[Federal Register Volume 79, Number 49 (Thursday, March 13, 2014)]
[Rules and Regulations]
[Pages 14174-14175]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-05465]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 30

RIN 3038-AD88


Enhancing Protections Afforded Customers and Customer Funds Held 
by Futures Commission Merchants and Derivatives Clearing Organizations; 
Correction

AGENCY: Commodity Futures Trading Commission.

ACTION: Correcting amendments.

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SUMMARY: The Commodity Futures Trading Commission (CFTC) is correcting 
final rules published in the Federal Register of November 14, 2013 (78 
FR 68506). Those rules, 17 CFR Parts 1, 3, 22, 30, and 140, took effect 
on January 13, 2014. This correction amends Appendix E to Part 30 
correcting a typographical error contained in that appendix.

DATES: Effective on March 13, 2014.

FOR FURTHER INFORMATION CONTACT: Thomas Smith, Deputy Director, 202-
418-5495, tsmith@cftc.gov, or Mark Bretscher, Attorney-Advisor, 312-
596-0529, mbretscher@cftc.gov, Division of Swap Dealer and Intermediary 
Oversight, Commodity Futures Trading Commission, Three Lafayette 
Centre, 1155 21st Street NW., Washington, DC 20581.

SUPPLEMENTARY INFORMATION: In the Federal Register of November 14, 2013 
(78 FR 68506), the CFTC published final rules adopting new regulations 
and amending existing regulations to require enhanced customer 
protections, risk management programs, internal monitoring and 
controls, capital and liquidity standards, customer disclosures, and 
auditing and examination programs for futures commission merchants. 
Those rules include Appendix E to Part 30--Acknowledgement Letter for 
CFTC Regulation 30.7 Customer Secured Account (``acknowledgment 
letter''). The third sentence of the second full paragraph of the body 
of the Appendix E acknowledgement letter contains a typographical 
error. Specifically, the phrase ``lines or credit'' should read ``lines 
of credit''. The Commission is making a correcting amendment to 
Appendix E to Part 30 to correct that error.

List of Subjects in 17 CFR Part 30

    Commodity futures, Consumer protection, Currency, Reporting and 
recordkeeping requirements.

    Accordingly, 17 CFR part 30 is corrected by making the following 
correcting amendment:

PART 30--FOREIGN FUTURES AND FOREIGN OPTIONS TRANSACTIONS

0
1. The authority citation for part 30 continues to read as follows:

    Authority: 7 U.S.C. 1a, 2, 6, 6c, and 12a, unless otherwise 
noted.


0
2. Revise Appendix E to part 30 to read as follows:

Appendix E to Part 30--Acknowledgment Letter for CFTC Regulation 30.7 
Customer Secured Account

    [Date]

[Name and Address of Depository]

    We refer to the Secured Amount Account(s) which [Name of Futures 
Commission Merchant] (``we'' or ``our'') have opened or will open 
with [Name of Depository] (``you'' or ``your'') entitled:
    [Name of Futures Commission Merchant] [if applicable, add ``FCM 
Customer Omnibus Account''] CFTC Regulation 30.7 Customer Secured 
Account under Section 4(b) of the Commodity Exchange Act [and, if 
applicable, ``, Abbreviated as [short title reflected in the 
depository's electronic system]'']
    Account Number(s): [ ] (collectively, the ``Account(s)'').
    You acknowledge that we have opened or will open the above-
referenced Account(s) for the purpose of depositing, as applicable, 
money, securities and other property (collectively ``Funds'') of 
customers who trade foreign futures and/or foreign options (as such 
terms are defined in U.S. Commodity Futures Trading Commission 
(``CFTC'') Regulation 30.1, as amended); that the Funds held by you, 
hereafter deposited in the Account(s) or accruing to the credit of 
the Account(s), will be kept separate and apart and separately 
accounted for on your books from our own funds and from any other 
funds or accounts held by us, in accordance with the provisions of 
the Commodity Exchange Act, as amended (the ``Act''), and Part 30 of 
the CFTC's regulations, as amended; that the Funds may not be 
commingled with our own funds in any proprietary account we maintain 
with you; and that the Funds must otherwise be treated in accordance 
with the provisions of Section 4(b) of the Act and CFTC Regulation 
30.7.
    Furthermore, you acknowledge and agree that such Funds may not 
be used by you or by us to secure or guarantee any obligations that 
we might owe to you, and they may not be used by us to secure or 
obtain credit from you. You further acknowledge and agree that the 
Funds in the Account(s) shall not be subject to any right of offset 
or lien for or on account of any indebtedness, obligations or 
liabilities we may now or in the future have owing to you. This 
prohibition does not affect your right to recover funds advanced in 
the form of cash transfers, lines of credit, repurchase agreements 
or other similar liquidity arrangements you make in lieu of 
liquidating non-cash assets held in the Account(s) or in lieu of 
converting cash held in the Account(s) to cash in a different 
currency.
    In addition, you agree that the Account(s) may be examined at 
any reasonable time by the director of the Division of Swap Dealer 
and Intermediary Oversight of the CFTC or the director of the 
Division of Clearing and Risk of the CFTC, or any successor 
divisions, or such directors' designees, or an appropriate officer, 
agent or employee of our designated self-regulatory organization 
(``DSRO''), [Name of DSRO], and this letter constitutes the 
authorization and direction of the undersigned on our behalf to 
permit any such examination to take place without further notice or 
consent from us.
    You agree to reply promptly and directly to any request for 
confirmation of account balances or provision of any other 
information regarding or related to the Account(s) from the director 
of the Division of Swap Dealer and Intermediary Oversight of the 
CFTC or the director of the Division of Clearing and Risk of the 
CFTC, or any successor divisions, or such directors' designees, or 
an appropriate officer, agent, or employee of [Name of DSRO], acting 
in its capacity as our DSRO, and this letter constitutes the 
authorization and direction of the undersigned on our behalf to 
release the requested information without further notice to or 
consent from us.
    You further acknowledge and agree that, pursuant to 
authorization granted by us to you previously or herein, you have 
provided, or will promptly provide following the opening of the 
Account(s), the director of the Division of Swap Dealer and 
Intermediary Oversight of the CFTC, or any successor division, or 
such director's designees, with technological connectivity, which 
may include provision of hardware, software, and related technology 
and protocol support, to facilitate direct, read-only electronic 
access to transaction and account balance information for the 
Account(s). This letter constitutes the authorization and direction 
of the undersigned on our behalf for you to establish this 
connectivity and access if not previously established, without 
further notice to or consent from us.
    The parties agree that all actions on your part to respond to 
the above information and access requests will be made in accordance 
with, and subject to, such usual and customary authorization 
verification and authentication policies and procedures as may be 
employed by you to verify the authority of, and authenticate the 
identity of, the individual making any such information or access 
request, in order to provide for the secure transmission and 
delivery of the

[[Page 14175]]

requested information or access to the appropriate recipient(s).
    We will not hold you responsible for acting pursuant to any 
information or access request from the director of the Division of 
Swap Dealer and Intermediary Oversight of the CFTC or the director 
of the Division of Clearing and Risk of the CFTC, or any successor 
divisions, or such directors' designees, or an appropriate officer, 
agent, or employee of [Name of DSRO], acting in its capacity as our 
DSRO, upon which you have relied after having taken measures in 
accordance with your applicable policies and procedures to assure 
that such request was provided to you by an individual authorized to 
make such a request.
    In the event we become subject to either a voluntary or 
involuntary petition for relief under the U.S. Bankruptcy Code, we 
acknowledge that you will have no obligation to release the Funds 
held in the Account(s), except upon instruction of the Trustee in 
Bankruptcy or pursuant to the Order of the respective U.S. 
Bankruptcy Court.
    Notwithstanding anything in the foregoing to the contrary, 
nothing contained herein shall be construed as limiting your right 
to assert any right of offset or lien on assets that are not 30.7 
customer funds maintained in the Account(s), or to impose such 
charges against us or any proprietary account maintained by us with 
you. Further, it is understood that amounts represented by checks, 
drafts or other items shall not be considered to be part of the 
Account(s) until finally collected. Accordingly, checks, drafts and 
other items credited to the Account(s) and subsequently dishonored 
or otherwise returned to you or reversed, for any reason, and any 
claims relating thereto, including but not limited to claims of 
alteration or forgery, may be charged back to the Account(s), and we 
shall be responsible to you as a general endorser of all such items 
whether or not actually so endorsed.
    You may conclusively presume that any withdrawal from the 
Account(s) and the balances maintained therein are in conformity 
with the Act and CFTC regulations without any further inquiry, 
provided that, in the ordinary course of your business as a 
depository, you have no notice of or actual knowledge of a potential 
violation by us of any provision of the Act or Part 30 of the CFTC 
regulations that relates to the holding of customer funds; and you 
shall not in any manner not expressly agreed to herein be 
responsible to us for ensuring compliance by us with such provisions 
of the Act and CFTC regulations; however, the aforementioned 
presumption does not affect any obligation you may otherwise have 
under the Act or CFTC regulations.
    You may, and are hereby authorized to, obey the order, judgment, 
decree or levy of any court of competent jurisdiction or any 
governmental agency with jurisdiction, which order, judgment, decree 
or levy relates in whole or in part to the Account(s). In any event, 
you shall not be liable by reason of any action or omission to act 
pursuant to any such order, judgment, decree or levy, to us or to 
any other person, firm, association or corporation even if 
thereafter any such order, decree, judgment or levy shall be 
reversed, modified, set aside or vacated.
    The terms of this letter agreement shall remain binding upon the 
parties, their successors and assigns and, for the avoidance of 
doubt, regardless of a change in the name of either party. This 
letter agreement supersedes and replaces any prior agreement between 
the parties in connection with the Account(s), including but not 
limited to any prior acknowledgment letter agreement, to the extent 
that such prior agreement is inconsistent with the terms hereof. In 
the event of any conflict between this letter agreement and any 
other agreement between the parties in connection with the 
Account(s), this letter agreement shall govern with respect to 
matters specific to Section 4(b) of the Act and the CFTC's 
regulations thereunder, as amended.
    This letter agreement shall be governed by and construed in 
accordance with the laws of [Insert governing law] without regard to 
the principles of choice of law.
    Please acknowledge that you agree to abide by the requirements 
and conditions set forth above by signing and returning to us the 
enclosed copy of this letter agreement, and that you further agree 
to provide a copy of this fully executed letter agreement directly 
to the CFTC (via electronic means in a format and manner determined 
by the CFTC) and to [Name of DSRO], acting in its capacity as our 
DSRO. We hereby authorize and direct you to provide such copies 
without further notice to or consent from us, no later than three 
business days after opening the Account(s) or revising this letter 
agreement, as applicable.

[Name of Futures Commission Merchant]

By:

Print Name:

Title:

ACKNOWLEDGED AND AGREED:

[Name of Depository]

By:

Print Name:

Title:

Contact Information: [Insert phone number and email address]

DATE:

    Issued in Washington, DC, on March 7, 2014, by the Commission.
Christopher J. Kirkpatrick,
Deputy Secretary of the Commission.
[FR Doc. 2014-05465 Filed 3-12-14; 8:45 am]
BILLING CODE 6351-01-P