[Federal Register Volume 81, Number 156 (Friday, August 12, 2016)]
[Proposed Rules]
[Pages 53343-53348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19231]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 3

RIN 3038-AE49


Chief Compliance Officer Annual Report Requirements for Futures 
Commission Merchants, Swap Dealers, and Major Swap Participants; 
Amendments to Filing Dates

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'' or 
``CFTC'') is proposing to amend certain provisions of its regulations 
concerning Chief Compliance Officers (``Proposal''). The regulation 
that is the subject of the Proposal addresses chief compliance officers 
(``CCOs'') of futures commission merchants (``FCMs''), swap dealers 
(``SDs''), and major swap participants (``MSPs'') (collectively, 
``Registrants''). The proposed amendments would: Codify existing no-
action relief regarding the timing of when a Registrant must furnish 
its CCO annual report to the Commission; clarify filing requirements 
for Registrants located in a jurisdiction for which the Commission has 
issued a comparability determination; and delegate to the Director of 
the Division of Swap Dealer and Intermediary Oversight (``DSIO'') 
authority to grant extensions to the CCO annual report filing deadline.

DATES: Comments must be received on or before September 12, 2016.

ADDRESSES: You may submit comments, identified by RIN 3038-AE49, by any 
of the following methods:
     CFTC Web site: http://comments.cftc.gov. Follow the 
instructions for submitting comments through the Comments Online 
process on the Web site.
     Mail: Send to 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.

[[Page 53344]]

     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    Please submit your comments using only one of these methods.
    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 is 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 set 
forth in Sec.  145.9 of the Commission's regulations.\2\
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    \1\ 5 U.S.C. 552.
    \2\ 17 CFR 145.9. The Commission's regulations are found at 17 
CFR Chapter I and can be accessed through the Commission's Web site 
at www.cftc.gov.
_____________________________________-

    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 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 the FOIA.

FOR FURTHER INFORMATION CONTACT: Eileen Flaherty, Director, 202-418-
5326, [email protected]; Erik Remmler, Deputy Director, 202-418-7630, 
[email protected]; Laura Gardy, Associate Director, 202-418-7645, 
[email protected]; or Pamela M. Geraghty, Special Counsel, 202-418-5634, 
[email protected], Division of Swap Dealer and Intermediary Oversight, 
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st 
Street NW., Washington, DC 20581.

SUPPLEMENTARY INFORMATION: 

I. Background

A. Commission Requirements for Submission of CCO Annual Reports

    Section 4s(k)(3) of the Commodity Exchange Act (``CEA'') requires 
CCOs for SDs and MSPs, in accordance with rules prescribed by the 
Commission, to prepare and sign an annual report (``CCO Annual 
Report'') describing, among other things, the SD's or MSP's compliance 
with the CEA and CFTC regulations.\3\ CEA section 4s(k)(3)(B) requires 
the CCO Annual Report to accompany each appropriate financial report of 
the SD or MSP required to be furnished to the Commission.\4\ CEA 
section 4d(d) requires CCOs of FCMs to ``perform such duties and 
responsibilities'' as are established by Commission regulation or rules 
of a registered futures association.\5\
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    \3\ 7 U.S.C. 6s(k)(3)(A)(i). The CEA can be accessed through the 
Commission's Web site.
    \4\ 7 U.S.C. 6s(k)(3)(B)(i).
    \5\ 7 U.S.C. 6d(d).
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    Regulations 3.3(e) and (f) codify the duty to prepare and furnish 
to the Commission a CCO Annual Report for all Registrants.\6\ 
Regulation 3.3(e) requires the CCO Annual Report to cover the most 
recently completed fiscal year of the Registrant and specifies certain 
reporting elements for Registrants in describing their compliance with 
the CEA and Commission regulations. Regulation 3.3(f)(1) requires the 
furnishing of the CCO Annual Report to the board or senior officer 
prior to its submission to the Commission. Regulation 3.3(f)(2) 
currently requires the CCO Annual Report to be furnished to the 
Commission electronically not more than 60 days after a Registrant's 
fiscal year-end.
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    \6\ 17 CFR 3.3(e) and (f).
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B. Regulation 3.3(f)(2) Implementation Experience

    Since the adoption of the 60-day filing requirement, DSIO has 
continuously provided no-action relief for CCO Annual Reports submitted 
to the Commission within 90 days of a Registrant's fiscal year-end.\7\ 
The no-action letter currently in effect, CFTC Staff Letter No. 15-15, 
responds to a request for relief on behalf of FCM and SD firms, which 
stated that having an additional 30 days to file the CCO Annual Report 
allows each Registrant to conduct a more substantive and complete 
review of its compliance program.\8\
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    \7\ See CFTC Letter No. 13-84, Time-Limited No-Action Relief for 
Futures Commission Merchants, Swap Dealers, and Major Swap 
Participants from Compliance with the Timing Requirements of 
Commission Regulation 3.3(f)(2) Relating to Annual Reports by Chief 
Compliance Officers (Dec. 30, 2013), available at: http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/13-84.pdf; CFTC Letter No. 14-154, Time-Limited No-Action Relief for 
Futures Commission Merchants, Swap Dealers, and Major Swap 
Participants from Compliance with the Timing Requirements of 
Commission Regulation 3.3(f)(2) Relating to Annual Reports by Chief 
Compliance Officers (Dec. 22, 2014), available at: http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/14-154.pdf; and CFTC Letter No. 15-15, No-Action Relief for Futures 
Commission Merchants, Swap Dealers, and Major Swap Participants from 
Compliance with the Timing Requirements of Commission Regulation 
3.3(f)(2) Relating to Annual Reports by Chief Compliance Officers 
(Mar. 27, 2015), available at: http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/15-15.pdf (``CFTC Staff 
Letter No. 15-15'').
    \8\ FIA and ISDA Letter, Request for no-action relief concerning 
certain requirements of CFTC Rule 3.3 relating to the timing of the 
Annual Report (Mar. 10, 2015) (on file with the CFTC, available for 
inspection and copying).
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    Recently, the U.S. Securities and Exchange Commission (``SEC'') 
adopted final rules corresponding to Regulation 3.3, and implementing a 
provision of Title VII of the Dodd-Frank Act the text of which is 
effectively identical to CEA section 4s(k)(3)(B).\9\ The SEC's 
corresponding rule requires that the equivalent chief compliance 
officer annual report for security-based swap dealers and major 
security-based swap participants be submitted to the SEC within 30 days 
following the deadline for filing each entity's annual financial 
report.\10\
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    \9\ Business Conduct Standards for Security-Based Swap Dealers 
and Major Security-Based Swap Participants, 81 FR 29959 (May 13, 
2016).
    \10\ See id. at 30150.
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C. Application of Regulation 3.3(f)(2) to Entities Located in Certain 
Non-U.S. Jurisdictions

    In December 2013, the Commission issued comparability 
determinations deeming an SD or MSP located in Canada, the European 
Union, Hong Kong, Japan, or Switzerland (``Substituted Compliance 
Registrants'') to be in compliance with Regulation 3.3(e) if it 
complies with the applicable corresponding regulation in its home 
jurisdiction.\11\ Specifically, a Substituted Compliance Registrant may 
elect to furnish the Commission with the comparable annual reporting 
information (hereinafter, ``Comparable Annual Report'') specified under 
the standards of its home jurisdiction. However, the Commission did not 
provide a comparability determination with respect to Regulation 3.3(f) 
regarding the timing of when the

[[Page 53345]]

Comparable Annual Report must be furnished to the CFTC.\12\
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    \11\ See Comparability Determination for Canada: Certain Entity-
Level Requirements, 78 FR 78839, 78843 (Dec. 27, 2013); 
Comparability Determination for the European Union: Certain Entity-
Level Requirements, 78 FR 78923, 78928 (Dec. 27, 2013); 
Comparability Determination for Hong Kong: Certain Entity-Level 
Requirements, 78 FR 78852, 78856 (Dec. 27, 2013); Comparability 
Determination for Japan: Certain Entity-Level Requirements, 78 FR 
78910, 78915 (Dec. 27, 2013); Comparability Determination for 
Switzerland: Certain Entity-Level Requirements, 78 FR 78899, 78903 
(Dec. 27, 2013). It should be noted that while Australia was granted 
a determination of comparability for some entity-level requirements, 
it was not granted a determination of comparability with respect to 
the requirements of Regulation 3.3(e). See Comparability 
Determination for Australia: Certain Entity-Level Requirements, 78 
FR 78864, 78869 (Dec. 27, 2013).
    \12\ See note 11, supra.
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II. The Proposal

A Proposed Amendments to Regulation 3.3(f)(2)

    The Commission is proposing to codify the current no-action relief 
by amending Regulation 3.3(f)(2). The amendments would permit an FCM to 
furnish its CCO Annual Report to the Commission not more than 30 days 
after submission of the Form 1-FR-FCM \13\ or Financial Operational 
Combined Uniform Single Report (``FOCUS Report''). The Proposal would 
also permit an SD or MSP to furnish its CCO Annual Report to the 
Commission not more than 90 days after its fiscal year-end until such 
time as the Commission adopts and implements rules establishing the 
time for filing the annual financial condition report required under 
CEA section 4s(f). The Commission has proposed, but not yet adopted, a 
financial condition report requirement comprised of an annual audited 
financial report for SDs and MSPs.\14\ Once the Commission adopts and 
implements a financial condition report rule, like FCMs, an SD or MSP 
will have up to 30 days after the submission of its annual financial 
condition report to submit the CCO Annual Report to the Commission.
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    \13\ The proposed amendment also makes a technical correction in 
Regulation 3.3(f)(2) by correcting the cross reference to the 
Commission regulation that requires the filing of Form 1-FR-FCM to 
Regulation 1.10(b)(1)(ii).
    \14\ See Capital Requirements of Swap Dealers and Major Swap 
Participants, 76 FR 27802, 27838 (proposed May 12, 2011).
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    Regulation 3.3(e) requires a broad and detailed assessment of each 
Registrant's compliance program over the preceding year as well as a 
discussion of planned changes and remedial steps to be taken for non-
compliance matters. The Commission believes that providing up to 30 
days after a Registrant's applicable financial reports are due would 
provide Registrants an appropriate amount of time to complete the in-
depth review and analyses required by Regulation 3.3(e). As a policy 
matter, the Commission recognizes that the periodic self-evaluation 
that underlies each CCO Annual Report is a critical step in promoting 
an active and robust compliance culture within firms.
    In codifying the relief provided in CFTC Staff Letter No. 15-15, 
the Commission is clarifying that the statutory requirement for an SD 
or MSP's CCO Annual Report to ``accompany each appropriate financial 
report'' allows for the CCO Annual Report to be furnished to the 
Commission not more than 30 days after the submission of a Registrant's 
annual financial report.\15\ The Commission recognizes the separate and 
distinct nature and purposes of the two reports, and believes that 
allowing Registrants to submit their CCO Annual Reports not more than 
30 days after their financial reports are due satisfies the statutory 
requirement that the CCO Annual Report ``accompany'' the other 
financial report. This is also consistent with the SEC's approach in 
its corresponding rule for delivery of chief compliance officer annual 
reports by security-based swap dealers and major security-based swap 
participants.\16\
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    \15\ The Proposal would remove the obligation of Registrants to 
file their CCO Annual Reports ``simultaneously'' with the applicable 
FCM financial report or financial condition report.
    \16\ In the adopting release, the SEC addresses the statutory 
language that links the filing of the CCO Annual Report with the 
filing of appropriate financial reports by stating, ``The Commission 
is interpreting `accompany' in Section 15F(k)(3)(B)(i) to mean 
follow within 30 days.'' 81 FR 29959, 30059, n.1238.
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B. Registrants Located in Substituted Compliance Jurisdictions

    The Commission is also proposing to amend Regulation 3.3(f) to 
address the timing of the filing requirement for Comparable Annual 
Reports. If the requirements of the Substituted Compliance Registrant's 
home jurisdiction identify a specific date by which the Comparable 
Annual Reports must be completed, then the Commission is proposing that 
Comparable Annual Reports may be furnished to the Commission 
electronically up to 15 days after the date on which the Comparable 
Annual Report must be completed.\17\ The additional 15 days would allow 
time for translation of the report text into English. If the 
Substituted Compliance Registrant's home jurisdiction does not 
establish a specifically identifiable completion date, then the 
Substituted Compliance Registrant must comply with the standard time 
frames provided in Regulation 3.3(f), as amended. A specifically 
identifiable completion date would be a date that can be clearly 
identified such as a specific calendar date or a set number of days 
after the Substituted Compliance Registrant's fiscal year-end. A home 
jurisdiction requirement to complete the Comparable Annual Report only 
if some event occurs or upon request, or which does not specify a 
deadline, is not considered comparable to the Commission's annual 
delivery requirement.
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    \17\ While each of the jurisdictions that have been granted a 
comparability determination with respect to Regulation 3.3(e) 
requires Substituted Compliance Registrants to produce and complete 
comparable annual reporting information, there is variation among 
the foreign jurisdictions as to whether and/or when a Comparable 
Annual Report must be furnished to the home regulator. Therefore, 
the Commission is using the date on which the Comparable Annual 
Report must be completed as the benchmark for determining when the 
Comparable Annual Report must be furnished to the Commission.
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C. Proposed Amendments Regarding a Delegation From the Commission to 
the Division

    Pursuant to Regulation 3.3(f)(5), Registrants may request from the 
Commission an extension of time to furnish their CCO Annual Reports if 
the failure to timely furnish the report could not be avoided absent 
``unreasonable effort or expense.'' The rule provides the Commission 
with discretion in granting such extensions. To expedite review and 
consideration of requests for extensions, the Commission is proposing 
to delegate to the Director of DSIO, or such other employee(s) that the 
Director may designate, the authority to grant extensions of time 
subject to the same standard set forth in Regulation 3.3(f)(5). The 
Commission notes that the exercise of such delegated authority would 
need to be consistent with Regulation 3.3(f)(5) and therefore would be 
limited to unique facts and circumstances that clearly demonstrate that 
the inability to timely furnish the report to the Commission could not 
have been eliminated absent unreasonable effort or expense. The 
Commission believes that such delegation is prudent given that the 
decision to provide an extension requires consideration of specific 
facts and circumstances and often this consideration needs to occur 
within a relatively short period of time. As is the case with existing 
delegations to staff, the Commission would continue to reserve the 
right to perform the functions described in Regulation 3.3(f)(5) itself 
at any time.\18\
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    \18\ In addition, notwithstanding any such delegation, in any 
case in which a Commission employee delegated authority under this 
section believes it is appropriate, the employee may submit the 
question to the Commission for its consideration.
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    The Commission requests comment on the appropriateness of the 
proposed delegation and whether additional procedural detail is 
necessary.

D. Request for Comment

    The Commission seeks comments regarding the following matters:
     Given the current filing requirements for the Form 1-FR-
FCM and FOCUS Reports, and the anticipated

[[Page 53346]]

filing requirements for the financial condition report, is it 
appropriate to permit FCMs, SDs, and MSPs an additional 30-days to 
furnish their CCO Annual Report to the Commission? Are there any 
practical or policy reasons for not permitting the additional 30 days?
     Does codifying the relief granted in CFTC Staff Letter No. 
15-15 sufficiently address Registrants' concerns?
     Should the Commission provide any further clarification of 
the requirements of Regulation 3.3(f) as they apply to entities located 
in jurisdictions for which comparability determinations have been 
issued?

III. Related Matters

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act \19\ (``RFA'') requires that 
agencies consider whether the rules they propose will have a 
significant economic impact on a substantial number of small entities 
and, if so, provide a regulatory flexibility analysis reflecting the 
impact. Section 3.3(f)(2), as proposed, amends the filing deadline for 
CCO Annual Reports of FCMs, SDs, and MSPs and clarifies the filing 
deadline for Comparable Annual Reports. The proposed amendments would 
affect FCMs, SDs, and MSPs that are required to be registered with the 
Commission. The Commission has previously established certain 
definitions of ``small entities'' to be used in evaluating the impact 
of its regulations on small entities in accordance with the RFA, and 
has previously determined that FCMs, SDs, and MSPs are not small 
entities for purposes of the RFA.\20\ Therefore, the Commission 
believes that the amendments to Regulation 3.3 would not have a 
significant economic impact on a substantial number of small entities. 
Accordingly, the Chairman, on behalf of the Commission, hereby 
certifies, pursuant to 5 U.S.C. 605(b), that the proposed amendments 
will not have a significant economic impact on a substantial number of 
small entities.
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    \19\ 5 U.S.C. 601 et seq.
    \20\ See Policy Statement and Establishment of Definitions of 
``Small Entities'' for Purposes of the Regulatory Flexibility Act, 
47 FR 18618, 18619 (Apr. 30, 1982) (FCMs); Further Definition of 
``Swap Dealer,'' ``Security-Based Swap Dealer,'' ``Major Swap 
Participant,'' ``Major Security-Based Swap Participant'' and 
``Eligible Contract Participant,'' 77 FR 30596, 30701 (May 23, 2012) 
(SDs and MSPs).
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B. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (``PRA'') \21\ provides that a 
federal agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid control number issued by the Office of Management and 
Budget (``OMB''). The collection of information related to this 
proposed rule is OMB control number 3038-0080--Annual Report for Chief 
Compliance Officer of Registrants. The Commission believes that this 
proposed rule will not impose any new information collection 
requirements that require approval of OMB under the PRA. As a general 
matter, the proposed rule would allow Registrants up to 90 days after 
the end of their fiscal years, and certain Substituted Compliance 
Registrants with up to 15 days after the date on which the Comparable 
Annual Report must be completed under the requirements of their home 
jurisdiction, to file the CCO Annual Report and Comparable Annual 
Reports, respectively. As such, this proposed rule does not, by itself, 
impose any new burden or any new information collection requirements in 
addition to those that already exist in connection with the preparation 
and delivery of the CCO Annual Report pursuant to part 3 of the 
Commission's regulations.
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    \21\ 44 U.S.C. 3501 et seq.
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C. Cost-Benefit Considerations

1. Background
    As discussed above, the Commission is proposing amendments to the 
filing requirements for CCO Annual Reports in Regulation 3.3 that 
would: (1) Increase the amount of time registrants have to file their 
CCO Annual Reports with the Commission; and (2) clarify the filing 
requirements for Comparable Annual Reports. The baseline for this cost 
and benefit consideration is existing Regulation 3.3. Although CFTC 
Staff Letter No. 15-15, as discussed above, currently offers no-action 
relief that is substantially similar to the relief that the proposed 
amendments would grant Registrants, as a no-action letter, it only 
represents the position of the issuing Division or Office and cannot 
bind the Commission or other Commission staff.\22\ Consequently, the 
Commission believes that CFTC Staff Letter No. 15-15 should not set or 
affect the baseline against which the Commission considers the costs 
and benefits of the proposal.
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    \22\ See 17 CFR 140.99(a)(2). See also CFTC Staff Letter No. 15-
15 at 4.
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2. Costs
    The Commission received no comments during the rulemaking process 
for Regulation 3.3 regarding costs associated with the timing of the 
filing deadline for the CCO Annual Report. The proposed amendment does 
not change the report contents or require any additional actions to be 
taken by Registrants. The additional 30 days (or up to 15 days after 
the date on which a Comparable Annual Report must be completed under 
applicable home jurisdiction standards that allow more time) provided 
by the proposal lengthens the time before senior management or the 
board of the Registrants and the Commission may receive the CCO Annual 
Reports. The additional time to furnish the reports should not 
materially impact regulatory oversight given that the purpose of the 
reports is to provide a status update for the Registrant's compliance 
activities over the course of the preceding fiscal year and planned 
changes for the coming year. The reports generally do not serve to 
address crisis situations for which immediacy is critical. Therefore, 
the additional time allowed will not materially impact the usefulness 
of the information in the reports.\23\ The Commission has no other 
information available to it that would indicate that changing the 
filing deadline would measurably change the cost to prepare the CCO 
Annual Reports. Accordingly, the Commission preliminarily believes that 
the proposal would not impose any additional costs on any other market 
participants, the markets themselves, or the general public. The 
Commission invites comment regarding the nature of, and the extent to 
which, costs associated with the CCO Annual Reports could change as a 
result of the adoption of the proposal and, to the extent they can be 
quantified, monetary and other numerical estimates thereof.
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    \23\ The CCO Annual Report must contain a description of 
material non-compliance events that occurred over the review period. 
However, reporting on those events in the CCO Annual Report provides 
transparency regarding the effectiveness of the implementation of 
the compliance program over the preceding year for management and 
the CFTC.
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3. Benefits
    The Commission believes that the proposal would provide relief for 
Registrants from time pressures in preparing and filing their CCO 
Annual Reports. The additional time provided will allow Registrants to 
more carefully complete their internal processes used to develop the 
broad variety of information needed for the reports resulting in more 
accurate and complete reports. The Commission invites comment regarding 
the nature and extent of these and any other benefits that could result 
from adoption of the proposal--including benefits to other market 
participants, the market itself, or the general public--and, to the 
extent they can be quantified, monetary and other numerical estimates 
thereof.

[[Page 53347]]

4. Section 15(a) Factors
    Section 15(a) of the CEA requires the Commission to consider the 
costs and benefits of its actions before promulgating a regulation 
under the CEA or issuing certain orders.\24\ Section 15(a) further 
specifies that the costs and benefits shall be evaluated in light of 
five broad areas of market and public concern: (1) Protection of market 
participants and the public; (2) efficiency, competitiveness, and 
financial integrity of futures markets; (3) price discovery; (4) sound 
risk management practices; and (5) other public interest 
considerations. The Commission considers the costs and benefits 
resulting from its discretionary determinations with respect to the 
section 15(a) factors.
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    \24\ 7 U.S.C. 19(a).
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a. Protection of Market Participants and the Public
    The Commission recognizes that there are trade-offs between 
reducing regulatory burdens and ensuring that the Commission has 
sufficient, timely information to fulfill its regulatory mission. The 
proposed amendments to Regulation 3.3 are intended to reduce some of 
the regulatory burdens on Registrants. While the amendment will delay 
the time by which the Commission will receive the CCO Annual Reports, 
the delay is relatively short given that the information in the reports 
looks back over the entire year-long reporting period and identifies 
planned improvements for the coming year. Accordingly, the Commission 
preliminarily believes that the short delay will not affect the 
protection of market participants and the public.
b. Efficiency, Competitiveness, and Financial Integrity of Markets
    The Commission believes that the proposed amendments to Regulation 
3.3 could improve allocational efficiency for participants in the 
market by reducing the burden of preparing the CCO Annual Report in a 
shorter time-frame, thereby allowing them to allocate compliance 
resources more efficiently over the report preparation period. The 
Commission preliminarily believes that the proposed amendments to 
Regulation 3.3 will not have any market efficiency, competitiveness, or 
market integrity impacts because the reports address internal 
compliance programs of each Registrant and are not publicly available.
c. Price Discovery
    The Commission preliminarily believes that the proposed amendments 
to Regulation 3.3 would not impact on price discovery. Given the fact 
that the proposed amendments affect only the timing of when the CCO 
Annual Reports are filed with the Commission and the CCO Annual Reports 
generally would not contain trade information or be available to the 
public, the proposed amendments would not affect price discovery.
d. Sound Risk Management Practices
    The Commission preliminarily believes that the proposed amendments 
would not have a meaningful effect on the risk management practices of 
Registrants. While the CCO Annual Reports may discuss certain risk 
management aspects related to the compliance programs of the 
Registrants, the proposal would only amend the timing of delivery of 
the reports to the Commission, not the contents of the reports. As 
described above under subsection 4.a, the short delay in delivery of 
the reports provided for by the proposal is not significant given the 
nature of the information included in the report and allowing 
additional time to prepare the CCO Annual Reports might allow the 
Registrants to prepare better reports that more effectively address the 
information contained therein.
e. Other Public Interest Considerations
    The Commission has not identified any other public interest 
considerations for this rulemaking.
5. Request for Comment
    The Commission invites comment on all aspects of its preliminary 
consideration of the costs and benefits associated with the proposal 
and the five factors the Commission is required to consider under CEA 
section 15(a). In addressing these areas and any other aspect of the 
Commission's preliminary cost-benefit considerations, the Commission 
encourages commenters to submit any data or other information they may 
have quantifying and/or qualifying the costs and benefits of the 
proposal.

List of Subjects in 17 CFR Part 3

    Administrative practice and procedure, Brokers, Commodity futures, 
Major swap participants, Reporting and recordkeeping requirements, Swap 
dealers.

    For the reasons stated in the preamble, the Commodity Futures 
Trading Commission proposes to amend 17 CFR part 3 as follows:

PART 3--REGISTRATION

0
1. The authority citation for part 3 is revised to read as follows:

    Authority: 5 U.S.C. 552, 552b; 7 U.S.C. 1a, 2, 6a, 6b, 6b-1, 6c, 
6d, 6e, 6f, 6g, 6h, 6i, 6k, 6m, 6n, 6o, 6p, 6s, 8, 9, 9a, 12, 12a, 
13b, 13c, 16a, 18, 19, 21, 23, as amended by Title VII of the Dodd-
Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-
203, 124 Stat. 1376 (Jul. 21, 2010).

0
2. Amend Sec.  3.3 as follows:
0
a. Revise paragraph (f)(2); and
0
b. Add paragraph (h).
    The revision and addition to read as follows:


Sec.  3.3  Chief compliance officer.

* * * * *
    (f) * * *
    (2)(i) Except as provided in paragraph (f)(2)(ii) of this section, 
the annual report shall be furnished electronically to the Commission 
not more than 30 days after the submission of Form 1-FR-FCM, as 
required under Sec.  1.10(b)(1)(ii) of this chapter, the Financial and 
Operational Combined Uniform Single Report, as required under Sec.  
1.10(h) of this chapter, or the financial condition report, as required 
under section 4s(f) of the Act, as applicable. Until such time as the 
Commission adopts and implements a regulation establishing the time for 
filing the financial condition report, a swap dealer or major swap 
participant shall furnish the annual report electronically to the 
Commission not more than 90 days after the end of its fiscal year.
    (ii) The annual report of a swap dealer or major swap participant 
that is eligible to comply with a substituted compliance regime for 
paragraph (e) of this section pursuant to a comparability determination 
of the Commission may be furnished to the Commission electronically up 
to 15 days after the date on which the comparable annual report must be 
completed under the requirements of the applicable substituted 
compliance regime. If the substituted compliance regime does not 
specify a date by which the comparable annual report must be completed, 
then the annual report shall be furnished to the Commission by the date 
specified in paragraph (f)(2)(i) of this section.
* * * * *
    (h) Delegation of Authority. The Commission hereby delegates to the 
Director of the Division of Swap Dealer and Intermediary Oversight, or 
such other employee or employees as the Director may designate from 
time to time, the authority to grant extensions of time, as set forth 
in paragraph (f)(5) of this section. Notwithstanding such

[[Page 53348]]

delegation, in any case in which a Commission employee delegated 
authority under this paragraph believes it appropriate, he or she may 
submit to the Commission for its consideration the question of whether 
an extension of time should be granted. The delegation of authority in 
this paragraph shall not prohibit the Commission, at its election, from 
exercising the authority set forth in paragraph (f)(5) of this section.

    Issued in Washington, DC, on August 8, 2016, by the Commission.
Christopher J. Kirkpatrick,
Secretary of the Commission.

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

Appendix to Chief Compliance Officer Annual Report Requirements for 
Futures Commission Merchants, Swap Dealers, and Major Swap 
Participants; Amendments to Filing Dates--Commission Voting Summary

    On this matter, Chairman Massad and Commissioners Bowen and 
Giancarlo voted in the affirmative. No Commissioner voted in the 
negative.

[FR Doc. 2016-19231 Filed 8-11-16; 8:45 am]
BILLING CODE 6351-01-P