[Federal Register Volume 81, Number 156 (Friday, August 12, 2016)]
[Proposed Rules]
[Pages 53343-53348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19231]
=======================================================================
-----------------------------------------------------------------------
COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 3
RIN 3038-AE49
Chief Compliance Officer Annual Report Requirements for Futures
Commission Merchants, Swap Dealers, and Major Swap Participants;
Amendments to Filing Dates
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Commodity Futures Trading Commission (``Commission'' or
``CFTC'') is proposing to amend certain provisions of its regulations
concerning Chief Compliance Officers (``Proposal''). The regulation
that is the subject of the Proposal addresses chief compliance officers
(``CCOs'') of futures commission merchants (``FCMs''), swap dealers
(``SDs''), and major swap participants (``MSPs'') (collectively,
``Registrants''). The proposed amendments would: Codify existing no-
action relief regarding the timing of when a Registrant must furnish
its CCO annual report to the Commission; clarify filing requirements
for Registrants located in a jurisdiction for which the Commission has
issued a comparability determination; and delegate to the Director of
the Division of Swap Dealer and Intermediary Oversight (``DSIO'')
authority to grant extensions to the CCO annual report filing deadline.
DATES: Comments must be received on or before September 12, 2016.
ADDRESSES: You may submit comments, identified by RIN 3038-AE49, by any
of the following methods:
CFTC Web site: http://comments.cftc.gov. Follow the
instructions for submitting comments through the Comments Online
process on the Web site.
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.
[[Page 53344]]
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Please submit your comments using only one of these methods.
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. You should submit only information that you wish
to make available publicly. If you wish the Commission to consider
information that is exempt from disclosure under the Freedom of
Information Act (``FOIA''),\1\ a petition for confidential treatment of
the exempt information may be submitted according to the procedures set
forth in Sec. 145.9 of the Commission's regulations.\2\
---------------------------------------------------------------------------
\1\ 5 U.S.C. 552.
\2\ 17 CFR 145.9. The Commission's regulations are found at 17
CFR Chapter I and can be accessed through the Commission's Web site
at www.cftc.gov.
_____________________________________-
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 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: Eileen Flaherty, Director, 202-418-
5326, [email protected]; Erik Remmler, Deputy Director, 202-418-7630,
[email protected]; Laura Gardy, Associate Director, 202-418-7645,
[email protected]; or Pamela M. Geraghty, Special Counsel, 202-418-5634,
[email protected], Division of Swap Dealer and Intermediary Oversight,
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st
Street NW., Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
I. Background
A. Commission Requirements for Submission of CCO Annual Reports
Section 4s(k)(3) of the Commodity Exchange Act (``CEA'') requires
CCOs for SDs and MSPs, in accordance with rules prescribed by the
Commission, to prepare and sign an annual report (``CCO Annual
Report'') describing, among other things, the SD's or MSP's compliance
with the CEA and CFTC regulations.\3\ CEA section 4s(k)(3)(B) requires
the CCO Annual Report to accompany each appropriate financial report of
the SD or MSP required to be furnished to the Commission.\4\ CEA
section 4d(d) requires CCOs of FCMs to ``perform such duties and
responsibilities'' as are established by Commission regulation or rules
of a registered futures association.\5\
---------------------------------------------------------------------------
\3\ 7 U.S.C. 6s(k)(3)(A)(i). The CEA can be accessed through the
Commission's Web site.
\4\ 7 U.S.C. 6s(k)(3)(B)(i).
\5\ 7 U.S.C. 6d(d).
---------------------------------------------------------------------------
Regulations 3.3(e) and (f) codify the duty to prepare and furnish
to the Commission a CCO Annual Report for all Registrants.\6\
Regulation 3.3(e) requires the CCO Annual Report to cover the most
recently completed fiscal year of the Registrant and specifies certain
reporting elements for Registrants in describing their compliance with
the CEA and Commission regulations. Regulation 3.3(f)(1) requires the
furnishing of the CCO Annual Report to the board or senior officer
prior to its submission to the Commission. Regulation 3.3(f)(2)
currently requires the CCO Annual Report to be furnished to the
Commission electronically not more than 60 days after a Registrant's
fiscal year-end.
---------------------------------------------------------------------------
\6\ 17 CFR 3.3(e) and (f).
---------------------------------------------------------------------------
B. Regulation 3.3(f)(2) Implementation Experience
Since the adoption of the 60-day filing requirement, DSIO has
continuously provided no-action relief for CCO Annual Reports submitted
to the Commission within 90 days of a Registrant's fiscal year-end.\7\
The no-action letter currently in effect, CFTC Staff Letter No. 15-15,
responds to a request for relief on behalf of FCM and SD firms, which
stated that having an additional 30 days to file the CCO Annual Report
allows each Registrant to conduct a more substantive and complete
review of its compliance program.\8\
---------------------------------------------------------------------------
\7\ See CFTC Letter No. 13-84, Time-Limited No-Action Relief for
Futures Commission Merchants, Swap Dealers, and Major Swap
Participants from Compliance with the Timing Requirements of
Commission Regulation 3.3(f)(2) Relating to Annual Reports by Chief
Compliance Officers (Dec. 30, 2013), available at: http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/13-84.pdf; CFTC Letter No. 14-154, Time-Limited No-Action Relief for
Futures Commission Merchants, Swap Dealers, and Major Swap
Participants from Compliance with the Timing Requirements of
Commission Regulation 3.3(f)(2) Relating to Annual Reports by Chief
Compliance Officers (Dec. 22, 2014), available at: http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/14-154.pdf; and CFTC Letter No. 15-15, No-Action Relief for Futures
Commission Merchants, Swap Dealers, and Major Swap Participants from
Compliance with the Timing Requirements of Commission Regulation
3.3(f)(2) Relating to Annual Reports by Chief Compliance Officers
(Mar. 27, 2015), available at: http://www.cftc.gov/idc/groups/public/@lrlettergeneral/documents/letter/15-15.pdf (``CFTC Staff
Letter No. 15-15'').
\8\ FIA and ISDA Letter, Request for no-action relief concerning
certain requirements of CFTC Rule 3.3 relating to the timing of the
Annual Report (Mar. 10, 2015) (on file with the CFTC, available for
inspection and copying).
---------------------------------------------------------------------------
Recently, the U.S. Securities and Exchange Commission (``SEC'')
adopted final rules corresponding to Regulation 3.3, and implementing a
provision of Title VII of the Dodd-Frank Act the text of which is
effectively identical to CEA section 4s(k)(3)(B).\9\ The SEC's
corresponding rule requires that the equivalent chief compliance
officer annual report for security-based swap dealers and major
security-based swap participants be submitted to the SEC within 30 days
following the deadline for filing each entity's annual financial
report.\10\
---------------------------------------------------------------------------
\9\ Business Conduct Standards for Security-Based Swap Dealers
and Major Security-Based Swap Participants, 81 FR 29959 (May 13,
2016).
\10\ See id. at 30150.
---------------------------------------------------------------------------
C. Application of Regulation 3.3(f)(2) to Entities Located in Certain
Non-U.S. Jurisdictions
In December 2013, the Commission issued comparability
determinations deeming an SD or MSP located in Canada, the European
Union, Hong Kong, Japan, or Switzerland (``Substituted Compliance
Registrants'') to be in compliance with Regulation 3.3(e) if it
complies with the applicable corresponding regulation in its home
jurisdiction.\11\ Specifically, a Substituted Compliance Registrant may
elect to furnish the Commission with the comparable annual reporting
information (hereinafter, ``Comparable Annual Report'') specified under
the standards of its home jurisdiction. However, the Commission did not
provide a comparability determination with respect to Regulation 3.3(f)
regarding the timing of when the
[[Page 53345]]
Comparable Annual Report must be furnished to the CFTC.\12\
---------------------------------------------------------------------------
\11\ See Comparability Determination for Canada: Certain Entity-
Level Requirements, 78 FR 78839, 78843 (Dec. 27, 2013);
Comparability Determination for the European Union: Certain Entity-
Level Requirements, 78 FR 78923, 78928 (Dec. 27, 2013);
Comparability Determination for Hong Kong: Certain Entity-Level
Requirements, 78 FR 78852, 78856 (Dec. 27, 2013); Comparability
Determination for Japan: Certain Entity-Level Requirements, 78 FR
78910, 78915 (Dec. 27, 2013); Comparability Determination for
Switzerland: Certain Entity-Level Requirements, 78 FR 78899, 78903
(Dec. 27, 2013). It should be noted that while Australia was granted
a determination of comparability for some entity-level requirements,
it was not granted a determination of comparability with respect to
the requirements of Regulation 3.3(e). See Comparability
Determination for Australia: Certain Entity-Level Requirements, 78
FR 78864, 78869 (Dec. 27, 2013).
\12\ See note 11, supra.
---------------------------------------------------------------------------
II. The Proposal
A Proposed Amendments to Regulation 3.3(f)(2)
The Commission is proposing to codify the current no-action relief
by amending Regulation 3.3(f)(2). The amendments would permit an FCM to
furnish its CCO Annual Report to the Commission not more than 30 days
after submission of the Form 1-FR-FCM \13\ or Financial Operational
Combined Uniform Single Report (``FOCUS Report''). The Proposal would
also permit an SD or MSP to furnish its CCO Annual Report to the
Commission not more than 90 days after its fiscal year-end until such
time as the Commission adopts and implements rules establishing the
time for filing the annual financial condition report required under
CEA section 4s(f). The Commission has proposed, but not yet adopted, a
financial condition report requirement comprised of an annual audited
financial report for SDs and MSPs.\14\ Once the Commission adopts and
implements a financial condition report rule, like FCMs, an SD or MSP
will have up to 30 days after the submission of its annual financial
condition report to submit the CCO Annual Report to the Commission.
---------------------------------------------------------------------------
\13\ The proposed amendment also makes a technical correction in
Regulation 3.3(f)(2) by correcting the cross reference to the
Commission regulation that requires the filing of Form 1-FR-FCM to
Regulation 1.10(b)(1)(ii).
\14\ See Capital Requirements of Swap Dealers and Major Swap
Participants, 76 FR 27802, 27838 (proposed May 12, 2011).
---------------------------------------------------------------------------
Regulation 3.3(e) requires a broad and detailed assessment of each
Registrant's compliance program over the preceding year as well as a
discussion of planned changes and remedial steps to be taken for non-
compliance matters. The Commission believes that providing up to 30
days after a Registrant's applicable financial reports are due would
provide Registrants an appropriate amount of time to complete the in-
depth review and analyses required by Regulation 3.3(e). As a policy
matter, the Commission recognizes that the periodic self-evaluation
that underlies each CCO Annual Report is a critical step in promoting
an active and robust compliance culture within firms.
In codifying the relief provided in CFTC Staff Letter No. 15-15,
the Commission is clarifying that the statutory requirement for an SD
or MSP's CCO Annual Report to ``accompany each appropriate financial
report'' allows for the CCO Annual Report to be furnished to the
Commission not more than 30 days after the submission of a Registrant's
annual financial report.\15\ The Commission recognizes the separate and
distinct nature and purposes of the two reports, and believes that
allowing Registrants to submit their CCO Annual Reports not more than
30 days after their financial reports are due satisfies the statutory
requirement that the CCO Annual Report ``accompany'' the other
financial report. This is also consistent with the SEC's approach in
its corresponding rule for delivery of chief compliance officer annual
reports by security-based swap dealers and major security-based swap
participants.\16\
---------------------------------------------------------------------------
\15\ The Proposal would remove the obligation of Registrants to
file their CCO Annual Reports ``simultaneously'' with the applicable
FCM financial report or financial condition report.
\16\ In the adopting release, the SEC addresses the statutory
language that links the filing of the CCO Annual Report with the
filing of appropriate financial reports by stating, ``The Commission
is interpreting `accompany' in Section 15F(k)(3)(B)(i) to mean
follow within 30 days.'' 81 FR 29959, 30059, n.1238.
---------------------------------------------------------------------------
B. Registrants Located in Substituted Compliance Jurisdictions
The Commission is also proposing to amend Regulation 3.3(f) to
address the timing of the filing requirement for Comparable Annual
Reports. If the requirements of the Substituted Compliance Registrant's
home jurisdiction identify a specific date by which the Comparable
Annual Reports must be completed, then the Commission is proposing that
Comparable Annual Reports may be furnished to the Commission
electronically up to 15 days after the date on which the Comparable
Annual Report must be completed.\17\ The additional 15 days would allow
time for translation of the report text into English. If the
Substituted Compliance Registrant's home jurisdiction does not
establish a specifically identifiable completion date, then the
Substituted Compliance Registrant must comply with the standard time
frames provided in Regulation 3.3(f), as amended. A specifically
identifiable completion date would be a date that can be clearly
identified such as a specific calendar date or a set number of days
after the Substituted Compliance Registrant's fiscal year-end. A home
jurisdiction requirement to complete the Comparable Annual Report only
if some event occurs or upon request, or which does not specify a
deadline, is not considered comparable to the Commission's annual
delivery requirement.
---------------------------------------------------------------------------
\17\ While each of the jurisdictions that have been granted a
comparability determination with respect to Regulation 3.3(e)
requires Substituted Compliance Registrants to produce and complete
comparable annual reporting information, there is variation among
the foreign jurisdictions as to whether and/or when a Comparable
Annual Report must be furnished to the home regulator. Therefore,
the Commission is using the date on which the Comparable Annual
Report must be completed as the benchmark for determining when the
Comparable Annual Report must be furnished to the Commission.
---------------------------------------------------------------------------
C. Proposed Amendments Regarding a Delegation From the Commission to
the Division
Pursuant to Regulation 3.3(f)(5), Registrants may request from the
Commission an extension of time to furnish their CCO Annual Reports if
the failure to timely furnish the report could not be avoided absent
``unreasonable effort or expense.'' The rule provides the Commission
with discretion in granting such extensions. To expedite review and
consideration of requests for extensions, the Commission is proposing
to delegate to the Director of DSIO, or such other employee(s) that the
Director may designate, the authority to grant extensions of time
subject to the same standard set forth in Regulation 3.3(f)(5). The
Commission notes that the exercise of such delegated authority would
need to be consistent with Regulation 3.3(f)(5) and therefore would be
limited to unique facts and circumstances that clearly demonstrate that
the inability to timely furnish the report to the Commission could not
have been eliminated absent unreasonable effort or expense. The
Commission believes that such delegation is prudent given that the
decision to provide an extension requires consideration of specific
facts and circumstances and often this consideration needs to occur
within a relatively short period of time. As is the case with existing
delegations to staff, the Commission would continue to reserve the
right to perform the functions described in Regulation 3.3(f)(5) itself
at any time.\18\
---------------------------------------------------------------------------
\18\ In addition, notwithstanding any such delegation, in any
case in which a Commission employee delegated authority under this
section believes it is appropriate, the employee may submit the
question to the Commission for its consideration.
---------------------------------------------------------------------------
The Commission requests comment on the appropriateness of the
proposed delegation and whether additional procedural detail is
necessary.
D. Request for Comment
The Commission seeks comments regarding the following matters:
Given the current filing requirements for the Form 1-FR-
FCM and FOCUS Reports, and the anticipated
[[Page 53346]]
filing requirements for the financial condition report, is it
appropriate to permit FCMs, SDs, and MSPs an additional 30-days to
furnish their CCO Annual Report to the Commission? Are there any
practical or policy reasons for not permitting the additional 30 days?
Does codifying the relief granted in CFTC Staff Letter No.
15-15 sufficiently address Registrants' concerns?
Should the Commission provide any further clarification of
the requirements of Regulation 3.3(f) as they apply to entities located
in jurisdictions for which comparability determinations have been
issued?
III. Related Matters
A. Regulatory Flexibility Act
The Regulatory Flexibility Act \19\ (``RFA'') requires that
agencies consider whether the rules they propose will have a
significant economic impact on a substantial number of small entities
and, if so, provide a regulatory flexibility analysis reflecting the
impact. Section 3.3(f)(2), as proposed, amends the filing deadline for
CCO Annual Reports of FCMs, SDs, and MSPs and clarifies the filing
deadline for Comparable Annual Reports. The proposed amendments would
affect FCMs, SDs, and MSPs that are required to be registered with the
Commission. The Commission has previously established certain
definitions of ``small entities'' to be used in evaluating the impact
of its regulations on small entities in accordance with the RFA, and
has previously determined that FCMs, SDs, and MSPs are not small
entities for purposes of the RFA.\20\ Therefore, the Commission
believes that the amendments to Regulation 3.3 would not have a
significant economic impact on a substantial number of small entities.
Accordingly, the Chairman, on behalf of the Commission, hereby
certifies, pursuant to 5 U.S.C. 605(b), that the proposed amendments
will not have a significant economic impact on a substantial number of
small entities.
---------------------------------------------------------------------------
\19\ 5 U.S.C. 601 et seq.
\20\ See Policy Statement and Establishment of Definitions of
``Small Entities'' for Purposes of the Regulatory Flexibility Act,
47 FR 18618, 18619 (Apr. 30, 1982) (FCMs); Further Definition of
``Swap Dealer,'' ``Security-Based Swap Dealer,'' ``Major Swap
Participant,'' ``Major Security-Based Swap Participant'' and
``Eligible Contract Participant,'' 77 FR 30596, 30701 (May 23, 2012)
(SDs and MSPs).
---------------------------------------------------------------------------
B. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (``PRA'') \21\ provides that a
federal 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 control number issued by the Office of Management and
Budget (``OMB''). The collection of information related to this
proposed rule is OMB control number 3038-0080--Annual Report for Chief
Compliance Officer of Registrants. The Commission believes that this
proposed rule will not impose any new information collection
requirements that require approval of OMB under the PRA. As a general
matter, the proposed rule would allow Registrants up to 90 days after
the end of their fiscal years, and certain Substituted Compliance
Registrants with up to 15 days after the date on which the Comparable
Annual Report must be completed under the requirements of their home
jurisdiction, to file the CCO Annual Report and Comparable Annual
Reports, respectively. As such, this proposed rule does not, by itself,
impose any new burden or any new information collection requirements in
addition to those that already exist in connection with the preparation
and delivery of the CCO Annual Report pursuant to part 3 of the
Commission's regulations.
---------------------------------------------------------------------------
\21\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------
C. Cost-Benefit Considerations
1. Background
As discussed above, the Commission is proposing amendments to the
filing requirements for CCO Annual Reports in Regulation 3.3 that
would: (1) Increase the amount of time registrants have to file their
CCO Annual Reports with the Commission; and (2) clarify the filing
requirements for Comparable Annual Reports. The baseline for this cost
and benefit consideration is existing Regulation 3.3. Although CFTC
Staff Letter No. 15-15, as discussed above, currently offers no-action
relief that is substantially similar to the relief that the proposed
amendments would grant Registrants, as a no-action letter, it only
represents the position of the issuing Division or Office and cannot
bind the Commission or other Commission staff.\22\ Consequently, the
Commission believes that CFTC Staff Letter No. 15-15 should not set or
affect the baseline against which the Commission considers the costs
and benefits of the proposal.
---------------------------------------------------------------------------
\22\ See 17 CFR 140.99(a)(2). See also CFTC Staff Letter No. 15-
15 at 4.
---------------------------------------------------------------------------
2. Costs
The Commission received no comments during the rulemaking process
for Regulation 3.3 regarding costs associated with the timing of the
filing deadline for the CCO Annual Report. The proposed amendment does
not change the report contents or require any additional actions to be
taken by Registrants. The additional 30 days (or up to 15 days after
the date on which a Comparable Annual Report must be completed under
applicable home jurisdiction standards that allow more time) provided
by the proposal lengthens the time before senior management or the
board of the Registrants and the Commission may receive the CCO Annual
Reports. The additional time to furnish the reports should not
materially impact regulatory oversight given that the purpose of the
reports is to provide a status update for the Registrant's compliance
activities over the course of the preceding fiscal year and planned
changes for the coming year. The reports generally do not serve to
address crisis situations for which immediacy is critical. Therefore,
the additional time allowed will not materially impact the usefulness
of the information in the reports.\23\ The Commission has no other
information available to it that would indicate that changing the
filing deadline would measurably change the cost to prepare the CCO
Annual Reports. Accordingly, the Commission preliminarily believes that
the proposal would not impose any additional costs on any other market
participants, the markets themselves, or the general public. The
Commission invites comment regarding the nature of, and the extent to
which, costs associated with the CCO Annual Reports could change as a
result of the adoption of the proposal and, to the extent they can be
quantified, monetary and other numerical estimates thereof.
---------------------------------------------------------------------------
\23\ The CCO Annual Report must contain a description of
material non-compliance events that occurred over the review period.
However, reporting on those events in the CCO Annual Report provides
transparency regarding the effectiveness of the implementation of
the compliance program over the preceding year for management and
the CFTC.
---------------------------------------------------------------------------
3. Benefits
The Commission believes that the proposal would provide relief for
Registrants from time pressures in preparing and filing their CCO
Annual Reports. The additional time provided will allow Registrants to
more carefully complete their internal processes used to develop the
broad variety of information needed for the reports resulting in more
accurate and complete reports. The Commission invites comment regarding
the nature and extent of these and any other benefits that could result
from adoption of the proposal--including benefits to other market
participants, the market itself, or the general public--and, to the
extent they can be quantified, monetary and other numerical estimates
thereof.
[[Page 53347]]
4. Section 15(a) Factors
Section 15(a) of the CEA requires the Commission to consider the
costs and benefits of its actions before promulgating a regulation
under the CEA or issuing certain orders.\24\ Section 15(a) further
specifies that the costs and benefits shall be evaluated in light of
five broad areas of market and public concern: (1) Protection of market
participants and the public; (2) efficiency, competitiveness, and
financial integrity of futures markets; (3) price discovery; (4) sound
risk management practices; and (5) other public interest
considerations. The Commission considers the costs and benefits
resulting from its discretionary determinations with respect to the
section 15(a) factors.
---------------------------------------------------------------------------
\24\ 7 U.S.C. 19(a).
---------------------------------------------------------------------------
a. Protection of Market Participants and the Public
The Commission recognizes that there are trade-offs between
reducing regulatory burdens and ensuring that the Commission has
sufficient, timely information to fulfill its regulatory mission. The
proposed amendments to Regulation 3.3 are intended to reduce some of
the regulatory burdens on Registrants. While the amendment will delay
the time by which the Commission will receive the CCO Annual Reports,
the delay is relatively short given that the information in the reports
looks back over the entire year-long reporting period and identifies
planned improvements for the coming year. Accordingly, the Commission
preliminarily believes that the short delay will not affect the
protection of market participants and the public.
b. Efficiency, Competitiveness, and Financial Integrity of Markets
The Commission believes that the proposed amendments to Regulation
3.3 could improve allocational efficiency for participants in the
market by reducing the burden of preparing the CCO Annual Report in a
shorter time-frame, thereby allowing them to allocate compliance
resources more efficiently over the report preparation period. The
Commission preliminarily believes that the proposed amendments to
Regulation 3.3 will not have any market efficiency, competitiveness, or
market integrity impacts because the reports address internal
compliance programs of each Registrant and are not publicly available.
c. Price Discovery
The Commission preliminarily believes that the proposed amendments
to Regulation 3.3 would not impact on price discovery. Given the fact
that the proposed amendments affect only the timing of when the CCO
Annual Reports are filed with the Commission and the CCO Annual Reports
generally would not contain trade information or be available to the
public, the proposed amendments would not affect price discovery.
d. Sound Risk Management Practices
The Commission preliminarily believes that the proposed amendments
would not have a meaningful effect on the risk management practices of
Registrants. While the CCO Annual Reports may discuss certain risk
management aspects related to the compliance programs of the
Registrants, the proposal would only amend the timing of delivery of
the reports to the Commission, not the contents of the reports. As
described above under subsection 4.a, the short delay in delivery of
the reports provided for by the proposal is not significant given the
nature of the information included in the report and allowing
additional time to prepare the CCO Annual Reports might allow the
Registrants to prepare better reports that more effectively address the
information contained therein.
e. Other Public Interest Considerations
The Commission has not identified any other public interest
considerations for this rulemaking.
5. Request for Comment
The Commission invites comment on all aspects of its preliminary
consideration of the costs and benefits associated with the proposal
and the five factors the Commission is required to consider under CEA
section 15(a). In addressing these areas and any other aspect of the
Commission's preliminary cost-benefit considerations, the Commission
encourages commenters to submit any data or other information they may
have quantifying and/or qualifying the costs and benefits of the
proposal.
List of Subjects in 17 CFR Part 3
Administrative practice and procedure, Brokers, Commodity futures,
Major swap participants, Reporting and recordkeeping requirements, Swap
dealers.
For the reasons stated in the preamble, the Commodity Futures
Trading Commission proposes to amend 17 CFR part 3 as follows:
PART 3--REGISTRATION
0
1. The authority citation for part 3 is revised to read as follows:
Authority: 5 U.S.C. 552, 552b; 7 U.S.C. 1a, 2, 6a, 6b, 6b-1, 6c,
6d, 6e, 6f, 6g, 6h, 6i, 6k, 6m, 6n, 6o, 6p, 6s, 8, 9, 9a, 12, 12a,
13b, 13c, 16a, 18, 19, 21, 23, as amended by Title VII of the Dodd-
Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-
203, 124 Stat. 1376 (Jul. 21, 2010).
0
2. Amend Sec. 3.3 as follows:
0
a. Revise paragraph (f)(2); and
0
b. Add paragraph (h).
The revision and addition to read as follows:
Sec. 3.3 Chief compliance officer.
* * * * *
(f) * * *
(2)(i) Except as provided in paragraph (f)(2)(ii) of this section,
the annual report shall be furnished electronically to the Commission
not more than 30 days after the submission of Form 1-FR-FCM, as
required under Sec. 1.10(b)(1)(ii) of this chapter, the Financial and
Operational Combined Uniform Single Report, as required under Sec.
1.10(h) of this chapter, or the financial condition report, as required
under section 4s(f) of the Act, as applicable. Until such time as the
Commission adopts and implements a regulation establishing the time for
filing the financial condition report, a swap dealer or major swap
participant shall furnish the annual report electronically to the
Commission not more than 90 days after the end of its fiscal year.
(ii) The annual report of a swap dealer or major swap participant
that is eligible to comply with a substituted compliance regime for
paragraph (e) of this section pursuant to a comparability determination
of the Commission may be furnished to the Commission electronically up
to 15 days after the date on which the comparable annual report must be
completed under the requirements of the applicable substituted
compliance regime. If the substituted compliance regime does not
specify a date by which the comparable annual report must be completed,
then the annual report shall be furnished to the Commission by the date
specified in paragraph (f)(2)(i) of this section.
* * * * *
(h) Delegation of Authority. The Commission hereby delegates to the
Director of the Division of Swap Dealer and Intermediary Oversight, or
such other employee or employees as the Director may designate from
time to time, the authority to grant extensions of time, as set forth
in paragraph (f)(5) of this section. Notwithstanding such
[[Page 53348]]
delegation, in any case in which a Commission employee delegated
authority under this paragraph believes it appropriate, he or she may
submit to the Commission for its consideration the question of whether
an extension of time should be granted. The delegation of authority in
this paragraph shall not prohibit the Commission, at its election, from
exercising the authority set forth in paragraph (f)(5) of this section.
Issued in Washington, DC, on August 8, 2016, by the Commission.
Christopher J. Kirkpatrick,
Secretary of the Commission.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Appendix to Chief Compliance Officer Annual Report Requirements for
Futures Commission Merchants, Swap Dealers, and Major Swap
Participants; Amendments to Filing Dates--Commission Voting Summary
On this matter, Chairman Massad and Commissioners Bowen and
Giancarlo voted in the affirmative. No Commissioner voted in the
negative.
[FR Doc. 2016-19231 Filed 8-11-16; 8:45 am]
BILLING CODE 6351-01-P