[Federal Register Volume 79, Number 9 (Tuesday, January 14, 2014)]
[Rules and Regulations]
[Pages 2370-2371]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-00406]



17 CFR Part 42

RIN 3038-AB90

Updates to Cross-References to Bank Secrecy Act Regulations

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rule; technical amendments.


SUMMARY: The Commodity Futures Trading Commission (``Commission'') is 
adopting technical amendments to the Commission's regulations that 
correct cross-references to regulations administered by the Financial 
Crimes Enforcement Network (``FinCEN''), a bureau of the U.S. 
Department of Treasury, under the Bank Secrecy Act (``BSA''). FinCEN's 
regulations have been reorganized and transferred to a new chapter in 
the Code of Federal Regulations. The amendments update the cross-
references to FinCEN regulations and are to be made effective upon 
publication of this rulemaking.

DATES: Effective January 14, 2014.

FOR FURTHER INFORMATION CONTACT: Helene D. Schroeder, Special Counsel, 
(202) 418-5424, [email protected], Commodity Futures Trading 
Commission, Division of Swap Dealer and Intermediary Oversight, Three 
Lafayette Centre, 1155 21st Street NW., Washington DC 2058.


I. Background

    The BSA \1\ authorizes the Secretary of the Treasury (the 
``Secretary'') to issue regulations requiring financial institutions to 
keep records and file reports that the Secretary determines have a high 
degree of usefulness in criminal, tax, or regulatory investigations or 
proceedings, or in the conduct of intelligence or counterintelligence 
activities, including analysis, to protect against international 
terrorism.\2\ The authority of the Secretary to administer the BSA has 
been delegated to the Director of FinCEN.\3\

    \1\ The BSA is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959 
and 31 U.S.C. 5311-5314; 5316-5332.
    \2\ 31 U.S.C. 5311.
    \3\ See Treasury Order 180-01 (Sept. 26, 2002).

    Section 5318(h) of the BSA requires ``financial institutions'' to 
establish anti-money laundering (``AML'') programs and specifies that 
these programs must contain certain minimum requirements.\4\ Section 
1010.100 of FinCEN's regulations defines futures commission merchants 
(``FCMs'') and introducing brokers (``IBs'') as financial 
institutions.\5\ As such, FCMs and IBs are required to establish AML 
programs under section 5318(h) of the BSA. FinCEN regulations also 
require FCMs and IBs to establish customer identification programs,\6\ 
establish special due diligence programs for certain foreign 
accounts,\7\ detect and report suspicious activity on suspicious 
activity reports,\8\ and file currency transaction reports on certain 
cash transactions,\9\ among other obligations. Section 42.2 of the 
Commissions regulations implements the authority FinCEN delegated to 
the Commission to examine FCMs and IBs and ensure that they comply with 
the BSA regulations to which they are subject,\10\ and specifically 
requires every FCM and IB to comply with the applicable provisions of 
the BSA, the FinCEN regulations promulgated thereunder, the 
requirements of 31 U.S.C. 5318(l) and 31 CFR 103.123, which require 
that a customer identification program be adopted as part of the firm's 
BSA compliance program.\11\

    \4\ Section 5318(h)(1) identifies these minimum requirements as 
follows: In order to guard against money laundering through 
financial institutions, each financial institution shall establish 
anti-money laundering programs, including, at a minimum--(A) the 
development of internal policies, procedures, and controls; (B) the 
designation of a compliance officer; (C) an ongoing employee 
training program; and (D) an independent audit function to test 
    \5\ 31 CFR 1010.100(t)(8) and (9).
    \6\ 31 CFR 1026.220.
    \7\ 31 CFR 1026.610 and 1026.620.
    \8\ 31 CFR 1026.320.
    \9\ 31 CFR 1026.300.
    \10\ See 31 U.S.C. 5318(a)(1) (permitting the Secretary of the 
Treasury to delegate BSA duties and powers to an appropriate 
supervising agency) and 31 CFR 1010.810(b)(9) (delegating BSA 
examination authority to the Commission).
    \11\ 17 CFR 42.2.

II. Amending Sec.  42.2 of the Commission's Regulations

    Until March 1, 2011, FinCEN regulations implementing the BSA 
appeared at 31 CFR part 103. Section 42.2 of the Commission's 
regulations currently references these part 103 regulations. Effective 
March 1, 2011, FinCEN's regulations were re-organized, re-numbered and 
transferred to a new chapter, chapter X, within title 31. The re-
numbered and re-organized regulations appear within parts 1000 through 
1099 of chapter X and are now generally organized by financial 
industry. Thus, part 1026 of chapter X, for example, sets forth the 
regulations applicable to FCMs and IBs. Based on the reorganization and 
transfer of

[[Page 2371]]

FinCEN regulations, the Commission is adopting technical amendments to 
part 42 of its regulations to replace outdated references to part 103 
with the appropriate references to chapter X.

III. Related Matters

A. Administrative Procedure Act

    Notice of proposed rulemaking is not required under section 
553(b)(3)(B) of the Administrative Procedure Act (``APA'') when an 
agency, for good cause, finds ``that notice and public procedure 
thereon are impracticable, unnecessary, or contrary to the public 
interest.'' \12\ The amendments described herein are technical changes 
that are required to correct inaccurate cross- references in the 
relevant regulation and will not impose any new substantive regulatory 
requirements on any person. For these reasons, the Commission finds 
that it is unnecessary to publish notice of these amendments under 
section 553(b)(3)(B) of the APA.

    \12\ 5 U.S.C. 553(b)(3)(B).

    The Commission also finds good cause to dispense with the 30-day 
delayed effective date requirement under section 553(d)(3) of the 
APA.\13\ The technical amendments update inaccurate cross references. 
Accordingly, the amendments will be effective on the date of 
publication of this action, January 14, 2014.

    \13\ 5 U.S.C. 553(d)(3).

B. Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (``RFA'') requires the Commission to 
consider whether a rule it proposes will have a significant economic 
impact on a substantial number of small entities and either provide a 
regulatory flexibility analysis respecting the significant impact or 
certify that the rule will not have such an impact.\14\ The RFA is 
applicable only to a rule for which the Commission publishes a general 
notice of proposed rulemaking pursuant to 5 U.S.C. 553(b).\15\ The 
Commission has determined that it is unnecessary to publish a general 
notice of proposed rulemaking for the amendments to part 42 of the 
Commission regulations that are being adopted by this notice, as the 
amendments are only technical in nature and do not subject any party to 
any new substantive regulatory requirements. Therefore, neither a 
regulatory flexibility analysis nor a certification is required for 
this rulemaking action.

    \14\ 5 U.S.C. 601 et seq.
    \15\ 5 U.S.C. 601(2).

C. Paperwork Reduction Act

    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it is approved by the 
Office of Management and Budget as required by the Paperwork Reduction 
Act.\16\ This final rulemaking will not impose any new recordkeeping or 
information collection requirements, or other collections of 

    \16\ 44 U.S.C. 3501 et seq.

D. Cost-Benefit Analysis

    Section 15(a) of the Commodity Exchange Act (``CEA'') \17\ requires 
the Commission to consider the costs and benefits of its actions before 
promulgating a regulation under the CEA. Section 15(a) specifies that 
the costs and benefits shall be considered against 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 
may give greater weight to one or more of the five enumerated 
considerations to determine, in its discretion, that a particular rule 
is necessary or appropriate to protect the public interest or to 
effectuate any of the provisions or accomplish any of the purposes of 
the CEA.

    \17\ 7 U.S.C. 19(a).

    This final rule does not impose any substantive regulatory 
obligations on any person. Rather, the Commission solely is adopting 
technical amendments to Sec.  42.2 of its regulations to ensure that 
its regulations implementing its BSA examination authority accurately 
refer to the BSA regulations administered by FinCEN. Accordingly, there 
are no quantifiable costs associated with this rulemaking. The sole 
qualitative benefit associated with this rulemaking is accuracy.

List of Subjects in 17 CFR Part 42

    Anti-money laundering, Brokers, Reporting and recordkeeping 
requirements, Terrorist financing.

Authority and Issuance

    For the reasons stated in the preamble, the Commodity Futures 
Trading Commission is amending part 42 of title 17 of the Code of 
Federal Regulations as set forth below:


1. The authority citation for part 42 continues to read as follows:

    Authority: 7 U.S.C. 1a, 2, 5, 6, 6b, 6d, 6f, 6g, 7, 7a, 7a-1, 
7a-2, 7b, 7b-1, 7b-2, 9, 12, 12a, 12c, 13a, 13a-1, 13c, 16 and 21; 
12 U.S.C. 1786(q), 1818, 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5332; title III, secs. 312-314, 319, 321, 326, 352, Pub. L. 
107-56, 115 Stat. 307.

2. Section 42.2 is revised to read as follows:

Sec.  42.2  Compliance with Bank Secrecy Act.

    Every futures commission merchant and introducing broker shall 
comply with the applicable provisions of the Bank Secrecy Act and the 
regulations promulgated by the Department of the Treasury under that 
Act at 31 CFR chapter X, and with the requirements of 31 U.S.C. 5318(l) 
and the implementing regulation jointly promulgated by the Commission 
and the Department of the Treasury at 31 CFR 1026.220, which require 
that a customer identification program be adopted as part of the firm's 
Bank Secrecy Act compliance program.

    Issued in Washington, DC, on January 8, 2014, by the Commission.
Melissa D. Jurgens,
Secretary of the Commission

Appendix to Technical Amendments Updating Cross-References to Bank 
Secrecy Act Regulations

    Note:  The following appendix will not appear in the Code of 
Federal Regulations.

Appendix 1--Commission Voting Summary

    On this matter, Acting Chairman Wetjen and Commissioners Chilton 
and O'Malia voted in the affirmative.

[FR Doc. 2014-00406 Filed 1-13-14; 8:45 am]