[Federal Register Volume 77, Number 88 (Monday, May 7, 2012)]
[Proposed Rules]
[Pages 26709-26713]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-10918]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 49

RIN 3038-AD83


Swap Data Repositories: Interpretative Statement Regarding the 
Confidentiality and Indemnification Provisions of Section 21(d) of the 
Commodity Exchange Act

AGENCY: Commodity Futures Trading Commission.

ACTION: Proposed interpretative statement.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'' or 
``CFTC'') is proposing this interpretative statement to provide 
guidance regarding the applicability of the confidentiality and 
indemnification provisions set forth in new section 21(d) of the 
Commodity Exchange Act (``CEA'') added by section 728 of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (``Dodd-Frank Act''). 
The Commission requests comment on all aspects of the proposed 
interpretative statement. The proposed interpretative statement 
clarifies that the provisions of section 21(d) should not operate to 
inhibit or prevent foreign regulatory authorities from accessing data 
in which they have an independent and sufficient regulatory interest, 
even if that data also has been reported pursuant to the CEA and 
Commission regulations.

DATES: Comments must be received on or before June 6, 2012.

ADDRESSES: Comments, identified by RIN number 3038-AD83, may be sent 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

[[Page 26710]]

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.

FOR FURTHER INFORMATION CONTACT: Adedayo Banwo, Counsel, Office of the 
General Counsel, at (202) 418.6249, [email protected]; With respect to 
questions relating to international consultation and coordination: 
Jacqueline Mesa, Director, Office of International Affairs, at (202) 
418.5386, [email protected], Commodity Futures Trading Commission, Three 
Lafayette Centre, 1155 21st Street NW., Washington, DC 20581.
    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''),\1\ a petition for confidential treatment of 
the exempt information may be submitted according to the procedures 
established in Sec.  145.9 of the CFTC's regulations.\2\ The Commission 
reserves the right, but shall have no obligation, to review, prescreen, 
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\ 5 U.S.C. 552.
    \2\ 17 CFR 145.9.

SUPPLEMENTARY INFORMATION: In this release, the Commission addresses 
issues raised by foreign regulators with respect to the scope and 
application of the confidentiality and indemnification provisions of 
new section 21(d) of the CEA and proposes to clarify that these 
provisions should not operate to inhibit or prevent foreign regulatory 
authorities from accessing data in which they have an independent and 
sufficient regulatory interest.

I. Background: Statutory and Regulatory Authorities

    On July 21, 2010, President Obama signed into law the Dodd-Frank 
Act.\3\ Title VIIamended the CEA to establish a comprehensive new 
regulatory framework for swaps and security-based swaps.\4\ The 
legislation was enacted to reduce risk, increase transparency and 
promote market integrity within the financial system by, among other 
things: (1) Providing for the registration and comprehensive regulation 
of swap dealers and major swap participants; (2) imposing clearing and 
trade execution requirements on standardized derivative products; (3) 
creating robust recordkeeping and real-time reporting regimes; and (4) 
enhancing the Commission's rulemaking and enforcement authorities with 
respect to, among others, all registered entities and intermediaries 
subject to the Commission's oversight.
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    \3\ See Dodd-Frank Wall Street Reform and Consumer Protection 
Act, Pub. L. 111-203, 124 Stat. 1376 (2010), available at http://www.cftc.gov/LawRegulation/OTCDERIVATIVES/index.htm.
    \4\ Pursuant to section 701 of the Dodd-Frank Act, Title VII may 
be cited as the ``Wall Street Transparency and Accountability Act of 
2010;'' 7 U.S.C. 1 et seq.
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    To enhance transparency, promote standardization and reduce 
systemic risk, section 727 of the Dodd-Frank Act added to the CEA new 
section 2(a)(13)(G),\5\ which requires all swaps--whether cleared or 
uncleared--to be reported to swap data repositories (``SDRs'').SDRs are 
new registered entities created by section 728 of the Dodd-Frank 
Act.\6\ SDRs are required to perform specified functions related to the 
collection and maintenance of swap transaction data and information.\7\
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    \5\ 7 U.S.C. 2(a)(13)(G).
    \6\ Section 721 of the Dodd-Frank Act amends section 1a of the 
CEA to add a definition of the term ``swap data repository.'' 
Pursuant to CEA section 1a(48), the term ``swap data repository 
means any person that collects and maintains information or records 
with respect to transactions or positions in, or the terms and 
conditions of, swaps entered into by third parties for the purpose 
of providing a centralized recordkeeping facility for swaps.'' 7 
U.S.C. 1a(48).
    \7\ See 7 U.S.C. 24a(c). See also Commission, Final Rulemaking: 
Swap Data Recordkeeping and Reporting Requirements, 77 FR 2136, Jan. 
13, 2012 (``Data Final Rules''). The Data Final Rules, among other 
things, set forth regulations governing SDR data collection and 
reporting responsibilities under part 45 of the Commission's 
regulations.
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    CEA section 21(c)(7) requires that SDRs make data available to 
certain domestic and foreign regulators \8\ under specified 
circumstances.\9\ Separately, section 21(d) mandates that prior to 
receipt of any requested data or information from an SDR, a regulatory 
authority described in section 21(c)(7) shall agree in writing to abide 
by the confidentiality requirements described in section 8 of the 
CEA,\10\ and to indemnify the SDR and the Commission for any expenses 
arising from litigation relating to the information provided under 
section 8 of the CEA.\11\
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    \8\ The Commission's regulations designate such regulators as 
either an ``Appropriate Domestic Regulator'' or an ``Appropriate 
Foreign Regulator'' in Sec.  49.17(b). See Commission, Final 
Rulemaking: Swap Data Repositories: Registration Standards, Duties 
and Core Principles, 76 FR 54538, 54554 Sept. 1, 2011 (``SDR Final 
Rules'').
    \9\ 7 U.S.C. 24a(c)(7).
    \10\ 7 U.S.C. 12.
    \11\ 7 U.S.C. 24a(d).
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    Section 752 of the Dodd-Frank Act seeks to ``promote effective and 
consistent global regulation of swaps,'' and provides that the CFTC and 
foreign regulators ``may agree to such information-sharing arrangements 
as may be deemed to be necessary or appropriate in the public interest. 
* * *'' \12\ In light of this statutory directive, the Commission has 
been working to provide sufficient access to SDR data to appropriate 
domestic and foreign regulatory authorities.
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    \12\ See section 752(a) of the Dodd-Frank Act.
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    On June 8, 2011, the Chairman of the CFTC and the Chairman of the 
Securities and Exchange Commission (``Chairmen'') jointly submitted a 
letter to Michel Barnier, European Commissioner for Internal Markets 
and Services,\13\ highlighting their desire for international 
cooperation. In the letter, the Chairmen expressed their belief that 
indemnification and notice requirements need not apply when a 
registered SDR is also registered in a foreign jurisdiction and the 
foreign regulator, acting within the scope of its jurisdiction, seeks 
information directly from the SDR.
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    \13\ See letter from Gary Gensler, Chairman of the Commission, 
and Mary Schapiro, Chairman of the SEC, to Michel Barnier, European 
Commissioner for Internal Markets and Services, European Commission, 
dated June 8, 2011.
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    On September 1, 2011, the Commission adopted regulations 
implementing CEA section 21's registration standards, duties, and core 
principles for SDRs. To implement the provisions of section 21(c)(7) 
and (d), the Commission adopted definitions and standards for 
determining access by domestic and foreign regulators to data 
maintained by SDRs.
    The Commission acknowledged in the SDR Final Rules that the CEA's 
indemnification requirement could have the unintended effect of 
inhibiting direct access by other regulators to data maintained by 
SDRsdue to various home country laws and regulations.\14\ The SDR Final 
Rulesprovided that

[[Page 26711]]

under specified circumstances, certain ``Appropriate Domestic 
Regulators'' \15\ may gain access to the swap data reported and 
maintained by SDRs without being subject to the notice and 
indemnification requirements of CEA sections 21(c)(7) and (d).\16\ In 
connection with foreign regulatory authorities, the Commission 
determined in the SDR Final Rules that confidential swap data reported 
to and maintained by an SDR may be accessed by an Appropriate Foreign 
Regulator \17\ without the execution of a confidentiality and 
indemnification agreement when the Appropriate Foreign Regulator has 
supervisory authority over an SDR registered with it pursuant to 
foreign law and/or regulation that is also registered with the 
Commission.
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    \14\ See SDR Final Rules at 54554.
    \15\ The term Appropriate Domestic Regulator is defined in 17 
CFR 49.17(b)(1) as the Securities and Exchange Commission; each 
prudential regulator identified in section 1a(39) of the CEA. 7 
U.S.C. 1a(39); the financial Stability Oversight Council; the 
Department of Justice; any Federal Reserve Bank; the Office of 
Financial Research; and any other person the Commission deems 
appropriate.
    \16\ In the Commission's view, it is appropriate to permit 
access to the swap data maintained by SDRs to Appropriate Domestic 
Regulators that have concurrent regulatory jurisdiction over such 
SDRs, without the application of the notice and indemnification 
provisions of sections 21(c)(7) and (d) of the CEA. See SDR Final 
Rules at 54554 n.163. Accordingly, these provisions do not apply to 
an Appropriate Domestic Regulator that has regulatory jurisdiction 
over an SDR registered with it pursuant to a separate statutory 
authority that is also registered with the Commission, if the 
Appropriate Domestic Regulator executes an MOU or similar 
information sharing arrangement with the Commission and the 
Commission, consistent with CEA section 21(c)(4)(A), designates the 
Appropriate Domestic Regulator to receive direct electronic access. 
See 17 CFR 17(d)(2).
    \17\ The term Appropriate Foreign Regulator is defined in 17 CFR 
49.17(b)(2) as a foreign regulator with an existing memorandum of 
understanding (``MOU'') or similar type of information sharing 
arrangement executed with the Commission, and/or a foreign regulator 
without an MOU as determined on a case-by-case basis by the 
Commission.
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    The confidentiality and indemnification provisions of new CEA 
section 21 apply only when a regulatory authority seeks access to data 
from an SDR. In the SDR Final Rules, the Commission noted that section 
8(e) of the CEA provides for the Commission (as opposed to an SDR) to 
share confidential information in its possession with any department or 
agency of the Government of the United States, or with any foreign 
futures authority, department or agency of any foreign government or 
political subdivision thereof,\18\ acting within the scope of its 
jurisdiction.\19\
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    \18\ Section 725(f) of the Dodd-Frank Act amended section 8(e) 
of the CEA to include foreign central banks and ministries.
    \19\ See SDR Final Rules at 54554.
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    The SDR Final Rules became effective on October 31, 2011.\20\ Under 
these rules, trade repositories may apply to the Commission for full 
registration as SDRs.Pending the adoption and effectiveness of other, 
related regulatory provisions and definitions, however, such 
registrations are deemed ``provisional.'' \21\
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    \20\ Id.
    \21\ See 17 CFR 49.3(b).
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II. Considerations Relevant to the Commission's Proposed Interpretative 
Statement \22\
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    \22\ Legislation has been introduced in Congress that would 
amend the CEA to eliminate or substantially limit the SDR 
indemnification provision.
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A. International Considerations

    As noted above, section 752(a) of the Dodd-Frank Act directs the 
Commission to consult and coordinate with foreign regulatory 
authorities regarding the establishment of consistent international 
standards for the regulation of swaps and various ``swap entities.'' 
Section 752(a) also provides that the Commission ``may agree to such 
information-sharing arrangements [with foreign regulatory authorities] 
as may be deemed to be necessary or appropriate in the public 
interest'' or for the protection of investors and counterparties.\23\
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    \23\ See section 752(a) of the Dodd-Frank Act.
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    The Commission is committed to a cooperative international approach 
to the registration and regulation of SDRs, and consulted extensively 
with various foreign regulatory authorities in promulgating both its 
proposed and final regulations concerning SDRs.\24\ The Commission 
notes that the SDR Final Rules are largely consistent with the 
recommendations and goals of the May 2010 ``CPSS-IOSCO Consultative 
Report, Considerations for Trade Repositories in the OTC Derivatives 
Market'' (``Working Group Report'').\25\
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    \24\ See public comment file in response to the proposal for the 
SDR Final Rules, available at http://comments.cftc.gov/PublicComments/CommentList.aspx?id=939 and SDR Final Rules note 6 at 
54539, supra.
    \25\ This working group was jointly established by the Committee 
on Payment and Settlement Systems (``CPSS'') of the Bank of 
International Settlements and the Technical Committee of the 
International Organization of Securities Commissions (``IOSCO''). 
The Working Group Report presented a set of factors to consider in 
connection with the design, operation and regulation of SDRs. A 
significant focus of the Working Group Report is access to SDR data 
by appropriate regulators. The Working Group Report urges that a 
trade repository ``should support market transparency by making data 
available to relevant authorities and the public in line with their 
respective information needs.'' The Working Group Report is 
available at http://www.bis.org/publ/cpss90.pdf. See also CPSS-IOSCO 
Consultative Report, Principles of Financial Market Infrastructures 
(March 2011) available at http://www.bis.org/publ/cpss94.pdf. See 
also Financial Stability Board (``FSB''), Implementing OTC 
Derivatives Market Reforms, Oct. 25, 2010 (``FSB Report''); FSB, 
Derivative Market Reforms, Progress Report on Implementation, Apr. 
15, 2010 (``FSB Progress Report'').
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B. Public Comments on SDR Regulations

    In developing the SDR Final Rules, the Commission received several 
comments regarding access to SDR data by foreign regulatory authorities 
and the confidentiality and indemnification provisions of CEA section 
21(d). The Commission has considered these comments in formulating this 
proposed interpretation but requests further comment concerning the 
specific interpretative statement proposed.
    Managed Funds Association (``MFA'') requested that the Commission 
actively participate in facilitating foreign regulatory access and 
confirming a foreign regulator's authority in connection with any SDR 
data request.\26\ The CME Group Inc. (``CME'') argued against the 
Commission designating any third party to receive swap data, and 
TriOptima suggested that the Commission ``adopt as flexible an 
interpretation as possible'' regarding the indemnification provisions 
in CEA section 21(d).\27\
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    \26\ See comment letter from MFA.
    \27\ See comment letters from CME and TriOptima.
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    The Depository Trust & Clearing Corporation (``DTCC'') stated that 
the ``indemnification provisions should not apply in situations where 
regulators are carrying out regulatory responsibilities, acting in a 
manner consistent with international agreements and maintaining the 
confidentiality of data.'' \28\ Additionally, the Commission received a 
comment letter from the European Securities and Markets Authority 
(``ESMA'') \29\ stating that it believes the indemnification provision 
``undermines'' principles of trust and consultation.
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    \28\ See comment letter from DTCC.
    \29\ See comment letter from ESMA.
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C. Consultations With Foreign Regulatory Authorities

    Consistent with the international harmonization envisioned by 
section 752 of the Dodd-Frank Act, the Commission has engaged in 
consultations with foreign regulatory authorities regarding the 
Commission's regulations relating to the Dodd-Frank Act. During these 
consultations, many foreign regulatory authorities have expressed 
concern about the difficulty in complying with the indemnification 
provisions of CEA section 21(d).
    As a consequence of these consultations with foreign regulatory

[[Page 26712]]

authorities, and pursuant to the mandate for cooperation under section 
752, the Commission concludes that further guidance is necessary to 
ensure that appropriate access by foreign regulatory authorities is not 
unnecessarily inhibited. For example, the Commission has learned that 
foreign regulatory authorities have asked whether a recognition regime 
with respect to SDRs, and/or access by foreign authorities that do not 
regulate an SDR, would conflict with Sec.  49.17(d)(3) and Sec.  
49.18(c) of the SDR Final Rules, which refer to registration with 
Appropriate Foreign Regulators. Foreign regulatory authorities have 
also taken action to harmonize regulatory reporting rules.
    While the SDR Final Rules address foreign regulators with 
supervisory authority and regulatory responsibility, the Commission is 
proposing the following interpretative statement, pursuant to section 
752, to ensure that foreign regulators receive sufficient access to 
data reported to SDRs where such foreign regulators have an independent 
and sufficient regulatory interest.

III. Commission Proposed Interpretative Statement

    In this proposed interpretative statement, the CFTC provides 
guidance regarding the confidentiality and indemnification provisions 
of CEA section 21(d). As noted above, the Commission seeks comment from 
interested members of the public on all aspects of this proposed 
interpretative statement.

A. Data Reported to Registered SDRs

    The Commission understands that some registered SDRs also maybe 
registered, recognized or otherwise authorized in a foreign 
jurisdiction and may accept swap data reported pursuant to the foreign 
regulatory regime. The Commission concludes that the confidentiality 
and indemnification provisions of CEA section 21(d) generally apply 
only to such data reported pursuant to the CEA and Commission 
regulations.
    The Commission further concludes that the confidentiality and 
indemnification provisions should not operate to inhibit or prevent 
foreign regulatory authorities from accessing data in which they have 
an independent and sufficient regulatory interest (even if that data 
also has been reported pursuant to the CEA and Commission regulations).
    Accordingly, and consistent with the Commission's SDR Final Rules, 
the Commission proposes to interpret CEA section 21(d) such that a 
registered SDR would not be subject to the confidentiality and 
indemnification provisions of that section if:
     Such registered SDR also is registered, recognized or 
otherwise authorized in a foreign jurisdiction's regulatory regime; and
     The data sought to be accessed by a foreign regulatory 
authority has been reported to such registered SDR pursuant to the 
foreign jurisdiction's regulatory regime.
    This proposed interpretative guidance is grounded in principles of 
international law and comity. For example, in F. Hoffmann-La Roche Ltd. 
v. Empagran S.A., the U.S. Supreme Court, in reviewing the 
extraterritorial applicability of a different federal statute, stated 
that extraterritorial jurisdiction should be construed, where 
ambiguous, ``to avoid unreasonable interference with the sovereign 
authority of other nations.'' \30\ In cases considering concepts of 
international law and comity in evaluating the extraterritorial scope 
of federal statutes, the Supreme Court has noted that the principles in 
the Third Restatement of Foreign Relations Law are relevant to the 
interpretation of U.S. law.\31\
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    \30\ F. Hoffmann-LaRoche, Ltd. v. Empagran S.A., 542 U.S. 155, 
164 (2004). In Hoffmann-LaRoche, the Supreme Court also stated that 
canons of statutory construction ``assume that legislators take 
account of the legitimate sovereign interests of other nations when 
they write American laws.'' Id.
    \31\ Id. at 164-165.
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    Specifically, section 403 of the Third Restatement of Foreign 
Relations Law states, in relevant part:

    Whether exercise of jurisdiction over a person or activity is 
unreasonable is determined by evaluating all relevant factors, 
including, where appropriate:
    (a) The link of the activity to the territory of the regulating 
state, i.e., the extent to which the activity takes place within the 
territory, or has substantial, direct, and foreseeable effect upon 
or in the territory;
    (b) The connections, such as nationality, residence, or economic 
activity, between the regulating state and the person principally 
responsible for the activity to be regulated, or between that state 
and those whom the regulation is designed to protect;
    (c) The character of the activity to be regulated, the 
importance of regulation to the regulating state, the extent to 
which other states regulate such activities, and the degree to which 
the desirability of such regulation is generally accepted;
    (d) The existence of justified expectations that might be 
protected or hurt by the regulation;
    (e) The importance of the regulation to the international 
political, legal, or economic system;
    (f) The extent to which the regulation is consistent with the 
traditions of the international system;
    (g) The extent to which another state may have an interest in 
regulating the activity; and
    (h) The likelihood of conflict with regulation by another 
state.\32\

    \32\ Rest. 3d., Third Restatement Foreign Relations Law section 
403 (scope of a statutory grant of authority must be construed in 
the context of international law and comity including, as 
appropriate, the extent to which regulation is consistent with the 
traditions of the international system).

    To avoid unreasonable interference with the sovereign authority of 
foreign regulators, this proposed interpretative statement is supported 
and underpinned by principles of international law and comity.

B. Foreign Regulatory Access

    In the Commission's view, a foreign regulator's access to data held 
in a registered SDR that also is registered, recognized, or otherwise 
authorized in a foreign jurisdiction's regulatory regime, where the 
data sought to be accessed has been reported pursuant to that 
regulatory regime, should be governed by such foreign jurisdiction's 
regulatory regime. The Commission concludes that application of the 
requirements of CEA section 21(d) in these circumstances is 
unreasonable in light of, among other things, the importance of such 
data to the foreign jurisdiction's regulatory regime, foreign 
regulators' interest in unfettered access to such data, and the 
traditions of mutual trust and cooperation among international 
regulators.\33\
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    \33\ The Commission notes that access to data held by trade 
repositories is a concept under discussion and development among 
international regulators. At the request of the FSB, CPSS and IOSCO 
have established a working group of relevant authorities to produce 
a forthcoming report regarding authorities' access to trade 
repository data.
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    Therefore, the Commission proposes that a foreign regulator's 
access to data from a registered SDR that also is registered, 
recognized, or otherwise authorized in a foreign jurisdiction's 
regulatory regime, where the data to be accessed has been reported 
pursuant to that regulatory regime, will be dictated by that foreign 
jurisdiction's regulatory regime and not by the CEA or Commission 
regulations. Such access is appropriate, in the Commission's view, even 
if the applicable data is also reported to the registered SDR pursuant 
to the Commission's Data Final Rules.\34\
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    \34\ Regarding the Commission's access to SDR data, section 
21(b)(1)(A) of the CEA states that the Commission ``shall prescribe 
standards that specify the data elements for each swap that shall be 
collected and maintained by each registered swap data repository.'' 
Section 21(c)(1) of the CEA requires registered SDRs to ``accept 
data prescribed by the Commission for each swap under subsection 
(b).'' Therefore, with respect to Commission access to data held in 
registered SDRs, the Commission concludes that the direct electronic 
access provisions of CEA section 21(c)(4) apply only to such data 
that the SDR is required to accept under section 21(c)(1), which is 
further defined by part 45 of the Commission's regulations. In this 
respect, the Commission concludes that its direct electronic access 
applies only to such data reported pursuant to section 21 and 
Commission regulations promulgated thereunder.

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[[Page 26713]]

    Additionally, the Commission reiterates that a foreign regulatory 
authority, like domestic regulators, can nonetheless receive 
confidential data, without the execution of a confidentiality and 
indemnification agreement, from the Commission (as opposed to an SDR) 
pursuant to section 8(e) of the CEA.\35\ Such data sharing and access 
would be governed by the confidentiality provisions of section 8 of the 
CEA.
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    \35\ As noted above, CEA section 8(e) allows the Commission to 
share confidential information in its possession obtained in 
connection with the administration of the CEA with ``any department 
or agency of the Government of the United States'' or with any 
foreign futures authority or a department, central bank or ministry, 
or agency of a foreign government or political subdivision thereof, 
acting within the scope of its jurisdiction. The Commission 
acknowledges the difficulty that registered SDRs may face in 
determining what data or reporting falls within the jurisdiction of 
a regulatory authority. In this regard, the Commission is 
considering a separate release regarding section 2(i) of the CEA.
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C. Request for Comment

    The Commission requests comment on all aspects of its proposed 
interpretative statement. In particular, the Commission requests 
comment on the following issue: How would the timing and implementation 
of foreign jurisdictions' regulatory regimes affect the Commission's 
proposed interpretative guidance?

    By the Commission.

    Dated: Issued in Washington, DC, on April 30, 2012.
David A. Stawick,
Secretary of the Commission.

Appendices To Swap Data Repositories: Interpretative Statement 
Regarding the Confidentiality and Indemnification Provisions of Section 
21(d) of the Commodity Exchange Act Interpretive Statement--Commission 
Voting Summary and Statements of Commissioners

    Note: The following appendices will not appear in the Code of 
Federal Regulations.

Appendix 1--Commission Voting Summary

    On this matter, Chairman Gensler and Commissioners Sommers, 
Chilton, O'Malia and Wetjen voted in the affirmative; no 
Commissioner votes in the negative.

Appendix 2--Statement of Chairman Gary Gensler

    I support the proposed interpretative statement regarding the 
application of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act) indemnification provisions for swap 
data repositories (SDRs). The Commission is working closely with 
international regulators on a collaborative approach regarding how 
data may be accessed by regulators. The proposed guidance, which 
benefited from international input, states the Commission's view 
that foreign regulators will not be subject to the indemnification 
provisions in the Dodd-Frank Act if the SDR is registered, 
recognized or otherwise authorized by foreign law and the data to be 
accessed is reported to the SDR pursuant to foreign law. The public 
will now have an opportunity to comment on the proposed guidance, 
and I look forward to the public's input.

Appendix 3--Statement of Commissioner Jill E. Sommers

    I concur in the issuance of this Proposed Interpretative 
Statement Regarding the Confidentiality and Indemnification 
Provisions of Section 21(d) of the Commodity Exchange Act (Proposed 
Interpretive Statement). It provides some additional clarification 
with respect to how the Commission intends to interpret the 
application of the Section 21(d) indemnification provisions beyond 
what the Commission stated when it finalized the swap data 
repository (SDR) rules. See Swap Data Repositories: Registration 
Standards, Duties and Core Principles, 76 FR 54,538 (Sept. 1, 2011). 
However, a legislative fix is the only real solution to providing 
appropriate regulators, both foreign and domestic, with timely 
access to relevant data. I agree with Commissioner O'Malia that the 
Commission should publicly support repeal of the indemnification 
provisions, and note that the SEC has already done so.
    When finalizing the SDR rules, the Commission stated that a 
foreign regulator may have direct access to confidential swap data 
reported to and maintained by an SDR registered with the Commission 
without executing a Confidentiality and Indemnification Agreement 
when the SDR is also registered with the foreign regulator and the 
foreign regulator is acting in a regulatory capacity with respect to 
the SDR. See id. at 54,554. The Proposed Guidance clarifies that 
this should be the case even if the data the foreign regulator seeks 
also has been reported pursuant to the CEA and Commission 
regulations.
    Aside from making this point, the Proposed Interpretive 
Statement does not provide any information that cannot be otherwise 
gleaned from the SDR final rules, with one notable exception. The 
final SDR rules define an ``Appropriate Foreign Regulator'' as one 
that has supervisory authority over an SDR that is registered with 
the foreign regulator and with the CFTC. The Proposed Interpretive 
Statement expands this concept to SDRs that are registered, 
recognized, or otherwise authorized in a foreign jurisdiction's 
regulatory regime. Thus, registration and recognition are 
equivalent. This is a welcome clarification and a step in the right 
direction.
    I should note that the indemnification provisions of Section 
21(d) may have an adverse effect on U.S. regulators too. The 
Proposed Interpretive Statement touches on a distinction drawn in 
Part 49 between ``Appropriate Domestic Regulators,'' which include a 
number of domestic regulatory authorities, and an ``Appropriate 
Domestic Regulator with Regulatory Responsibility over a Swap Data 
Repository'' (a single entity subcategory of Appropriate Domestic 
Regulators, namely, the Securities and Exchange Commission (SEC)). 
Only the latter category of domestic regulator (i.e. the SEC) is 
exempt from the indemnification provisions of Section 21(d). While 
it makes sense that the SEC should be able to receive SDR data 
directly from an SDR absent an indemnification agreement, I 
encourage comments as to whether other Appropriate Domestic 
Regulators should have similar access.

Appendix 4--Statement of Commissioner Scott D. O'Malia

    I concur in support of the Commission's proposed interpretative 
statement (``Proposed Interpretative Statement'') regarding the 
confidentiality and indemnification provisions of Section 21(d) of 
the Commodity Exchange Act (``CEA'').
    Ultimately, Congress should repeal the confidentiality and 
indemnification provisions of Section 21(d) of the CEA and the 
Commission should publicly support that repeal. Absent a legislative 
fix, however, I believe the Commission is taking the right step to 
allay the concerns expressed by many foreign regulatory authorities.
    I am somewhat concerned that the Proposed Interpretative 
Statement does not address one important issue. Specifically, the 
Proposed Interpretative Statement would not provide foreign 
regulatory authorities with access to swaps data if those 
authorities had not yet finalized their regulations. In order to 
better understand the public's view on this issue, I have added a 
question seeking comment on how the timing and implementation of 
foreign jurisdictions' regulatory regimes should affect the 
Commission's final interpretation.
    Lastly, I am pleased that this Proposed Interpretative Statement 
is based on principles of international harmonization and comity. 
The Commission should continue to consult with foreign regulatory 
authorities in a manner consistent with international agreements 
regarding the registration of swap data repositories and the sharing 
of swaps data. In my view, these principles should establish the 
foundation of the Commission's forthcoming rulemaking concerning the 
extraterritorial application of the Dodd-Frank Act to foreign-based 
entities. Several foreign jurisdictions are in the process of 
finalizing new rules for the regulation of swaps and it is important 
that those rules provide a level and competitive playing field for 
U.S. firms as well.

[FR Doc. 2012-10918 Filed 5-4-12; 8:45 am]
BILLING CODE 6351-01-P