[Federal Register Volume 85, Number 79 (Thursday, April 23, 2020)]
[Proposed Rules]
[Pages 22690-22693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08109]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Chapter I
RIN 3038-AD99, RIN 3038-AE31, RIN 3038-AE32, RIN 3038-AE60, RIN 3038-
AE94
Extension of Currently Open Comment Periods for Rulemakings in
Response to the COVID-19 Pandemic
AGENCY: Commodity Futures Trading Commission.
ACTION: Extension of currently open comment periods for rulemakings.
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SUMMARY: The coronavirus disease 2019 (``COVID-19'') pandemic may
present challenges to the ability of market participants and other
members of the public to submit timely comments on the Commission's
proposed rulemakings. Accordingly, the Commission is extending the
comment period for the rulemakings listed herein until the dates
specified herein in order to provide market participants and other
members of the public an additional period of time to comment on the
proposed rulemakings.
DATES: For those rulemakings listed in SUPPLEMENTARY INFORMATION for
which the comment period is being extended, comments must be received
on or before the dates specified herein.
[[Page 22691]]
ADDRESSES: You may submit comments by any of the following methods:
CFTC Website: comments.cftc.gov. Follow the instructions
for submitting comments through the Comments Online process on the
website.
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.
Please submit your comments using only one method.
To ensure that your comments are considered to the fullest extent
possible by the Commission, you should identify each of the proposed
rulemakings to which your comment applies by providing the name and RIN
number associated with each rulemaking.
All comments must be submitted in English, or if not, accompanied
by an English translation. Comments will be posted as received to
https://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 (``FOIA''), a petition for confidential
treatment of the exempt information may be submitted according to the
procedures established in Sec. 145.9 of the Commission's
regulations.\1\
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\1\ 17 CFR 145.9. Commission regulations referred to herein are
found at 17 CFR chapter I.
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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 https://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: On this release, Laura B. Badian,
Assistant General Counsel, (202) 418-5969, [email protected]; Mark T.
Fajfar, Assistant General Counsel, (202) 418-6636, [email protected], in
each case at the Office of the General Counsel, Commodity Futures
Trading Commission, 1155 21st Street NW, Washington, DC 20581. On any
particular rulemaking, the Commission staff members listed in the
associated notice of proposed rulemaking.
SUPPLEMENTARY INFORMATION:
Extension of Open Comment Periods on Rulemakings and Request for
Comment
In response to the COVID-19 pandemic, the Commission has worked
closely with the industry to identify relief or other assistance that
may be needed to help ensure the industry can support orderly and
liquid markets in the face of the coronavirus. These efforts include
staff no-action relief letters that offer market participants
temporary, tailored relief to mitigate market disruptions.\2\
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\2\ See, e.g., CFTC Letter No. 20-11 (Mar. 20, 2020) (granting
temporary relief for commodity pool operators) and CFTC Letter No.
20-12 (Mar. 31, 2020) (granting temporary relief for foreign brokers
exempt pursuant to Commission Regulation 30.5 to handle U.S. futures
market orders). All CFTC staff relief granted in response to COVID-
19 is available at https://www.cftc.gov/coronavirus.
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The Commission, at its discretion, has traditionally considered
comments submitted after a comment period closes but before adoption of
a final rule or order. Nevertheless, in recognition of the challenges
that market participants and other interested members of the public may
face in commenting on proposed rulemakings as a result of the COVID-19
pandemic, the Commission is formally extending the comment period for
the rulemakings listed herein until the dates specified herein.
The Commission is continuing to monitor the impact of the COVID-19
pandemic on derivatives markets and their participants and may consider
additional comment period extensions and other relief as appropriate.
The comment periods for the following proposed rulemakings are
being extended until the date specified below:
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Original
Title of rulemaking Date proposed closing date Extended closing date for comments
for comments
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Position Limits for Derivatives......... 1/30/2020 4/29/2020 Friday, 5/15/2020.
Swap Execution Facility Requirements and 1/30/2020 4/20/2020 Friday, 5/22/2020.
Real-Time Reporting Requirements.
Certain Swap Data Repository and Data 5/13/2019 * 5/20/2020 Friday, 5/22/2020.
Reporting Requirements.
Amendments to the Real-Time Public 2/20/2020 5/20/2020 Friday, 5/22/2020.
Reporting Requirements.
Amendments to the Swap Data 2/20/2020 5/20/2020 Friday, 5/22/2020.
Recordkeeping and Reporting
Requirements.
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* Previously extended from 7/29/2019.
Issued in Washington, DC, on April 13, 2020, by the Commission.
Robert Sidman,
Deputy Secretary of the Commission.
Appendices to Extension of Currently Open Comment Periods for
Rulemakings in Response to the COVID-19 Pandemic--Commission Voting
Summary and Commissioners' Statements
Appendix 1--Commission Voting Summary
On this matter, Chairman Tarbert and Commissioners Quintenz and
Stump voted in the affirmative. Commissioners Behnam and Berkovitz
voted in the negative.
Appendix 2--Dissenting Statement of Commissioner Rostin Behnam
I strongly support extending all current open comment periods on
rule proposals, which will allow commenters to solely focus their
efforts on the immediate personal and professional needs of the day,
and ensure--after we collectively get through these uncertain
times--that commenters are able to provide the CFTC with the most
fulsome comments to these important policy proposals. Unfortunately,
today's Commission action does not extend current open comment
periods in any meaningful way, and thus I respectfully must dissent.
Five open comment periods are extended by today's action.
However, the comment periods for three of the five rules are
extended for a mere two days. That is not an extension at all.
Instead, it is essentially an announcement that the Commission will
not be extending these deadlines. For two of these rules, the
comment period opened on February 20, so the entire comment period
has essentially spanned the COVID-19 pandemic. Market participants
deserve an opportunity to comment outside of current market
conditions, and better rules would result. Importantly, the COVID-19
pandemic itself may impact views on the proposed rules, and the CFTC
should adjust comment
[[Page 22692]]
periods to allow for consideration of these evolving impacts.
Similarly, today's action extends the comment period for
position limits by a mere sixteen days. Prior position limits
proposals have garnered hundreds of public comments totaling
thousands of pages. Producing these comments presumably takes months
of work and careful thought by market participants and other
stakeholders. Extending the deadline to May 15 as market and public
health uncertainty continues is not sufficient.
I commend agency Division Directors and staff, who are
themselves adjusting in real-time to the new realities of social
distancing and teleworking, for issuing no-action relief aimed at
providing market participants and registrants with necessary
relief.\1\ These important actions have enabled market participants
and registrants to focus their efforts on business continuity,
market stability, and personnel management in these turbulent times.
I also applaud the CFTC's recent actions to issue Customer
Advisories notifying the public to be on high alert for fraudsters
that are seeking to profit from recent market volatility related to
COVID-19.\2\
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\1\ CFTC Provides Relief to Market Participants in Response to
COVID-19 (March 17, 2020), https://www.cftc.gov/PressRoom/PressReleases/8132-20; CFTC Issues Second Wave of Relief to Market
Participants in Response to COVID-19 (March 17, 2020), https://www.cftc.gov/PressRoom/PressReleases/8133-20; CFTC Issues Third Wave
of Relief to Market Participants in Response to COVID-19 (March 20,
2020), https://www.cftc.gov/PressRoom/PressReleases/8136-20; CFTC
Provides Further Relief to Market Participants in Response to COVID-
19 (March 31, 2020), https://www.cftc.gov/PressRoom/PressReleases/8142-20.
\2\ CFTC Issue Customer Advisory on COVID-19 (March 18, 2020),
https://www.cftc.gov/PressRoom/PressReleases/8134-20; CFTC Issues
Customer Advisory on Fee Scams (April 6, 2020).
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I previously stated that the CFTC should temporarily table all
non-critical policy work, shifting all our efforts and resources
towards monitoring market and institutional stability and
resiliency, prioritizing surveillance and enforcement, working with
other regulators, and exhaustively engaging with market participants
to consider necessary agency action that will alleviate market
disruptions and support stable financial markets.\3\
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\3\ Statement of Commissioner Rostin Behnam Regarding COVID-19
and CFTC Digital Assets Rulemaking (March 24, 2020). https://www.cftc.gov/PressRoom/SpeechesTestimony/behnamstatement032420.
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Although markets continue to show signs of normalcy and
stability since the most volatile days of the last two months, there
remains significant uncertainty and a steep road ahead.
Consequently, I believe comment periods should be of sufficient
length to allow market participants to focus on the current crisis,
which the public and country continue to endure. I stand ready to
work with the Chairman, my fellow Commissioners, and market
participants to reach agreement on meaningful extensions.
Appendix 3--Dissenting Statement of Commissioner Dan M. Berkovitz
I dissent from today's extensions of comment periods for several
pending proposed rulemakings because the extensions are too short.
Market participants and the public need more time to be able to
provide high-quality comments on pending CFTC rulemakings in light
of the disruptions resulting from the novel coronavirus pandemic.
Public comments serve a critical role in the Commission's
rulemaking deliberative process on regulations that will impact
market participants and safeguard derivatives markets for years to
come. Not providing the public sufficient time to obtain additional
perspective and develop meaningful comments in these extraordinary
times is bad public policy.
The Commission should afford market participants and interested
members of the public comment periods substantially longer than the
standard periods that apply absent these extraordinary
circumstances. At a minimum, the Commission should extend all
pending comment periods by 60 days. The two-week and two-day
extensions granted by the Commission today are inadequate.
The pandemic has disrupted--and destroyed--life across the
country. To date, the coronavirus has killed more than 12,800
Americans.\1\ The projected toll is expected to be much larger.\2\
Nearly 300 million Americans (over 90 percent of the population) are
under stay-at-home orders.\3\ Nearly 10 million workers have filed
jobless claims during the past two weeks.\4\ Schools are closed.
Non-essential travel is forbidden. By no means can the current
circumstances be described as--or treated as--business-as-usual.
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\1\ Worldometer, Coronavirus Cases, as of April 8, 2020,
available at https://www.worldometers.info/coronavirus/country/us/.
\2\ See generally http://www.healthdata.org/.
\3\ Philip Bump, Nearly all Americans are under stay-at-home
orders. Some may have come too late., Washington Post, Mar. 2, 2020,
available at https://www.washingtonpost.com/politics/2020/04/02/nearly-all-americans-are-under-stay-at-home-orders-some-may-have-come-too-late/.
\4\ Rebecca Rainey and Norman McCaskill, `No words for this': 10
million workers file jobless claims in just two weeks, Politico,
Apr. 2, 2020,available at https://www.politico.com/news/2020/04/02/unemployment-claims-coronavirus-pandemic-161081.
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So far, the financial markets have been resilient and have
performed their intended functions of price discovery and risk
management. Our market infrastructures--exchanges, clearinghouses,
and swap execution facilities--have met the challenges posed by
record volatility and volumes. Market participants have continued to
provide essential risk management tools to American companies to
help them maintain operations through this time of national crisis.
I commend the work done by the CFTC staff in monitoring these
markets and for taking appropriate action to ensure market
participants can continue to access the markets while observing
social distancing requirements. I also commend the Chairman and the
agency's executive leadership team for enabling all of us at the
CFTC to telework and carry out the mission of the agency from safe
locations in accordance with state and federal requirements and
guidelines.
The COVID-19 related regulatory relief granted by the CFTC over
the past few weeks is clear recognition that the pandemic has
disrupted normal operations of market participants. Many functions
cannot be performed in a timely manner due to physical displacements
and other extraordinary demands on market participants. Just three
weeks ago, on March 17, 2020, in CFTC Letter No. 20-02, CFTC staff
observed, ``[d]isruptions in transportation and limited access to
facilities and support staff as a result of the COVID-19 pandemic
could hamper efforts of market participants to meet their regulatory
obligations.'' The staff noted that no-action relief has been
requested ``where compliance is anticipated to be particularly
challenging or impossible because of displacement of firm personnel
from their normal business sites due to [social distancing] and
closures . . . .'' \5\ Subsequent staff no-action relief letters
similarly recognized the difficulties that market participants face
in complying with CFTC requirements and requests.
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\5\ CFTC Letter No. 20-02.
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To accommodate these extraordinary circumstances, the CFTC has
granted relief from a variety of CFTC recordkeeping, reporting, and
registration requirements. Specifically, the CFTC has granted relief
from requirements to: Time-stamp records; \6\ record oral
conversations; \7\ furnish Chief Compliance Officer Annual Reports
to the Commission prior to September 1, 2020; \8\ register as an
Introducing Broker (IB); \9\ submit annual compliance reports and
fourth quarter financial reports prior to September 1, 2020; \10\
comply with audit trail requirements; \11\ file Form CPO-PQR
pursuant to regulation 4.27; \12\ submit commodity pool annual
reports due on or before April 30, 2020; \13\ distribute periodic
account statements to pool participants due on or before April 30,
2020; \14\ register as an IB (for foreign brokers acting under
specified circumstances); \15\ and register as a Major Swap
Participant prior to September 30, 2020.\16\
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\6\ Id. (members of Designated Contract Markets (DCMs) and swap
execution facilities (SEFs)); CFTC Letter No. 20-03 (futures
commission merchants and IBs); CFTC Letter No. 20-04 (Floor
Brokers); CFTC Letter No. 20-05 (Retail Foreign Exchange Dealers);
CFTC Letter No. 20-06 (swap dealers).
\7\ CFTC Letter No. 20-03; CFTC Letter No. 20-04; CFTC Letter
No. 20-05; CFTC Letter No. 20-06; CFTC Letter No. 20-07 (SEFs).
\8\ CFTC Letter No. 20-03; CFTC Letter No. 20-06.
\9\ CFTC Letter No. 20-04.
\10\ CFTC Letter No. 20-08 (SEFs).
\11\ CFTC Letter No. 20-09 (DCMs, to the extent noncompliance is
caused by displacement resulting from the COVID-19 pandemic
response).
\12\ CFTC Letter No. 20-11 (relief permits Small or Mid-Sized
CPOs to file the required annual reports, and Large CPOs to file
quarterly reports for the first quarter 2020, up to 45 days later
than required by regulation).
\13\ Id.
\14\ Id.
\15\ CFTC Letter No. 20-12.
\16\ CFTC Letter No. 20-10.
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The Commission's refusal to grant meaningful rulemaking comment
period extensions stands in contrast to its swift recognition of
requests by market
[[Page 22693]]
participants for relief from the Commission's reporting and
registration regulations. It is not clear why the Commission
believes that market participants who state that it is difficult to
comply with fundamental reporting or registration requirements
nonetheless will be able to evaluate proposed rules and prepare
comments with minimal delay.
Today's extension of two weeks for the position limits
rulemaking--a rule that has been a decade in the making--is
insignificant given the scope and magnitude of the proposed changes
to the existing position limits rules. Further, the commodity
markets have experienced unprecedented price movements and stresses
over the past several weeks and commenters and the Commission would
be well-served to review and take into account how the markets
performed in this environment in fashioning and considering public
comments. There is no compelling reason to require public comments
on a position limits rule that has been ten years in the making
without fully considering how the market has performed in the recent
conditions of extreme stress.
The two extensions of two days for the swap reporting
rulemakings are not meaningful. In fact, they are almost
disrespectful to the many industry professionals that are attempting
to meet the Commission's comment deadlines under unprecedented
circumstances. Typically, comment periods are measured in days.
These extensions can be measured in hours. I doubt any market
participant will find these extensions of any benefit.
It is unreasonable to require market participants to prepare
comments on complex rulemakings at the same time they are struggling
to comply with fundamental recordkeeping, reporting, and
registration obligations. The Commission should extend these
comments periods by at least 60 days.
[FR Doc. 2020-08109 Filed 4-22-20; 8:45 am]
BILLING CODE 6351-01-P