[Federal Register Volume 80, Number 247 (Thursday, December 24, 2015)]
[Notices]
[Pages 80327-80329]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32417]


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COMMODITY FUTURES TRADING COMMISSION


Agency Information Collection Activities: Proposed Collection 
Revision, Comment Request: Final Rule for Records of Commodity Interest 
and Related Cash or Forward Transactions

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice.

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SUMMARY: The Commodity Futures Trading Commission (``CFTC'' or the 
``Commission'') is announcing an opportunity for public comment on the 
proposed revision to the collection of certain information by the 
Commission. Under the Paperwork Reduction Act (``PRA''), Federal 
agencies are required to publish notice in the Federal Register 
concerning each proposed collection of information and to allow 60 days 
for public comment. The Commission recently adopted a final rule that 
amends the Commission Regulation dealing with records of commodity 
interest and related cash or forward transactions (the ``Final Rule''). 
The Final Rule modifies some of the recordkeeping requirements that 
apply to certain participants in the markets regulated by the 
Commission. This notice solicits additional comments on the PRA 
implications of the amended recordkeeping requirements that are set 
forth in the Final Rule, including comments that address the burdens 
associated with the modified information collection requirements of the 
Final Rule.

DATES: Comments must be submitted on or before February 22, 2016.

ADDRESSES: You may submit comments, identified by ``OMB Control No. 
3038-0090; Records of Commodity Interest and Related Cash or Forward 
Transactions Collection,'' by any of the following methods:
     The Commission's Web site, via its Comments Online process 
at http://comments.cftc.gov/. Follow the instructions for submitting 
comments through the Web site.
     Mail: Christopher Kirkpatrick, 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 through the Portal.
    Please submit your comments using 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.

FOR FURTHER INFORMATION CONTACT: Katherine Driscoll, Associate Chief 
Counsel, (202) 418-5544, [email protected]; August A. Imholtz III, 
Special Counsel, (202) 418-5140, [email protected]; or Lauren Bennett, 
Special Counsel, (202) 418-5290, [email protected], Division of Swap 
Dealer and Intermediary Oversight, Commodity Futures Trading 
Commission, 1155 21st Street NW., Washington, DC 20581.

SUPPLEMENTARY INFORMATION: The Final Rule amends Regulation 1.35(a). 
The collections of information related to Regulation 1.35(a) have been 
previously reviewed and approved by OMB in accordance with the PRA \1\ 
and assigned OMB Control Number 3038-0090. Section 3506(c)(2)(A) of the 
PRA, 44 U.S.C. 3506(c)(2)(A), requires Federal agencies to provide a 
60-day notice in the Federal Register concerning each proposed 
collection of information before submitting the collection to OMB for 
approval. To comply with this requirement, the CFTC is publishing 
notice of the proposed revision to the collection of information listed 
below.
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    \1\ 44 U.S.C. 3501 et seq.
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    Title: Adaption of Regulations to Incorporate Swaps--Records of 
Transactions (OMB Control No. 3038-0090). This is a request for an 
extension

[[Page 80328]]

and revision of a currently approved information collection.
    Abstract: The Commission amended Regulation 1.35(a) to: (1) Exclude 
members of designated contract markets (``DCMs'') and members of swap 
execution facilities (``SEFs'') that are not registered or required to 
register with the Commission (``Unregistered Members'') from the 
requirement to keep written communications that lead to the execution 
of a commodity interest transaction and related cash or forward 
transactions; (2) exclude Unregistered Members from the requirement to 
maintain records in a particular form and manner; (3) exclude 
Unregistered Members from the requirement to retain text messages; (4) 
exclude commodity trading advisors (``CTAs'') from the oral 
recordkeeping requirement; and (5) provide that all records required to 
be kept under the regulation must be kept in a form and manner which 
permits prompt, accurate and reliable location, access, and retrieval 
of any particular record, data, or information; and clarify that all 
records, except records of oral and written communications leading to 
the execution of a transaction in a commodity interest and related cash 
or forward transactions, must be kept in a form and manner that allows 
for identification of a particular transaction.
    With respect to the collection of information, the CFTC invites 
comments on:
     Whether the proposed revision to the collection of 
information is necessary for the proper performance of the functions of 
the Commission, including whether the information will have a practical 
use;
     The accuracy of the Commission's estimate of the burden of 
the proposed revision to the collection of information, including the 
validity of the methodology and assumptions used;
     Ways to enhance the quality, usefulness, and clarity of 
the information to be collected; and
     Ways to minimize the burden of collection of information 
on those who are to respond, including through the use of appropriate 
automated electronic, mechanical, or other technological collection 
techniques or other forms of information technology; e.g., permitting 
electronic submission of responses.
    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 you believe is exempt from disclosure under the 
Freedom of Information Act, a petition for confidential treatment of 
the exempt information may be submitted according to the procedures 
established in Regulation 145.9.\2\
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    \2\ 17 CFR 145.9.
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    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 information collection request 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 the Freedom of Information Act.
    Burden Statement: In the Notice of Proposed Rulemaking, the 
Commission's preliminary estimate stated that no additional 
recordkeeping or information collection requirements or changes to 
existing collection requirements would result from the proposed 
amendments to Regulation 1.35(a).\3\ The Commission subsequently 
determined, however, that the amendments to Regulation 1.35(a) likely 
will reduce the current information collection burdens on affected 
market participants under OMB control number 3038-0090.
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    \3\ See Records of Commodity Interest and Related Cash or 
Forward Transactions, 79 FR 68140, 68144 (Nov. 4, 2014).
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1. Exclusion of Unregistered Members From Requirement To Maintain 
Records of Pre-Trade Written Communications

    Pursuant to the prior version of Regulation 1.35(a), which was 
published in 2012, Unregistered Members were required to keep written 
communications that lead to the execution of a commodity interest 
transaction and related cash or forward transactions.\4\ The Final Rule 
states that Unregistered Members are not required to keep written 
communications that lead to the execution of a commodity interest 
transaction and related cash or forward transactions. Therefore, their 
compliance costs, and the associated information collection burden, 
with respect to this particular aspect of the rule will be eliminated. 
The Commission estimates that this change to Regulation 1.35(a) will 
decrease the information collection burden under the rule by 
approximately one-half hour per week per entity. The Commission 
estimates based on select market data that there are approximately 
3,200 Unregistered Members that will have their recordkeeping 
obligations reduced as a result of this element of the Final Rule.
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    \4\ See Adaptation of Regulations to Incorporate Swaps--Records 
of Transactions, 77 FR 75523 (Dec. 21, 2012) (the ``2012 Rule'').
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2. Exclusion of Unregistered Members From Requirement To Maintain 
Records in a Particular Form and Manner

    Pursuant to the prior version of Regulation 1.35(a), which was 
published in 2012, Unregistered Members were required to comply with 
the form and manner requirements of the rule.\5\ The Final Rule states 
that Unregistered Members are not required to keep their required 
records in a prescribed form and manner. Therefore, their compliance 
costs, and the associated information collection burden, with respect 
to this particular aspect of the rule will be eliminated. The 
Commission estimates that this change to Regulation 1.35(a) will 
decrease the information collection burden under the rule by 
approximately one-half hour per month per entity. The Commission 
estimates based on select market data that there are approximately 
3,200 Unregistered Members that will have their recordkeeping 
obligations reduced as a result of this element of the Final Rule.
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    \5\ Id.
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3. Exclusion of Unregistered Members From Requirement To Retain Text 
Messages

    The records that must be kept under Regulation 1.35 include text 
messages, as well as other forms of electronic records. The Final Rule 
amends Regulation 1.35(a) to provide that Unregistered Members are not 
required to maintain records of text messages.\6\ The Final Rule 
defines ``text messages'' as written communications sent from one 
telephone number to one or more telephone numbers by short message 
service (``SMS'') or multimedia messaging service (``MMS''). It can be 
difficult or cumbersome to transfer SMS and MMS messages to computers, 
storage devices, or storage media, and to maintain and access the 
messages on an ongoing basis. Therefore, the Commission believes that 
eliminating this requirement for Unregistered Members will reduce their 
recordkeeping burden by eliminating the time required to periodically

[[Page 80329]]

transfer these messages to computers, storage devices, or storage 
media, as well as the time required to periodically confirm the 
transfer and retention of the messages. The Commission estimates that 
Unregistered Members would spend approximately one-half hour per month 
preserving and maintaining text messages in the manner described above. 
The Commission estimates based upon select market data that there are 
approximately 3,200 Unregistered Members that will have their 
recordkeeping obligations reduced as a result of this element of the 
Final Rule.
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    \6\ Although the 2012 Rule required Unregistered Members to keep 
text messages, Commission staff granted Unregistered Members no-
action relief from this requirement in May 2014 (see CFTC Staff 
Letter No. 14-72).
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4. Exclusion of CTAs From Requirement To Record Oral Communications

    Pursuant to the Final Rule, CTAs will no longer be required to 
record oral communications.\7\ In the 2012 Rule, the Commission added 
the requirement that certain types of firms, including CTAs that are 
members of a DCM or of a SEF, record all oral communications that lead 
to the execution of a transaction. Under the Final Rule, CTAs that are 
members of a DCM or of a SEF no longer have to comply with this 
requirement, and they therefore no longer have to administer a 
recording program and maintain a recording infrastructure. The 
Commission estimates that these CTAs would spend approximately one-half 
hour per week administering a recording program and maintaining 
recording infrastructure. The Commission estimates that there are 
approximately 1,175 CTAs that will have their recordkeeping obligations 
reduced as a result of this element of the Final Rule.\8\
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    \7\ Pursuant to CFTC Staff Letter Nos. 14-60, 14-147 and 15-65, 
Commission staff granted no-action relief to CTAs from the 
requirement to record oral communications.
    \8\ As of November 2015, there were approximately 2,350 CTAs 
registered with the Commission. For the purposes of this analysis, 
the Commission is conservatively estimating that half of registered 
CTAs are members of a DCM or of a SEF.
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5. Form and Manner Requirements, in General

    Pursuant to the Final Rule, all records required to be kept under 
Regulation 1.35(a) must be kept in a form and manner which permit 
prompt, accurate and reliable location, access, and retrieval of any 
particular record, data, or information. In addition, the Final Rule 
also states that all records, except records of oral and written 
communications leading to the execution of a transaction in a commodity 
interest and related cash or forward transactions, must be kept in a 
form and manner that allows for identification of a particular 
transaction. These new requirements replace the former requirement in 
the previous version of the rule that required records be 
``identifiable and searchable by transaction.'' The Commission views 
these revised form and manner requirements as a clarification of the 
prior requirements. Accordingly, the revised form and manner 
requirements do not increase or decrease the information collection 
burden for market participants that are subject to Regulation 1.35(a).
    The Commission estimates the burden of this collection of 
information as follows:
    Respondents/Affected Entities: Futures Commission Merchants, Retail 
Foreign Exchange Dealers, Introducing Brokers, and Members of a DCM or 
of a SEF.
    Estimated number of respondents: 6,000.
    Estimated total annual burden on respondents: 319,707 hours.
    Frequency of collection: Ongoing.

    Authority:  44 U.S.C. 3501 et seq.)

    Dated: December 18, 2015.
Christopher J. Kirkpatrick,
Secretary of the Commission.
[FR Doc. 2015-32417 Filed 12-23-15; 8:45 am]
 BILLING CODE 6351-01-P