[Federal Register Volume 81, Number 13 (Thursday, January 21, 2016)]
[Proposed Rules]
[Pages 3354-3356]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01148]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Part 240
[Release No. 34-76922; File No. S7-15-15]
RIN 3235-AL74
Access to Data Obtained by Security-Based Swap Data Repositories
and Exemption From Indemnification Requirement
AGENCY: Securities and Exchange Commission.
ACTION: Reopening of comment period.
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SUMMARY: The Securities and Exchange Commission (``Commission'') is
reopening the comment period for proposed amendments to rule 13n-4
under the Securities Exchange Act of 1934 (``Exchange Act'') related to
regulatory access to security-based swap data held by security-based
swap data repositories. The proposed rule amendments would implement
Exchange Act provisions that conditionally require that security-based
swap data repositories make data available to certain regulators and
other authorities. Recent legislation has modified certain underlying
statutory provisions.
DATES: The comment period for the proposed rule published September 14,
2015, at 80 FR 55182, is reopened. Submit comments on or before
February 22, 2016.
ADDRESSES: Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/proposed.shtml); or
Send an email to [email protected]. Please include
File Number S7-15-15 on the subject line; or
Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.
Paper Comments
Send paper comments to Secretary, Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number S7-15-15. This file number
should be included on the subject line if email is used. To help us
process and review your comments more efficiently, please use only one
method. The Commission will post all comments on the Commission's
Internet Web site (http://www.sec.gov/rules/proposed.shtml). Comments
are also available for Web site viewing and printing in the
Commission's Public Reference Room, 100 F Street NE., Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly.
Studies, memoranda, or other substantive items may be added by the
Commission or staff to the comment file during this rulemaking. A
notification of the inclusion in the comment file of any such materials
will be made available on the SEC's Web site. To ensure direct
electronic receipt of such notifications, sign up through the ``Stay
Connected'' option at www.sec.gov to receive notifications by email.
FOR FURTHER INFORMATION CONTACT: Carol McGee, Assistant Director,
Joshua Kans, Senior Special Counsel, or Kateryna P. Imus, Special
Counsel, at (202) 551-5870; Division of Trading and Markets, Securities
and Exchange
[[Page 3355]]
Commission, 100 F Street NE., Washington, DC 20549-7010.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Proposed Rule
Exchange Act sections 13(n)(5)(G) and (H), which were added by
Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection
Act of 2010, conditionally require security-based swap data
repositories to make data available to certain regulators and other
entities. The statute identifies certain entities as being eligible to
access data, and states that the Commission may determine that other
persons are appropriate to access such data. The statute further
provides that the Commission must be notified of requests for access,
and also conditions data access on the security-based swap data
repository receiving certain confidentiality-related agreements.
Moreover, under the statute as it was originally enacted in 2010, data
access was conditional on the recipient entity agreeing to indemnify
the repository and the Commission for expenses arising from litigation
relating to the information provided.\1\
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\1\ See generally Access to Data Obtained by Security-Based Swap
Data Repositories and Exemption From Indemnification Requirement,
Exchange Act Release No. 75845 (Sept. 14, 2015), 80 FR 55182 (Sept.
14, 2015) (``Data Access Proposing Release'').
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On September 14, 2015, the Commission proposed rules to implement
those data access provisions.\2\ Key features of the proposal included:
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\2\ The proposal built upon two prior Commission proposals to
implement the data access provisions and to provide an exemption
from the indemnification requirement. See id. at 55182-84.
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(i) Designation of entities that may access data. The proposal
provided that, in addition to the entities identified by the statute,
the Federal Reserve Banks and the Office of Financial Research
(``OFR'') may access data.\3\ The proposal also specified factors and
conditions that the Commission would consider in making future
determinations regarding entities eligible to access data and the scope
of such entities' access to data. In that regard the Commission stated
that it preliminarily expected that such determination orders
``typically would incorporate conditions that specify the scope of a
relevant authority's access to data, and that limit this access in a
manner that reflects the relevant authority's regulatory mandates or
legal responsibility or authority.'' \4\
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\3\ See proposed Exchange Act rule 13n-4(b)(9)(ix).
\4\ See Data Access Proposing Release, 80 FR 55187-88.
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(ii) Confidentiality condition to data access. To implement the
statutory confidentiality condition, the proposal provided that there
must be a memorandum of understanding (``MOU'') or other arrangement
between the Commission and the recipient of data to address the
confidentiality of the data provided to the recipient.\5\ The
Commission stated that it expected this approach would help avoid the
possibility of uneven and potentially inconsistent application of the
confidentiality condition.\6\
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\5\ See proposed Exchange Act rule 13n-4(b)(10).
\6\ See Data Access Proposing Release, 80 FR 55190.
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(iii) Notification requirement. The proposal provided that a
security-based swap data repository could satisfy the statutory
notification requirement by notifying the Commission of the first data
access request by an entity, and maintaining a record of subsequent
requests.\7\
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\7\ See id. at 55188-89; proposed Exchange Act rule 13n-4(e).
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(iv) Indemnification exemption. The proposal included an exemption
from the indemnification requirement. This exemption would have been
conditioned, in part, on the information provided relating to ``persons
or activities within the recipient entity's regulatory mandate, or
legal responsibility or authority.'' \8\
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\8\ See proposed Exchange Act rule 13n-4(d). The proposal also
would require the Commission and the recipient of data to enter into
an MOU or other arrangement to specify the type of information that
would fall within this regulatory mandate, or legal responsibility
or authority. See id.
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B. Statutory Amendment
On December 4, 2015, President Obama signed into law Public Law
114-94, the Surface Transportation Reauthorization and Reform Act of
2015. This law, among other things, amended the statutory data access
provisions by eliminating the indemnification requirement discussed
above.\9\ The law also revised the data access provisions in two other
ways.\10\
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\9\ See Public Law 114-94, sec. 86011(c)(2).
\10\ In part, the statutory revision clarified that the scope of
the data access provision applies to security-based swap data, not
all data maintained by the repository. See Public Law 114-94, sec.
86011(c)(1)(A) (striking ``all'' and adding ``security-based swap''
in the introductory part of Exchange Act section 13(n)(5)(G)). That
focus on security-based swaps already was incorporated into the
proposal. See proposed Exchange Act rule 13n-4(b)(9).
The statutory revision also added the term ``other foreign
authorities'' to the nonexclusive statutory list of entities that
the Commission may determine appropriate to access data under these
provisions. See Public Law 114-94, sec. 86011(c)(1)(B). That change
is consistent with the proposal, which used the term ``including,
but not limited to'' in the relevant portion of the rule text
(preceding the specific references to foreign financial supervisors,
foreign central banks, and foreign ministries). See proposed
Exchange Act rule 13n-4(b)(9)(x).
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The elimination of the indemnification requirement makes
unnecessary paragraph (d) of proposed rule 13n-4, which would have
implemented the conditional exemption from the indemnification
requirement.\11\ The statutory amendments, however, do not affect the
proposed provisions: (i) Addressing the designation of additional
entities as being eligible to access data (potentially including the
Federal Reserve Banks and the OFR); (ii) implementing the
confidentiality condition to data access; and (iii) implementing the
statutory notification requirement.
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\11\ See Data Access Proposing Release, 80 FR at 55211.
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II. Request for Comments
Commenters are invited to discuss the proposal in light of the
recent statutory amendments. Commenters particularly are invited to
address the impact, on the remaining aspects of the proposal, arising
from the elimination of the proposed indemnification exemption,
including the exemption's proposed condition limiting access to
security-based swap data to persons or authorities within a relevant
authority's regulatory mandate or legal responsibility or authority.
For example, to what extent should those criteria related to an
entity's regulatory mandate or legal responsibility and authority be
used by the Commission as it implements the confidentiality condition
and/or the Commission's determination authority?
Commenters further are invited to address whether the use of that
limitation should vary depending on the type of recipient entity. For
example, should those criteria be considered exclusively in conjunction
with recipient authorities not specifically named in the statute,
including the Federal Reserve Banks and the OFR, or should those
criteria instead be considered in conjunction with access to data by
all entities under these provisions? \12\
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\12\ As noted above, the Commission stated that it preliminarily
expected that subsequent determination orders under the statute and
proposed rule ``typically would incorporate conditions that specify
the scope of a relevant authority's access to data, and that limit
this access in a manner that reflects the relevant authority's
regulatory mandates or legal responsibility or authority.''
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In addition, commenters are requested to address whether the
proposal should be revised to address the other statutory changes to
the data access provisions--such as addition of the term ``other
[[Page 3356]]
foreign authorities'' to the list of entities that the Commission may
determine appropriate to access data. For example, should the
Commission revise proposed paragraph (b)(9)(x) of rule 13n-4 to
specifically note that it may determine that ``other foreign
authorities'' also may access data pursuant to these provisions?
Commenters are also invited to address the impact of the statutory
amendments on the Commission's economic analysis.
By the Commission.
Dated: January 15, 2016.
Brent J. Fields,
Secretary.
[FR Doc. 2016-01148 Filed 1-20-16; 8:45 am]
BILLING CODE 8011-01-P