[Federal Register Volume 74, Number 126 (Thursday, July 2, 2009)]
[Proposed Rules]
[Pages 31642-31647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-15665]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 16

RIN 3038-AC63


Account Ownership and Control Report

AGENCY: Commodity Futures Trading Commission (``Commission'').

ACTION: Advanced notice of proposed rulemaking (``Advanced Notice'') 
and request for public comment.

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SUMMARY: The Commission has determined to collect certain ownership, 
control, and related information for all trading accounts active on 
U.S. futures exchanges. The information collected will enhance market 
transparency, leverage the Commission's existing surveillance systems, 
and foster synergies between its market surveillance, trade practice, 
enforcement, and economic research programs. The Commission will 
collect relevant data via an account ``Ownership and Control Report'' 
(``OCR'') submitted periodically by all reporting entities.\1\ 
Tentatively, the OCR will include a trading account number; the names 
and addresses of the account's owners and controllers; the last four 
digits of the owners' and controllers' social security or tax ID 
numbers; the special account number, if one has been assigned; an 
indication of whether the account is a reportable account pursuant to 
large trader thresholds set forth under Part 18 of the Commission's 
regulations; and other relevant information.\2\ This Advanced

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Notice seeks public comment on that tentative content, as well as on 
other features of the OCR's planned design. Public comments collected 
in response to this Advanced Notice will be used in developing a 
proposed rule at a later date.
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    \1\ The Commission anticipates that most reporting entities will 
be designated contract markets, but they could be any registered 
entity that provides trade data to the Commission on a regular 
basis.
    \2\ Under the CFTC's Large Trader Record Format, special account 
numbers contain two elements: (1) A reporting firm ID and (2) a 
unique account number assigned by the reporting firm. Special 
accounts numbers are discussed more fully in Section III(C), below.

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DATES: Comments must be received on or before August 17, 2009.

ADDRESSES: Comments should be sent to David Stawick, Secretary, 
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st 
Street, NW., Washington, DC 20581. Comments may be submitted via e-mail 
at [email protected]. ``Account Ownership and Control Report'' must be 
in the subject field of responses submitted via e-mail, and clearly 
indicated on written submissions. Comments may also be submitted at 
http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Sebastian Pujol Schott, Special 
Counsel, 202-418-5641, or Cody J. Alvarez, Attorney Advisor, 202-418-
5404, Division of Market Oversight, Commodity Futures Trading 
Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, 
DC 20581.

SUPPLEMENTARY INFORMATION:

I. Background

A. The Ownership and Control Report Will Enhance Regulatory Oversight 
in an Electronic Trading Environment

    Since the late 1990s, U.S. designated contract markets (``DCMs'') 
have rapidly evolved from open-outcry trading pits to global electronic 
platforms. In 1999, electronic trading accounted for only 5% of volume 
on all U.S. exchanges. By 2008, it was responsible for some 80% of 
volume.\3\ In addition, every new exchange designated since the year 
2000 has offered only electronic trading, and many contracts that were 
once offered in open-outcry are now available only electronically. 
While open-outcry trading remains important in specific contexts, 
including options on futures, electronic platforms are now dominant in 
the United States.
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    \3\ Derived from volume data for what is today CBOT, CME, NYMEX, 
and ICE Futures U.S. These exchanges collectively account for 99% of 
the futures and options on futures trading volume on regulated 
exchanges in the U.S.
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    The ascendancy of electronic trading has revolutionized the 
business of futures, and the Commission has worked diligently to keep 
pace in every respect. The Commission, and its Division of Market 
Oversight (``DMO''), have been especially vigilant in the area of 
regulatory data and technology. Under all circumstances, Commission 
staff must have the information necessary to conduct effective 
oversight, ensure market integrity, and protect customers from fraud 
and abuse. The Commission has invested heavily to modernize its 
regulatory systems, and is equally committed to obtaining the raw data 
necessary for effective surveillance of futures markets.
    In many cases, the Commission already receives the information it 
requires for effective regulation, including large trader reports for 
market surveillance and exchange trade registers for trade practice 
surveillance.\4\ The OCR will integrate these existing resources, and 
leverage them in dynamic new ways. It will facilitate innovative trade 
practice and market surveillance by DMO; bridge the gap between 
individual transactions reported on exchange trade registers and 
aggregate positions reported in large trader data; and allow other 
Commission Offices and Divisions to better utilize regulatory data in 
support of their own missions.\5\ Each of these benefits is discussed 
more fully in Section III of this Advanced Notice. In addition, as 
explained immediately below, the OCR will increase market transparency 
and respond to new regulatory data needs in an era of electronic 
trading.
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    \4\ ``Trade register'' is a generic term for a comprehensive, 
daily record of every trade facilitated by an exchange, whether 
executed via open-outcry, electronically, or non-competitively. 
Trade registers contain detailed information with respect to the 
terms of a trade, the parties involved, and other data points. They 
also contain trading account numbers, but no information with 
respect to the owners or controllers of those accounts. In addition, 
the trading account numbers in exchange trade registers often do not 
correspond to account numbers reported in other Commission data 
systems, including its large trader reporting system. The Commission 
has recently standardized the content and format of all trade 
registers submitted to it, which are now required to be FIXML Trade 
Capture Reports. FIXML and the Trade Capture Report are discussed in 
Section I (B), below.
    \5\ Efficient integration of large trader and trade register 
data will be one of the most important regulatory benefits deriving 
from the OCR. At present, the Commission can sometimes link the two 
data sets on a case-by-case basis, but the process is extremely 
labor-intensive, requires assistance from exchange clearing members 
and others, and does not lend itself to more routine, automated 
surveillance and follow-up investigation. See Section III (C), 
below.
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    For both the Commission and exchange compliance staffs, electronic 
trading has conferred a host of informational advantages, including 
more detailed and accurate order histories, trade records, and audit 
trails. Paradoxically, it has also challenged regulatory programs 
through the growing dispersion and anonymity of market participants. 
The Commission once monitored trading on regulated exchanges via on-
site surveillance of open-outcry pits. Today, that surveillance is 
primarily electronic and data-driven. Indeed, as exchange trading has 
shifted to electronic platforms, trade data has become the device by 
which the Commission ``sees'' its regulated markets.\6\ Together with 
trade registers and large trader reports, the OCR will allow the 
Commission to see more clearly and completely by identifying otherwise 
anonymous market participants and revealing links between apparently 
unrelated trading accounts whose aggregate behavior is of regulatory 
consequence.
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    \6\ The Commission notes that it continues to conduct on-site 
surveillance of exchange's remaining trading floors.
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    The detail and depth of the regulatory data available to the 
Commission is substantial, but insufficient to substitute for the 
unique information once imparted by a physical presence on exchanges' 
trading floors. Member brokers and locals, once clustered in compact 
rings and readily identifiable to Commission staff, have given way to 
large, widely dispersed pools of opaque persons trading on electronic 
platforms. While case-by-case manual inquiry is possible, the 
Commission has no way to identify traders and trading accounts quickly 
and independently. To the contrary, what is now visible to the 
Commission--trade data--instead reflects unknown individuals directing 
trades on behalf of unnamed accounts. The result is a growing lack of 
transparency from which even exchange compliance departments sometimes 
suffer.\7\ The OCR project seeks to redress this imbalance of 
information, and to realign the Commission's data resources with its 
modern regulatory needs. Moreover, OCR data will also enhance 
exchanges' internal regulatory efforts.
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    \7\ While accounts and persons executing trades are uniquely 
designated in the trade data, those designations do not reveal the 
actual identities of traders or of account owners or controllers, 
nor do they reveal relationships between trading accounts. Gathering 
such information requires a time consuming manual effort by 
Commission staff with the aid of exchanges, exchange clearing 
members, and others. Exchange compliance departments must engage in 
their own time consuming efforts when they require information with 
respect to trading account owners, controllers, and relationships 
for self-regulatory purposes.
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B. The Commission's Surveillance Systems and the Trade Capture Report

    The Commission's surveillance programs include daily collection of 
trade data from all U.S. DCMs or their

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regulatory service providers.\8\ The data collected is central to the 
Commission's trade practice surveillance program, and of growing 
importance to market surveillance and other regulatory efforts, as 
explained below. Presently, market and trade practice surveillance 
utilize distinct platforms--the Integrated Surveillance System 
(``ISS'') for market surveillance and the Trade Surveillance System 
(``TSS'') for trade practice surveillance. Broadly speaking, ISS 
facilitates the storage, analysis, and mining of large trader data 
while TSS does the same for trade data. The systems include a range of 
tools for automated surveillance, pattern detection, ad hoc examination 
of raw data, and investigation. One valuable benefit of the OCR is that 
it will effectively integrate these two primary systems by linking 
individual transactions reported on exchange trade registers (TSS) with 
aggregate positions reported in large trader data (ISS). TSS and ISS 
are described more fully in Section III, below.
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    \8\ At present, there are 14 DCMs with listed contracts.
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    While ISS is a long-standing system, TSS and the data streams that 
support it are newer. The Commission has invested significant resources 
to develop TSS, adopting a comprehensive new platform better suited for 
monitoring electronic trading than TSS's predecessor. One important 
component of TSS is the Trade Capture Report, a new data standard 
governing the trade registers submitted daily to the Commission by all 
DCMs. The Trade Capture Report was developed through a collaborative 
effort between the Commission, DCMs, and others, under the auspices of 
the Joint Compliance Committee.\9\ Design of the Trade Capture Report 
was formally completed in August of 2008.
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    \9\ The Joint Compliance Committee (``JCC'') is an information 
sharing organization whose members include compliance officials from 
all U.S. DCMs. Commission staff representing DMO's Market Compliance 
Section also participates in JCC meetings. In May of 2007, at the 
Commission's request, the JCC created the Trade Surveillance Data 
Subcommittee (``TSDS'') to improve the manner in which trade data 
was submitted to the Commission. The TSDS determined to pursue the 
Trade Capture Report.
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    Briefly stated, the Trade Capture Report is an electronic file that 
employs the Financial Information eXchange Markup Language (``FIXML'') 
to uniformly tag or designate trade information provided to the 
Commission. Exchanges transmit their Trade Capture Reports daily via 
Secure File Transfer Protocol (``SFTP''). All information received is 
processed overnight by TSS and available to Commission staff early the 
following morning.\10\ Trade Capture Reports contain trade and related 
order data for every matched trade facilitated by an exchange, whether 
executed via open-outcry, electronically, or non-competitively.\11\ 
Among the data included in the Trade Capture Report are trade date, 
product, contract month, trade time, price, quantity, trade type (e.g., 
open outcry outright future, electronic outright option, give-up, 
spread, block, etc.), executing broker, clearing member, opposite 
broker and clearing member, customer type indicator, trading account 
numbers, and numerous other data points. Additional information is also 
required for options on futures, including put/call indicators and 
strike price, as well as for give-ups, spreads, and other special trade 
types. Noticeably absent from Trade Capture Report data, however, is 
any account ownership or control information.
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    \10\ As noted above, the Commission already receives trade 
registers from all DCMs, and has developed a new trade register 
format called the Trade Capture Report. DCMs are currently 
transitioning to the Trade Capture Report, a process which the 
Commission expects to be completed by the end of 2009.
    \11\ E.g., block trades.
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    The Trade Capture Report is central to the OCR project. As noted 
above, the Trade Capture Report provides the trading account numbers 
for both sides of a reported trade; the OCR, in turn, will provide 
biographical data for those account numbers. The elements of an OCR are 
set forth below.

II. Ownership and Control Report Outline

    The OCR will serve as an ownership, control, and relationship 
directory for every trading account number reported to the Commission 
through exchanges' Trade Capture Reports. The data points contemplated 
for the OCR have been specifically selected to achieve four Commission 
objectives. These include: (1) Identifying with certainty all accounts 
that are under common ownership or control at a single exchange; (2) 
identifying with certainty all accounts that are under common ownership 
or control at multiple exchanges; (3) identifying all trading accounts 
whose owners or controllers are also included in the Commission's large 
trader reporting program (including Forms 40 and 102); and (4) 
identifying the entities to which the Commission should have recourse 
if additional information is required, including the trading account's 
executing firm and clearing firm, and the name(s) of the firm(s) 
providing OCR information for the trading account.

A. Specific Data Points Required by the Ownership and Control Report

    To ensure that the objectives outlined above are achieved, the 
Commission believes the OCR should include the following information:

--The trading account number, as reported in the Trade Capture Report 
(see TCR tags 448 and 452, Party Role 24);
--Name and address of the trading account's owner(s);
--Date on which the trading account was assigned to its current 
owner(s);
--Name and address of the trading account's controller(s);
--Date on which the trading account was assigned to its current 
controller(s);
--The account controller or controllers' Commodity Trading Advisor 
number(s), if applicable;
--Special account number, if one has been assigned;
--Indication of whether the trading account is a reportable account;
--Indication of whether the trading account is a firm omnibus account, 
and if so, the name of the firm;
--Name of the executing firm for the trading account, and its unique 
identifier as reported in the TCR (see TCR tags 448 and 452, Party Role 
1);
--Name of the clearing firm for the trading account, and its unique 
identifier as reported in the TCR (see TCR tags 448 and 452, Party Role 
4);
--The last four digits of the Social Security number or taxpayer 
identification number of the trading account's owner(s) and 
controller(s);
--Name of the firm(s) providing OCR information for the trading 
account;
--Name of the exchange or other entity submitting the OCR to the 
Commission;
--OCR transmission date.

B. Form, Manner, and Frequency of the Ownership and Control Report

    The Commission anticipates that exchanges (and possibly other 
registered entities) will submit their OCRs weekly, in FIXML via SFTP. 
Each exchange's first OCR submission will constitute a ``master file'' 
containing the required data for all trading account numbers present in 
the Trade Capture Report during the previous 30 days. The master file 
will establish a baseline directory. Each subsequent OCR should be a 
weekly ``change file'' reporting only additions, deletions, or 
amendments to the master file; if the reported change includes changes 
to an account's owners or controllers, the precise date of such

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change should also be reported. The Commission understands that 
exchanges may not possess all of the information contemplated for the 
OCR, and that they may have to collect it from outside sources.

III. Additional Benefits Derived From the Ownership and Control Report

    The OCR will facilitate important regulatory objectives in the 
areas of market transparency; trade practice and market surveillance; 
and enhanced enforcement and research programs. Many of the OCR's 
systemic benefits have already been outlined above. It will allow the 
Commission to see its regulated markets more clearly and completely 
than before, and help it adjust to new regulatory data needs given that 
electronic platforms have become the dominant venue for regulated 
futures trading in the United States. It will also enhance the 
Commission's surveillance capabilities--for example, by allowing staff 
to aggregate trading accounts under common ownership or control; 
facilitating links between reporting firms' large trader reports and 
exchanges' trade registers; and improving the Commission's detection 
and deterrence capabilities with respect to specific trading practices 
and market abuses.\12\ Similarly, the OCR will introduce new 
efficiencies in surveillance and enforcement programs by automating 
what are currently slow, labor-intensive practices. The OCR will also 
allow the Commission to compensate for the loss of exchange trading 
floors and the information imparted by daily physical surveillance of a 
small, concentrated, and well-known universe of exchange members. 
Furthermore, it will allow the Commission to maximize the benefits of 
more detailed and accurate electronic trading records, and to better 
oversee trading by widely dispersed individuals and accounts whose 
identities and relationships otherwise cannot be ascertained quickly 
and efficiently by Commission staff.
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    \12\ Reporting firms include exchange clearing members, futures 
commission merchants, and foreign brokers.
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    In addition to broad, Commission-wide benefits, the OCR will 
facilitate specific programs administered by the Commission's Division 
of Enforcement (``DOE''), Office of the Chief Economist (``OCE''), and 
DMO. Specific examples from each Office and Division are provided 
below.

A. The Division of Enforcement

    DOE investigates and prosecutes alleged violations of the Commodity 
Exchange Act (``Act'') and Commission regulations. It can act against 
any number of persons and entities suspected of such violations, 
including individuals and firms registered with the Commission, those 
who are engaged in commodity futures and option trading on designated 
domestic exchanges, and those who improperly market futures and options 
contracts. DOE proceedings typically begin with careful investigations 
based on leads developed internally or information referred by other 
Commission divisions, industry self-regulatory associations; state, 
federal, and international authorities; and members of the public. At 
the conclusion of any investigation, DOE may recommend that the 
Commission initiate administrative proceedings or take action in 
Federal court. When DOE obtains evidence that criminal violations of 
the Act have occurred, it may refer the matter to the Department of 
Justice for prosecution.
    The OCR will be of immediate help to DOE's investigatory work, 
especially work that relies on aggregating related trading accounts. 
DOE investigations in the areas of intra-day manipulation and trade 
practice rely on exchange trade registers/Trade Capture Reports. At 
present, however, the inherent absence of ownership and control 
information in Trade Capture Report data presents an obstacle when DOE 
is investigating potential price manipulations or trade practice 
abuses, such as front-running. As noted previously, the Trade Capture 
Report does not identify account owners or controllers, nor does it 
aggregate accounts under common ownership or control. Thus, any DOE 
investigations that are dependent on such information face special 
obstacles. DOE staff must first identify the universe of accounts 
traded in a relevant period, then request and await information from 
outside the Commission to identify the entity associated with the 
account number, and finally aggregate all identified entities that 
relate to a common owner. Only then can staff assess a particular 
owner's trading activity. This time-consuming process must be re-
created every time DOE initiates an intra-day trading manipulation 
investigation. The Commission believes the information contained in the 
OCR will significantly reduce the time and resources expended in 
determining the identities and relationships between account holders, 
and thus facilitate DOE investigative activity across markets and 
exchanges.

B. The Office of the Chief Economist

    OCE conducts research on major policy issues facing the Commission 
and assesses the economic impact of regulatory changes on the futures 
markets. It also participates in the development of Commission 
rulemakings, provides expert advice to other Commission offices and 
divisions, and conducts special studies and evaluations as required. An 
important objective of OCE is to help the Commission achieve deeper and 
more sophisticated knowledge of the futures markets from the data 
available to it. The OCR will advance this objective in significant 
ways.
    OCE is particularly interested in the OCR as a tool for enhancing 
the transparency of regulated markets through the disclosure of 
information on related accounts. It has a number of initiatives under 
way designed to enhance the Commission's surveillance capabilities, 
assist in enforcement, and improve data integrity. Related account 
information derived from the OCR will help OCE to better link traders' 
intraday transactions with their end-of-day positions. It will also 
help OCE to calculate how different categories of traders contribute to 
market wide open-interest. Building on these results, OCE will achieve 
more sophisticated benefits for the Commission, including new avenues 
of surveillance and enforcement tools. For example, armed with OCR/
Trade Capture Report-derived data, OCE will eventually be able to 
accurately identify and categorize market participants based on their 
actual trading behavior on a contract-by-contract basis, rather than on 
how they self-report to the Commission (e.g. registration type, 
marketing/merchandising activity, etc. on Commission Form 40).
    In addition to these specific projects, ownership and control 
information available via the OCR will allow OCE to perform more 
complete and accurate studies and provide more targeted guidance to 
other Commission staff in pursuing trade practice violations and 
attempted manipulations.

C. The Division of Market Oversight

    DMO's primary responsibility is to ensure that U.S. futures markets 
accurately reflect the underlying forces of supply and demand for all 
products traded, and that futures markets are free from fraud and 
abuse. DMO monitors all futures and option markets to detect and 
prevent price manipulation, abusive trading practices, and customer 
harm. It is concerned with both aggregate abuses against the market 
(market surveillance)

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and individual trading violations (trade practice surveillance); often, 
the two are connected. DMO's surveillance efforts include routine 
monitoring of markets and trades, and detailed, data-driven 
investigations of both when appropriate.
    DMO's market surveillance and trade practice surveillance programs 
rely on ISS and TSS, respectively, as their primary technology 
platforms. ISS tools and data serve to detect and prevent price 
manipulation and market congestion on regulated exchanges, and to 
enforce speculative position limits pursuant to section 4g of the Act. 
ISS receives data from reporting firms via large trader reports filed 
daily with the Commission. Large trader reports show open end-of-day 
positions in futures and options that are at or above specific 
reporting levels set by the Commission (``large traders''). Related 
accounts are aggregated by reporting firms and given a ``special 
account number'' which DMO uses to track their consolidated end of day 
positions. Through ISS, DMO can account for 70 to 90% of the total open 
interest in a given market.
    ISS' strength lies in capturing market-wide open interest and the 
large traders most responsible for that open interest. At the same 
time, ISS is limited by its inability to reconstruct trading and 
determine how large traders established their reportable positions. 
ISS, whose data includes large traders' names but not their trading 
account numbers, cannot communicate with TSS, whose data includes 
trading account numbers, but no names. This simple disconnect prevents 
the efficient integration of market and trade practice surveillance by 
DMO. The Commission is determined to link TSS trading account numbers 
with ISS large trader names though the OCR.
    As previously explained, DMO's trade practice surveillance program 
relies on TSS as its primary technology platform. Armed with trade 
register/Trade Capture Report data, TSS aids in the detection, 
analysis, and investigation of numerous abusive trading practices, 
including trading ahead of customer orders, wash trading, pre-arranged 
trading, money-passing, and other violations. TSS and trade register/
Trade Capture Report data also aid in the detection of market abuses, 
such as banging the close, and in enforcement and research programs led 
by other Commission offices and Divisions.
    Like ISS, TSS possesses both strengths and limitations arising from 
its raw data resources. TSS' power lies in its totality of information: 
it is a detailed record of every trade executed on every U.S. futures 
exchange every day. It is a robust instrument for customer protection, 
direct monitoring of markets by DMO, and oversight of exchange self-
regulation. In this era of electronic trading, TSS is an unparalleled 
means of ``seeing'' regulated markets directly and without filter. TSS' 
limitations, however, are equally data-driven. TSS is unable to quickly 
aggregate related trading accounts because its Trade Capture Report 
data feeds do not contain the necessary ownership and control 
information. DMO cannot efficiently police for small and medium sized 
traders whose open interest does not reach reportable levels, but who 
can still have deleterious effects on the markets during concentrated 
periods of intra-day trading. Similarly, trade practice violations 
whose discovery might depend on recognizing concerted action by related 
accounts are more difficult to detect. The Commission can resolve each 
of these limitations via the OCR.
    While DMO's current data resources are substantial, the OCR will 
elevate them to a level of sophistication and completeness that is 
appropriate for the size and complexity of modern futures markets. 
Integrated data--large trader reports in ISS, trade data in TSS, and 
OCR ownership and control information to bind them together--will 
complete the information chain for the Commission's entire surveillance 
infrastructure. For the first time, DMO will be empowered to monitor 
the totality of a market in an efficient, integrated, and automated 
manner. No more than 24 hours after trades are executed and positions 
are established, DMO will see everything from large reportable 
positions to the individual trades responsible for those positions, and 
down further to the individual account owners and controllers 
responsible for those trades. Similarly, DMO will be empowered to 
monitor markets from the bottom up, linking individual accounts under 
common ownership and control, aggregating their intra-day trading, and 
viewing their end-of-day positions even when they do not reach 
reporting thresholds.
    Equipped with the OCR and its resulting synergies, all futures 
transactions will be fully transparent to DMO. DMO staff will have the 
ability to perform more timely analyses of trading activity in order to 
detect price distortions, manipulative conduct, trade practice abuses, 
and customer harm on individual markets and across markets and 
exchanges.

D. Exchange Compliance Departments

    While this Advanced Notice has focused primarily on the OCR's 
benefit to the Commission, OCR data may also be useful to exchange 
compliance departments and other regulatory entities in the futures 
industry. Many of the information challenges faced by the Commission 
are shared by other industry regulatory bodies who are themselves 
striving for maximum market transparency and effective regulation. 
Indeed, at least one major exchange already works with an information 
file that seeks to accomplish some of the same goals as the OCR. The 
exchange uses a ``related accounts file'' to aggregate certain trading 
accounts that are under common control, if those trading accounts are 
associated with a reportable account. The information collected thus 
acts as a reference file and supplement to the exchange's large trader 
reporting system. The exchange's related accounts file does not 
necessarily collect the same information as the Commission's 
contemplated OCR. However, the Commission believes that all exchanges 
can benefit from the OCR, and from the complete data set proposed in 
this Advanced Notice.

IV. Request for Comments

    The Commission invites public comment on any relevant aspect of the 
OCR contemplated in this Advanced Notice. In addition, to help the 
Commission formulate an effective and practical rule implementing the 
OCR, the Commission encourages responses to the following specific 
questions:
    1. Is there additional information, not included in Section II(A), 
that should be included in the OCR?
    2. What is the lifecycle of the information required by the OCR? 
Who possesses it at a root level? From what types of entities will 
exchanges draw the information required by the OCR (e.g. exchange 
clearing members, non-member futures commission merchants, etc.)? How 
will exchanges obtain OCR information?
    3. Will OCR information be more difficult to acquire for some 
account types than for others? If so, what types of accounts will 
present a greater challenge and why? How can the challenge be overcome?
    4. The Commission expects that initially the OCR will be submitted 
in FIXML via FTP. Is there a better way to electronically transmit the 
OCR? Is there an existing FIXML report that may be used to transmit OCR 
information? If not, is there an existing FIXML report that can be 
easily modified to supply the information contained in the OCR?
    5. The Commission anticipates that each exchange will initially 
transmit a ``master file'' containing the required information for 
every trading account

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number included in the Trade Capture Report during the previous month 
or longer. The master file will effectively establish a baseline of 
account information. Subsequently, each exchange would be required to 
file a weekly ``change file'' reporting only changes that occurred 
during the week (e.g., new accounts, deleted accounts, or changes to 
accounts already in the master file). Is there a more convenient way to 
provide the required information on a regular basis? Do changes occur 
so frequently that a change file should be submitted daily instead of 
weekly?
    6. What entities will have to report raw data to exchanges so that 
exchanges can compile the information required by the OCR? Since these 
entities will already be in possession of OCR information, what 
additional measures will they have to take to transmit it to exchanges 
or prepare it for transmission? What will be the dollar and staff-hour 
cost of those measures? To the extent possible, please itemize costs 
related to initial implementation as well as regular reporting costs.
    7. How long will it take exchanges to assemble the necessary 
information and transmit the first OCR to the Commission? What will be 
the dollar and staff-hour costs associated with providing the OCR? To 
the extent possible, please itemize costs related to initial 
implementation as well as regular reporting.
    8. Will the OCR impose any disparate impact on small businesses? If 
so, how can it be minimized? Please describe and estimate the number of 
small entities that will be impacted.

V. Conclusion

    The Commission invites comment on this Advanced Notice and the 
specific questions presented above. The comments and answers received 
will be used in developing a proposed rule with respect to the OCR at a 
later date.

    Issued in Washington, DC, on June 26, 2009 by the Commission.
David Stawick,
Secretary of the Commission.
[FR Doc. E9-15665 Filed 7-1-09; 8:45 am]
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