[Federal Register Volume 85, Number 159 (Monday, August 17, 2020)]
[Notices]
[Pages 50013-50014]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17896]


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COMMODITY FUTURES TRADING COMMISSION


Agency Information Collection Activities: Notice of Intent To 
Renew Collection 3038-0092, Customer Clearing Documentation and Timing 
of Acceptance for Clearing

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'' or 
``CFTC'') is announcing an opportunity for public comment on the 
extension of the collection of certain information by the agency. Under 
the Paperwork Reduction Act (``PRA''), Federal agencies are required to 
publish notice in the Federal Register concerning each proposed 
collection of information, including each proposed extension of an 
existing collection of information, and to allow 60 days for public 
comment. This notice solicits comments on the obligation to maintain 
records related to clearing documentation between the customer and the 
customer's clearing member.

DATES: Comments must be submitted on or before October 16, 2020.

ADDRESSES: You may submit comments, identified by OMB Control No. 3038-
0092 by any of the following methods:
     The Agency's website, at http://comments.cftc.gov/. Follow 
the instructions for submitting comments through the website.
     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.
    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: Megan Wallace, Senior Special Counsel, 
Division of Clearing and Risk, Commodity Futures Trading Commission, 
(202) 418-5150; email: [email protected].

SUPPLEMENTARY INFORMATION: Under the PRA, 44 U.S.C. 3501 et seq., 
Federal agencies must obtain approval from the Office of Management and 
Budget (``OMB'') for each collection of information they conduct or 
sponsor. ``Collection of Information'' is defined in 44 U.S.C. 3502(3) 
and 5 CFR 1320.3 and includes agency requests or requirements that 
members of the public submit reports, keep records, or provide 
information to a third party. 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, including each proposed extension of an existing 
collection of information, before submitting the collection to OMB for 
approval. To comply with this requirement, the Commission is publishing 
notice of the proposed extension of the collection of information 
listed below. An 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 OMB control number.
    Title: Customer Clearing Documentation and Timing of Acceptance for 
Clearing (OMB Control No. 3038-0092). This is a request for extension 
and revision of a currently approved information collection.
    Abstract: Section 4d(c) of the Commodity Exchange Act (``CEA''), as 
amended by the Dodd-Frank Wall Street Reform and Consumer Protection 
Act (``Dodd-Frank Act''), directs the Commission to require futures 
commission merchants (``FCMs'') to implement conflict of interest 
procedures that address such issues the Commission determines to be 
appropriate. Similarly, section 4s(j)(5) of the CEA, as added by the 
Dodd-Frank Act, requires swap dealers (``SDs) and major swap 
participants (``MSPs'') to

[[Page 50014]]

implement conflict of interest procedures that address such issues the 
Commission determines to be appropriate. Section 4s(j)(5) also requires 
SDs and MSPs to ensure that any persons providing clearing activities 
or making determinations as to accepting clearing customers are 
separated by appropriate informational partitions from persons whose 
involvement in pricing, trading, or clearing activities might bias 
their judgment or contravene the core principle of open access. Section 
4s(j)(6) of the CEA prohibits a SD or MSP from adopting any process or 
taking any action that results in any unreasonable restraint on trade 
or imposes any material anticompetitive burden on trading or clearing, 
unless necessary or appropriate to achieve the purposes of the Act. 
Section 2(h)(1)(B)(ii) of the CEA requires that derivatives clearing 
organization (``DCOs) rules provide for the nondiscriminatory clearing 
of swaps executed bilaterally or through an unaffiliated designated 
contract market or swap execution facility.
    To address these provisions, the Commission promulgated regulations 
that prohibit arrangements involving FCMs, SDs, MSPs, and DCOs that 
would (a) disclose to an FCM, SD, or MSP the identity of a customer's 
original executing counterparty (Sec. Sec.  1.72(a), 23.608(a), and 
39.12(a)(1)(vi)); (b) limit the number of counterparties with whom a 
customer may enter into a trade (Sec. Sec.  1.72(b), 23.608(b), and 
39.12(a)(1)(vi)); (c) restrict the size of the position a customer may 
take with any individual counterparty, apart from an overall credit 
limit for all positions held by the customer at the FCM (Sec. Sec.  
1.72(c), 23.608(c), and 39.12(a)(1)(vi)); (d) impair a customer's 
access to execution of a trade on terms that have a reasonable 
relationship to the best terms available (Sec. Sec.  1.72(d), 
23.608(d), and 39.12(a)(1)(vi)); or (e) prevent compliance with 
specified time frames for acceptance of trades into clearing set forth 
in 1.74(b), 23.610(b), or 39.12(b)(7) (Sec. Sec.  1.72(e), 23.608(e), 
and 39.12(a)(1)(vi)). Additionally, the Commission requires, through 
regulation 39.12(b)(7)(i)(B), DCOs to coordinate with clearing members 
to establish prompt processing of trades. Regulations 1.74(a) and 
23.610(a) require reciprocal coordination by FCMs, SDs, and MSPs that 
are clearing members.
    Under the above regulations, SDs, MSPs, FCMs, and DCOs are required 
to develop and maintain written customer clearing documentation and 
trade processing procedures. Maintenance of contracts, policies, and 
procedures is prudent business practice. All SDs, MSPs, FCMs, and DCOs 
maintain documentation consistent with these regulations. The 
regulations are crucial both for effective risk management and for the 
efficient operation of trading venues among SDs, MSPs, FCMs, and DCOs. 
Each of these entities has a general recordkeeping obligation for these 
requirements under the Commission's regulations (Sec.  39.20 for DCOs; 
Sec.  23.606 for SDs and MSPs; and Sec.  1.73 for FCMs).
    As discussed further below, the information collection burden 
arising from the regulations primarily is restricted to the costs 
associated with the affected registrants' obligation to maintain 
records related to clearing documentation between the customer and the 
customer's clearing member, and trade processing procedures between 
DCOs and FCMs, SDs, and MSPs. The information collection obligations 
are necessary to implement certain provisions of the CEA, including 
ensuring that registrants exercise effective risk management and for 
the efficient operation of trading venues among swap dealers, major 
swap participants, futures commission merchants, and derivatives 
clearing organizations.
    With respect to the collection of information, the CFTC invites 
comments on:
     Whether the proposed 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 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.
    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 section 145.9 of 
the Commission's regulations.\1\
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    \1\ 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: The Commission is revising its estimate of the 
burden for this collection, which include 107 Swap Dealers, Major Swap 
Participants, 61 Futures Commission Merchants, and 15 Derivatives 
Clearing Organizations. The respondent burden for this collection is 
estimated to be as follows:
    Respondents/Affected Entities: 183.
    Estimated Average Burden Hours per Respondent: 40.
    Estimated Total Annual Burden Hours: 7,320.
    Frequency of collection: Daily, annual, and as needed.
    There are no capital costs or operating and maintenance costs 
associated with this collection.

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

    Dated: August 11, 2020.
Robert Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2020-17896 Filed 8-14-20; 8:45 am]
BILLING CODE 6351-01-P