[Federal Register Volume 76, Number 57 (Thursday, March 24, 2011)]
[Proposed Rules]
[Pages 16587-16588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-6972]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 39

RIN 3038-AC98


Risk Management Requirements for Derivatives Clearing 
Organizations

AGENCY: Commodity Futures Trading Commission.

ACTION: Reopening of comment period.

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SUMMARY: The Commodity Futures Trading Commission (Commission) is 
reopening the comment period for a proposed rule that would require 
derivatives clearing organizations (DCOs) to report end-of-day 
positions for each clearing member, by customer origin and house 
origin, and for customer origin, separately, the gross positions of 
each beneficial owner.

DATES: Submit comments on or before April 25, 2011.

ADDRESSES: You may submit comments, identified by RIN number 3038-AC98, 
by any of the following methods:
     Agency Web site, via its Comments Online process: http://comments.cftc.gov. Follow the instructions for submitting comments 
through the Web site.
     Mail: David A. Stawick, Secretary of the Commission, 
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st 
Street, NW., Washington, DC 20581.
     Hand Delivery/Courier: Same as mail above.
     Federal eRulemaking Portal: http://www.Regulations.gov. 
Follow the instructions for submitting comments.

Please submit comments by only one method.
    All comments must be submitted in English, or if not, accompanied 
by an English translation. Comments will be posted as received to 
http://www.cftc.gov. You should submit only information that you wish 
to make available publicly. If you wish the Commission to consider 
information that may be exempt from disclosure under the Freedom of 
Information Act (FOIA), a petition for confidential treatment of the 
exempt information may be submitted according to the procedures 
established in Sec.  145.9 of the Commission's regulations.\1\ The 
Commission reserves the right, but shall have no obligation, to review, 
pre-screen, filter, redact, refuse, or remove any or all of your 
submission from http://www.cftc.gov that it may deem to be 
inappropriate for publication, such as obscene language. All 
submissions that have been redacted or removed that contain comments on 
the merits of the rulemaking will be retained in the public comment 
file and will be considered as required under the Administrative 
Procedure Act and other applicable laws, and may be accessible under 
FOIA.
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    \1\ Commission regulations referred to herein are found at 17 
CFR Ch. 1 (2010). They are accessible on the Commission's Web site 
at http://www.cftc.gov.

FOR FURTHER INFORMATION CONTACT: Phyllis P. Dietz, Associate Director, 
202-418-5449, [email protected], Jacob Preiserowicz, Attorney-Advisor, 
202-418-5432, [email protected], Division of Clearing and 
Intermediary Oversight, Commodity Futures Trading Commission, Three 
Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581; and Anne 
C. Polaski, Special Counsel, 312-596-0575, [email protected], Division 
of Clearing and Intermediary Oversight, Commodity Futures Trading 
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Commission, 525 West Monroe Street, Chicago, Illinois 60661.

SUPPLEMENTARY INFORMATION: On July 21, 2010, President Obama signed the 
Dodd-Frank Act.\2\ Title VII of the Dodd-Frank Act \3\ amended the 
Commodity Exchange Act (CEA) \4\ to establish a comprehensive 
regulatory framework to reduce risk, increase transparency, and promote 
market integrity within the financial system. Section 725(c) of the 
Dodd-Frank Act amended Section 5b(c)(2) of the CEA, which sets forth 
core principles with which a DCO must comply to be registered and to 
maintain registration as a DCO.\5\
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    \2\ See Dodd-Frank Wall Street Reform and Consumer Protection 
Act, Public Law 111-203, 124 Stat. 1376 (2010). The text of the 
Dodd-Frank Act may be accessed at http://www.cftc.gov/LawRegulation/OTCDERIVATIVES/index.htm.
    \3\ Pursuant to section 701 of the Dodd-Frank Act, Title VII may 
be cited as the ``Wall Street Transparency and Accountability Act of 
2010.''
    \4\ 7 U.S.C. 1 et seq.
    \5\ 7 U.S.C. 5b(c)(2).
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    On December 16, 2010, the Commission approved for publication in 
the Federal Register proposed regulations which, among other things, 
would implement DCO Core Principle D (Risk Management) and would 
establish a related reporting requirement under Core Principle J 
(Reporting). More specifically, the Commission proposed Sec.  
39.13(g)(8)(i) to establish customer ``gross margin'' requirements, and 
proposed Sec.  39.19(c)(1)(iv) to establish related daily reporting 
requirements. The proposed regulations were published for comment in 
the January 20, 2011 issue of the Federal Register.\6\
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    \6\ 76 FR 3698, Jan. 20, 2011.
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    The Federal Register preamble explained that proposed Sec.  
39.13(g)(8)(i)

[[Page 16588]]

would require a DCO to collect initial margin on a gross basis for each 
clearing member's customer account equal to the sum of the initial 
margin amounts that would be required by the DCO for each individual 
customer within that account if each individual customer were a 
clearing member. A DCO would not be permitted to net positions of 
different customers against one another, but it could collect initial 
margin for its clearing members' house accounts on a net basis.\7\
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    \7\ 76 FR at 3706.
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    Related to this customer gross margin requirement, the preamble 
further explained as follows, that proposed Sec.  39.19(c)(1)(iv) would 
require DCOs to report end-of-day positions for each clearing member, 
by customer origin and house origin, and for customer origin, 
separately, the gross positions of each beneficial owner:

    The Commission recently proposed a new Sec.  39.19(c)(1)(iv) 
under which a DCO would be required, on a daily basis, to report the 
end-of-day positions for each clearing member, by origin. [footnote 
reference to 75 FR at 78195] In connection with the proposed Sec.  
39.13(g)(8)(i) requirement for DCOs to collect initial margin for 
customer accounts on a gross basis, the Commission is proposing to 
amend proposed Sec.  39.19(c)(1)(iv) to additionally require a DCO, 
for the customer origin, to report the gross positions of each 
beneficial owner.\8\
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    \8\ Id.

    It has come to the attention of the Commission that there was an 
omission in the Federal Register publication of the proposed rule text 
setting forth the requirement for end-of-day reporting of customer 
positions by the gross positions of each beneficial owner. The text of 
proposed Sec.  39.19(c)(1)(iv), which read ``End-of-day positions for 
each clearing member, by customer origin and house origin'' should have 
read, ``End-of-day positions for each clearing member, by customer 
origin and house origin; and for customer origin, separately, the gross 
positions of each beneficial owner.''
    In order to provide an adequate opportunity for comment on this 
reporting requirement, the Commission has determined to extend the 
comment period for proposed Sec.  39.19(c)(1)(iv), as corrected 
elsewhere in this issue of the Federal Register, until April 25, 2011.

    Issued in Washington, DC, on March 17, 2011, by the Commission.
David A. Stawick,
Secretary of the Commission.
[FR Doc. 2011-6972 Filed 3-23-11; 8:45 am]
BILLING CODE 6351-01-P