[Federal Register Volume 85, Number 122 (Wednesday, June 24, 2020)]
[Notices]
[Pages 37880-37922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13465]


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COMMODITY FUTURES TRADING COMMISSION

RIN 3038-0023; 3038-0072


Adoption of Revised Registration Form 8-R

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice.

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SUMMARY: The Commodity Futures Trading Commission (the ``Commission'' 
or ``CFTC'') is revising its Form 8-R, the application form that 
individuals must use to register with the Commission as an associated 
person of a registrant, floor broker, or floor trader, or to be listed 
as a principal of a registrant (collectively, ``applicants''). These 
revisions, which are essentially technical and non-substantive in 
nature, have been adopted to assist the National Futures Association 
(``NFA'') in the performance of the registration functions authorized 
by the Commission, and in the implementation and operation of NFA's 
program to register and regulate directly the associated persons 
sponsored by members of NFA.

DATES: The new, revised version of Form 8-R shall come into effect (and 
the prior version shall cease to be in effect) when the NFA makes the 
new, revised version of the Form 8-R available on the NFA website for 
use by individual applicants.

FOR FURTHER INFORMATION CONTACT: Joshua Sterling, Director, (202) 418-
6700, [email protected]; Amanda Olear, Deputy Director, (202) 418-
5283, [email protected]; or Christopher Cummings, Special Counsel, (202) 
418-5445, [email protected], Division of Swap Dealer and Intermediary 
Oversight, Commodity Futures Trading Commission, 1155 21st Street NW, 
Washington, DC 20581.

SUPPLEMENTARY INFORMATION:

I. Background

    Form 8-R requests information about the applicant that can be used 
to assess the applicant's fitness to engage in business as a 
derivatives professional. Form 8-R is a Commission form administered 
and used by NFA. Individuals acting in certain capacities in the 
markets regulated by the Commission must file a completed Form 8-R with 
NFA.\1\ These applicants include: associated persons of futures 
commission merchants, retail foreign exchange dealers, introducing 
brokers, commodity trading advisors, commodity pool operators, and 
leverage transaction merchants; floor brokers; and floor traders.\2\ 
Additionally, any individual acting in the capacity as principal of a 
futures commission merchant, retail foreign exchange dealer, 
introducing broker, commodity trading advisor, commodity pool operator, 
swap dealer, major swap participant, floor trader or leverage 
transaction merchant also must file a completed Form 8-R.\3\ Lastly, 
individuals that enter orders for floor trader firms must file the Form 
8-R as well.\4\ Individual applicants have been required to use Form 8-
R since 1977.\5\
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    \1\ 17 CFR 3.10(a)(2), 3.11(a), and 3.12(c).
    \2\ 17 CFR 3.11(a); 3.12(c).
    \3\ 17 CFR 3.1(a); 3.10(a)(2); 3.11(a)(1). While ``principal'' 
is not technically a registration class and principals do not apply 
for registration, for purposes of this Notice, the Form 8-R filings 
by principals will be referred to with the other Form 8-R filings as 
``registration applications.''
    \4\ 17 CFR 3.11(a)(1).
    \5\ Revision of Registration Forms and Amendment of Related 
Rules, 42 FR 23988 (May 11, 1977) (Form 8-R replaced Forms 2-R, 4-R 
and 94).
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    NFA is currently the only registered futures association authorized 
by the Commission in accordance with Section 17 of the Commodity 
Exchange Act (``Act'').\6\ Pursuant to Section 17(o) of the Act,\7\ 
Regulation 3.2,\8\ and a series of orders, the Commission delegated to 
NFA certain registration functions including, among other things, the 
processing of all Form 8-R filings.\9\

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Since the first delegation to NFA in 1984, NFA has developed 
substantial expertise in registration matters, including reviewing and 
processing completed Forms 8-R. In 2002, with the approval of the 
Commission, NFA replaced its paper-based registration system with an 
online registration system that utilizes, among other things, an 
electronic version of Form 8-R.\10\
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    \6\ 7 U.S.C. 21 (2012).
    \7\ 7 U.S.C. 21(o) (2012).
    \8\ 17 CFR 3.2.
    \9\ See, e.g., Introducing Brokers and Associated Persons of 
Introducing Brokers; Authorization of National Futures Association 
to Perform Commission Registration Functions, 48 FR 35158 (Aug. 3, 
1983); Performance of Registration Functions by National Futures 
Association, 49 FR 39593 (Oct. 9, 1984) (futures commission 
merchants, commodity pool operators, commodity trading advisors, and 
associated persons thereof); Performance of Registration Functions 
by National Futures Association; Delegation of Authority, 51 FR 
34490 (Sept. 29, 1986) (floor brokers); Performance of Registration 
Functions by National Futures Association with Respect to Floor 
Traders and Floor Brokers, 58 FR 19657 (Apr. 15, 1993); and 
Performance of Registration Functions by National Futures 
Association with Respect to Swap Dealers and Major Swap 
Participants, 77 FR 2708 (Jan. 19, 2012).
    \10\ Registration of Intermediaries, 67 FR 38869 (June 6, 2002). 
The transition to an online registration system has permitted 
greater efficiencies, including allowing individuals to update their 
existing Forms 8-R instead of completing a separate Form 3-R. To 
that end, in 2012, the Commission eliminated the requirement that 
registrants and individuals use Form 3-R to update information in 
their existing Form 7-R or 8-R, and provided that an update to a 
registrant's online Form 7-R or 8-R would automatically create a 
record of changes equivalent to a completed Form 3-R. Registration 
of Intermediaries, 77 FR 51898 (Aug. 28, 2012); see also, 
Registration of Intermediaries, 76 FR 12888, 12891 (proposed Mar. 9, 
2011).
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II. Revisions to Commission Form 8-R

    NFA has requested that the Commission make several changes to Form 
8-R.\11\ Upon consideration, the Commission is making all of the 
changes requested by NFA and revising and updating Form 8-R 
accordingly. In addition, the Commission is updating the Form 8-R 
Privacy Act and Paperwork Reduction Act Statements. The Form 8-R 
revisions are described below.
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    \11\ Request from NFA to CFTC, dated February 14, 2020, which is 
on file with the Commission.
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    In the ``Completing the Proficiency Requirements Section'' of the 
Form 8-R, the Commission is adding a paragraph that describes the 
obligation of an individual seeking approval as a swap associated 
person or as a sole-proprietor swap firm to satisfy the Swaps 
Proficiency Requirements, and what constitutes satisfaction of those 
requirements. In the application itself, the Commission is adding a 
question that asks whether the applicant has completed the Swaps 
Proficiency Requirements within the past two years.\12\ The Commission 
is making these changes to conform Form 8-R to the Swaps Proficiency 
Requirements in NFA Bylaw 301 and Compliance Rule 2-24,\13\ recently 
implemented by NFA pursuant to CEA section 17(j).\14\ The Commission 
believes that this question is a necessary addition to the form, as 
Form 8-R is a screening instrument assessing fitness of a swaps 
associated person, so this question only effectuates this new 
requirement, ensuring that it has been met.\15\
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    \12\ The Commission acknowledges that this requirement is not 
effective until January 31, 2021, so an applicant's response, before 
that date, would not have an effect on meeting their fitness 
requirements.
    \13\ Interpretive Notice 9075-NFA Bylaw 301 and Compliance Rule 
2-24: Proficiency Requirements for Swap APs,'' effective January 31, 
2020, available at https://www.nfa.futures.org/rulebook/rules.aspx?Section=9&RuleID=9075. See generally section 17(p)(1) of 
the Act, 7 U.S.C. 21(p), which requires a futures association to 
establish training standards and proficiency testing for persons 
involved in the solicitation of swaps and their supervisors.
    \14\ CEA section 17(j) (7 U.S.C. 21(j)) permits a registered 
futures association such as NFA to make rule changes effective ten 
days after receipt by the Commission of such changes, provided the 
Commission does not notify the registered futures association within 
that ten-day period that it intends to review the changes for 
approval. The Commission did not so notify NFA in this instance.
    \15\ The Commission expects those individuals that meet this 
standard to still retain documentation of proof.
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    The revised Form 8-R also replaces the Federal Bureau of 
Investigation (``FBI'')-mandated disclosure for persons whose 
fingerprints are taken for purposes other than criminal justice with an 
updated version of that disclosure. In 2018, the FBI updated its 
Privacy Rights notice \16\ and Privacy Act disclosure; \17\ therefore, 
the Commission is making conforming changes to Form 8-R.\18\
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    \16\ See, https://www.fbi.gov/file-repository/compact-council-noncriminal-justice-applicants-privacy-rights.pdf/view.
    \17\ 5 U.S.C. 552a.
    \18\ 28 CFR 16.30-34.
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    In the ``Definition of Terms'' section, the Commission is revising 
the definition of ``adversary action'' to conform the definition to the 
way the term is used in the form's ``Disciplinary Information 
Section.'' The Commission is revising this definition to make the use 
of the term ``adversary action'' in Form 8-R internally consistent.
    Finally, the words ``entity'' and ``person'' are underlined where 
they occur in the text to indicate that they are terms that are defined 
in the ``Definition of Terms'' section.
    A revised version of Form 8-R that incorporates the changes 
discussed above is attached as Appendix A to this Notice.

III. Related Matters

    Paperwork Reduction Act. Recordkeeping or information collection 
requirements under the Paperwork Reduction Act (``PRA'') related to 
Form 8-R exist under current law. The titles for the existing 
information collections are ``Registration Under the Commodity Exchange 
Act,'' OMB control number 3038-0023, and ``Registration of Swap Dealers 
and Major Swap Participants,'' OMB control number 3038-0072. The 
preliminary view of the Commission is that the revisions to Form 8-R 
may modify the existing recordkeeping or information collection 
requirements under the PRA. To ensure compliance with the PRA, the 
Commission will publish in the Federal Register a separate notice and 
request for comment on the amended PRA burden associated with the 
revised Form 8-R.\19\ The Commission also will submit to OMB an 
information collection request to amend the information collection, in 
accordance with 44 U.S.C. 3506(c)(2)(A) and 5 CFR 1320.8(d).
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    \19\ The notice and request for comment on the amended PRA 
burden will also address reassigning from Form 3-R to Form 8-R the 
PRA burden associated with providing updated information on Form 8-
R.

    Issued by the Commission on June 18, 2020, in Washington, DC
Robert Sidman,
Deputy Secretary of the Commission.

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

Appendices to Adoption of Revised Registration Form 8-R--Form 8-R and 
Commission Voting Summary

BILLING CODE 6351-01-P

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Appendix 1--Commission Voting Summary

    On this matter, Chairman Tarbert and Commissioners Quintenz, 
Behnam, Stump, and Berkovitz voted in the affirmative. No 
Commissioner voted in the negative.

[FR Doc. 2020-13465 Filed 6-23-20; 8:45 am]
BILLING CODE 6351-01-C