[Title 17 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2022 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, 2022

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2022
                    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........................     563
      Alphabetical List of Agencies Appearing in the CFR......     583
      List of CFR Sections Affected...........................     593

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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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[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
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that volume.

[[Page vii]]

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    Oliver A. Potts,
    Director,
    Office of the Federal Register
    April 1, 2022







[[Page ix]]



                               THIS TITLE

    Title 17--Commodity and Securities Exchanges is composed of five 
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, contains additional 
regulations of the Securities and Exchange Commission. The fifth volume, 
comprising part 241 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 codified under this title by the Commodity Futures Trading 
Commission, the Securities and Exchange Commission, and the Department 
of the Treasury as of April 1, 2022.

    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 sections of volume 4, 
containing part 240, and volume 5, containing part 241 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............................          65
45              Swap data recordkeeping and reporting 
                    requirements............................          66
46              Swap data recordkeeping and reporting 
                    requirements: pre-enactment and 
                    transition swaps........................         112
48              Registration of foreign boards of trade.....         128
49              Swap data repositories......................         161
50              Clearing requirement and related rules......         202
75              Proprietary trading and certain interests in 
                    and relationships with covered funds....         216
100             Delivery period required....................         263
140             Organization, functions, and procedures of 
                    the Commission..........................         263
141             Salary offset...............................         290
142             Indemnification of CFTC employees...........         294
143             Collection of claims owed the United States 
                    arising from activities under the 
                    Commission's jurisdiction...............         295
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..............................         298
145             Commission records and information..........         301
146             Records maintained on individuals...........         315
147             Open Commission meetings....................         324
148             Implementation of the Equal Access to 
                    Justice Act in covered adjudicatory 
                    proceedings before the Commission.......         331
149             Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by the Commodity 
                    Futures Trading Commission..............         338

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150             Limits on positions.........................         344
151

[Reserved]

155             Trading standards...........................         378
156             Broker Associations.........................         381
160             Privacy of consumer financial information 
                    under Title V of the Gramm-Leach-Bliley 
                    Act.....................................         383
162             Protection of consumer information under the 
                    Fair Credit Reporting Act...............         412
165             Whistleblower rules.........................         429
166             Customer protection rules...................         468
170             Registered futures associations.............         471
171             Rules relating to review of National Futures 
                    Association decisions in disciplinary, 
                    membership denial, registration and 
                    member responsibility actions...........         475
180             Prohibition against manipulation............         489
190             Bankruptcy rules............................         490
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

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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, and 
18.05 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). The rules in the preceding sentence 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; 
86 FR 19421, Apr. 13, 2021]



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

[[Page 24]]

traded on or subject to the rules of a foreign board of trade;
    (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

[[Page 25]]

shown by any regularly published reporting or quotation service. If 
there is 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.

[[Page 26]]

    (11) Floor broker shall have the meaning provided in section 1a(16) 
of the Act.
    (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

[[Page 27]]

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 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

[[Page 28]]

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 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 fifteen (15) 
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.

[67 FR 53171, Aug. 14, 2002, as amended at 85 FR 75146, Nov. 24, 2020]



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

[[Page 29]]

(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;
    (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:

[[Page 30]]

    (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 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

[[Page 31]]

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 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.

[[Page 32]]

43.7 Delegation of authority.

Appendix A to Part 43--Swap Transaction and Pricing Data Elements
Appendix B to Part 43--Enumerated Physical Commodity Contracts and Other 
          Contracts
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(c)(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) Rules of construction. The examples in 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.

[76 FR 1243, Jan. 9, 2012, as amended at 85 FR 75476, Nov. 25, 2020]



Sec.  43.2  Definitions.

    (a) Definitions. As used in this part:
    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:
    (1) Involves a swap that is listed on a swap execution facility or 
designated contract market;
    (2) Is executed on a swap execution facility's trading system or 
platform that is not an order book as defined in Sec.  37.3(a)(3) of 
this chapter, or occurs away from the swap execution facility's or 
designated contract market's trading system or platform and is executed 
pursuant to the 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 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.
    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.
    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

[[Page 33]]

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.
    Execution means an agreement by the parties, by any method, to the 
terms of a swap that legally binds the parties to such swap terms under 
applicable law.
    Execution date means the date of execution of a particular 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.
    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.
    Mirror swap means a swap:
    (1) To which--
    (i) A prime broker is a counterparty; or
    (ii) Both counterparties are prime brokers;
    (2) That is executed contemporaneously with a corresponding trigger 
swap;
    (3) That has identical terms and pricing as the contemporaneously 
executed trigger swap, except:
    (i) That a mirror swap, but not the corresponding trigger swap, may 
include any associated prime brokerage service fees agreed to by the 
parties; and
    (ii) As provided in paragraph (5) of this ``mirror swap'' 
definition;
    (4) With respect to which the sole price forming event is the 
occurrence of the contemporaneously executed trigger swap; and
    (5) The execution of which is contingent on, or is triggered by, the 
execution of the contemporaneously executed trigger swap. The 
contractually agreed payments and delivery amounts under a mirror swap 
may differ from those amounts of the corresponding trigger swap if:
    (i) Under all such mirror swaps to which the prime broker that is a 
counterparty to the trigger swap is also a counterparty, the aggregate 
contractually agreed payments and delivery amounts shall be equal to the 
aggregate of the contractually agreed payments and delivery amounts 
under the corresponding trigger swap; and
    (ii) The market risk and contractually agreed payments and delivery 
amounts of all such mirror swaps to which a prime broker that is not a 
counterparty to the corresponding trigger swap is a party will offset 
each other, resulting in such prime broker having a flat market risk 
position at the execution of such mirror swaps.
    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 legally 
transfers all or part of its rights, liabilities, duties, and 
obligations under the swap to a new legal party other than the 
counterparty to the swap under applicable law.
    Off-facility swap means any swap transaction that is not executed on 
or pursuant to the rules of a swap execution facility or designated 
contract market.
    Other commodity means any commodity that is not categorized in the 
interest rate, credit, foreign exchange, equity, or 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.
    Post-priced swap means an off-facility swap for which the price is 
not determined as of the time of execution.
    Pricing event means the completion of the negotiation of the 
material economic terms and pricing of a trigger swap.
    Prime broker means, with respect to a mirror swap and its related 
trigger swap, a swap dealer acting in the capacity of a prime broker 
with respect to such swaps.
    Prime broker swap means any swap to which a swap dealer acting in 
the capacity as prime broker is a party.

[[Page 34]]

    Prime brokerage agency arrangement means an arrangement pursuant to 
which a prime broker authorizes one of its clients, acting as agent for 
such prime broker, to cause the execution of a prime broker swap.
    Prime brokerage agent means a client of a prime broker who causes 
the execution of one or more prime broker swap(s) acting pursuant to a 
prime brokerage agency arrangement.
    Public dissemination and publicly disseminate means to make freely 
available and readily accessible to the public swap transaction and 
pricing data in a non-discriminatory manner, through the internet or 
other electronic data feed that is widely published. Such public 
dissemination shall be made in a consistent, usable, and machine-
readable electronic format that allows the data to be downloaded, saved, 
and analyzed.
    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;
    (ii) Portfolio compression exercises; and
    (iii) Swaps entered into by a derivatives clearing organization as 
part of managing the default of a clearing member.
    (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.
    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.
    Reporting counterparty 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.
    Swap execution facility means a trading system or platform that is a 
swap execution facility as defined in CEA section 1a(50) and in Sec.  
1.3 of this chapter and that is registered with the Commission pursuant 
to CEA section 5h and part 37 of this chapter.
    Swap transaction and pricing data means all data elements for a swap 
in appendix A of this part that are required to be reported or publicly 
disseminated pursuant to this part.
    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.
    Trigger swap means a swap:
    (1) That is executed pursuant to one or more prime brokerage agency 
arrangements;
    (2) To which one counterparty or both counterparties are prime 
brokers;
    (3) That serves as the contingency for, or triggers, the execution 
of one or more corresponding mirror swaps; and
    (4) That is a publicly reportable swap transaction that is required 
to be reported to a swap data repository pursuant to this part and part 
45 of this chapter. A prime broker swap executed on or pursuant to the 
rules of a swap execution facility or designated contract market shall 
be treated as the trigger swap for purposes of this part.
    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 two standard deviations above the mean for the other 
commodity asset class and three standard deviations above the mean for 
all other asset classes.

[[Page 35]]

    (b) Other defined terms. Terms not defined in this part have the 
meanings assigned to the terms in Sec.  1.3 of this chapter.

[85 FR 75476, Nov. 25, 2020]



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

    (a) Responsibilities to report swap transaction and pricing data in 
real-time--(1) In general. The reporting counterparty, swap execution 
facility, or designated contract market responsible for reporting a swap 
as determined by this section shall report the publicly reportable swap 
transaction to a swap data repository as soon as technologically 
practicable after execution, subject to paragraphs (a)(2) through (6) of 
this section. Such reporting shall be done in the manner set forth in 
paragraph (d) of this section.
    (2) 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 shall report swap transaction and pricing data to a swap data 
repository as soon as technologically practicable after execution.
    (3) Off-facility swaps. Except as otherwise provided in paragraphs 
(a)(4) through (6) of this section, a reporting counterparty shall 
report all publicly reportable swap transactions that are off-facility 
swaps to a swap data repository for the appropriate asset class in 
accordance with the rules set forth in this part as soon as 
technologically practicable after execution. Unless otherwise agreed to 
by the parties prior to execution, the following shall be the reporting 
counterparty for a publicly reportable swap transaction that is an off-
facility swap:
    (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 
counterparty;
    (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 
counterparty;
    (iii) If both parties are swap dealers, then the swap dealers shall 
designate which party shall be the reporting counterparty prior to 
execution of such swap;
    (iv) If both parties are major swap participants, then the major 
swap participants shall designate which party shall be the reporting 
counterparty prior to execution of such swap; and
    (v) If neither party is a swap dealer or a major swap participant, 
then the parties shall designate which party shall be the reporting 
counterparty prior to execution of such swap.
    (4) Post-priced swaps--(i) Post-priced swaps reporting delays. The 
reporting counterparty may delay reporting a post-priced swap to a swap 
data repository until the earlier of the price being determined and 
11:59:59 p.m. eastern time on the execution date. If the price of a 
publicly reportable swap transaction that is a post-priced swap is not 
determined by 11:59:59 p.m. eastern time on the execution date, the 
reporting counterparty shall report to a swap data repository by 
11:59:59 p.m. eastern time on the execution date all swap transaction 
and pricing data for such post-priced swap other than the price and any 
other then-undetermined swap transaction and pricing data and shall 
report each such item of previously undetermined swap transaction and 
pricing data as soon as technologically practicable after such item is 
determined.
    (ii) Other economic terms. The post-priced swap reporting delay set 
forth in paragraph (a)(4)(i) of this section does not apply to publicly 
reportable swap transactions with respect to which the price is known at 
execution, but one or more other economic or other terms are not yet 
known at the time of execution.
    (5) Clearing swaps. Notwithstanding the provisions of paragraphs 
(a)(1) through (3) of this section, if a clearing swap, as defined in 
Sec.  45.1(a) of this chapter, is a publicly reportable swap 
transaction, the derivatives clearing organization that is a party to 
such swap shall be the reporting counterparty and shall fulfill all 
reporting counterparty obligations for such swap as soon as 
technologically practicable after execution.
    (6) Prime broker swaps. (i) A mirror swap is not a publicly 
reportable swap transaction. Execution of a trigger

[[Page 36]]

swap, for purposes of determining when execution occurs under paragraphs 
(a)(1) through (3) of this section, shall be deemed to occur at the time 
of the pricing event for such trigger swap.
    (ii) With respect to a given set of swaps, if it is unclear which 
is, or are the mirror swap(s) and which is the related trigger swap 
(including, but not limited to, situations where there is more than one 
prime broker counterparty within such set of swaps and situations where 
the pricing event for each set of swaps occurs between prime brokerage 
agents of a common prime broker), or if under the prime brokerage agency 
arrangement, the trigger swap would occur between two prime brokers, the 
prime broker(s) shall determine which of the prime broker swaps shall be 
treated as the trigger swap and which are mirror swaps.
    (iii) Trigger swaps shall be reported in accordance with the 
following:
    (A) Trigger swaps executed on or pursuant to the rules of a swap 
execution facility or designated contract market shall be reported 
pursuant to paragraph (a)(2) of this section; and
    (B) Off-facility trigger swaps shall be reported pursuant to 
paragraph (a)(3) of this section, except that if a counterparty to a 
trigger swap is a swap dealer that is not a prime broker with respect to 
that trigger swap, then that swap dealer counterparty shall be the 
reporting counterparty for the trigger swap.
    (7) Third-party facilitation of data reporting. Any person required 
by this part to report swap transaction and pricing data, while 
remaining fully responsible for reporting as required by this part, may 
contract with a third-party service provider to facilitate reporting.
    (b) Public dissemination of swap transaction and pricing data by 
swap data repositories in real-time--(1) In general. A swap data 
repository shall publicly disseminate swap transaction and pricing data 
as soon as technologically practicable after such data is received from 
a swap execution facility, designated contract market, or reporting 
counterparty, unless such swap transaction and pricing data is subject 
to a time delay described in Sec.  43.5, in which case the swap 
transaction and pricing data shall be publicly disseminated in the 
manner described in Sec.  43.5.
    (2) Compliance with 17 CFR part 49. Any swap data repository that 
accepts and publicly disseminates swap transaction and pricing data in 
real-time shall comply with part 49 of this chapter.
    (3) Prohibitions on disclosure of data. (i) If there is a swap data 
repository for an asset class, a 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 swap data repository 
unless:
    (A) Such disclosure is made no earlier than the transmittal of such 
data to a swap data repository for public dissemination;
    (B) Such disclosure is only made to market participants on such swap 
execution facility or designated contract market;
    (C) Market participants are provided advance notice of such 
disclosure; and
    (D) Any such disclosure by the swap execution facility or designated 
contract market is non-discriminatory.
    (ii) If there is a swap data repository for an asset class, a swap 
dealer or major swap participant 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 swap 
data repository unless:
    (A) Such disclosure is made no earlier than the transmittal of such 
data to a 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.
    (4) Acceptance and public dissemination of all swaps in an asset 
class. Any swap

[[Page 37]]

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.
    (5) Annual independent review. Any 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 swap data 
repository's security and other system controls for the purpose of 
ensuring compliance with the requirements in this part.
    (c) Availability of swap transaction and pricing data to the public. 
(1) Swap data repositories shall make swap transaction and pricing data 
available on their websites for a period of time that is at least one 
year after the initial public dissemination of such data and shall make 
instructions freely available on their websites on how to download, 
save, and search such data.
    (2) Swap transaction and pricing data that is publicly disseminated 
pursuant to this paragraph shall be made available free of charge.
    (d) Data reported to swap data repositories. (1) In reporting swap 
transaction and pricing data to a swap data repository, each reporting 
counterparty, swap execution facility, or designated contract market 
shall report the swap transaction and pricing data as described in the 
elements in appendix A of this part in the form and manner provided in 
the technical specification published by the Commission pursuant to 
Sec.  43.7.
    (2) In reporting swap transaction and pricing data to a swap data 
repository, each reporting counterparty, swap execution facility, or 
designated contract market making such report shall satisfy the data 
validation procedures of the swap data repository.
    (3) In reporting swap transaction and pricing data to a swap data 
repository, each reporting counterparty, swap execution facility, or 
designated contract market shall use the facilities, methods, or data 
standards provided or required by the swap data repository to which the 
entity or reporting counterparty reports the data.
    (e) Correction of errors--(1) Swap execution facilities, designated 
contract markets, and reporting counterparties. Any swap execution 
facility, designated contract market, or reporting counterparty that by 
any means becomes aware of any error relating to swap transaction and 
pricing data that it was required to report under this part shall 
correct the error. To correct an error, the swap execution facility, 
designated contract market, or reporting counterparty shall submit 
complete and accurate swap transaction and pricing data to the swap data 
repository that maintains the swap transaction and pricing data for the 
relevant swap, or completely and accurately report swap transaction and 
pricing data for a swap that was not previously reported to a swap data 
repository as required under this part, as applicable. Except as 
otherwise provided in this section, the requirement to correct any error 
applies regardless of the state of the swap that is the subject of the 
swap transaction and pricing data, including a swap that has terminated, 
matured, or otherwise is no longer considered to be an open swap.
    (i) Timing requirement for correcting errors. The swap execution 
facility, designated contract market, or reporting counterparty shall 
correct any error as soon as technologically practicable after discovery 
of the error. In all cases, errors shall be corrected within seven 
business days after discovery. Any error that a reporting counterparty 
discovers or could have discovered during the verification process 
required under Sec.  45.14(b) of this chapter is considered discovered 
for the purposes of this section as of the moment the reporting 
counterparty began the verification process during which the error was 
first discovered or discoverable.
    (ii) Notification of failure to timely correct. If the swap 
execution facility, designated contract market, or reporting 
counterparty will, for any reason, fail to timely correct an error, the 
swap execution facility, designated contract market, or reporting 
counterparty

[[Page 38]]

shall notify the Director of the Division of Market Oversight, or such 
other employee or employees of the Commission as the Director may 
designate from time to time. The notification shall be in the form and 
manner, and according to the instructions, specified by the Director of 
the Division of Market Oversight, or such other employee or employees of 
the Commission as the Director may designate from time to time. Unless 
otherwise instructed by the Director of the Division of Market 
Oversight, or such other employee or employees of the Commission as the 
Director may designate from time to time, the notification shall include 
an initial assessment of the scope of the error or errors that were 
discovered, and shall include any initial remediation plan for 
correcting the error or errors, if an initial remediation plan exists. 
This notification shall be made within 12 hours of the swap execution 
facility's, designated contract market's, or reporting counterparty's 
determination that it will fail to timely correct the error.
    (iii) Form and manner for error correction. In order to satisfy the 
requirements of this section, a swap execution facility, designated 
contract market, or reporting counterparty shall conform to a swap data 
repository's policies and procedures created pursuant to Sec.  49.10 of 
this chapter for correction of errors.
    (2) Non-reporting counterparties. Any non-reporting counterparty 
that by any means becomes aware of any error in the swap transaction and 
pricing data for a swap to which it is the non-reporting counterparty, 
shall notify the reporting counterparty for the swap of the error as 
soon as technologically practicable after discovery, but not later than 
three business days following discovery of the error. If the non-
reporting counterparty does not know the identity of the reporting 
counterparty, the non-reporting counterparty shall notify the swap 
execution facility or designated contract market where the swap was 
executed of the error as soon as technologically practicable after 
discovery, but no later than three business days following the 
discovery. Such notice from the non-reporting counterparty to the swap 
execution facility, designated contract market, or reporting 
counterparty constitutes discovery under this section.
    (3) Exception. The requirements to correct errors set forth in 
paragraph (e) of this section only apply to errors in swap transaction 
and pricing data relating to swaps for which the record retention period 
under Sec.  45.2 of this chapter has not expired as of the time the 
error is discovered. Errors in swap transaction and pricing data 
relating to swaps for which the record retention periods under Sec.  
45.2 of this chapter have expired at the time that the errors are 
discovered are not subject to the requirements to correct errors set 
forth in paragraph (e) of this section.
    (4) Error defined--(i) Errors. For the purposes of this part, there 
is an error when swap transaction and pricing data is not completely and 
accurately reported. This includes, but is not limited to, the following 
circumstances:
    (A) Any of the swap transaction and pricing data for a swap reported 
to a swap data repository is incorrect or any of the swap transaction 
and pricing data that is maintained by a swap data repository differs 
from any of the relevant swap transaction and pricing data contained in 
the books and records of a party to the swap.
    (B) Any of the swap transaction and pricing data for a swap that is 
required to be reported to a swap data repository or to be maintained by 
a swap data repository is not reported to a swap data repository or is 
not maintained by the swap data repository as required by this part.
    (C) None of the swap transaction and pricing data for a swap that is 
required to be reported to a swap data repository or to be maintained by 
a swap data repository is reported to a swap data repository or is 
maintained by a swap data repository.
    (D) Any of the swap transaction and pricing data for a swap that is 
no longer an open swap is maintained by the swap data repository as if 
the swap is still an open swap.
    (ii) Presumption. For the purposes of this section, there is a 
presumption that an error exists if the swap data or the swap 
transaction and pricing data that is maintained and disseminated by

[[Page 39]]

an SDR for a swap is not complete and accurate. This includes, but is 
not limited to, the swap data that the SDR makes available to the 
reporting counterparty for verification under Sec.  49.11 of this 
chapter.
    (f) Data validation acceptance message. (1) A swap data repository 
shall validate each swap transaction and pricing data report submitted 
to the swap data repository and notify the reporting counterparty, swap 
execution facility, or designated contract market submitting the report 
whether the report satisfied the data validation procedures of the swap 
data repository as soon as technologically practicable after accepting 
the swap transaction and pricing data report. A swap data repository may 
satisfy the requirements of this paragraph by making available data 
validation acceptance messages as required by Sec.  49.10 of this 
chapter.
    (2) If a swap transaction and pricing data report submitted to a 
swap data repository does not satisfy the data validation procedures of 
the swap data repository, the reporting counterparty, swap execution 
facility, or designated contract market required to submit the report 
has not satisfied its obligation to report swap transaction and pricing 
data in the manner provided by paragraph (d) of this section. The 
reporting counterparty, swap execution facility, or designated contract 
market has not satisfied its obligation until it submits the swap 
transaction and pricing data report in the manner provided by paragraph 
(d) of this section, which includes the requirement to satisfy the data 
validation procedures of the swap data repository.
    (g) Fees. Any fee or charge assessed on a reporting counterparty, 
swap execution facility, or designated contract market by a 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 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 counterparties, swap execution facilities, and designated 
contract markets in an equitable and non-discriminatory manner.

[76 FR 1243, Jan. 9, 2012, as amended at 85 FR 75478, 75653, Nov. 25, 
2020]



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

    (a) Public dissemination of data fields. Any 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 of this part for the swap transaction and pricing data, as 
applicable, in the form and manner provided in the technical 
specification published by the Commission pursuant to Sec.  43.7.
    (b) Additional swap information. A swap data repository that accepts 
and publicly disseminates swap transaction and pricing data in real-time 
may require reporting counterparties, swap execution facilities, and 
designated contract markets to report to such swap data repository 
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 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. Such additional information shall not be 
publicly disseminated by the swap data repository.
    (c) 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 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 swap data repository. 
Reporting counterparties, swap execution facilities, and designated 
contract markets shall provide a swap data repository with swap 
transaction and pricing data that includes an actual description of

[[Page 40]]

the underlying asset(s). This requirement is separate from the 
requirement that a reporting counterparty, swap execution facility, or 
designated contract market shall report swap data to a swap data 
repository pursuant to section 2(a)(13)(G) of the Act and 17 CFR chapter 
I.
    (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 paragraph (c)(4) of this section, a 
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 swap data repository shall 
publicly disseminate swap transaction and pricing data in the other 
commodity asset class as described in this paragraph.
    (i) A 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 
(c)(4)(ii) and (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
    (C) Any publicly reportable swap transaction executed on or pursuant 
to the rules of a swap execution facility or designated contract market.
    (iii) The underlying assets of swaps in the other commodity asset 
class that are not described in paragraph (c)(4)(ii) of this section 
shall be publicly disseminated by limiting the geographic detail of the 
underlying asset(s). 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.
    (d) Reporting of notional or principal amounts to a swap data 
repository--(1) Off-facility swaps. The reporting counterparty shall 
report the actual notional or principal amount of any publicly 
reportable swap transaction that is an off-facility swap to a swap data 
repository that accepts and publicly disseminates such data pursuant to 
this part.
    (2) Swaps executed on or pursuant to the rules of a swap execution 
facility or designated contract market. (i) A swap execution facility or 
designated contract market shall report the actual notional or principal 
amount for all swaps executed on or pursuant to the rules of such swap 
execution facility or designated contract market to a swap data 
repository that accepts and publicly disseminates such data pursuant to 
this part.
    (ii) The actual notional or principal amount for any block trade 
executed on or pursuant to the rules of a swap execution facility or 
designated contract market shall be reported to the swap execution 
facility or designated contract market pursuant to the rules of the swap 
execution facility of designated contract market.
    (e) Public dissemination of notional or principal amounts. The 
notional or principal amount of a publicly reportable swap transaction 
shall be publicly disseminated by a swap data repository subject to 
rounding as set forth in paragraph (f) of this section, and the cap size 
as set forth in paragraph (g) of this section.
    (f) Process to determine appropriate rounded notional or principal 
amounts. (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 10 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 10 thousand, round to nearest one thousand;

[[Page 41]]

    (4) If the notional or principal amount is less than one million but 
equal to or greater than 100 thousand, round to nearest 10 thousand;
    (5) If the notional or principal amount is less than 100 million but 
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 10 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 100 million;
    (9) If the notional or principal amount is equal to or greater than 
100 billion, round to the nearest 10 billion.
    (g) 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) 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 (g)(1) through (5) 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 
(g)(1) through (5) of this section.--
    (1) 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:
    (i) USD 250 million for swaps with a tenor greater than zero up to 
and including two years;
    (ii) USD 100 million for swaps with a tenor greater than two years 
up to and including ten years; and
    (iii) USD 75 million for swaps with a tenor greater than ten years.
    (2) 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.
    (3) 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.
    (4) 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.
    (5) 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.
    (h) Post-initial cap sizes. (1) The Commission shall establish, by 
swap categories, post-initial cap sizes as described in paragraphs 
(h)(2) through (8) of this section.
    (2) The Commission shall determine post-initial cap sizes for the 
swap categories described in paragraphs (c)(1)(i), (c)(2)(i) through 
(xii), (c)(4)(i), and (c)(5)(i) of Sec.  43.6 by utilizing reliable data 
collected by swap data repositories, as determined by the Commission, 
based on paragraphs (h)(2)(i) and (ii) of this section. If the 
Commission is unable to determine a cap size for any swap category 
described in Sec.  43.6(c)(1)(i), the Commission shall assign a cap size 
of USD 100 million to such category.
    (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(d)(2).
    (3) The Commission shall determine the post-initial cap size for a 
swap category in the foreign exchange asset class described in Sec.  
43.6(c)(4)(ii) as the lower of the notional amount of either currency's 
cap size for the swap category described in Sec.  43.6(c)(4)(i).
    (4) All swaps or instruments in the swap category described in Sec.  
43.6(c)(1)(ii) shall have a cap size of USD 100 million.
    (5) All swaps or instruments in the swap category described in Sec.  
43.6(c)(2)(xiii) shall have a cap size of USD 400 million.

[[Page 42]]

    (6) All swaps or instruments in the swap category described in Sec.  
43.6(c)(3) shall have a cap size of USD 250 million.
    (7) All swaps or instruments in the swap category described in Sec.  
43.6(c)(4)(iii) shall have a cap size of USD 150 million.
    (8) All swaps or instruments in the swap category described in Sec.  
43.6(c)(5)(ii) shall have a cap size of USD 100 million.
    (9) The Commission shall publish post-initial cap sizes on its 
website at http://www.cftc.gov.
    (10) Unless otherwise indicated on the Commission's website, the 
post-initial cap sizes shall be effective on the first day of the second 
month following the date of publication of the revised cap size.

[85 FR 75479, Nov. 25, 2020]



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. It is the responsibility of the 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 this part upon the expiration of the 
appropriate time delay described in paragraphs (d) through (h) of this 
section.
    (b) Public dissemination of publicly reportable swap transactions 
subject to a time delay. A 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) [Reserved]
    (d) Time delay for block trades executed on or pursuant to the rules 
of a swap execution facility or designated contract market. Any block 
trade that is executed on or pursuant to the rules of a 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) [Reserved]
    (2) The time delay for public dissemination of swap transaction and 
pricing data for all publicly reportable swap transactions described in 
this paragraph (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 paragraph 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 17 CFR 
chapter I, and this paragraph shall not apply to those swaps that are 
required to be cleared under section 2(h)(2) of the Act and 17 CFR 
chapter I 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 17 CFR chapter 
I, in which at least one party is a swap dealer or major swap 
participant, shall receive a time delay as follows:
    (i) [Reserved]
    (ii) The time delay for public dissemination of swap transaction and 
pricing data for all swaps described in this paragraph (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 17 CFR chapter 
I, in which neither party is a swap dealer or major swap participant, 
shall receive a time delay as follows:
    (i)-(ii) [Reserved]
    (iii) The time delay for public dissemination of swap transaction 
and

[[Page 43]]

pricing data for all swaps described in this paragraph (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 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)-(2) [Reserved]
    (3) The time delay for public dissemination of swap transaction and 
pricing data for all swaps described in this paragraph (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)-(2) [Reserved]
    (3) The time delay for public dissemination of swap transaction and 
pricing data for all swaps described in this paragraph (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)-(2) [Reserved]
    (3) The time delay for public dissemination transaction and pricing 
data for all swaps described in this paragraph (h) shall be 24 business 
hours immediately after the execution of such swap.

[85 FR 75481, Nov. 25, 2020]



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 paragraphs (b) and (c) of this 
section, as applicable, in accordance with the provisions set forth in 
paragraph (d), (e), (f), (g), (h), or (i) of this section, as 
applicable.
    (b) Initial 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:

[[Page 44]]

    (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.
    (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) Post-initial swap categories. Swap categories shall be 
established for all swaps, by asset class, in the following manner:
    (1) Interest rate asset class. Swaps in the interest rate asset 
class shall be grouped into swap categories as follows:
    (i) Based on a unique combination of the following currencies and 
tenors:
    (A) A currency of one of the following countries or union:
    (1) Australia;
    (2) Brazil;
    (3) Canada;
    (4) Chile;
    (5) Czech Republic;
    (6) The European Union;
    (7) Great Britain;
    (8) India;
    (9) Japan;
    (10) Mexico;
    (11) New Zealand;
    (12) South Africa;
    (13) South Korea;
    (14) Sweden; or
    (15) The United States; and
    (B) One of the following tenors:
    (1) Zero to 46 days;
    (2) Greater than 46 and less than or equal to 107 days;
    (3) Greater than 107 and less than or equal to 198 days;
    (4) Greater than 198 and less than or equal to 381 days;
    (5) Greater than 381 and less than or equal to 746 days;
    (6) Greater than 746 and less than or equal to 1,842 days;
    (7) Greater than 1,842 and less than or equal to 3,668 days;
    (8) Greater than 3,668 and less than or equal to 10,973 days; or
    (9) Greater than 10,973 days.
    (ii) Other interest rate swaps not covered in the paragraph 
(c)(1)(i) of this section.
    (2) Credit asset class. Swaps in the credit asset class shall be 
grouped into swap categories as follows.
    (i) Based on the CDXHY product type, without options and a tenor

[[Page 45]]

greater than 1,477 days and less than or equal to 2,207 days;
    (ii) Based on the CDXHY product type, with only options and a tenor 
greater than 1,477 days and less than or equal to 2,207 days;
    (iii) Based on the iTraxx Europe product type, without options and a 
tenor greater than 1,477 days and less than or equal to 2,207 days;
    (iv) Based on the iTraxx Europe product type, with only options and 
a tenor greater than 1,477 days and less than or equal to 2,207 days;
    (v) Based on the iTraxx Crossover product type, without options and 
a tenor greater than 1,477 days and less than or equal to 2,207 days;
    (vi) Based on the iTraxx Crossover product type, with only options 
and a tenor greater than 1,477 days and less than or equal to 2,207 
days;
    (vii) Based on the iTraxx Senior Financials product type, without 
options and a tenor greater than 1,477 days and less than or equal to 
2,207 days;
    (viii) Based on the iTraxx Senior Financials product type, with only 
options and a tenor greater than 1,477 days and less than or equal to 
2,207 days;
    (ix) Based on the CDXIG product type and a tenor greater, without 
options than 1,477 days and less than or equal to 2,207 days;
    (x) Based on the CDXIG product type with only options and a tenor 
greater, than 1,477 days and less than or equal to 2,207 days;
    (xi) Based on the CDXEmergingMarkets product type and a tenor 
greater than 1,477 days and less than or equal to 2,207 days;
    (xii) Based on the CMBX product type; and
    (xiii) Other credit swaps not covered in paragraphs (c)(2)(i)-(xii) 
of this section.
    (3) Equity asset class. There shall be one swap category consisting 
of all swaps in the equity asset class.
    (4) Foreign exchange asset class. Swaps in the foreign exchange 
asset class shall be grouped into swap categories as follows:
    (i) By the unique currency combinations of the United States 
currency paired with a currency of one of the following countries or 
union: Argentina, Australia, Brazil, Canada, Chile, China, Colombia, the 
European Union, Great Britain, India, Indonesia, Japan, Malaysia, 
Mexico, New Zealand, Peru, Philippines, Russia, South Korea, or Taiwan.
    (ii) By the unique currency pair consisting of two separate 
currencies from the following countries or union: Argentina, Australia, 
Brazil, Canada, Chile, China, Colombia, the European Union, Great 
Britain, India, Indonesia, Japan, Malaysia, Mexico, New Zealand, Peru, 
Philippines, Russia, South Korea, and Taiwan.
    (iii) Other swap categories in the foreign exchange asset class not 
covered in paragraph (c)(4)(i) or (ii) of this section.
    (5) Other commodity asset class. Swaps in the other commodity asset 
class shall be grouped into swap categories as follows:
    (i) For swaps that have a physical commodity underlier listed in 
appendix D of this part, by the relevant physical commodity underlier; 
or
    (ii) Other commodity swaps that are not covered in paragraph 
(c)(5)(i) of this section.
    (d) 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) 67-percent notional amount calculation. The Commission shall use 
the following procedure in determining the 67-percent notional amount 
calculation:
    (i) For each relevant swap category, select all reliable SDR data 
for at least a one-year period;
    (ii) Convert the notional amount 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 (d)(1)(iv) of this 
section;
    (vii) Select the notional amount associated with that observation;
    (viii) Round the notional amount of that observation up to two 
significant digits, or if the notional amount associated with that 
observation is already significant to only 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 (d)(1)(viii) of this section.
    (2) 75-percent notional amount calculation. The Commission shall use 
the procedure set out in paragraph (d)(1) of this section with 75-
percent in place of 67-percent.
    (3) 50-percent notional amount calculation. The Commission shall use 
the procedure set out in paragraph (d)(1) of this section with 50-
percent in place of 67-percent.
    (e) 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.
    (f) Initial appropriate minimum block sizes. Prior to the Commission 
making a determination as described in paragraph (g)(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 (f)(1) of this section, for any publicly 
reportable swap transaction that falls within the swap categories 
described in paragraph (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.
    (g) Post-initial process to determine appropriate minimum block 
sizes--(1) Post-initial period. The Commission shall establish, by swap 
categories, the appropriate minimum block sizes as described in 
paragraphs (g)(2) through (6) 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 (c)(1)(i), 
(c)(2)(i) through (xii), (c)(4)(i), and (c)(5)(i) of this section by 
utilizing a one-year window of swap transaction and pricing 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. If the Commission is unable to determine an 
appropriate minimum block size for any swap category described in 
paragraph (c)(1)(i) of this section, the Commission shall assign a block 
size of zero to such swap category.
    (3) Certain swaps in the foreign exchange asset class. The parties 
to a swap in the foreign exchange asset class described in paragraph 
(c)(4)(ii) of this section may elect to receive block treatment if the 
notional amount of either currency in the exchange is greater than the 
minimum block size for a swap in the foreign exchange asset class 
between the respective currency, in the same amount, and U.S. dollars 
described in paragraph (c)(4)(i) of this section.
    (4) All swaps or instruments in the swap category described in 
paragraphs (c)(1)(ii), (c)(2)(xiii), (c)(4)(iii), and (c)(5)(ii) of this 
section shall have a block size of zero and be eligible to be treated as 
a block trade or large notional off-facility swap, as applicable.

[[Page 47]]

    (5) Commission publication of post-initial appropriate minimum block 
sizes. The Commission shall publish the appropriate minimum block sizes 
determined pursuant to paragraph (g)(1) of this section on its website 
at http://www.cftc.gov.
    (6) Effective date of post-initial appropriate minimum block sizes. 
Unless otherwise indicated on the Commission's website, the post-initial 
appropriate minimum block sizes described in paragraph (g)(1) of this 
section shall be effective on the first day of the second month 
following the date of publication.
    (h) Required notification--(1) Block trades entered into on a 
trading system or platform, that is not an order book as defined in 
Sec.  37.3(a)(3) of a swap execution facility, or pursuant to the rules 
of a swap execution facility or designated contract market. (i) If the 
parties make such an election, the reporting counterparty shall notify 
the swap execution facility or designated contract market, as 
applicable, of the parties' election. The parties to a publicly 
reportable swap transaction may elect to have a publicly reportable swap 
transaction treated as a block trade if such swap:
    (A) Is executed on the trading system or platform, that is not an 
order book as defined in Sec.  37.3(a)(3) of this chapter of a swap 
execution facility, or pursuant to the rules of a swap execution 
facility or designated contract market; and
    (B) That has a notional amount at or above the appropriate minimum 
block size.
    (ii) The swap execution facility or designated contract market, as 
applicable, shall notify the swap data repository of such a block trade 
election when reporting the swap transaction and pricing data to such 
swap data repository in accordance with this part.
    (iii) The swap execution facility or designated contract market, as 
applicable, shall not disclose swap transaction and pricing data 
relating to a block trade subject to the block trade election prior to 
the expiration of the applicable delay set forth in Sec.  43.5(d).
    (2) Large notional off-facility swap election. The parties to a 
publicly reportable swap transaction that is an off-facility swap and 
that has a notional amount at or above the appropriate minimum block 
size may elect to have the publicly reportable swap transaction treated 
as a large notional off-facility swap. If the parties make such an 
election, the reporting counterparty for such publicly reportable swap 
transaction shall notify the applicable swap data repository of the 
reporting counterparty's election when reporting the swap transaction 
and pricing data in accordance with this part.
    (i) 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 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

[[Page 48]]

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;
    (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. The aggregation of orders for different accounts in 
order to satisfy the minimum block trade size or the cap size 
requirement is permitted for publicly reportable swap transactions only 
if each of the following conditions is satisfied:
    (i) The aggregation of orders is done by a person who:
    (A) Is a commodity trading advisor registered pursuant to section 4n 
of the Act, or exempt from such registration under the Act, or a 
principal thereof, and 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 paragraph (i)(6)(i)(A) or (B) of this section 
and is subject as such to foreign regulation;
    (ii) The aggregated transaction is reported pursuant to this part 
and part 45 of this chapter as a block trade or large notional off-
facility swap, as applicable, subject to the cap size thresholds;
    (iii) The aggregated orders are executed as one swap transaction; 
and
    (iv) Aggregation occurs on a designated contract market or swap 
execution facility if the swap is listed for trading by a designated 
contract market or swap execution facility.
    (j) Eligible block trade parties. (1) Parties to a block trade shall 
be ``eligible contract participants,'' as defined in section 1a(18) of 
the Act and 17 CFR chapter I. 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, and 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 paragraph (j)(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.
    (2) A person transacting a block trade on behalf of a customer shall 
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.

[85 FR 75482, Nov. 25, 2020]



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 publish the technical specification providing the form and 
manner for reporting and publicly disseminating the swap transaction and 
pricing data elements in appendix A of this part as described in 
Sec. Sec.  43.3(d)(1) and 43.4(a);
    (2) To determine cap sizes as described in Sec.  43.4(g) and (h);
    (3) To determine whether swaps fall within specific swap categories 
as described in Sec.  43.6(b) and (c); and
    (4) To determine and publish post-initial appropriate minimum block 
sizes as described in Sec.  43.6(g).
    (b) Submission for Commission consideration. The Director of the 
Division of Market Oversight may submit to the Commission for its 
consideration any

[[Page 49]]

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, as amended at 85 FR 75485, Nov. 25, 2020]





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[85 FR 75485, Nov. 25, 2020]



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

                                 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

[[Page 60]]

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 ``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 swap data 
repository.

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

                            All Asset Classes
------------------------------------------------------------------------
                   Time delay for public dissemination
-------------------------------------------------------------------------
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.  43.5(e)(2))

    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.

                            All Asset Classes
------------------------------------------------------------------------
                   Time delay for public dissemination
-------------------------------------------------------------------------
15 minutes.
------------------------------------------------------------------------

  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.  43.5(e)(3))

    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.

                            All Asset Classes
------------------------------------------------------------------------
                   Time delay for public dissemination
-------------------------------------------------------------------------
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.  43.5(f))

    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.

     Interest Rates, Credit, Foreign Exchange, Equity Asset Classes
------------------------------------------------------------------------
                   Time delay for public dissemination
-------------------------------------------------------------------------
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.  43.5(g))

    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.

                       Other Commodity Asset Class
------------------------------------------------------------------------
                   Time delay for public dissemination
-------------------------------------------------------------------------
2 hours.
------------------------------------------------------------------------


[[Page 61]]

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.  43.5(h))

    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.

                            All Asset Classes
------------------------------------------------------------------------
                   Time delay for public dissemination
-------------------------------------------------------------------------
24 business hours.
------------------------------------------------------------------------


[85 FR 75495, Nov. 25, 2020]



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

Commodity: Metals
    Aluminum
    Copper
    Gold
    Lead
    Nickel
    Silver
    Virtual
    Zinc
Commodity: Energy
    Electricity
    Fuel Oil
    Gasoline--RBOB
    Heating Oil
    Natural Gas
    Oil
Commodity: Agricultural
    Corn
    Soybean
    Coffee
    Wheat
    Cocoa
    Sugar
    Cotton
    Soymeal
    Soybean oil
    Cattle
    Hogs

[85 FR 75496, Nov. 25, 2020]



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

    Swap data repositories are required by Sec.  43.4(c)(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(c)(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(c)(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)

[[Page 62]]

    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
    Australia/New Zealand/Pacific Islands

[85 FR 75496, Nov. 25, 2020]

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


[[Page 63]]


                                                  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).
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
                              ILS.......                 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.

[[Page 64]]

 
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 BLOCKS.......  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.
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]

[[Page 65]]



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 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

[[Page 66]]

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 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 transaction identifiers.
45.6 Legal entity identifiers.
48.7 Unique product identifiers.
45.8 Determination of which counterparty shall 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 [Reserved]
45.13 Required data standards.
45.14 Correcting errors in swap data and verification of swap data 
          accuracy.
45.15 Delegation of authority.

Appendix 1 to Part 45--Swap Data Elements


[[Page 67]]


    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.

    (a) As used in this part:
    Allocation means the process by which an agent, having facilitated a 
single swap transaction on behalf of several clients, allocates a 
portion of the executed swap to the clients.
    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.
    Business day means the twenty-four-hour day, on all days except 
Saturdays, Sundays, and legal holidays, in the location of the swap 
execution facility, designated contract market, or reporting 
counterparty reporting data for the swap.
    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.
    Collateral data means the data elements necessary to report 
information about the money, securities, or other property posted or 
received by a swap counterparty to margin, guarantee, or secure a swap, 
as specified in appendix 1 to this part.
    Derivatives clearing organization means a derivatives clearing 
organization, as defined by Sec.  1.3 of this chapter, that is 
registered with the Commission.
    Electronic reporting (``report electronically'') means the reporting 
of data normalized in data elements 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.
    Execution means an agreement by the parties, by any method, to the 
terms of a swap that legally binds the parties to such swap terms under 
applicable law.
    Execution date means the date of execution of a particular swap. The 
execution date for a clearing swap that replaces an original swap is the 
date on which the original swap has been accepted for clearing.
    Financial entity has the meaning set forth in CEA section 
2(h)(7)(C).
    Global Legal Entity Identifier System means the system established 
and overseen by the Legal Entity Identifier Regulatory Oversight 
Committee for the unique identification of legal entities and 
individuals.
    Legal entity identifier or LEI means a unique code assigned to swap 
counterparties and entities in accordance with the standards set by the 
Global Legal Entity Identifier System.
    Legal Entity Identifier Regulatory Oversight Committee means the 
group charged with the oversight of the Global Legal Entity Identifier 
System that was established by the Finance Ministers and the Central 
Bank Governors of the Group of Twenty nations and the Financial 
Stability Board, under the Charter of the Regulatory Oversight Committee 
for the Global Legal Entity Identifier System dated November 5, 2012, or 
any successor thereof.
    Life-cycle event means any event that would result in a change to 
required swap creation 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

[[Page 68]]

identifier for a swap counterparty previously identified 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.
    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 Securities and Exchange Commission.
    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/DCO counterparty means a swap counterparty that is not a 
swap dealer, major swap participant, or derivatives clearing 
organization.
    Non-SD/MSP/DCO reporting counterparty means a reporting counterparty 
that is not a swap dealer, major swap participant, or derivatives 
clearing organization.
    Novation means the process by which a party to a swap legally 
transfers all or part of its rights, liabilities, duties, and 
obligations under the swap to a new legal party other than the 
counterparty to the swap under applicable law.
    Off-facility swap means any swap transaction that is not executed on 
or pursuant to the rules of a swap execution facility or designated 
contract market.
    Open swap means an executed swap transaction that has not reached 
maturity or expiration, and has not been fully exercised, closed out, or 
terminated.
    Original swap means a swap that has been accepted for clearing by a 
derivatives clearing organization.
    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 swap 
data concerning the swap in the swap data repository remains current and 
accurate, and includes all changes to the required swap creation data 
occurring during the existence of the swap. For this purpose, required 
swap continuation data includes:
    (i) All life-cycle-event data for the swap; and
    (ii) All swap valuation, margin, and collateral data for the swap.
    Required swap creation data means all data for a swap required to be 
reported pursuant to Sec.  45.3 for the swap data elements in appendix 1 
to this part.
    Swap means any swap, as defined by Sec.  1.3 of this chapter, as 
well as any foreign exchange forward, as defined by section 1a(24) of 
the Act, or foreign exchange swap, as defined by section 1a(25) of the 
Act.
    Swap data means the specific data elements in appendix 1 to this 
part required to be reported to a swap data repository pursuant to this 
part or made available to the Commission pursuant to part 49 of this 
chapter, as applicable.
    Swap data validation procedures means procedures established by a 
swap data repository pursuant to Sec.  49.10 of this chapter to accept, 
validate, and process swap data reported to the swap data repository 
pursuant to part 45 of this chapter.
    Swap execution facility means a trading system or platform that is a 
swap execution facility as defined in CEA section 1a(50) and in Sec.  
1.3 of this chapter and that is registered with the Commission pursuant 
to CEA section 5h and part 37 of this chapter.
    Swap transaction and pricing data means all data elements for a swap 
in appendix A to part 43 of this chapter that are required to be 
reported or publicly disseminated pursuant to part 43 of this chapter.
    Unique transaction identifier means a unique alphanumeric identifier 
with a maximum length of 52 characters constructed solely from the 
upper-case alphabetic characters A to Z or the digits 0 to 9, inclusive 
in both cases, generated for each swap pursuant to Sec.  45.5.
    Valuation data means the data elements necessary to report 
information about the daily mark of the transaction, pursuant to section

[[Page 69]]

4s(h)(3)(B)(iii) of the Act, and to Sec.  23.431 of this chapter, if 
applicable, as specified in appendix 1 to this part.
    (b) Other defined terms. Terms not defined in this part have the 
meanings assigned to the terms in Sec.  1.3 of this chapter.

[85 FR 75559, Nov. 25, 2020, as amended at 85 FR 75654, Nov. 25, 2020]



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 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/DCO counterparties. All non-SD/MSP/
DCO counterparties 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 electany clearing requirement exception or exemption pursuant 
to section 2(h)(7) of the Act or part 50 of this chapter.
    (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 in them is 
reportable, as required by this section.
    (2) Records required to be kept by non-SD/MSP/DCO 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/DCO counterparty shall be retrievable by 
that counterparty within five business days throughout the period during 
which it is required to be kept.
    (f)-(g) [Reserved]

[[Page 70]]

    (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/
DCO counterparty 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/DCO counterparty 
that is not a Commission registrant shall be provided in the form, 
whether electronic or paper, in which the records are kept.

[77 FR 2197, Jan. 13, 2012, as amended at 85 FR 75560, 75654, Nov. 25, 
2020]



Sec.  45.3  Swap data reporting: Creation data.

    (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 shall report required swap creation data electronically to a swap 
data repository in the manner provided in Sec.  45.13(a) not later than 
the end of the next business day following the execution date.
    (b) Off-facility swaps. For each off-facility swap, the reporting 
counterparty shall report required swap creation data electronically to 
a swap data repository as provided by paragraph (b)(1) or (2) of this 
section, as applicable.
    (1) If the reporting counterparty is a swap dealer, major swap 
participant, or derivatives clearing organization, the reporting 
counterparty shall report required swap creation data electronically to 
a swap data repository in the manner provided in Sec.  45.13(a) not 
later than the end of the next business day following the execution 
date.
    (2) If the reporting counterparty is a non-SD/MSP/DCO counterparty, 
the reporting counterparty shall report required swap creation data 
electronically to a swap data repository in the manner provided in Sec.  
45.13(a) not later than the end of the second business day following the 
execution date.
    (c) Allocations. For swaps involving allocation, required swap 
creation data shall be reported electronically 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 paragraph (a) or (b) of this 
section, as applicable. A unique transaction identifier for the initial 
swap transaction shall 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 no later than eight business hours after execution.
    (ii) Duties of the reporting counterparty. The reporting 
counterparty shall report required swap creation data, as required by 
paragraph (b) of this section, for each swap resulting from allocation 
to the same swap data repository to which the initial swap transaction 
is reported. The reporting counterparty shall create a unique 
transaction identifier for each such swap as required in Sec.  45.5.
    (d) 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 reporting required swap creation data pursuant to this 
section.

[[Page 71]]

    (e) Mixed swaps. (1) For each mixed swap, required swap creation 
data and required swap continuation data shall be reported to a swap 
data repository 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 reporting 
required swap creation data pursuant to this section shall ensure that 
the same unique transaction identifier is recorded for the swap in both 
the swap data repository and the security-based swap data repository.
    (f) Choice of swap data repository. 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 
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.

[85 FR 75561, Nov. 25, 2020]



Sec.  45.4  Swap data reporting: Continuation data.

    (a) Continuation data reporting method generally. For each swap, 
regardless of asset class, reporting counterparties and derivatives 
clearing organizations required to report required swap continuation 
data shall report life-cycle-event data for the swap electronically to a 
swap data repository in the manner provided in Sec.  45.13(a) within the 
applicable deadlines set forth in this section.
    (b) Continuation data reporting for original swaps. For each 
original swap, the derivatives clearing organization shall report 
required swap continuation data, including terminations, electronically 
to the swap data repository to which the swap that was accepted for 
clearing was reported pursuant to Sec.  45.3 in the manner provided in 
Sec.  45.13(a) and in this section, and such required swap continuation 
data shall be accepted and recorded by such swap data repository as 
provided in Sec.  49.10 of this chapter.
    (1) The derivatives clearing organization that accepted the swap for 
clearing shall report all life-cycle-event data electronically to a swap 
data repository in the manner provided in Sec.  45.13(a) not later than 
the end of the next business day following the day that any life cycle 
event occurs with respect to the swap.
    (2) In addition to all other required swap continuation data, life-
cycle-event data shall 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(b);
    (ii) The unique transaction identifier of the original swap that was 
replaced by the clearing swaps; and
    (iii) The unique transaction identifier of each clearing swap that 
replaces a particular original swap.
    (c) Continuation data reporting for swaps other than original swaps. 
For each swap that is not an original swap, including clearing swaps and 
swaps not cleared by a derivatives clearing organization, the reporting 
counterparty shall report all required swap continuation data 
electronically to a swap data repository in the manner provided in Sec.  
45.13(a) as provided in this paragraph (c).
    (1) Life-cycle-event data reporting. (i) If the reporting 
counterparty is a swap dealer, major swap participant, or derivatives 
clearing organization, the reporting counterparty shall report life-
cycle-event data electronically to a swap data repository in the manner 
provided in Sec.  45.13(a) not later than the end of the next business 
day following the day that any life cycle event occurred, with the sole 
exception that life-cycle-event data relating to a corporate event of 
the non-reporting counterparty shall be reported in the manner provided 
in Sec.  45.13(a) not later than the end of the second business day

[[Page 72]]

following the day that such corporate event occurred.
    (ii) If the reporting counterparty is a non-SD/MSP/DCO counterparty, 
the reporting counterparty shall report life-cycle-event data 
electronically to a swap data repository in the manner provided in Sec.  
45.13(a) not later than the end of the second business day following the 
day that any life cycle event occurred.
    (2) Valuation, margin, and collateral data reporting. (i) If the 
reporting counterparty is a swap dealer, major swap participant, or 
derivatives clearing organization, swap valuation data shall be reported 
electronically to a swap data repository in the manner provided in Sec.  
45.13(b) each business day.
    (ii) If the reporting counterparty is a swap dealer or major swap 
participant, collateral data shall be reported electronically to a swap 
data repository in the manner provided in Sec.  45.13(b) each business 
day.

[85 FR 75561, Nov. 25, 2020]



Sec.  45.5  Unique transaction identifiers.

    Each swap shall be identified in all recordkeeping and all swap data 
reporting pursuant to this part by the use of a unique transaction 
identifier, which shall be created, transmitted, and used for each swap 
as provided in paragraphs (a) through (h) 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 designated 
contract market, the swap execution facility or designated contract 
market shall create and transmit a unique transaction 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 transaction 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 transaction identifier shall consist of a single data element 
with a maximum length of 52 characters that contains two components:
    (i) The legal entity identifier of the swap execution facility or 
designated contract market; 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 transaction 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 financial entity reporting 
counterparty. For each off-facility swap where the reporting 
counterparty is a financial entity, the reporting counterparty shall 
create and transmit a unique transaction identifier as provided in 
paragraphs (b)(1) and (2) of this section.
    (1) Creation. The reporting counterparty shall generate and assign a 
unique transaction 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 swap data to a derivatives 
clearing organization if the swap is to be cleared. The unique 
transaction identifier shall consist of a single data element with a 
maximum length of 52 characters that contains two components:
    (i) The legal entity identifier of the reporting counterparty; and
    (ii) An alphanumeric code generated and assigned to that swap by the 
automated systems of the reporting counterparty, which shall be unique 
with respect to all such codes generated and assigned by that reporting 
counterparty.

[[Page 73]]

    (2) Transmission. The reporting counterparty shall transmit the 
unique transaction 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, no later than 
the applicable deadline in Sec.  45.3(b) for reporting required swap 
creation data; 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/DCO reporting counterparty 
that is not a financial entity. For each off-facility swap for which the 
reporting counterparty is a non-SD/MSP/DCO counterparty that is not a 
financial entity, the reporting counterparty shall either: Create and 
transmit a unique transaction identifier as provided in paragraphs 
(b)(1) and (2) of this section; or request that the swap data repository 
to which required swap creation data will be reported create and 
transmit a unique transaction identifier as provided in paragraphs 
(c)(1) and (2) of this section.
    (1) Creation. The swap data repository shall generate and assign a 
unique transaction identifier as soon as technologically practicable 
following receipt of the request from the reporting counterparty. The 
unique transaction identifier shall consist of a single data element 
with a maximum length of 52 characters that contains two components:
    (i) The legal entity identifier of the swap data repository; 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 
transaction identifier electronically as follows:
    (i) To the counterparties to the swap, as soon as technologically 
practicable following creation of the unique transaction 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 transaction identifier.
    (d) Off-facility swaps with a derivatives clearing organization 
reporting counterparty. For each off-facility swap where the reporting 
counterparty is a derivatives clearing organization, the reporting 
counterparty shall create and transmit a unique transaction identifier 
as provided in paragraphs (d)(1) and (2) of this section.
    (1) Creation. The derivatives clearing organization shall generate 
and assign a unique transaction 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 transaction identifier shall consist of a single data element 
with a maximum length of 52 characters that contains two components:
    (i) The legal entity identifier of the derivatives clearing 
organization; 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 transaction 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.

[[Page 74]]

    (e) Allocations. For swaps involving allocation, unique transaction 
identifiers shall be created and transmitted as follows.
    (1) Initial swap between reporting counterparty and agent. The 
unique transaction identifier for the initial swap transaction between 
the reporting counterparty and the agent shall be created as required by 
paragraphs (a) through (d) of this section, as applicable, and shall be 
transmitted as follows:
    (i) If the unique transaction identifier is created by a swap 
execution facility or designated contract market, the swap execution 
facility or designated contract market must include the unique 
transaction 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 transaction identifier is created by the 
reporting counterparty, the reporting counterparty must include the 
unique transaction 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 transaction 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 transaction identifier to:
    (i) The non-reporting counterparty for the swap in question.
    (ii) The agent; and
    (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 and swap counterparty shall include 
the unique transaction 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 transaction identifier as provided in 
this section, throughout the existence of the swap and for as long as 
any records are required by the Act or Commission regulations to be kept 
concerning the swap, regardless of any life cycle events concerning the 
swap, including, without limitation, any changes with respect to the 
counterparties to the swap.
    (g) Third-party service provider. If a registered entity or 
reporting counterparty required by this part to report required swap 
creation data or required swap continuation data contracts with a third-
party service provider to facilitate reporting pursuant to Sec.  45.9, 
the registered entity or reporting counterparty shall ensure that such 
third-party service provider creates and transmits the unique 
transaction identifier as otherwise required for such category of swap 
by paragraphs (a) through (e) of this section. The unique transaction 
identifier shall consist of a single data element with a maximum length 
of 52 characters that contains two components:
    (1) The legal entity identifier of the third-party service provider; 
and
    (2) An alphanumeric code generated and assigned to that swap by the 
automated systems of the third-party service provider, which shall be 
unique with respect to all such codes generated and assigned by that 
third-party service provider.
    (h) Cross-jurisdictional swaps. Notwithstanding the provisions of 
paragraphs (a) through (g) of this section, if a swap is also reportable 
to one or more other jurisdictions with a regulatory reporting deadline 
earlier than the deadline set forth in Sec.  45.3 or in part 43 of this 
chapter, the same unique transaction identifier generated according to 
the rules of the jurisdiction with the earliest regulatory reporting 
deadline shall be transmitted pursuant to paragraphs (a) through (g) of 
this section and used in all recordkeeping and all swap data reporting 
pursuant to this part.

[81 FR 41775, June 27, 2016, as amended at 85 FR 75562, Nov. 25, 2020]



Sec.  45.6  Legal entity identifiers.

    Each swap execution facility, designated contract market, 
derivatives clearing organization, swap data repository, entity 
reporting pursuant to Sec.  45.9, and counterparty to any swap

[[Page 75]]

that is eligible to receive a legal entity identifier shall obtain, 
maintain, and be identified in all recordkeeping and all swap data 
reporting pursuant to this part by a single legal entity identifier as 
specified in this section.
    (a) Definitions. As used in this section:
    Local operating unit means an entity authorized under the standards 
of the Global Legal Entity Identifier System to issue legal entity 
identifiers.
    Reference data means all identification and relationship 
information, as set forth in the standards of the Global Legal Entity 
Identifier System, of the legal entity or individual to which a legal 
entity identifier is assigned.
    Self-registration means submission by a legal entity or individual 
of its own reference data.
    Third-party registration means submission of reference data for a 
legal entity or individual that is or may become a swap counterparty, 
made by an entity or organization other than the legal entity or 
individual identified by the submitted reference data. Examples of 
third-party registration include, without limitation, submission by a 
swap dealer or major swap participant of reference data for its swap 
counterparties, and submission by a national numbering agency, national 
registration agency, or data service provider of reference data 
concerning legal entities or individuals with respect to which the 
agency or service provider maintains information.
    (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 shall be issued under, and shall conform 
to, ISO Standard 17442, Legal Entity Identifier (LEI), issued by the 
International Organization for Standardization.
    (c) Reference data reporting. Reference data for each swap execution 
facility, designated contract market, derivatives clearing organization, 
swap data repository, entity reporting pursuant to Sec.  45.9, and 
counterparty to any swap shall be reported, by self-registration, third-
party registration, or both, to a local operating unit in accordance 
with the standards set by the Global Legal Entity Identifier System. All 
subsequent changes and corrections to reference data previously reported 
shall be reported, by self-registration, third-party registration, or 
both, to a local operating unit as soon as technologically practicable 
following occurrence of any such change or discovery of the need for a 
correction.
    (d) Use of the legal entity identifier. (1) Each swap execution 
facility, designated contract market, derivatives clearing organization, 
swap data repository, entity reporting pursuant to Sec.  45.9, and swap 
counterparty shall use legal entity identifiers to identify itself and 
swap counterparties in all recordkeeping and all swap data reporting 
pursuant to this part. If a swap counterparty is not eligible to receive 
a legal entity identifier as determined by the Global Legal Entity 
Identifier System, such counterparty shall be identified in all 
recordkeeping and all swap data reporting pursuant to this part with an 
alternate identifier as prescribed by the Commission pursuant to Sec.  
45.13(a) of this chapter.
    (2) Each swap dealer, major swap participant, swap execution 
facility, designated contract market, derivatives clearing organization, 
and swap data repository shall maintain and renew its legal identity 
identifier in accordance with the standards set by the Global Legal 
Entity Identifier System.
    (3) Each financial entity reporting counterparty executing a swap 
with a counterparty that is eligible to receive a legal entity 
identifier, but has not been assigned a legal entity identifier, shall, 
prior to reporting any required swap creation data for such swap, use 
best efforts to cause a legal entity identifier to be assigned to the 
counterparty. If these efforts do not result in a legal entity 
identifier being assigned to the counterparty prior to the reporting of 
required swap creation data, the financial entity reporting counterparty 
shall promptly provide the identity and contact information of the 
counterparty to the Commission.
    (4) For swaps previously reported pursuant to this part using 
substitute counterparty identifiers assigned by a

[[Page 76]]

swap data repository prior to Commission designation of a legal entity 
identifier system, 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.

[85 FR 75563, Nov. 25, 2020]



Sec.  45.7  Unique product identifiers.

    Each swap 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 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.

[77 FR 2197, Jan. 13, 2012, as amended at 85 FR 75563, Nov. 25, 2020]



Sec.  45.8  Determination of which counterparty shall report.

    The determination of which counterparty is the reporting 
counterparty for each swap shall be made as provided in 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/DCO 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.

[[Page 77]]

    (d) If both counterparties are swap dealers, or both counterparties 
are major swap participants, or both counterparties are non-SD/MSP/DCO 
counterparties that are financial entities as defined in CEA section 
2(h)(7)(C), or both counterparties are non-SD/MSP/DCO 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/DCO 
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/DCO 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.
    (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 required swap 
creation data as provided in this part.
    (1) To comply with paragraph (h) of this section, 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).

[[Page 78]]

    (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 transaction 
identifier of the initial swap transaction between the reporting 
counterparty and the agent.
    (2) To comply with paragraph (h) of this section, 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, as amended at 85 FR 75563, Nov. 25, 2020]



Sec.  45.9  Third-party facilitation of data reporting.

    Registered entities and reporting 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.

[77 FR 2197, Jan. 13, 2012, as amended at 85 FR 75564, Nov. 25, 2020]



Sec.  45.10  Reporting to a single swap data repository.

    All swap transaction and pricing data and swap data for a given swap 
shall be reported to a single swap data repository, which shall be the 
swap data repository to which the first report of such data is made, 
unless the reporting counterparty changes the swap data repository to 
which such data is reported pursuant to paragraph (d) of this section.
    (a) Swaps executed on or pursuant to the rules of a swap execution 
facility or designated contract market. To ensure that all swap 
transaction and pricing data and swap data 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 shall 
report all swap transaction and pricing data and required swap creation 
data for a swap to a single swap data repository. As soon as 
technologically practicable after execution of the swap, 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, the identity of the swap 
data repository to which such data is reported.
    (2) Thereafter, all swap transaction and pricing data, required swap 
creation data, and required swap continuation data for the swap shall be 
reported to that same swap data repository, unless the reporting 
counterparty changes the swap data repository to which such data is 
reported pursuant to paragraph (d) of this section.
    (b) Off-facility swaps that are not clearing swaps. To ensure that 
all swap transaction and pricing data and swap data for an off-facility 
swap that is not a clearing swap is reported to a single swap data 
repository:
    (1) The reporting counterparty shall report all swap transaction and 
pricing data and required swap creation data to a single swap data 
repository. As soon as technologically practicable after execution, the 
reporting counterparty shall transmit to the other counterparty to the 
swap, and to the derivatives clearing organization, if any, that will 
clear the swap, the identity of the swap data repository to which such 
data is reported.

[[Page 79]]

    (2) Thereafter, all swap transaction and pricing data, required swap 
creation data, and required swap continuation data for the swap shall be 
reported to the same swap data repository, unless the reporting 
counterparty changes the swap data repository to which such data is 
reported pursuant to paragraph (d) of this section.
    (c) Clearing swaps. To ensure that all swap transaction and pricing 
data and swap data for a given clearing swap, including 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 swap transaction and pricing data 
and 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 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 identity of 
the swap data repository to which such data is reported.
    (2) Thereafter, all swap transaction and pricing data, required swap 
creation data and required swap continuation data for that clearing swap 
shall be reported by the derivatives clearing organization to the same 
swap data repository to which swap data has been reported pursuant to 
paragraph (c)(1) of this section, unless the reporting counterparty 
changes the swap data repository to which such data is reported pursuant 
to paragraph (d) of this section.
    (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 swap transaction and 
pricing data, required swap creation data, and required swap 
continuation data for such clearing swaps to a single swap data 
repository.
    (d) Change of swap data repository for swap transaction and pricing 
data and swap data reporting. A reporting counterparty may change the 
swap data repository to which swap transaction and pricing data and swap 
data is reported as set forth in this paragraph.
    (1) Notifications. At least five business days prior to changing the 
swap data repository to which the reporting counterparty reports swap 
transaction and pricing data and swap data for a swap, the reporting 
counterparty shall provide notice of such change to the other 
counterparty to the swap, the swap data repository to which swap 
transaction and pricing data and swap data is currently reported, and 
the swap data repository to which swap transaction and pricing data and 
swap data will be reported going forward. Such notification shall 
include the unique transaction identifier of the swap and the date on 
which the reporting counterparty will begin reporting such swap 
transaction and pricing data and swap data to a different swap data 
repository.
    (2) Procedure. After providing the notifications required in 
paragraph (d)(1) of this section, the reporting counterparty shall 
follow paragraphs (d)(2)(i) through (iii) of this section to complete 
the change of swap data repository.
    (i) The reporting counterparty shall report the change of swap data 
repository to the swap data repository to which the reporting 
counterparty is currently reporting swap transaction and pricing data 
and swap data as a life cycle event for such swap pursuant to Sec.  
45.4.
    (ii) On the same day that the reporting counterparty reports 
required swap continuation data as required by paragraph (d)(2)(i) of 
this section, the reporting counterparty shall also report the change of 
swap data repository to the swap data repository to which swap 
transaction and pricing data and swap data will be reported going 
forward as a life cycle event for such swap pursuant to Sec.  45.4. The 
required swap continuation data report shall identify the swap using the 
same unique transaction identifier used to identify the swap at the 
previous swap data repository.

[[Page 80]]

    (iii) Thereafter, all swap transaction and pricing data, required 
swap creation data, and required swap continuation data for the swap 
shall be reported to the same swap data repository, unless the reporting 
counterparty for the swap makes another change to the swap data 
repository to which such data is reported pursuant to paragraph (d) of 
this section.

[85 FR 75564, Nov. 25, 2020]



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 currently accepts swap data, each swap execution facility, 
designated contract market, derivatives clearing organization, or 
reporting 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 subject to this section shall be reported at times 
announced by the Commission and in an electronic file in a format 
acceptable to the Commission.

[85 FR 75565, Nov. 25, 2020]



Sec.  45.12  [Reserved]



Sec.  45.13  Required data standards.

    (a) Data reported to swap data repositories. (1) In reporting 
required swap creation data and required swap continuation data to a 
swap data repository, each reporting counterparty, swap execution 
facility, designated contract market, and derivatives clearing 
organization shall report the swap data elements in appendix 1 to this 
part in the form and manner provided in the technical specifications 
published by the Commission pursuant to Sec.  45.15.
    (2) In reporting required swap creation data and required swap 
continuation data to a swap data repository, each reporting 
counterparty, swap execution facility, designated contract market, and 
derivatives clearing organization making such report shall satisfy the 
swap data validation procedures of the swap data repository.
    (3) In reporting swap data to a swap data repository as required by 
this part, each reporting counterparty, swap execution facility, 
designated contract market, and derivatives clearing organization 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.
    (b) Data validation acceptance message. (1) For each required swap 
creation data or required swap continuation data report submitted to a 
swap data repository, a swap data repository shall notify the reporting 
counterparty, swap execution facility, designated contract market, 
derivatives clearing organization, or third-party service provider 
submitting the report whether the report satisfied the swap data 
validation procedures of the swap data repository. The swap data 
repository shall provide such notification as soon as technologically 
practicable after accepting the required swap creation data or required 
swap continuation data report. A swap data repository may satisfy the 
requirements of this paragraph by transmitting data validation 
acceptance messages as required by Sec.  49.10 of this chapter.
    (2) If a required swap creation data or required swap continuation 
data report to a swap data repository does not satisfy the data 
validation procedures of the swap data repository, the reporting 
counterparty, swap execution facility, designated contract market, or 
derivatives clearing organization required to submit the report has not 
yet satisfied its obligation to report required swap creation or 
continuation data in the manner provided by paragraph (a) of this 
section within the timelines set forth in Sec. Sec.  45.3 and 45.4. The 
reporting counterparty, swap execution facility, designated contract 
market, or derivatives clearing organization has not satisfied its 
obligation until it submits the required swap data report in the manner 
provided by paragraph (a) of this section, which includes the 
requirement to satisfy the data validation procedures of the swap data 
repository, within the applicable time deadline set forth in Sec. Sec.  
45.3 and 45.4.

[85 FR 75565, Nov. 25, 2020]

[[Page 81]]



Sec.  45.14  Correcting errors in swap data and verification of swap
data accuracy.

    (a) Correction of errors--(1) Swap execution facilities, designated 
contract markets, and reporting counterparties. Any swap execution 
facility, designated contract market, or reporting counterparty that by 
any means becomes aware of any error relating to swap data that it was 
required to report under this part shall correct the error. To correct 
an error, the swap execution facility, designated contract market, or 
reporting counterparty shall submit complete and accurate swap data to 
the swap data repository that maintains the swap data for the relevant 
swap, or completely and accurately report swap data for a swap that was 
not previously reported to a swap data repository as required under this 
part, as applicable. Except as otherwise provided in this section, the 
requirement to correct any error applies regardless of the state of the 
swap that is the subject of the swap data, including a swap that has 
terminated, matured, or otherwise is no longer considered to be an open 
swap.
    (i) Timing requirement for correcting errors. The swap execution 
facility, designated contract market, or reporting counterparty shall 
correct any error as soon as technologically practicable after discovery 
of the error. In all cases, errors shall be corrected within seven 
business days after discovery. Any error that a reporting counterparty 
discovers or could have discovered during the verification process 
required under paragraph (b) of this section is considered discovered 
for the purposes of this section as of the moment the reporting 
counterparty began the verification process during which the error was 
first discovered or discoverable.
    (ii) Notification of failure to timely correct. If the swap 
execution facility, designated contract market, or reporting 
counterparty will, for any reason, fail to timely correct an error, the 
swap execution facility, designated contract market, or reporting 
counterparty shall notify the Director of the Division of Market 
Oversight, or such other employee or employees of the Commission as the 
Director may designate from time to time. The notification shall be in 
the form and manner, and according to the instructions, specified by the 
Director of the Division of Market Oversight, or such other employee or 
employees of the Commission as the Director may designate from time to 
time. Unless otherwise instructed by the Director of the Division of 
Market Oversight, or such other employee or employees of the Commission 
as the Director may designate from time to time, the notification shall 
include an initial assessment of the scope of the error or errors that 
were discovered, and shall include any initial remediation plan for 
correcting the error or errors, if an initial remediation plan exists. 
This notification shall be made within 12 hours of the swap execution 
facility's, designated contract market's, or reporting counterparty's 
determination that it will fail to timely correct the error.
    (iii) Form and manner for error correction. In order to satisfy the 
requirements of this section, a swap execution facility, designated 
contract market, or reporting counterparty shall conform to a swap data 
repository's policies and procedures created pursuant to Sec.  49.10 of 
this chapter for correction of errors.
    (2) Non-reporting counterparties. Any non-reporting counterparty 
that by any means becomes aware of any error in the swap data for a swap 
to which it is the non-reporting counterparty, shall notify the 
reporting counterparty for the swap of the error as soon as 
technologically practicable after discovery, but not later than three 
business days following discovery of the error. If the non-reporting 
counterparty does not know the identity of the reporting counterparty, 
the non-reporting counterparty shall notify the swap execution facility 
or designated contract market where the swap was executed of the error 
as soon as technologically practicable after discovery, but no later 
than three business days following the discovery. Such notice from the 
non-reporting counterparty to the swap execution facility, designated 
contract market, or reporting counterparty constitutes discovery under 
this section.

[[Page 82]]

    (3) Exception. The requirements to correct errors set forth in 
paragraph (a) of this section only apply to errors in swap data relating 
to swaps for which the record retention period under Sec.  45.2 has not 
expired as of the time the error is discovered. Errors in swap data 
relating to swaps for which the record retention periods under Sec.  
45.2 have expired at the time that the errors are discovered are not 
subject to the requirements to correct errors set forth in paragraph (a) 
of this section.
    (b) Verification that swap data is complete and accurate. Each 
reporting counterparty shall verify that there are no errors in the swap 
data for all open swaps that the reporting counterparty reported, or was 
required to report, to a swap data repository under the requirements of 
this part, in accordance with this paragraph (b).
    (1) Method of verification. Each reporting counterparty shall 
utilize the mechanism for verification that each swap data repository to 
which the reporting counterparty reports swap data adopts under Sec.  
49.11 of this chapter. Each reporting counterparty shall utilize the 
relevant mechanism(s) to compare all swap data for each open swap for 
which it serves as the reporting counterparty maintained by the relevant 
swap data repository or repositories with all swap data contained in the 
reporting counterparty's internal books and records for each swap, to 
verify that there are no errors in the relevant swap data maintained by 
the swap data repository. Notwithstanding the foregoing, a reporting 
counterparty is not required to verify the accuracy and completeness of 
any swap data to which the reporting counterparty is not permitted 
access under the Act or Commission regulations, including, but not 
limited to, Sec.  49.17 of this chapter.
    (2) Verification policies and procedures. In performing verification 
as required by this paragraph, each reporting counterparty shall conform 
to each relevant swap data repository's verification policies and 
procedures created pursuant to Sec.  49.11 of this chapter. If a 
reporting counterparty utilizes a third-party service provider to 
perform verification, the reporting counterparty shall conform to each 
relevant swap data repository's third-party service provider 
verification policies and procedures created pursuant to Sec.  49.11 of 
this chapter and shall require the third-party service provider to 
conform to the same policies and procedures while performing 
verification on behalf of the reporting counterparty.
    (3) Correcting errors. Any and all errors discovered during the 
verification process shall be corrected in accordance with paragraph 
(a)(1) of this section.
    (4) Frequency. Each reporting counterparty shall perform 
verification at a minimum:
    (i) If the reporting counterparty is a swap dealer, major swap 
participant, or derivatives clearing organization, once every thirty 
calendar days; or
    (ii) If the reporting counterparty is not a swap dealer, major swap 
participant, or a derivatives clearing organization, once every calendar 
quarter, provided that there are at least two calendar months between 
verifications.
    (5) Verification log. Each reporting counterparty shall keep a log 
of each verification that it performs. For each verification, the log 
shall include all errors discovered during the verification, and the 
corrections performed under paragraph (a) of this section. This 
requirement is in addition to any other applicable reporting 
counterparty recordkeeping requirement.
    (c) Error defined--(1) Errors. For the purposes of this part, there 
is an error when swap data is not completely and accurately reported. 
This includes, but is not limited to, the following circumstances:
    (i) Any of the swap data for a swap reported to a swap data 
repository is incorrect or any of the swap data that is maintained by a 
swap data repository differs from any of the relevant swap data 
contained in the books and records of a party to the swap.
    (ii) Any of the swap data for a swap that is required to be reported 
to a swap data repository or to be maintained by a swap data repository 
is not reported to a swap data repository or is not maintained by the 
swap data repository as required by this part.
    (iii) None of the swap data for a swap that is required to be 
reported to a

[[Page 83]]

swap data repository or to be maintained by a swap data repository is 
reported to a swap data repository or is maintained by a swap data 
repository.
    (iv) Any of the swap data for a swap that is no longer an open swap 
is maintained by the swap data repository as if the swap is still an 
open swap.
    (2) Presumption. For the purposes of this section, there is a 
presumption that an error exists if the swap data that is maintained and 
disseminated by an SDR for a swap is not complete and accurate. This 
includes, but is not limited to, the swap data that the SDR makes 
available to the reporting counterparty for verification under Sec.  
49.11 of this chapter.

[85 FR 75654, Nov. 25, 2020]



Sec.  45.15  Delegation of authority.

    (a) 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 (a) 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 this paragraph (a) 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 Sec.  45.11;
    (2) The authority to determine whether the Commission may permit or 
require use by swap execution facilities, designated contract markets, 
derivatives clearing organizations, or reporting counterparties in 
reporting pursuant to Sec.  45.11 of one or more particular data 
standards (such as FIX, FpML, ISO 20022, or some other standard), 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 Sec.  
45.11; and
    (4) The chief information officer shall publish from time to time in 
the Federal Register and on the website of the Commission the format, 
data schema, electronic data transmission methods and procedures, and 
dates and times for reporting acceptable to the Commission with respect 
to swap data reporting pursuant to Sec.  45.11.
    (b) Delegation of authority to the Director of the Division of 
Market Oversight. The Commission hereby delegates to the Director of the 
Division of Market Oversight, until the Commission orders otherwise, the 
authority set forth in Sec.  45.13(a)(1), to be exercised by the 
Director of the Division of Market Oversight or by such other employee 
or employees of the Commission as may be designated from time to time by 
the Director of the Division of Market Oversight. The Director of the 
Division of Market Oversight may submit to the Commission for its 
consideration any matter which has been delegated pursuant to 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 Director of the Division of Market Oversight 
by this paragraph (b) shall include:
    (1) The authority to publish the technical specifications providing 
the form and manner for reporting the swap data elements in appendix 1 
to this part to swap data repositories as provided in Sec.  45.13(a)(1);
    (2) The authority to determine whether the Commission may permit or 
require use by swap execution facilities, designated contract markets, 
derivatives clearing organizations, or reporting counterparties in 
reporting pursuant to Sec.  45.13(a)(1) of one or more particular data 
standards (such as FIX, FpML, ISO 20022, or some other standard), 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 Sec.  
45.13(a)(1); and

[[Page 84]]

    (4) The Director of the Division of Market Oversight shall publish 
from time to time in the Federal Register and on the website of the 
Commission the technical specifications for swap data reporting pursuant 
to Sec.  45.13(a)(1).

[85 FR 75565, Nov. 25, 2020]

[[Page 85]]



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[85 FR 75566, Nov. 25, 2020]

[[Page 112]]



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 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.

    (a) As used in this part:
    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.
    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.
    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).
    Historical swap means pre-enactment swaps and transition swaps.
    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/DCO counterparty means a swap counterparty that is not a 
swap

[[Page 113]]

dealer, major swap participant, or derivatives clearing organization.
    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 
data for a pre-enactment swap or a transition swap pursuant to this 
part, selected as provided in Sec.  46.5.
    Required swap continuation data means all of the data elements that 
shall be reported during the existence of a swap as required by part 45 
of this chapter.
    Substitute counterparty identifier means a unique alphanumeric code 
assigned by a swap data repository to a swap counterparty prior to the 
Commission designation of a legal entity identifier system on July 23, 
2012.
    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.
    (b) Other defined terms. Terms not defined in this part have the 
meanings assigned to the terms in Sec.  1.3 of this chapter.

[77 FR 35226, June 12, 2012, as amended at 85 FR 75594, Nov. 25, 2020]



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:
    (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/DCO 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

[[Page 114]]

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 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/DCO 
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/DCO counterparty shall be provided in the 
form, whether electronic or paper, in which the records

[[Page 115]]

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.

[77 FR 35226, June 12, 2012, as amended at 85 FR 75594, Nov. 25, 2020]



Sec.  46.3  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.
    (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 as required by part 45 of this chapter.
    (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.
    (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 such 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

[[Page 116]]

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 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).

[77 FR 35226, June 12, 2012, as amended at 85 FR 75594, Nov. 25, 2020]



Sec.  46.4  Unique identifiers.

    The unique identifier requirements for 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), 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.

[[Page 117]]

    (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, unique transaction identifier, and 
unique product identifier requirements of part 45 of this chapter shall 
not apply to pre-enactment or transition swaps.

[77 FR 35226, June 12, 2012, as amended at 85 FR 75594, Nov. 25, 2020]



Sec.  46.5  Determination of which counterparty must report.

    (a) Determination of which counterparty must report 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/DCO 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/DCO counterparties 
that are financial entities as defined in CEA section 2(h)(7)(C), or 
both counterparties are non-SD/MSP/DCO 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/DCO counterparties, if 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/DCO 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 118]]

    (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.

[77 FR 35226, June 12, 2012, as amended at 85 FR 75594, Nov. 25, 2020]



Sec.  46.6  Third-party facilitation of data reporting.

    Counterparties required by this part 46 to report 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.

[77 FR 35226, June 12, 2012, as amended at 85 FR 75594, Nov. 25, 2020]



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 data for 
pre-enactment and transition swaps, each registered entity or 
counterparty required by this part to report any such 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 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 registered 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 
reporting data for pre-enactment and transition swaps pursuant to this 
section.

[77 FR 35226, June 12, 2012, as amended at 85 FR 75594, Nov. 25, 2020]

[[Page 119]]



Sec.  46.9  Voluntary supplemental reporting.

    (a) For purposes of this section, the term voluntary, supplemental 
report means any report of 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 data for a pre-enactment or a transition 
swap 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.

[77 FR 35226, June 12, 2012, as amended at 85 FR 75594, Nov. 25, 2020]



Sec.  46.10  Required data standards.

    In reporting data for a pre-enactment or a transition swap 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. In reporting required swap continuation data as required by this 
part, each reporting counterparty shall comply with the required data 
standards set forth in part 45 of this chapter, including those set 
forth in Sec.  45.13(a) of this chapter.

[77 FR 35226, June 12, 2012, as amended at 85 FR 75594, Nov. 25, 2020]



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

    (a) Each swap counterparty required by this part 46 to report data 
for a pre-enactment or a transition swap 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) 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 data for a pre-
enactment or transition swap 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

[[Page 120]]

counterparty shall report a correction of each such error or omission to 
the swap data repository.
    (c) 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.

[77 FR 35226, June 12, 2012, as amended at 85 FR 75595, Nov. 25, 2020]



  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 129]]

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 130]]

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 131]]

    (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 132]]

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 133]]

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 134]]

    (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 135]]

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 136]]

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 137]]

    (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 138]]

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 139]]

    (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 140]]

    (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 141]]

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 142]]

    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.
---------------------------------------------------------------------------

    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.
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    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 143]]

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] TR23DE11.052


[[Page 145]]


[GRAPHIC] [TIFF OMITTED] TR23DE11.053


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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 147]]

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 148]]

    (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 149]]

  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.
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    (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 150]]

    (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 151]]

    (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 152]]

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\
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    \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 153]]

routinely in the public files of the Commission and will be available 
for inspection by any interested person.
---------------------------------------------------------------------------

    \9\ 17 CFR 145.9.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    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 159]]

    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 160]]

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\
---------------------------------------------------------------------------

    \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 161]]

    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 Request for transfer of registration.
49.7 Swap data repositories located in foreign jurisdictions.

[[Page 162]]

49.8 Procedures for implementing swap data repository rules.
49.9 Open swaps reports provided to the Commission.
49.10 Acceptance and validation of data.
49.11 Verification of swap 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 by swap data repositories.
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 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.
49.28 Operating hours of swap data repositories.
49.29 Information relating to swap data repository compliance.
49.30 Form and manner of reporting and submitting information to the 
          Commission.
49.31 Delegation of authority to the Director of the Division of Market 
          Oversight relating to certain part 49 matters.

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 Swap Data 
          Respositories Pursuant to Sec. Sec.  49.17(d)(6) and 49.18(a)

    Authority: 7 U.S.C. 1a, 2(a), 6r, 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 (Jul. 21, 2010), unless otherwise noted.

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

    Editorial Note: Nomenclature changes to part 49 appear at 85 FR 
75672, Nov. 25, 2020.



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:
    Affiliate means a person that directly, or indirectly, controls, is 
controlled by, or is under common control with, the swap data 
repository.
    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.
    Commercial use means the use of SDR data held and maintained by a 
swap data repository for a profit or business purposes. A swap data 
repository's use of SDR data for regulatory purposes and/or to perform 
its regulatory responsibilities would not be considered a commercial use 
regardless of whether the swap data repository charges a fee for 
reporting such SDR data.
    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.
    Data validation acceptance message means a notification that SDR 
data satisfied the data validation procedures applied by a swap data 
repository.
    Data validation error means that a specific data element of SDR data 
did not satisfy the data validation procedures applied by a swap data 
repository.
    Data validation error message means a notification that SDR data 
contained one or more data validation error(s).
    Data validation procedures procedures established by a swap data 
repository pursuant to Sec.  49.10 to validate SDR data reported to the 
swap data repository.

[[Page 163]]

    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.
    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.
    Market participant means any person participating in the swap 
market, including, but not limited to, designated contract markets, 
derivatives clearing organizations, swap execution facilities, swap 
dealers, major swap participants, and any other counterparty to a swap 
transaction.
    Non-affiliated third party means any person except:
    (1) The swap data repository;
    (2) The swap data repository's affiliate; or
    (3) A person jointly employed by a swap data repository and any 
entity that is not the swap data repository's affiliate (the term ``non-
affiliated third party'' includes such entity that jointly employs the 
person).
    Open swap means an executed swap transaction that has not reached 
maturity or expiration, and has not been fully exercised, closed out, or 
terminated.
    Person associated with a swap data repository means:
    (1) Any partner, officer, or director of such swap data repository 
(or any person occupying a similar status or performing similar 
functions);
    (2) Any person directly or indirectly controlling, controlled by, or 
under common control with such swap data repository; or
    (3) Any person employed by such swap data repository, including a 
jointly employed person.
    Position means the gross and net notional amounts of open swap 
transactions aggregated by one or more attributes, including, but not 
limited to, the:
    (1) Underlying instrument;
    (2) Index, or reference entity;
    (3) Counterparty;
    (4) Asset class;
    (5) Long risk of the underlying instrument, index, or reference 
entity; and
    (6) Short risk of the underlying instrument, index, or reference 
entity.
    Reporting counterparty means the counterparty required to report SDR 
data pursuant to part 43, 45, or 46 of this chapter.
    SDR data means the specific data elements and information required 
to be reported to a swap data repository or disseminated by a swap data 
repository pursuant to two or more of parts 43, 45, 46, and/or 49 of 
this chapter, as applicable in the context.
    SDR information means any information that the swap data repository 
receives or maintains related to the business of the swap data 
repository that is not SDR data.
    Section 8 material means the business transactions, SDR data, or 
market positions of any person and trade secrets or names of customers.
    Swap data means the specific data elements and information required 
to be reported to a swap data repository pursuant to part 45 of this 
chapter or made available to the Commission pursuant to this part, as 
applicable.
    Swap transaction and pricing data means the specific data elements 
and information required to be reported to a swap data repository or 
publicly disseminated by a swap data repository pursuant to part 43 of 
this chapter, as applicable.
    (b) Other defined terms. Terms not defined in this part have the 
meanings assigned to the terms in Sec.  1.3 of this chapter.

[76 FR 54575, Sept. 1, 2011, as amended at 83 FR 27436, June 12, 2018; 
85 FR 75595, 75656, Nov. 25, 2020]



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.

[[Page 164]]

    (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 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. 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 under 
this paragraph (a), the swap data repository shall promptly file an 
amendment on Form SDR updating such information.
    (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

[[Page 165]]

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 SDR data, a dormant swap data repository as defined in Sec.  
40.1 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 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.

[76 FR 54575, Sept. 1, 2011, as amended at 85 FR 75657, Nov. 25, 2020]



Sec.  49.4  Withdrawal from registration.

    (a)(1) A 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. Such notice shall 
be served at least 60 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 swap data 
repository and shall specify:
    (i) The name of the swap data repository 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 swap data 
repository; and
    (iii) The address where such data and records will be located.
    (2) Prior to filing a request to withdraw, a swap data repository 
shall execute an agreement with the custodial swap data repository 
governing the custody of the withdrawing swap data repository's data and 
records. The custodial swap data repository shall retain such records 
for at least as long as the remaining period of time the swap data 
repository withdrawing from registration would have been required to 
retain such records pursuant to this part.
    (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.

[[Page 166]]

    (c) Revocation of registration for false application. If, after 
notice and opportunity for hearing, the Commission finds that any 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.

[76 FR 54575, Sept. 1, 2011, as amended at 85 FR 75595, 75657, Nov. 25, 
2020]



Sec.  49.5  Equity interest transfers.

    (a) Equity interest transfer notification. A swap data repository 
shall file with the Commission a notification of each transaction 
involving the direct or indirect transfer of ten percent or more of the 
equity interest in the swap data repository. The Commission may, upon 
receiving such notification, request that the swap data repository 
provide supporting documentation of the transaction.
    (b) Timing of notification. The equity interest transfer notice 
described in paragraph (a) of this section shall be filed electronically 
with the Secretary of the Commission at its Washington, DC headquarters 
at [email protected] and the Division of Market Oversight at 
[email protected], at the earliest possible time but in no event 
later than the open of business ten business days following the date 
upon which a firm obligation is made to transfer, directly or 
indirectly, ten percent or more of the equity interest in the swap data 
repository.
    (c) Certification. Upon a transfer, whether directly or indirectly, 
of an equity interest of ten percent or more in a swap data repository, 
the swap data repository shall file electronically with the Secretary of 
the Commission at its Washington, DC headquarters at 
[email protected] and the Division of Market Oversight at 
[email protected], a certification that the swap data repository 
meets all of the requirements of section 21 of the Act and the 
Commission regulations in 17 CFR chapter I, no later than two business 
days following the date on which the equity interest of ten percent or 
more was acquired.

[85 FR 75657, Nov. 25, 2020]



Sec.  49.6  Request for transfer of registration.

    (a) Request for approval. A swap data repository seeking to transfer 
its registration from its current legal entity to a new legal entity as 
a result of a corporate change shall file a request for approval to 
transfer such registration with the Secretary of the Commission in the 
form and manner specified by the Commission.
    (b) Timing for filing a request for transfer of registration. A swap 
data repository shall file a request for transfer of registration as 
soon as practicable prior to the anticipated corporate change.
    (c) Required information. The request for transfer of registration 
shall include the following:
    (1) The underlying documentation that governs the corporate change;
    (2) A description of the corporate change, including the reason for 
the change and its impact on the swap data repository, including the 
swap data repository's governance and operations, and its impact on the 
rights and obligations of market participants;
    (3) A discussion of the transferee's ability to comply with the Act, 
including the core principles applicable to swap data repositories and 
the Commission's regulations;
    (4) The governance documents adopted by the transferee, including a 
copy of any constitution; articles or certificate of incorporation, 
organization, formation, or association with all amendments thereto; 
partnership or limited liability agreements; and any existing bylaws, 
operating agreement, or rules or instruments corresponding thereto;
    (5) The transferee's rules marked to show changes from the current 
rules of the swap data repository; and
    (6) A representation by the transferee that it:

[[Page 167]]

    (i) Will be the surviving entity and successor-in-interest to the 
transferor swap data repository and will retain and assume the assets 
and liabilities of the transferor, except if otherwise indicated in the 
request;
    (ii) Will assume responsibility for complying with all applicable 
provisions of the Act and the Commission's regulations; and
    (iii) Will notify market participants of all changes to the 
transferor's rulebook prior to the transfer, including those changes 
that may affect the rights and obligations of market participants, and 
will further notify market participants of the concurrent transfer of 
the registration to the transferee upon Commission approval and issuance 
of an order permitting the transfer.
    (d) Commission determination. Upon review of a request for transfer 
of registration, the Commission, as soon as practicable, shall issue an 
order either approving or denying the request for transfer of 
registration.

[85 FR 75657, Nov. 25, 2020]



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.



Sec.  49.8  Procedures for implementing 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 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 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  Open swaps reports provided to the Commission.

    Each swap data repository shall provide reports of open swaps to the 
Commission in accordance with this section.
    (a) Content of the open swaps report. In order to satisfy the 
requirements of this section, each swap data repository shall provide 
the Commission with open swaps reports that contain an accurate 
reflection, as of the time the swap data repository compiles the open 
swaps report, of the swap data maintained by the swap data repository 
for every swap data field required to be reported for swaps pursuant to 
part 45 of this chapter for every open swap. The report shall be 
organized by the unique identifier created pursuant to Sec.  45.5 of 
this chapter that is associated with each open swap.
    (b) Transmission of the open swaps report. Each swap data repository 
shall transmit all open swaps reports to the Commission as instructed by 
the Commission. Such instructions may include, but are not limited to, 
the method, timing, and frequency of transmission, as well as the format 
of the swap data to be transmitted.

[85 FR 75657, Nov. 25, 2020]



Sec.  49.10  Acceptance and validation of data.

    (a) General requirements--(1) Generally. A swap data repository 
shall establish,

[[Page 168]]

maintain, and enforce policies and procedures reasonably designed to 
facilitate the complete and accurate reporting of SDR data. A swap data 
repository shall promptly accept, validate, and record SDR data.
    (2) Electronic connectivity. For the purpose of accepting SDR data, 
the 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, swap execution facilities, swap 
dealers, major swap participants and non-SD/MSP/DCO reporting 
counterparties who report such data. The technological protocols 
established by a swap data repository shall provide for the receipt of 
SDR data. The swap data repository shall ensure that its mechanisms for 
SDR data acceptance are reliable and secure.
    (b) Duty to accept SDR data. A 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 SDR data. If a 
swap data repository accepts SDR data of a particular asset class, then 
it shall accept SDR data from all swaps of that asset class, unless 
otherwise prescribed by the Commission.
    (c) Duty to validate SDR data. A swap data repository shall validate 
SDR data as soon as technologically practicable after such data is 
accepted according to the validation conditions approved in writing by 
the Commission. A swap data repository shall validate SDR data by 
providing data validation acceptance messages and data validation error 
messages, as provided in this paragraph (c).
    (1) Data validation acceptance message. A swap data repository shall 
validate each SDR data report submitted to the swap data repository and 
notify the reporting counterparty, swap execution facility, designated 
contract market, or third-party service provider submitting the report 
whether the report satisfied the data validation procedures of the swap 
data repository as soon as technologically practicable after accepting 
the SDR data report.
    (2) Data validation error message. If SDR data contains one or more 
data validation errors, the swap data repository shall distribute a data 
validation error message to the designated contract market, swap 
execution facility, reporting counterparty, or third-party service 
provider that submitted such SDR data as soon as technologically 
practicable after acceptance of such data. Each data validation error 
message shall indicate which specific data validation error(s) was 
identified in the SDR data.
    (3) Swap transaction and pricing data submitted with swap data. If a 
swap data repository allows for the joint submission of swap transaction 
and pricing data and swap data, the swap data repository shall validate 
the swap transaction and pricing data and swap data separately. Swap 
transaction and pricing data that satisfies the data validation 
procedures applied by a swap data repository shall not be deemed to 
contain a data validation error because it was submitted to the swap 
data repository jointly with swap data that contained a data validation 
error.
    (d) Policies and procedures to prevent invalidation or modification. 
A 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 verification or recording process of 
the swap data repository. The policies and procedures shall ensure that 
the swap data repository's user agreements are designed to prevent any 
such invalidation or modification.
    (e) Error corrections--(1) Accepting corrections. A swap data 
repository shall accept error corrections for SDR data. Error 
corrections include corrections to errors and omissions in SDR data 
previously reported to the swap data repository pursuant to part 43, 45, 
or 46 of this chapter, as well as omissions in reporting SDR data for 
swaps that were not previously reported to a swap data repository as 
required under part 43, 45, or 46 of this chapter. The requirement to 
accept error corrections applies for all swaps, regardless of the state 
of the swap that is the subject of the SDR data. This includes swaps 
that have terminated, matured, or are otherwise no longer considered to 
be open swaps, provided that the record retention period under Sec.  
49.12(b)(2) has not expired

[[Page 169]]

as of the time the error correction is reported.
    (2) Recording corrections. A swap data repository shall record the 
corrections, as soon as technologically practicable after the swap data 
repository accepts the error correction.
    (3) Dissemination. A swap data repository shall disseminate 
corrected SDR data to the public and the Commission, as applicable, in 
accordance with this chapter, as soon as technologically practicable 
after the swap data repository records the corrected SDR data.
    (4) Policies and procedures. A swap data repository shall establish, 
maintain, and enforce policies and procedures designed for the swap data 
repository to accept error corrections, to record the error corrections 
as soon as technologically practicable after the swap data repository 
accepts the error correction, and to disseminate corrected SDR data to 
the public and to the Commission, as applicable, in accordance with this 
chapter.
    (f) Policies and procedures for resolving disputes regarding data 
accuracy. A swap data repository shall establish procedures and provide 
facilities for effectively resolving disputes over the accuracy of the 
SDR data and positions that are recorded in the swap data repository.

[85 FR 75595, Nov. 25, 2020, as amended at 85 FR 75657, Nov. 25, 2020]



Sec.  49.11  Verification of swap data accuracy.

    (a) General requirement. Each swap data repository shall verify the 
accuracy and completeness of swap data that it receives from swap 
execution facilities, designated contract markets, reporting 
counterparties, or third-party service providers acting on their behalf, 
in accordance with paragraph (b) of this section.
    (b) Verifying swap data accuracy and completeness--(1) Swap data 
access. Each swap data repository shall provide a mechanism that allows 
each reporting counterparty that is a user of the swap data repository 
to access all swap data maintained by the swap data repository for each 
open swap for which the reporting counterparty is serving as the 
reporting counterparty, as specified in paragraph (b)(2) of this 
section. This mechanism shall allow sufficient access, provide 
sufficient information, and be in a form and manner to enable each 
reporting counterparty to perform swap data verification as required 
under Sec.  45.14 of this chapter.
    (2) Scope of swap data access. The swap data accessible through the 
mechanism provided by each swap data repository shall accurately reflect 
the most current swap data maintained by the swap data repository, as of 
the time the reporting counterparty accesses the swap data using the 
provided mechanism, for each data field that the reporting counterparty 
was required to report for each relevant open swap pursuant to part 45 
of this chapter, except as provided in paragraph (b)(3) of this section. 
The swap data accessible through the mechanism provided by each swap 
data repository shall include sufficient information to allow reporting 
counterparties to successfully perform the swap data verification 
required under Sec.  45.14 of this chapter.
    (3) Confidentiality. The swap data access each swap data repository 
shall provide pursuant to this section is subject to all applicable 
confidentiality requirements of the Act and this chapter, including, but 
not limited to, Sec.  49.17. The swap data accessible to any reporting 
counterparty shall not include any swap data that the relevant reporting 
counterparty is prohibited to access under any Commission regulation.
    (4) Frequency of swap data access. Each swap data repository shall 
allow each reporting counterparty that is a user of the relevant swap 
data repository to utilize the mechanism as required under this section 
with at least sufficient frequency to allow each relevant reporting 
counterparty to perform the swap data verification required under Sec.  
45.14 of this chapter.
    (5) Third-party service providers. If a reporting counterparty 
informs a swap data repository that the reporting counterparty will 
utilize a third-party service provider to perform verification as 
required pursuant to Sec.  45.14 of this chapter, the swap data 
repository will satisfy its requirements under this section by providing 
the third-party service provider with the same access to the mechanism 
and the relevant swap data for the reporting counterparty

[[Page 170]]

under this section, as if the third-party service provider was the 
reporting counterparty. The access for the third-party service provider 
shall be in addition to the access for the reporting counterparty 
required under this section. The access for the third-party service 
provider under this paragraph shall continue until the reporting 
counterparty informs the swap data repository that the third-party 
service provider should no longer have access on behalf of the reporting 
counterparty. The policies and procedures each swap data repository 
adopts under paragraph (c) of this section shall include instructions 
detailing how each reporting counterparty can successfully inform the 
swap data repository regarding a third-party service provider.
    (c) Policies and procedures--(1) Contents. Each swap data repository 
shall establish, maintain, and enforce policies and procedures designed 
to ensure compliance with the requirements of this section. Such 
policies and procedures shall include, but are not limited to, 
instructions detailing how each reporting counterparty, or third-party 
service provider acting on behalf of a reporting counterparty, can 
successfully utilize the mechanism provided pursuant to this section to 
perform each reporting counterparty's verification responsibilities 
under Sec.  45.14 of this chapter.
    (2) Amendments. Each swap data repository shall comply with the 
requirements under part 40 of this chapter in adopting or amending the 
policies and procedures required by this section.

[85 FR 75658, Nov. 25, 2020]



Sec.  49.12  Swap data repository recordkeeping requirements.

    (a) General requirement. A swap data repository 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, including, but not limited to, all SDR information and all 
SDR data that is reported to the swap data repository pursuant to this 
chapter.
    (b) Maintenance of records. A swap data repository shall maintain 
all records required to be kept by this section in accordance with this 
paragraph (b).
    (1) A swap data repository shall maintain all SDR information, 
including, but not limited to, all documents, policies, and procedures 
required by the Act and the Commission's regulations, correspondence, 
memoranda, papers, books, notices, accounts, and other such records made 
or received by the swap data repository in the course of its business. 
All SDR information shall be maintained in accordance with Sec.  1.31 of 
this chapter.
    (2) A swap data repository shall maintain all SDR data and 
timestamps reported to or created by the swap data repository pursuant 
to this chapter, and all messages related to such reporting, throughout 
the existence of the swap that is the subject of the SDR data and for 
five years following final termination of the swap, during which time 
the records shall be readily accessible by the swap data repository and 
available to the Commission via real-time electronic access, and for a 
period of at least ten additional years in archival storage from which 
such records are retrievable by the swap data repository within three 
business days.
    (c) Records of data errors and omissions. A swap data repository 
shall create and maintain records of data validation errors and SDR data 
reporting errors and omissions in accordance with this paragraph (c).
    (1) A swap data repository shall create and maintain an accurate 
record of all reported SDR data that fails to satisfy the swap data 
repository's data validation procedures including, but not limited to, 
all SDR data reported to the swap data repository that fails to satisfy 
the data validation procedures, all data validation errors, and all 
related messages and timestamps. A swap data repository shall make these 
records available to the Commission on request.
    (2) A swap data repository shall create and maintain an accurate 
record of all SDR data errors and omissions reported to the swap data 
repository and all corrections disseminated by the swap data repository 
pursuant to parts 43, 45, and 46 of this chapter and this part. A swap 
data repository shall

[[Page 171]]

make these records available to the Commission on request.
    (d) Availability of records. All records required to be kept 
pursuant to this part shall be open to inspection upon request by any 
representative of the Commission or the United States Department of 
Justice in accordance with the provisions of Sec.  1.31 of this chapter. 
A swap data repository required to keep, create, or maintain records 
pursuant to this section shall provide such records in accordance with 
the provisions of Sec.  1.31 of this chapter, unless otherwise provided 
in this part.
    (e) A 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 swap data repository.

[85 FR 75658, Nov. 25, 2020]



Sec.  49.13  Monitoring, screening and analyzing swap data.

    (a) Duty to monitor, screen and analyze SDR data. A swap data 
repository shall monitor, screen, and analyze all relevant SDR data in 
its possession in such a manner as the Commission may require. A swap 
data repository shall routinely monitor, screen, and analyze SDR data 
for the purpose of any standing swap surveillance objectives that 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 SDR data. A 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.

[76 FR 54575, Sept. 1, 2011, as amended at 85 FR 75659, Nov. 25, 2020]



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

    A 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.



Sec.  49.15  Real-time public reporting by swap data repositories.

    (a) Scope. The provisions of this section apply to the real-time 
public reporting of swap transaction and pricing data submitted to a 
swap data repository pursuant to part 43 of this chapter.
    (b) Systems to accept and disseminate data in connection with real-
time public reporting. A swap data repository shall establish such 
electronic systems as are necessary to accept and publicly disseminate 
swap transaction and pricing data submitted to the swap data repository 
pursuant to part 43 of this chapter in order to meet the real-time 
public reporting obligations of part 43 of this chapter. Any electronic 
system established for this purpose shall be capable of accepting and 
ensuring the public dissemination of all data fields required by part 43 
this chapter.
    (c) Duty to notify the Commission of untimely data. A swap data 
repository shall 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.

[85 FR 75659, Nov. 25, 2020]



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

[[Page 172]]

information and all SDR data that is not swap transaction and pricing 
data disseminated under 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 and all SDR data (except for swap transaction and pricing 
data disseminated under part 43 of this chapter) 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 or SDR data; and/or
    (iii) Intellectual property, such as trading strategies or portfolio 
positions, by the swap data repository or any person associated with a 
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 or SDR data, and intellectual property;
    (B) Standards controlling persons associated with a swap data 
repository trading for their personal benefit or the benefit of others; 
and
    (C) Adequate oversight to ensure compliance with this paragraph 
(a)(2).
    (b) A swap data repository shall not, as a condition of accepting 
SDR data from any swap execution facility, designated contract market, 
or reporting counterparty, require the waiver of any privacy rights by 
such swap execution facility, designated contract market, or reporting 
counterparty.
    (c) Subject to section 8 of the Act, a swap data repository may 
disclose aggregated SDR data on a voluntary basis or as requested, in 
the form and manner prescribed by the Commission.

[85 FR 75659, Nov. 25, 2020]



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 SDR data held and maintained by registered SDR 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
    (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 section, the 
term ``direct electronic access'' shall mean an electronic system, 
platform, framework, or other technology that provides internet-based or 
other form of access to real-time SDR data that is acceptable to the 
Commission and also provides scheduled data transfers to Commission 
electronic systems.
    (c) Commission access. A swap data repository shall provide access 
to the Commission for all SDR data maintained by the swap data 
repository pursuant to this chapter in accordance with this paragraph 
(c).
    (1) Direct electronic access requirements. A swap data repository 
shall provide direct electronic access to the

[[Page 173]]

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 the Commission's regulations in 17 
CFR chapter I. A swap data repository shall maintain all SDR data 
reported to the swap data repository in a format acceptable to the 
Commission, and shall transmit all SDR data requested by the Commission 
to the Commission as instructed by the Commission. Such instructions may 
include, but are not limited to, the method, timing, and frequency of 
transmission, as well as the format and scope of the SDR data to be 
transmitted.
    (2) Monitoring tools. A swap data repository is required to provide 
the Commission with proper tools for the monitoring, screening and 
analyzing of SDR data, including, but not limited to, Web-based 
services, services that provide automated transfer of SDR 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 swap data repository, which can provide 
assistance to the Commission regarding data structure and content.
    (3) Authorized users. The SDR data provided to the Commission by a 
swap data repository shall be accessible only by authorized users. 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 
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 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.
    (4) Obligations of the swap data repository in connection with 
appropriate domestic regulator or appropriate foreign regulator requests 
for swap data access. (i) A 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

[[Page 174]]

foreign regulator's jurisdiction, as described and appended to the 
confidentiality arrangement required by Sec.  49.18(a). Each 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 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 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 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 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 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 swap data repository. Access 
to the SDR data and SDR information maintained by a swap data repository 
may be necessary for certain third parties that provide various 
technology and data-

[[Page 175]]

related services to a swap data repository. Third-party access to the 
SDR data and SDR information maintained by a swap data repository is 
permissible subject to the following conditions:

    (1) Both the swap data repository and the third party service 
provider shall have strict confidentiality procedures that protect SDR 
data and SDR information from improper disclosure.
    (2) Prior to a swap data repository granting access to SDR data or 
SDR information to a third-party service provider, the third-party 
service provider and the swap data repository shall execute a 
confidentiality agreement setting forth minimum confidentiality 
procedures and permissible uses of the SDR 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 SDR data maintained by the swap data repository is 
prohibited other than as set forth in paragraph (f)(2) of this section.
    (2) Exception. SDR data and SDR information related to a particular 
swap transaction that is maintained by the swap data repository may be 
accessed by either counterparty to that particular swap. However, the 
SDR data and SDR information maintained by the 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 Sec. Sec.  1.74, 23.610, and 
39.12(b)(7) of this chapter.
    (g) Commercial uses of SDR data accepted and maintained by the swap 
data repository prohibited. SDR 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 swap data repository is required to adopt and implement 
adequate ``firewalls'' or controls to protect the reported SDR 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 execution facility, designated contract 
market, or reporting counterparty that submits the SDR data maintained 
by the 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 SDR data require a swap execution facility, designated contract 
market, or reporting counterparty to consent to the use of any reported 
SDR data for commercial or business purposes.
    (3) Swap data repositories responsible for the public dissemination 
of swap transaction and pricing 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 swap data 
repository, and whether the applicant employs appropriate 
confidentiality safeguards to ensure that any swap data such applicant 
receives from a 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 section 21(c)(7) of the Act, 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--

[[Page 176]]

    (i) The applicant employs appropriate confidentiality safeguards to 
ensure that any swap data such applicant receives from a 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 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.

[76 FR 54575, Sept. 1, 2011, as amended at 83 FR 27436, June 12, 2018; 
85 FR 75659, Nov. 25, 2020]



Sec.  49.18  Confidentiality arrangement.

    (a) Confidentiality arrangement required prior to disclosure of swap 
data by a swap data repository to an appropriate domestic regulator or 
appropriate foreign regulator. Prior to a 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 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.
    (c) Reporting failures to fulfill the terms of a confidentiality 
arrangement. A 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 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.

[83 FR 27438, June 12, 2018, as amended at 85 FR 75661, Nov. 25, 2020]



Sec.  49.19  Core principles applicable to 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 section. 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 section.
    (b) Antitrust considerations (Core Principle 1). Unless necessary or 
appropriate to achieve the purposes of the Act, a swap data repository 
shall avoid

[[Page 177]]

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). Swap data 
repositories shall establish governance arrangements as set forth in 
Sec.  49.20.
    (d) Conflicts of interest (Core Principle 3). 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). Swap data repositories 
shall also comply with the following additional duties:
    (1) Financial resources. Swap data repositories shall maintain 
sufficient financial resources as set forth in Sec.  49.25;
    (2) Disclosure requirements of swap data repositories. 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. 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.

[76 FR 54575, Sept. 1, 2011, as amended at 85 FR 75661, Nov. 25, 2020]



Sec.  49.20  Governance arrangements (Core Principle 2).

    (a) General. (1) Each 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 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 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 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 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 swap data repository;
    (ii) The mission statement and/or charter of the board of directors, 
as well as of each committee of the 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 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) defines such term;
    (vi) The lines of responsibility and accountability for each 
operational unit of the swap data repository to any committee thereof 
and/or the board of directors; and
    (vii) Summaries of significant decisions impacting 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 SDR data, and use of section 8 material, SDR 
information, and intellectual property (as referenced in Sec.  49.16). 
Such summaries of

[[Page 178]]

significant decisions shall not require the swap data repository to 
disclose section 8 material or, where appropriate, information that the 
swap data repository received on a confidential basis from a swap 
execution facility, designated contract market, or reporting 
counterparty.
    (3) The 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 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 swap data 
repository shall establish, maintain, and enforce (including, without 
limitation, pursuant to paragraph (c)(4) of this section) 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 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 swap data repository complies 
with all statutory and regulatory responsibilities under the Act and the 
regulations promulgated thereunder.
    (ii) Each 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 swap data repository or any swap execution facility, designated 
contract market, or reporting counterparty user thereof (or, in each 
case, affiliates thereof, as Sec.  49.2(a) 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 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 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 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 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 section, 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

[[Page 179]]

to exercise sound judgment about the affairs of the swap data 
repository.
    (d) Compliance with core principle. The chief compliance officer of 
the swap data repository shall review the compliance of the swap data 
repository with this core principle.

[76 FR 54575, Sept. 1, 2011, as amended at 85 FR 75661, Nov. 25, 2020]



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

    (a) General. (1) Each 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 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 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 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 swap 
data 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 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 section 
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 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 swap data 
repository's chief compliance officer shall report directly to the board 
of directors or to the senior

[[Page 180]]

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 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 swap data repository provide fair and open access as set forth 
in Sec.  49.27 of this part; and
    (iii) Conflicts between a 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;
    (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 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;

[[Page 181]]

    (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 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 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 swap data 
repository's fiscal year.
    (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. An amendment shall contain the oath or certification 
required under paragraph (e)(6) of this section.
    (4) A 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 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 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 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; 
85 FR 75661, Nov. 25, 2020]



Sec.  49.23  Emergency authority policies and procedures.

    (a) Emergency policies and procedures required. A 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 SDR data resides at the swap data repository.
    (b) Invocation of emergency authority. A 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

[[Page 182]]

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

[76 FR 54575, Sept. 1, 2011, as amended at 85 FR 75661, Nov. 25, 2020]



Sec.  49.24  System safeguards.

    (a) Each swap data repository shall, with respect to all SDR 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.

[[Page 183]]

    (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.
    (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. Sec.  49.10 through 49.18, 49.23, and the core principles set forth 
in Sec. Sec.  49.19 through 49.21 and Sec. Sec.  49.25 through 49.27, 
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 obligation 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) 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.

[[Page 184]]

    (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 SDR 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 SDR 
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 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 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 swap data repository following any 
disruption of its operations; or
    (2) Contractual arrangements with other 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 SDR data contained in the swap data repository.
    (g) A 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 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.  1.31 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

[[Page 185]]

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.  1.31 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 SDR data and SDR 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 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 SDR data and SDR 
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 SDR 
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

[[Page 186]]

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 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

[[Page 187]]

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, and major swap 
participants who report SDR 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 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 SDR data to the 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 SDR 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,

[[Page 188]]

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; 
85 FR 75661, Nov. 25, 2020]



Sec.  49.25  Financial resources.

    (a) General rule. (1) A swap data repository shall maintain 
sufficient financial resources to perform its statutory and regulatory 
duties set forth in this chapter.
    (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.
    (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 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 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 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 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.

[[Page 189]]

    (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.

[76 FR 54575, Sept. 1, 2011, as amended at 85 FR 75662, Nov. 25, 2020]



Sec.  49.26  Disclosure requirements of swap data repositories.

    Before accepting any SDR data from a swap execution facility, 
designated contract market, or reporting counterparty; or upon a swap 
execution facility's, designated contract market's, or reporting 
counterparty's request; a swap data repository shall furnish to the swap 
execution facility, designated contract market, or reporting 
counterparty a disclosure document that contains the following written 
information, which shall reasonably enable the swap execution facility, 
designated contract market, or reporting counterparty to identify and 
evaluate accurately the risks and costs associated with using the 
services of the swap data repository:
    (a) The swap data repository's criteria for providing others with 
access to services offered and SDR data maintained by the swap data 
repository;
    (b) The swap data repository's criteria for those seeking to connect 
to or link with the swap data repository;
    (c) A description of the swap data repository's policies and 
procedures regarding its safeguarding of SDR data and operational 
reliability to protect the confidentiality and security of such data, as 
described in Sec.  49.24;
    (d) The swap data repository's policies and procedures reasonably 
designed to protect the privacy of any and all SDR data that the swap 
data repository receives from a swap execution facility, designated 
contract market, or reporting counterparty, as described in Sec.  49.16;
    (e) The swap data repository's policies and procedures regarding its 
non-commercial and/or commercial use of the SDR data that it receives 
from a swap execution facility, designated contract market, or reporting 
counterparty;
    (f) The swap data repository's dispute resolution procedures;
    (g) A description of all the swap data repository's services, 
including any ancillary services;
    (h) The 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;
    (i) A description of the swap data repository's governance 
arrangements; and
    (j) The swap data repository's policies and procedures regarding the 
reporting of SDR data to the swap data repository, including the swap 
data repository's SDR data validation procedures, swap data verification 
procedures, and procedures for correcting SDR data errors and omissions.

[76 FR 54575, Sept. 1, 2011, as amended at 85 FR 75662, Nov. 25, 2020]



Sec.  49.27  Access and fees.

    (a) Fair, open and equal access. (1) A 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 section, a 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 swap data repository 
in connection with the reporting of SDR 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

[[Page 190]]

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 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 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.

[76 FR 54575, Sept. 1, 2011, as amended at 85 FR 75662, Nov. 25, 2020]



Sec.  49.28  Operating hours of swap data repositories.

    (a) Except as otherwise provided in this paragraph (a), a swap data 
repository shall have systems in place to continuously accept and 
promptly record all SDR data reported to the swap data repository as 
required in this chapter and, as applicable, publicly disseminate all 
swap transaction and pricing data reported to the swap data repository 
as required in part 43 of this chapter.
    (1) A swap data repository may establish normal closing hours to 
perform system maintenance during periods when, in the reasonable 
estimation of the swap data repository, the swap data repository 
typically receives the least amount of SDR data. A swap data repository 
shall provide reasonable advance notice of its normal closing hours to 
market participants and to the public.
    (2) A swap data repository may declare, on an ad hoc basis, special 
closing hours to perform system maintenance that cannot wait until 
normal closing hours. A swap data repository shall schedule special 
closing hours during periods when, in the reasonable estimation of the 
swap data repository in the context of the circumstances prompting the 
special closing hours, the special closing hours will be the least 
disruptive to the swap data repository's SDR data reporting 
responsibilities. A swap data repository shall provide reasonable 
advance notice of its special closing hours to market participants and 
to the public whenever possible, and, if advance notice is not 
reasonably possible, shall provide notice of its special closing hours 
to market participants and to the public as soon as reasonably possible 
after declaring special closing hours.
    (b) A swap data repository shall comply with the requirements under 
part 40 of this chapter in adopting or amending normal closing hours and 
special closing hours.
    (c) During normal closing hours and special closing hours, a swap 
data repository shall have the capability to accept and hold in queue 
any and all SDR data reported to the swap data repository during the 
normal closing hours or special closing hours.
    (1) Upon reopening after normal closing hours or special closing 
hours, a swap data repository shall promptly process all SDR data 
received during normal closing hours or special closing hours, as 
required pursuant to this chapter, and, pursuant to part 43 of this 
chapter, publicly disseminate all swap transaction and pricing data 
reported to the swap data repository that was held in queue during the 
normal closing hours or special closing hours.
    (2) If at any time during normal closing hours or special closing 
hours a swap data repository is unable to receive and hold in queue any 
SDR data reported pursuant to this chapter, then the swap data 
repository shall immediately issue notice to all swap execution 
facilities, designated contract markets, reporting counterparties, and 
the public that it is unable to receive and hold in queue SDR data. 
Immediately upon reopening, the swap data repository shall issue notice 
to all swap execution facilities, designated contract markets, reporting 
counterparties, and the public that it has resumed normal operations. 
Any swap

[[Page 191]]

execution facility, designated contract market, or reporting 
counterparty that was obligated to report SDR data pursuant to this 
chapter to the swap data repository, but could not do so because of the 
swap data repository's inability to receive and hold in queue SDR data, 
shall report the SDR data to the swap data repository immediately after 
receiving such notice.

[85 FR 75662, Nov. 25, 2020]



Sec.  49.29  Information relating to swap data repository compliance.

    (a) Requests for information. Upon the Commission's request, a swap 
data repository shall file with the Commission information related to 
its business as a swap data repository and such information as the 
Commission determines to be necessary or appropriate for the Commission 
to perform the duties of the Commission under the Act and regulations in 
17 CFR chapter I. The swap data repository shall file the information 
requested in the form and manner and within the time period the 
Commission specifies in the request.
    (b) Demonstration of compliance. Upon the Commission's request, a 
swap data repository shall file with the Commission a written 
demonstration, containing supporting data, information, and documents, 
that it is in compliance with its obligations under the Act and the 
Commission's regulations in 17 CFR chapter I, as the Commission 
specifies in the request. The swap data repository shall file the 
written demonstration in the form and manner and within the time period 
the Commission specifies in the request.

[85 FR 75663, Nov. 25, 2020]



Sec.  49.30  Form and manner of reporting and submitting information to
the Commission.

    Unless otherwise instructed by the Commission, a swap data 
repository shall submit SDR data reports and any other information 
required under this part to the Commission, within the time specified, 
using the format, coding structure, and electronic data transmission 
procedures approved in writing by the Commission.

[85 FR 75663, Nov. 25, 2020]



Sec.  49.31  Delegation of authority to the Director of the Division of
Market Oversight relating to certain part 49 matters.

    (a) 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 
staff acting under his or her direction as he or she may designate from 
time to time:
    (1) All functions reserved to the Commission in Sec.  49.5.
    (2) All functions reserved to the Commission in Sec.  49.9.
    (3) All functions reserved to the Commission in Sec.  49.10.
    (4) All functions reserved to the Commission in Sec.  49.12.
    (5) All functions reserved to the Commission in Sec.  49.13.
    (6) All functions reserved to the Commission in Sec.  49.16.
    (7) All functions reserved to the Commission in Sec.  49.17.
    (8) All functions reserved to the Commission in Sec.  49.18.
    (9) All functions reserved to the Commission in Sec.  49.22.
    (10) All functions reserved to the Commission in Sec.  49.23.
    (11) All functions reserved to the Commission in Sec.  49.24.
    (12) All functions reserved to the Commission in Sec.  49.25.
    (13) All functions reserved to the Commission in Sec.  49.29.
    (14) All functions reserved to the Commission in Sec.  49.30.
    (b) The Director of the Division of Market Oversight may submit to 
the Commission for its consideration any matter that has been delegated 
under paragraph (a) of this section.
    (c) Nothing in this section may prohibit the Commission, at its 
election, from exercising the authority delegated in this section.

[85 FR 75663, Nov. 25, 2020]

[[Page 192]]



                  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. 13 and 18 U.S.C. 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 
(``Act''), and in the General Rules and Regulations of the Commodity 
Futures Trading Commission (``Commission'') thereunder (17 CFR chapter 
I).
    For the purposes of this Form SDR, the term ``Applicant'' shall 
include any applicant for registration as a swap data repository or any 
applicant amending a pending application.

                          GENERAL INSTRUCTIONS

    1. This Form SDR, which includes instructions, a Cover Sheet, and 
required Exhibits (together ``Form SDR''), is to be filed with the 
Commission by all Applicants, pursuant to section 21 of the Act and the 
Commission's regulations thereunder. Upon the filing of an application 
for registration in accordance with the instructions provided herein, 
the Commission will publish notice of the filing and afford interested 
persons an opportunity to submit written comments concerning such 
application. No application for registration shall be effective unless 
the Commission, by order, grants such registration.
    2. Individuals' names, except the executing signature, shall be 
given in full (Last Name, First Name, Middle Name).
    3. Signatures on all copies of the Form SDR filed with the 
Commission can be executed electronically. If this Form SDR is filed by 
a corporation, it shall be signed in the name of the corporation by a 
principal officer duly authorized; if filed by a limited liability 
company, it shall be signed in the name of the limited liability company 
by a manager or member duly authorized to sign on the limited liability 
company's behalf; if filed by a partnership, it shall be signed in the 
name of the partnership by a general partner duly authorized; if filed 
by an unincorporated organization or association that is not a 
partnership, it shall be signed in the name of such 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 this Form SDR is being filed as an application for 
registration, all applicable items must be answered in full. If any item 
is inapplicable, indicate by ``none,'' ``not applicable,'' or ``N/A,'' 
as appropriate.
    5. Under section 21 of the Act and the Commission's regulations 
thereunder, the Commission is authorized to solicit the information 
required to be supplied by this Form SDR from any Applicant seeking 
registration as a swap data repository. Disclosure by the Applicant of 
the information specified in this Form SDR is mandatory prior to the 
start of the processing of an application for registration as a swap 
data repository. The information provided in this Form SDR 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 an Applicant in order to 
process its application. A Form SDR that 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 a 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 SDR will be included 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.

                         APPLICATION AMENDMENTS

    1. An Applicant amending a pending application for registration as a 
swap data repository shall file an amended Form SDR electronically with 
the Secretary of the Commission in the manner specified by the 
Commission.
    2. When filing this Form SDR for purposes of amending a pending 
application, an Applicant must re-file the entire Cover Sheet, amended 
if necessary, include an executing signature, and attach thereto revised 
Exhibits or other materials marked to show any amendments. The 
submission of an amendment to a pending application represents that all 
unamended items and Exhibits remain true, current, and complete as 
previously filed.

[[Page 193]]

                              WHERE TO FILE

    This Form SDR shall be filed electronically with the Secretary of 
the Commission in the manner specified by the Commission.
[GRAPHIC] [TIFF OMITTED] TR25NO20.038


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[GRAPHIC] [TIFF OMITTED] TR25NO20.039


[[Page 195]]


[GRAPHIC] [TIFF OMITTED] TR25NO20.040


[[Page 196]]


[GRAPHIC] [TIFF OMITTED] TR25NO20.041

                          EXHIBITS INSTRUCTIONS

    The following Exhibits must be included as part of Form SDR and 
filed with the Commission by each Applicant seeking registration as a 
swap data repository pursuant to section 21 of the Act and the 
Commission's regulations thereunder. Such Exhibits must be labeled 
according to the items specified in this Form SDR. If any Exhibit is 
inapplicable, please specify the Exhibit letter and indicate by 
``none,'' ``not applicable,'' or ``N/A,'' as appropriate. 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.
    If the Applicant is a newly formed enterprise and does not have the 
financial statements required pursuant to Items 27 and 28 of this form, 
the Applicant should provide pro forma financial statements for the most

[[Page 197]]

recent six months or since inception, whichever is less.

                    EXHIBITS I--BUSINESS ORGANIZATION

    14. Attach as Exhibit A, any person who owns ten (10) percent or 
more of Applicant's equity or possesses voting power of any class, 
either directly or indirectly, through agreement or otherwise, in any 
other manner, may control or direct the management or policies of 
Applicant. ``Control'' for this purpose is defined in Commission 
Regulation Sec.  49.2(a).
    State in Exhibit A the full name and address of each such person and 
attach a copy of the agreement or, if there is none written, describe 
the agreement or basis upon which such person exercises or may exercise 
such control or direction.
    15. Attach as Exhibit B, a narrative that sets forth the fitness 
standards for the board of directors and its composition including the 
number or percentage of public directors.
    Attach a list of the present officers, directors (including an 
identification of the public directors), governors (and, if the 
Applicant is not a corporation, the members of all standing committees 
grouped by committee), or persons performing functions similar to any of 
the foregoing, of the swap data repository or of the entity identified 
in Item 16 that performs the swap data repository activities of the 
Applicant, indicating for each:
    a. Name
    b. Title
    c. Date of commencement and, if appropriate, termination of present 
term of position
    d. Length of time each present officer, director, or governor has 
held the same position
    e. Brief account of the business experience of each officer and 
director over the last five (5) years
    f. Any other business affiliations in the securities industry or OTC 
derivatives industry
    g. A description of:
    (1) any order of the Commission with respect to such person pursuant 
to section 5e of the Act;
    (2) any conviction or injunction within the past 10 years;
    (3) any disciplinary action with respect to such person within the 
last five (5) years;
    (4) any disqualification under sections 8b and 8d of the Act;
    (5) any disciplinary action under section 8c of the Act; and
    (6) any violation pursuant to section 9 of the Act.
    h. For directors, list any committees on which the director serves 
and any compensation received by virtue of their directorship.
    16. Attach as Exhibit C, the following information about the chief 
compliance officer who has been appointed by the board of directors of 
the swap data repository or a person or group performing a function 
similar to such board of directors:
    a. Name
    b. Title
    c. Dates of commencement and termination of present term of office 
or position
    d. Length of time the chief compliance officer has held the same 
office or position
    e. Brief account of the business experience of the chief compliance 
officer over the last five (5) years
    f. Any other business affiliations in the derivatives/securities 
industry or swap data repository industry
    g. A description of:
    (1) any order of the Commission with respect to such person pursuant 
to section 5e of the Act;
    (2) any conviction or injunction within the past 10 years;
    (3) any disciplinary action with respect to such person within the 
last five (5) years;
    (4) any disqualification under sections 8b and 8d of the Act;
    (5) any disciplinary action under section 8c of the Act; and
    (6) any violation pursuant to section 9 of the Act.
    17. Attach as Exhibit D, a copy of documents relating to the 
governance arrangements of the Applicant, including, but not limited to:
    a. The nomination and selection process of the members on the 
Applicant's board of directors, a person or group performing a function 
similar to a board of directors (collectively, ``board''), or any 
committee that has the authority to act on behalf of the board, the 
responsibilities of each of the board and such committee, and the 
composition of each board and such committee;
    b. a description of the manner in which the composition of the board 
allows the Applicant to comply with applicable core principles, 
regulations, as well as the rules of the Applicant; and
    c. a description of the procedures to remove a member of 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.
    18. Attach as Exhibit E, a narrative or graphic description of the 
organizational structure of the Applicant. Note: If the swap data 
repository activities are conducted primarily by a division, 
subdivision, or other segregable entity within the Applicant's 
corporation or organization, describe the relationship of such entity 
within the overall organizational structure and attach as Exhibit E only 
such description as applies to the segregable entity. Additionally, 
provide any relevant jurisdictional information, including

[[Page 198]]

any and all jurisdictions in which the Applicant or any affiliated 
entity is doing business and registration status, including pending 
application (e.g., country, regulator, registration category, date of 
registration). In addition, include a description of the lines of 
responsibility and accountability for each operational unit of the 
Applicant to (i) any committee thereof and/or (ii) the board.
    19. Attach as Exhibit F, a copy of the conflicts of interest 
policies and procedures implemented by the Applicant to minimize 
conflicts of interest in the decision-making process of the swap data 
repository and to establish a process for the resolution of any such 
conflicts of interest.
    20. Attach as Exhibit G, a list of all affiliates of the swap data 
repository and indicate the general nature of the affiliation. Provide a 
copy of any agreements entered into or to be entered by the swap data 
repository, including partnerships or joint ventures, or its 
participants, that will enable the Applicant to comply with the 
registration requirements and core principles specified in section 21 of 
the Act. With regard to an affiliate that is a parent company of the 
Applicant, if such parent controls the Applicant, an Applicant must 
provide (i) the board composition of the parent, including public 
directors, and (ii) all ownership information requested in Exhibit A for 
the parent. ``Control'' for this purpose is defined in Commission 
Regulation Sec.  49.2(a).
    21. Attach as Exhibit H, a copy of the constitution; articles of 
incorporation or association with all amendments thereto; existing by-
laws, rules, or instruments corresponding thereto, of the Applicant. The 
Applicant shall also provide a certificate of good standing dated within 
one week of the date of the application.
    22. Where the Applicant is a foreign entity seeking registration or 
filing an amendment to an existing registration, attach as Exhibit I, 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.
    23. Where the Applicant is a foreign entity seeking registration, 
attach as Exhibit I-1, a form that designates and authorizes an agent in 
the United States, other than a Commission official, to 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.
    24. Attach as Exhibit J, a current copy of the Applicant's rules, as 
defined in Commission Regulation Sec.  40.1, consisting of all the rules 
necessary to carry out the duties as a swap data repository.
    25. Attach as Exhibit K, a description of the Applicant's internal 
disciplinary and enforcement protocols, tools, and procedures. Include 
the procedures for dispute resolution.
    26. Attach as Exhibit L, a brief description of any material pending 
legal proceeding(s), other than ordinary and routine litigation 
incidental to the business, to which the Applicant or any of its 
affiliates is a party or to which any of its or their property is the 
subject. Include the name of the court or agency in which the 
proceeding(s) are pending, the date(s) instituted, and the principal 
parties thereto, a description of the factual basis alleged to underlie 
the proceeding(s) and the relief sought. Include similar information as 
to any such proceeding(s) known to be contemplated by the governmental 
agencies.

                   EXHIBITS II--FINANCIAL INFORMATION

    27. Attach as Exhibit M, a balance sheet, statement of income and 
expenses, statement of sources and application of revenues, and all 
notes or schedules thereto, as of the most recent fiscal year of the 
Applicant. If a balance sheet and statements certified by an independent 
public accountant are available, such balance sheet and statement shall 
be submitted as Exhibit M.
    28. Attach as Exhibit N, a balance sheet and an income and expense 
statement for each affiliate of the swap data repository that also 
engages in swap data repository activities as of the end of the most 
recent fiscal year of each such affiliate.
    29. Attach as Exhibit O, the following:
    a. A complete list of all dues, fees, and other charges imposed, or 
to be imposed, by or on behalf of Applicant for its swap data repository 
services and identify the service or services provided for each such 
due, fee, or other charge.
    b. Furnish a description of the basis and methods used in 
determining the level and structure of the dues, fees, and other charges 
listed in paragraph a of this item.
    c. If the Applicant differentiates, or proposes to differentiate, 
among its customers, or classes of customers in the amount of any dues, 
fees, or other charges imposed for the same or similar services, so 
state and indicate the amount of each differential. In addition, 
identify and describe any differences in the cost of providing such 
services, and any other factors, that account for such differentiations.

                  EXHIBITS III--OPERATIONAL CAPABILITY

    30. Attach as Exhibit P, copies of all material contracts with any 
swap execution facility, designated contract market, clearing agency, 
central counterparty, or third party service provider. To the extent 
that form contracts are used by the Applicant, submit

[[Page 199]]

a sample of each type of form contract used. In addition, include a list 
of swap execution facilities, designated contract markets, clearing 
agencies, central counterparties, and third party service providers with 
whom the Applicant has entered into material contracts. Where swap data 
repository functions are performed by a third-party, attach any 
agreements between or among the Applicant and such third party, and 
identify the services that will be provided.
    31. Attach as Exhibit Q, any technical manuals, other guides or 
instructions for users of, or participants in, the market.
    32. Attach as Exhibit R, a description of system test procedures, 
test conducted or test results that will enable the Applicant to comply, 
or demonstrate the Applicant's ability to comply, with the core 
principles for swap data repositories.
    33. Attach as Exhibit S, a description in narrative form, or by the 
inclusion of functional specifications, of each service or function 
performed as a swap data repository. Include in Exhibit S a description 
of all procedures utilized for the collection, processing, distribution, 
publication, and retention (e.g., magnetic tape) of information with 
respect to transactions or positions in, or the terms and conditions of, 
swaps entered into by market participants.
    34. Attach as Exhibit T, a list of all computer hardware utilized by 
the Applicant to perform swap data repository functions, indicating 
where such equipment (terminals and other access devices) is physically 
located.
    35. Attach as Exhibit U, a description of the personnel 
qualifications for each category of professional employees employed by 
the swap data repository or the division, subdivision, or other 
segregable entity within the swap data repository as described in Item 
16.
    36. Attach as Exhibit V, a description of the measures or procedures 
implemented by Applicant to provide for the security of any system 
employed to perform the functions of a swap data repository. Include a 
general description of any physical and operational safeguards designed 
to prevent unauthorized access (whether by input or retrieval) to the 
system. Describe any circumstances within the past year in which the 
described security measures or safeguards failed to prevent any such 
unauthorized access to the system and any measures taken to prevent a 
reoccurrence. Describe any measures used to verify the accuracy of 
information received or disseminated by the system.
    37. Attach as Exhibit W, copies of emergency policies and procedures 
and Applicant's business continuity-disaster recovery plan. Include a 
general description of any 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.
    38. Where swap data repository functions are performed by automated 
facilities or systems, attach as Exhibit X a description of all backup 
systems or subsystems that are designed to prevent interruptions in the 
performance of any swap data repository function as a result of 
technical malfunctions or otherwise in the system itself, in any 
permitted input or output system connection, or as a result of any 
independent source. Include a narrative description of each type of 
interruption that has lasted for more than two minutes and has occurred 
within the six (6) months preceding the date of the filing, including 
the date of each interruption, the cause, and duration. Also state the 
total number of interruptions that have lasted two minutes or less.
    39. Attach as Exhibit Y, the following:
    a. For each of the swap data repository functions:
    (1) Quantify in appropriate units of measure the limits on the swap 
data repository's capacity to receive (or collect), process, store, or 
display (or disseminate for display or other use) the data elements 
included within each function (e.g., number of inquiries from remote 
terminals);
    (2) identify the factors (mechanical, electronic, or other) that 
account for the current limitations reported in answer to (1) on the 
swap data repository's capacity to receive (or collect), process, store, 
or display (or disseminate for display or other use) the data elements 
included within each function.
    b. If the Applicant is able to employ, or presently employs, the 
central processing units of its system(s) for any use other than for 
performing the functions of a swap data repository, state the priorities 
of assignment of capacity between such functions and such other uses, 
and state the methods used or able to be used to divert capacity between 
such functions and such other uses.

                     EXHIBITS IV--ACCESS TO SERVICES

    40. Attach as Exhibit Z, the following:
    a. As to each swap data repository service that the Applicant 
provides, state the number of persons who presently utilize, or who have 
notified the Applicant of their intention to utilize, the services of 
the swap data repository.
    b. For each instance during the past year in which any person has 
been prohibited or limited in respect of access to services offered by 
the Applicant as a swap data repository, indicate the name of each such 
person and the reason for the prohibition or limitation.
    c. Define the data elements for purposes of the swap data 
repository's real-time public reporting obligation. Appendix A to Part 
43

[[Page 200]]

of the Commission's Regulations (Data Elements and Form for Real-Time 
Reporting for Particular Markets and Contracts) sets forth the specific 
data elements for real-time public reporting.
    41. Attach as Exhibit AA, copies of any agreements governing the 
terms by which information may be shared by the swap data repository, 
including with market participants. To the extent that form contracts 
are used by the Applicant, submit a sample of each type of form contract 
used.
    42. Attach as Exhibit BB, a description of any specifications, 
qualifications, or other criteria that limit, are interpreted to limit, 
or have the effect of limiting access to or use of any swap data 
repository services furnished by the Applicant and state the reasons for 
imposing such specifications, qualifications, or other criteria, 
including whether such specifications, qualifications, or other criteria 
are imposed.
    43. Attach as Exhibit CC, any specifications, qualifications, or 
other criteria required of participants who utilize the services of the 
Applicant for collection, processing, preparing for distribution, or 
public dissemination by the Applicant.
    44. Attach as Exhibit DD, any specifications, qualifications, or 
other criteria required of any person, including, but not limited to, 
regulators, market participants, market infrastructures, venues from 
which data could be submitted to the Applicant, and third party service 
providers who request access to data maintained by the Applicant.
    45. Attach as Exhibit EE, policies and procedures implemented by the 
Applicant to review any prohibition or limitation of any person with 
respect to access to services offered or data maintained by the 
Applicant and to grant such person access to such services or data if 
such person has been discriminated against unfairly.

                EXHIBITS V--OTHER POLICIES AND PROCEDURES

    46. Attach as Exhibit FF, a narrative and supporting documents that 
may be provided under other Exhibits herein, that describes the manner 
in which the Applicant is able to comply with each core principle and 
other requirements pursuant to Commission Regulation Sec.  49.19.
    47. Attach as Exhibit GG, policies and procedures implemented by the 
Applicant to protect the privacy of any and all SDR data, section 8 
material, and SDR information that the swap data repository receives 
from reporting entities.
    48. Attach as Exhibit HH, a description of safeguards, policies, and 
procedures implemented by the Applicant to prevent the misappropriation 
or misuse of (a) any confidential information received by the Applicant, 
including, but not limited to, SDR data, section 8 material, and SDR 
information, about a market participant or any of its customers; and/or 
(b) intellectual property by Applicant or any person associated with the 
Applicant for their personal benefit or the benefit of others.
    49. Attach as Exhibit II, policies and procedures implemented by the 
Applicant regarding its use of the SDR data, section 8 material, and SDR 
information that it receives from a market participant, any registered 
entity, or any person for non-commercial and/or commercial purposes.
    50. Attach as Exhibit JJ, procedures and a description of facilities 
of the Applicant for effectively resolving disputes over the accuracy of 
the SDR data and positions that are maintained by the swap data 
repository.
    51. Attach as Exhibit KK, policies and procedures relating to the 
Applicant's calculation of positions.
    52. Attach as Exhibit LL, policies and procedures that are 
reasonably designed to prevent any provision in a valid swap from being 
invalidated or modified through the procedures or operations of the 
Applicant.
    53. Attach as Exhibit MM, Applicant's policies and procedures that 
ensure that the SDR data that are maintained by the Applicant continues 
to be maintained after the Applicant withdraws from registration as a 
swap data repository, which shall include procedures for transferring 
the SDR data to the Commission or its designee (including another swap 
data repository).

[85 FR 75663, Nov. 25, 2020]

[[Page 201]]



Sec. Appendix B to Part 49--Confidentiality Arrangement for Appropriate 
Domestic Regulators and Appropriate Foreign Regulators to Obtain Access 
     to Swap Data Maintained by Swap Data Respositories Pursuant to 
                   Sec. Sec.  49.17(d)(6) and 49.18(a)
[GRAPHIC] [TIFF OMITTED] TR25NO20.042

    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 or provisionally registered with the CFTC.

                     Article One: General Provisions

    1. ABC is permitted to request and receive swap data directly from 
an 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 an SDR, this Arrangement will satisfy 
the requirement for a written agreement pursuant to Section 21(d) of the 
Act and CFTC Regulation 49.17(d)(6). This Arrangement does not apply to 
information that is [reported to an 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 an 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,

[[Page 202]]

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 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.

                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 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] [name of signatory]

Chairman, [title]

U.S. Commodity Futures Trading Commission [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 legal entity identifiers of all 
jurisdictional entities and could also include unique product 
identifiers of all jurisdictional products or, if no CFTC-approved 
unique product identifier 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.]

[85 FR 75671, Nov. 25, 2020]



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



             Subpart A_Definitions and Clearing Requirement

Sec.
50.1 Definitions.

[[Page 203]]

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_Clearing Requirement Compliance Schedule and Compliance Dates

50.25 Clearing requirement compliance schedule.
50.26 Swap clearing requirement compliance dates.
50.27-50.49 [Reserved]

    Subpart C_Exceptions and Exemptions from the Clearing Requirement

50.50 Non-financial end-user exception to the clearing requirement.
50.51 Cooperatives exempt from the clearing requirement.
50.52 Affiliated entities exempt from the clearing requirement.
50.53 Banks, savings associations, farm credit system institutions, and 
          credit unions exempt from the clearing requirement.

Subpart D--Swaps Not Subject to the Clearing Requirement

50.75 Swaps entered into by central banks or sovereign entities.
50.76 Swaps entered into by international financial institutions.
50.77 Interest rate swaps entered into by community development 
          financial institutions.
50.78 Swaps entered into by bank holding companies.
50.79 Swaps entered into by savings and loan holding companies.

    Authority: 7 U.S.C. 2(h), 6(c), 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:
    (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.

[[Page 204]]

    (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.
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.
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 205]]


                                                                         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-OIS.............  CORRA-OIS.............  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.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (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.

[[Page 206]]

 
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 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_Clearing Requirement Compliance Schedule and Compliance Dates



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

[[Page 207]]

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]



Sec.  50.26  Swap clearing requirement compliance dates.

    (a) Compliance dates for interest rate swap classes. The compliance 
dates for swaps that are required to be cleared under Sec.  50.4(a) are 
specified in the following table.

                                            Table 1 to Paragraph (a)
----------------------------------------------------------------------------------------------------------------
                                                       Currency and          Stated
        Swap asset class             Swap class       floating rate     termination date   Clearing requirement
                                      subtype             index              range            compliance date
----------------------------------------------------------------------------------------------------------------
Interest Rate Swap.............  Fixed-to-Floating  Euro (EUR)         28 days to 50      Category 1 entities
                                                     EURIBOR.           years.             March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Interest Rate Swap.............  Fixed-to-Floating  Sterling (GBP)     28 days to 50      Category 1 entities
                                                     LIBOR.             years.             March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Interest Rate Swap.............  Fixed-to-Floating  U.S. Dollar (USD)  28 days to 50      Category 1 entities
                                                     LIBOR.             years.             March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Interest Rate Swap.............  Fixed-to-Floating  Yen (JPY) LIBOR..  28 days to 50      Category 1 entities
                                                                        years.             March 11, 2013.

[[Page 208]]

 
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Interest Rate Swap.............  Fixed-to-Floating  Australian Dollar  28 days to 30      All entities December
                                                     (AUD) BBSW.        years.             13, 2016.
Interest Rate Swap.............  Fixed-to-Floating  Canadian Dollar    28 days to 30      All entities July 10,
                                                     (CAD) CDOR.        years.             2017.
Interest Rate Swap.............  Fixed-to-Floating  Hong Kong Dollar   28 days to 10      All entities August
                                                     (HKD) HIBOR.       years.             30, 2017.
Interest Rate Swap.............  Fixed-to-Floating  Mexican Peso       28 days to 21      All entities December
                                                     (MXN) TIIE-        years.             13, 2016.
                                                     BANXICO.
Interest Rate Swap.............  Fixed-to-Floating  Norwegian Krone    28 days to 10      All entities April 10,
                                                     (NOK) NIBOR.       years.             2017.
Interest Rate Swap.............  Fixed-to-Floating  Polish Zloty       28 days to 10      All entities April 10,
                                                     (PLN) WIBOR.       years.             2017.
Interest Rate Swap.............  Fixed-to-Floating  Singapore Dollar   28 days to 10      All entities October
                                                     (SGD) SOR-VWAP.    years.             15, 2018.
Interest Rate Swap.............  Fixed-to-Floating  Swedish Krona      28 days to 15      All entities April 10,
                                                     (SEK) STIBOR.      years.             2017.
Interest Rate Swap.............  Fixed-to-Floating  Swiss Franc (CHF)  28 days to 30      All entities October
                                                     LIBOR.             years.             15, 2018.
Interest Rate Swap.............  Basis............  Euro (EUR)         28 days to 50      Category 1 entities
                                                     EURIBOR.           years.             March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Interest Rate Swap.............  Basis............  Sterling (GBP)     28 days to 50      Category 1 entities
                                                     LIBOR.             years.             March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Interest Rate Swap.............  Basis............  U.S. Dollar (USD)  28 days to 50      Category 1 entities
                                                     LIBOR.             years.             March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Interest Rate Swap.............  Basis............  Yen (JPY) LIBOR..  28 days to 30      Category 1 entities
                                                                        years.             March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Interest Rate Swap.............  Basis............  Australian Dollar  28 days to 30      All entities December
                                                     (AUD) BBSW.        years.             13, 2016.
Interest Rate Swap.............  Forward Rate       Euro (EUR)         3 days to 3 years  Category 1 entities
                                  Agreement.         EURIBOR.                              March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Interest Rate Swap.............  Forward Rate       Sterling (GBP)     3 days to 3 years  Category 1 entities
                                  Agreement.         LIBOR.                                March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Interest Rate Swap.............  Forward Rate       U.S. Dollar (USD)  3 days to 3 years  Category 1 entities
                                  Agreement.         LIBOR.                                March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Interest Rate Swap.............  Forward Rate       Yen (JPY) LIBOR..  3 days to 3 years  Category 1 entities
                                  Agreement.                                               March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Interest Rate Swap.............  Forward Rate       Polish Zloty       3 days to 2 years  All entities April 10,
                                  Agreement.         (PLN) WIBOR.                          2017.
Interest Rate Swap.............  Forward Rate       Norwegian Krone    3 days to 2 years  All entities April 10,
                                  Agreement.         (NOK) NIBOR.                          2017.
Interest Rate Swap.............  Forward Rate       Swedish Krona      3 days to 3 years  All entities April 10,
                                  Agreement.         (SEK) STIBOR.                         2017.
Interest Rate Swap.............  Overnight Index    Euro (EUR) EONIA.  7 days to 2 years  Category 1 entities
                                  Swap.                                                    March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.

[[Page 209]]

 
                                                                       2 years + 1 day    All entities December
                                                                        to 3 years.        13, 2016.
Interest Rate Swap.............  Overnight Index    Sterling (GBP)     7 days to 2 years  Category 1 entities
                                  Swap.              SONIA.                                March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
                                                                       2 years + 1 day    All entities December
                                                                        to 3 years.        13, 2016.
Interest Rate Swap.............  Overnight Index    U.S. Dollar (USD)  7 days to 2 years  Category 1 entities
                                  Swap.              FedFunds.                             March 11, 2013.
                                                                                          All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
                                                                       2 years + 1 day    All entities December
                                                                        to 3 years.        13, 2016.
Interest Rate Swap.............  Overnight Index    Australian Dollar  7 days to 2 years  All entities December
                                  Swap.              (AUD) AONIA-OIS.                      13, 2016.
Interest Rate Swap.............  Overnight Index    Canadian Dollar    7 days to 2 years  All entities July 10,
                                  Swap.              (CAD) CORRA-OIS.                      2017.
----------------------------------------------------------------------------------------------------------------

    (b) Compliance dates for credit default swap classes. The compliance 
dates for swaps that are required to be cleared under Sec.  50.4(b) are 
specified in the following table.

                                            Table 2 to Paragraph (b)
----------------------------------------------------------------------------------------------------------------
                                     Swap class                                            Clearing requirement
        Swap asset class              subtype            Indices             Tenor            compliance date
----------------------------------------------------------------------------------------------------------------
Credit Default Swap............  North American     CDX.NA.IG........  3Y, 5Y, 7Y, 10Y..  Category 1 entities
                                  untranched CDS                                           March 11, 2013.
                                  indices.                                                All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Credit Default Swap............  North American     CDX.NA.HY........  5Y...............  Category 1 entities
                                  untranched CDS                                           March 11, 2013.
                                  indices.                                                All non-Category 2
                                                                                           entities June 10,
                                                                                           2013.
                                                                                          Category 2 entities
                                                                                           September 9, 2013.
Credit Default Swap............  European           iTraxx Europe....  5Y, 10Y..........  Category 1 entities
                                  untranched CSD                                           April 26, 2013.
                                  indices.                                                Category 2 entities
                                                                                           July 25, 2013.
                                                                                          All non-Category 2
                                                                                           entities October 23,
                                                                                           2013.
Credit Default Swap............  European           iTraxx Europe      5Y...............  Category 1 entities
                                  untranched CSD     Crossover.                            April 26, 2013.
                                  indices.                                                Category 2 entities
                                                                                           July 25, 2013.
                                                                                          All non-Category 2
                                                                                           entities October 23,
                                                                                           2013.
Credit Default Swap............  European           iTraxx Europe      5Y...............  Category 1 entities
                                  untranched CSD     HiVol.                                April 26, 2013.
                                  indices.                                                Category 2 entities
                                                                                           July 25, 2013.
                                                                                          All non-Category 2
                                                                                           entities October 23,
                                                                                           2013.
----------------------------------------------------------------------------------------------------------------


[85 FR 76446, Nov. 30, 2020]



Sec. Sec.  50.27-50.49  [Reserved]



    Subpart C_Exceptions and Exemptions from the Clearing Requirement

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

[[Page 210]]



Sec.  50.50  Non-financial end-user exception 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 Sec.  50.53;
    (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 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


[[Page 211]]

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.

[77 FR 74337, Dec. 13, 2012, as amended at 85 FR 76448, Nov. 30, 2020]



Sec.  50.51  Cooperatives exempt from the clearing requirement.

    Exemption for cooperatives. Exempt cooperatives may elect not to 
clear certain swaps identified in paragraph (b) 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.  50.53; 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.  50.53.
    (b) An exempt cooperative may elect not to clear a swap that is 
subject to

[[Page 212]]

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; 85 
FR 76448, Nov. 30, 2020]



Sec.  50.52  Affiliated entities exempt from the clearing requirement.

    (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;
    (ii) The term ``eligible affiliate counterparty'' means an entity 
that meets the requirements of this paragraph; and
    (iii) The term ``United States'' means the United States of America, 
its territories and possessions, any State of the United States, and the 
District of Columbia.
    (b) Additional conditions. Eligible affiliate counterparties to a 
swap may elect the exemption described in paragraph (a) of this section 
if:
    (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

[[Page 213]]

the requirements of Sec.  23.600 of this chapter; and
    (4)(i) Subject to paragraphs (b)(4)(ii) and (iii) of this section, 
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) If one of the eligible affiliate counterparties is located in 
Australia, Canada, the European Union, Hong Kong, Japan, Mexico, 
Singapore, Switzerland, or the United Kingdom and 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, the requirements of paragraph (b)(4)(i) of this section 
shall be satisfied.
    (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 Australia, Canada, the European Union, Hong 
Kong, Japan, Mexico, Singapore, Switzerland, the United Kingdom, or the 
United States, 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 the requirements of 
paragraph (b)(4)(i) of this section shall be satisfied when 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

[[Page 214]]

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 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, as amended at 85 FR 44181, July 22, 2020]



Sec.  50.53  Banks, savings associations, farm credit system institutions,
and credit unions exempt from the clearing requirement.

    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'' and is eligible to 
elect the exception to the clearing requirement under Sec.  50.50, if 
such person:
    (a) 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
    (b) Has total assets of $10,000,000,000 or less on the last day of 
such person's most recent fiscal year;
    (c) Reports, or causes to be reported, the swap to a swap data 
repository pursuant to Sec. Sec.  45.3 and 45.4 of this chapter, and 
reports, or causes to be reported, all information as provided in 
paragraph (b) of Sec.  50.50 to a swap data repository; and
    (d) Is using the swap to hedge or mitigate commercial risk as 
provided in paragraph (c) of Sec.  50.50.

[85 FR 76448, Nov. 30, 2020]



         Subpart D_Swaps Not Subject to the Clearing Requirement

    Source: 85 FR 76448, Nov. 30, 2020, unless otherwise noted.



Sec.  50.75  Swaps entered into by central banks or sovereign entities.

    Swaps entered into by a central bank or sovereign entity shall be 
exempt from the clearing requirement of section 2(h)(1)(A) of the Act.
    (a) For the purposes of this section, the term central bank means a 
reserve bank or monetary authority of a central government (including 
the Board of Governors of the Federal Reserve

[[Page 215]]

System or any of the Federal Reserve Banks) or the Bank for 
International Settlements.
    (b) For the purposes of this section, the term sovereign entity 
means a central government (including the U.S. Government), or an 
agency, department, or ministry of a central government.



Sec.  50.76  Swaps entered into by international financial institutions.

    (a) Swaps entered into by an international financial institution 
shall be exempt from the clearing requirement of section 2(h)(1)(A) of 
the Act.
    (b) For purposes of this section, the term international financial 
institution means:
    (1) African Development Bank;
    (2) African Development Fund;
    (3) Asian Development Bank;
    (4) Banco Centroamericano de Integraci[oacute]n Econ[oacute]mica;
    (5) Bank for Economic Cooperation and Development in the Middle East 
and North Africa;
    (6) Caribbean Development Bank;
    (7) Corporaci[oacute]n Andina de Fomento;
    (8) Council of Europe Development Bank;
    (9) European Bank for Reconstruction and Development;
    (10) European Investment Bank;
    (11) European Investment Fund;
    (12) European Stability Mechanism;
    (13) Inter-American Development Bank;
    (14) Inter-American Investment Corporation;
    (15) International Bank for Reconstruction and Development;
    (16) International Development Association;
    (17) International Finance Corporation;
    (18) International Monetary Fund;
    (19) Islamic Development Bank;
    (20) Multilateral Investment Guarantee Agency;
    (21) Nordic Investment Bank;
    (22) North American Development Bank; and
    (23) Any other entity that provides financing for national or 
regional development in which the U.S. Government is a shareholder or 
contributing member.



Sec.  50.77  Interest rate swaps entered into by community development 
financial institutions.

    (a) For the purposes of this section, the term community development 
financial institution means an entity that satisfies the definition in 
section 103(5) of the Community Development Banking and Financial 
Institutions Act of 1994, and is certified by the U.S. Department of the 
Treasury's Community Development Financial Institution Fund as meeting 
the requirements set forth in 12 CFR 1805.201(b).
    (b) A swap entered into by a community development financial 
institution shall not be subject to the clearing requirement of section 
2(h)(1)(A) of the Act and this part if:
    (1) The swap is a U.S. dollar denominated interest rate swap in the 
fixed-to-floating class or the forward rate agreement class of swaps 
that would otherwise be subject to the clearing requirement under Sec.  
50.4(a);
    (2) The total aggregate notional value of all swaps entered into by 
the community development financial institution during the 365 calendar 
days prior to the day of execution of the swap is less than or equal to 
$200,000,000;
    (3) The swap is one of ten or fewer swap transactions that the 
community development financial institution enters into within a period 
of 365 calendar days;
    (4) One of the counterparties to the swap reports the swap to a swap 
data repository pursuant to Sec. Sec.  45.3 and 45.4 of this chapter, 
and reports all information as provided in paragraph (b) of Sec.  50.50 
to a swap data repository; and
    (5) The swap is used to hedge or mitigate commercial risk as 
provided in paragraph (c) of Sec.  50.50.



Sec.  50.78  Swaps entered into by bank holding companies.

    (a) For purposes of this section, the term bank holding company 
means an entity that is organized as a bank holding company, as defined 
in section 2 of the Bank Holding Company Act of 1956.
    (b) A swap entered into by a bank holding company shall not be 
subject to the clearing requirement of section 2(h)(1)(A) of the Act and 
this part if:

[[Page 216]]

    (1) The bank holding company has aggregated assets, including the 
assets of all of its subsidiaries, that do not exceed $10,000,000,000 
according to the value of assets of each subsidiary on the last day of 
each subsidiary's most recent fiscal year;
    (2) One of the counterparties to the swap reports the swap to a swap 
data repository pursuant to Sec. Sec.  45.3 and 45.4 of this chapter, 
and reports all information as provided in paragraph (b) of Sec.  50.50 
to a swap data repository; and
    (3) The swap is used to hedge or mitigate commercial risk as 
provided in paragraph (c) of Sec.  50.50.



Sec.  50.79  Swaps entered into by savings and loan holding companies.

    (a) For purposes of this section, the term savings and loan holding 
company means an entity that is organized as a savings and loan holding 
company, as defined in section 10 of the Home Owners' Loan Act of 1933.
    (b) A swap entered into by a savings and loan holding company shall 
not be subject to the clearing requirement of section 2(h)(1)(A) of the 
Act and this part if:
    (1) The savings and loan holding company has aggregated assets, 
including the assets of all of its subsidiaries, that do not exceed 
$10,000,000,000 according to the value of assets of each subsidiary on 
the last day of each subsidiary's most recent fiscal year;
    (2) One of the counterparties to the swap reports the swap to a swap 
data repository pursuant to Sec. Sec.  45.3 and 45.4 of this chapter, 
and reports all information as provided in paragraph (b) of Sec.  50.50 
to a swap data repository; and
    (3) The swap is used to hedge or mitigate commercial risk as 
provided in paragraph (c) of Sec.  50.50.



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

    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,

[[Page 217]]

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]



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));

[[Page 218]]

    (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 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.

[[Page 219]]

    (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 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:

[[Page 220]]

    (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 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

[[Page 221]]

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 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

[[Page 222]]

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:
    (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;

[[Page 223]]

    (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 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

[[Page 224]]

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, 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

[[Page 225]]

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 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

[[Page 226]]

    (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 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

[[Page 227]]

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 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

[[Page 228]]

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:
    (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

[[Page 229]]

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:
    (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

[[Page 230]]

    (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
    (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

[[Page 231]]

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 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:

[[Page 232]]

    (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.
    (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

[[Page 233]]

controlling the U.S. branch, agency, or subsidiary.
    (f) Permitted trading activities of qualifying foreign excluded 
funds. The prohibition contained in Sec.  75.3(a) does not apply to the 
purchase or sale of a financial instrument by a qualifying foreign 
excluded fund. For purposes of this paragraph (f), a qualifying foreign 
excluded fund means a banking entity that:
    (1) Is organized or established outside the United States, and the 
ownership interests of which are offered and sold solely outside the 
United States;
    (2)(i) Would be a covered fund if the entity were organized or 
established in the United States, or
    (ii) Is, or holds itself out as being, an entity or arrangement that 
raises money from investors primarily for the purpose of investing in 
financial instruments for resale or other disposition or otherwise 
trading in financial instruments;
    (3) Would not otherwise be a banking entity except by virtue of the 
acquisition or retention of an ownership interest in, sponsorship of, or 
relationship with the entity, by another banking entity that meets the 
following:
    (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; and
    (ii) The banking entity's acquisition or retention of an ownership 
interest in or sponsorship of the fund meets the requirements for 
permitted covered fund activities and investments solely outside the 
United States, as provided in Sec.  75.13(b);
    (4) Is established and operated as part of a bona fide asset 
management business; and
    (5) Is not operated in a manner that enables the banking entity that 
sponsors or controls the qualifying foreign excluded fund, or any of its 
affiliates, to evade the requirements of section 13 of the BHC Act or 
this part.

[79 FR 6048, Jan. 31, 2014, as amended at 84 FR 62208, Nov. 14, 2019; 85 
FR 46516, July 31, 2020]



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 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,

[[Page 234]]

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 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;

[[Page 235]]

    (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; and
    (B) Is authorized to offer and sell ownership interests, and such 
interests are offered and sold, through one or more public offerings.
    (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 more than 75 percent of the 
ownership interests in the issuer are sold 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 senior executive officers as defined in Sec.  
225.71(c) of the Board's Regulation Y (12 CFR 225.71(c)) of such 
entities.
    (iii) For purposes of paragraph (c)(1)(i)(B) 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 is subject to substantive disclosure and retail 
investor protection laws or regulations;
    (B) With respect to an issuer for which the banking entity serves as 
the investment manager, investment adviser, commodity trading advisor, 
commodity pool operator, or sponsor, the distribution complies with all 
applicable requirements in the jurisdiction in which such distribution 
is being made;
    (C) The distribution does not restrict availability to investors 
having a minimum level of net worth or net investment assets; and
    (D) The issuer has filed or submitted, with the appropriate 
regulatory authority in such jurisdiction, offering disclosure documents 
that are publicly available.

[[Page 236]]

    (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 composed 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 this paragraph 
(c)(8) and the assets or holdings of which are composed solely of:
    (A) Loans as defined in Sec.  75.2(t);
    (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 that 
is a security (other than special units of beneficial interest and 
collateral certificates meeting the requirements of paragraph (c)(8)(v) 
of this section) 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;
    (D) Special units of beneficial interest and collateral certificates 
that meet the requirements of paragraph (c)(8)(v) of this section; and
    (E) Debt securities, other than asset-backed securities and 
convertible securities, provided that:
    (1) The aggregate value of such debt securities does not exceed five 
percent of the aggregate value of loans held

[[Page 237]]

under paragraph (c)(8)(i)(A) of this section, cash and cash equivalents 
held under paragraph (c)(8)(iii)(A) of this section, and debt securities 
held under this paragraph (c)(8)(i)(E); and
    (2) The aggregate value of the loans, cash and cash equivalents, and 
debt securities for purposes of this paragraph is calculated at par 
value at the most recent time any such debt security is acquired, except 
that the issuing entity may instead determine the value of any such 
loan, cash equivalent, or debt security based on its fair market value 
if:
    (i) The issuing entity is required to use the fair market value of 
such assets for purposes of calculating compliance with concentration 
limitations or other similar calculations under its transaction 
agreements, and
    (ii) The issuing entity's valuation methodology values similarly 
situated assets consistently.
    (ii) Impermissible assets. For purposes of this paragraph (c)(8), 
except as permitted under paragraph (c)(8)(i)(E) 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 paragraphs 
(c)(8)(iii), (iv), or (v) 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, other than debt 
securities permitted under paragraph (c)(8)(i)(E) of this section, if 
those securities are:
    (A) Cash equivalents--which, for the purposes of this paragraph, 
means high quality, highly liquid investments whose maturity corresponds 
to the securitization's expected or potential need for funds and whose 
currency corresponds to either the underlying loans or the asset-backed 
securities--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 derivatives directly relate to the 
loans, the asset-backed securities, the contractual rights or other 
assets described in paragraph (c)(8)(i)(B) of this section, or the debt 
securities described in paragraph (c)(8)(i)(E) of this section; and
    (B) The derivatives reduce the interest rate and/or foreign exchange 
risks related to the loans, the asset-backed securities, the contractual 
rights or other assets described in paragraph (c)(8)(i)(B) of this 
section, or the debt securities described in paragraph (c)(8)(i)(E) 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 
this paragraph (c)(8);
    (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 this 
paragraph (c)(8) 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:

[[Page 238]]

    (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 composed 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 that has 
voluntarily surrendered its license to operate as a small business 
investment company in accordance with 13 CFR 107.1900 and does not make 
any new investments (other than investments in cash equivalents, which, 
for the purposes of this paragraph, means high quality, highly liquid 
investments whose maturity corresponds to the issuer's expected or 
potential need for funds and whose currency corresponds to the issuer's 
assets) after such voluntary surrender;
    (ii) The business of which is to make investments that are:

[[Page 239]]

    (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) and including investments that qualify for 
consideration under the regulations implementing the Community 
Reinvestment Act (12 U.S.C. 2901 et seq.); 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;
    (iii) That has elected to be regulated or is regulated as a rural 
business investment company, as described in 15 U.S.C. 80b-3(b)(8)(A) or 
(B), or that has terminated its participation as a rural business 
investment company in accordance with 7 CFR 4290.1900 and does not make 
any new investments (other than investments in cash equivalents, which, 
for the purposes of this paragraph, means high quality, highly liquid 
investments whose maturity corresponds to the issuer's expected or 
potential need for funds and whose currency corresponds to the issuer's 
assets) after such termination; or
    (iv) That is a qualified opportunity fund, as defined in 26 U.S.C. 
1400Z-2(d).
    (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 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.
    (15) Credit funds. Subject to paragraphs (c)(15)(iii), (iv), and (v) 
of this section, an issuer that satisfies the asset and activity 
requirements of paragraphs (c)(15)(i) and (ii) of this section.
    (i) Asset requirements. The issuer's assets must be composed solely 
of:
    (A) Loans as defined in Sec.  75.2(t);
    (B) Debt instruments, subject to paragraph (c)(15)(iv) of this 
section;
    (C) Rights and other assets that are related or incidental to 
acquiring, holding, servicing, or selling such loans or debt 
instruments, provided that:
    (1) Each right or asset held under this paragraph (c)(15)(i)(C) that 
is a security is either:
    (i) A cash equivalent (which, for the purposes of this paragraph, 
means high quality, highly liquid investments whose maturity corresponds 
to the issuer's expected or potential need for funds and whose currency 
corresponds to either the underlying loans or the debt instruments);
    (ii) A security received in lieu of debts previously contracted with 
respect to such loans or debt instruments; or
    (iii) An equity security (or right to acquire an equity security) 
received on

[[Page 240]]

customary terms in connection with such loans or debt instruments; and
    (2) Rights or other assets held under this paragraph (c)(15)(i)(C) 
of this section may not include commodity forward contracts or any 
derivative; and
    (D) Interest rate or foreign exchange derivatives, if:
    (1) The written terms of the derivative directly relate to the 
loans, debt instruments, or other rights or assets described in 
paragraph (c)(15)(i)(C) of this section; and
    (2) The derivative reduces the interest rate and/or foreign exchange 
risks related to the loans, debt instruments, or other rights or assets 
described in paragraph (c)(15)(i)(C) of this section.
    (ii) Activity requirements. To be eligible for the exclusion of 
paragraph (c)(15) of this section, an issuer must:
    (A) Not engage in any activity that would constitute proprietary 
trading under Sec.  75.3(b)(l)(i), as if the issuer were a banking 
entity; and
    (B) Not issue asset-backed securities.
    (iii) Requirements for a sponsor, investment adviser, or commodity 
trading advisor. A banking entity that acts as a sponsor, investment 
adviser, or commodity trading advisor to an issuer that meets the 
conditions in paragraphs (c)(15)(i) and (ii) of this section may not 
rely on this exclusion unless the banking entity:
    (A) Provides in writing to any prospective and actual investor in 
the issuer the disclosures required under Sec.  75.11(a)(8) of this 
subpart, as if the issuer were a covered fund;
    (B) Ensures that the activities of the issuer are consistent with 
safety and soundness standards that are substantially similar to those 
that would apply if the banking entity engaged in the activities 
directly; and
    (C) Complies with the limitations imposed in Sec.  75.14, as if the 
issuer were a covered fund, except the banking entity may acquire and 
retain any ownership interest in the issuer.
    (iv) Additional Banking Entity Requirements. A banking entity may 
not rely on this exclusion with respect to an issuer that meets the 
conditions in paragraphs (c)(15)(i) and (ii) of this section unless:
    (A) The banking entity does not, directly or indirectly, guarantee, 
assume, or otherwise insure the obligations or performance of the issuer 
or of any entity to which such issuer extends credit or in which such 
issuer invests; and
    (B) Any assets the issuer holds pursuant to paragraphs (c)(15)(i)(B) 
or (i)(C)(l)(iii) of this section would be permissible for the banking 
entity to acquire and hold directly under applicable federal banking 
laws and regulations.
    (v) Investment and Relationship Limits. A banking entity's 
investment in, and relationship with, the issuer must:
    (A) Comply with the limitations imposed in Sec.  75.15, as if the 
issuer were a covered fund; and
    (B) Be conducted in compliance with, and subject to, applicable 
banking laws and regulations, including applicable safety and soundness 
standards.
    (16) Qualifying venture capital funds. (i) Subject to paragraphs 
(c)(16)(ii) through (iv) of this section, an issuer that:
    (A) Is a venture capital fund as defined in 17 CFR 275.203(l)-1; and
    (B) Does not engage in any activity that would constitute 
proprietary trading under Sec.  75.3(b)(1)(i), as if the issuer were a 
banking entity.
    (ii) A banking entity that acts as a sponsor, investment adviser, or 
commodity trading advisor to an issuer that meets the conditions in 
paragraph (c)(16)(i) of this section may not rely on this exclusion 
unless the banking entity:
    (A) Provides in writing to any prospective and actual investor in 
the issuer the disclosures required under Sec.  75.11(a)(8), as if the 
issuer were a covered fund;
    (B) Ensures that the activities of the issuer are consistent with 
safety and soundness standards that are substantially similar to those 
that would apply if the banking entity engaged in the activities 
directly; and
    (C) Complies with the restrictions in Sec.  75.14 as if the issuer 
were a covered fund (except the banking entity may acquire and retain 
any ownership interest in the issuer).
    (iii) The banking entity must not, directly or indirectly, 
guarantee, assume, or otherwise insure the obligations or performance of 
the issuer.

[[Page 241]]

    (iv) A banking entity's ownership interest in or relationship with 
the issuer must:
    (A) Comply with the limitations imposed in Sec.  75.15, as if the 
issuer were a covered fund; and
    (B) Be conducted in compliance with, and subject to, applicable 
banking laws and regulations, including applicable safety and soundness 
standards.
    (17) Family wealth management vehicles. (i) Subject to paragraph 
(c)(17)(ii) of this section, any entity that 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, and:
    (A) If the entity is a trust, the grantor(s) of the entity are all 
family customers; and
    (B) If the entity is not a trust:
    (1) A majority of the voting interests in the entity are owned 
(directly or indirectly) by family customers;
    (2) A majority of the interests in the entity are owned (directly or 
indirectly) by family customers;
    (3) The entity is owned only by family customers and up to 5 closely 
related persons of the family customers; and
    (C) Notwithstanding paragraph (c)(17)(i)(A) and (B) of this section, 
up to an aggregate 0.5 percent of the entity's outstanding ownership 
interests may be acquired or retained by one or more entities that are 
not family customers or closely related persons if the ownership 
interest is acquired or retained by such parties for the purpose of and 
to the extent necessary for establishing corporate separateness or 
addressing bankruptcy, insolvency, or similar concerns.
    (ii) A banking entity may rely on the exclusion in paragraph 
(c)(17)(i) of this section with respect to an entity provided that the 
banking entity (or an affiliate):
    (A) Provides bona fide trust, fiduciary, investment advisory, or 
commodity trading advisory services to the entity;
    (B) Does not, directly or indirectly, guarantee, assume, or 
otherwise insure the obligations or performance of such entity;
    (C) Complies with the disclosure obligations under Sec.  
75.11(a)(8), as if such entity were a covered fund, provided that the 
content may be modified to prevent the disclosure from being misleading 
and the manner of disclosure may be modified to accommodate the specific 
circumstances of the entity;
    (D) Does not acquire or retain, as principal, an ownership interest 
in the entity, other than as described in paragraph (c)(17)(i)(C) of 
this section;
    (E) Complies with the requirements of Sec. Sec.  75.14(b) and 75.15, 
as if such entity were a covered fund; and
    (F) Except for riskless principal transactions as defined in 
paragraph (d)(11) of this section, complies with the requirements of 12 
CFR 223.15(a), as if such banking entity and its affiliates were a 
member bank and the entity were an affiliate thereof.
    (iii) For purposes of paragraph (c)(17) of this section, the 
following definitions apply:
    (A) Closely related person means a natural person (including the 
estate and estate planning vehicles of such person) who has longstanding 
business or personal relationships with any family customer.
    (B) Family customer means:
    (1) A family client, as defined in Rule 202(a)(11)(G)-1(d)(4) of the 
Investment Advisers Act of 1940 (17 CFR 275.202(a)(11)(G)-1(d)(4)); or
    (2) Any natural person who is a father-in-law, mother-in-law, 
brother-in-law, sister-in-law, son-in-law or daughter-in-law of a family 
client, or a spouse or a spousal equivalent of any of the foregoing.
    (18) Customer facilitation vehicles. (i) Subject to paragraph 
(c)(18)(ii) of this section, an issuer that is formed by or at the 
request of a customer of the banking entity for the purpose of providing 
such customer (which may include one or more affiliates of such 
customer) with exposure to a transaction, investment strategy, or other 
service provided by the banking entity.
    (ii) A banking entity may rely on the exclusion in paragraph 
(c)(18)(i) of this section with respect to an issuer provided that:
    (A) All of the ownership interests of the issuer are owned by the 
customer (which may include one or more of its

[[Page 242]]

affiliates) for whom the issuer was created;
    (B) Notwithstanding paragraph (c)(18)(ii)(A) of this section, up to 
an aggregate 0.5 percent of the issuer's outstanding ownership interests 
may be acquired or retained by one or more entities that are not 
customers if the ownership interest is acquired or retained by such 
parties for the purpose of and to the extent necessary for establishing 
corporate separateness or addressing bankruptcy, insolvency, or similar 
concerns; and
    (C) The banking entity and its affiliates:
    (1) Maintain documentation outlining how the banking entity intends 
to facilitate the customer's exposure to such transaction, investment 
strategy, or service;
    (2) Do not, directly or indirectly, guarantee, assume, or otherwise 
insure the obligations or performance of such issuer;
    (3) Comply with the disclosure obligations under Sec.  75.11(a)(8), 
as if such issuer were a covered fund, provided that the content may be 
modified to prevent the disclosure from being misleading and the manner 
of disclosure may be modified to accommodate the specific circumstances 
of the issuer;
    (4) Do not acquire or retain, as principal, an ownership interest in 
the issuer, other than as described in paragraph (c)(18)(ii)(B) of this 
section;
    (5) Comply with the requirements of Sec. Sec.  75.14(b) and 75.15, 
as if such issuer were a covered fund; and
    (6) Except for riskless principal transactions as defined in 
paragraph (d)(11) of this section, comply with the requirements of 12 
CFR 223.15(a), as if such banking entity and its affiliates were a 
member bank and the issuer were an affiliate thereof.
    (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:
    (1) The rights of a creditor to exercise remedies upon the 
occurrence of an event of default or an acceleration event; and
    (2) The right to participate in the removal of an investment manager 
for ``cause'' or participate in the selection of a replacement manager 
upon an investment manager's resignation or removal. For purposes of 
this paragraph (d)(6)(i)(A)(2), ``cause'' for removal of an investment 
manager means one or more of the following events:
    (i) The bankruptcy, insolvency, conservatorship or receivership of 
the investment manager;
    (ii) The breach by the investment manager of any material provision 
of the covered fund's transaction agreements applicable to the 
investment manager;
    (iii) The breach by the investment manager of material 
representations or warranties;
    (iv) The occurrence of an act that constitutes fraud or criminal 
activity in the performance of the investment manager's obligations 
under the covered fund's transaction agreements;
    (v) The indictment of the investment manager for a criminal offense, 
or the

[[Page 243]]

indictment of any officer, member, partner or other principal of the 
investment manager for a criminal offense materially related to his or 
her investment management activities;
    (vi) A change in control with respect to the investment manager;
    (vii) The loss, separation or incapacitation of an individual 
critical to the operation of the investment manager or primarily 
responsible for the management of the covered fund's assets; or
    (viii) Other similar events that constitute ``cause'' for removal of 
an investment manager, provided that such events are not solely related 
to the performance of the covered fund or the investment manager's 
exercise of investment discretion under the covered fund's transaction 
agreements;
    (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 (F) of this section.
    (ii) Ownership interest does not include:
    (A) 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:
    (1) 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;
    (2) 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;
    (3) Any amounts invested in the covered fund, including any amounts 
paid by the entity in connection with obtaining the restricted profit 
interest, are within the limits of Sec.  75.12 of this subpart; and
    (4) 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

[[Page 244]]

an unaffiliated party that provides investment management, investment 
advisory, commodity trading advisory, or other services to the fund.
    (B) Any senior loan or senior debt interest that has the following 
characteristics:
    (1) Under the terms of the interest the holders of such interest do 
not have the right to receive a share of the income, gains, or profits 
of the covered fund, but are entitled to receive only:
    (i) Interest at a stated interest rate, as well as commitment fees 
or other fees, which are not determined by reference to the performance 
of the underlying assets of the covered fund; and
    (ii) Repayment of a fixed principal amount, on or before a maturity 
date, in a contractually-determined manner (which may include prepayment 
premiums intended solely to reflect, and compensate holders of the 
interest for, forgone income resulting from an early prepayment);
    (2) The entitlement to payments under the terms of the interest are 
absolute and could not 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; 
and
    (3) The holders of the interest are not entitled to receive the 
underlying assets of the covered fund after all other interests have 
been redeemed 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).
    (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.
    (11) Riskless principal transaction. Riskless principal transaction 
means a transaction in which a banking entity, after receiving an order 
from a customer to buy (or sell) a security, purchases (or sells) the 
security in the secondary market for its own account to offset a 
contemporaneous sale to (or purchase from) the customer.

[79 FR 6048, Jan. 31, 2014, as amended at 84 FR 35021, July 22, 2019; 84 
FR 62208, Nov. 14, 2019; 85 FR 46516, July 31, 2020; 85 FR 60355, Sept. 
25, 2020]



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

[[Page 245]]

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
    (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

[[Page 246]]

    (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) 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,

[[Page 247]]

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:
    (A) The banking entity, together with its affiliates, 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) The banking entity, or an affiliate of the banking entity, 
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

[[Page 248]]

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 
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

[[Page 249]]

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 in 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 in 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.
    (5) Parallel Investments and Co-Investments. (i) A banking entity 
shall not be required to include in the calculation of the investment 
limits under paragraph (a)(2) of this section any investment the banking 
entity makes alongside a covered fund as long as the investment is made 
in compliance with applicable laws and regulations, including applicable 
safety and soundness standards.
    (ii) A banking entity shall not be restricted under this section in 
the amount of any investment the banking entity makes alongside a 
covered fund as long as the investment is made in compliance with 
applicable laws and regulations, including applicable safety and 
soundness standards.
    (c) Aggregate permitted investments in all covered funds. (1)(i) 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 in connection with obtaining a 
restricted profit interest under Sec.  75.10(d)(6)(ii)), on a historical 
cost basis;
    (ii) Treatment of employee and director restricted profit interests 
financed by the banking entity. For purposes of paragraph (c)(1)(i) of 
this section, an investment by a director or employee of a banking 
entity who acquires a restricted profit 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 restricted profit interest in the fund and 
the financing is used to acquire such ownership interest in the covered 
fund.
    (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

[[Page 250]]

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)(i) 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 in connection with 
obtaining a restricted profit interest under Sec.  75.10(d)(6)(ii) of 
subpart C of this part), on a historical cost basis, plus any earnings 
received; and
    (ii) The fair market value of the banking entity's ownership 
interests in the covered fund as determined under paragraph (b)(2)(ii) 
or (b)(3) of this section (together with any amounts paid by the entity 
in connection with obtaining a restricted profit interest under Sec.  
75.10(d)(6)(ii) of subpart C of this part), if the banking entity 
accounts for the profits (or losses) of the fund investment in its 
financial statements.
    (2) Treatment of employee and director restricted profit interests 
financed by the banking entity. For purposes of paragraph (d)(1) of this 
section, an investment by a director or employee of a banking entity who 
acquires a restricted profit 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 restricted profit interest in the fund and the financing is 
used to acquire such ownership interest in the covered fund.
    (e) Extension of time to divest an ownership interest--(1) Extension 
period. 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.
    (2) Application requirements. 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)(3) 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.
    (3) Factors governing the Board determinations. In reviewing any 
application under paragraph (e)(1) of this section, the Board may 
consider all the facts

[[Page 251]]

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.
    (4) 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.
    (5) 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.

[79 FR 6048, Jan. 31, 2014, as amended at 85 FR 46520, July 31, 2020]



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 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;

[[Page 252]]

    (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
    (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.

[[Page 253]]

    (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 the safety and soundness of the 
banking entity, or the financial stability of the United States.
    (d) Permitted covered fund activities and investments of qualifying 
foreign excluded funds. (1) The prohibition contained in Sec.  75.10(a) 
does not apply to a qualifying foreign excluded fund.
    (2) For purposes of this paragraph (d), a qualifying foreign 
excluded fund means a banking entity that:
    (i) Is organized or established outside the United States, and the 
ownership interests of which are offered and sold solely outside the 
United States;
    (ii)(A) Would be a covered fund if the entity were organized or 
established in the United States, or
    (B) Is, or holds itself out as being, an entity or arrangement that 
raises money from investors primarily for the purpose of investing in 
financial instruments for resale or other disposition or otherwise 
trading in financial instruments;
    (iii) Would not otherwise be a banking entity except by virtue of 
the acquisition or retention of an ownership interest in, sponsorship 
of, or relationship with the entity, by another banking entity that 
meets the following:
    (A) 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; and
    (B) The banking entity's acquisition of an ownership interest in or 
sponsorship of the fund by the foreign banking entity meets the 
requirements for permitted covered fund activities and investments 
solely outside the United States, as provided in Sec.  75.13(b);

[[Page 254]]

    (iv) Is established and operated as part of a bona fide asset 
management business; and
    (v) Is not operated in a manner that enables the banking entity that 
sponsors or controls the qualifying foreign excluded fund, or any of its 
affiliates, to evade the requirements of section 13 of the BHC Act or 
this part.

[79 FR 6048, Jan. 31, 2014, as amended at 84 FR 62208, Nov. 14, 2019; 85 
FR 46521, July 31, 2020]



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;
    (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; and
    (iii) Enter into a transaction with a covered fund that would be an 
exempt covered transaction under 12 U.S.C. 371c(d) or Sec.  223.42 of 
the Board's Regulation W (12 CFR 223.42) subject to the limitations 
specified under 12 U.S.C. 371c(d) or Sec.  223.42 of the Board's 
Regulation W (12 CFR 223.42), as applicable,
    (iv) Enter into a riskless principal transaction with a covered 
fund; and
    (v) Extend credit to or purchase assets from a covered fund, 
provided:
    (A) Each extension of credit or purchase of assets is in the 
ordinary course of business in connection with payment transactions; 
settlement services; or futures, derivatives, and securities clearing;
    (B) Each extension of credit is repaid, sold, or terminated by the 
end of five business days; and
    (C) The banking entity making each extension of credit meets the 
requirements of Sec.  223.42(l)(1)(i) and (ii) of the Board's Regulation 
W (12 CFR 223.42(l)(1)(i) and(ii)), as if the extension of credit was an 
intraday extension of credit, regardless of the duration of the 
extension of credit.
    (3) Any transaction or activity permitted under paragraphs 
(a)(2)(iii), (iv) or (v) must comply with the limitations in Sec.  
75.15.
    (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 other permitted transactions. Any transaction 
permitted

[[Page 255]]

under paragraphs (a)(2)(ii), (iii), or (iv) 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 under 
section 23B.

[79 FR 6048, Jan. 31, 2014, as amended at 84 FR 62209, Nov. 14, 2019; 85 
FR 46522, July 31, 2020]



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.



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:

[[Page 256]]

    (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.

[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 or a qualifying 
foreign excluded fund under section 75.6(f) or 75.13(d)) 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;

[[Page 257]]

    (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 (other than a qualifying foreign excluded fund under 
section 75.6(f) or 75.13(d)) engaged in proprietary trading activity 
permitted under subpart B shall comply with the reporting requirements 
described in appendix A to this part, if:
    (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 (other than a qualifying 
foreign excluded fund under section 75.6(f) or 75.13(d)) 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,

[[Page 258]]

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 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,

[[Page 259]]

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; 85 
FR 46522, July 31, 2020]



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.





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

[[Page 260]]

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.
    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;

[[Page 261]]

    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.

      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.

[[Page 262]]

    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.
    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

[[Page 263]]

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]



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 [Reserved]
140.98 Publication of no-action, interpretative and exemption letters 
          and other written communications.

[[Page 264]]

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).



                         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

[[Page 265]]

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 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]

[[Page 266]]



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]



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]

[[Page 267]]



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]



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

[[Page 268]]

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.
    (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

[[Page 269]]

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.
    (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

[[Page 270]]

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 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 receiver-
ship 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

[[Page 271]]

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 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

[[Page 272]]

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.
    (10) All functions reserved to the Commission in Sec.  1.52 of this 
chapter.
    (11) All functions reserved to the Commission in Sec.  23.100-106 of 
this chapter, except for those related to the revocation of a swap 
dealer's or major swap participant's approval to use internal models to 
compute capital requirements under Sec.  23.102 of this chapter, those 
related to the Commission's order under Sec.  23.104 of this chapter, 
and the issuance of Capital Comparability Determinations under Sec.  
23.106 of this chapter.
    (12) All functions reserved to the Commission in Sec.  30.7 of this 
chapter.
    (13) 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; 85 FR 57570, Sept. 15, 2020]



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.

[[Page 273]]

    (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 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 functions 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)(4) of this chapter, to extend the review period for an 
application pursuant to Sec.  39.3(a)(7) 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.  39.6 of this 
chapter, except for the authority to:
    (i) Grant an exemption under Sec.  39.6(a) of this chapter;
    (ii) Prescribe conditions to an exemption under Sec.  39.6(b) of 
this chapter;
    (iii) Modify or terminate an exemption under Sec.  39.6(f)(4) of 
this chapter; and
    (iv) Terminate an exemption under Sec.  39.6(g)(3) of this chapter.
    (5) All functions reserved to the Commission in Sec.  
39.10(c)(4)(iv) of this chapter;
    (6) 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;

[[Page 274]]

    (7) All functions reserved to the Commission in Sec.  
39.12(a)(5)(iii) of this chapter;
    (8) 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;
    (9) 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;
    (10) All functions reserved to the Commission in Sec.  39.19(c)(2), 
(c)(3)(iv), and (c)(5) of this chapter;
    (11) All functions reserved to the Commission in Sec.  39.20(a)(5) 
of this chapter;
    (12) All functions reserved to the Commission in Sec.  39.21(c) of 
this chapter;
    (13) All functions reserved to the Commission in Sec.  39.31 of this 
chapter; and
    (14) The authority to approve the requests described in Sec. Sec.  
39.34(d) and 39.39(f) of this chapter.
    (15) All functions reserved to the Commission in Sec.  39.51 of this 
chapter, except for the authority to:
    (i) Grant registration under Sec.  39.51(a) of this chapter;
    (ii) Prescribe conditions to registration under Sec.  39.51(b) of 
this chapter; and
    (iii) Modify registration under Sec.  39.51(d)(4) 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; 85 FR 67189, Oct. 21, 2020; 86 FR 968, Jan. 7, 
2021]



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 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

[[Page 275]]

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  [Reserved]



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

[[Page 276]]

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.
    (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:

[[Page 277]]

    (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 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

[[Page 278]]

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 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

[[Page 279]]

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 
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.
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    \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;

[[Page 280]]

    (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, 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
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    \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.
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    (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\
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    \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.
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    (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

[[Page 281]]

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 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

[[Page 282]]

facility, or any derivatives clearing organization subject to regulation 
or oversight by the Commission; \6\
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    \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\
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    \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.
---------------------------------------------------------------------------

    (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
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    \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.
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    (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

[[Page 283]]

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 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\
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    \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;

[[Page 284]]

    (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.
    (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;

[[Page 285]]

    (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 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

[[Page 286]]

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 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

[[Page 287]]

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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    (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\
---------------------------------------------------------------------------

    \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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[[Page 288]]

    (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 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

[[Page 289]]

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 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

[[Page 290]]

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.
---------------------------------------------------------------------------

    (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 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

[[Page 291]]

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, 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;

[[Page 292]]

    (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.



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

[[Page 293]]

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 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.

[[Page 294]]



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 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

[[Page 295]]

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.

    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]

[[Page 296]]



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 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

[[Page 297]]

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) 2022 Inflation adjustment. The maximum amount of each civil 
monetary penalty in the following charts applies to penalties assessed 
after January 15, 2022:
    (1) For Non-Manipulation or Attempted Manipulation Violations:

                                           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        $180,714
 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         995,471
 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         199,094
 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 2 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  05/21/ through  08/14/ 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      $1,303,559
 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       1,303,559
 the Commodity Exchange Act).    entity \1\ or
                                 any of its
                                 directors,
                                 officers or
                                 employees.
----------------------------------------------------------------------------------------------------------------

[[Page 298]]

 
             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       1,303,559
 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 87 FR 2035, Jan. 13, 2022]



                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, 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.

[[Page 299]]



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.
    (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.

[[Page 300]]



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.



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.

[[Page 301]]



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:
    (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

[[Page 302]]

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;
    (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;

[[Page 303]]

    (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 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

[[Page 304]]

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 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,

[[Page 305]]

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 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

[[Page 306]]

(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 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

[[Page 307]]

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;
    (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;

[[Page 308]]

    (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 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

[[Page 309]]

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.
    (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

[[Page 310]]

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 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

[[Page 311]]

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 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.

[[Page 312]]

    (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 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

[[Page 313]]

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.
    (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.

[[Page 314]]

    (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.
    (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

[[Page 315]]

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 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

[[Page 316]]

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:
    (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

[[Page 317]]

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 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.

[[Page 318]]

    (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;
    (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;

[[Page 319]]

    (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 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

[[Page 320]]

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 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

[[Page 321]]

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;
    (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.

[[Page 322]]

    (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
    (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

[[Page 323]]

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. 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.

[[Page 324]]

    (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]



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;

[[Page 325]]

    (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 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

[[Page 326]]

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 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

[[Page 327]]

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 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

[[Page 328]]

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 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.

[[Page 329]]

    (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, 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

[[Page 330]]

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 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

[[Page 331]]

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 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

[[Page 332]]

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. 
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.

[[Page 333]]

    (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]



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

[[Page 334]]

    (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.



             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

[[Page 335]]

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 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.

[[Page 336]]



            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 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

[[Page 337]]

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 
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).

[[Page 338]]



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]
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.

[[Page 339]]

    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.
    (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.

[[Page 340]]

    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 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

[[Page 341]]

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.



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

[[Page 342]]

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 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

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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.



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

[[Page 344]]

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 Federal speculative position limits.
150.3 Exemptions.
150.4 Aggregation of positions.
150.5 Exchange-set speculative position limits and exemptions therefrom.
150.6 Scope.
150.7 [Reserved]
150.8 Severability.
150.9 Process for recognizing non-enumerated bona fide hedging 
          transactions or positions with respect to Federal speculative 
          position limits.

Appendix A to Part 150--List of Enumerated Bona Fide Hedges
Appendix B to Part 150--Guidance on Gross Hedging Positions and 
          Positions Held During the Spot Period
Appendix C to Part 150--Guidance Regarding the Definition of Referenced 
          Contract
Appendix D to Part 150--Commodities Listed as Substantially the Same for 
          Purposes of the Term ``Location Basis Contract'' as Used in 
          the Referenced Contract Definition
Appendix E to Part 150--Speculative Position Limit Levels
Appendix F to Part 150--Guidance on, and Acceptable Practices in, 
          Compliance With the Requirements for Exchange-Set Limits and 
          Position Accountability on Commodity Derivative Contracts
Appendix G to Part 150--Guidance on Spread Transaction Exemptions 
          Granted for Contracts that are Subject to Federal Speculative 
          Position Limits

    Authority: 7 U.S.C. 1a, 2, 5, 6, 6a, 6c, 6f, 6g, 6t, 12a, and 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: 52 FR 38923, Oct. 20, 1987, unless otherwise noted.



Sec.  150.1  Definitions.

    As used in this part--
    Bona fide hedging transaction or position means a transaction or 
position in commodity derivative contracts in a physical commodity, 
where:
    (1) Such transaction or position:
    (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 price risks in 
the conduct and management of a commercial enterprise; and
    (iii) Arises from the potential change in the value of--
    (A) Assets which a person owns, produces, manufactures, processes, 
or merchandises or anticipates owning, producing, manufacturing, 
processing, or merchandising;
    (B) Liabilities which a person owes or anticipates incurring; or
    (C) Services that a person provides or purchases, or anticipates 
providing or purchasing; or
    (2) Such transaction or position qualifies as a:
    (i) Pass-through swap and pass-through swap offset pair. Paired 
positions of a pass-through swap and a pass-through swap offset, where:
    (A) The pass-through swap is a swap position entered into by one 
person for which the swap would qualify as a bona fide hedging 
transaction or position pursuant to paragraph (1) of this definition 
(the bona fide hedging swap counterparty) that is opposite another 
person (the pass-through swap counterparty);
    (B) The pass-through swap offset:
    (1) Is a futures contract position, option on a futures contract 
position, or swap position entered into by the pass-through swap 
counterparty; and
    (2) Reduces the pass-through swap counterparty's price risks 
attendant to the pass-through swap; and
    (C) With respect to the pass-through swap offset, the pass-through 
swap

[[Page 345]]

counterparty receives from the bona fide hedging swap counterparty a 
written representation that the pass-through swap qualifies as a bona 
fide hedging transaction or position pursuant to paragraph (1) of this 
definition, and the pass-through swap counterparty may rely in good 
faith on such written representation, unless the pass-through swap 
counterparty has information that would cause a reasonable person to 
question the accuracy of the representation; or
    (ii) Offset of a bona fide hedger's qualifying swap position. A 
futures contract position, option on a futures contract position, or 
swap position entered into by a bona fide hedging swap counterparty that 
reduces price risks attendant to a previously-entered-into swap position 
that qualified as a bona fide hedging transaction or position at the 
time it was entered into for that counterparty pursuant to paragraph (1) 
of this definition.
    Commodity derivative contract means any futures contract, option on 
a futures contract, or swap in a commodity (other than a security 
futures product as defined in section 1a(45) of the Act).
    Core referenced futures contract means a futures contract that is 
listed in Sec.  150.2(d).
    Economically equivalent swap means, with respect to a particular 
referenced contract, any swap that has identical material contractual 
specifications, terms, and conditions to such referenced contract.
    (1) Other than as provided in paragraph (2) of this definition, for 
the purpose of determining whether a swap is an economically equivalent 
swap with respect to a particular referenced contract, the swap shall 
not be deemed to lack identical material contractual specifications, 
terms, and conditions due to different lot size specifications or 
notional amounts, delivery dates diverging by less than one calendar 
day, or different post-trade risk management arrangements.
    (2) With respect to any natural gas referenced contract, for the 
purpose of determining whether a swap is an economically equivalent swap 
to such referenced contract, the swap shall not be deemed to lack 
identical material contractual specifications, terms, and conditions due 
to different lot size specifications or notional amounts, delivery dates 
diverging by less than two calendar days, or different post-trade risk 
management arrangements.
    (3) With respect to any referenced contract or class of referenced 
contracts, the Commission may make a determination that any swap or 
class of swaps satisfies, or does not satisfy, this economically 
equivalent swap definition.
    Eligible affiliate means an entity with respect to which another 
person:
    (1) Directly or indirectly holds either:
    (i) A majority of the equity securities of such entity, or
    (ii) The right to receive upon dissolution of, or the contribution 
of, a majority of the capital of such entity;
    (2) 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 such entity; and
    (3) Is required to aggregate the positions of such entity under 
Sec.  150.4 and does not claim an exemption from aggregation for such 
entity.
    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:

[[Page 346]]

    (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.
    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.
    Futures-equivalent means:
    (1)(i) An option contract, whether an option on a futures contract 
or an option that is a swap, which has been:
    (A) Adjusted by an economically reasonable and analytically 
supported exposure to price changes of the underlying referenced 
contract that has been computed for that option contract as of the 
previous day's close or the current day's close or computed 
contemporaneously during the trading day, and
    (B) Converted to an economically equivalent amount of an open 
position in the underlying referenced contract.
    (ii) An entity is allowed one business day to liquidate an amount of 
the position that is in excess of speculative position limits without 
being considered in violation of the speculative position limits if such 
excess position results from:
    (A) A position that exceeds speculative position limits as a result 
of an option contract assignment; or
    (B) A position that includes an option contract that exceeds 
speculative position limits when the applicable option contract is 
adjusted by an economically reasonable and analytically supported 
exposure to price changes of the underlying referenced contract as of 
that business day's close of trading, as long as the applicable option 
contract does not exceed such speculative position limits when evaluated 
using the previous business day's exposure to the underlying referenced 
contract. This paragraph (B) shall not apply if such day would be the 
last trading day of the spot month for the corresponding core referenced 
futures contract.
    (2) A futures contract which has been converted to an economically 
equivalent amount of an open position in a core referenced futures 
contract; and
    (3) A swap which has been converted to an economically equivalent 
amount of an open position in a core referenced futures contract.
    Independent account controller means a person:
    (1) Who specifically is authorized by an eligible entity, as defined 
in 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).
    Long position means, on a futures-equivalent basis, a long call 
option, a short put option, a long underlying futures contract, or a 
swap position that is equivalent to a long futures contract.

[[Page 347]]

    Physical commodity means any agricultural commodity as that term is 
defined in Sec.  1.3 of this chapter or any exempt commodity as that 
term is defined in section 1a of the Act.
    Position accountability means any bylaw, rule, regulation, or 
resolution that:
    (1) Is submitted to the Commission pursuant to part 40 of this 
chapter in lieu of, or along with, a speculative position limit, and
    (2) Requires an entity whose position exceeds the accountability 
level to consent to:
    (i) Provide information about its position to the designated 
contract market or swap execution facility; and
    (ii) Halt increasing further its position or reduce its position in 
an orderly manner, in each case as requested by the designated contract 
market or swap execution facility.
    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.
    Pre-existing position means any position in a commodity derivative 
contract acquired in good faith prior to the effective date of any 
bylaw, rule, regulation, or resolution that specifies a speculative 
position limit level or a subsequent change to that level.
    Referenced contract means:
    (1) A core referenced futures contract listed in Sec.  150.2(d) or, 
on a futures-equivalent basis with respect to a particular core 
referenced futures contract, a futures contract or an option on a 
futures contract, including a spread, that is either:
    (i) 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
    (ii) 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; or
    (2) On a futures-equivalent basis, an economically equivalent swap.
    (3) The definition of referenced contract does not include a 
location basis contract, a commodity index contract, any guarantee of a 
swap, a trade option that meets the requirements of Sec.  32.3 of this 
chapter, any outright price reporting agency index contract, or any 
monthly average pricing contract.
    Short position means, on a futures-equivalent basis, a short call 
option, a long put option, a short underlying futures contract, or a 
swap position that is equivalent to a short futures contract.
    Speculative position limit means the maximum position, either net 
long or net short, in a commodity derivative contract that may be held 
or controlled by one person absent an exemption, whether such limits are 
adopted for:
    (1) Combined positions in all commodity derivative contracts in a 
particular commodity, including the spot month futures contract and all 
single month futures contracts (the spot month and all single month 
futures contracts, cumulatively, ``all-months-combined'');
    (2) Positions in a single month of commodity derivative contracts in 
a particular commodity other than the spot month futures contract 
(``single month''); or
    (3) Positions in the spot month of commodity derivative contacts in 
a particular commodity. Such a limit may be established under Federal 
regulations or rules of a designated contract market or swap execution 
facility. For referenced contracts other than core referenced futures 
contracts, single month means the same period as that of the relevant 
core referenced futures contract.
    Spot month means:
    (1) For physical-delivery core referenced futures contracts, the 
period of time beginning at the earlier of:
    (i) The close of business on the trading day preceding the first day 
on which delivery notices can be issued by the clearing organization of 
a contract market or
    (ii) The close of business on the trading day preceding the third-
to-last trading day and ending when the contract expires, except as 
follows:

[[Page 348]]

    (A) For the ICE Futures U.S. Sugar No. 11 (SB) core referenced 
futures contract, the spot month means the period of time beginning at 
the opening of trading on the second business day following the 
expiration of the regular option contract traded on the expiring futures 
contract and ending when the contract expires;
    (B) For the ICE Futures U.S. Sugar No. 16 (SF) core referenced 
futures contract, the spot month means the period of time beginning on 
the third-to-last trading day of the contract month and ending when the 
contract expires; and
    (C) For the Chicago Mercantile Exchange Live Cattle (LC) core 
referenced futures contract, the spot month means the period of time 
beginning at the close of trading on the first business day following 
the first Friday of the contract month and ending when the contract 
expires; and
    (2) For referenced contracts other than core referenced futures 
contracts, the spot month means the same period as that of the relevant 
core referenced futures contract.
    Spread transaction means an intra-market spread, inter-market 
spread, intra-commodity spread, or inter-commodity spread, including a 
calendar spread, quality differential spread, processing spread, product 
or by-product differential spread, or futures-option spread.
    Swap means ``swap'' as that term is defined in section 1a of the Act 
and as further defined in Sec.  1.3 of this chapter.
    Swap dealer means ``swap dealer'' as that term is defined in section 
1a of the Act and as further defined in Sec.  1.3 of this chapter.
    Transition period swap means a swap entered into during the period 
commencing on the day of the enactment of the Dodd-Frank Act of 2010 
(July 21, 2010), and ending 60 days after the publication in the Federal 
Register of final amendments to this part implementing section 737 of 
the Dodd-Frank Act of 2010, the terms of which have not expired as of 60 
days after the publication date.

[86 FR 3463, Jan. 14, 2021]



Sec.  150.2  Federal speculative position limits.

    (a) Spot month speculative position limits. For physical-delivery 
referenced contracts and, separately, for cash-settled referenced 
contracts, no person may hold or control positions in the spot month, 
net long or net short, in excess of the levels specified by the 
Commission.
    (b) Single month and all-months-combined speculative position 
limits. For any referenced contract, no person may hold or control 
positions in a single month or in all-months-combined (including the 
spot month), net long or net short, in excess of the levels specified by 
the Commission.
    (c) Relevant contract month. For purposes of this part, for 
referenced contracts other than core referenced futures contracts, the 
spot month and any single month shall be the same as those of the 
relevant core referenced futures contract.
    (d) Core referenced futures contracts. Federal speculative position 
limits apply to referenced contracts based on the following core 
referenced futures contracts:

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[GRAPHIC] [TIFF OMITTED] TR14JA21.023


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[GRAPHIC] [TIFF OMITTED] TR14JA21.024

    (e) Establishment of speculative position limit levels. The levels 
of Federal speculative position limits are fixed by the Commission at 
the levels listed in appendix E to this part.
    (f) Designated contract market estimates of deliverable supply. Each 
designated contract market listing a core referenced futures contract 
shall supply to the Commission an estimated spot month deliverable 
supply upon request by the Commission, and may supply such estimates to 
the Commission at any other time. Each estimate shall be

[[Page 351]]

accompanied by a description of the methodology used to derive the 
estimate and any statistical data supporting the estimate, and shall be 
submitted using the format and procedures approved in writing by the 
Commission. A designated contract market should use the guidance 
regarding deliverable supply in appendix C to part 38 of this chapter.
    (g) Pre-existing positions--(1) Pre-existing positions in a spot 
month. A spot month speculative position limit established under this 
section shall apply to pre-existing positions, other than pre-enactment 
swaps and transition period swaps.
    (2) Pre-existing positions in a non-spot month. A single month or 
all-months-combined speculative position limit established under this 
section shall apply to pre-existing positions, other than pre-enactment 
swaps and transition period swaps.
    (h) Positions on foreign boards of trade. The speculative position 
limits established under this section shall apply to a person's combined 
positions in referenced contracts, including positions executed on, or 
pursuant to the rules of, a foreign board of trade, pursuant to section 
4a(a)(6) of the Act, provided that:
    (1) 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
    (2) 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.
    (i) Anti-evasion provision. For the purposes of applying the 
speculative position limits in this section, if used to willfully 
circumvent or evade speculative position limits:
    (1) A commodity index contract, monthly average pricing contract, 
outright price reporting agency index contract, and/or a location basis 
contract shall be considered to be a referenced contract;
    (2) A bona fide hedging transaction or position recognition or 
spread exemption shall no longer apply; and
    (3) A swap shall be considered to be an economically equivalent 
swap.
    (j) Delegation of authority to the Director of the Division of 
Market Oversight. (1) 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 in paragraph (f) of this section to request 
estimated spot month deliverable supply from a designated contract 
market and to provide the format and procedures for submitting such 
estimates.
    (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 section.
    (3) Nothing in this section prohibits the Commission, at its 
election, from exercising the authority delegated in this section.
    (k) Eligible affiliates and aggregation. For purposes of this part, 
if an eligible affiliate meets the conditions for any exemption from 
aggregation under Sec.  150.4, the eligible affiliate may choose to 
utilize that exemption, or it may opt to be aggregated with its 
affiliated entities.

[86 FR 3465, Jan. 14, 2021]



Sec.  150.3  Exemptions.

    (a) Positions which may exceed limits. A person may exceed the 
speculative position limits set forth in Sec.  150.2 to the extent that 
all applicable requirements in this part are met, provided that such 
person's transactions or positions each satisfy one of the following:
    (1) Bona fide hedging transactions or positions. Positions that 
comply with the bona fide hedging transaction or position definition in 
Sec.  150.1, and are:
    (i) Enumerated in appendix A to this part; or
    (ii) Approved as non-enumerated bona fide hedging transactions or 
positions in accordance with paragraph (b)(4) of this section or Sec.  
150.9.
    (2) Spread transactions. Transactions that:
    (i) Meet the spread transaction definition in Sec.  150.1; or

[[Page 352]]

    (ii) Do not meet the spread transaction definition in Sec.  150.1, 
but have been approved by the Commission pursuant to paragraph (b)(4) of 
this section.
    (3) Financial distress positions. Positions of a person, or a 
related person or persons, under financial distress circumstances, when 
exempted by the Commission from any of the requirements of this part in 
response to a specific request made pursuant to Sec.  140.99(a)(1) of 
this chapter, where financial distress circumstances include, but are 
not limited to, situations involving the potential default or bankruptcy 
of a customer of the requesting person or persons, an affiliate of the 
requesting person or persons, or a potential acquisition target of the 
requesting person or persons.
    (4) Conditional spot month limit exemption positions in natural gas. 
Spot month positions in natural gas cash-settled referenced contracts 
that exceed the spot month speculative position limit set forth in Sec.  
150.2, provided that:
    (i) Such positions do not exceed the futures-equivalent of 10,000 
NYMEX Henry Hub Natural Gas core referenced futures contracts per 
designated contract market that lists a cash-settled referenced contract 
in natural gas;
    (ii) Such positions do not exceed the futures-equivalent of 10,000 
NYMEX Henry Hub Natural Gas core referenced futures contracts in 
economically equivalent swaps in natural gas; and
    (iii) The person holding or controlling such positions does not hold 
or control positions in spot month physical-delivery referenced 
contracts in natural gas.
    (5) Pre-enactment and transition period swaps exemption. The 
speculative position limits set forth in Sec.  150.2 shall not apply to 
positions acquired in good faith in any pre-enactment swap or any 
transition period swap, provided however that a person may net such 
positions with post-effective date commodity derivative contracts for 
the purpose of complying with any non-spot month speculative position 
limit.
    (b) Application for relief. Any person with a position in a 
referenced contract seeking recognition of such position as a bona fide 
hedging transaction or position in accordance with paragraph (a)(1)(ii) 
of this section, or seeking an exemption for a spread position in 
accordance with paragraphs (a)(2)(ii) of this section, in each case for 
purposes of Federal speculative position limits set forth in Sec.  
150.2, may apply to the Commission in accordance with this section.
    (1) Required information. The application shall include the 
following information:
    (i) With respect to an application for recognition of a bona fide 
hedging transaction or position:
    (A) A description of the position in the commodity derivative 
contract for which the application is submitted, including but not 
necessarily limited to, the name of the underlying commodity and the 
derivative position size;
    (B) An explanation of the hedging strategy, including a statement 
that the position complies with the requirements of section 4a(c)(2) of 
the Act and the definition of bona fide hedging transaction or position 
in Sec.  150.1, and information to demonstrate why the position 
satisfies such requirements and definition;
    (C) A statement concerning the maximum size of all gross positions 
in commodity derivative contracts for which the application is 
submitted;
    (D) A description of the applicant's activity in the cash markets 
and swaps markets for the commodity underlying the position for which 
the application is submitted, including, but not necessarily limited to, 
information regarding the offsetting cash positions; and
    (E) Any other information that may help the Commission determine 
whether the position satisfies the requirements of section 4a(c)(2) of 
the Act and the definition of bona fide hedging transaction or position 
in Sec.  150.1.
    (ii) With respect to an application for a spread exemption:
    (A) A description of the spread position for which the application 
is submitted;
    (B) A statement concerning the maximum size of all gross positions 
in commodity derivative contracts for which the application is 
submitted; and
    (C) Any other information that may help the Commission determine 
whether the position is consistent with section 4a(a)(3)(B) of the Act.

[[Page 353]]

    (2) Additional information. If the Commission determines that it 
requires additional information in order to determine whether to 
recognize a position as a bona fide hedging transaction or position or 
to grant a spread exemption, the Commission shall:
    (i) Notify the applicant of any supplemental information required; 
and
    (ii) Provide the applicant with ten business days in which to 
provide the Commission with any supplemental information.
    (3) Timing of application. (i) Except as provided in paragraph 
(b)(3)(ii) of this section, a person seeking relief in accordance with 
this section must apply to the Commission and receive a notice of 
approval of such application prior to the date that the position for 
which the application was submitted would be in excess of the applicable 
Federal speculative position limit set forth in Sec.  150.2;
    (ii) Due to demonstrated sudden or unforeseen increases in its bona 
fide hedging needs, a person may apply for recognition of a bona fide 
hedging transaction or position within five business days after the 
person established the position that exceeded the applicable Federal 
speculative position limit.
    (A) Any application filed pursuant to paragraph (b)(3)(ii) of this 
section must include an explanation of the circumstances warranting the 
sudden or unforeseen increases in bona fide hedging needs.
    (B) If an application filed pursuant to paragraph (b)(3)(ii) of this 
section is denied, the person must bring its position within the Federal 
speculative position limits within a commercially reasonable time, as 
determined by the Commission in consultation with the applicant and the 
applicable designated contract market or swap execution facility.
    (C) If an application filed pursuant to paragraph (b)(3)(ii) of this 
section is denied, the Commission will not pursue an enforcement action 
for a position limits violation for the person holding the position 
during the period of the Commission's review nor once the Commission has 
issued its determination so long as the application was submitted in 
good faith and the person brings its position within the Federal 
speculative position limits within a commercially reasonable time in 
accordance with paragraph (b)(3)(ii)(B) of this section.
    (4) Commission determination. After a review of any application 
submitted under paragraph (b) of this section and any supplemental 
information provided by the applicant, the Commission will determine, 
with respect to the transaction or position for which the application is 
submitted, whether to recognize all or a specified portion of such 
transaction or position as a bona fide hedging transaction or position 
or whether to exempt all or a specified portion of such spread 
transaction, as applicable. The Commission shall notify the applicant of 
its determination, and an applicant may exceed Federal speculative 
position limits set forth in Sec.  150.2, or in the case of applications 
filed pursuant to paragraph (b)(3)(ii) of this section, the applicant 
may rely upon the Commission's determination, upon receiving a notice of 
approval.
    (5) Renewal of application. With respect to any application approved 
by the Commission pursuant to this section, a person shall renew such 
application if there are any material changes to the information 
provided in the original application pursuant to paragraph (b)(1) of 
this section or upon request by the Commission.
    (6) Commission revocation or modification. If the Commission 
determines, at any time, that a recognized bona fide hedging transaction 
or position is no longer consistent with section 4a(c)(2) of the Act or 
the definition of bona fide hedging transaction or position in Sec.  
150.1, or that a spread exemption is no longer consistent with section 
4a(a)(3)(B) of the Act, the Commission shall:
    (i) Notify the person holding such position;
    (ii) Provide an opportunity for the applicant to respond to such 
notification; and
    (iii) Issue a determination to revoke or modify the bona fide hedge 
recognition or spread exemption for purposes of Federal speculative 
position limits and, as applicable, require the person to reduce the 
derivative position within a commercially reasonable time, as

[[Page 354]]

determined by the Commission in consultation with the applicant and the 
applicable designated contract market or swap execution facility, or 
otherwise come into compliance. This notification shall briefly specify 
the nature of the issues raised and the specific provisions of the Act 
or the Commission's regulations with which the position or application 
is, or appears to be, inconsistent.
    (c) Previously-granted risk management exemptions. To the extent 
that exemptions previously granted under Sec.  1.47 of this chapter or 
by a designated contract market or a swap execution facility are for the 
risk management of positions in financial instruments, including but not 
limited to index funds, such exemptions shall no longer apply as of 
January 1, 2023.
    (d) Recordkeeping. (1) Persons who avail themselves of exemptions 
under this section shall keep and maintain complete books and records 
concerning all details of each of their exemptions, including relevant 
information about related cash, forward, futures contracts, option on 
futures contracts, and swap positions and transactions (including 
anticipated requirements, production, merchandising activities, 
royalties, contracts for services, cash commodity products and by-
products, cross-commodity hedges, and records of bona fide hedging swap 
counterparties) as applicable, and shall make such books and records 
available to the Commission upon request under paragraph (e) of this 
section.
    (2) Any person that relies on a written representation received from 
another person that a swap qualifies as a pass-through swap under 
paragraph (2) of the definition of bona fide hedging transaction or 
position in Sec.  150.1 shall keep and make available to the Commission 
upon request the relevant books and records of such written 
representation, including any books and records that the person intends 
to use to demonstrate that the pass-through swap is a bona fide hedging 
transaction or position, for a period of at least two years following 
the expiration of the swap.
    (3) All books and records required to be kept pursuant to this 
section shall be kept in accordance with the requirements of Sec.  1.31 
of this chapter.
    (e) Call for information. Upon call by the Commission, the Director 
of the Division of Enforcement, or the Director's delegate, any person 
claiming an exemption from speculative position limits under this 
section shall provide to the Commission 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 commodity derivative 
contracts or cash-market positions which support the claimed exemption; 
and the relevant business relationships supporting a claimed exemption.
    (f) Aggregation of accounts. Entities required to aggregate accounts 
or positions under Sec.  150.4 shall be considered the same person for 
the purpose of determining whether they are eligible for an exemption 
under paragraphs (a)(1) through (4) of this section with respect to such 
aggregated account or position.
    (g) Delegation of authority to the Director of the Division of 
Market Oversight. (1) 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:
    (i) The authority in paragraph (a)(3) of this section to provide 
exemptions in circumstances of financial distress;
    (ii) The authority in paragraph (b)(2) of this section to request 
additional information with respect to a request for a bona fide hedging 
transaction or position recognition or spread exemption;
    (iii) The authority in paragraph (b)(3)(ii)(B) of this section to, 
if applicable, determine a commercially reasonable amount of time 
required for a person to bring its position within the Federal 
speculative position limits;
    (iv) The authority in paragraph (b)(4) of this section to determine 
whether to recognize a position as a bona fide hedging transaction or 
position or to grant a spread exemption; and
    (v) The authority in paragraph (b)(2) or (5) of this section to 
request that a person submit updated materials or renew their request 
with the Commission.

[[Page 355]]

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

[86 FR 3468, Jan. 14, 2021]



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 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

[[Page 356]]

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 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

[[Page 357]]

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 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

[[Page 358]]

    (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 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 and exemptions therefrom.

    (a) Requirements for exchange-set limits on commodity derivative 
contracts subject to Federal speculative position limits set

[[Page 359]]

forth in Sec.  150.2--(1) Exchange-set limits. For any commodity 
derivative contract that is subject to a Federal speculative position 
limit under Sec.  150.2, a designated contract market or swap execution 
facility that is a trading facility shall set a speculative position 
limit no higher than the level specified in Sec.  150.2.
    (2) Exemptions to exchange-set limits. A designated contract market 
or swap execution facility that is a trading facility may grant 
exemptions from any speculative position limits it sets under paragraph 
(a)(1) of this section in accordance with the following:
    (i) Exemption levels. An exemption that conforms to an exemption the 
Commission identified in:
    (A) Sections 150.3(a)(1)(i), (a)(2)(i), (a)(4) and (a)(5) may be 
granted at a level that exceeds the level of the applicable Federal 
limit in Sec.  150.2;
    (B) Sections 150.3(a)(1)(ii) and (a)(2)(ii) may be granted at a 
level that exceeds the level of the applicable Federal limit in Sec.  
150.2, provided the exemption is first approved in accordance with Sec.  
150.3(b) or 150.9, as applicable;
    (C) Section 150.3(a)(3) may be granted at a level that exceeds the 
level of the applicable Federal limit in Sec.  150.2, provided that, a 
division of the Commission has first approved such exemption pursuant to 
a request submitted under Sec.  140.99(a)(1) of this chapter; and
    (D) An exemption of the type that does not conform to any of the 
exemptions identified in Sec.  150.3(a) must be granted at a level that 
does not exceed the applicable Federal limit in Sec.  150.2 and that 
complies with paragraph (a)(2)(ii)(G) of this section, unless the 
Commission has first approved such exemption pursuant to Sec.  150.3(b) 
or pursuant to a request submitted under Sec.  140.99(a)(1).
    (ii) Application for exemption from exchange-set limits. With 
respect to a designated contract market or swap execution facility that 
is a trading facility that elects to grant exemptions under paragraph 
(a)(2)(i) of this section:
    (A) Except as provided in paragraph (a)(2)(ii)(B) of this section, 
the designated contract market or swap execution facility shall require 
an entity to file an application requesting such exemption in advance of 
the date that such position would be in excess of the limits then in 
effect. Such application shall include any information needed to enable 
the designated contract market or swap execution facility and the 
Commission to determine whether the facts and circumstances demonstrate 
that the designated contract market or swap execution facility may grant 
an exemption. Any application for a bona fide hedging transaction or 
position shall include a description of the applicant's activity in the 
cash markets and swaps markets for the commodity underlying the position 
for which the application is submitted, including, but not limited to, 
information regarding the offsetting cash positions.
    (B) The designated contract market or swap execution facility may 
adopt rules that allow a person, due to demonstrated sudden or 
unforeseen increases in its bona fide hedging needs, to file an 
application to request a recognition of a bona fide hedging transaction 
or position within five business days after the person established the 
position that exceeded the applicable exchange-set speculative position 
limit.
    (C) The designated contract market or swap execution facility must 
require that any application filed pursuant to paragraph (a)(2)(ii)(B) 
of this section include an explanation of the circumstances warranting 
the sudden or unforeseen increases in bona fide hedging needs.
    (D) If an application filed pursuant to paragraph (a)(2)(ii)(B) of 
this section is denied, the applicant must bring its position within the 
designated contract market or swap execution facility's speculative 
position limits within a commercially reasonable time as determined by 
the designated contract market or swap execution facility.
    (E) The Commission will not pursue an enforcement action for a 
position limits violation for the person holding the position during the 
period of the designated contract market or swap execution facility's 
review nor once the designated contract market or swap execution 
facility has issued its determination, so long as the application was 
submitted in good faith and the applicant brings its position within the 
designated contract market or swap

[[Page 360]]

execution facility's speculative position limits within a commercially 
reasonable time as determined by the designated contract market or swap 
execution facility.
    (F) The designated contract market or swap execution facility shall 
require, for any such exemption granted, that the entity re-apply for 
the exemption at least annually;
    (G) The designated contract market or swap execution facility:
    (1) May, in accordance with the designated contract market or swap 
execution facility's rules, deny any such application, or limit, 
condition, or revoke any such exemption, at any time after providing 
notice to the applicant, and
    (2) Shall consider whether the requested exemption would result in 
positions that would not be in accord with sound commercial practices in 
the relevant commodity derivative market and/or that would exceed an 
amount that may be established and liquidated in an orderly fashion in 
that market; and
    (H) Notwithstanding paragraph (a)(2)(ii)(G) of this section, the 
designated contract market or swap execution facility may grant 
exemptions, subject to terms, conditions, or limitations, that require a 
person to exit any referenced contract positions in excess of position 
limits during the lesser of the last five days of trading or the time 
period for the spot month in such physical-delivery contract, or to 
otherwise limit the size of such position during that time period. 
Designated contract markets and swap execution facilities may refer to 
paragraph (b) of appendix B or appendix G to part 150, for guidance 
regarding the foregoing, as applicable.
    (3) Exchange-set limits on pre-existing positions--(i) Pre-existing 
positions in a spot month. A designated contract market or swap 
execution facility that is a trading facility shall require compliance 
with spot month exchange-set speculative position limits for pre-
existing positions in commodity derivative contracts other than pre-
enactment swaps and transition period swaps.
    (ii) Pre-existing positions in a non-spot month. A single month or 
all-months-combined speculative position limit established under 
paragraph (a)(1) of this section shall apply to any pre-existing 
positions in commodity derivative contracts, other than pre-enactment 
swaps and transition period swaps.
    (4) Monthly reports detailing the disposition of each exemption 
application. (i) For commodity derivative contracts subject to Federal 
speculative position limits, the designated contract market or swap 
execution facility shall submit to the Commission a report each month 
showing the disposition of any exemption application, including the 
recognition of any position as a bona fide hedging transaction or 
position, the exemption of any spread transaction or other position, the 
renewal, revocation, or modification of a previously granted recognition 
or exemption, and the rejection of any application, as well as the 
following details for each application:
    (A) The date of disposition;
    (B) The effective date of the disposition;
    (C) The expiration date of any recognition or exemption;
    (D) Any unique identifier(s) the designated contract market or swap 
execution facility may assign to track the application, or the specific 
type of recognition or exemption;
    (E) If the application is for an enumerated bona fide hedging 
transaction or position, the name of the enumerated bona fide hedging 
transaction or position listed in appendix A to this part;
    (F) If the application is for a spread transaction listed in the 
spread transaction definition in Sec.  150.1, the name of the spread 
transaction as it is listed in Sec.  150.1;
    (G) The identity of the applicant;
    (H) The listed commodity derivative contract or position(s) to which 
the application pertains;
    (I) The underlying cash commodity;
    (J) The maximum size of the commodity derivative position that is 
recognized by the designated contract market or swap execution facility 
as a bona fide hedging transaction or position, specified by contract 
month and by the type of limit as spot month, single month, or all-
months-combined, as applicable;

[[Page 361]]

    (K) Any size limitations or conditions established for a spread 
exemption or other exemption; and
    (L) For a bona fide hedging transaction or position, a concise 
summary of the applicant's activity in the cash markets and swaps 
markets for the commodity underlying the commodity derivative position 
for which the application was submitted.
    (ii) The designated contract market or swap execution facility shall 
submit to the Commission the information required by paragraph (a)(4)(i) 
of this section:
    (A) As specified by the Commission on the Forms and Submissions page 
at www.cftc.gov; and
    (B) Using the format, coding structure, and electronic data 
transmission procedures approved in writing by the Commission.
    (b) Requirements for exchange-set limits on commodity derivative 
contracts in a physical commodity that are not subject to the limits set 
forth in Sec.  150.2--(1) Exchange-set spot-month limits. For any 
physical commodity derivative contract that is not subject to a Federal 
speculative position limit under Sec.  150.2, a designated contract 
market or swap execution facility that is a trading facility shall set a 
speculative position limit as follows:
    (i) Spot month speculative position limit levels. For any commodity 
derivative contract subject to paragraph (b) of this section, a 
designated contract market or swap execution facility that is a trading 
facility shall establish speculative position limits for the spot month 
no greater than 25 percent of the estimated spot month deliverable 
supply, calculated separately for each month to be listed.
    (ii) Additional sources for compliance. Alternatively, a designated 
contract market or swap execution facility that is a trading facility 
may submit rules to the Commission establishing spot month speculative 
position limits other than as provided in paragraph (b)(1)(i) of this 
section, provided that each limit is set at a level that is necessary 
and appropriate to reduce the potential threat of market manipulation or 
price distortion of the contract's or the underlying commodity's price 
or index.
    (2) Exchange-set limits or accountability outside of the spot 
month--(i) Non-spot month speculative position limit or accountability 
levels. For any commodity derivative contract subject to paragraph (b) 
of this section, a designated contract market or swap execution facility 
that is a trading facility shall adopt either speculative position 
limits or position accountability outside of the spot month at a level 
that is necessary and appropriate to reduce the potential threat of 
market manipulation or price distortion of the contract's or the 
underlying commodity's price or index.
    (ii) Additional sources for compliance. A designated contract market 
or swap execution facility that is a trading facility may refer to the 
non-exclusive acceptable practices in paragraph (b) of appendix F of 
this part to demonstrate to the Commission compliance with the 
requirements of paragraph (b)(2)(i) of this section.
    (3) Look-alike contracts. For any newly listed commodity derivative 
contract subject to paragraph (b) of this section that is substantially 
the same as an existing contract listed on a designated contract market 
or swap execution facility that is a trading facility, the designated 
contract market or swap execution facility that is a trading facility 
listing such newly listed contract shall adopt spot month, individual 
month, and all-months-combined speculative position limits comparable to 
those of the existing contract. Alternatively, if such designated 
contract market or swap execution facility seeks to adopt speculative 
position limits that are not comparable to those of the existing 
contract, such designated contract market or swap execution facility 
shall demonstrate to the Commission how the levels comply with 
paragraphs (b)(1) and/or (b)(2) of this section.
    (4) Exemptions to exchange-set limits. A designated contract market 
or swap execution facility that is a trading facility may grant 
exemptions from any speculative position limits it sets under paragraph 
(b)(1) or (2) of this section in accordance with the following:

[[Page 362]]

    (i) An entity seeking an exemption shall be required to apply to the 
designated contract market or swap execution facility for any such 
exemption from its speculative position limit rules; and
    (ii) A designated contract market or swap execution facility that is 
a trading facility may deny any such application, or limit, condition, 
or revoke any such exemption, at any time after providing notice to the 
applicant. Such designated contract market or swap execution facility 
shall consider whether the requested exemption would result in positions 
that would not be in accord with sound commercial practices in the 
relevant commodity derivative market and/or would exceed an amount that 
may be established and liquidated in an orderly fashion in that market.
    (c) Requirements for security futures products. For security futures 
products, speculative position limits and position accountability 
requirements are specified in Sec.  41.25 of this chapter.
    (d) Rules on aggregation. For commodity derivative contracts in a 
physical commodity, a designated contract market or swap execution 
facility that is a trading facility shall have aggregation rules that 
conform to Sec.  150.4.
    (e) Requirements for submissions to the Commission. In order for a 
designated contract market or swap execution facility that is a trading 
facility to adopt speculative position limits and/or position 
accountability pursuant to paragraph (a) or (b) of this section and/or 
to elect to offer exemptions from any such levels pursuant to such 
paragraphs, the designated contract market or swap execution facility 
shall submit to the Commission pursuant to part 40 of this chapter rules 
establishing such levels and/or exemptions. To the extent that a 
designated contract market or swap execution facility adopts speculative 
position limit levels, such part 40 submission shall also include the 
methodology by which such levels are calculated. The designated contract 
market or swap execution facility shall review such speculative position 
limit levels regularly for compliance with this section and update such 
speculative position limit levels as needed.
    (f) Delegation of authority to the Director of the Division of 
Market Oversight--(1) Commission delegations. 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 in paragraph (a)(4)(ii) 
of this section to provide instructions regarding the submission to the 
Commission of information required to be reported, pursuant to paragraph 
(a)(4)(i) of this section, by a designated contract market or swap 
execution facility, to specify the manner for submitting such 
information on the Forms and Submissions page at www.cftc.gov, and to 
determine the format, coding structure, and electronic data transmission 
procedures for submitting such information.
    (2) Commission consideration of delegated matter. 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.
    (3) Commission authority. Nothing in this section prohibits the 
Commission, at its election, from exercising the authority delegated in 
this section.

[86 FR 3470, Jan. 14, 2021]



Sec.  150.6  Scope.

    This part shall only be construed as having an effect on speculative 
position limits set by the Commission or by a designated contract market 
or swap execution facility, including any associated recordkeeping and 
reporting regulations in this chapter. Nothing in this part shall be 
construed to relieve any designated contract market, swap execution 
facility, or its governing board from responsibility under section 
5(d)(4) of the Act to prevent manipulation and corners. Further, nothing 
in this part shall be construed to affect any other provisions of the 
Act or Commission regulations, including, but not limited to, those 
relating to actual or attempted manipulation, corners, squeezes, 
fraudulent or deceptive conduct, or to prohibited transactions.

[86 FR 3472, Jan. 14, 2021]

[[Page 363]]



Sec.  150.7  [Reserved]



Sec.  150.8  Severability.

    If any provision of this part, or the application thereof to any 
person or circumstances, is held invalid, such invalidity shall not 
affect the validity of other provisions or the application of such 
provision to other persons or circumstances that can be given effect 
without the invalid provision or application.

[86 FR 3472, Jan. 14, 2021]



Sec.  150.9  Process for recognizing non-enumerated bona fide hedging 
transactions or positions with respect to Federal speculative position 
limits.

    For purposes of Federal speculative position limits, a person with a 
position in a referenced contract seeking recognition of such position 
as a non-enumerated bona fide hedging transaction or position, in 
accordance with Sec.  150.3(a)(1)(ii), shall apply to the Commission, 
pursuant to Sec.  150.3(b), or apply to a designated contract market or 
swap execution facility in accordance with this section. If such person 
submits an application to a designated contract market or swap execution 
facility in accordance with this section, and the designated contract 
market or swap execution facility, with respect to its own speculative 
position limits established pursuant to Sec.  150.5(a), recognizes the 
person's position as a non-enumerated bona fide hedging transaction or 
position, then the person may also exceed the applicable Federal 
speculative position limit for such position in accordance with 
paragraph (e) of this section. The designated contract market or swap 
execution facility may approve such applications only if the designated 
contract market or swap execution facility complies with the conditions 
set forth in paragraphs (a) through (e) of this section.
    (a) Approval of rules. The designated contract market or swap 
execution facility must maintain rules that establish application 
processes and conditions for recognizing bona fide hedging transactions 
or positions consistent with the requirements of this section, and must 
seek approval of such rules from the Commission pursuant to Sec.  40.5 
of this chapter.
    (b) Prerequisites for a designated contract market or swap execution 
facility to recognize a bona fide hedging transaction or position in 
accordance with this section. (1) The designated contract market or swap 
execution facility lists the applicable referenced contract for trading;
    (2) The position meets the definition of bona fide hedging 
transaction or position in section 4a(c)(2) of the Act and the 
definition of bona fide hedging transaction or position in Sec.  150.1; 
and
    (3) The designated contract market or swap execution facility does 
not recognize as a bona fide hedging transaction or position any 
position involving a commodity index contract and one or more referenced 
contracts, including exemptions known as risk management exemptions.
    (c) Application process. The designated contract market or swap 
execution facility's application process meets the following conditions:
    (1) Required application information. The designated contract market 
or swap execution facility requires the applicant to provide, and can 
obtain from the applicant, all information needed to enable the 
designated contract market or swap execution facility and the Commission 
to determine whether the facts and circumstances demonstrate that the 
designated contract market or swap execution facility may recognize a 
position as a bona fide hedging transaction or position, including the 
following:
    (i) A description of the position in the commodity derivative 
contract for which the application is submitted, including but not 
limited to, the name of the underlying commodity and the derivative 
position size;
    (ii) An explanation of the hedging strategy, including a statement 
that the position complies with the requirements of section 4a(c)(2) of 
the Act and the definition of bona fide hedging transaction or position 
in Sec.  150.1, and information to demonstrate why the position 
satisfies such requirements and definition;
    (iii) A statement concerning the maximum size of all gross positions 
in

[[Page 364]]

commodity derivative contracts for which the application is submitted;
    (iv) A description of the applicant's activity in the cash markets 
and the swaps markets for the commodity underlying the position for 
which the application is submitted, including, but not limited to, 
information regarding the offsetting cash positions; and
    (v) Any other information the designated contract market or swap 
execution facility requires, in its discretion, to determine that the 
position complies with paragraph (b)(2) of this section, as applicable.
    (2) Timing of application. (i) Except as provided in paragraph 
(c)(2)(ii) of this section, the designated contract market or swap 
execution facility requires the applicant to submit an application and 
receive a notice of approval of such application from the designated 
contract market or swap execution facility prior to the date that the 
position for which such application was submitted would be in excess of 
the applicable Federal speculative position limits.
    (ii) A designated contract market or swap execution facility may 
adopt rules that allow a person, due to demonstrated sudden or 
unforeseen increases in its bona fide hedging needs, to file an 
application with the designated contract market or swap execution 
facility to request a recognition of a bona fide hedging transaction or 
position within five business days after the person established the 
position that exceeded the applicable Federal speculative position 
limit.
    (A) The designated contract market or swap execution facility must 
require that any application filed pursuant to paragraph (c)(2)(ii) of 
this section include an explanation of the circumstances warranting the 
sudden or unforeseen increases in bona fide hedging needs.
    (B) If an application filed pursuant to paragraph (c)(2)(ii) of this 
section is denied by the designated contract market, swap execution 
facility, or Commission, the applicant must bring its position within 
the applicable Federal speculative position limits within a commercially 
reasonable time as determined by the Commission in consultation with the 
applicant and the applicable designated contract market or swap 
execution facility.
    (C) The Commission will not pursue an enforcement action for a 
position limits violation for the person holding the position during the 
period of the designated contract market, swap execution facility, or 
Commission's review nor once a determination has been issued, so long as 
the application was submitted in good faith and the person complies with 
paragraph (c)(2)(ii)(B) of this section.
    (3) Renewal of applications. The designated contract market or swap 
execution facility requires each applicant to reapply with the 
designated contract market or swap execution facility to maintain such 
recognition at least on an annual basis by updating the initial 
application, and to receive a notice of extension of the original 
approval from the designated contract market or swap execution facility 
to continue relying on such recognition for purposes of Federal 
speculative position limits. If the facts and circumstances underlying a 
renewal application are materially different than the initial 
application, the designated contract market or swap execution facility 
is required to treat such application as a new request submitted through 
the Sec.  150.9 process and subject to the Commission's 10/2-day review 
process in paragraph (e) of this section.
    (4) Exchange revocation authority. The designated contract market or 
swap execution facility retains its authority to limit, condition, or 
revoke, at any time after providing notice to the applicant, any bona 
fide hedging transaction or position recognition for purposes of the 
designated contract market or swap execution facility's speculative 
position limits established under Sec.  150.5(a), for any reason as 
determined in the discretion of the designated contract market or swap 
execution facility, including if the designated contract market or swap 
execution facility determines that the position no longer meets the 
conditions set forth in paragraph (b) of this section, as applicable.

[[Page 365]]

    (d) Recordkeeping. (1) The designated contract market or swap 
execution facility keeps full, complete, and systematic records, which 
include all pertinent data and memoranda, of all activities relating to 
the processing of such applications and the disposition thereof. Such 
records include:
    (i) Records of the designated contract market's or swap execution 
facility's recognition of any derivative position as a bona fide hedging 
transaction or position, revocation or modification of any such 
recognition, or the rejection of an application;
    (ii) All information and documents submitted by an applicant in 
connection with its application, including documentation and information 
that is submitted after the disposition of the application, and any 
withdrawal, supplementation, or update of any application;
    (iii) Records of oral and written communications between the 
designated contract market or swap execution facility and the applicant 
in connection with such application; and
    (iv) All information and documents in connection with the designated 
contract market or swap execution facility's analysis of, and action(s) 
taken with respect to, such application.
    (2) All books and records required to be kept pursuant to this 
section shall be kept in accordance with the requirements of Sec.  1.31 
of this chapter.
    (e) Process for a person to exceed Federal speculative position 
limits on a referenced contract--(1) Notification to the Commission. The 
designated contract market or swap execution facility must submit to the 
Commission a notification of each initial determination to recognize a 
bona fide hedging transaction or position in accordance with this 
section, concurrently with the notice of such determination the 
designated contract market or swap execution facility provides to the 
applicant.
    (2) Notification requirements. The notification in paragraph (e)(1) 
of this section shall include, at a minimum, the following information:
    (i) Name of the applicant;
    (ii) Brief description of the bona fide hedging transaction or 
position being recognized;
    (iii) Name of the contract(s) relevant to the recognition;
    (iv) The maximum size of the position that may exceed Federal 
speculative position limits;
    (v) The effective date and expiration date of the recognition;
    (vi) An indication regarding whether the position may be maintained 
during the last five days of trading during the spot month, or the time 
period for the spot month; and
    (vii) A copy of the application and any supporting materials.
    (3) Exceeding Federal speculative position limits on referenced 
contracts. A person may exceed Federal speculative position limits on a 
referenced contract after the designated contract market or swap 
execution facility issues the notification required pursuant to 
paragraph (e)(1) of this section, unless the Commission notifies the 
designated contract market or swap execution facility and the applicant 
otherwise, pursuant to paragraph (e)(5) or (6) of this section, before 
the ten business day period expires.
    (4) Exceeding Federal speculative position limits on referenced 
contracts due to sudden or unforeseen circumstances. If a person files 
an application for a recognition of a bona fide hedging transaction or 
position in accordance with paragraph (c)(2)(ii) of this section, then 
such person may rely on the designated contract market or swap execution 
facility's determination to grant such recognition for purposes of 
Federal speculative position limits two business days after the 
designated contract market or swap execution facility issues the 
notification required pursuant to paragraph (e)(1) of this section, 
unless the Commission notifies the designated contract market or swap 
execution facility and the applicant otherwise, pursuant to paragraph 
(e)(5) or (6) of this section, before the two business day period 
expires.
    (5) Commission stay of pending applications and requests for 
additional information. The Commission may stay an application that 
requires additional time to analyze, and/or may request additional 
information to determine whether the position for which the application 
is submitted meets the conditions

[[Page 366]]

set forth in paragraph (b) of this section. The Commission shall notify 
the applicable designated contract market or swap execution facility and 
the applicant of a Commission determination to stay the application and/
or request any supplemental information, and shall provide an 
opportunity for the applicant to respond. The Commission will have an 
additional 45 days from the date of the stay notification to conduct the 
review and issue a determination with respect to the application. If the 
Commission stays an application and the applicant has not yet exceeded 
Federal speculative position limits, then the applicant may not exceed 
Federal speculative position limits unless the Commission approves the 
application. If the Commission stays an application and the applicant 
has already exceeded Federal speculative position limits, then the 
applicant may continue to maintain the position unless the Commission 
notifies the designated contract market or swap execution facility and 
the applicant otherwise, pursuant to paragraph (e)(6) of this section.
    (6) Commission determination for pending applications. If, during 
the Commission's ten or two business day review period in paragraphs 
(e)(3) and (4) of this section, the Commission determines that a 
position for which the application is submitted does not meet the 
conditions set forth in paragraph (b) of this section, the Commission 
shall:
    (i) Notify the designated contract market or swap execution facility 
and the applicant within ten or two business days, as applicable, after 
the designated contract market or swap execution facility issues the 
notification required pursuant to paragraph (e)(1) of this section;
    (ii) Provide an opportunity for the applicant to respond to such 
notification;
    (iii) Issue a determination to deny the application, or limit or 
condition the application approval for purposes of Federal speculative 
position limits and, as applicable, require the person to reduce the 
derivatives position within a commercially reasonable time, as 
determined by the Commission in consultation with the applicant and the 
applicable designated contract market or swap execution facility, or 
otherwise come into compliance; and
    (iv) The Commission will not pursue an enforcement action for a 
position limits violation for the person holding the position during the 
period of the Commission's review nor once the Commission has issued its 
determination, so long as the application was submitted in good faith 
and the person complies with any requirement to reduce the position 
pursuant to paragraph (e)(6)(iii) of this section, as applicable.
    (f) Commission revocation of applications previously approved. (1) 
If a designated contract market or a swap execution facility limits, 
conditions, or revokes any recognition of a bona fide hedging 
transaction or position for purposes of the respective designated 
contract market's or swap execution facility's speculative position 
limits established under Sec.  150.5(a), then such recognition will also 
be deemed limited, conditioned, or revoked for purposes of Federal 
speculative position limits.
    (2) If the Commission determines, at any time, that a position that 
has been recognized as a bona fide hedging transaction or position for 
purposes of Federal speculative position limits is no longer consistent 
with section 4a(c)(2) of the Act or the definition of bona fide hedging 
transaction or position in Sec.  150.1, the following applies:
    (i) The Commission shall notify the person holding the position and 
the relevant designated contract market or swap execution facility. 
After providing such person and such designated contract market or swap 
execution facility an opportunity to respond, the Commission may, in its 
discretion, limit, condition, or revoke its determination for purposes 
of Federal speculative position limits and require the person to reduce 
the derivatives position within a commercially reasonable time as 
determined by the Commission in consultation with such person and such 
designated contract market or swap execution facility, or otherwise come 
into compliance;
    (ii) The Commission shall include in its notification a brief 
explanation of the nature of the issues raised and the

[[Page 367]]

specific provisions of the Act or the Commission's regulations with 
which the position or application is, or appears to be, inconsistent; 
and
    (iii) The Commission will not pursue an enforcement action for a 
position limits violation for the person holding the position during the 
period of the Commission's review, nor once the Commission has issued 
its determination, provided the person submitted the application in good 
faith and reduces the position within a commercially reasonable time, as 
determined by the Commission in consultation with such person and the 
relevant designated contract market or swap execution facility, or 
otherwise comes into compliance.
    (g) Delegation of authority to the Director of the Division of 
Market Oversight--(1) Commission delegations. 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 to request additional 
information, pursuant to paragraph (e)(5) of this section, from the 
applicable designated contract market or swap execution facility and 
applicant.
    (2) Commission consideration of delegated matter. 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.
    (3) Commission authority. Nothing in this section prohibits the 
Commission, at its election, from exercising the authority delegated in 
this section.

[86 FR 3472, Jan. 14, 2021]



    Sec. Appendix A to Part 150--List of Enumerated Bona Fide Hedges

    Pursuant to Sec.  150.3(a)(1)(i), positions that comply with the 
bona fide hedging transaction or position definition in Sec.  150.1 and 
that are enumerated in this appendix A may exceed Federal speculative 
position limits to the extent that all applicable requirements in this 
part are met. A person holding such positions enumerated in this 
appendix A may exceed Federal speculative position limits for such 
positions without requesting prior approval under Sec.  150.3 or Sec.  
150.9. A person holding such positions that are not enumerated in this 
appendix A must request and obtain approval pursuant to Sec.  150.3 or 
Sec.  150.9 prior to exceeding the applicable Federal speculative 
position limits--unless such positions qualify for the retroactive 
approval process, and the person seeks retroactive approval in 
accordance with Sec.  150.3 or Sec.  150.9.
    The enumerated bona fide hedges do not state the exclusive means for 
establishing compliance with the bona fide hedging transaction or 
position definition in Sec.  150.1 or with the requirements of Sec.  
150.3(a)(1).
    (a) Enumerated hedges--(1) Hedges of inventory and cash commodity 
fixed-price purchase contracts. Short positions in commodity derivative 
contracts that do not exceed in quantity the sum of the person's 
ownership of inventory and fixed-price purchase contracts in the 
commodity derivative contracts' underlying cash commodity.
    (2) Hedges of cash commodity fixed-price sales contracts. Long 
positions in commodity derivative contracts that do not exceed in 
quantity the sum of the person's fixed-price sales contracts in the 
commodity derivative contracts' underlying cash commodity and the 
quantity equivalent of fixed-price sales contracts of the cash products 
and by-products of such commodity.
    (3) Hedges of offsetting unfixed-price cash commodity sales and 
purchases. Both short and long positions in commodity derivative 
contracts that do not exceed in quantity the amount of the commodity 
derivative contracts' underlying cash commodity that has been both 
bought and sold by the same person at unfixed prices:
    (i) Basis different delivery months in the same commodity derivative 
contract; or
    (ii) Basis different commodity derivative contracts in the same 
commodity, regardless of whether the commodity derivative contracts are 
in the same calendar month.
    (4) Hedges of unsold anticipated production. Short positions in 
commodity derivative contracts that do not exceed in quantity the 
person's unsold anticipated production of the commodity derivative 
contracts' underlying cash commodity.
    (5) Hedges of unfilled anticipated requirements. Long positions in 
commodity derivative contracts that do not exceed in quantity the 
person's unfilled anticipated requirements for the commodity derivative 
contracts' underlying cash commodity, for processing, manufacturing, or 
use by that person, or for resale by a utility as it pertains to the 
utility's obligations to meet the unfilled anticipated demand of its 
customers for the customer's use.
    (6) Hedges of anticipated merchandising. Long or short positions in 
commodity derivative contracts that offset the anticipated change in 
value of the underlying commodity that a person anticipates purchasing 
or selling, provided that:
    (i) The positions in the commodity derivative contracts do not 
exceed in quantity twelve months' of current or anticipated

[[Page 368]]

purchase or sale requirements of the same cash commodity that is 
anticipated to be purchased or sold; and
    (ii) The person is a merchant handling the underlying commodity that 
is subject to the anticipatory merchandising hedge, and that such 
merchant is entering into the position solely for purposes related to 
its merchandising business and has a demonstrated history of buying and 
selling the underlying commodity for its merchandising business.
    (7) Hedges by agents. Long or short positions in commodity 
derivative contracts by an agent who does not own or has not contracted 
to sell or purchase the commodity derivative contracts' underlying cash 
commodity at a fixed price, provided that the agent is responsible for 
merchandising the cash positions that are being offset in commodity 
derivative contracts and the agent has a contractual arrangement with 
the person who owns the commodity or holds the cash-market commitment 
being offset.
    (8) Hedges of anticipated mineral royalties. Short positions in a 
person's commodity derivative contracts offset by the anticipated change 
in value of mineral royalty rights that are owned by that person, 
provided that the royalty rights arise out of the production of the 
commodity underlying the commodity derivative contracts.
    (9) Hedges of anticipated services. Short or long positions in a 
person's commodity derivative 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 that person, provided that the 
contract for services arises out of the production, manufacturing, 
processing, use, or transportation of the commodity underlying the 
commodity derivative contracts.
    (10) Offsets of commodity trade options. Long or short positions in 
commodity derivative contracts that do not exceed in quantity, on a 
futures-equivalent basis, a position in a commodity trade option that 
meets the requirements of Sec.  32.3 of this chapter. Such commodity 
trade option transaction, if it meets the requirements of Sec.  32.3 of 
this chapter, may be deemed, for purposes of complying with this 
paragraph (a)(10) of this appendix A, as either a cash commodity 
purchase or sales contract as set forth in paragraph (a)(1) or (2) of 
this appendix A, as applicable.
    (11) Cross-commodity hedges. Positions in commodity derivative 
contracts described in paragraph (2) of the bona fide hedging 
transaction or position definition in Sec.  150.1 or in paragraphs 
(a)(1) through (10) of this appendix A may also be used to offset the 
risks arising from a commodity other than the cash commodity underlying 
the commodity derivative contracts, provided that the fluctuations in 
value of the cash commodity underlying the commodity derivative 
contracts, shall be substantially related to the fluctuations in value 
of the actual or anticipated cash commodity position or a pass-through 
swap.
    (b) [Reserved]

[86 FR 3475, Jan. 14, 2021]



  Sec. Appendix B to Part 150--Guidance on Gross Hedging Positions and 
                  Positions Held During the Spot Period

    (a) Guidance on gross hedging positions. (1) A person's gross 
hedging positions may be deemed in compliance with the bona fide hedging 
transaction or position definition in Sec.  150.1, whether enumerated or 
non-enumerated, provided that all applicable regulatory requirements are 
met, including that the position is economically appropriate to the 
reduction of risks in the conduct and management of a commercial 
enterprise and otherwise satisfies the bona fide hedging definition in 
Sec.  150.1, and provided further that:
    (i) The manner in which the person measures risk is consistent and 
follows historical practice for that person;
    (ii) The person is not measuring risk on a gross basis to evade the 
speculative position limits in Sec.  150.2 or the aggregation rules in 
Sec.  150.4; and
    (iii) The person is able to demonstrate compliance with paragraphs 
(a)(1)(i) and (ii) of this appendix, including by providing 
justifications for measuring risk on a gross basis, upon the request of 
the Commission and/or of a designated contract market, including by 
providing information regarding the entities with which the person 
aggregates positions.
    (b) Guidance regarding positions held during the spot period. The 
regulations governing exchange-set speculative position limits and 
exemptions therefrom under Sec.  150.5(a)(2)(ii)(D) provide that 
designated contract markets and swap execution facilities 
(``exchanges'') may impose restrictions on bona fide hedging transaction 
or position exemptions to require the person to exit any such positions 
in excess of limits during the lesser of the last five days of trading 
or the time period for the spot month in such physical-delivery 
contract, or otherwise limit the size of such position. This guidance is 
intended to provide factors the Commission believes exchanges should 
consider when determining whether to impose a five-day rule or similar 
restriction but is not intended to be used as a mandatory checklist. The 
exchanges may consider whether:
    (1) The position complies with the bona fide hedging transaction or 
position definition in Sec.  150.1, whether enumerated or non-
enumerated;
    (2) There is an economically appropriate need to maintain such 
position in excess of

[[Page 369]]

Federal speculative position limits during the spot period for such 
contract, and such need relates to the purchase or sale of a cash 
commodity; and
    (3) The person wishing to exceed Federal position limits during the 
spot period:
    (i) Intends to make or take delivery during that time period;
    (ii) Has the ability to take delivery for any long position at 
levels that are economically appropriate (i.e., the delivery comports 
with the person's demonstrated need for the commodity and the contract 
is the most economical source for that commodity);
    (iii) Has the ability to deliver against any short position (i.e., 
has inventory on hand in a deliverable location and in a condition in 
which the commodity can be used upon delivery and that delivery against 
futures contracts is economically appropriate, as it is the best sales 
option for that inventory).

[86 FR 3475, Jan. 14, 2021]



   Sec. Appendix C to Part 150--Guidance Regarding the Definition of 
                           Referenced Contract

    This appendix C provides guidance regarding the ``referenced 
contract'' definition in Sec.  150.1, which provides in paragraph (3) of 
the definition of referenced contract that the term referenced contract 
does not include a location basis contract, a commodity index contract, 
a swap guarantee, a trade option that meets the requirements of Sec.  
32.3 of this chapter, a monthly average pricing contract, or an outright 
price reporting agency index contract. The term ``referenced contract'' 
is used throughout part 150 of the Commission's regulations to refer to 
contracts that are subject to Federal position limits. A position in a 
contract that is not a referenced contract is not subject to Federal 
position limits, and, as a consequence, cannot be netted with positions 
in referenced contracts for purposes of Federal position limits. This 
guidance is intended to clarify the types of contracts that would 
qualify as a location basis contract, commodity index contract, monthly 
average pricing contract, or outright price reporting agency index 
contract.
    Compliance with this guidance does not diminish or replace, in any 
event, the obligations and requirements of any person to comply with the 
regulations provided under this part, or any other part of the 
Commission's regulations. The guidance is for illustrative purposes only 
and does not state the exclusive means for a contract to qualify, or not 
qualify, as a referenced contract as defined in Sec.  150.1, or to 
comply with any other provision in this part.
    (a) Guidance. (1) As provided in paragraph (3) of the ``referenced 
contract'' definition in Sec.  150.1, the following types of contracts 
are not deemed referenced contracts, meaning such contracts are not 
subject to Federal position limits and cannot be netted with positions 
in referenced contracts for purposes of Federal position limits: 
location basis contracts; commodity index contracts; swap guarantees; 
trade options that meet the requirements of Sec.  32.3 of this chapter; 
monthly average pricing contracts; and outright price reporting agency 
index contracts.
    (2) Location basis contract. For purposes of the referenced contract 
definition in Sec.  150.1, a location basis contract means a commodity 
derivative contract that is cash-settled based on the difference in:
    (i) The price, directly or indirectly, of:
    (A) A particular core referenced futures contract; or
    (B) A commodity deliverable on a particular core referenced futures 
contract, whether at par, a fixed discount to par, or a premium to par; 
and
    (ii) The price, at a different delivery location or pricing point 
than that of the same particular core referenced futures contract, 
directly or indirectly, of:
    (A) A commodity deliverable on the same particular core referenced 
futures contract, whether at par, a fixed discount to par, or a premium 
to par; or
    (B) A commodity that is listed in appendix D to this part as 
substantially the same as a commodity underlying the same core 
referenced futures contract.
    (3) Commodity index contract. For purposes of the referenced 
contract definition in Sec.  150.1, a commodity index contract means an 
agreement, contract, or transaction that is based on an index comprised 
of prices of commodities that are not the same or substantially the 
same, and that is not a location basis contract, a calendar spread 
contract, or an intercommodity spread contract as such terms are defined 
in this guidance, where:
    (i) A 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; and
    (ii) An 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.
    (4) Monthly average pricing contract means a contract that satisfies 
one of the following:
    (i) The contract's price is calculated based on the equally-weighted 
arithmetic average

[[Page 370]]

of the daily prices of the underlying referenced contract for the entire 
corresponding calendar month or trade month, as applicable; or
    (ii) In determining the price of such contract, the component daily 
prices, in the aggregate, during the spot month of the underlying 
referenced contract comprise no more than 40 percent of such contract's 
weighting.
    (5) Outright price reporting agency index contract means any 
outright commodity derivative contract whose settlement price is based 
solely on an index published by a price reporting agency that surveys 
cash-market transaction prices, provided, however, that this term does 
not include any commodity derivative contract that settles at a basis, 
or differential, between a referenced contract and a price reporting 
agency index.
    (b) [Reserved]

[86 FR 3475, Jan. 14, 2021]



  Sec. Appendix D to Part 150--Commodities Listed as Substantially the 
Same for Purposes of the Term ``Location Basis Contract'' as Used in the 
                     Referenced Contract Definition

    The following table lists each relevant core referenced futures 
contract and associated commodities that are treated as substantially 
the same as a commodity underlying a core referenced futures contract 
for purposes of the term ``location basis contract'' as such term is 
used in the referenced contract definition under Sec.  150.1, and as 
such term is discussed in appendix C to this part.

[[Page 371]]

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[86 FR 3475, Jan. 14, 2021]

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     Sec. Appendix E to Part 150--Speculative Position Limit Levels
[GRAPHIC] [TIFF OMITTED] TR14JA21.028

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

    \1\ Step-down spot month limits apply to positions net long or net 
short as follows: 600 contracts at the close of trading on the first 
business day following the first Friday of the contract month; 300 
contracts at the close of trading on the business day prior to the last 
five trading days of the contract month; and 200 contracts at the close 
of trading on the business day prior to the last two trading days of the 
contract month.

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[[Page 375]]

[GRAPHIC] [TIFF OMITTED] TR14JA21.029

     
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    \2\ For persons that are not availing themselves of the Sec.  
150.3(a)(4) conditional spot month limit exemption in natural gas, the 
2,000 contract spot month speculative position limit level applies to: 
(1) the physically-settled NYMEX Henry Hub Natural Gas (NG) core 
referenced futures contract and any other physically-settled contract 
that qualifies as a referenced contract to NYMEX Henry Hub Natural Gas 
(NG) under the definition of ``referenced contract'' under Sec.  150.1, 
in the aggregate across all exchanges listing a physically-settled NYMEX 
Henry Hub Natural Gas (NG) referenced contract and the OTC swaps market, 
net long or net short; and (2) the cash-settled NYMEX Henry Hub Natural 
Gas (NG) referenced contracts, net long or net short, on a per-exchange 
basis for each exchange that lists one or more cash-settled NYMEX Henry 
Hub Natural Gas (NG) referenced contract(s) rather than aggregated 
across such exchanges. Further, an additional 2,000 contract limit, net 
long or net short, applies across all cash-settled economically 
equivalent NYMEX Henry Hub Natural Gas (NG) OTC swaps.
    \3\ Step-down spot month limits apply to positions net long or net 
short as follows: 6,000 contracts at the close of trading three business 
days prior to the last trading day of the contract; 5,000 contracts at 
the close of trading two business days prior to the last trading day of 
the contract; and 4,000 contracts at the close of trading one business 
day prior to the last trading day of the contract.

[86 FR 3475, Jan. 14, 2021]

[[Page 376]]



 Sec. Appendix F to Part 150--Guidance on, and Acceptable Practices in, 
 Compliance With the Requirements for Exchange-Set Limits and Position 
            Accountability on Commodity Derivative Contracts

    The following are guidance and acceptable practices for compliance 
with Sec.  150.5. Compliance with the acceptable practices and guidance 
does not diminish or replace, in any event, the obligations and 
requirements of the person to comply with the other regulations provided 
under this part. The acceptable practices and guidance are for 
illustrative purposes only and do not state the exclusive means for 
establishing compliance with Sec.  150.5.
    (a) Acceptable practices for compliance with Sec.  150.5(b)(2)(i) 
regarding exchange-set limits or accountability outside of the spot 
month. A designated contract market or swap execution facility that is a 
trading facility may satisfy Sec.  150.5(b)(2)(i) by complying with 
either of the following acceptable practices:
    (1) Non-spot month speculative position limits. For any commodity 
derivative contract subject to Sec.  150.5(b), a designated contract 
market or swap execution facility that is a trading facility sets 
individual single month or all-months-combined levels no greater than 
any one of the following:
    (i) The average of historical position sizes held by speculative 
traders in the contract as a percentage of the average combined futures 
and delta-adjusted option month-end open interest for that contract for 
the most recent calendar year;
    (ii) The level of the spot month limit for the contract;
    (iii) 5,000 contracts (scaled-down proportionally to the notional 
quantity per contract relative to the typical cash-market transaction if 
the notional quantity per contract is larger than the typical cash-
market transaction, and scaled up proportionally to the notional 
quantity per contract relative to the typical cash-market transaction if 
the notional quantity per contract is smaller than the typical cash-
market transaction); or
    (iv) 10 percent of the average combined futures and delta-adjusted 
option month-end open interest in the contract for the most recent 
calendar year up to 50,000 contracts, with a marginal increase of 2.5 
percent of open interest thereafter.
    (2) Non-spot month position accountability. For any commodity 
derivative contract subject to Sec.  150.5(b), a designated contract 
market or swap execution facility that is a trading facility adopts 
position accountability, as defined in Sec.  150.1.
    (b) [Reserved]

[86 FR 3475, Jan. 14, 2021]



 Sec. Appendix G to Part 150--Guidance on Spread Transaction Exemptions 
 Granted for Contracts that are Subject to Federal Speculative Position 
                                 Limits

    Positions that comply with Sec.  150.3(a)(2)(i) or (ii) may exceed 
Federal speculative position limits, provided that the entity separately 
requests a spread transaction exemption from the relevant exchange's 
position limits established pursuant to proposed Sec.  150.5(a). The 
following provides guidance to exchanges and market participants on the 
use of spread transaction exemptions granted pursuant to Sec.  150.5(a). 
Exchanges and market participants may also consider this guidance for 
purposes of spread transaction exemptions granted pursuant to Sec.  
150.5(b). The following guidance includes recommendations for exchanges 
and market participants to consider when granting or relying on spread 
transaction exemptions for positions that include referenced contracts 
that are subject to Federal speculative position limits.
    (a) General guidance on spread transaction exemptions for referenced 
contracts. (1) When granting spread transaction exemptions pursuant to 
Sec.  150.5(a), an exchange should:
    (i) Collect sufficient information from the market participant to be 
able to:
    (A) Understand the spread strategy, consistent with Sec.  
150.5(a)(2)(ii)(A); and
    (B) Verify that there is a material economic relationship between 
the legs of the spread transaction, consistent with the requirement in 
Sec.  150.5(a)(2)(ii)(G) to grant exemptions in accordance with sound 
commercial practices;
    (ii) Consider whether granting the spread transaction exemption 
would, to the maximum extent practicable:
    (A) Ensure sufficient market liquidity for bona fide hedgers; and
    (B) Not unduly reduce the effectiveness of Federal speculative 
position limits to:
    (1) Diminish, eliminate, or prevent excessive speculation;
    (2) Deter and prevent market manipulations, squeezes, and corners; 
and
    (3) Ensure that the price discovery function of the underlying 
market is not disrupted;
    (iii) Consider implementing safeguards to ensure that when granting 
spread transaction exemptions, especially during the

[[Page 377]]

spot period, the exchange is able to comply with all statutory and 
regulatory obligations, including the requirements of:
    (A) DCM Core Principle 2 and SEF Core Principle 2, as applicable, 
to, among other things, prohibit abusive trading practices on its 
markets by members and market participants, and prohibit any other 
manipulative or disruptive trading practices prohibited by the Act or 
Commission regulations;
    (B) DCM Core Principle 4 and SEF Core Principle 4, as applicable, to 
prevent manipulation, price distortion, and disruptions of the delivery 
or cash-settlement process through market surveillance, compliance, and 
enforcement practices and procedures;
    (C) DCM Core Principle 5 and SEF Core Principle 6, as applicable, to 
implement exchange-set position limits in a manner that reduces the 
potential threat of market manipulation or congestion; and
    (D) DCM Core Principle 12, as applicable, to protect markets and 
market participants from abusive practices committed by any party, 
including abusive practices committed by a party acting as an agent for 
a participant; and to promote fair and equitable trading on the contract 
market;
    (iv) Ensure that any spread exemption transaction does not impede 
convergence or facilitate the formation of artificial prices; and
    (v) Provide a cap or limit on the maximum size of all gross 
positions permitted under the spread transaction exemption.
    (2) The Commission reminds market participants that when utilizing a 
spread transaction exemption, compliance with Federal speculative 
position limits or an exemption thereto does not confer any type of safe 
harbor or good faith defense to a claim that the participant has engaged 
in an attempted or perfected manipulation or willfully circumvented or 
evaded speculative position limits, consistent with the Commission's 
anti-evasion provision in Sec.  150.2(i).
    (b) Guidance on transactions permitted under the spread transaction 
definition. (1) The Commission understands that market participants are 
generally familiar with the meaning of intra-market spreads, inter-
market spreads, intra-commodity spreads, and inter-commodity spreads, as 
those terms are used in the spread transaction definition in Sec.  
150.1. However, for the avoidance of confusion, the Commission provides 
the following descriptions of such spread strategies to assist exchanges 
in their analysis of whether a spread position complies with the spread 
transaction definition. The Commission generally understands that the 
following spread strategies are typically defined as follows:
    (i) Intra-market spread means a long (short) position in one or more 
commodity derivative contracts in a particular commodity, or its 
products or by-products, and a short (long) position in one or more 
commodity derivative contracts in the same, or similar, commodity, or 
its products or by-products, on the same designated contract market or 
swap execution facility.
    (ii)Inter-market spread means a long (short) position in one or more 
commodity derivative contracts in a particular commodity, or its 
products or by-products, at a particular designated contract market or 
swap execution facility and a short (long) position in one or more 
commodity derivative contracts in that same, or similar, commodity, or 
its products or by-products, away from that particular designated 
contract market or swap execution facility.
    (iii) Intra-commodity spread means a long (short) position in one or 
more commodity derivatives contracts in a particular commodity, or its 
product or by-products, and a short (long) position in one or more 
commodity derivative contracts in the same, or similar, commodity, or 
its products or by-products.
    (iv) Inter-commodity spread means a long (short) position in one or 
more commodity derivatives contracts in a particular commodity, or its 
product or by-products, and a short (long) position in one or more 
commodity derivative contracts in a different commodity or its products 
or by-products.
    (2) The following is a non-exhaustive list of spread strategies that 
comply with the spread transaction definition in Sec.  150.1:
    (i) An inter-market spread transaction in which the legs of the 
transaction are futures contracts in the same, or similar commodity, or 
its products or its by-products, and same calendar month or expiration;
    (ii) A spread transaction in which one leg is a referenced contract, 
as defined in Sec.  150.1, and the other leg is a commodity derivative 
contract, as defined in Sec.  150.1, that is not a referenced contract 
(including over-the-counter commodity derivative contracts);
    (iii) A spread transaction between a physically-settled contract and 
a cash-settled contract;
    (iv) A spread transaction between two cash-settled contracts; and
    (v) Spread transactions that are ``legged in,'' that is, carried out 
in two steps, or alternatively are ``combination trades,'' that is, all 
components of the spread are executed simultaneously or 
contemporaneously.
    (3) A spread transaction exemption cannot be used to exceed the 
conditional spot month limit exemption, in Sec.  150.3(a)(4), for 
positions in natural gas.
    (4) The spread transaction definition does not include a single 
cash-settled agreement, contract or transaction that, by its terms and 
conditions:
    (i) Simply represents the difference (or basis) between the 
settlement price of a referenced contract and the settlement price of 
another contract, agreement, or transaction (whether or not a referenced 
contract), and

[[Page 378]]

    (ii) Does not comprise separate long and short positions.
    (5) The spread transaction definition does not include a spread 
position involving a commodity index contract and one or more referenced 
contracts.
    (c) Guidance on cash-and-carry exemptions. The spread transaction 
definition in Sec.  150.1 would permit transactions commonly known as 
``cash-and-carry'' trades whereby a market participant enters a long 
futures position in the spot month and an equivalent short futures 
position in the following month, in order to guarantee a return that, at 
minimum, covers the costs of its carrying charges, such as the cost of 
financing, insuring, and storing the physical inventory until the next 
expiration (including insurance, storage fees, and financing costs, as 
well as other costs such as aging discounts that are specific to 
individual commodities). With this exemption, the market participant is 
able to take physical delivery of the product in the nearby month and 
may redeliver the same product in a deferred month. When determining 
whether to grant, and when monitoring, cash-and-carry spread transaction 
exemptions, the exchange should consider:
    (1) Implementing safeguards to require a market participant relying 
on such an exemption to reduce its position below the speculative 
Federal position limit within a timely manner once market prices no 
longer permit entry into a full carry transaction;
    (2) Implementing safeguards that require market participants to 
liquidate all long positions in the nearby contract month before the 
price of the nearby contract month rises to a premium to the second 
(2nd) contract month; and
    (3) Requiring market participants that seek to rely on such 
exemption to:
    (i) Provide information about their expected cost of carrying the 
physical commodity, and the quantity of stocks currently owned in 
exchange-licensed warehouses or tank facilities; and
    (ii) Agree that before the price of the nearby contract month rises 
to a premium to the second (2nd) contract month, the market participant 
will liquidate all long positions in the nearby contract month.

[86 FR 3475, Jan. 14, 2021]

                           PART 151 [RESERVED]



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 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

[[Page 379]]

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 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

[[Page 380]]

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 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]

[[Page 381]]



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 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.

[[Page 382]]


    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 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

[[Page 383]]

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 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]

[[Page 384]]



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;
    (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

[[Page 385]]

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 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;

[[Page 386]]

    (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 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.

[[Page 387]]

    (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;
    (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;

[[Page 388]]

    (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, 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

[[Page 389]]

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 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

[[Page 390]]

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 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]

[[Page 391]]



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;
    (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

[[Page 392]]

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:
    (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]

[[Page 393]]



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; 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:

[[Page 394]]

    (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;
    (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.

[[Page 395]]

    (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 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.

[[Page 396]]

    (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 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

[[Page 397]]

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 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

[[Page 398]]

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 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

[[Page 399]]

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]



            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

[[Page 400]]

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. These policies and procedures must be 
reasonably designed to:
    (a) Insure the security and confidentiality of customer records and 
information;
    (b) Protect against any anticipated threats or hazards to the 
security or integrity of customer records and information; and
    (c) Protect against unauthorized access to or use of customer 
records or information that could result in substantial harm or 
inconvenience to any customer.

[85 FR 29614, May 18, 2020]





             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 408]]

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 409]]

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 410]]

                               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 411]]

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 412]]

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 413]]

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 414]]

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 415]]

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 416]]

    (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 417]]

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 418]]

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 419]]

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 420]]



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 421]]

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 422]]

    (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 423]]

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 424]]



               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 425]]

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 426]]



 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 427]]

            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 428]]

    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 429]]

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 430]]

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 431]]

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 432]]

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 433]]

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 434]]

    (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 435]]

    (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 436]]

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 437]]

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 438]]

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 439]]

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 440]]

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 441]]

    (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 442]]

    (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 443]]

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 444]]

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 445]]

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 446]]

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]

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          Sec. Appendix B to Part 165--Form TCR and Form WP-APP
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[GRAPHIC] [TIFF OMITTED] TR30MY17.028

                          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, 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

[[Page 459]]

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.
    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.

[[Page 460]]

 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 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 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

[[Page 466]]

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
     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

[[Page 467]]

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 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.

[[Page 468]]

                    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).



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

[[Page 469]]

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,
    (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

[[Page 470]]

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 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.

[[Page 471]]

    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 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.

[[Page 472]]



  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.



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:

[[Page 473]]

    (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 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

[[Page 474]]

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 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

[[Page 475]]

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.
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;

[[Page 476]]

    (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 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

[[Page 477]]

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.
    (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.

[[Page 478]]



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.
    (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

[[Page 479]]

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 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

[[Page 480]]

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 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.

[[Page 481]]

    (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.



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

[[Page 482]]

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 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

[[Page 483]]

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 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

[[Page 484]]

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 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

[[Page 485]]

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 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

[[Page 486]]

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.



    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

[[Page 487]]

responsibility action immediately effective at the time a final decision 
is issued.



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 488]]



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 489]]

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 490]]



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 RULES--Table of Contents



                      Subpart A_General Provisions

Sec.
190.00 Statutory authority, organization, core concepts, scope, and 
          construction.
190.01 Definitions.
190.02 General.

             Subpart B_Futures Commission Merchant as Debtor

190.03 Notices and proofs of claims.
190.04 Operation of the debtor's estate--customer property.
190.05 Operation of the debtor's estate--general.
190.06 Making and taking delivery under commodity contracts.
190.07 Transfers.
190.08 Calculation of funded net equity.
190.09 Allocation of property and allowance of claims.
190.10 Current records during business as usual.

                Subpart C_Clearing Organization as Debtor

190.11 Scope and purpose of this subpart.
190.12 Required reports and records.
190.13 Prohibition on avoidance of transfers.
190.14 Operation of the estate of the debtor subsequent to the filing 
          date.
190.15 Recovery and wind-down plans; default rules and procedures.
190.16 Delivery.
190.17 Calculation of net equity.
190.18 Treatment of property.
190.19 Support of daily settlement.

Appendix A to Part 190--Customer Proof of Claim Form
Appendix B to Part 190--Special Bankruptcy Distributions

    Authority: 7 U.S.C. 1a, 2, 6c, 6d, 6g, 7a-1, 12, 12a, 19, and 24; 11 
U.S.C. 362, 546, 548, 556, and 761-767, unless otherwise noted.

    Source: 86 FR 19421, Apr. 13, 2021, unless otherwise noted.



                      Subpart A_General Provisions



Sec.  190.00  Statutory authority, organization, core concepts, scope,
and construction.

    (a) Statutory authority. The Commission has adopted the regulations 
in this part pursuant to its authority under sections 8a(5) and 20 of 
the Act. Section 8a(5) provides general rulemaking authority to 
effectuate the provisions and accomplish the purposes of the Act. 
Section 20 provides that the Commission may, notwithstanding title 11 of 
the United States Code, adopt certain rules or regulations governing a 
proceeding involving a commodity broker that is a debtor under 
subchapter IV of chapter 7 of the Bankruptcy Code. Specifically, the 
Commission is authorized to adopt rules or regulations specifying:
    (1) That certain cash, securities, or other property, or commodity 
contracts, are to be included in or excluded from customer property or 
member property;
    (2) That certain cash, securities, or other property, or commodity 
contracts, are to be specifically identifiable to a particular customer 
in a particular capacity;
    (3) The method by which the business of the commodity broker is to 
be conducted or liquidated after the date of the filing of the petition 
under chapter 7 of the Bankruptcy Code, including the payment and 
allocation of margin with respect to commodity contracts not 
specifically identifiable to a particular customer pending their orderly 
liquidation;
    (4) Any persons to which customer property and commodity contracts 
may be transferred under section 766 of the Bankruptcy Code; and
    (5) How a customer's net equity is to be determined.
    (b) Organization. This part is organized into three subparts. This 
subpart contains general provisions applicable in all cases. Subpart B 
of this part contains provisions that apply when the debtor is a futures 
commission merchant (as that term is defined in the Act or Commission 
regulations). This includes acting as a foreign futures commission 
merchant, as defined in section 761(12) of the Bankruptcy Code,

[[Page 491]]

but excludes a person that is ``notice-registered'' as a futures 
commission merchant pursuant to section 4f(a)(2) of the Act. Subpart C 
contains provisions that apply when the debtor is registered as a 
derivatives clearing organization under the Act.
    (c) Core concepts. The regulations in this part reflect several core 
concepts. The descriptions of core concepts in paragraphs (c)(1) through 
(6) of this section are subject to the further specific requirements set 
forth in this part, and the specific requirements in this part should be 
interpreted and applied consistently with these core concepts.
    (1) Commodity brokers. Subchapter IV of chapter 7 of the Bankruptcy 
Code applies to a debtor that is a commodity broker, against which a 
customer holds a ``net equity'' claim relating to a commodity contract. 
This part is limited to a commodity broker that is:
    (i) A futures commission merchant; or
    (ii) A derivatives clearing organization registered under the Act 
and Sec.  39.3 of this chapter.
    (2) Account classes. The Act and Commission regulations in parts 1, 
22, and 30 of this chapter provide differing treatment and protections 
for different types of cleared commodity contracts. This part 
establishes three account classes that correspond to the different types 
of accounts that futures commission merchants and clearing organizations 
are required to maintain under the regulations in the preceding 
sentence, specifically, the futures account class (including options on 
futures), the foreign futures account class (including options on 
foreign futures), and the cleared swaps account class (including cleared 
options other than options on futures or foreign futures). This part 
also establishes a fourth account class, the delivery account class 
(which may be further subdivided as provided in this part), for property 
held in an account designated within the books and records of the debtor 
as a delivery account, for effecting delivery under commodity contracts 
whose terms require settlement via delivery when the commodity contract 
is held to expiration or, in the case of a cleared option, is exercised.
    (3) Public customers and non-public customers; Commission 
segregation requirements; member property--(i) Public customers and non-
public customers. This part prescribes separate treatment of ``public 
customers'' and ``non-public customers'' (as these terms are defined in 
Sec.  190.01) within each account class in the event of a proceeding 
under this part in which the debtor is a futures commission merchant. 
Public customers of a debtor futures commission merchant are entitled to 
a priority in the distribution of cash, securities, or other customer 
property over non-public customers, and both have priority over all 
other claimants (except for claims relating to the administration of 
customer property) pursuant to section 766(h) of the Bankruptcy Code.
    (A) The cash, securities, or other property held on behalf of the 
public customers of a futures commission merchant in the futures, 
foreign futures, or cleared swaps account classes are subject to special 
segregation requirements imposed under parts 1, 22, and 30 of this 
chapter for each account class. Although such segregation requirements 
generally are not applicable to cash, securities, or other property 
received from or reflected in the futures, foreign futures, or cleared 
swaps accounts of non-public customers of a futures commission merchant, 
such transactions and property are customer property within the scope of 
this part.
    (B) While parts 1, 22, and 30 of this chapter do not impose special 
segregation requirements with respect to treatment of cash, securities, 
or other property of public customers carried in a delivery account, 
such property does constitute customer property. Thus, the distinction 
between public and non-public customers is, given the priority for 
public customers in section 766(h) of the Bankruptcy Code, relevant for 
the purpose of making distributions to delivery account class customers 
pursuant to this part.
    (C) Where a provision in this part affords the trustee discretion, 
that discretion should be exercised in a manner that the trustee 
determines will best achieve the overarching goal of protecting public 
customers as a class by

[[Page 492]]

enhancing recoveries for, and mitigating disruptions to, public 
customers as a class. In seeking to achieve that overarching goal, the 
trustee has discretion to balance those two sub-goals when they are in 
tension. Where the trustee is directed to exercise ``reasonable 
efforts'' to meet a standard, those efforts should only be less than 
``best efforts'' to the extent that the trustee determines that such an 
approach would support the foregoing goals.
    (ii) Clearing organization bankruptcies: Member property and 
customer property other than member property. For a clearing 
organization, ``customer property'' is divided into ``member property'' 
and ``customer property other than member property.'' The term member 
property is used to identify the cash, securities, or property available 
to pay the net equity claims of clearing members based on their house 
account at the clearing organization. Thus, in the event of a proceeding 
under this part in which the debtor is a clearing organization, the 
classification of customers as public customers or non-public customers 
also is relevant, in that each member of the clearing organization will 
have separate claims against the clearing organization (by account 
class) with respect to:
    (A) Commodity contract transactions cleared for its own account or 
on behalf of any of its non-public customers (which are cleared in a 
``house account'' at the clearing organization); and
    (B) Commodity contract transactions cleared on behalf of any public 
customers of the clearing member (which are cleared in accounts at the 
clearing organization that is separate and distinct from house 
accounts).
    (iii) Preferential assignment among customer classes and account 
classes for clearing organization bankruptcies. Section 190.18 is 
designed to support the interests of public customers of members of a 
debtor that is a clearing organization.
    (A) Certain customer property is preferentially assigned to 
``customer property other than member property'' instead of ``member 
property'' to the extent that there is a shortfall in funded balances 
for members' public customer claims. Moreover, to the extent that there 
are excess funded balances for members' claims in any customer class/
account class combination, that excess is also preferentially assigned 
to ``customer property other than member property'' to the extent of any 
shortfall in funded balances for members' public customer claims.
    (B) Where property is assigned to a particular customer class with 
more than one account class, it is assigned to the account class for 
which the funded balance percentage is the lowest until there are two 
account classes with equal funded balance percentages, then to both such 
account classes, keeping the funded balance percentage the same, and so 
forth following the analogous approach if the debtor has more than two 
account classes within the relevant customer class.
    (4) Porting of public customer commodity contract positions. In a 
proceeding in which the debtor is a futures commission merchant, this 
part sets out a policy preference for transferring to another futures 
commission merchant, or ``porting,'' open commodity contract positions 
of the debtor's public customers along with all or a portion of such 
customers' account equity. Porting mitigates risks to both the customers 
of the debtor futures commission merchant and to the markets. To 
facilitate porting, this part addresses the manner in which the debtor's 
business is to be conducted on and after the filing date, with specific 
provisions addressing the collection and payment of margin for open 
commodity contract positions prior to porting.
    (5) Pro rata distribution. (i) The commodity broker provisions of 
the Bankruptcy Code, subchapter IV of chapter 7, in particular section 
766(h), have long revolved around the principle of pro rata 
distribution. If there is a shortfall in the cash, securities or other 
property in a particular account class needed to satisfy the net equity 
claims of public customers in that account class, the customer property 
in that account class will be distributed pro rata to those public 
customers (subject to appendix B of this part). Any customer property 
not attributable to a specific account class, or that exceeds the amount 
needed to pay

[[Page 493]]

allowed customer net equity claims in a particular account class, will 
be distributed to public customers in other account classes so long as 
there is a shortfall in those other classes. Non-public customers will 
not receive any distribution of customer property so long as there is 
any shortfall, in any account class, of customer property needed to 
satisfy public customer net equity claims.
    (ii) The pro rata distribution principle means that, if there is a 
shortfall of customer property in an account class, all customers within 
that account class will suffer the same proportional loss relative to 
their allowed net equity claims. The principle in this paragraph 
(c)(5)(ii) applies to all customers, including those who post as 
collateral specifically identifiable property or letters of credit. The 
pro rata distribution principle is subject to the special distribution 
provisions set forth in framework 1 in appendix B of this part for 
cross-margin accounts and framework 2 in appendix B of this part for 
funds held outside of the U.S. or held in non-U.S. currency.
    (6) Deliveries. (i) Commodity contracts may have terms that require 
a customer owning the contract:
    (A) To make or take delivery of the underlying commodity if the 
customer holds the contract to a delivery position; or
    (B) In the case of an option on a commodity:
    (1) To make delivery upon exercise (as the buyer of a put option or 
seller of a call option); or
    (2) To take delivery upon exercise (as seller of a put option or 
buyer of a call option).
    (ii) Depending upon the circumstances and relevant market, delivery 
may be effected via a delivery account, a futures account, a foreign 
futures account or a cleared swaps account, or, when the commodity 
subject to delivery is a security, in a securities account (in which 
case property associated with the delivery held in a securities account 
is not part of any customer account class for purposes of this part).
    (iii) Although commodity contracts with delivery obligations are 
typically offset before reaching the delivery stage (i.e., prior to 
triggering bilateral delivery obligations), when delivery obligations do 
arise, a delivery default could have a disruptive effect on the cash 
market for the commodity and adversely impact the parties to the 
transaction. This part therefore sets out special provisions to address 
open commodity contracts that are settled by delivery, when those 
positions are nearing or have entered into a delivery position at the 
time of or after the filing date. The delivery provisions in this part 
are intended to allow deliveries to be completed in accordance with the 
rules and established practices for the relevant commodity contract 
market or clearing organization, as applicable and to the extent 
permitted under this part.
    (iv) In a proceeding in which the debtor is a futures commission 
merchant, the delivery provisions in this part reflect policy 
preferences to:
    (A) Liquidate commodity contracts that settle via delivery before 
they move into a delivery position; and
    (B) When such contracts are in a delivery position, to allow 
delivery to occur, where practicable, outside administration of the 
debtor's estate.
    (v) The delivery provisions in this part apply to any commodity that 
is subject to delivery under a commodity contract, as the term commodity 
is defined in section of 1a(9) of the Act, whether the commodity itself 
is tangible or intangible, including agricultural commodities as defined 
in Sec.  1.3 of this chapter, other non-financial commodities (such as 
metals or energy commodities) covered by the definition of exempt 
commodity in section 1a(20) of the Act, and commodities that are 
financial in nature (such as foreign currencies) covered by the 
definition of excluded commodity in section 1a(19) of the Act. The 
delivery provisions also apply to virtual currencies that are subject to 
delivery under a commodity contract.
    (d) Scope--(1) Proceedings--(i) Certain commodity broker proceedings 
under subchapter IV of chapter 7 of the Bankruptcy Code. (A) Section 
101(6) of the Bankruptcy Code recognizes ``futures commission 
merchants'' and ``foreign futures commission merchants,'' as those terms 
are defined in section 761(12) of

[[Page 494]]

the Bankruptcy Code, as separate categories of commodity broker. The 
definition of commodity broker in Sec.  190.01, as it applies to a 
commodity broker that is a futures commission merchant under the Act, 
also covers foreign futures commission merchants because a foreign 
futures commission merchant is required to register as a futures 
commission merchant under the Act.
    (B) Section 101(6) of the Bankruptcy Code recognizes ``commodity 
options dealers,'' and ``leverage transaction merchants'' as defined in 
sections 761(6) and (13) of the Bankruptcy Code, as separate categories 
of commodity brokers. There are no commodity options dealers or leverage 
transaction merchants as of December 8, 2020.

    Note 1 to paragraph (b)(1)(i)(B).
    The Commission intends to adopt rules with respect to commodity 
options dealers or leverage transaction merchants, respectively, at such 
time as an entity registers as such.

    (ii) Futures commission merchants subject to a SIPA proceeding. 
Pursuant to section 7(b) of SIPA, 15 U.S.C. 78fff-1(b), the trustee in a 
SIPA proceeding, where the debtor also is a commodity broker, has the 
same duties as a trustee in a proceeding under subchapter IV of chapter 
7 of the Bankruptcy Code, to the extent consistent with the provisions 
of SIPA or as otherwise ordered by the court. This part therefore also 
applies to a proceeding commenced under SIPA with respect to a debtor 
that is registered as a broker or dealer under section 15 of the 
Securities Exchange Act of 1934 when the debtor also is a futures 
commission merchant.
    (iii) Commodity brokers subject to an FDIC proceeding. Section 
5390(m)(1)(B) of title 12 of the United States Code provides that the 
FDIC must apply the provisions of subchapter IV of chapter 7 of the 
Bankruptcy Code in respect of the distribution of customer property and 
member property in connection with the liquidation of a covered 
financial company or a bridge financial company (as those terms are 
defined in section 5381(a) of title 12) that is a commodity broker as if 
such person were a debtor for purposes of subchapter IV, except as 
specifically provided in section 5390 of title 12. This part therefore 
shall serve as guidance as to such distribution of property in a 
proceeding in which the FDIC is acting as a receiver pursuant to title 
II of the Dodd-Frank Wall Street Reform and Consumer Protection Act with 
respect to a covered financial company or bridge financial company that 
is a commodity broker whose liquidation otherwise would be administered 
by a trustee under subchapter IV of chapter 7 of the Bankruptcy Code.
    (2) Account class and implied trust limitations. (i) The trustee may 
not recognize any account class that is not one of the account classes 
enumerated in Sec.  190.01.
    (ii) No property that would otherwise be included in customer 
property, as defined in Sec.  190.01, shall be excluded from customer 
property because such property is considered to be held in a 
constructive, resulting, or other trust that is implied in equity.
    (3) Commodity contract exclusions. For purposes of this part, the 
following are excluded from the term ``commodity contract'':
    (i) Options on commodities (including swaps subject to regulation 
under part 32 of this chapter) that are not centrally cleared by a 
clearing organization or foreign clearing organization.
    (ii) Transactions, contracts or agreements that are classified as 
``forward contracts'' under the Act pursuant to the exclusion from the 
term ``future delivery'' set out in section 1a(27) of the Act or the 
exclusion from the definition of a ``swap'' under section 1a(47)(B)(ii) 
of the Act, in each case that are not centrally cleared by a clearing 
organization or foreign clearing organization.
    (iii) Security futures products as defined in section 1a(45) of the 
Act when such products are held in a securities account.
    (iv) Any off-exchange retail foreign currency transaction, contract 
or agreement described in sections 2(c)(2)(B) or (C) of the Act.
    (v) Any security-based swap or other security (as defined in section 
3 of the Exchange Act), but a security futures product or a mixed swap 
(as defined in 1a(47)(D) of the Act) that is, in either case, carried in 
an account for which there is a corresponding account class under this 
part is not so excluded.

[[Page 495]]

    (vi) Any off-exchange retail commodity transaction, contract or 
agreement described in section 2(c)(2)(D) of the Act, unless such 
transaction, contract or agreement is traded on or subject to the rules 
of a designated contract market or foreign board of trade as, or as if, 
such transaction, contract, or agreement is a futures contract.
    (e) Construction. (1) A reference in this part to a specific section 
of a Federal statute or specific regulation refers to such section or 
regulation as the same may be amended or superseded.
    (2) Where they differ, the definitions set forth in Sec.  190.01 
shall be used instead of defined terms set forth in section 761 of the 
Bankruptcy Code. In many cases, these definitions are based on 
definitions in parts 1, 22, and 30 of this chapter. Notwithstanding the 
use of different defined terms, the regulations in this part are 
intended to be consistent with the provisions and objectives of 
subchapter IV of chapter 7 of the Bankruptcy Code.
    (3) In the context of portfolio margining and cross margining 
programs, commodity contracts and associated collateral will be treated 
as part of the account class in which, consistent with part 1, 22, 30, 
or 39 of this chapter, or Commission Order, they are held.
    (i) Thus, as noted in paragraph (2) of the definition of account 
class in Sec.  190.01, where open commodity contracts (and associated 
collateral) that would be attributable to one account class are, 
instead, commingled with the commodity contracts (and associated 
collateral) in a second account class (the ``home field''), then the 
trustee must treat all such commodity contracts and collateral as part 
of, and consistent with the regulations applicable to, the second 
account class.
    (ii) The concept in paragraph (e)(3)(i) of this section, that the 
rules of the ``home field'' will apply, also pertains to securities 
positions that are, pursuant to an approved cross margining program, 
held in a commodities account class (in which case the rules of that 
commodities account class will apply) and to commodities positions that 
are, pursuant to an approved cross-margining program, held in a 
securities account (in which case, the rules of the securities account 
will apply, consistent with section 16(2)(b)(ii) of SIPA, 15 U.S.C. 
78lll(2)(b)(ii)).



Sec.  190.01  Definitions.

    For purposes of this part:
    Account class:
    (1) Means one or more of each of the following types of accounts 
maintained by a futures commission merchant or clearing organization (as 
applicable), each type of which must be recognized as a separate account 
class by the trustee:
    (i) Futures account means:
    (A) With respect to public customers, the same definition as set 
forth in Sec.  1.3 of this chapter.
    (B) With respect to non-public customers:
    (1) With respect to a futures commission merchant, an account 
maintained on the books and records of the futures commission merchant 
for the purpose of accounting for a person's transactions in futures or 
options on futures contracts executed on or subject to the rules of a 
designated contract market registered under the Act (and related cash, 
securities, or other property); and
    (2) With respect to a clearing organization, an account maintained 
on the books and records of the clearing organization for the purpose of 
accounting for transactions in futures or options on futures contracts 
cleared or settled by the clearing organization for a member or a 
member's non-public customers (and related cash, securities, or other 
property).
    (ii) Foreign futures account means:
    (A) With respect to public customers:
    (1) With respect to a futures commission merchant, a 30.7 account, 
as such term is defined in Sec.  30.1(g) of this chapter; and
    (2) With respect to a clearing organization, an account maintained 
on the books and records of the clearing organization for the purpose of 
accounting for transactions in futures or options on futures contracts 
executed on or subject to the rules of a foreign board of trade, cleared 
or settled by the clearing organization for a member that is a futures 
commission merchant (and related cash, securities or other property), on 
behalf of that member's

[[Page 496]]

30.7 customers (as that latter term is defined in Sec.  30.1(f) of this 
chapter).
    (B) With respect to non-public customers:
    (1) With respect to a futures commission merchant, an account 
maintained on the books and records of the futures commission merchant 
for the purpose of accounting for a person's transactions in futures or 
options on futures contracts executed on or subject to the rules of a 
foreign board of trade (and related cash, securities, or other 
property); and
    (2) With respect to a clearing organization, an account maintained 
on the books and records of the clearing organization for the purpose of 
accounting for transactions in futures or options on futures contracts 
executed on or subject to the rules of a foreign board of trade, cleared 
or settled by the clearing organization for a member or a member's non-
public customers (and related cash, securities, or other property).
    (iii) Cleared swaps account means:
    (A) With respect to public customers, a cleared swaps customer 
account, as such term is defined in Sec.  22.1 of this chapter.
    (B) With respect to non-public customers:
    (1) With respect to a futures commission merchant, an account 
maintained on the books and records of the futures commission merchant 
for the purpose of accounting for a person's transactions in cleared 
swaps (as defined in Sec.  22.1 of this chapter) (and related cash, 
securities, or other property); and
    (2) With respect to a clearing organization, an account maintained 
on the books and records of the clearing organization for the purpose of 
accounting for transactions in cleared swaps (as defined in Sec.  22.1 
of this chapter) (or in other contracts permitted to be cleared in the 
account) cleared or settled by the clearing organization for a member or 
a member's non-public customers (including any property related 
thereto).
    (iv)(A) Delivery account means (for both public and non-public 
customers, considered separately):
    (1) An account maintained on the books and records of a futures 
commission merchant for the purpose of accounting for the making or 
taking of delivery under commodity contracts whose terms require 
settlement by delivery of a commodity, and which is designated as a 
delivery account on the books and records of the futures commission 
merchant; and
    (2) An account maintained on the books and records of a clearing 
organization for a clearing member (or a customer of a clearing member) 
for the purpose of accounting for the making or taking of delivery under 
commodity contracts whose terms require settlement by delivery of a 
commodity, as well as any account in which the clearing organization 
holds physical delivery property represented by electronic title 
documents or otherwise existing in an electronic (dematerialized) form 
in its capacity as a central depository, in each case where the account 
is designated as a delivery account on the books and the records of the 
clearing organization.
    (B) The delivery account class is further divided into a ``physical 
delivery account class'' and a ``cash delivery account class,'' as 
provided in Sec.  190.06(b), each of which shall be recognized as a 
separate class of account by the trustee.
    (2)(i) If open commodity contracts that would otherwise be 
attributable to one account class (and any property margining, 
guaranteeing, securing or accruing in respect of such commodity 
contracts) are, pursuant to a Commission rule, regulation, or order, or 
a clearing organization rule approved in accordance with Sec.  
39.15(b)(2) of this chapter, held separately from other commodity 
contracts and property in that account class and are commingled with the 
commodity contracts and property of another account class, then the 
trustee must treat the former commodity contracts (and any property 
margining, guaranteeing, securing, or accruing in respect of such 
commodity contracts), for purposes of this part, as being held in an 
account of the latter account class.
    (ii) The principle in paragraph (2)(i) of this definition will be 
applied to securities positions and associated collateral held in a 
commodity account class pursuant to a cross margining program approved 
by the Commission

[[Page 497]]

(and thus treated as part of that commodity account class) and to 
commodity positions and associated collateral held in a securities 
account pursuant to a cross margining program approved by the Commission 
(and thus treated as part of the securities account).
    (3) For the purpose of this definition, a commodity broker is 
considered to maintain an account for another person by establishing 
internal books and records in which it records the person's commodity 
contracts and cash, securities or other property received from or on 
behalf of such person or accruing to the credit of such person's 
account, and related activity (such as liquidation of commodity contract 
positions or adjustments to reflect mark-to-market gains or losses on 
commodity contract positions), regardless whether the commodity broker 
has kept such books and records current or accurate.
    Act means the Commodity Exchange Act.
    Bankruptcy Code means, except as the context of the regulations in 
this part otherwise requires, those provisions of title 11 of the United 
States Code relating to ordinary bankruptcies (chapters 1 through 5) and 
liquidations (chapter 7 with the exception of subchapters III and V), 
together with the Federal Rules of Bankruptcy Procedure relating 
thereto.
    Business day means weekdays, not including Federal holidays as 
established annually by 5 U.S.C. 6103. A business day begins at 8:00 
a.m. in Washington, DC, and ends at 7:59:59 a.m. on the next day that is 
a business day.
    Calendar day means the time from midnight to midnight in Washington, 
DC.
    Cash delivery account class has the meaning set forth under account 
class in this section.
    Cash delivery property means any cash or cash equivalents recorded 
in a delivery account that is, as of the filing date:
    (1) Credited to such account to pay for receipt of delivery of a 
commodity under a commodity contract;
    (2) Credited to such account to collateralize or guarantee an 
obligation to make or take delivery of a commodity under a commodity 
contract; or
    (3) Has been credited to such account as payment received in 
exchange for making delivery of a commodity under a commodity contract. 
It also includes property in the form of commodities that have been 
delivered after the filing date in exchange for cash or cash equivalents 
held in a delivery account as of the filing date. The cash or cash 
equivalents must be identified on the books and the records of the 
debtor as having been received, from or for the account of a particular 
customer, on or after seven calendar days before the relevant:
    (i) First notice date in the case of a futures contract; or
    (ii) Exercise date in the case of a (cleared) option.
    (4) Cash delivery property also includes any cash transferred by a 
customer to the trustee on or after the filing date for the purpose of 
paying for delivery, consistent with Sec.  190.06(a)(3)(ii)(B)(1).
    (5) In the case of a contract where one fiat currency is exchanged 
for another fiat currency, each such currency, to the extent that it is 
recorded in a delivery account, will be considered cash delivery 
property.
    Cash equivalents means assets, other than United States dollar cash, 
that are highly liquid such that they may be converted into United 
States dollar cash within one business day without material discount in 
value.
    Cleared swaps account has the meaning set forth under account class 
in this section.
    Clearing organization means a derivatives clearing organization that 
is registered with the Commission as such under the Act.
    Commodity broker means any person that is:
    (1) A futures commission merchant under the Act, but excludes a 
person that is ``notice-registered'' as a futures commission merchant 
under section 4f(a)(2) of the Act; or
    (2) A clearing organization, in each case with respect to which 
there is a ``customer'' as that term is defined in this section.
    Commodity contract means:

[[Page 498]]

    (1) A futures or options on futures contract executed on or subject 
to the rules of a designated contract market;
    (2) A futures or option on futures contract executed on or subject 
to the rules of a foreign board of trade;
    (3) A swap as defined in section 1a(47) of the Act and Sec.  1.3 of 
this chapter, that is directly or indirectly submitted to and cleared by 
a clearing organization and which is thus a cleared swap as that term is 
defined in section 1a(7) of the Act and Sec.  22.1 of this chapter; or
    (4) Any other contract that is a swap for purposes of this part 
under the definition in this section and is submitted to and cleared by 
a clearing organization.
    (5) Notwithstanding paragraphs (1) through (4) of this definition, a 
security futures product as defined in section 1a(45) of the Act is not 
a commodity contract for purposes of this part when such contract is 
held in a securities account. Moreover, a contract, agreement, or 
transaction described in Sec.  190.00(d)(3) as excluded from the term 
``commodity contract'' is excluded from this definition.
    Commodity contract account means:
    (1) A futures account, foreign futures account, cleared swaps 
account, or delivery account; or
    (2) If the debtor is a futures commission merchant, for purposes of 
identifying customer property for the foreign futures account class 
(subject to Sec.  190.09(a)(1)), an account maintained for the debtor by 
a foreign clearing organization or a foreign futures intermediary 
reflecting futures or options on futures executed on or subject to the 
rules of a foreign board of trade, including any account maintained on 
behalf of the debtor's public customers.
    Court means the court having jurisdiction over the debtor's estate.
    Cover has the meaning set forth in Sec.  1.17(j) of this chapter.
    Customer means:
    (1)(i) With respect to a futures commission merchant as debtor 
(including a foreign futures commission merchant as that term is defined 
in section 761(12) of the Bankruptcy Code), the meaning set forth in 
sections 761(9)(A) and (B) of the Bankruptcy Code.
    (ii) With respect to a clearing organization as debtor, the meaning 
set forth in section 761(9)(D) of the Bankruptcy Code.
    (2) The term customer includes the owner of a portfolio cross-
margining account covering commodity contracts and related positions in 
securities (as defined in section 3 of the Exchange Act) that is carried 
as a futures account or cleared swaps customer account pursuant to an 
appropriate rule, regulation, or order of the Commission.
    Customer claim of record means a customer claim that is determinable 
solely by reference to the records of the debtor.
    Customer class means each of the following two classes of customers, 
which must be recognized as separate classes by the trustee: Public 
customers and non-public customers; provided, however, that when the 
debtor is a clearing organization the references to public customers and 
non-public customers are based on the classification of customers of, 
and in relation to, the members of the clearing organization.
    Customer property and customer estate are used interchangeably to 
mean the property subject to pro rata distribution in a commodity broker 
bankruptcy in the priority set forth in sections 766(h) or (i), as 
applicable, of the Bankruptcy Code, and includes cash, securities, and 
other property as set forth in Sec.  190.09(a).
    Debtor means a person with respect to which a proceeding is 
commenced under subchapter IV of chapter 7 of the Bankruptcy Code or 
under SIPA, or for which the Federal Deposit Insurance Corporation is 
appointed as a receiver pursuant to 12 U.S.C. 5382, provided, however, 
that this part applies only to such a proceeding if the debtor is a 
commodity broker as defined in this section.
    Delivery account has the meaning set forth under account class in 
this section.
    Distribution of property to a customer includes transfer of property 
on the customer's behalf, return of property to a customer, as well as 
distributions to a customer of valuable property that is different than 
the property posted by that customer.
    Equity means the amount calculated as equity in accordance with 
Sec.  190.08(b)(1).

[[Page 499]]

    Exchange Act means the Securities Exchange Act of 1934, as amended, 
15 U.S.C. 78a et seq.
    FDIC means the Federal Deposit Insurance Corporation.
    Filing date means the date a petition under the Bankruptcy Code or 
application under SIPA commencing a proceeding is filed or on which the 
FDIC is appointed as a receiver pursuant to 12 U.S.C. 5382(a).
    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 as determined 
by rule 3002(c) of the Federal Rules of Bankruptcy Procedure, the 
expiration of the six-month period imposed pursuant to section 8(a)(3) 
of SIPA, or such other date (whether earlier or later) set by the court 
(or, in the case of the FDIC acting as a receiver pursuant to 12 U.S.C. 
5382(a), the deadline set by the FDIC pursuant to 12 U.S.C. 
5390(a)(2)(B); or
    (4) The day following the allowance (by the trustee or by the 
bankruptcy court) or disallowance (by the bankruptcy court) of all 
disputed customer net equity claims.
    Foreign board of trade has the same meaning as set forth in Sec.  
1.3 of this chapter.
    Foreign clearing organization means a clearing house, clearing 
association, clearing corporation or similar entity, facility, or 
organization clears and settles transactions in futures or options on 
futures executed on or subject to the rules of a foreign board of trade.
    Foreign future shall have the same meaning as that set forth in 
section 761(11) of the Bankruptcy Code.
    Foreign futures account has the meaning set forth under account 
class in this section.
    Foreign futures commission merchant shall have the same meaning as 
that set forth in section 761(12) of the Bankruptcy Code.
    Foreign futures intermediary refers to a foreign futures and options 
broker, as such term is defined in Sec.  30.1(e) of this chapter, acting 
as an intermediary for foreign futures contracts between a foreign 
futures commission merchant and a foreign clearing organization.
    Funded balance means the amount calculated as funded balance in 
accordance with Sec.  190.08(c) and, as applicable, Sec.  190.17(d).
    Funded net equity means, for purposes of subpart B of this part, the 
amount calculated as funded net equity in accordance with Sec.  
190.08(a), and for purposes of subpart C of this part, the amount 
calculated as funded net equity in accordance with Sec.  190.17(c).
    Futures and futures contract are used interchangeably to mean any 
contract for the purchase or sale of a commodity (as defined in section 
1a(9) of the Act) for future delivery that is executed on or subject to 
the rules of a designated contract market or on or subject to the rules 
of a foreign board of trade. The term also covers, for purposes of this 
part:
    (1) Any transaction, contract or agreement described in section 
2(c)(2)(D) of the Act and traded on or subject to the rules of a 
designated contract market or foreign board of trade, to the extent not 
covered by the foregoing definition; and
    (2) Any transaction, contract, or agreement that is classified as a 
``forward contract'' under the Act pursuant to the exclusion from the 
term ``future delivery'' set out in section 1a(27) of the Act or the 
exclusion from the definition of a ``swap'' under section 1a(47)(B)(ii) 
of the Act, provided that such transaction, contract, or agreement is 
traded on or subject to the rules of a designated contract market or 
foreign board of trade and is cleared by, respectively, a clearing 
organization or foreign clearing organization the same as if it were a 
futures contract.
    Futures account has the meaning set forth under account class in 
this section.
    House account means, in the case of a clearing organization, any 
commodity contract account of a member at such

[[Page 500]]

clearing organization maintained to reflect trades for the member's own 
account or for any non-public customer of such member.
    In-the-money means:
    (1) With respect to a call option, when the value of the underlying 
interest (such as a commodity or futures contract) which is the subject 
of the option exceeds the strike price of the option; and
    (2) With respect to a put option, when the value of the underlying 
interest (such as a commodity or futures contract) which is the subject 
of the option is exceeded by the strike price of the option.
    Joint account means any commodity contract account held by more than 
one person.
    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 the member's house 
account at the clearing organization, including any claims on behalf of 
non-public customers of the member.
    Net equity means, for purposes of subpart B of this part, the amount 
calculated as net equity in accordance with Sec.  190.08(b), and for 
purposes of subpart C of this part, the amount calculated as net equity 
in accordance with Sec.  190.17(b).
    Non-public customer means:
    (1) With respect to a futures commission merchant, any customer that 
is not a public customer; and
    (2) With respect to a clearing organization, any person whose 
account carried on the books and records of:
    (i) A member of the clearing organization that is a futures 
commission merchant, is classified as a proprietary account under Sec.  
1.3 of this chapter (in the case of the futures or foreign futures 
account class) or as a cleared swaps proprietary account under Sec.  
22.1 of this chapter (in the case of the cleared swaps account class); 
or
    (ii) A member of the clearing organization that is a foreign broker, 
is classified or treated as proprietary under and for purposes of:
    (A) The rules of the clearing organization; or
    (B) The jurisdiction of incorporation of such member.
    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 (i.e., liquidated) by 
another commodity contract.
    Order for relief has the same meaning set forth in section 301 of 
the Bankruptcy Code, in the case of the filing of a voluntary bankruptcy 
petition, and means the entry of an order granting relief under section 
303 of the Bankruptcy Code in an involuntary case. It also means, where 
applicable, the issuance of a protective decree under section 5(b)(1) of 
SIPA or the appointment of the FDIC as receiver pursuant to 12 U.S.C. 
5382(a)(1)(A).
    Person means any individual, association, partnership, corporation, 
trust, or other form of legal entity.
    Physical delivery account class has the meaning set forth under 
account class in this section.
    Physical delivery property means:
    (1) In general. A commodity, whether tangible or intangible, held in 
a form that can be delivered to meet and fulfill delivery obligations 
under a commodity contract that settles via delivery if held to a 
delivery position (as described in Sec.  190.06(a)(1)), including 
warehouse receipts, other documents of title, or shipping certificates 
(including electronic versions of any of the foregoing) for the 
commodity, or the commodity itself:
    (i) That the debtor holds for the account of a customer for the 
purpose of making delivery of such commodity on the customer's behalf, 
which as of the filing date or thereafter, can be identified on the 
books and records of the debtor as held in a delivery account for the 
benefit of such customer. Cash or cash equivalents received after the 
filing date in exchange for delivery of such physical delivery property 
shall also constitute physical delivery property;
    (ii) That the debtor holds for the account of a customer and that 
the customer received or acquired by taking delivery under an expired or 
exercised commodity contract and which, as of the filing date or 
thereafter, can be

[[Page 501]]

identified on the books and records of the debtor as held in a delivery 
account for the benefit of such customer, regardless how long such 
property has been held in such account; or
    (iii) Where property that the debtor holds in a futures account, 
foreign futures account, or cleared swaps account, or, if the commodity 
is a security, in a securities account, would meet the criteria listed 
in paragraph (1) or (2) of this definition, but for the fact of being 
held in such account rather than a delivery account, such property will 
be considered physical delivery property solely for purposes of the 
obligations to make or take delivery of physical delivery property 
pursuant to Sec.  190.06.
    (iv) Commodities or documents of title that are not held by the 
debtor and are delivered or received by a customer in accordance with 
Sec.  190.06(a)(2) (or in accordance with Sec.  190.06(a)(2) in 
conjunction with Sec.  190.16(a) if the debtor is a clearing 
organization) to fulfill a customer's delivery obligation under a 
commodity contract will be considered physical delivery property solely 
for purposes of the obligations to make or take delivery of physical 
delivery property pursuant to Sec.  190.06. As this property is held 
outside of the debtor's estate, it is not subject to pro rata 
distribution.
    (2) Special cases. (i) In the case of a contract where one fiat 
currency is exchanged for another fiat currency, neither such currency, 
to the extent that it is recorded in a delivery account, will be 
considered physical delivery property.
    (ii) In a case where the final settlement price is negative, i.e., 
where the party obliged to deliver physical delivery property under an 
expiring futures contract or an expired options contract is also obliged 
to make a cash payment to the buyer, such cash or cash equivalents 
constitute physical delivery property.
    Primary liquidation date means the first business day immediately 
following the day on which all commodity contracts (including any 
commodity contracts that are specifically identifiable property) have 
been liquidated or transferred.
    Public customer means:
    (1) With respect to a futures commission merchant and in relation 
to:
    (i) The futures account class, a futures customer as defined in 
Sec.  1.3 of this chapter whose futures account is subject to the 
segregation requirements of section 4d(a) of the Act and the regulations 
in this chapter that implement section 4d(a), including as applicable 
Sec. Sec.  1.20 through 1.30 of this chapter;
    (ii) The foreign futures account class, a 30.7 customer as defined 
in Sec.  30.1 of this chapter whose foreign futures accounts is subject 
to the segregation requirements of Sec.  30.7 of this chapter;
    (iii) The cleared swaps account class, a Cleared Swaps Customer as 
defined in Sec.  22.1 of this chapter whose cleared swaps account is 
subject to the segregation requirements of part 22 of this chapter; and
    (iv) The delivery account class, a customer that is or would be 
classified as a public customer if the property reflected in the 
customer's delivery account had been held in an account described in 
paragraph (1)(i), (ii), or (iii) of this definition.
    (2) With respect to a clearing organization, any customer of that 
clearing organization that is not a non-public customer.
    Securities account means, in relation to a futures commission 
merchant that is registered as a broker or dealer under the Exchange 
Act, an account maintained by such futures commission merchant in 
accordance with the requirements of section 15(c)(3) of the Exchange Act 
and Sec.  240.15c3-3 of this title.
    Security has the meaning set forth in section 101(49) of the 
Bankruptcy Code.
    SIPA means the Securities Investor Protection Act of 1970, 15 U.S.C 
78aaa et seq.
    Specifically identifiable property means:
    (1)(i) The following property received, acquired, or held by or for 
the account of the debtor from or for the futures account, foreign 
futures account, or cleared swaps account of a customer:
    (A) Any security which as of the filing date is:
    (1)(i) Held for the account of a customer;

[[Page 502]]

    (ii) Registered in such customer's name;
    (iii) Not transferable by delivery; and
    (iv) Has a duration or maturity date of more than 180 days; or
    (2)(i) Fully paid;
    (ii) Non-exempt; and
    (iii) 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.
    (B) Any warehouse receipt, bill of lading, or other document of 
title which as of the filing date:
    (1) Can be identified on the books and records of the debtor as held 
for the account of a particular customer; and
    (2) Is not in bearer form and is not otherwise transferable by 
delivery;
    (ii) Any open commodity contracts treated as specifically 
identifiable property in accordance with Sec.  190.03(c)(2); and
    (iii) Any physical delivery property described in paragraphs (1) 
through (3) of the definition of physical delivery property in this 
section.
    (2) Notwithstanding paragraphs (1) and (3) of this definition, 
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, if held in a securities account.
    (3) No property that is not explicitly included in this definition 
may be treated as specifically identifiable property.
    Strike price means the price per unit multiplied by the total number 
of units at which a person may purchase or sell a futures contract or a 
commodity or other interest underlying an option that is a commodity 
contract.
    Substitute customer property means cash or cash equivalents 
delivered to the trustee by or on behalf of a customer in connection 
with:
    (1) The return of specifically identifiable property by the trustee; 
or
    (2) The return of, or an agreement not to draw upon, a letter of 
credit received, acquired or held to margin, guarantee, secure, 
purchase, or sell a commodity contract.
    Swap has the meaning set forth in section 1a(47) of the Act and 
Sec.  1.3 of this chapter, and, in addition, also means any other 
contract, agreement, or transaction that is carried in a cleared swaps 
account pursuant to a rule, regulation, or order of the Commission, 
provided, in each case, that it is cleared by a clearing organization 
as, or the same as if it were, a swap.
    Trustee means, as appropriate, the trustee in bankruptcy or in a 
SIPA proceeding, appointed to administer the debtor's estate and any 
interim or successor trustee, or the FDIC, where it has been appointed 
as a receiver pursuant to 12 U.S.C. 5382.
    Undermargined means, with respect to a futures account, foreign 
futures account, or cleared swaps account carried by the debtor, the 
funded balance for such account is below the minimum amount that the 
debtor is required to collect and maintain for the open commodity 
contracts in such account under the rules of the relevant clearing 
organization, foreign clearing organization, designated contract market, 
swap execution facility or foreign board of trade. If any such rules 
establish both an initial margin requirement and a lower maintenance 
margin requirement applicable to any commodity contracts (or to the 
entire portfolio of commodity contracts or any subset thereof) in a 
particular commodity contract account of the customer, the trustee will 
use the lower maintenance margin level to determine the customer's 
minimum margin requirement for such account.
    Variation settlement means variation margin as defined in Sec.  1.3 
of this chapter plus all other daily settlement amounts (such as price 
alignment payments) that may be owed or owing on the commodity contract.



Sec.  190.02  General.

    (a) Request for exemption. (1) The trustee (or, in the case of an 
involuntary petition pursuant to section 303 of the Bankruptcy Code, any 
other person charged with the management of a

[[Page 503]]

commodity broker) may, for good cause shown, request from the Commission 
an exemption from the requirements of any procedural provision in this 
part, including an extension of any time limit prescribed by this part 
or an exemption subject to conditions, provided that the Commission 
shall not grant an extension for any time period established by the 
Bankruptcy Code.
    (2) A request pursuant to paragraph (a)(1) of this section--
    (i) May be made ex parte and by any means of communication, written 
or oral, provided that the trustee must confirm an oral request in 
writing within one business day and such confirmation must contain all 
the information required by paragraph (b)(3) of this section. The 
request or confirmation of an oral request must be given to the 
Commission as provided in paragraph (a) of this section.
    (ii) Must state the particular provision of this part 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 this part.
    (3) The Director of the Division of Clearing and Risk, or members of 
the Commission staff designated by the Director, shall grant, deny, or 
otherwise respond to a request, on the basis of the information provided 
in any such request and after consultation with the Director of the 
Market Participants Division or members of the Commission staff 
designated by the Director, unless exigent circumstances require 
immediate action precluding such prior consultation, and shall 
communicate that determination by the most appropriate means to the 
person making the request.
    (b) 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 the Director's direction as they may designate, after 
consultation with the Director of the Market Participants Division, or 
such members of the Commission's staff under the Director's direction as 
they may designate, unless exigent circumstances require immediate 
action, all the functions of the Commission set forth in this part, 
except the authority to disapprove a pre-relief transfer of a public 
customer commodity contract account or customer property pursuant to 
Sec.  190.07(e)(1).
    (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 the Director pursuant to paragraph (b)(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 (b)(1) of this section.
    (c) 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, that is not cleared by a clearing 
organization, will not be deemed to be a customer.
    (d) 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 
options 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 of the 
Commission's regulations in this chapter, or by any order of the 
Commission.
    (e) Rule of construction. Contracts in security futures products 
held in a securities account shall not be considered to be ``from or for 
the commodity futures 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.
    (f) Receivers. In the event that a receiver for a futures commission 
merchant is appointed due to the violation or imminent violation of the 
customer property protection requirements of

[[Page 504]]

section 4d of the Act, or of the regulations in part 1, 22, or 30 of 
this chapter that implement section 4d or 4(b)(2) of the Act, or of the 
futures commission merchant's minimum capital requirements in Sec.  1.17 
of this chapter, such receiver may, in an appropriate case, file a 
petition for bankruptcy of such futures commission merchant pursuant to 
section 301 of the Bankruptcy Code.
    (g) Definition of ``allowed.'' The term ``allowed'' in this part 
shall have the meaning ascribed to it in the Bankruptcy Code.



             Subpart B_Futures Commission Merchant as Debtor



Sec.  190.03  Notices and proofs of claims.

    (a) Notices-means of providing--(1) To the Commission. Unless 
instructed otherwise by the Commission, all mandatory or discretionary 
notices to be given to the Commission under this subpart shall be 
directed by electronic mail to [email protected]. For purposes 
of this subpart, notice to the Commission shall be deemed to be given 
only upon actual receipt.
    (2) To Customers. The trustee, after consultation with the 
Commission, and unless otherwise instructed by the Commission, will 
establish and follow procedures reasonably designed for giving adequate 
notice to customers under this subpart and for receiving claims or other 
notices from customers. Such procedures should include, absent good 
cause otherwise, the use of a prominent website as well as communication 
to customers' electronic addresses that are available in the debtor's 
books and records.
    (b) Notices to the Commission and designated self-regulatory 
organizations--(1) Of commencement of a proceeding. Each commodity 
broker that is a futures commission merchant and files a petition in 
bankruptcy shall as soon as practicable before, and in any event no 
later than, the time of such filing, notify the Commission and such 
commodity broker's designated self-regulatory organization of the 
anticipated or actual filing date, the court in which the proceeding 
will be or has been filed and, as soon as known, the docket number 
assigned to that proceeding. Each commodity broker that is a futures 
commission merchant and against which a bankruptcy petition is filed or 
with respect to which an application for a protective decree under SIPA 
is filed shall immediately upon the filing of such petition or 
application notify the Commission and such commodity broker's designated 
self-regulatory organization of the filing date, the court in which the 
proceeding has been filed, and, as soon as known, the docket number 
assigned to that proceeding.
    (2) Of transfers under section 764(b) of the Bankruptcy Code. As 
soon as possible, the trustee of a commodity broker that is a futures 
commissions merchant, the relevant designated self-regulatory 
organization, or the applicable clearing organization must notify the 
Commission, and in the case of a futures commission merchant, the 
trustee shall also notify its designated self-regulatory organization 
and clearing organization(s), if such person intends to transfer or to 
apply to transfer open commodity contracts or customer property on 
behalf of the public customers of the debtor in accordance with section 
764(b) of the Bankruptcy Code and Sec.  190.07(c) or (d).
    (c) Notices to customers--(1) Specifically identifiable property 
other than open commodity contracts. In any case in which an order for 
relief has been entered, the trustee must use all reasonable efforts to 
promptly notify, in accordance with paragraph (a)(2) of this section, 
any customer whose futures account, foreign futures account, or cleared 
swaps account includes specifically identifiable property, other than 
open commodity contracts, which has not been liquidated, that such 
specifically identifiable property may be liquidated commencing on and 
after the seventh day after the order for relief (or such other date as 
is specified by the trustee in the notice with the approval of the 
Commission or court) if the customer has not instructed the trustee in 
writing before the deadline specified in the notice to return such 
property pursuant to the terms for distribution of specifically 
identifiable property contained in Sec.  190.09(d)(1). Such notice must 
describe the specifically identifiable property and specify the terms

[[Page 505]]

upon which that property may be returned, including if applicable and to 
the extent practicable any substitute customer property that must be 
provided by the customer.
    (2) Open commodity contracts carried in hedging accounts. To the 
extent reasonably practicable under the circumstances of the case, and 
following consultation with the Commission, the trustee may treat open 
commodity contracts of public customers identified on the books and 
records of the debtor as held in a futures account, foreign futures 
account, or cleared swaps account designated as a hedging account in the 
debtor's records, as specifically identifiable property of such 
customer.
    (i) If the trustee does not exercise such authority, such open 
commodity contracts do not constitute specifically identifiable 
property.
    (ii) If the trustee exercises such authority:
    (A) The trustee shall use reasonable efforts to promptly notify, in 
accordance with paragraph (a)(2) of this section, each relevant public 
customer of such determination.
    (B)(1) Where, in the judgment of the trustee, the books and records 
of the debtor reveal a clear preference by a relevant public customer 
with respect to transfer or liquidation of open commodity contracts, the 
trustee shall endeavor, to the extent reasonably practicable, to comply 
with that preference.
    (2) Where, in the judgment of the trustee, the books and records of 
the debtor do not reveal a clear preference by a relevant public 
customer with respect to transfer or liquidation of open commodity 
contracts, the trustee will request the customer to provide written 
instructions whether to transfer or liquidate such open commodity 
contracts. Such notice must specify the manner for providing such 
instructions and the deadline by which the customer must provide 
instructions.
    (C) Such notice must also inform the customer that:
    (1) (Where instructions have been requested pursuant to paragraph 
(c)(2)(ii)(B)(2) of this section), if the customer does not provide 
instructions in the prescribed manner and by the prescribed deadline, 
the customer's open commodity contracts will not be treated as 
specifically identifiable property under this part;
    (2) Any transfer of the open commodity contracts is subject to the 
terms for distribution contained in Sec.  190.09(d)(2);
    (3) Absent compliance with any terms imposed by the trustee or the 
court, the trustee may liquidate the open commodity contracts; and
    (4) Providing (or having provided) instructions may not prevent the 
open commodity contracts from being liquidated.
    (3) Involuntary cases. Prior to entry of an order for relief, and 
upon leave of the court, a trustee appointed in an involuntary 
proceeding pursuant to section 303 of the Bankruptcy Code may notify 
customers, in accordance with paragraph (a)(2) of this section, of the 
commencement of such proceeding and may request customer instructions 
with respect to the return, liquidation, or transfer of specifically 
identifiable property.
    (4) Notice of bankruptcy and request for proof of customer claim. 
The trustee shall promptly notify, in accordance with paragraph (a)(2) 
of this section, each customer that an order for relief has been entered 
and instruct each customer to file a proof of customer claim containing 
the information specified in paragraph (e) of this section. Such notice 
may be given separately from any notice provided in accordance with 
paragraph (c) of this section. The trustee shall cause the proof of 
customer claim form referred to in paragraph (e) of this section to set 
forth the bar date for its filing.
    (d) Notice of court filings. 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 filings shall be directed to the Commission addressed as 
provided in paragraph (a)(1) of this section.
    (e) Proof of customer claim. The trustee shall request that 
customers provide, to the extent reasonably practicable, information 
sufficient to determine a customer's claim in accordance with the 
regulations contained in this

[[Page 506]]

part, including in the discretion of the trustee:
    (1) The class of commodity contract account upon which each claim is 
based (i.e., futures account, foreign futures account, cleared swaps 
account, or delivery account (and, in the case of a delivery account, 
how much is based on cash delivery property and how much is based on the 
value of physical delivery property);
    (2) Whether the claimant is a public customer or a non-public 
customer;
    (3) The number of commodity contract accounts held by each claimant, 
and, for each such account:
    (i) The account number;
    (ii) The name in which the account is held;
    (iii) The balance as of the last account statement for the account, 
and information regarding any activity in the account from the date of 
the last account statement up to and including the filing date that 
affected the balance of the account;
    (iv) The capacity in which the account is held;
    (v) Whether the account is a joint account and, if so, the amount of 
the claimant's percentage interest in that account and whether 
participants in the joint account are claiming jointly or separately;
    (vi) Whether the account is a discretionary account;
    (vii) Whether the account is an individual retirement account for 
which there is a custodian; and
    (viii) Whether the account is a cross-margining account for futures 
and securities;
    (4) A description of any accounts held by the claimant with the 
debtor that are not commodity contract accounts;
    (5) A description of all claims against the debtor not based upon a 
commodity contract account of the claimant or an account listed in 
response to paragraph (e)(4) of this section;
    (6) A description of all claims of the debtor against the claimant 
not included in the balance of a commodity contract account of the 
claimant;
    (7) A description of and the value of any open positions, 
unliquidated securities, or other unliquidated property held by the 
debtor on behalf of the claimant, indicating the portion of such 
property, if any, which was included in the information provided in 
paragraph (e)(3) of this section, and identifying any such property 
which would be specifically identifiable property as defined in Sec.  
190.01;
    (8) Whether the claimant holds positions in security futures 
products, and, if so, whether those positions are held in a futures 
account, a foreign futures account, or a securities account;
    (9) Whether the claimant wishes to receive payment in kind, to the 
extent practicable, for any claim for unliquidated securities or other 
unliquidated property; and
    (10) 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.
    (f) Proof of claim form. A template customer proof of claim form 
which may (but is not required to) be used by the trustee is set forth 
in appendix A to this part.
    (1) If there are no open commodity contracts that are being treated 
as specifically identifiable property (e.g., if the customer proof of 
claim form was distributed after the primary liquidation date), the 
trustee should modify the customer proof of claim form to delete 
references to open commodity contracts as specifically identifiable 
property.
    (2) In the event the trustee determines that the debtor's books and 
records reflecting customer transactions are not reasonably reliable, or 
account statements are not available from which account balances as of 
the date of transfer or liquidation of customer property may be 
determined, the proof of claim form used by the trustee should be 
modified to take into account the particular facts and circumstances of 
the case.



Sec.  190.04  Operation of the debtor's estate--customer property.

    (a) Transfers--(1) All cases. The trustee for a commodity broker 
shall promptly use its best efforts to effect a transfer in accordance 
with Sec.  190.07(c) and (d) no later than the seventh calendar day 
after the order for relief of the open commodity contracts and

[[Page 507]]

property held by the commodity broker for or on behalf of its public 
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, shall use its best efforts to effect a 
transfer in accordance with Sec.  190.07(c) and (d) of all open 
commodity contracts and property held by the commodity broker for or on 
behalf of its public 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 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 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.
    (b) Treatment of open commodity contracts--(1) Payments by the 
trustee. Prior to the primary liquidation date, the trustee may make 
payments of initial margin and variation settlement to a clearing 
organization, commodity broker, foreign clearing organization, or 
foreign futures intermediary, carrying the account of the debtor, 
pending the transfer, or liquidation of any open commodity contracts, 
whether or not such contracts are specifically identifiable property of 
a particular customer, provided, that:
    (i) To the extent within the trustee's control, the trustee shall 
not make any payments on behalf of any commodity contract account on the 
books and records of the debtor that is in deficit; provided, however, 
that the provision in this paragraph (b)(1) shall not be construed to 
prevent a clearing organization, foreign clearing organization, futures 
commission merchant, or foreign futures intermediary carrying an account 
of the debtor from exercising its rights to the extent permitted under 
applicable law;
    (ii) Any margin payments made by the trustee with respect to a 
specific customer account shall not exceed the funded balance for that 
account;
    (iii) The trustee shall not make any payments on behalf of non-
public customers of the debtor from funds that are segregated for the 
benefit of public customers;
    (iv) If the trustee receives payments from a customer in response to 
a margin call, then to the extent within the trustee's control, the 
trustee must use such payments to make margin payments for the open 
commodity contract positions of such customer;
    (v) The trustee may not use payments received from one public 
customer to meet the margin (or any other) obligations of any other 
customer; and
    (vi) If funds segregated for the benefit of public customers in a 
particular account class exceed the aggregate net equity claims for all 
public customers in such account class, the trustee may use such excess 
funds to meet the margin obligations for any public customer in such 
account class whose account is under-margined (as described in paragraph 
(b)(4) of this section) but not in deficit, provided that the trustee 
issues a margin call to such customer and provided further that the 
trustee shall liquidate such customer's open commodity contracts if the 
customer fails to make the margin payment within a reasonable time as 
provided in paragraph (b)(4) of this section.
    (2) Margin calls. The trustee (or, prior to appointment of the 
trustee, the debtor against which an involuntary petition was filed) may 
issue a margin call to any public customer whose commodity contract 
account contains open commodity contracts if such account is under-
margined.
    (3) Margin payments by the customer. The full amount of any margin 
payment by a customer in response to a margin call under paragraph 
(b)(2) of this section must be credited to the funded balance of the 
particular account for which it was made.
    (4) Trustee obligation to liquidate certain open commodity 
contracts. The trustee shall, as soon as practicable under the 
circumstances, liquidate all open commodity contracts in any commodity 
contract account that is in deficit, or for which any mark-to-market

[[Page 508]]

calculation would result in a deficit, or for which the customer fails 
to meet a margin call made by the trustee within a reasonable time. 
Except as otherwise provided in this part, absent exigent circumstances, 
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) Partial liquidation of open commodity contracts by others. In 
the event that a clearing organization, foreign clearing organization, 
futures commission merchant, foreign futures intermediary, or other 
person carrying a commodity customer account for the debtor in the 
nature of an omnibus account has liquidated only a portion of open 
commodity contracts in such account, the trustee will exercise 
reasonable business judgment in assigning the liquidating transactions 
to the underlying commodity customer accounts carried by the debtor. 
Specifically, the trustee should endeavor to assign the contracts as 
follows: First, to liquidate open commodity contracts in a risk-reducing 
manner in any accounts that are in deficit; second, to liquidate open 
commodity contracts in a risk-reducing manner in any accounts that are 
undermargined; third, to liquidate open commodity contracts in a risk-
reducing manner in any other accounts, and finally to liquidate any 
remaining open commodity contracts in any accounts. If more than one 
commodity contract account reflects open commodity contracts in a 
particular account class for which liquidating transactions have been 
executed, the trustee shall to the extent practicable allocate the 
liquidating transactions to such commodity contract accounts pro rata 
based on the number of open commodity contracts of such commodity 
contract accounts. For purposes of this section, the term ``a risk-
reducing manner'' is measured by margin requirements set using the 
margin methodology and parameters followed by the derivatives clearing 
organization at which such contracts are cleared.
    (c) Contracts moving into delivery position. After entry of the 
order for relief and subject to paragraph (a) of this section, which 
requires the trustee to attempt to make transfers to other commodity 
brokers permitted by Sec.  190.07 and section 764(b) of the Bankruptcy 
Code, the trustee shall use its best efforts to liquidate any open 
commodity contract that settles upon expiration or exercise via the 
making or taking of delivery of a commodity:
    (1) If such contract is a futures contract or a cleared swaps 
contract, before the earlier of the last trading day or the first day on 
which notice of intent to deliver may be tendered with respect thereto, 
or otherwise before the debtor or its customer incurs an obligation to 
make or take delivery of the commodity under such contract;
    (2) If such contract is a long option on a commodity and has value, 
before the first date on which the contract could be automatically 
exercised or the last date on which the contract could be exercised if 
not subject to automatic exercise; or
    (3) If such contract is a short option on a commodity that is in-
the-money in favor of the long position holder, before the first date on 
which the long option position could be exercised.
    (d) Liquidation or offset. After entry of the order for relief and 
subject to paragraph (a) of this section, which requires the trustee to 
attempt to make transfers to other commodity brokers permitted by Sec.  
190.07 and section 764(b) of the Bankruptcy Code, and except as 
otherwise set forth in this paragraph (d), the following commodity 
contracts and other property held by or for the account of a debtor must 
be liquidated in the market in accordance with paragraph (e)(1) of this 
section or liquidated via book entry in accordance with paragraph (e)(2) 
of this section by the trustee promptly and in an orderly manner:
    (1) Open commodity contracts. All open commodity contracts, except 
for:
    (i) Commodity contracts that are specifically identifiable property 
(if applicable) and are subject to customer instructions to transfer (in 
lieu of liquidating) as provided in Sec.  190.03(c)(2), provided that 
the customer is in compliance with the terms of Sec.  190.09(d)(2); and
    (ii) Open commodity contract positions that are in a delivery 
position,

[[Page 509]]

which shall be treated in accordance with the provisions of Sec.  
190.06.
    (2) Specifically identifiable property, other than open commodity 
contracts or physical delivery property. Specifically identifiable 
property, other than open commodity contracts or physical delivery 
property, to the extent that:
    (i) The fair market value of such property is less than 75% of its 
fair market value on the date of entry of the order for relief;
    (ii) Failure to liquidate the specifically identifiable property may 
result in a deficit balance in the applicable customer account; or
    (iii) The trustee has not received instructions to return pursuant 
to Sec.  190.03(c)(1), or has not returned such property upon the terms 
contained in Sec.  190.09(d)(1).
    (3) Letters of credit. The trustee may request that a customer 
deliver substitute customer property with respect to any letter of 
credit received, acquired, or held to margin, guarantee, secure, 
purchase, or sell a commodity contract, whether the letter of credit is 
held by the trustee on behalf of the debtor's estate or a derivatives 
clearing organization or a foreign intermediary or foreign clearing 
organization on a pass-through or other basis, including in cases where 
the letter of credit has expired since the date of the order for relief. 
The amount of the request may equal the full face amount of the letter 
of the credit or any portion thereof, to the extent required or may be 
required in the trustee's discretion to ensure pro rata treatment among 
customer claims within each account class, consistent with Sec. Sec.  
190.08 and 190.09.
    (i) If a customer fails to provide substitute customer property 
within a reasonable time specified by the trustee, the trustee may, if 
the letter of credit has not expired, draw upon the full amount of the 
letter of credit or any portion thereof.
    (ii) For any letter of credit referred to in this paragraph (d)(3), 
the trustee shall treat any portion that is not drawn upon (less the 
value of any substitute customer property delivered by the customer) as 
having been distributed to the customer for purposes of calculating 
entitlements to distribution or transfer. The expiration of the letter 
of credit on or at any time after the date of the order for relief shall 
not affect such calculation.
    (iii) Any proceeds of a letter of credit drawn by the trustee, or 
substitute customer property posted by a customer, shall be considered 
customer property in the account class applicable to the original letter 
of credit.
    (iv) The trustee shall, in exercising their discretion with regard 
to addressing letters of credit, including as to the timing and amount 
of a request for substitute customer property, endeavor to mitigate, to 
the extent practicable, the adverse effects upon customers that have 
posted letters of credit, in a manner that achieves pro rata treatment 
among customer claims.
    (4) All other property. All other property, other than physical 
delivery property held for delivery in accordance with the provisions of 
Sec.  190.06, which is not required to be transferred or returned 
pursuant to customer instructions and which has not been liquidated in 
accordance with paragraphs (d)(1) through (3) of this section.
    (e) Liquidation of open commodity contracts--(1) By the trustee or a 
clearing organization in the market--(i) Debtor as a clearing member. 
For open commodity contracts cleared by the debtor as a member of a 
clearing organization, the trustee or clearing organization, as 
applicable, shall liquidate such open commodity contracts pursuant to 
the rules of the clearing organization, a designated contract market, or 
a swap execution facility, if and as applicable. Any such rules 
providing for liquidation other than on the open market shall be 
designed to achieve, to the extent feasible under market conditions at 
the time of liquidation, a process for liquidating open commodity 
contracts that results in competitive pricing. For open commodity 
contracts that are futures or options on futures that were established 
on or subject to the rules of a foreign board of trade and cleared by 
the debtor as a member of a foreign clearing organization, the trustee 
shall liquidate such open commodity contracts pursuant to the rules of 
the foreign clearing organization or foreign board of trade or, in the 
absence of

[[Page 510]]

such rules, in the manner the trustee determines appropriate.
    (ii) Debtor not a clearing member. For open commodity contracts 
submitted by the debtor for clearing through one or more accounts 
established with a futures commission merchant (as defined in Sec.  1.3 
of this chapter) or foreign futures intermediary, the trustee shall use 
commercially reasonable efforts to liquidate the open commodity 
contracts to achieve competitive pricing, to the extent feasible under 
market conditions at the time of liquidation and subject to any rules or 
orders of the relevant clearing organization, foreign clearing 
organization, designated contract market, swap execution facility, or 
foreign board of trade governing the liquidation of open commodity 
contracts.
    (2) By the trustee or a clearing organization via book entry offset. 
Upon application by the trustee or 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 in accordance with 
its rules. Such rules shall be designed to establish, to the extent 
feasible under market conditions at the time of liquidation, such 
settlement prices in a competitive manner.
    (3) By a futures commission merchant or foreign futures 
intermediary. For open commodity contracts cleared by the debtor through 
one or more accounts established with a futures commission merchant or a 
foreign futures intermediary, such futures commission merchant or 
foreign futures intermediary may exercise any enforceable contractual 
rights it has to liquidate such commodity contracts, provided, that it 
shall use commercially reasonable efforts to liquidate the open 
commodity contracts to achieve competitive pricing, to the extent 
feasible under market conditions at the time of liquidation and subject 
to any rules or orders of the relevant clearing organization, foreign 
clearing organization, designated contract market, swap execution 
facility, or foreign board of trade governing its liquidation of such 
open commodity contracts. If a futures commission merchant or foreign 
futures intermediary fails to use commercially reasonable efforts to 
liquidate open commodity contracts to achieve competitive pricing in 
accordance with this paragraph (e)(3), the trustee may seek damages 
reflecting the difference between the price (or prices) at which the 
relevant commodity contracts would have been liquidated using 
commercially reasonable efforts to achieve competitive pricing and the 
price (or prices) at which the commodity contracts were liquidated, 
which shall be the sole remedy available to the trustee. In no event 
shall any such liquidation be voided.
    (4) Liquidation only. (i) Nothing in this part shall be interpreted 
to permit the trustee to purchase or sell new commodity contracts for 
the debtor or its customers 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.
    (ii) Notwithstanding paragraph (e)(4)(i) 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.
    (f) Long option contracts. Subject to paragraphs (d) and (e) of this 
section, the trustee shall use its best efforts to assure that a 
commodity contract that is a long option contract with value does not 
expire worthless.

[[Page 511]]



Sec.  190.05  Operation of the debtor's estate--general.

    (a) Compliance with the Act and regulations in this chapter. Except 
as specifically provided otherwise in this part, the trustee shall use 
reasonable efforts to comply with all of the provisions of the Act and 
of the regulations in this chapter as if it were the debtor.
    (b) Computation of funded balance. The trustee shall use reasonable 
efforts to compute a funded balance for each customer account that 
contains open commodity contracts or other property as of the close of 
business each business day subsequent to the order for relief until the 
date all open commodity contracts and other property in such account 
have been transferred or liquidated, which shall be as accurate as 
reasonably practicable under the circumstances, including the 
reliability and availability of information.
    (c) Records--(1) Maintenance. Except as otherwise ordered by the 
court or as permitted by the Commission, records required under this 
chapter to be maintained by the debtor, including records of the 
computations required by this part, shall be maintained by the trustee 
until such time as the debtor's case is closed.
    (2) Accessibility. The records required to be maintained by 
paragraph (c)(1) of this section shall be available during business 
hours to the Commission and the U.S. Department of Justice. The trustee 
shall give the Commission and the U.S. Department of Justice 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 chapter would require 
such records to be maintained by the commodity broker.
    (d) Customer statements. The trustee shall use all reasonable 
efforts to continue to issue account statements with respect to any 
customer for whose account open commodity contracts or other property is 
held that has not been liquidated or transferred. With respect to such 
accounts, the trustee must also issue an account statement reflecting 
any liquidation or transfer of open commodity contracts or other 
property promptly after such liquidation or transfer.
    (e) Other matters--(1) Disbursements. With the exception of 
transfers of customer property made in accordance with Sec.  190.07, the 
trustee shall make no disbursements to customers except with approval of 
the court.
    (2) Investment. The trustee shall promptly invest the proceeds from 
the liquidation of commodity contracts or specifically identifiable 
property, and may invest any other customer property, in obligations of 
the United States and obligations fully guaranteed as to principal and 
interest by the United States, provided that such obligations are 
maintained in a depository located in the United States, its territories 
or possessions.
    (f) Residual interest. The trustee shall apply the residual interest 
provisions of Sec.  1.11 of this chapter in a manner appropriate to the 
context of their responsibilities as a bankruptcy trustee pursuant 
subchapter IV of chapter 7 of the Bankruptcy Code and this part, and in 
light of the existence of a surplus or deficit in customer property 
available to pay customer claims.



Sec.  190.06  Making and taking delivery under commodity contracts.

    (a) Deliveries--(1) General. The provisions of this paragraph (a) 
apply to commodity contracts that settle upon expiration or exercise by 
making or taking delivery of physical delivery property, if such 
commodity contracts are in a delivery position on the filing date, or 
the trustee is unable to liquidate such commodity contracts in 
accordance with Sec.  190.04(c) to prevent them from moving into a 
delivery position, i.e., before the debtor or its customer incurs 
bilateral contractual obligations to make or take delivery under such 
commodity contracts.
    (2) Delivery made or taken on behalf of a customer outside of the 
administration of the debtor's estate. (i) The trustee shall use 
reasonable efforts to allow a customer to deliver physical delivery 
property that is held directly by the customer and not by the debtor 
(and thus not recorded in any commodity contract account of the 
customer) in settlement of a commodity contract, and to allow payment in 
exchange for

[[Page 512]]

such delivery, to occur outside the administration of the debtor's 
estate, when the rules of the exchange or other market listing the 
commodity contract, or the clearing organization or the foreign clearing 
organization clearing the commodity contract, as applicable, prescribe a 
process for delivery that allows the delivery to be fulfilled:
    (A) In the normal course directly by the customer;
    (B) By substitution of the customer for the commodity broker; or
    (C) Through agreement of the buyer and seller to alternative 
delivery procedures.
    (ii) Where a customer delivers physical delivery property in 
settlement of a commodity contract outside of the administration of the 
debtors' estate in accordance with paragraph (a)(2)(i) of this section, 
any property of such customer held at the debtor in connection with such 
contract must nonetheless 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.
    (3) Delivery as part of administration of the debtor's estate. When 
the trustee determines that it is not practicable to effect delivery as 
provided in paragraph (a)(2) of this section:
    (i) To facilitate the making or taking of delivery directly by a 
customer, the trustee may, as it determines reasonable under the 
circumstances of the case and consistent with the pro rata distribution 
of customer property by account class:
    (A) When a customer is obligated to make delivery, return any 
physical delivery property to the customer that is held by the debtor 
for or on behalf of the customer under the terms set forth in Sec.  
190.09(d)(1)(ii), to allow the customer to deliver such property to 
fulfill its delivery obligation under the commodity contract; or
    (B) When a customer is obligated to take delivery:
    (1) Return any cash delivery property to the customer that is 
reflected in the customer's delivery account, provided that cash 
delivery property returned under this paragraph (a)(3)(i)(B)(1) shall 
not exceed the lesser of:
    (i) The amount the customer is required to pay for delivery of the 
commodity; or
    (ii) The customer's net funded balance for all of the customer's 
commodity contract accounts;
    (2) Return cash, securities, or other property held in the 
customer's non-delivery commodity contract accounts, provided that 
property returned under this section shall not exceed the lesser of:
    (i) The amount the customer is required to pay for delivery of the 
commodity; or
    (ii) The net funded balance for all of the customer's commodity 
contract accounts reduced by any amount returned to the customer 
pursuant to paragraph (a)(3)(i)(B)(1) of this section, and provided 
further, however, that the trustee may distribute such property only to 
the extent that the customer's funded balance for each such account 
exceeds the minimum margin obligations for such account (as described in 
Sec.  190.04(b)(2)); and
    (C) Impose such conditions on the customer as it considers 
appropriate to assure that property returned to the customer is used to 
fulfill the customer's delivery obligations.
    (ii) If the trustee does not return physical delivery property, cash 
delivery property, or other property in the form of cash or cash 
equivalents to the customer as provided in paragraph (a)(3)(i) of this 
section, subject to paragraph (a)(4) of this section:
    (A) To the extent practical, the trustee shall make or take delivery 
of physical delivery property in the same manner as if no bankruptcy had 
occurred, and when making delivery, the party to which delivery is made 
must pay the full price required for taking such delivery; or
    (B) When taking delivery of physical delivery property:
    (1) The trustee shall pay for the delivery first using the 
customer's cash delivery property or other property, limited to the 
amounts set forth in paragraph (a)(3)(i)(B) of this section, along with 
any cash transferred by the customer to the trustee on or after the 
filing date for the purpose of paying for delivery.

[[Page 513]]

    (2) If the value of the cash or cash equivalents that may be used to 
pay for deliveries as described in paragraph (a)(3)(i)(B) of this 
section is less than the amount required to be paid for taking delivery, 
the trustee shall issue a payment call to the customer. The full amount 
of any payment made by the customer in response to a payment call must 
be credited to the funded balance of the particular account for which 
such payment is made.
    (3) If the customer fails to meet a call for payment under paragraph 
(a)(3)(ii)(B)(2) of this section before payment is made for delivery, 
the trustee must convert any physical delivery property received on 
behalf of the customer to cash as promptly as possible.
    (4) Deliveries in a securities account. If an open commodity 
contract held in a futures account, foreign futures account, or cleared 
swaps account requires delivery of a security upon expiration or 
exercise of such commodity contract, and delivery is not completed 
pursuant to paragraph (a)(2) or (a)(3)(i) of this section, the trustee 
may make or take delivery in a securities account in a manner consistent 
with paragraph (a)(3)(ii) of this section, provided, however, that the 
trustee may transfer property from the customer's commodity contract 
accounts to the securities account to fulfill the delivery obligation 
only to the extent that the customer's funded balance for such commodity 
contract account exceeds the customer's minimum margin obligations for 
such accounts (as described in Sec.  190.04(b)(2)) and provided further 
that the customer is not under-margined or does not have a deficit 
balance in any other commodity contract accounts.
    (5) Delivery made or taken on behalf of proprietary account. If 
delivery of physical delivery property is to be made or taken on behalf 
of the debtor's own account or the account of any non-public customer of 
the debtor, the trustee shall make or take delivery, as the case may be, 
on behalf of the debtor's estate, provided that if the trustee takes 
delivery of physical delivery property it must convert such property to 
cash as promptly as possible.
    (b) Special account class provisions for delivery accounts. (1) 
Within the delivery account class, the trustee shall treat--
    (i) Physical delivery property held in delivery accounts as of the 
filing date, and the proceeds of any such physical delivery property 
subsequently received, as part of the physical delivery account class; 
and
    (ii) Cash delivery property in delivery accounts as of the filing 
date, along with any physical delivery property for which delivery is 
subsequently taken on behalf of a customer in accordance with paragraph 
(a)(3) of this section, as part of a separate cash delivery account 
class.
    (2)(i) If the debtor holds any cash or cash equivalents in an 
account maintained at a bank, clearing organization, foreign clearing 
organization, or other person, under a name or in a manner that clearly 
indicates that the account holds property for the purpose of making 
payment for taking delivery, or receiving payment for making delivery, 
of a commodity under commodity contracts, such property shall (subject 
to Sec.  190.09) be considered customer property--
    (A) In the cash delivery account class if held for making payment 
for taking delivery; and
    (B) In the physical delivery account class, if held as a result of 
receiving such payment for a making delivery after the filing date.
    (ii) Any other property (excluding property segregated for the 
benefit of customer in the futures, foreign futures or cleared swaps 
account class) that is traceable as having been held or received for the 
purpose of making delivery, or as having been held or received as a 
result of taking delivery, of a commodity under commodity contracts, 
shall (subject to Sec.  190.09) be considered customer property--
    (A) In the cash delivery account class if received after the filing 
date in exchange for taking delivery; and
    (B) Otherwise shall be considered customer property in the physical 
delivery account class.



Sec.  190.07  Transfers.

    (a) Transfer rules. No clearing organization or self-regulatory 
organization

[[Page 514]]

may adopt, maintain in effect, or enforce rules that:
    (1) Are inconsistent with the provisions of this part;
    (2) Interfere with the acceptance by its members of transfers of 
commodity contracts, and the property margining or securing such 
contracts, from futures commission merchants that are required to 
transfer accounts pursuant to Sec.  1.17(a)(4) of this chapter; or
    (3) Interfere with the acceptance by its members of transfers of 
commodity contracts, and the property margining or securing such 
contracts, from a futures commission merchant that is a debtor as 
defined in Sec.  190.01, if such transfers have been approved by the 
Commission, provided, however, that this paragraph (a)(3) shall not--
    (i) Limit the exercise of any contractual right of a clearing 
organization or other registered entity to liquidate or transfer open 
commodity contracts; or
    (ii) Be interpreted to limit a clearing organization's ability 
adequately to manage risk.
    (b) Requirements for transferees. (1) It is the duty of each 
transferee to assure that it will not accept a transfer that would cause 
the transferee to be in violation of the minimum financial requirements 
set forth in this chapter.
    (2) Any transferee that accepts a transfer of open commodity 
contracts from the estate of the debtor--
    (i) Accepts the transfer subject to any loss that may arise in the 
event the transferee cannot recover from the customer any deficit 
balance that may arise related to the transferred open commodity 
contracts.
    (ii) If the commodity contracts were held for the account of a 
customer:
    (A) Must keep such commodity contracts open at least one business 
day after their 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 commodity contracts 
and the margin which such transferee would require with respect to a 
similar set of commodity contracts held for the account of a customer in 
the ordinary course of business; and
    (B) May not collect commissions with respect to the transfer of such 
commodity contracts.
    (3) A transferee may accept open commodity contracts and property, 
and open accounts on its records, for customers whose commodity 
contracts and property are transferred pursuant to this part prior to 
completing customer diligence, provided that account opening diligence 
as required by law (including the risk disclosures referred to in Sec.  
1.65(a)(3) of this chapter) is performed, and records and information 
required by law are obtained, as soon as practicable, but in any event 
within six months of the transfer, unless this time is extended for a 
particular account, transferee, or debtor by the Commission.
    (4)(i) Any account agreements governing a transferred account 
(including an account that has been partially transferred) shall be 
deemed assigned to the transferee by operation of law and shall govern 
the transferee and customer's relationship until such time as the 
transferee and customer enter into a new agreement; provided, however, 
that any breach of such agreement by the debtor existing at or before 
the time of the transfer (including, but not limited to, any failure to 
segregate sufficient customer property) shall not constitute a default 
or breach of the agreement on the part of the transferee, or constitute 
a defense to the enforcement of the agreement by the transferee.
    (ii) Paragraph (b)(4)(i) of this section shall not apply where the 
customer has a pre-existing account agreement with the transferee 
futures commission merchant. In such a case, the transferred account 
will be governed by that pre-existing account agreement.
    (5) If open commodity contracts or any specifically identifiable 
property has been, or is to be, transferred in accordance with section 
764(b) of the Bankruptcy Code and this section, customer instructions 
previously received by the trustee with respect to open commodity 
contracts or with respect to specifically identifiable property, shall 
be transmitted to the transferee of property, which shall comply 
therewith to the extent practicable.

[[Page 515]]

    (c) Eligibility for transfer under section 764(b) of the Bankruptcy 
Code--accounts eligible for transfer. All commodity contract accounts 
(including accounts with no open commodity contract positions) are 
eligible for transfer after the order for relief pursuant to section 
764(b) of the Bankruptcy Code, except:
    (1) The debtor's own account or the accounts of general partners of 
the debtor if the debtor is a partnership; and
    (2) Accounts that are in deficit.
    (d) Special rules for transfers under section 764(b) of the 
Bankruptcy Code--(1) Effecting transfer. The trustee for a commodity 
broker shall use its best efforts to effect a transfer to one or more 
other commodity brokers of all eligible commodity contract accounts, 
open commodity contracts and property held by the debtor for or on 
behalf of its customers, based on customer claims or record, no later 
than the seventh calendar day after the order for relief.
    (2) Partial transfers; multiple transferees--(i) Of the customer 
estate. If all eligible commodity contract 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. Commodity contract 
accounts may be transferred to one or more transferees, and, subject to 
paragraph (d)(4) of this section, may be transferred to different 
transferees by account class.
    (ii) Of a customer's commodity contract account. If all of a 
customer's open commodity contracts and property cannot be transferred 
under this section, a partial transfer of contracts and property may be 
made so long as such transfer would not result in an increase in the 
amount of any customer's net equity claim. One, but not the only, means 
to effectuate a partial transfer is by liquidating a portion of the open 
commodity contracts held by a customer such that sufficient value is 
realized, or margin requirements are reduced to an extent sufficient, to 
permit the transfer of some or all of the remaining open commodity 
contracts and property. If any open commodity contract to be transferred 
in a partial transfer is part of a spread or straddle, to the extent 
practicable under the circumstances, each side of such spread or 
straddle must be transferred or none of the open commodity contracts 
comprising the spread or straddle may be transferred.
    (3) Letters of credit. A letter of credit received, acquired, or 
held to margin, guarantee, secure, purchase, or sell a commodity 
contract may be transferred with an eligible commodity contract account 
if it is held by a derivatives clearing organization on a pass-through 
or other basis or is transferable by its terms, so long as the transfer 
will not result in a recovery which exceeds the amount to which the 
customer would be entitled under Sec. Sec.  190.08 and 190.09. If the 
letter of credit cannot be transferred as provided for in the foregoing 
sentence, and the customer does not deliver substitute customer property 
to the trustee in accordance with Sec.  190.04(d)(3), the trustee may 
draw upon a portion or all of the letter of credit, the proceeds of 
which shall be treated as customer property in the applicable account 
class.
    (4) Physical delivery property. The trustee shall use reasonable 
efforts to prevent physical delivery property held for the purpose of 
making delivery on a commodity contract from being transferred separate 
and apart from the related commodity contract, or to a different 
transferee.
    (5) No prejudice to other customers. No transfer shall be made under 
this part by the trustee if, after taking into account all customer 
property available for distribution to customers in the applicable 
account class at the time of the transfer, such transfer would result in 
insufficient remaining customer property to make an equivalent 
percentage distribution (including all previous transfers and 
distributions) to all customers in the applicable account class, based 
on--
    (i) Customer claims of record; and
    (ii) Estimates of other customer claims made in the trustee's 
reasonable discretion based on available information, in each case as of 
the calendar day immediately preceding transfer.

[[Page 516]]

    (e) Prohibition on avoidance of transfers under section 764(b) of 
the Bankruptcy Code--(1) Pre-relief transfers. Notwithstanding the 
provisions of paragraphs (c) and (d) of this section, the following 
transfers are approved and may not be avoided under sections 544, 546, 
547, 548, 549, or 724(a) of the Bankruptcy Code:
    (i) The transfer of commodity contract accounts or customer property 
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;
    (ii) The transfer, withdrawal, or settlement, prior to the order for 
relief at the request of a public customer, including a transfer, 
withdrawal, or settlement at the request of a public customer that is a 
commodity broker, of commodity contract accounts or customer property 
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 customer property or the 
bankruptcy estate than that to which it would be entitled under this 
part; or
    (B) The transfer is disapproved by the Commission;
    (iii) The transfer prior to the order for relief by a clearing 
organization, or by a receiver that has been appointed for the futures 
commission merchant (FCM) that is now a debtor, of one or more accounts 
held for or on behalf of customers of the debtor, or of commodity 
contracts and other customer property held for or on behalf of customers 
of the debtor, provided that the transfer is not disapproved by the 
Commission.
    (2) Post-relief transfers. Notwithstanding the provisions of 
paragraphs (c) and (d) of this section, the following transfers are 
approved and may not be avoided under sections 544, 546, 547, 548, 549, 
or 724(a) of the Bankruptcy Code:
    (i) The transfer of a commodity contract account or customer 
property eligible to be transferred under paragraphs (c) and (d) of this 
section made by the trustee or by any clearing organization on or before 
the seventh calendar day after the entry of the order for relief, as to 
which the Commission has not disapproved the transfer; or
    (ii) The transfer of a commodity contract account or customer 
property 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.
    (f) Commission action. Notwithstanding any other provision of this 
section (other than paragraphs (d)(2)(ii) and (d)(5) of this section), 
in appropriate cases and to protect the public interest, the Commission 
may:
    (1) Prohibit the transfer of a particular set or sets of commodity 
contract accounts and customer property; or
    (2) Permit transfers of a particular set or sets of commodity 
contract accounts and customer property that do not comply with the 
requirements of this section.



Sec.  190.08  Calculation of funded net equity.

    For purposes of this subpart, funded net equity shall be computed as 
follows:
    (a) Funded claim. The funded net equity claim of a customer shall be 
equal to the aggregate of the funded balances of such customer's net 
equity claim for each account class.
    (b) Net equity. Net equity means a customer's total customer claim 
of record against the estate of the debtor based on the customer 
property, including any 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. (i) Determine the equity balance of 
each commodity contract account of a customer by computing, with respect 
to such account, the sum of:
    (A) The ledger balance;
    (B) The open trade balance; and
    (C) The 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.

[[Page 517]]

    (ii) For the purposes of this paragraph (b)(1), the ledger balance 
of a customer account shall be calculated by:
    (A) Adding:
    (1) Cash deposited to purchase, margin, guarantee, secure, or settle 
a commodity contract;
    (2) Cash proceeds of liquidations of any securities or other 
property referred to in paragraph (b)(1)(i)(C) of this section;
    (3) Gains realized on trades; and
    (4) The face amount of any letter of credit received, acquired or 
held to margin, guarantee, secure, purchase or sell a commodity 
contract; and
    (B) Subtracting from the result:
    (1) Losses realized on trades;
    (2) Disbursements to or on behalf of the customer (including, for 
these purposes, transfers made pursuant to Sec. Sec.  190.04(a) and 
190.07); 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.
    (iii) 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.
    (iv) For purposes of this paragraph (b)(1), 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 (xii) 
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 that are maintained with a debtor in a person's name and that, 
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 in its capacity as such shall be deemed to 
be held in a separate capacity from accounts held by such executor or 
administrator in its individual capacity.
    (iv) 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 in its capacity as such 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 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 this paragraph (b)(2)(v) 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

[[Page 518]]

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 paragraphs (b)(2)(ix) and (xiv) of this section, 
the futures accounts, foreign futures accounts, delivery accounts, 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 for public customers of a futures 
commission merchant maintained with a debtor shall be deemed to be held 
in a separate capacity from any omnibus customer account for non-public 
customers of such futures commission merchant and from any account 
maintained with the debtor on its own behalf or on behalf of any non-
public customer.
    (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. Sec.  190.04(a) and 190.07, 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 that 
is subject to the terms of the Employee Retirement Income Security Act 
of 1974 and the regulations in 29 CFR chapter XXV, or similar state, 
Federal, or foreign laws or regulations applicable to retirement or 
pension plans, 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 cleared swaps customer account within each cleared swap 
omnibus customer account referred to in paragraph (b)(2)(viii) of this 
section shall be deemed to be held in a separate capacity from each 
other such individual cleared swaps customer account, subject to the 
provisions of paragraphs (b)(2)(i) through (xi) of this section.
    (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 account.
    (ii) Any obligation to the debtor owed by a customer which is not 
required to be included in computing the equity of that customer under 
paragraph (b)(1) of this section (defined as x), must be deducted from 
any obligation to the customer owed by the debtor which is not required 
to be included in computing the equity of that customer (defined as y). 
If the former amount (x) exceeds the latter (y), the excess (x-y) 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 one class of 
accounts with a positive equity balance, the excess (again, x-y) must be 
allocated and offset against each positive equity balance in the same 
proportion as that positive equity balance bears to the total of all 
positive equity

[[Page 519]]

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 one class of accounts with a 
positive equity balance, such negative equity 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 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 shall only be applied subsequent to 
the entry of an order for relief; prior to that 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 in part 1, 22, or 30 of this chapter 
that implement sections 4d(a)(2) and 4d(f)) 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 date 
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) through (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 
is transferred in accordance with Sec.  190.07 and section 764(b) of the 
Bankruptcy Code, net equity shall be computed based solely upon those 
allowed customer claims, if any, filed subsequent to the order for 
relief which are not claims of record on the filing date.
    (5) Step 5-correction for ongoing events. Compute any adjustments to 
the steps in paragraphs (b)(1) through (4) of this section required to 
correct misestimates or errors including, without limitation, 
corrections for ongoing events such as the liquidation of unliquidated 
claims or specifically identifiable property at a value different from 
the estimated value previously used in computing net equity.
    (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 for distribution to customers of the same customer class.
    (1) Funded balance computation. The funded balance of any customer 
claim shall be computed (separately by account class and customer class) 
by:
    (i) Multiplying the ratio of the amount of the net equity claim of 
such customer (defined as x) less the amounts referred to in paragraph 
(c)(1)(ii) of this section of such customer for any account class 
(defined as y) divided by the sum of the net equity claims of all 
customers for accounts of that class (defined as p) less the amounts 
referred to in paragraph (c)(1)(ii) of this section of all customers for 
accounts of that class (defined as q) (thus, ((x-y)/(p-q)) by the sum 
of:
    (A) The value of letters of credit received, acquired, or held to 
margin, guarantee, secure, purchase, or sell a commodity contract 
relating to all customer accounts of the same class;
    (B) The value of the money, securities, or other property segregated 
on behalf of all customer accounts of the same class less the amounts 
referred to in paragraph (c)(1)(ii) of this section;
    (C) The value of any money, securities, or other property which must 
be allocated under Sec.  190.09 to all customer accounts of the same 
class; and
    (D) The amount of any add-back required under paragraph (b)(4) of 
this section; and
    (ii) Then adding 100% of--
    (A) Any margin payment made between the entry of the order for 
relief (or, in an involuntary case, the date on which the petition for 
bankruptcy is

[[Page 520]]

filed) and the primary liquidation date; provided, however, that if 
margin is posted to substitute for a letter of credit, such margin does 
not increase the funded balance; and
    (B) For cash delivery property, any cash transferred to the trustee 
on or after the filing date for the purpose of paying for delivery.
    (2) Corrections to funded balance. The funded balance must be 
adjusted to correct for ongoing events including, without limitation:
    (i) Added claimants;
    (ii) Disallowed claims;
    (iii) Liquidation of unliquidated claims at a value other than their 
estimated value; and
    (iv) Recovery of property.
    (d) 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 (d).
    (1) Commodity contracts--(i) Open contracts. Unless otherwise 
specified in this paragraph (d), 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, however, that if an open 
commodity contract is transferred to another commodity broker, its value 
on the debtor's books and records shall be determined as of the end of 
the last settlement cycle on the day preceding such transfer.
    (ii) Liquidated contracts. Except as specified in paragraphs 
(d)(1)(ii)(A) and (B) of this section, the value of a commodity contract 
liquidated on the open market shall equal the actual value realized on 
liquidation of the commodity contract.
    (A) Weighted average. If identical commodity contracts are 
liquidated within a 24-hour period or business day (or such other period 
as the bankruptcy court may determine is appropriate) as part of a 
general liquidation of commodity contracts, 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 for 
which the debtor held such commodity contracts.
    (B) Bulk liquidation. The value of a commodity contract liquidated 
as part of a bulk auction, taken into inventory or under management by a 
clearing organization, or similarly liquidated outside of the open 
market shall be equal to the settlement price calculated by the clearing 
organization as of the end of the settlement cycle during which the 
commodity contract was liquidated.
    (2) 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, the value of such 
security shall be equal to the actual value realized on liquidation of 
the security; provided, however, that if identical securities are 
liquidated within a 24-hour period or business day (or such other period 
as the bankruptcy court may determine is appropriate) as part of a 
general liquidation of securities, 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 for which the debtor 
held such securities. Securities which are not publicly traded shall be 
valued by the trustee pursuant to paragraph (d)(5) of this section.
    (3) Commodities held in inventory. Commodities held in inventory, as 
collateral or otherwise, shall be valued at their fair market value. If 
such fair market value is not readily ascertainable based upon public 
sources of prices, the trustee shall value such commodities pursuant to 
paragraph (d)(5) of this section.
    (4) Letters of credit. The value of any letter of credit received, 
acquired or held to margin, guarantee, secure, purchase, or sell a 
commodity contract shall be its face amount, less the amount, if any, 
drawn and outstanding, provided that, if the trustee makes a 
determination in good faith that a draw on a letter of credit is 
unlikely to be honored on either a temporary or a permanent basis, the 
trustee shall value the letter of credit pursuant to paragraph (d)(5) of 
this section.

[[Page 521]]

    (5) All other property. Subject to the other provisions of this 
paragraph (d), all other property shall be valued by the trustee 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 equal to the actual value realized on the sale of 
such property; and, provided further, that the sale shall be made in 
compliance with all applicable statutes, rules, and orders of any court 
or governmental entity with jurisdiction there over.



Sec.  190.09  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. 
(Property connected with certain cross-margining arrangements is subject 
to the provisions of framework 1 in appendix B to this part.) The 
property so 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) Physical delivery property as that term is defined in paragraphs 
(1) through (3) in the definition of that term in Sec.  190.01;
    (D) Cash delivery property, or other cash, securities, or other 
property received by the debtor as payment for a commodity to be 
delivered to fulfill a commodity contract from or for the commodity 
customer account of a customer;
    (E) Profits or contractual rights accruing to a customer as the 
result of a commodity contract;
    (F) Letters of credit, including any proceeds of a letter of credit 
drawn by the trustee, or substitute customer property posted by the 
customer, pursuant to Sec.  190.04(d)(3);
    (G) Securities held in a portfolio margining account carried as a 
futures account or a cleared swaps customer account; or
    (H) 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 for customers 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) Was property of a type described in paragraph (a)(1)(i)(A) of 
this section that is subsequently recovered by the avoidance powers of 
the trustee or is otherwise recovered by the trustee on any other claim 
or basis;
    (E) Represents recovery of any debit balance, margin deficit, or 
other claim of the debtor against a customer;
    (F) Was unlawfully converted but is part of the debtor's estate;
    (G) Constitutes current assets of the debtor (as of the date of the 
order for relief) within the meaning of Sec.  1.17(c)(2) of this 
chapter, including the debtor's trading or operating accounts and 
commodities of the debtor held in inventory, in the greater of--
    (1) The amount that the debtor is obligated to set aside as its 
targeted residual interest amount pursuant to Sec.  1.11 of this chapter 
and the debtor's residual interest policies adopted thereunder, with 
respect to each of the futures account class, the foreign futures 
account class, and the cleared swaps account class; or
    (2) The debtor's obligations to cover debit balances or under-
margined amounts as provided in Sec. Sec.  1.20, 1.22, 22.2, and 30.7 of 
this chapter;
    (H) Is other property of the debtor that any applicable law, rule, 
regulation, or order requires to be set aside for the benefit of 
customers;

[[Page 522]]

    (I) Is property of the debtor's estate recovered by the Commission 
in any proceeding brought against the principals, agents, or employees 
of the debtor;
    (J) Is proceeds from the investment of customer property by the 
trustee pending final distribution;
    (K) Is a payment from an insurer to the trustee arising from or 
related to a claim related to the conversion or misuse of customer 
property; or
    (L) 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)(F) and (a)(1)(ii)(A) through (K) of 
this section is insufficient to satisfy in full all claims of public 
customers. Such property includes ``customer property,'' as defined in 
section 16(4) of SIPA, 15 U.S.C. 78lll(4), that remains after allocation 
in accordance with section 8(c)(1)(A)-(D) of SIPA, 15 U.S.C. 78fff-
2(c)(1)(A)-(D) and that is allocated to the debtor's general estate in 
accordance with section 8(c)(1) of SIPA, 15 U.S.C. 78fff-2(c)(1).
    (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 in this chapter;
    (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 (unless such contracts are cleared by a 
clearing organization or, in the case of forward contracts treated as 
foreign futures, a foreign clearing organization);
    (iv) Physical delivery property that is not held by the debtor, and 
is delivered or received by a customer in accordance with Sec.  
190.06(a)(2) or Sec.  190.16(a) to fulfill the customer's delivery 
obligation under a commodity contract;
    (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 
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;
    (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; and
    (viii) Money, securities, or property held in a securities account 
to fulfill delivery, under a commodity contract from or for the account 
of a customer, as described in Sec.  190.06(b)(2).
    (3) Nothing contained in this section, including, but not limited 
to, the satisfaction of customer claims by operation of this section, 
shall prevent a trustee from asserting claims against any person to 
recover the shortfall of property enumerated in paragraphs (a)(1)(i)(F) 
and (a)(1)(ii)(A) through (L) of this section.
    (b) Allocation of customer property between customer classes. No 
customer property 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 or attributable to non-public customers 
must be treated initially as part of the public customer estate and 
allocated in accordance with paragraph (c)(2) of this section.
    (c) Allocation of customer property among account classes--(1) 
Property identified to an account class--(i) 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, or recovered by the trustee on behalf of or for the 
benefit of an account class, must be allocated to the customer estate of 
the account class for which it is segregated, to which it is readily 
traceable, or for which it is recovered.
    (ii) Excess property. If, after payment in full of all allowed 
customer claims in a particular account class, any property remains 
allocated to that account class, such excess shall be allocated in 
accordance with paragraph (c)(2) of this section.

[[Page 523]]

    (2) All other property. Money, securities, and property received 
from or for the account of customers which cannot be allocated in 
accordance with paragraph (c)(1)(i) of this section, must be allocated 
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) through (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. Specifically identifiable property 
not required to be liquidated under Sec.  190.04(d)(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 
substitute customer property is first deposited with the trustee with a 
value 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 margining an open commodity 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 substitute customer property with the trustee 
with a value 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 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, however, that adequate security to 
assure the recovery 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 open commodity contract that is 
specifically identifiable property and which is not required to be 
liquidated under Sec.  190.04(d), and which is not otherwise liquidated, 
may be transferred on behalf of a public customer, provided, however, 
that such customer must first deposit substitute customer property with 
the trustee with a value 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

[[Page 524]]

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; and, provided further, 
that adequate security to assure the recovery 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 are specifically identifiable property as 
defined in paragraph (1)(i)(A) of the definition of that term in Sec.  
190.01 of this chapter, but the customer has no open commodity 
contracts, the customer may request that the trustee purchase or 
otherwise obtain the largest whole number of like-kind securities (i.e., 
securities of the same class and series of an issuer), with a fair 
market value (inclusive of transaction costs) which does not exceed that 
portion of the funded balance 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 (3) of this section prior to receipt of a 
completed proof of customer claim as described in Sec.  190.03(e) or 
(f).
    (5) No differential distributions. No further disbursements may be 
made to customers with respect to a particular account class for whom 
transfers have been made pursuant to Sec.  190.07 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 in such account class. Partial distributions, other 
than the transfers referred to in Sec.  190.07 and paragraph (d)(2) of 
this section, with respect to a particular account class 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 to assure the recovery of any overpayments by the 
trustee and distributes an equal percentage of net equity to all public 
customers in such account class.



Sec.  190.10  Current records during business as usual.

    A person that is a futures commission merchant is required to 
maintain current records relating to its customers' accounts, including 
copies of all account agreements and related account documentation, and 
``know your customer'' materials, pursuant to Sec. Sec.  1.31, 1.35, 
1.36, and 1.37 of this chapter, which may be provided to another futures 
commission merchant to facilitate the transfer of open commodity 
contracts or other customer property held by such person for or on 
behalf of its customers to the other futures commission merchant, in the 
event an order for relief is entered with respect to such person.



                Subpart C_Clearing Organization as Debtor



Sec.  190.11  Scope and purpose of this subpart.

    (a) This subpart applies to a proceeding commenced under subchapter 
IV of chapter 7 of the Bankruptcy Code in which the debtor is a clearing 
organization.
    (b) If the debtor clearing organization is organized outside the 
United States, and is subject to a foreign proceeding, as defined in 11 
U.S.C. 101(23), in the jurisdiction in which it is organized, then only 
the following provisions of this part shall apply:
    (1) Subpart A.
    (2) Section 190.12.
    (3) Section 190.13, but only with respect to futures contracts and 
cleared swaps contracts cleared by FCM clearing members on behalf of 
their public customers and the property margining or securing such 
contracts.
    (4) Sections 190.17 and 190.18, but only with respect to claims of 
FCM clearing members on behalf of their public customers, as well as to 
property that is or should have been segregated for the benefit of FCM 
clearing members' public customers, or that has been recovered for the 
benefit of FCM clearing members' public customers.



Sec.  190.12  Required reports and records.

    (a) Notices--(1) Means of providing--(i) To the Commission. Unless 
instructed

[[Page 525]]

otherwise by the Commission, all mandatory or discretionary notices to 
be given to the Commission under this subpart shall be directed by 
electronic mail to [email protected]. For purposes of this 
subpart, notice to the Commission shall be deemed to be given only upon 
actual receipt.
    (ii) To members. The trustee, after consultation with the 
Commission, and unless otherwise instructed by the Commission, will 
establish and follow procedures reasonably designed for giving adequate 
notice to members under this subpart and for receiving claims or other 
notices from members. Such procedures should include, absent good cause 
otherwise, the use of a prominent website as well as communication to 
members' electronic addresses that are available in the debtor's books 
and records.
    (2) Of commencement of a proceeding. A debtor that files a petition 
in bankruptcy that is subject to this subpart shall, at or before the 
time of such filing, and a debtor against which such a petition is filed 
shall, as soon as possible, but in any event no later than three hours 
after the receipt of notice of such filing, notify the Commission of the 
filing date, the court in which the proceeding has been or will be 
filed, and, as soon as available, the docket number assigned to that 
proceeding by the court.
    (b) Reports and records to be provided to the trustee and the 
Commission within three hours. (1) As soon as practicable following the 
commencement of a proceeding that is subject to this subpart and in any 
event no later than three hours following the later of the commencement 
of such proceeding or the appointment of the trustee, the debtor shall 
provide to the trustee copies of each of the most recent reports that 
the debtor was required to file with the Commission under Sec.  39.19(c) 
of this chapter, including copies of any reports required under Sec.  
39.19(c)(2), (3), and (4) of this chapter (including the most up-to-date 
version of any recovery and wind-down plans of the debtor maintained 
pursuant to Sec.  39.39(b) of this chapter) that the debtor filed with 
the Commission during the preceding 12 months.
    (2) As soon as practicable following the commencement of a 
proceeding that is subject to this subpart and in any event no later 
than three hours following the commencement of such proceeding (or, with 
respect to the trustee, the appointment of the trustee), the debtor 
shall provide to the trustee and the Commission copies of the most up-
to-date versions of the default management plan and default rules and 
procedures maintained by the debtor pursuant to Sec.  39.16 and, as 
applicable, Sec.  39.35 of this chapter.
    (c) Records to be provided to the trustee and the Commission by the 
next business day. As soon as practicable following commencement of a 
proceeding that is subject to this subpart and in any event no later 
than the next business day, the debtor shall make available to the 
trustee and the Commission copies of the following records:
    (1) All records maintained by the debtor described in Sec.  39.20(a) 
of this chapter; and
    (2) Any opinions of counsel or other legal memoranda provided to the 
debtor (whether by external or internal counsel) in the five years 
preceding the commencement of such proceeding relating to the 
enforceability of the rules and procedures of the debtor in the event of 
an insolvency proceeding involving the debtor.



Sec.  190.13  Prohibition on avoidance of transfers.

    The following transfers are approved and may not be avoided under 
sections 544, 546, 547, 548, 549, or 724(a) of the Bankruptcy Code:
    (a) Pre-relief transfers. Any transfer of open commodity contracts 
and the property margining or securing such contracts made to another 
clearing organization that was approved by the Commission, either before 
or after such transfer, and was made prior to entry of the order for 
relief; and
    (b) Post-relief transfers. Any transfers of open commodity contracts 
and the property margining or securing such contracts made to another 
clearing organization on or before the seventh calendar day after the 
entry of the order for relief, that was made with the approval of the 
Commission, either before or after such transfer.

[[Page 526]]



Sec.  190.14  Operation of the estate of the debtor subsequent to the
filing date.

    (a) Proofs of claim. The trustee may, in its discretion based upon 
the facts and circumstances of the case, instruct each customer to file 
a proof of claim containing such information as is deemed appropriate by 
the trustee, and seek a court order establishing a bar date for the 
filing of such proofs of claim.
    (b) Operation of the derivatives clearing organization. Subsequent 
to the order for relief, the derivatives clearing organization shall 
cease making calls for variation settlement or initial margin.
    (c) Liquidation. (1) The trustee shall liquidate all open commodity 
contracts that have not been terminated, liquidated, or transferred no 
later than seven calendar days after entry of the order for relief. Such 
liquidation of open commodity contracts shall be conducted in accordance 
with the rules and procedures of the debtor, to the extent applicable 
and practicable.
    (2) In lieu of liquidating securities held by the debtor and making 
distributions in the form of cash, the trustee may, in its reasonable 
discretion, make distributions in the form of securities that are 
equivalent (i.e., securities of the same class and series of an issuer) 
to the securities originally delivered to the debtor by a clearing 
member or such clearing member's customer.
    (d) Computation of funded balance. The trustee shall use reasonable 
efforts to compute a funded balance for each customer account 
immediately prior to any distribution of property within the account, 
which shall be as accurate as reasonably practicable under the 
circumstances, including the reliability and availability of 
information.



Sec.  190.15  Recovery and wind-down plans; default rules and procedures.

    (a) Prohibition on avoidance of actions taken pursuant to recovery 
and wind-down plans. Subject to the provisions of section 766 of the 
Bankruptcy Code and Sec. Sec.  190.13 and 190.18, the trustee shall not 
avoid or prohibit any action taken by a debtor subject to this subpart 
that was reasonably within the scope of and was provided for in any 
recovery and wind-down plans maintained by the debtor and filed with the 
Commission pursuant to Sec.  39.39 of this chapter.
    (b) Implementation of debtor's default rules and procedures. In 
administering a proceeding under this subpart, the trustee shall 
implement, in consultation with the Commission, the default rules and 
procedures maintained by the debtor under Sec.  39.16 and, as 
applicable, Sec.  39.35 of this chapter and any termination, close-out 
and liquidation provisions included in the rules of the debtor, subject 
to the reasonable discretion of the trustee and to the extent that 
implementation of such default rules and procedures is practicable.
    (c) Implementation of recovery and wind-down plans. In administering 
a proceeding under this subpart, the trustee shall, in consultation with 
the Commission, take actions in accordance with any recovery and wind-
down plans maintained by the debtor and filed with the Commission 
pursuant to Sec.  39.39 of this chapter, to the extent reasonable and 
practicable, and consistent with the protection of customers.



Sec.  190.16  Delivery.

    (a) General. In the event that a commodity contract, cleared by the 
derivatives clearing organization, that settles upon expiration or 
exercise by making or taking delivery of physical delivery property, has 
moved into delivery position prior to the date and time of the order for 
relief, or moves into delivery position after that date and time, but 
before being terminated, liquidated, or transferred, then, in either 
such event, the trustee must use reasonable efforts to facilitate and 
cooperate with the completion of delivery on behalf of the clearing 
member or the clearing member's customer in a manner consistent with 
Sec.  190.06(a) and the pro rata distribution principle addressed in 
Sec.  190.00(c)(5).
    (b) Special provisions for delivery accounts. (1) Consistent with 
the separation of the physical delivery property account class and the 
cash delivery account class set forth in Sec.  190.06(b), the trustee 
shall treat--
    (i) Physical delivery property held in delivery accounts as of the 
filing date,

[[Page 527]]

along with the proceeds from any subsequent sale of such physical 
delivery property in accordance with Sec.  190.06(a)(3) to fulfill a 
clearing member's or its customer's delivery obligation or any other 
subsequent sale of such property, as part of the physical delivery 
account class; and
    (ii) Cash delivery property in delivery accounts as of the filing 
date, along with any physical delivery property for which delivery is 
subsequently taken on behalf of a clearing member or its customer in 
accordance with Sec.  190.06(a)(3), as part of the separate cash 
delivery account class.
    (2) If the debtor holds any cash or property in the form of cash 
equivalents in an account with a bank or other person under a name or in 
a manner that clearly indicates that the account holds property for the 
purpose of making payment for taking physical delivery, or receiving 
payment for making physical delivery, of a commodity under any commodity 
contracts, such property shall (subject to Sec.  190.19) be considered 
customer property in the cash delivery account class if held for making 
payment for taking delivery, or in the physical delivery account class, 
if held for the purpose of receiving such payment.



Sec.  190.17  Calculation of net equity.

    (a) Net equity-separate capacities and calculations. (1) If a member 
of the clearing organization clears trades in commodity contracts 
through a commodity contract account carried by the debtor as a customer 
account for the benefit of the clearing member's public customers and 
separately through a house account, the clearing member shall be treated 
as having customer claims against the debtor in separate capacities with 
respect to the customer account and house account at the clearing 
organization, and by account class. A member shall be treated as part of 
the public customer class with respect to claims based on any commodity 
customer accounts carried as ``customer accounts'' by the clearing 
organization for the benefit of the member's public customers, and as 
part of the non-public customer class with respect to claims based on 
its house account.
    (2) Net equity shall be calculated separately for each separate 
customer capacity in which the clearing member has a claim against the 
debtor, i.e., separately by the member's customer account and house 
account and by account class.
    (b) Net equity--application of debtor's loss allocation rules and 
procedures. (1)(i) The calculation of a clearing member's net equity 
claim shall include the full application of the debtor's loss allocation 
rules and procedures, including the default rules and procedures 
referred to in Sec.  39.16 and, if applicable, Sec.  39.35 of this 
chapter.
    (ii) The calculation in paragraph (b)(1)(i) of this section will 
include, with respect to the clearing member's house account, any 
assessments or similar loss allocation arrangements provided for under 
those rules and procedures that were not called for before the filing 
date, or, if called for, have not been paid. Such loss allocation 
arrangements shall be applied to the extent necessary to address losses 
arising from default by clearing members.
    (2) Appropriate adjustments shall be made to the net equity claims 
of the clearing members that are so entitled under the following 
circumstances: Where the debtor's loss allocation rules and procedures 
would entitle clearing members to additional payments of cash or other 
property due to--
    (i) Portions of mutualized default resources that are prefunded, or 
assessed and collected, but in either event not used; or
    (ii) The debtor's recoveries on claims against others (including, 
but not limited to, recoveries on claims against clearing members who 
have defaulted on their obligations to the debtor).
    (c) Net equity--general. Subject to paragraph (b) of this section, 
net equity shall be calculated in the manner provided in Sec.  190.08, 
to the extent applicable.
    (d) Calculation of funded balance. Funded balance means a clearing 
member's pro rata share of customer property other than member property 
(for accounts for a clearing member's customer accounts) or member 
property (for a clearing member's house accounts) with respect to each 
account

[[Page 528]]

class available for distribution to customers of the same customer 
class, calculated in the manner provided in Sec.  190.08(c) to the 
extent applicable.



Sec.  190.18  Treatment of property.

    (a) General. The property of the debtor's estate must be allocated 
between member property and customer property other than member property 
as provided in this section to satisfy claims of clearing members, as 
customers of the debtor. The property so allocated will constitute a 
separate estate of the customer class (i.e., member property, and 
customer property other than member property) and the account class to 
which it is allocated, and will be designated by reference to such 
customer class and account class.
    (b) Scope of customer property. Customer property is the property 
available for distribution within the relevant account class in respect 
of claims by clearing members, as customers of the clearing 
organization, based on customer accounts carried by the debtor for the 
benefit of such members' public customers or, considered separately, 
such members' house accounts.
    (1) Customer property includes the following:
    (i) All cash, securities, or other property, or the proceeds of such 
cash, securities, or other property, that is received, acquired, or held 
by or for the account of the debtor, from or for any commodity contract 
account of a clearing member carried by the debtor, which is:
    (A) Property received, acquired, or held, in order to margin, 
guarantee, secure, purchase, or sell a commodity contract;
    (B) Open commodity contracts;
    (C) Physical delivery property as that term is defined in paragraphs 
(1) through (3) of the definition of that term in Sec.  190.01;
    (D) Cash, securities or other property received by the debtor as 
payment for a commodity to be delivered to fulfill a commodity contract 
from or for the commodity customer account of a clearing member or a 
customer of a clearing member;
    (E) Profits or contractual rights accruing as a result of a 
commodity contract;
    (F) Letters of credit, including any proceeds of a letter of credit 
drawn upon by the trustee, or substitute customer property posted by a 
clearing member or a customer of a clearing member, pursuant to Sec.  
190.04(d)(3); or
    (G) Securities held in a portfolio margining account carried as a 
futures account or a cleared swaps customer account;
    (ii) All cash, securities, or other property which:
    (A) Is segregated by the debtor on the filing date for the benefit 
of clearing members' house accounts or clearing members' public customer 
accounts;
    (B) Was of a type described in paragraph (b)(1)(i)(A) of this 
section that is subsequently recovered by the avoidance powers of the 
trustee or is otherwise recovered by the trustee on any other claim or 
basis;
    (C) Represents a recovery of any debit balance, margin deficit or 
other claim of the debtor against any commodity contract account carried 
for the benefit of a member's house accounts or a member's public 
customer accounts;
    (D) Was unlawfully converted but is part of the debtor's estate; or
    (E) Was of a type described in paragraphs (a)(1)(ii)(H) through (K) 
of Sec.  190.09 (as if the term debtor used therein refers to a clearing 
organization as debtor);
    (iii) Any guaranty fund deposit, assessment, or similar payment or 
deposit made by a clearing member, or recovered by the trustee, to the 
extent any remains following administration of the debtor's default 
rules and procedures, and any other property of a member available under 
the debtor's rules and procedures to satisfy claims made by or on behalf 
of public customers of a member; and
    (iv) Amounts of its own funds that the debtor had committed as part 
of its loss allocation rules, to the extent that such amounts have not 
already been applied under such rules.
    (2) Customer property will not include property of the type 
described in Sec.  190.09(a)(2), as if the term debtor used

[[Page 529]]

therein refers to a clearing organization and to the extent relevant to 
a clearing organization.
    (c) Allocation of customer property between customer classes. (1) 
Where the funded balance for members' house accounts is greater than one 
hundred percent with respect to any account class:
    (i) Any excess should be allocated to customer property other than 
member property to the extent that the funded balance is less than one 
hundred percent of net equity claims for members' public customers in 
any account class; and
    (ii) Any remaining excess after the application of paragraph 
(c)(1)(i) of this section should be allocated to member property to the 
extent that the funded balance is less than one hundred percent of net 
equity claims for members' house accounts in any other account class.
    (2) Where the funded balance for members' public customers in any 
account class is greater than one hundred percent:
    (i) Any excess should be allocated to customer property other than 
member property to the extent that the funded balance is less than one 
hundred percent of net equity claims for members' public customers in 
any other account class; and
    (ii) Any remaining excess after the application of paragraph 
(c)(2)(i) of this section should be allocated to member property to the 
extent that the funded balance is less than one hundred percent of net 
equity claims for members' house accounts in any account class.
    (d) Allocation of customer 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 within a customer class, or readily 
traceable on the filing date to customers of such account class within a 
customer class, or recovered by the trustee on behalf of or for the 
benefit of an account class within a customer class, must be allocated 
to the customer estate of the account class for which it is segregated, 
to which it is readily traceable, or for which it is recovered.
    (2) All other property. Customer property which cannot be allocated 
in accordance with paragraph (d)(1) of this section, shall be allocated 
within customer classes, but between account classes, in the following 
order:
    (i) To the estate of the account class for which the percentage of 
each members' net equity claim which is funded is the lowest, until the 
funded percentage of net equity claims of such account class equals the 
percentage of each members' 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 so that the percentage 
of the net equity claims which are funded for each such account class 
remains equal until the percentage of each net equity claim which is 
funded equals the percentage of each net equity claim which is funded 
for the account class with the next lowest percentage of funded claims, 
and so forth, until all account classes within the customer class are 
fully funded.
    (e) Accounts without separation by account class. Where the debtor 
has, prior to the order for relief, kept initial margin for house 
accounts in accounts without separation by account class, then member 
property will be considered to be in a single account class.
    (f) Assertion of claims by trustee. Nothing in this section, 
including, but not limited to, the satisfaction of customer claims by 
operation of this section, shall prevent a trustee from asserting claims 
against any person to recover the shortfall of property enumerated in 
paragraphs (b)(1)(i)(E) and (b)(1)(ii) and (iii) of this section.



Sec.  190.19  Support of daily settlement.

    (a) Notwithstanding any other provision of this part, funds received 
(whether from clearing members' house or customer accounts) by a debtor 
clearing organization as part of the daily settlement required pursuant 
to Sec.  39.14 of this chapter shall, upon and after an order for 
relief, be included as customer property that is reserved for and 
traceable to, and promptly shall be distributed to, members entitled to 
payments of such funds with respect to

[[Page 530]]

such members' house and customer accounts as part of that same daily 
settlement. Such funds when received, other than deposits of initial 
margin described in Sec.  39.14(a)(1)(iii) of this chapter, shall be 
considered member property and, separately, customer property other than 
member property, in proportion to the ratio of total gains in member 
accounts with net gains, and total gains in clearing members' customer 
accounts with net gains, respectively. Deposits of initial margin 
described in Sec.  39.14(a)(1)(iii) of this chapter shall be considered 
member property and, separately, customer property other than member 
property, to the extent deposited on behalf of, respectively, clearing 
members' house accounts and customer accounts.
    (b) To the extent there is a shortfall in funds received pursuant to 
paragraph (a) of this section:
    (1) Such funds shall be supplemented with the property described in 
paragraphs (b)(1)(i) through (iv) of this section, as applicable, to the 
extent necessary to meet the shortfall, in accordance with the 
derivatives clearing organization's default rules and procedures adopted 
pursuant to Sec.  39.16 and, as applicable, Sec.  39.35 of this chapter, 
and (with respect to paragraph (b)(1)(ii) of this section) any recovery 
and wind-down plans maintained pursuant to Sec.  39.39 of this chapter 
and submitted pursuant to Sec.  39.19 of this chapter. Such funds shall 
be included as member property and customer property other than member 
property in the proportion described in paragraph (a) of this section, 
and shall be distributed promptly to members' house accounts and 
members' customer accounts which accounts are entitled to payment of 
such funds as part of that daily settlement.
    (i) Initial margin held for the account of a member, including 
initial margin segregated for the customers of such member, that has 
defaulted on payments required pursuant to a daily settlement, but only 
to the extent that such margin is permitted to be used pursuant to parts 
1, 22, and 30 of this chapter.
    (ii) Assets of the debtor, to the extent dedicated to such use as 
part of the debtor's default rules and procedures, and any recovery and 
wind-down plans, described in this paragraph (b)(1).
    (iii) Prefunded guarantee or default funds maintained pursuant to 
the debtor's default rules and procedures.
    (iv) Payments made by members pursuant to assessment powers 
maintained pursuant to the debtor's default rules and procedures.
    (2) If the funds that are included as customer property pursuant to 
paragraph (a) of this section, supplemented as described in paragraph 
(b)(1) of this section, are insufficient to pay in full members entitled 
to payment of such funds as part of daily settlement, then such funds 
shall be distributed pro rata to such members' house accounts and 
customer accounts in proportion to the ratio of total gains in member 
accounts with net gains, and total gains in customer accounts with net 
gains, respectively.

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      Sec. Appendix B to Part 190--Special Bankruptcy Distributions

   Framework 1--Special Distribution of Customer Funds When the Cross-
                 Margining Account Is a Futures Account

    (a) This framework 1 applies when a debtor futures commission 
merchant has participated in a cross-margining (``XM'') program for 
futures and securities under which the cross-margined positions of its 
futures customers (as defined in Sec.  1.3 of this chapter) and the 
property received to margin, secure or guarantee such positions are held 
in one or more accounts pursuant to a Commission order that requires 
such positions and property to be segregated, pursuant to section 4d(a) 
of the Act, from the positions and property of:
    (1) The futures commission merchant;
    (2) If applicable, any affiliate carrying the securities positions 
as a participant in the XM program (``Affiliate''); and
    (3) Other futures customers of the futures commission merchant (such 
segregated accounts, the ``XM accounts'').
    (b) The futures commission merchant may, and any Affiliate that 
holds the securities positions in an XM account that it directly carries 
will, be registered as a broker-dealer under the Exchange Act. The 
Commission order approving the XM program may limit participating 
customers to market professionals and will require a participating 
customer to sign an agreement, in a form approved by the Commission, 
that refers to this distributional rule.
    (c) A futures commission merchant is deemed to receive securities 
held in an XM account, including securities and other property held by 
an Affiliate in an XM account, as ``futures customer funds'' (as defined 
in Sec.  1.3 of this chapter) that margin, guarantee or secure commodity 
contracts in the XM account (or paired XM accounts at the futures 
commission merchant and an Affiliate).

[[Page 541]]

Under the agreement signed by the customer, in the event that the 
futures commission merchant (or Affiliate) is the subject of a SIPA 
proceeding, the customer agrees that securities in an XM account are 
excluded from the securities estate for purposes of SIPA, and that its 
claim for return of the securities will not be treated as a customer 
claim under SIPA. These restrictions apply to the customer only, and 
should not be read to limit any action that the trustee may take to seek 
recovery of property in an XM account carried by an Affiliate as part of 
the customer estate of the futures commission merchant.
    (d) XM accounts, and other futures accounts that are subject to 
segregation under section 4d(a) of the Act (pursuant to the Commission's 
regulations in part 1 of this chapter) (``non-XM accounts''), are 
treated as two subclasses of futures account with two separate pools of 
segregated futures customer property, an XM pool and a non-XM pool, each 
of which constitutes a segregated pool under section 4d(a) of the Act. 
If the futures commission merchant has participated in multiple XM 
programs, the XM accounts in the different programs are combined and 
treated as part of the same XM subclass of futures accounts. A futures 
customer could hold both non-XM and XM accounts.
    (e) Customer claims under this part arising out of the XM subclass 
of accounts are subordinated to customer claims arising out of the non-
XM subclass of accounts in certain circumstances in which the futures 
commission merchant does not meet its segregation requirements. The 
segregation requirement is the amount of futures customer funds that the 
futures commission merchant is required by the Act and Commission 
regulations in part 1 of this chapter or Commission orders to hold on 
deposit in segregated accounts on behalf of its futures customers 
(exclusive of its targeted residual amount obligations pursuant to Sec.  
1.3 of this chapter).
    (f)(1) If there is a shortfall in the non-XM pool and no shortfall 
in the XM pool, all customer net equity claims, whether or not they 
arise out of the XM subclass of accounts, will be combined and paid pro 
rata out of the combined XM and non-XM pools of futures customer 
property.
    (2) If there is a shortfall in the XM pool and no shortfall in the 
non-XM pool, customer net equity claims arising from the XM subclass of 
accounts must be satisfied first from the XM pool, and customer net 
equity claims arising from the non-XM subclass of accounts must be 
satisfied first from the non-XM pool.
    (3) If there is a shortfall in both the non-XM and XM pools:
    (i) If the non-XM shortfall as a percentage of the segregation 
requirement for the non-XM pool is greater than or equal to the XM 
shortfall as a percentage of the segregation requirement for the XM 
pool, all customer net equity claims will be paid pro rata out of the 
combined XM and non-XM pools of futures customer property; and
    (ii) If the XM shortfall as a percentage of the segregation 
requirement for the XM pool is greater than the non-XM shortfall as a 
percentage of the segregation requirement for the non-XM pool, non-XM 
customer net equity claims will be paid pro rata out of the available 
non-XM pool, and XM customer net equity claims will be paid pro rata out 
of the available XM pool.
    (4) In this way, non-XM customers will never be adversely affected 
by an XM shortfall.
    (g) The following examples illustrate the operation of this 
framework 1. The examples assume that the FCM has two futures customers, 
one with exclusively XM accounts and one with exclusively non-XM 
accounts.

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  Framework 2--Special Allocation of Shortfall to Customer Claims When 
    Customer Funds for Futures Contracts and Cleared Swaps Customer 
Collateral are Held in a Depository Outside of the United States or in a 
                            Foreign Currency

    The Commission has established the following allocation convention 
with respect to futures customer funds (as Sec.  1.3 of this chapter 
defines such term) and Cleared Swaps Customer Collateral (as Sec.  22.1 
of this chapter defines such term) (both of which are customer funds (as 
Sec.  1.3 of this chapter defines such term) that are segregated 
pursuant to the Act and Commission rules thereunder), which applies in 
certain circumstances when futures customer funds or Cleared Swaps 
Customer Collateral are held by a futures commission merchant in a 
depository outside the United States (``U.S.'') or in a foreign 
currency. If a futures commission merchant enters into bankruptcy and 
maintains futures customer funds or Cleared Swaps Customer Collateral in 
a depository outside the U.S. or in a depository located in the U.S. in 
a currency other than U.S. dollars, the trustee shall use the following 
allocation procedures to calculate the claim of each public customer in 
the futures account class or each public customer in the cleared swaps 
account class, as applicable, when a sovereign action of a foreign 
government or court has occurred that contributes to shortfalls in the 
amounts of futures customer funds or Cleared Swaps Customer Collateral. 
In the event a sovereign action creates or

[[Page 544]]

contributes to a shortfall in customer property, applying the allocation 
convention will result in a reallocation of distributions of futures 
customer funds or Cleared Swaps Collateral to take into account the 
impact of the sovereign action. For purposes of this bankruptcy 
convention, sovereign action of a foreign government or court would 
include, but not be limited to, the application or enforcement of 
statutes, rules, regulations, interpretations, advisories, decisions, or 
orders, formal or informal, by a Federal, state, or provincial 
executive, legislature, judiciary, or government agency. The trustee 
should perform the allocation procedures separately with respect to each 
public customer in the futures account class or cleared swaps account 
class.

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                        PARTS 191	199 [RESERVED]

[[Page 561]]



                              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 563]]



                    Table of CFR Titles and Chapters




                      (Revised as of April 1, 2022)

                      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 564]]

     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 565]]

    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 566]]

     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 (Parts 10100--10199)
       CII  U.S. Office of Special Counsel (Parts 10200--10299)

                      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 567]]

        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 568]]

         L  Rural Business-Cooperative Service, and Rural 
                Utilities Service, Department of Agriculture 
                (Parts 5000--5099)

                    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 (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  [Reserved]
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  (Parts 900--999) [Reserved]
         X  Bureau of Consumer Financial Protection (Parts 1000--
                1099)

[[Page 569]]

        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)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
       XVI  Office of Financial Research, Department of the 
                Treasury (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)

[[Page 570]]

      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)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
        XV  Office of the Under-Secretary for Economic Affairs, 
                Department of Commerce (Parts 1500--1599)
            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]

[[Page 571]]

                     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)
        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  United States Agency for Global Media (Parts 500--599)
       VII  U.S. International Development Finance 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)

[[Page 572]]

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        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)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799) 
                [Reserved]
       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]

[[Page 573]]

        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)

                           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--799)

                   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)

[[Page 574]]

        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)
        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

[[Page 575]]

         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)
      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  Great Lakes St. Lawrence Seaway Development 
                Corporation, Department of Transportation (Parts 
                400--499)

[[Page 576]]

                          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)
       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  [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)

[[Page 577]]

       III  Copyright Royalty Board, Library of Congress (Parts 
                300--399)
        IV  National Institute of Standards and Technology, 
                Department of Commerce (Parts 400--599)

           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)
        IX  Federal Permitting Improvement Steering Council (Part 
                1900)

          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)

[[Page 578]]

       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--Federal Acquisition Supply Chain Security
       201  Federal Acquisition Security Council (Part 201)
            Subtitle E [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)
   II--III  [Reserved]
        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)

[[Page 579]]

                       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)
       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)

[[Page 580]]

                      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)
        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)

[[Page 581]]

        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]
        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)

[[Page 582]]

        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)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

[[Page 583]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of April 1, 2022)

                                                  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 584]]

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
Benefits Review Board                             20, VII
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase from People Who Are
  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
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 Affairs, Office of the Under-          15, XV
       Secretary for
  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
Council of the Inspectors General on Integrity    5, XCVIII
     and Efficiency
Court Services and Offender Supervision Agency    5, LXX; 28, VIII
     for the District of Columbia
Customs and Border Protection                     19, 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
  Defense Acquisition Regulations System          48, 2
  Defense Intelligence Agency                     32, I

[[Page 585]]

  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 Affairs, Office of the Under-Secretary   15, XV
     for
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
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           2, XXXV; 5, LII; 12, IV

[[Page 586]]

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 Acquisition Security Council              41, 201
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 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 Permitting Improvement Steering Council   40, IX
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
  Federal Management Regulation                   41, 102

[[Page 587]]

  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
Great Lakes St. Lawrence Seaway Development       33, IV
     Corporation
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, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office 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
[[Page 588]]

Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
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 Environmental Enforcement, Bureau    30, II
       of
  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
  Benefits Review Board                           20, VII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Federal Acquisition Regulation                  48, 29

[[Page 589]]

  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  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, VI
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; 47, II

[[Page 590]]

National Technical Information Service            15, XI
National Telecommunications and Information       15, XXIII; 47, III, IV, V
     Administration
National Transportation Safety Board              49, VIII
Natural Resource Revenue, Office of               30, XII
Natural Resources Conservation Service            7, VI
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
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
  Human Resources Management and Labor Relations  5, XCVII
       Systems, Department of Homeland Security
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 and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Contracts, Department of Labor             41, 50
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
Science and Technology Policy, Office of          32, XXIV; 47, II
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
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State, Department of                              2, VI; 22, I; 28, XI

[[Page 591]]

  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 Acquisition Security Council              41, 201
  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
  Great Lakes St. Lawrence Seaway Development     33, IV
       Corporation
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 47, IV; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  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 Agency for Global Media             22, V
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
U.S. Office of Special Counsel                    5, CII
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 593]]



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, 2017 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.

                                  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
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

[[Page 594]]

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

                                  2020

17 CFR
                                                                   85 FR
                                                                    Page
Chapter I
41.45 (b)(1) revised...............................................75146
43.1 (b) and (d) removed; (c) redesignated as new (b); new (b) 
        revised....................................................75476
43.2 Revised.......................................................75476
43.3 (g) and (h) removed; (i) redesignated as new (g); (a) through 
        (d), (f), and new (g) revised..............................75478
43.3 (e) revised...................................................75653
43.4 Revised.......................................................75479
43.5 Revised.......................................................75481
43.6 Revised.......................................................75482
43.7 (a)(1) through (3) revised; (a)(4) added......................75485
43 Appendix A revised..............................................75485
43 Appendix C revised..............................................75495
43 Appendix D and Appendix E revised...............................75496
45.1 Revised.......................................................75559
45.1 (a) amended...................................................75654
45.2 (a) introductory text, (b), (h) amended; nomenclature change 
                                                                   75560
45.2 (f) and (g) removed...........................................75654
45.3 Revised.......................................................75561
45.4 Revised.......................................................75561
45.5 Heading, (a)(1)(i), (b)(1)(i), (2)(ii), (c) introductory 
        text, (1) introductory text, (i), (d) introductory text, 
        (1)(i), and (f) revised; introductory text, (a)(1) 
        introductory text, (b) heading, introductory text, (1) 
        introductory text, (ii), (d)(1) introductory text, (e)(1) 
        introductory text, (2)(i), and (ii) amended; (g) and (h) 
        added; nomenclature change.................................75562
45.6 Revised.......................................................75563
45.7 Introductory text amended.....................................75563

[[Page 595]]

45.8 Heading and introductory text revised; (h) introductory text, 
        (1) introductory text, (vii)(D), (2), and section amended 
                                                                   75563
45.9 Amended.......................................................75564
45.10 Revised......................................................75564
45.11 Revised......................................................75565
45.12 Removed......................................................75565
45.13 Revised......................................................75565
45.14 Revised......................................................75654
45.15 Added........................................................75565
45 Appendix 1 revised..............................................75566
46.1 Introductory text redesignated as (a) introductory text and 
        revised; (b) added; section amended........................75594
46.2 Nomenclature change...........................................75594
46.3 Heading and (a)(2)(i) revised; (a)(1)(iii)(A) and (3)(i) 
        amended....................................................75594
46.4 Introductory text, (a), and (d) amended.......................75594
46.5 (a) introductory text, (3) through (5), and (d)(3) amended....75594
46.6 Amended.......................................................75594
46.8 (a), (c)(2)(ii), and (d) amended..............................75594
46.9 (a) and (f) amended...........................................75594
46.10 Amended......................................................75594
46.11 (a) amended; (b) removed; (c) and (d) redesignated as new 
        (b) and (c); new (c) revised...............................75595
49 Authority citation revised...............................75595, 75656
49 Nomenclature change.............................................75672
49.2 (a) amended...................................................75595
49.2 (a) amended; (b) revised......................................75656
49.3 (a)(5) revised; (d) amended...................................75657
49.4 (a)(1) introductory text, (i) through (iii), and (c) amended; 
        (a)(1)(iv) removed; (a)(2) revised.........................75595
49.4 (c) heading revised...........................................75657
49.5 Revised.......................................................75657
49.6 Revised.......................................................75657
49.9 Revised.......................................................75657
49.10 Revised......................................................75595
49.10 (e) added....................................................75657
49.11 Revised......................................................75658
49.12 Revised......................................................75658
49.13 (a) and (b) heading revised..................................75659
49.15 Revised......................................................75659
49.16 Revised......................................................75659
49.17 (i) removed; (b)(3), (c)(1), (d)(1) heading, (5) heading, 
        (f)(2) revised; (c) introductory text added; (a), (b)(1) 
        heading, introductory text, (2) heading, (2), (c)(2), (3), 
        (d)(1)(i), (ii), (3) heading, (3), (4) heading, (i), 
        (iii), (5)(i) through (iii), (6) heading, (6), (e) 
        introductory text, (1), (2), (f)(1), (g) heading, 
        introductory text, (1), (2)(A), (B), (3), (h)(3) 
        introductory text, and (4) amended.........................75659
49.18 (a) and (b) amended; (e) removed.............................75661
49.19 (a) amended..................................................75661
49.20 (b)(2)(v), (vii), and (c)(1)(ii)(B) revised; (b) heading, 
        (c)(1)(i) introductory text, (A)(2), (B), and (c)(5) 
        amended....................................................75661
49.22 (a) heading, (b)(1) heading, (2) heading, (i), (d)(1), (4), 
        (e)(2) introductory text, (i), (f)(3), and (g)(1)(iii)(A) 
        amended; (c)(1) heading, (f) heading, and (2) revised......75661
49.23 (a) and (e) heading amended..................................75661
49.24 (d) revised; (a) introductory text, (e)(3)(i), (ii), (f)(2), 
        (i) introductory text, (5), (j)(1), (k)(1), (2), (l)(3), 
        and (m) amended............................................75661
49.25 (a)(1) revised...............................................75662
49.26 Introductory text revised; (a), (c) through (e), (h), and 
        (i) amended; (j) added.....................................75662
49.27 (a)(2) and (b)(1) amended....................................75662
49.28 Added........................................................75662
49.29 Added........................................................75663
49.30 Added........................................................75663
49.31 Added........................................................75663
49 Appendix A revised..............................................75663
49 Appendix B revised..............................................75671
50 Authority citation revised...............................44181, 76446
50.25--50.49 (Subpart B) Heading revised...........................76446
50.26 Added........................................................76446
50.50--50.52 (Subpart C) Heading revised...........................76448
50.50 Heading and (b)(1)(iii)(A)(2) revised; (d) removed...........76448
50.51 Heading, (a)(3)(i), and (ii) revised.........................76448

[[Page 596]]

50.52 (a)(2)(i), (ii), and (b)(4) revised; (a)(2)(iii) added.......44181
50.52 Heading revised..............................................76448
50.53 Added........................................................76448
50.75--50.79 (Subpart D) Added.....................................76448
75.6 (f) added.....................................................46516
75.10 (c)(1), (3)(i), (8), (10) heading, (i), (11), and (d)(6) 
        revised; (c)(15) through (18), and (d)(11) added...........46516
75.10 Correction: (c)(11) amended..................................60355
75.12 (b)(1)(ii), (4), (c)(1), (d), and (e) revised; (b)(5) added 
                                                                   46520
75.13 (d) added....................................................46521
75.14 (a)(2)(i), (ii)(C), and (c) revised; (a)(2)(iii), (iv), (v), 
        and (3) added..............................................46522
75.20 (a), (d) heading, (1), and (e) introductory text revised.....46522
75.20 Correction: amended..........................................60355
140.91 (a)(11) and (12) redesignated as (a)(12) and (13); new 
        (a)(11) added..............................................57570
140.94 (c)(1) and (4) through (13) revised..........................4900
140.94 (c) introductory text and (1) revised; (c)(15) added........67189
143.8 (b) revised...................................................1749
160.30 Revised.....................................................29614

                                  2021

17 CFR
                                                                   86 FR
                                                                    Page
Chapter I
40.1 (j)(1)(vii) and (2)(vii) revised...............................3463
41.41 (d) revised..................................................19421
140.94 (c)(4) through (13) redesignated as (c)(5) through (14); 
        new (c)(4) added.............................................968
140.97 Removed......................................................3463
143.8 (b) revised...................................................7804
150 Authority citation revised......................................3463
150.1 Revised.......................................................3463
150.2 Revised.......................................................3465
150.3 Revised.......................................................3468
150.5 Revised.......................................................3470
150.6 Revised.......................................................3472
150.8 Added.........................................................3472
150.9 Added.........................................................3472
150 Appendices A through G added....................................3475
151 Removed.........................................................3483
190 Revised........................................................19421

                                  2022

   (Regulations published from January 1, 2022, through April 1, 2022)

17 CFR
                                                                   87 FR
                                                                    Page
Chapter I
143.8 (b) revised...................................................2035


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