[Federal Register Volume 87, Number 205 (Tuesday, October 25, 2022)]
[Notices]
[Pages 64455-64457]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-23195]


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COMMODITY FUTURES TRADING COMMISSION


Agency Information Collection Activities Under OMB Review

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice.

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SUMMARY: In compliance with the Paperwork Reduction Act of 1995 
(``PRA''), this notice announces that the Information Collection 
Request (``ICR'') abstracted below has been forwarded to the Office of 
Information and Regulatory Affairs (``OIRA'') of the Office of 
Management and Budget (``OMB'') for review and comment. The ICR 
describes the nature of the information collection and its expected 
costs and burden.

DATES: Comments must be submitted on or before November 25, 2022.

ADDRESSES: Written comments and recommendations for the proposed 
information collection should be submitted within 30 days of this 
notice's publication to OIRA, at https://www.reginfo.gov/public/do/PRAMain. Please find this particular information collection by 
selecting ``Currently under 30-day Review--Open for Public Comments'' 
or by using the website's search function. Comments can be entered 
electronically by clicking on the ``comment'' button next to the 
information collection on the ``OIRA Information Collections Under 
Review'' page, or the ``View ICR--Agency Submission'' page. A copy of 
the supporting statement for the collection of information discussed 
herein may be obtained by visiting https://www.reginfo.gov/public/do/PRAMain.
    In addition to the submission of comments to https://Reginfo.gov as 
indicated above, a copy of all comments submitted to OIRA may also be 
submitted to the Commodity Futures Trading Commission (the 
``Commission'' or ``CFTC'') by clicking on the ``Submit Comment'' box 
next to the descriptive entry for OMB Control No. 3038-0111, at https://comments.cftc.gov/FederalRegister/PublicInfo.aspx.
    Or by either of the following methods:
     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.
    All comments must be submitted in English, or if not, accompanied 
by an English translation. Comments submitted to the Commission should 
include 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 Sec.  145.9 of the 
Commission's Regulations.\1\ 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 ICR 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.
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    \1\ 17 CFR 145.9.

FOR FURTHER INFORMATION CONTACT: Dina Moussa, Attorney Advisor, Market 
Participants Division, Commodity Futures Trading Commission, (202) 418-
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5696 or [email protected], and refer to OMB Control No. 3038-0111.

SUPPLEMENTARY INFORMATION: 
    Title: Margin Requirements for Uncleared Swaps for Swap Dealers and 
Major Swap Participants--Cross-Border Application of the Margin 
Requirements (OMB Control No. 3038-0111). This is a request for an 
extension of a currently approved information collection.
    Abstract: Section 731 of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act,\2\ amended the Commodity Exchange Act 
(``CEA''), 7 U.S.C. 1 et seq., to add, as Section 4s(e) thereof, 
provisions concerning the setting of initial and variation margin 
requirements for swap dealers (``SDs'') and major swap participants 
(``MSPs'').\3\ Each SD and MSP for which there is a Prudential 
Regulator, as defined in Section 1a(39) of the CEA,\4\ must meet margin 
requirements established by the applicable Prudential Regulator, and 
each SD and MSP for which there is no Prudential Regulator (``Covered 
Swap Entities'' or ``CSEs'') must comply with the Commission's 
Regulations governing margin on all swaps that are not centrally 
cleared.
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    \2\ Public Law 111-023, 124 Stat. 1376 (2010).
    \3\ 7 U.S.C. 6s(e).
    \4\ 7 U.S.C. 1a(39).
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    With regard to the cross-border application of the Commission's 
margin rules, Section 2(i) \5\ of the CEA provides the Commission with 
express authority over activities outside the United States relating to 
swaps when certain conditions are met. Section 2(i) of the CEA provides 
that the provisions of the CEA relating to swaps that were enacted by 
the Wall Street Transparency and Accountability Act of 2010 (including 
any rule prescribed or regulation promulgated under that Act), shall 
not apply to activities outside the United States unless those 
activities (1) have a direct and significant connection with activities 
in, or effect on, commerce of the United States or (2) contravene such 
rules or regulations as the Commission may prescribe or promulgate as 
are necessary or appropriate to prevent the evasion of any provision of 
the CEA that was enacted by the Wall Street Transparency and 
Accountability Act of 2010.
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    \5\ 7 U.S.C. 2(i).
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    On May 31, 2016, the Commission published the Commission's Margin 
Requirements for Uncleared Swaps for Swap Dealers and Major Swap 
Participants--Cross-Border Application of the Margin Requirements 
(``Final Rule'') addressing the cross-border application of its margin 
requirements for uncleared swaps applicable to CSEs.\6\ The Final Rule 
contains a collection of information under Commission Regulation 
23.160(c) regarding requests for comparability determinations, and 
information collections regarding non-netting jurisdictions,\7\ and 
non-segregation jurisdictions.\8\
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    \6\ 81 FR 34818 (May 31, 2016).
    \7\ As used in the adopting release, a ``non-netting 
jurisdiction'' is a jurisdiction in which a CSE cannot conclude, 
with a well-founded basis, that the netting agreement with a 
counterparty in that foreign jurisdiction meets the definition of an 
``eligible master netting agreement'' set forth in Commission 
Regulation 23.151, and as described in Section II.B.5.b of the 
adopting release.
    \8\ As used in the adopting release, a ``non-segregation 
jurisdiction'' is a jurisdiction where inherent limitations in the 
legal or operational infrastructure of the foreign jurisdiction make 
it impracticable for the CSE and its counterparty to post initial 
margin pursuant to custodial arrangements that comply with the 
Commission's margin rules, as further described in Section II.B.4.b 
of the adopting release.

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[[Page 64456]]

    Under Commission Regulation 23.160(c)(1), a CSE that is eligible 
for substituted compliance or a foreign regulatory agency that has 
direct supervisory authority over one or more CSEs and that is 
responsible for administering the relevant foreign jurisdiction's 
margin requirements may request, individually or collectively, that the 
Commission make a determination that a CSE that complies with margin 
requirements in the relevant foreign jurisdiction would be deemed to be 
in compliance with the Commission's corresponding margin rule (a 
``comparability determination''). Once a comparability determination is 
made for a jurisdiction, it applies for all entities or transactions in 
that jurisdiction to the extent provided in the comparability 
determination, as approved by the Commission and subject to any 
conditions specified by the Commission. All CSEs, regardless of whether 
they rely on a comparability determination, remain subject to the 
Commission's examination and enforcement authority.
    Commission Regulation 23.160(c)(2) requires that applicants for a 
comparability determination provide copies of the relevant foreign 
jurisdiction's margin requirements and descriptions of their 
objectives, how they differ from the margin policy framework for non-
cleared, bilateral derivatives set forth by the Basel Committee on 
Banking Supervision and the International Organization of Securities 
Commissions, and how they address the elements of the Commission's 
margin requirements. The applicant must identify the specific legal and 
regulatory provisions of the foreign jurisdiction's margin requirements 
that correspond to each element and, if necessary, whether the relevant 
foreign jurisdiction's margin requirements do not address a particular 
element.
    Commission Regulation 23.160(d) includes a special provision for 
non-netting jurisdictions. This provision allows CSEs that cannot 
conclude after sufficient legal review with a well-founded basis that 
the netting agreement with a counterparty in a foreign jurisdiction 
meets the definition of an ``eligible master netting agreement'' set 
forth in Commission Regulation 23.151 to nevertheless net uncleared 
swaps in determining the amount of margin that they post, provided that 
certain conditions are met. In order to avail itself of this special 
provision, a CSE must treat the uncleared swaps covered by the 
agreement on a gross basis in determining the amount of initial and 
variation margin that it must collect, but may net those uncleared 
swaps in determining the amount of initial and variation margin it must 
post to the counterparty, in accordance with the netting provisions of 
Commission Regulations 23.152(c) and 23.153(d). A CSE that enters into 
uncleared swaps in ``non-netting'' jurisdictions in reliance on this 
provision must have policies and procedures ensuring that it complies 
with the special provision's requirements, and maintain books and 
records properly documenting that all of the requirements of this 
exception are satisfied.
    Commission Regulation 23.160(e) includes a special provision for 
non-segregation jurisdictions that allows non-U.S. CSEs that are 
Foreign Consolidated Subsidiaries (``FCS'') (as defined in Commission 
Regulation 23.160(a)(1)) and foreign branches of U.S. CSEs to engage in 
swaps in foreign jurisdictions where inherent limitations in the legal 
or operational infrastructure make it impracticable for the CSE and its 
counterparty to post collateral in compliance with the custodial 
arrangement requirements of the Commission's margin rules, subject to 
certain conditions. In order to rely on this special provision, a FCS 
or foreign branch of a U.S. CSE is required to satisfy all of the 
conditions of the rule, including that (1) inherent limitations in the 
legal or operational infrastructure of the foreign jurisdiction make it 
impracticable for the CSE and its counterparty to post any form of 
eligible initial margin collateral for the uncleared swap pursuant to 
custodial arrangements that comply with the Commission's margin rules; 
(2) foreign regulatory restrictions require the CSE to transact in 
uncleared swaps with the counterparty through an establishment within 
the foreign jurisdiction and do not permit the posting of collateral 
for the swap in compliance with the custodial arrangements of 
Commission Regulation 23.157 in the United States or a jurisdiction for 
which the Commission has issued a comparability determination under 
Commission Regulation 23.160(c) with respect to Commission Regulation 
23.157; (3) the CSE's counterparty is not a U.S. person and is not a 
CSE, and the counterparty's obligations under the uncleared swap are 
not guaranteed by a U.S. person; (4) the CSE collects initial margin in 
cash on a gross basis, and posts and collects variation margin in cash, 
for the uncleared swap in accordance with specific requirements; (5) 
for each broad risk category, as set out in Commission Regulation 
23.154(b)(2)(v), the total outstanding notional value of all uncleared 
swaps in that broad risk category, as to which the CSE is relying on 
Commission Regulation 23.160(e), may not exceed 5 percent of the CSE's 
total outstanding notional value for all uncleared swaps in the same 
broad risk category; (6) the CSE has policies and procedures ensuring 
that it is in compliance with the requirements of this provision; and 
(7) the CSE maintains books and records properly documenting that all 
of the requirements of this provision are satisfied.
    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. On August 5, 2022, the Commission 
published in the Federal Register notice of the proposed extension of 
this information collection and provided 60 days for public comment on 
the proposed renewal, 87 FR 48001 (``60-Day Notice''). The Commission 
received no relevant comments on the 60-Day Notice.\9\
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    \9\ The Commission received one comment from William J. 
Harrington on October 4, 2022. See Comment of William J. Harrington 
(Oct. 4, 2022). The comment is not relevant to the Commission's 
Paperwork Reduction Act analysis, including its cost and hour burden 
estimates, but instead advocates for an unrelated change to the 
Commission Regulations referenced above.
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     Burden Statement--Information Collection for Comparability 
Determinations:
    The Commission estimates that approximately 53 CSEs may request a 
comparability determination pursuant to Commission Regulation 
23.160(c).\10\ The Commission notes that any foreign regulatory agency 
that has direct supervisory authority over one or more CSEs and that is 
responsible for administering the relevant foreign jurisdiction's 
margin requirements may also apply for a comparability determination. 
However, once a comparability determination is made for a jurisdiction, 
it will apply for all entities or transactions in that jurisdiction to 
the extent provided in the determination, as approved by the 
Commission. To date, the Commission

[[Page 64457]]

has issued a comparability determination for 3 jurisdictions.\11\ 
Accordingly, the Commission estimates that it will receive requests 
from the 13 remaining jurisdictions within the G20,\12\ in addition to 
Switzerland. The number of burden hours associated with such requests 
is estimated to be 40 hours. Accordingly, the respondent burden for 
this collection is estimated to be as follows:
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    \10\ Currently, there are approximately 108 swap entities 
provisionally registered with the Commission. The Commission 
estimates that of the approximately 108 swap entities that are 
provisionally registered, approximately 53 are CSEs for which there 
is no Prudential Regulator, and are therefore subject to the 
Commission's margin rules.
    \11\ See Comparability Determination for Japan: Margin 
Requirements for Uncleared Swaps for Swap Dealers and Major Swap 
Participants, 81 FR 63376 (Sep. 15, 2016); Comparability 
Determination for the European Union: Margin Requirements for 
Uncleared Swaps for Swap Dealers and Major Swap Participants, 82 FR 
48394 (Oct. 18, 2017); and Comparability Determination for 
Australia: Margin Requirements for Uncleared Swaps for Swap Dealers 
and Major Swap Participants, 84 FR 12908 (Apr. 3, 2019). The 
Commission subsequently amended its comparability determination for 
Japan. See Amendment to Comparability Determination for Japan: 
Margin Requirements for Uncleared Swaps for Swap Dealers and Major 
Swap Participants, 84 FR 12074 (Apr. 1, 2019).
    \12\ The Group of 20 (``G20'') is comprised of foreign leaders 
and central bank managers from the top 19 countries with the largest 
economies along with the European Union.
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    Estimated Number of Respondents: 14.
    Estimated Average Burden Hours per Respondent: 40.
    Estimated Total Annual Burden Hours: 560.
    Frequency of Collection: Once.
    There are no capital costs or operating and maintenance costs 
associated with this collection.
     Burden Statement--Information Collection for Non-Netting 
Jurisdictions:
    The Commission is revising its estimate of the burden for this 
collection to reflect the current number of registrants subject to the 
Commission's margin requirements for uncleared swaps. Specifically, the 
Commission estimates that approximately 53 CSEs may rely on Commission 
Regulation 23.160(d).\13\ Furthermore, the Commission estimates that 
these CSEs would incur an average of 10 annual burden hours to maintain 
books and records properly documenting that all of the requirements of 
this exception are satisfied (including policies and procedures 
ensuring compliance). Accordingly, the respondent burden for this 
collection is estimated to be as follows:
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    \13\ See n.9, supra. Because all of these CSEs are eligible to 
use the special provision for non-netting jurisdictions, the 
Commission estimates that 53 CSEs may rely on Commission Regulation 
23.160(d).
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    Estimated Number of Respondents: 53.
    Estimated Average Burden Hours per Respondent: 10.
    Estimated Total Annual Burden Hours: 530.
    Frequency of Collection: Once; As needed.
    There are no capital costs or operating and maintenance costs 
associated with this collection.
     Burden Statement--Information Collection for Non-
Segregation Jurisdictions:
    The Commission estimates that there are eight jurisdictions for 
which the first two conditions specified above for non-segregation 
jurisdictions are satisfied and where FCSs and foreign branches of U.S. 
CSEs that are subject to the Commission's margin rules may engage in 
swaps. The Commission estimates that approximately 12 FCSs or foreign 
branches of U.S. CSEs may rely on Commission Regulation 23.160(e) in 
some or all of these jurisdictions. The Commission estimates that each 
FCS or foreign branch of a U.S. CSE relying on this provision would 
incur an average of 20 annual burden hours to maintain books and 
records properly documenting that all of the requirements of this 
provision are satisfied (including policies and procedures for ensuring 
compliance) with respect to each jurisdiction as to which they rely on 
the special provision. Thus, based on the estimate of eight non-
segregation jurisdictions, the Commission estimates that each of the 
approximately 12 FCSs and foreign branches of U.S. CSEs that may rely 
on this provision will incur an estimated 160 average burden hours per 
year (i.e., 20 average burden hours per jurisdiction multiplied by 8). 
Accordingly, the respondent burden for this collection is estimated to 
be as follows:
    Estimated Number of Respondents: 12.
    Estimated Average Burden Hours per Respondent: 160.
    Estimated Total Annual Burden Hours: 1,920.
    Frequency of Collection: Once; 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: October 20, 2022.
Robert Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2022-23195 Filed 10-24-22; 8:45 am]
BILLING CODE 6351-01-P