[Federal Register Volume 78, Number 13 (Friday, January 18, 2013)]
[Proposed Rules]
[Pages 4093-4094]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-00820]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Parts 1, 3, 22, 30 and 140
RIN 3038-AD88
Extension of Comment Period for the Rulemaking Enhancing
Protections Afforded Customers and Customer Funds Held by Futures
Commission Merchants and Derivatives Clearing Organizations
AGENCY: Commodity Futures Trading Commission.
ACTION: Extension of comment period.
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SUMMARY: On November 14, 2012, the Commodity Futures Trading Commission
(``Commission'') published in the Federal Register a notice of proposed
rulemaking (the ``Customer Protection Proposal'') \1\ to adopt new
regulations and amend 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
(``FCMs''). The Customer Protection Proposal also addressed certain
related issues concerning derivatives clearing organizations (``DCOs'')
and chief compliance officers (``CCOs''). In order to provide
interested parties with an additional opportunity to comment on the
Customer Protection Proposal, the Commission is extending the comment
period for the Customer Protection Proposal.
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\1\ See Enhancing Protections Afforded Customers and Customer
Funds Held by Futures Commission Merchants and Derivatives Clearing
Organizations, 77 FR 67866 (Nov. 14, 2012).
DATES: The comment period for the Customer Protection Proposal is
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extended until February 15, 2013.
ADDRESSES: You may submit comments, identified by RIN 3038-AD88, by any
of the following methods:
Agency Web site, via its Comments Online process at http://comments.cftc.gov. Follow the instructions for submitting comments
through the Web site, and submit all comments through the ``submit
comment'' link associated with this extension.
Mail: Send to Natise Stowe, Office of the Secretariat,
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. You should submit only information that you wish
to make available publicly. If you wish the Commission to consider
information that may be 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, 17 CFR 145.9.\2\
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\2\ Commission regulations referred to herein are found at 17
CFR Ch. 1 (2012). Commission regulations are accessible on the
Commission's Web site, www.cftc.gov.
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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 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 Freedom of Information Act.
FOR FURTHER INFORMATION CONTACT: Division of Swap Dealer and
Intermediary Oversight: Gary Barnett, Director, 202-418-5977,
[email protected]; Thomas Smith, Deputy Director, 202-418-5495,
[email protected]; Ward P. Griffin, Associate Chief Counsel, 202-418-
5425, [email protected], Commodity Futures Trading Commission, Three
Lafayette Centre, 1155 21st Street NW., Washington, DC 20581; 202-418-
5648; or Kevin Piccoli, Deputy Director, 646-746-9834,
[email protected], 140 Broadway, 19th Floor, New York, NY 10005.
Division of Clearing and Risk: Robert B. Wasserman, Chief Counsel,
202-418-5092, [email protected], Commodity Futures Trading
Commission, Three Lafayette Centre, 1155 21st Street NW., Washington,
DC 20581. Office of the Chief Economist: Camden Nunery, Economist,
[email protected], 202-418-5723, Commodity Futures Trading Commission,
Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
I. Background
The protection of customers--and the safeguarding of money,
securities or
[[Page 4094]]
other property deposited by customers with an FCM--is a fundamental
component of the Commission's disclosure and financial responsibility
framework. Section 4d(a)(2) \3\ of the Commodity Exchange Act (``Act'')
\4\ requires each FCM to segregate from its own assets all money,
securities and other property deposited by futures customers to margin,
secure, or guarantee futures contracts and options on futures contracts
traded on designated contract markets. Section 4d(a)(2) further
requires an FCM to treat and deal with futures customer funds as
belonging to the futures customer, and prohibits an FCM from using the
funds deposited by a futures customer to margin or extend credit to any
person other than the futures customer that deposited the funds.
Section 4d(f) of the Act, which was added by section 724(a) of the
Dodd-Frank Wall Street Reform and Consumer Protection Act, requires,
subject to certain exceptions, each FCM to segregate from its own
assets all money, securities and other property deposited by Cleared
Swaps Customers to margin transactions in Cleared Swaps.
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\3\ 7 U.S.C. 6d(a)(2).
\4\ 7 U.S.C. 1 et seq.
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The Commission issued the Customer Protection Proposal because
market events had illustrated both the need to: (i) Require that care
be taken about monitoring excess segregated and secured funds, and the
conditions under and the extent to which such funds may be withdrawn;
and (ii) place appropriate risk management controls around the other
risks of the business to help relieve (A) the likelihood of an exigent
event or, (B) if such an event occurs, the likelihood of a failure to
prepare for such an event, which in either case could create pressures
that might result in an inappropriate withdrawal of customer funds.
Although the Commission stated that it believed that existing
regulations provide an essential foundation to fostering a well-
functioning marketplace, wherein customers are protected and
institutional risks are minimized, it noted that recent events had
demonstrated the need for additional measures to effectuate the
fundamental purposes of the statutory provisions discussed above.
Further, the Commission believed that, concurrently with the enhanced
responsibilities for FCMs contained in the Customer Protection
Proposal, the oversight and examination systems should be enhanced to
mitigate risks and effectuate the statutory purposes.
II. Reopening and Extension of Comment Periods and Request for Comment
Subsequent to issuing the Customer Protection Proposal, the
Commission has received a number of comments from interested parties
requesting that the Commission extend the comment period for the
proposal. Of particular note are the requests of the futures industry's
self-regulatory organizations, which have requested an extension to the
comment period to provide additional time for all interested parties to
evaluate the costs and benefits of the Customer Protection Proposal,
and to propose alternative measures to provide increased customer
protection and enhanced monitoring of FCMs.
In light of the comments received, the Commission is extending the
comment period of the Customer Protection Proposal to provide the
public with an additional opportunity to comment on the proposal's
provisions. Given the emphasis of the comments received thus far on the
potential costs of the Customer Protection Proposal, the Commission
specifically seeks comments providing quantitative information
addressing the costs and benefits of the proposed rulemaking.
All comments that were received after the close of the originally
established comment period of the Customer Protection Proposal will be
treated as if they were received during the extended comment period and
need not be resubmitted.
Issued in Washington, DC, this 11th day of January 2013, by the
Commission.
Stacy D. Yochum,
Counsel to the Executive Director.
[FR Doc. 2013-00820 Filed 1-17-13; 8:45 am]
BILLING CODE 6351-01-P