL BE RETURNED, TRANSFERRED OR DISTRIBUTED TO YOU, OR ON YOUR BEHALF, 
ONLY TO THE EXTENT OF YOUR PRO RATA SHARE OF ALL PROPERTY AVAILABLE FOR 
DISTRIBUTION TO CUSTOMERS.
    2. NOTICE CONCERNING THE TERMS FOR THE RETURN OF SPECIFICALLY 
IDENTIFIABLE PROPERTY WILL BE BY PUBLICATION IN A NEWSPAPER OF GENERAL 
CIRCULATION.
    3. THE COMMISSION'S REGULATIONS CONCERNING BANKRUPTCIES OF COMMODITY 
BROKERS CAN BE FOUND AT 17 CODE OF FEDERAL REGULATIONS PART 190.

    (3) The statement contained in paragraph (c)(2) of this section need 
be furnished only once to each customer to whom it is required to be 
furnished by this section.
    (d) Delegation of authority to the Director of the Division of 
Clearing and Risk. (1) Until such time as the Commission orders 
otherwise, the Commission hereby delegates to the Director of the 
Division of Clearing and Risk, and to such members of the Commission's 
staff acting under his direction as he may designate, after consultation 
with the Director of the Division of Swap Dealer and Intermediary 
Oversight, or such member of the Commission's staff under his direction 
as he may designate, unless exigent circumstances require immediate 
action., all the functions of the Commission set forth in this part 
except the authority to approve or disapprove a withdrawal or settlement 
of a commodity contract account by a public customer pursuant to Sec.  
190.06(g)(3).
    (2) The Director of the Division of Clearing and Risk may submit to 
the Commission for its consideration any matter which has been delegated 
to him pursuant to paragraph (d)(1) of this section.
    (3) Nothing in this section shall prohibit the Commission, at its 
election, from exercising its authority delegated to the Director of the 
Division of Clearing and Risk under paragraph (d)(1) of this section.
    (e) Forward contracts. For purposes of this part, an entity for or 
with whom the debtor deals who holds a claim against the debtor solely 
on account of a forward contract will not be deemed to be a customer.
    (f) Notice of court papers pertaining to the operation of the 
estate. The trustee shall promptly provide the Commission with copies of 
any complaint, motion, or petition filed in a commodity broker 
bankruptcy which concerns the disposition of customer property. Court 
papers shall be directed to the Washington, DC headquarters of the 
Commission addressed as provided in paragraph (a) of this section.
    (g) Other. The Bankruptcy Code will not be construed by the 
Commission to prohibit a commodity broker from doing business as any 
combination of the following: futures commission merchant, commodity 
option dealer, foreign futures commission merchant or leverage 
transaction merchant, nor will the Commission construe the Bankruptcy 
Code to permit any operation, trade or business, or any combination of 
the foregoing, otherwise prohibited by the Act or by any rule, 
regulation or order of the Commission thereunder.
    (h) Rule of construction. Contracts in security futures products 
held in a securities account shall not be considered to be ``from or for 
the commodity contract account'' or ``from or for the commodity options 
account'' of such customers, as such terms are used in section 761(9) of 
the Bankruptcy Code.

(Secs. 2(a), 4c, 4d, 4g, 5, 5a, 8a, 15, 19 and 20 of the Commodity 
Exchange Act, as amended by the Futures Trading Act of 1982, Pub. L. 97-
444, 96 Stat. 2294 (1983), 7 U.S.C. 2 and 4a, 6c, 6d, 6g, 7, 7a, 12a, 
19, 23 and 24 (1976 & Supp. V. 1981 and Pub. L. 97-444); secs. 761-766 
of the Bankruptcy Reform Act of 1978, as amended by the Bankruptcy Act 
Amendments, Pub. L. 97-222, 96 Stat. 235 (1982), 11 U.S.C. 761-766 
(Supp. V. 1981 as amended by Pub. L. 97-222))

[48 FR 8739, Mar. 1, 1983, as amended at 48 FR 28980, June 24, 1983; 58 
FR 17505, Apr. 5, 1993; 59 FR 34382, July 5, 1994; 60 FR 49336, Sept. 
25, 1995; 63 FR 8571, Feb. 20, 1998; 67 FR 58298, Sept. 13, 2002; 67 FR 
62353, Oct. 7, 2002; 77 FR 6378, 6382, Feb. 7, 2012; 78 FR 22419, Apr. 
16, 2013]

[[Page 530]]



              Sec. Appendix A to Part 190--Bankruptcy Forms

 Bankruptcy Appendix Form 1--Operation of the Debtor's Estate--Schedule 
                           of Trustee's Duties

    For the convenience of a prospective trustee, the Commission has 
constructed an approximate schedule of important duties which the 
trustee should perform during the early stages of a commodity broker 
bankruptcy proceeding. The schedule includes duties required by this 
part, subchapter IV of chapter 7 of the Bankruptcy Code as well as 
certain practical suggestions, but it is only intended to highlight the 
more significant duties and is not an exhaustive description of all the 
trustee's responsibilities. It also assumes that the commodity broker 
being liquidated is an FCM. Moreover, it is important to note that the 
operating facts in a particular bankruptcy proceeding may vary the 
schedule or obviate the need for any of the particular activities.

                                All Cases

                        Date of Order for Relief

    1. Assure that the commodity broker has notified the Commission, its 
designated self-regulatory organization (``DSRO'') (if any), and all 
applicable clearing organizations of which it is a member that a 
petition or order for relief has been filed (Sec.  190.02(a)(1)).
    2. Attempt to effectuate the transfer of entire customer accounts 
wherein the commodity contracts are transferred together with the money, 
securities, or other property margining, guaranteeing, or securing the 
commodity contracts (hereinafter the ``transfer'').
    3. Attempt to estimate shortfall of customer funds segregated 
pursuant to sections 4d(a) and (b) of the Act; customer funds segregated 
pursuant to section 4f of the Act; and the foreign futures or foreign 
options secured amount, as defined in Sec.  1.3 of this chapter.
    a. The trustee should:
    i. Contact the DSRO (if any) and the clearing organizations and 
attempt to effectuate a transfer with such shortfall under section 
764(b) of the Code; notify the Commission for assistance (Sec.  
190.02(a)(2) and (e)(1), Sec.  190.06(b)(2), (e), (f)(3), (g)(2), and 
(h)) but recognize that if there is a substantial shortfall, a transfer 
of such funds or amounts is highly unlikely.
    ii. If a transfer cannot be effectuated, liquidate all customer 
commodity contracts that are margined, guaranteed, or secured by funds 
or amounts with such shortfall, except dealer options and specifically 
identifiable commodity contracts which are bona fide hedging positions 
(as defined in Sec.  190.01(kk)(2)) with instructions not to be 
liquidated. (See Sec. Sec.  190.02(f) and 190.06(d)(1)). (In this 
connection, depending upon the size of the debtor and other 
complications of liquidation, the trustee should be aware of special 
liquidation rules, and in particular the availability under certain 
circumstances of book-entry liquidation (Sec.  190.04(d)(1)(ii)).
    b. If there is a small shortfall in any of the funds or amounts 
listed in paragraph 2, negotiate with the clearing organization to 
effect a transfer; notify the Commission (Sec. Sec.  190.02(a)(2) and 
(e)(1), 190.06(b)(2), (e), (f)(3), (g)(2), and (h)).
    4. Whether or not a transfer has occurred, liquidate or offset open 
commodity contracts not eligible for transfer (e.g., deficit accounts) 
(Sec.  190.06(e)(1)).
    5. Offset all futures contracts and Cleared Swaps contracts which 
cannot be settled in cash and which would otherwise remain open either 
beyond the last day of trading (if applicable) or the first day on which 
notice of intent to deliver may be tendered with respect thereto, 
whichever occurs first; offset all long options on a physical commodity 
which cannot be settled in cash, have value and would be automatically 
exercised or would remain open beyond the last day of exercise; and 
offset all short options on a physical commodity which cannot be settled 
in cash (Sec.  190.02(f)(1)).
    6. Compute estimated funded balance for each customer commodity 
contract account containing open commodity contracts (Sec.  190.04(b)) 
(daily thereafter).
    7. Make margin calls if necessary (Sec.  190.02(g)(1)) (daily 
thereafter).
    8. Liquidate or offset any open commodity contact account for which 
a customer has failed to meet a margin call (Sec.  190.02(f)(1)) (daily 
thereafter).
    9. Commence liquidation or offset of specifically identifiable 
property described in Sec.  190.02(f)(2)(i) (property which has lost 10% 
or more of value) (and as appropriate thereafter).
    10. Commence liquidation or offset of property described in Sec.  
190.02(f)(3) (``all other property'').
    11. Be aware of any contracts in delivery position and rules 
pertaining to such contracts (Sec.  190.05).

        First Calendar Day After the Entry of an Order for Relief

    1. If a transfer occurred on the date of entry of the order for 
relief:
    a. Liquidate any remaining open commodity contracts, except any 
dealer option or specifically identifiable commodity contract [hedge] 
(See Sec.  190.01(kk)(2) and Sec.  190.02(f)(1)), and not otherwise 
transferred in the transfer.
    b. Primary liquidation date for transferred or liquidated commodity 
contracts (Sec.  190.01(ff)).
    2. If no transfer has yet been effected, continue attempt to 
negotiate transfer of open

[[Page 531]]

commodity contracts and dealer options (Sec.  190.02(c)(1)).
    3. Provide the clearing organization or Collecting Futures 
Commission Merchant (as such term is defined in Sec.  22.1) with 
assurances to prevent liquidation of open commodity contract accounts 
available for transfer at the customer's instruction or liquidate all 
open commodity contracts except those available for transfer at a 
customer's instruction and dealer options.

       Second Calendar Day After the Entry of an Order for Relief

    If no transfer has yet been effected, request directly customer 
instructions regarding transfer of open commodity contracts and publish 
notice for customer instructions regarding the return of specifically 
identifiable property other than commodity contracts (Sec. Sec.  
190.02(b) (1) and (2)).

        Third Calendar Day After the Entry of an Order for Relief

    1. Second publication date for customer instructions (Sec.  
190.02(b)(1)) (publication is to be made on two consecutive days, 
whether or not the second day is a business day).
    2. Last day on which to notify the Commission with regard to whether 
a transfer in accordance with section 764(b) of the Bankruptcy Code will 
take place (Sec.  190.02(a)(2) and Sec.  190.06(e)).

        Sixth Calendar Day After the Entry of an Order for Relief

    Last day for customers to instruct the trustee concerning open 
commodity contracts (Sec.  190.02(b)(2)).

       Seventh Calendar Day After the Entry of an Order for Relief

    1. If not previously concluded, conclude transfers under Sec.  
190.06(e) and (f). (See Sec.  190.02(e)(1) and Sec.  
190.06(g)(2)(i)(A)).
    2. Transfer all open dealer option contracts which have not 
previously been transferred (Sec.  190.06(f)(3)(i)).
    3. Primary liquidation date (Sec.  190.01(ff)) (assuming no 
transfers and liquidation effected for all open commodity contracts for 
which no customer instructions were received by the sixth calendar day).
    4. Establishment of transfer accounts (Sec.  190.03(a)(1)) (assuming 
this is the primary liquidation date); mark such accounts to market 
(Sec.  190.03(a)(2)) (daily thereafter until closed).
    5. Liquidate or offset all remaining open commodity contracts (Sec.  
190.02(b)(2)).
    6. If not done previously, notify customers of bankruptcy and 
request customer proof of claim (Sec.  190.02(b)(4)).

       Eighth Calendar Day After the Entry of an Order for Relief

    Customer instructions due to trustee concerning specifically 
identifiable property (Sec.  190.02(b)(1)).

        Ninth Calendar Day After the Entry of an Order for Relief

    Commence liquidation of specifically identifiable property for which 
no arrangements for return have been made in accordance with customer 
instructions (Sec. Sec.  190.02(b)(1), 190.03(c)).

        Tenth Calendar Day After the Entry of an Order for Relief

    Complete liquidation to the extent reasonably possible of 
specifically identifiable property which has yet to be liquidated and 
for which no customer instructions have been received (Sec.  190.03(c)).

      Separate Procedures for Involuntary Petitions for Bankruptcy

    1. Within one calendar day after notice of receipt of filing of the 
petition in bankruptcy, the trustee should assure that proper 
notification has been given to the Commission, the commodity broker's 
designated self-regulatory organization (Sec.  190.02(a)(1)) (if any), 
and all applicable clearing organizations; margin calls should be issued 
if necessary (Sec.  190.02(g)(2)).
    2. On or before the seventh calendar day after the filing of a 
petition in bankruptcy, the trustee should use his best efforts to 
effect a transfer in accordance with Sec.  190.06(e) and (f) of all open 
commodity contracts and equity held for or on behalf of customers of the 
commodity broker (Sec.  190.02(e)(2)) unless the debtor can provide 
certain assurances to the trustee.

  Bankruptcy Appendix Form 2-- Request for Instructions Concerning Non-
             Cash Property Deposited With (Commodity Broker)

    Please take notice: On (date), a petition in bankruptcy was filed by 
[against] (commodity broker). Those customers of (commodity broker) who 
deposited certain kinds of non-cash property (see below) with (commodity 
broker) may instruct the trustee of the estate to return their property 
to them as provided below.
    As no customer may obtain more than his or her proportionate share 
of the property available to satisfy customer claims, if you instruct 
the trustee to return your property to you, you will be required to pay 
the estate, as a condition to the return of your property, an amount 
determined by the trustee. If your property is not margining an open 
contract, this amount will approximate the difference between the market 
value of

[[Page 532]]

your property and your pro rata share of the estate, as estimated by the 
trustee. If your property is margining an open commodity contract, this 
amount will be approximately the full fair market value of the property 
on the date of its return.

             Kinds of Property to Which This Notice Applies

    1. Any security deposited as margin which, as of (date petition was 
filed), was securing an open commodity contract and is:

--registered in your name,
--not transferrable by delivery, and
--not a short-term obligation.
    2. Any fully-paid, non-exempt security held for your account in 
which there were no open commodity contracts as of (date petition was 
filed). (Rather than the return, at this time, of the specific 
securities you deposited with (commodity broker), you may instead 
request now, or at any later time, that the trustee purchase ``like-
kind'' securities of a fair market value which does not exceed your 
proportionate share of the estate).
    3. Any warehouse receipt, bill of lading or other document of title 
deposited as margin which, as of (date petition was filed), was securing 
an open commodity contract and--can be identified in (commodity 
broker)'s records as being held for your account, and--is neither in 
bearer form nor otherwise transferable by delivery.
    4. Any warehouse receipt bill of lading or other document of title, 
or any commodity received, acquired or held by (commodity broker) to 
make or take delivery or exercise from or for your account and which--
can be identified in (commodity broker)'s records as received from or 
for your account as held specifically for the purpose of delivery or 
exercise.
    5. Any cash or other property deposited to make or take delivery on 
a commodity contract may be eligible to be returned. The trustee should 
be contacted directly for further information if you have deposited such 
property with (commodity broker) and desire its return.
    Instructions must be received by (the 5th calendar day after 2d 
publication date) or the trustee will liquidate your property. (If you 
own such property but fail to provide the trustee with instructions, you 
will still have a claim against (commodity broker) but you will not be 
able to have your specific property returned to you).

    Note: Prior to receipt of your instructions, circumstances may 
require the trustee to liquidate your property, or transfer your 
property to another broker if it is margining open commodity contracts. 
If your property is transferred and your instructions were received 
within the required time, your instructions will be forwarded to the new 
broker.

    Instructions should be directed to: (Trustee's name, address, and/or 
telephone).
    Even if you request the return of your property, you must also pay 
the trustee the amount he specifies and provide the trustee with proof 
of your claim before (the 7th calendar day after 2d publication date) or 
your property will be liquidated. (Upon receipt of customer instructions 
to return property, the trustee will mail the sender a form which 
describes the information he must provide to substantiate his claim).

    Note: The trustee is required to liquidate your property despite the 
timely receipt of your instructions, money, and proof of claim if, for 
any reason, your property cannot be returned by (close of business on 
the 7th calendar day after 2d publication date).

Bankruptcy Appendix Form 3--Request for Instructions Concerning Transfer 
           of Your Hedge Contracts Held by (Commodity Broker)

United States Bankruptcy Court __District of __In re __, Debtor, No. __.
Please take notice: On (date), a petition in bankruptcy was filed by 
[against] (commodity broker).

    You indicated when your hedge account was opened that the commodity 
contracts in your hedge account should not be liquidated automatically 
in the event of the bankruptcy of (commodity broker), and that you 
wished to provide instructions at this time concerning their 
disposition.
    Instructions to transfer your commodity contracts and a cash deposit 
(as described below) must be received by the trustee by (the 6th 
calendar day after entry of order for relief) or your commodity 
contracts will be liquidated.
    If you request the transfer of your commodity contracts, prior to 
their transfer, you must pay the trustee in cash an amount determined by 
the trustee which will approximate the difference between the value of 
the equity margining your commodity contracts and your pro rata share of 
the estate plus an amount constituting security for the nonrecovery of 
any overpayments. In your instructions, you should specify the broker to 
which you wish your commodity contracts transferred.
    Be further advised that prior to receipt of your instructions, 
circumstances may, in any event, require the trustee to liquidate or 
transfer your commodity contracts. If your commodity contracts are so 
transferred and your instructions are received, your instructions will 
be forwarded to the new broker.
    Note also that the trustee is required to liquidate your positions 
despite the timely receipt of your instructions and money if, for any 
reason, you have not made arrangements to transfer and/or your contracts 
are

[[Page 533]]

not transferred by (7 calendar days after entry of order for relief).
    Instructions should be sent to: (Trustee's or designee's name, 
address, and/or telephone). [Instructions may also be provided by 
phone].

               Bankruptcy Appendix Form 4--Proof of Claim

[Note to trustee: As indicated in Sec.  190.02(d), this form is provided 
as a guide to the trustee and should be modified as necessary depending 
upon the information which the trustee needs at the time a proof of 
claim is requested and the time provided for a response.]

                             Proof of Claim

United States Bankruptcy Court __District of __In re __, Debtor, No. __.
Return this form by __ or your claim will be barred (unless extended, 
for good cause only).

    I. [If claimant is an individual claiming for himself] The 
undersigned, who is the claimant herein, resides at __.
    [If claimant is a partnership claiming through a member] The 
undersigned, who resides at __, is a member of __, a partnership, 
composed of the undersigned and __, of __, and doing business at __, and 
is duly authorized to make this proof of claim on behalf of the 
partnership.
    [If claimant is a corporation claiming though a duly authorized 
officer] The undersigned, who resides at __ is the __ of __, a 
corporation organized under the laws of __ and doing business at __, and 
is duly authorized to make this proof of claim on behalf of the 
corporation.
    [If claim is made by agent] The undersigned, who resides at __, is 
the agent of __, and is duly authorized to make this proof of claim on 
behalf of the claimant.
    II. The debtor was, at the time of the filing of the petition 
initiating this case, and still is, indebted to this claimant for the 
total sum of $ __.
    III. List EACH account on behalf of which a claim is being made by 
number and name of account holder[s], and for EACH account, specify the 
following information:
    a. Whether the account is a futures, foreign futures, leverage, 
option (if an option account, specify whether exchange-traded, dealer or 
cleared swap), ``delivery'' account, or a cleared swaps account. A 
``delivery'' account is one which contains only documents of title, 
commodities, cash, or other property identified to the claimant and 
deposited for the purposes of making or taking delivery on a commodity 
underlying a commodity contract or for payment of the strike price upon 
exercise of an option.
    b. The capacity in which the account is held, as follows (and if 
more than one is applicable, so state):
    1. [The account is held in the name of the undersigned in his 
individual capacity];
    2. [The account is held by the undersigned as guardian, custodian, 
or conservator for the benefit of a ward or a minor under the Uniform 
Gift to Minors Act];
    3. [The account is held by the undersigned as executor or 
administrator of an estate];
    4. [The account is held by the undersigned as trustee for the trust 
beneficiary];
    5. [The account is held by the undersigned in the name of a 
corporation, partnership, or unincorporated association];
    6. [The account is held as an omnibus customer account of the 
undersigned futures commission merchant];
    7. [The account is held by the undersigned as part owner of a joint 
account];
    8. [The account is held by the undersigned in the name of a plan 
which, on the date the petition in bankruptcy was filed, had in effect a 
registration statement in accordance with the requirements of Sec.  1031 
of the Employee Retirement Income Security Act of 1974 and the 
regulations thereunder]; or
    9. [The account is held by the undersigned as agent or nominee for a 
principal or beneficial owner (and not described above in items 1-8 of 
this II, b)].
    10. [The account is held in any other capacity not described above 
in items 1-9 of this II, b. Specify the capacity].
    c. The equity, as of the date the petition in bankruptcy was filed, 
based on the commodity contracts in the account.
    d. Whether the person[s] (including a general partnership, limited 
partnership, corporation, or other type of association) on whose behalf 
the account is held is one of the following persons OR whether one of 
the following persons, alone or jointly, owns 10% or more of the 
account:
    1. [If the debtor is an individual--
    A. Such individual;
    B. Relative (as defined below in item 8 of this III.d) of the debtor 
or of a general partner of the debtor;
    C. Partnership in which the debtor is a general partner;
    D. General partner of the debtor; or
    E. Corporation of which the debtor is a director, officer, or person 
in control];
    2. [If the debtor is a partnership--
    A. Such partnership;
    B. General partner in the debtor;
    C. Relative (as defined in item 8 of this III.d) of a general 
partner in, general partner of, or person in control of the debtor;
    D. Partnership in which the debtor is a general partner;
    E. General partner of the debtor; or
    F. Person in control of the debtor];
    3. [If the debtor is a limited partnership--
    A. Such limited partnership;

[[Page 534]]

    B. A limited or special partner in such partnership whose duties 
include:
    i. The management of the partnership business or any part thereof;
    ii. The handling of the trades or customer funds of customers of 
such partnership;
    iii. The keeping of records pertaining to the trades or customer 
funds of customers of such partnership; or
    iv. The signing or co-signing of checks or drafts on behalf of such 
partnership];
    4. [If the debtor is a corporation or association (except a debtor 
which is a futures commission merchant and is also a cooperative 
association of producers)--
    A. Such corporation or association;
    B. Director of the debtor;
    C. Officer of the debtor;
    D. Person in control of the debtor;
    E. Partnership in which the debtor is a general partner;
    F. General partner of the debtor;
    G. Relative (as defined in item 8 of this III.d) of a general 
partner, director, officer, or person in control of the debtor;
    H. An officer, director or owner of ten percent or more of the 
capital stock of such organization];
    5. [If the debtor is a futures commission merchant which is a 
cooperative association of producers--
    Shareholder or member of the debtor which is an officer, director or 
manager];
    6. [An employee of such individual, partnership, limited 
partnership, corporation or association whose duties include:
    A. The management of the business of such individual, partnership, 
limited partnership, corporation or association or any part thereof;
    B. The handling of the trades or customer funds of customers of such 
individual, partnership, limited partnership, corporation or 
association;
    C. The keeping of records pertaining to the trades or funds of 
customers of such individual, partnership, limited partnership, 
corporation or association; or
    D. The signing or co-signing of checks or drafts on behalf of such 
individual, partnership, limited partnership, corporation or 
association];
    7. [Managing agent of the debtor];
    8. [A spouse or minor dependent living in the same household of ANY 
OF THE FOREGOING PERSONS, or any other relative, regardless of 
residency, (unless previously described in items 1-B, 2-C, or 4-G of 
this III.d) defined as an individual related by affinity or 
consanguinity within the third degree as determined by the common law, 
or individual in a step or adoptive relationship within such degree];
    9. [``Affiliate'' of the debtor, defined as:
    A. Entity that directly or indirectly owns, controls, or holds with 
power to vote, 20 percent or more of the out-standing voting securities 
of the debtor, other than an entity that holds such securities--
    i. In a fiduciary or agency capacity without sole discretionary 
power to vote such securities; or
    ii. Solely to secure a debt, if such entity has not in fact 
exercised such power to vote;
    B. Corporation 20 percent or more of whose outstanding voting 
securities are directly or indirectly owned, con-trolled, or held with 
power to vote, by the debtor, or by an entity that directly or 
indirectly owns, controls, or holds with power to vote, 20 percent or 
more of the outstanding voting securities of the debtor, other than an 
entity that holds such securities--
    i. In a fiduciary or agency capacity without sole discretionary 
power to vote such securities; or
    ii. Solely to secure a debt, if such entity has not in fact 
exercised such power to vote;
    C. Person whose business is operated under a lease or operating 
agreement by the debtor, or person substantially all of whose property 
is operated under an operating agreement with the debtor;
    D. Entity that otherwise, directly or indirectly, is controlled by 
or is under common control with the debtor];
    E. Entity that operates the business or all or substantially all of 
the property of the debtor under a lease or operating agreement; or
    F. Entity that otherwise, directly or indirectly, controls the 
debtor; or
    10. [Any of the persons listed in items 1-7 above of this III.d if 
such person is associated with an affiliate (see item 9 above) of the 
debtor as if the affiliate were the debtor].
    e. Whether the account is a discretionary account. (If it is, the 
name in which the ``attorney in fact'' is held).
    f. If the account is a joint account, the amount of the claimant's 
percentage interest in the account. (Also specify whether participants 
in a joint account are claiming separately or jointly).
    g. Whether the claimant's positions in security futures products are 
held in a futures account or securities account, as those terms are 
defined in Sec.  1.3 of this chapter.
    IV. Describe all claims against the debtor not based upon a 
commodity contract account of the claimant (e.g., if landlord, for rent; 
if customer, for misrepresentation or fraud).
    V. Describe all claims of the DEBTOR against the CLAIMANT not 
already included in the equity of a commodity contract account[s] of the 
claimant (see III.c above).
    VI. Describe any deposits of money, securities or other property 
held by or for the debtor from or for the claimant, and indicate if any 
of this property was included in your answer to III.c above.

[[Page 535]]

    VII. Of the money, securities, or other property described in VI 
above, identify any which consists of the following:
    a. With respect to property received, acquired, or held by or for 
the account of the debtor from or for the account of the claimant to 
margin, guarantee or secure an open commodity contract, the following:
    1. Any security which as of the filing date is:
    A. Held for the claimant's account;
    B. Registered in the claimant's name;
    C. Not transferable by delivery; and
    D. Not a short term obligation; or
    2. Any warehouse receipt, bill of lading or other document of title 
which as of the filing date:
    A. Can be identified on the books and records of the debtor as held 
for the account of the claimant; and
    B. Is not in bearer form and is not otherwise transferable by 
delivery.
    b. With respect to open commodity contracts, and except as otherwise 
provided below in item g of this VII, any such contract which:
    1. As of the date the petition in bankruptcy was filed, is 
identified on the books and records of the debtor as held for the 
account of the claimant;
    2. Is a bona fide hedging position or transaction as defined in Rule 
1.3 of the Commodity Futures Trading Commission (``CFTC'') or is a 
commodity option transaction which has been determined by a registered 
entity to be economically appropriate to the reduction of risks in the 
conduct and management of a commercial enterprise pursuant to rules 
which have been approved by the CFTC pursuant to section 5c(c) of the 
Commodity Exchange Act;
    3. Is in an account designated in the accounting records of the 
debtor as a hedging account.
    c. With respect to warehouse receipts, bills of lading or other 
documents of title, or physical commodities received, acquired, or held 
by or for the account of the debtor for the purpose of making or taking 
delivery or exercise from or for the claimant's account, any such 
document of title or commodity which as of the filing date can be 
identified on the books and records of the debtor as received from or 
for the account of the claimant specifically for the purpose of delivery 
or exercise.
    d. Any cash or other property deposited prior to bankruptcy to pay 
for the taking of physical delivery on a long commodity contract or for 
payment of the strike price upon exercise of a short put or a long call 
option contract on a physical commodity, which cannot be settled in 
cash, in excess of the amount necessary to margin such commodity 
contract prior to the notice date or exercise date which cash or other 
property is identified on the books and records of the debtor as 
received from or for the account of the claimant within three or less 
days of the notice date or three or less days of the exercise date 
specifically for the purpose of payment of the notice price upon taking 
delivery or the strike price upon exercise.
    e. The cash price tendered for any property deposited prior to 
bankruptcy to make physical delivery on a short commodity contract or 
for exercise of a long put or a short call option contract on a physical 
commodity, which cannot be settled in cash, to the extent it exceeds the 
amount necessary to margin such contract prior to the notice exercise 
date which property is identified on the books and records of the debtor 
as received from or for the account of the claimant within three or less 
days of the notice date or of the exercise date specifically for the 
purpose of a delivery or exercise.
    f. Fully paid, non-exempt securities identified on the books and 
records of the debtor as held by the debtor for or on behalf of the 
commodity contract account of the claimant for which, according to such 
books and records as of the filing date, no open commodity contracts 
were held in the same capacity.
    g. Open commodity contracts transferred to another futures 
commission merchant by the trustee.
    VIII. Specify whether the claimant wishes to receive payment in 
kind, to the extent possible, for any claim for securities.
    IX. Attach copies of any documents which support the information 
provided in this proof of claim, including but not limited to customer 
confirmations, account statements, and statements of purchase or sale.
    This proof of claim must be filed with the trustee no later than __, 
or your claim will be barred unless an extension has been granted, 
available only for good cause.

Return this form to:
(Trustee's name (or designee's) and address)
________________________________________________________________________
 Dated:_________________________________________________________________
 (Signed)_______________________________________________________________

Penalty for Presenting Fraudulent Claim. Fine of not more than $5,000 or 
imprisonment for not more than five years or both--Title 18, U.S.C. 152.

(Approved by the Office of Management and Budget under control number 
3038-0021)

[77 FR 6382, Feb. 7, 2012]

[[Page 536]]



      Sec. Appendix B to Part 190--Special Bankruptcy Distributions

    Framework 1--Special Distribution of Customer Funds for Futures 
           Contracts When FCM Participated in Cross-Margining

    The Commission has established the following distributional 
convention with respect to ``customer funds'' (as Sec.  1.3 of this 
chapter defines such term) for futures contracts held by a futures 
commission merchant (FCM) that participated in a cross-margining (XM) 
program which shall apply if participating market professionals sign an 
agreement that makes reference to this distributional rule and the form 
of such agreement has been approved by the Commission by rule, 
regulation or order:
    All customer funds for futures contracts held in respect of XM 
accounts, regardless of the product that customers holding such accounts 
are trading, are required by Commission order to be segregated 
separately from all other customer segregated funds. For purposes of 
this distributional rule, XM accounts will be deemed to be commodity 
interest accounts and securities held in XM accounts will be deemed to 
be received by the FCM to margin, guarantee or secure commodity interest 
contracts. The maintenance of property in an XM account will result in 
subordination of the claim for such property to certain non-XM customer 
claims and thereby will operate to cause such XM claim not to be treated 
as a customer claim for purposes of the Securities Investors Protection 
Act and the XM securities to be excluded from the securities estate. 
This creates subclasses of futures customer accounts, an XM account and 
a non-XM account (a person could hold each type of account), and results 
in two pools of segregated funds belonging to futures customers: An XM 
pool and a non-XM pool. In the event that there is a shortfall in the 
non-XM pool of customer class segregated funds and there is no shortfall 
in the XM pool of customer segregated funds, all futures customer net 
equity claims, whether or not they arise out of the XM subclass of 
accounts, will be combined and will be paid pro rata out of the total 
pool of available XM and non-XM customer funds for futures contracts. In 
the event that there is a shortfall in the XM pool of customer 
segregated funds and there is no shortfall in the non-XM pool of 
customer segregated funds, then futures customer net equity claims 
arising from the XM subclass of accounts shall be satisfied first from 
the XM pool of customer segregated funds, and futures customer net 
equity claims arising from the non-XM subclass of accounts shall be 
satisfied first from the non-XM customer segregated funds. Furthermore, 
in the event that there is a shortfall in both the non-XM and XM pools 
of customer segregated funds: (1) If the non-XM shortfall as a 
percentage of the segregation requirement in the non-XM pool is greater 
than or equal to the XM shortfall as a percentage of the segregation 
requirement in the XM pool, all futures customer net equity claims will 
be paid pro rata; and (2) if the XM shortfall as a percentage of the 
segregation requirement in the XM pool is greater than the non-XM 
shortfall as a percentage of the segregation requirement of the non-XM 
pool, non-XM futures customer net equity claims will be paid pro rata 
out of the available non-XM segregated funds, and XM futures customer 
net equity claims will be paid pro rata out of the available XM 
segregated funds. In this way, non-XM customers will never be adversely 
affected by an XM shortfall.
    The following examples illustrate the operation of this convention. 
The examples assume that the FCM has two customers, one with exclusively 
XM accounts and one with exclusively non-XM accounts. However, the 
examples would apply equally if there were only one customer, with both 
an XM account and a non-XM account.

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[77 FR 6386, Feb. 7, 2012]

                        PARTS 191	199 [RESERVED]

[[Page 557]]



                              FINDING AIDS




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

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 559]]



                    Table of CFR Titles and Chapters




                      (Revised as of April 1, 2020)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
       III  Administrative Conference of the United States (Parts 
                300--399)
        IV  Miscellaneous Agencies (Parts 400--599)
        VI  National Capital Planning Commission (Parts 600--699)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 2--199)
        II  Office of Management and Budget Guidance (Parts 200--
                299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
       III  Department of Health and Human Services (Parts 300--
                399)
        IV  Department of Agriculture (Parts 400--499)
        VI  Department of State (Parts 600--699)
       VII  Agency for International Development (Parts 700--799)
      VIII  Department of Veterans Affairs (Parts 800--899)
        IX  Department of Energy (Parts 900--999)
         X  Department of the Treasury (Parts 1000--1099)
        XI  Department of Defense (Parts 1100--1199)
       XII  Department of Transportation (Parts 1200--1299)
      XIII  Department of Commerce (Parts 1300--1399)
       XIV  Department of the Interior (Parts 1400--1499)
        XV  Environmental Protection Agency (Parts 1500--1599)
     XVIII  National Aeronautics and Space Administration (Parts 
                1800--1899)
        XX  United States Nuclear Regulatory Commission (Parts 
                2000--2099)
      XXII  Corporation for National and Community Service (Parts 
                2200--2299)
     XXIII  Social Security Administration (Parts 2300--2399)
      XXIV  Department of Housing and Urban Development (Parts 
                2400--2499)
       XXV  National Science Foundation (Parts 2500--2599)
      XXVI  National Archives and Records Administration (Parts 
                2600--2699)

[[Page 560]]

     XXVII  Small Business Administration (Parts 2700--2799)
    XXVIII  Department of Justice (Parts 2800--2899)
      XXIX  Department of Labor (Parts 2900--2999)
       XXX  Department of Homeland Security (Parts 3000--3099)
      XXXI  Institute of Museum and Library Services (Parts 3100--
                3199)
     XXXII  National Endowment for the Arts (Parts 3200--3299)
    XXXIII  National Endowment for the Humanities (Parts 3300--
                3399)
     XXXIV  Department of Education (Parts 3400--3499)
      XXXV  Export-Import Bank of the United States (Parts 3500--
                3599)
     XXXVI  Office of National Drug Control Policy, Executive 
                Office of the President (Parts 3600--3699)
    XXXVII  Peace Corps (Parts 3700--3799)
     LVIII  Election Assistance Commission (Parts 5800--5899)
       LIX  Gulf Coast Ecosystem Restoration Council (Parts 5900--
                5999)

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--199)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
        IV  Office of Personnel Management and Office of the 
                Director of National Intelligence (Parts 1400--
                1499)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Parts 2100--2199)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Parts 3200--
                3299)
     XXIII  Department of Energy (Parts 3300--3399)
      XXIV  Federal Energy Regulatory Commission (Parts 3400--
                3499)
       XXV  Department of the Interior (Parts 3500--3599)
      XXVI  Department of Defense (Parts 3600--3699)

[[Page 561]]

    XXVIII  Department of Justice (Parts 3800--3899)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  U.S. International Development Finance Corporation 
                (Parts 4300--4399)
     XXXIV  Securities and Exchange Commission (Parts 4400--4499)
      XXXV  Office of Personnel Management (Parts 4500--4599)
     XXXVI  Department of Homeland Security (Parts 4600--4699)
    XXXVII  Federal Election Commission (Parts 4700--4799)
        XL  Interstate Commerce Commission (Parts 5000--5099)
       XLI  Commodity Futures Trading Commission (Parts 5100--
                5199)
      XLII  Department of Labor (Parts 5200--5299)
     XLIII  National Science Foundation (Parts 5300--5399)
       XLV  Department of Health and Human Services (Parts 5500--
                5599)
      XLVI  Postal Rate Commission (Parts 5600--5699)
     XLVII  Federal Trade Commission (Parts 5700--5799)
    XLVIII  Nuclear Regulatory Commission (Parts 5800--5899)
      XLIX  Federal Labor Relations Authority (Parts 5900--5999)
         L  Department of Transportation (Parts 6000--6099)
       LII  Export-Import Bank of the United States (Parts 6200--
                6299)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Parts 6400--6499)
        LV  National Endowment for the Arts (Parts 6500--6599)
       LVI  National Endowment for the Humanities (Parts 6600--
                6699)
      LVII  General Services Administration (Parts 6700--6799)
     LVIII  Board of Governors of the Federal Reserve System 
                (Parts 6800--6899)
       LIX  National Aeronautics and Space Administration (Parts 
                6900--6999)
        LX  United States Postal Service (Parts 7000--7099)
       LXI  National Labor Relations Board (Parts 7100--7199)
      LXII  Equal Employment Opportunity Commission (Parts 7200--
                7299)
     LXIII  Inter-American Foundation (Parts 7300--7399)
      LXIV  Merit Systems Protection Board (Parts 7400--7499)
       LXV  Department of Housing and Urban Development (Parts 
                7500--7599)
      LXVI  National Archives and Records Administration (Parts 
                7600--7699)
     LXVII  Institute of Museum and Library Services (Parts 7700--
                7799)
    LXVIII  Commission on Civil Rights (Parts 7800--7899)
      LXIX  Tennessee Valley Authority (Parts 7900--7999)
       LXX  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 8000--8099)
      LXXI  Consumer Product Safety Commission (Parts 8100--8199)
    LXXIII  Department of Agriculture (Parts 8300--8399)

[[Page 562]]

     LXXIV  Federal Mine Safety and Health Review Commission 
                (Parts 8400--8499)
     LXXVI  Federal Retirement Thrift Investment Board (Parts 
                8600--8699)
    LXXVII  Office of Management and Budget (Parts 8700--8799)
      LXXX  Federal Housing Finance Agency (Parts 9000--9099)
   LXXXIII  Special Inspector General for Afghanistan 
                Reconstruction (Parts 9300--9399)
    LXXXIV  Bureau of Consumer Financial Protection (Parts 9400--
                9499)
    LXXXVI  National Credit Union Administration (Parts 9600--
                9699)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Parts 
                9700--9799)
    XCVIII  Council of the Inspectors General on Integrity and 
                Efficiency (Parts 9800--9899)
      XCIX  Military Compensation and Retirement Modernization 
                Commission (Parts 9900--9999)
         C  National Council on Disability (Parts 10000--10049)
        CI  National Mediation Board (Part 10101)

                      Title 6--Domestic Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 1--199)
         X  Privacy and Civil Liberties Oversight Board (Parts 
                1000--1099)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Agricultural Marketing Service (Federal Grain 
                Inspection Service, Fair Trade Practices Program), 
                Department of Agriculture (Parts 800--899)

[[Page 563]]

        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  [Reserved]
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  [Reserved]
       XXV  Office of Advocacy and Outreach, Department of 
                Agriculture (Parts 2500--2599)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  National Institute of Food and Agriculture (Parts 
                3400--3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

[[Page 564]]

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Agricultural Marketing Service (Federal Grain 
                Inspection Service, Fair Trade Practices Program), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1300--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Parts 1800--1899)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)
        II  Election Assistance Commission (Parts 9400--9499)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  (Parts 500--599) [Reserved]
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
         X  Bureau of Consumer Financial Protection (Parts 1000--
                1099)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XII  Federal Housing Finance Agency (Parts 1200--1299)
      XIII  Financial Stability Oversight Council (Parts 1300--
                1399)

[[Page 565]]

       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
       XVI  Office of Financial Research (Parts 1600--1699)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--1199)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  National Technical Information Service, Department of 
                Commerce (Parts 1100--1199)

[[Page 566]]

      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399) [Reserved]

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  U.S. Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  U.S. Immigration and Customs Enforcement, Department 
                of Homeland Security (Parts 400--599) [Reserved]

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)

[[Page 567]]

        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board (Parts 900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Millennium Challenge Corporation (Parts 1300--1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)

[[Page 568]]

        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XV  Emergency Mortgage Insurance and Loan Programs, 
                Department of Housing and Urban Development (Parts 
                2700--2799) [Reserved]
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
      XXIV  Board of Directors of the HOPE for Homeowners Program 
                (Parts 4000--4099) [Reserved]
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

[[Page 569]]

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--899)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900--999)
        VI  Office of the Assistant Secretary, Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Parts 1200--1299)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--End)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)

[[Page 570]]

        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Bureau of Safety and Environmental Enforcement, 
                Department of the Interior (Parts 200--299)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
         V  Bureau of Ocean Energy Management, Department of the 
                Interior (Parts 500--599)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)
       XII  Office of Natural Resources Revenue, Department of the 
                Interior (Parts 1200--1299)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)

[[Page 571]]

      VIII  Office of Investment Security, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)
         X  Financial Crimes Enforcement Network, Department of 
                the Treasury (Parts 1000--1099)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Department of Defense, Defense Logistics Agency (Parts 
                1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
      XVII  Office of the Director of National Intelligence (Parts 
                1700--1799)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army, Department 
                of Defense (Parts 200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)

[[Page 572]]

       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Career, Technical and Adult Education, 
                Department of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599) 
                [Reserved]
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education (Parts 700--799) 
                [Reserved]
            Subtitle C--Regulations Relating to Education
        XI  (Parts 1100--1199) [Reserved]
       XII  National Council on Disability (Parts 1200--1299)

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
        VI  [Reserved]
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Parts 1500--
                1599)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  U.S. Copyright Office, Library of Congress (Parts 
                200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                300--399)
        IV  National Institute of Standards and Technology, 
                Department of Commerce (Parts 400--599)

[[Page 573]]

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--199)
        II  Armed Forces Retirement Home (Parts 200--299)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Regulatory Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)
      VIII  Gulf Coast Ecosystem Restoration Council (Parts 1800--
                1899)

          Title 41--Public Contracts and Property Management

            Subtitle A--Federal Procurement Regulations System 
                [Note]
            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
   62--100  [Reserved]
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
  103--104  [Reserved]
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
  129--200  [Reserved]
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]

[[Page 574]]

            Subtitle E--Federal Information Resources Management 
                Regulations System [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--699)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1099)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 400--999)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10099)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)

[[Page 575]]

       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
        IX  Denali Commission (Parts 900--999)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Administration for Children and Families, Department 
                of Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission of Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Parts 2300--2399)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)

[[Page 576]]

        IV  National Telecommunications and Information 
                Administration, Department of Commerce, and 
                National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 400--499)
         V  The First Responder Network Authority (Parts 500--599)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Department of Health and Human Services (Parts 300--
                399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  Agency for International Development (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199) [Reserved]
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399) 
                [Reserved]

[[Page 577]]

        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  Civilian Board of Contract Appeals, General Services 
                Administration (Parts 6100--6199)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation (Parts 1400--1499) 
                [Reserved]
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)

[[Page 578]]

        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

[[Page 579]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of April 1, 2020)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Conference of the United States    1, III
Advisory Council on Historic Preservation         36, VIII
Advocacy and Outreach, Office of                  7, XXV
Afghanistan Reconstruction, Special Inspector     5, LXXXIII
     General for
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development              2, VII; 22, II
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, VIII, IX, X, XI; 9, 
                                                  II
Agricultural Research Service                     7, V
Agriculture, Department of                        2, IV; 5, LXXIII
  Advocacy and Outreach, Office of                7, XXV
  Agricultural Marketing Service                  7, I, VIII, IX, X, XI; 9, 
                                                  II
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Economic Research Service                       7, XXXVII
  Energy Policy and New Uses, Office of           2, IX; 7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  National Institute of Food and Agriculture      7, XXXIV
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force, Department of                          32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
   Compliance Board
[[Page 580]]

Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI; 38, II
Army, Department of                               32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase from People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Career, Technical, and Adult Education, Office    34, IV
     of
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chemical Safety and Hazard Investigation Board    40, VI
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X, XIII
Civil Rights, Commission on                       5, LXVIII; 45, VII
Civil Rights, Office for                          34, I
Council of the Inspectors General on Integrity    5, XCVIII
     and Efficiency
Court Services and Offender Supervision Agency    5, LXX
     for the District of Columbia
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce, Department of                           2, XIII; 44, IV; 50, VI
  Census Bureau                                   15, I
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II; 37, IV
  National Marine Fisheries Service               50, II, IV
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Technical Information Service          15, XI
  National Telecommunications and Information     15, XXIII; 47, III, IV
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Secretary of Commerce, Office of                15, Subtitle A
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Financial Protection Bureau              5, LXXXIV; 12, X
Consumer Product Safety Commission                5, LXXI; 16, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    2, XXII; 45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    5, LXX; 28, VIII
     for the District of Columbia
Customs and Border Protection                     19, I
Defense Contract Audit Agency                     32, I
Defense, Department of                            2, XI; 5, XXVI; 32, 
                                                  Subtitle A; 40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III; 
                                                  48, 51

[[Page 581]]

  Defense Acquisition Regulations System          48, 2
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  National Imagery and Mapping Agency             32, I
  Navy, Department of                             32, VI; 48, 52
  Secretary of Defense, Office of                 2, XI; 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
Denali Commission                                 45, IX
Disability, National Council on                   5, C; 34, XII
District of Columbia, Court Services and          5, LXX; 28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          2, XXXIV; 5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Career, Technical, and Adult Education, Office  34, IV
       of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
Educational Research and Improvement, Office of   34, VII
Election Assistance Commission                    2, LVIII; 11, II
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Policy, National Commission for        1, IV
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             2, IX; 5, XXIII; 10, II, 
                                                  III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   2, XV; 5, LIV; 40, I, IV, 
                                                  VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                2, Subtitle A; 5, III, 
                                                  LXXVII; 14, VI; 48, 99
  National Drug Control Policy, Office of         2, XXXVI; 21, III
  National Security Council                       32, XXI; 47, II
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II

[[Page 582]]

  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           2, XXXV; 5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       5, XXXVII; 11, I
Federal Emergency Management Agency               44, I
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Agency                    5, LXXX; 12, XII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority                 5, XIV, XLIX; 22, XIV
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Financial Crimes Enforcement Network              31, X
Financial Research Office                         12, XVI
Financial Stability Oversight Council             12, XIII
Fine Arts, Commission of                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5

[[Page 583]]

  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Gulf Coast Ecosystem Restoration Council          2, LIX; 40, VIII
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          2, III; 5, XLV; 45, 
                                                  Subtitle A
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X, XIII
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  2, XXX; 5, XXXVI; 6, I; 8, 
                                                  I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection                   19, I
  Federal Emergency Management Agency             44, I
  Human Resources Management and Labor Relations  5, XCVII
       Systems
  Immigration and Customs Enforcement Bureau      19, IV
  Transportation Security Administration          49, XII
HOPE for Homeowners Program, Board of Directors   24, XXIV
     of
Housing and Urban Development, Department of      2, XXIV; 5, LXV; 24, 
                                                  Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Immigration and Customs Enforcement Bureau        19, IV
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Independent Counsel, Offices of                   28, VI
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V

[[Page 584]]

Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII, XV
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior, Department of                           2, XIV
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Natural Resource Revenue, Office of             30, XII
  Ocean Energy Management, Bureau of              30, V
  Reclamation, Bureau of                          43, I
  Safety and Enforcement Bureau, Bureau of        30, II
  Secretary of the Interior, Office of            2, XIV; 43, Subtitle A
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Development Finance Corporation,    5, XXXIII; 22, VII
     U.S.
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
Investment Security, Office of                    31, VIII
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice, Department of                            2, XXVIII; 5, XXVIII; 28, 
                                                  I, XI; 40, IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Independent Counsel, Offices of                 28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor, Department of                              2, XXIX; 5, XLII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50

[[Page 585]]

  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I, VII
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Libraries and Information Science, National       45, XVII
     Commission on
Library of Congress                               36, VII
  Copyright Royalty Board                         37, III
  U.S. Copyright Office                           37, II
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II, LXIV
Micronesian Status Negotiations, Office for       32, XXVII
Military Compensation and Retirement              5, XCIX
     Modernization Commission
Millennium Challenge Corporation                  22, XIII
Mine Safety and Health Administration             30, I
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
Museum and Library Services, Institute of         2, XXXI
National Aeronautics and Space Administration     2, XVIII; 5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   2, XXII; 45, XII, XXV
National Archives and Records Administration      2, XXVI; 5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Capital Planning Commission              1, IV, VI
National Counterintelligence Center               32, XVIII
National Credit Union Administration              5, LXXXVI; 12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           2, XXXVI; 21, III
National Endowment for the Arts                   2, XXXII
National Endowment for the Humanities             2, XXXIII
National Foundation on the Arts and the           45, XI
     Humanities
National Geospatial-Intelligence Agency           32, I
National Highway Traffic Safety Administration    23, II, III; 47, VI; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute of Food and Agriculture        7, XXXIV
National Institute of Standards and Technology    15, II; 37, IV
National Intelligence, Office of Director of      5, IV; 32, XVII
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV
National Mediation Board                          5, CI; 29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       2, XXV; 5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
   and Technology Policy
[[Page 586]]

National Technical Information Service            15, XI
National Telecommunications and Information       15, XXIII; 47, III, IV, V
     Administration
National Transportation Safety Board              49, VIII
Natural Resources Conservation Service            7, VI
Natural Resource Revenue, Office of               30, XII
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy, Department of                               32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     2, XX; 5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Ocean Energy Management, Bureau of                30, V
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       2, XXXVII; 22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, IV, XXXV; 45, VIII
  Human Resources Management and Labor Relations  5, XCVII
       Systems, Department of Homeland Security
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Regulatory Commission                      5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Privacy and Civil Liberties Oversight Board       6, X
Procurement and Property Management, Office of    7, XXXII
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Utilities Service                           7, XVII, XVIII, XLII
Safety and Environmental Enforcement, Bureau of   30, II
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                5, XXXIV; 17, II
Selective Service System                          32, XVI
Small Business Administration                     2, XXVII; 13, I
Smithsonian Institution                           36, V
Social Security Administration                    2, XXIII; 20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI

[[Page 587]]

Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State, Department of                              2, VI; 22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Tennessee Valley Authority                        5, LXIX; 18, XIII
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     2, XII; 5, L
  Commercial Space Transportation                 14, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 47, IV; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury, Department of the                       2, X; 5, XXI; 12, XV; 17, 
                                                  IV; 31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection                   19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Claims Collection Standards             31, IX
  Federal Law Enforcement Training Center         31, VII
  Financial Crimes Enforcement Network            31, X
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  Investment Security, Office of                  31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
U.S. Copyright Office                             37, II
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs, Department of                   2, VIII; 38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I, VII
World Agricultural Outlook Board                  7, XXXVIII

[[Page 589]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations (CFR) that 
were made by documents published in the Federal Register since January 
1, 2015 are enumerated in the following list. Entries indicate the 
nature of the changes effected. Page numbers refer to Federal Register 
pages. The user should consult the entries for chapters, parts and 
subparts as well as sections for revisions.
For changes to this volume of the CFR prior to this listing, consult the 
annual edition of the monthly List of CFR Sections Affected (LSA). The 
LSA is available at www.govinfo.gov. For changes to this volume of the 
CFR prior to 2001, see the ``List of CFR Sections Affected, 1949-1963, 
1964-1972, 1973-1985, and 1986-2000'' published in 11 separate volumes. 
The ``List of CFR Sections Affected 1986-2000'' is available at 
www.govinfo.gov.

                                  2015

17 CFR
                                                                   80 FR
                                                                    Page
Chapter I
43 Policy statement................................................12555
45 Policy statement................................................12555
46 Policy statement................................................12555
140.99 (d)(2)(i) revised...........................................59578
170 Policy statement...............................................12555
    Authority citation revised.....................................55029
170.17 Added.......................................................55029

                                  2016

17 CFR
                                                                   81 FR
                                                                    Page
Chapter I
43 Policy statement................................................54478
45 Policy statement................................................54478
45 Authority citation revised......................................41772
45.1 Amended.......................................................41772
45.3 Revised.......................................................41772
45.4 (b)(2)(ii) removed; eff. 6-27-16..............................41774
    Revised; eff. 7-27-16..........................................41774
45.5 Revised.......................................................41775
45.8 Revised.......................................................41777
45.10 Revised......................................................41778
45 Appendix 1 revised..............................................41778
46 Policy statement................................................54478
49.24 (b), (c), (d), (i), (j) and (k) introductory text revised; 
        (l), (m) and (n) added.....................................64315
50.4 (a) revised...................................................71239
140.93 (a)(6) added..................................................704
143 Authority citation revised.....................................41437
143.8 (a)(1) through (4) and (b) revised; (c) removed; interim.....41437
150 Authority citation revised.....................................91489
150.1 (d), (e)(2) and (5) revised..................................91489
150.3 (a)(3) amended; (a)(4) removed...............................91489
150.4 Revised......................................................91490
170 Policy statement...............................................54478

                                  2017

17 CFR
                                                                   82 FR
                                                                    Page
Chapter I
48.11 Added........................................................28769
140.72 (a) revised.................................................28769
140.73 (a) introductory text revised...............................28770
140.74 Revised.....................................................28770
140.97 Revised.....................................................28770
143.8 (a)(1)(ii) introductory text, (2)(ii), (3)(ii) introductory 
        text and (4)(ii) introductory text revised; (a)(1)(iii), 
        (2)(iii), (3)(iii), and (4)(iii) added; interim.............7645
145 Authority citation revised; interim............................28002
145.0 Revised; interim.............................................28003
145.4 (a) amended; (b) revised; interim............................28003
145.5 Introductory text and (e) revised; interim...................28003

[[Page 590]]

145.6 (a) revised; interim.........................................28003
145.7 (b), (c), (f), (g), (h)(1), (2), (3) introductory text, 
        (i)(2), (5), (6) introductory text, (iii), (7) and (j) 
        revised; interim...........................................28003
145.8 Revised; interim.............................................28005
150 Authority citation revised.....................................28770
150.3 (b) revised..................................................28770
150.4 (e) revised..................................................28770
165 Authority citation revised.....................................24496
165.2 (i)(2), (3), (l)(1)(i) and (o) revised.......................24497
165.3 Introductory text removed; (a) introductory text and (1) 
        revised....................................................24497
165.4 (a) introductory text, (1) and (2) revised...................24497
165.5 Revised......................................................24498
165.6 (a)(1) revised...............................................24498
165.7 Heading, (b), (d), and (e) revised; (f) through (l) added....24498
165.9 Introductory text revised....................................24500
165.10 Heading and (b) revised; (a)(6) and (7) amended; (a)(8) and 
        (9) added..................................................24500
165.11 Revised.....................................................24500
165.12 (c) revised.................................................24500
165.13 Revised.....................................................24500
165.15 Revised.....................................................24501
165.19 Revised.....................................................24501
165.20 Added.......................................................24501
165 Appendix A revised; Appendix B added...........................24501

                                  2018

17 CFR
                                                                   83 FR
                                                                    Page
Chapter I
41.41 (d) and (e) amended; interim..................................7997
41.43 (a)(13) and (28) amended; interim.............................7997
49 Authority citation revised......................................27436
49.2 (a)(5) revised................................................27436
49.9 (a)(9) revised................................................27436
49.17 (a), (b)(1)(vii), (2), (c)(2), (d)(1), (2), (3), (4)(i) 
        through (iv), (5), (6), (e), and (f) revised; (c)(2) and 
        (3) amended; (h) and (i) added.............................27436
49.18 Revised......................................................27438
49.22 (d)(4) revised...............................................27439
49 Appendix B added................................................27439
50.51 (b)(1) revised; interim.......................................7997
143.8 Revised.......................................................9428
150.3 (a)(1) amended; interim.......................................7997
150.5 (d)(1) revised; interim.......................................7997
151.11 (f)(1)(ii) revised; interim..................................7997
155.3 (b)(2)(ii) amended; interim...................................7997
155.4 (b)(2)(ii) amended; interim...................................7997
166.2 (a) and (b) amended; interim..................................7997

                                  2019

17 CFR
                                                                   84 FR
                                                                    Page
Chapter I
41.25 (a) through (d) redesignated as (b) through (e); new (a) 
        added; new (b)(3), new (c)(2), new (3), and new (e) 
        revised....................................................51021
41.21--41.27 (Subpart C) Appendix A added..........................51022
75.1 (c) revised...................................................35021
75.2 (r) revised...................................................35021
75.2 Revised.......................................................62201
75.3 (e)(5) through (13) redesignated as (e)(6) through (14); 
        (d)(10) through (13) and new (e)(5) added; (b), (d)(3), 
        (8), (9), (e)(11), (12), and (14) revised..................62203
75.4 Revised.......................................................62205
75.5 (b) and (c)(1) introductory text revised; (c)(4) added........62207
75.6 (e)(3) revised; (e)(4) and (6) removed; (e)(5) redesignated 
        as new (e)(4)..............................................62208
75.10 (d)(9)(iii) revised..........................................35021
75.10 (c)(7)(ii) and (8)(i)(A) revised.............................62208
75.11 (a)(6) revised...............................................35022
75.11 Regulation at 84 FR 35022 corrected..........................38115
75.11 (c) revised..................................................62208
75.13 (a), (b)(3), (4), and (c) revised............................62208
75.14 (a)(2)(ii)(B) revised........................................62209
75.20 (a), (b) introductory text, (c), (d), (e) introductory text, 
        and (f)(2) revised; (g), (h), and (i) added................62209
75 Appendix A revised..............................................62210
75 Appendix B removed..............................................62212
75 Appendix Z added (temporary)....................................62212
143.8 (b) revised...................................................3104
160.5 (a)(1) amended; (d) added....................................17345

[[Page 591]]

                                  2020

   (Regulations published from January 1, 2020, through April 1, 2020)

17 CFR
                                                                   85 FR
                                                                    Page
Chapter I
140.94 (c)(1) and (4) through (13) revised..........................4900
143.8 (b) revised...................................................1749


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