2011-6972

Federal Register, Volume 76 Issue 57 (Thursday, March 24, 2011)[Federal Register Volume 76, Number 57 (Thursday, March 24, 2011)]

[Proposed Rules]

[Pages 16587-16588]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2011-6972]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 39

RIN 3038-AC98

Risk Management Requirements for Derivatives Clearing

Organizations

AGENCY: Commodity Futures Trading Commission.

ACTION: Reopening of comment period.

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SUMMARY: The Commodity Futures Trading Commission (Commission) is

reopening the comment period for a proposed rule that would require

derivatives clearing organizations (DCOs) to report end-of-day

positions for each clearing member, by customer origin and house

origin, and for customer origin, separately, the gross positions of

each beneficial owner.

DATES: Submit comments on or before April 25, 2011.

ADDRESSES: You may submit comments, identified by RIN number 3038-AC98,

by any of the following methods:

Agency Web site, via its Comments Online process: http://comments.cftc.gov. Follow the instructions for submitting comments

through the Web site.

Mail: David A. Stawick, 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.

Federal eRulemaking Portal: http://www.Regulations.gov.

Follow the instructions for submitting comments.

Please submit comments by 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 (FOIA), 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 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

FOIA.

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\1\ Commission regulations referred to herein are found at 17

CFR Ch. 1 (2010). They are accessible on the Commission's Web site

at http://www.cftc.gov.

FOR FURTHER INFORMATION CONTACT: Phyllis P. Dietz, Associate Director,

202-418-5449, pdietz@cftc.gov, Jacob Preiserowicz, Attorney-Advisor,

202-418-5432, jpreiserowicz@cftc.gov, Division of Clearing and

Intermediary Oversight, Commodity Futures Trading Commission, Three

Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581; and Anne

C. Polaski, Special Counsel, 312-596-0575, apolaski@cftc.gov, Division

of Clearing and Intermediary Oversight, Commodity Futures Trading

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Commission, 525 West Monroe Street, Chicago, Illinois 60661.

SUPPLEMENTARY INFORMATION: On July 21, 2010, President Obama signed the

Dodd-Frank Act.\2\ Title VII of the Dodd-Frank Act \3\ amended the

Commodity Exchange Act (CEA) \4\ to establish a comprehensive

regulatory framework to reduce risk, increase transparency, and promote

market integrity within the financial system. Section 725(c) of the

Dodd-Frank Act amended Section 5b(c)(2) of the CEA, which sets forth

core principles with which a DCO must comply to be registered and to

maintain registration as a DCO.\5\

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\2\ See Dodd-Frank Wall Street Reform and Consumer Protection

Act, Public Law 111-203, 124 Stat. 1376 (2010). The text of the

Dodd-Frank Act may be accessed at http://www.cftc.gov/LawRegulation/OTCDERIVATIVES/index.htm.

\3\ Pursuant to section 701 of the Dodd-Frank Act, Title VII may

be cited as the ``Wall Street Transparency and Accountability Act of

2010.''

\4\ 7 U.S.C. 1 et seq.

\5\ 7 U.S.C. 5b(c)(2).

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On December 16, 2010, the Commission approved for publication in

the Federal Register proposed regulations which, among other things,

would implement DCO Core Principle D (Risk Management) and would

establish a related reporting requirement under Core Principle J

(Reporting). More specifically, the Commission proposed Sec.

39.13(g)(8)(i) to establish customer ``gross margin'' requirements, and

proposed Sec. 39.19(c)(1)(iv) to establish related daily reporting

requirements. The proposed regulations were published for comment in

the January 20, 2011 issue of the Federal Register.\6\

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\6\ 76 FR 3698, Jan. 20, 2011.

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The Federal Register preamble explained that proposed Sec.

39.13(g)(8)(i)

[[Page 16588]]

would require a DCO to collect initial margin on a gross basis for each

clearing member's customer account equal to the sum of the initial

margin amounts that would be required by the DCO for each individual

customer within that account if each individual customer were a

clearing member. A DCO would not be permitted to net positions of

different customers against one another, but it could collect initial

margin for its clearing members' house accounts on a net basis.\7\

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\7\ 76 FR at 3706.

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Related to this customer gross margin requirement, the preamble

further explained as follows, that proposed Sec. 39.19(c)(1)(iv) would

require DCOs to report end-of-day positions for each clearing member,

by customer origin and house origin, and for customer origin,

separately, the gross positions of each beneficial owner:

The Commission recently proposed a new Sec. 39.19(c)(1)(iv)

under which a DCO would be required, on a daily basis, to report the

end-of-day positions for each clearing member, by origin. [footnote

reference to 75 FR at 78195] In connection with the proposed Sec.

39.13(g)(8)(i) requirement for DCOs to collect initial margin for

customer accounts on a gross basis, the Commission is proposing to

amend proposed Sec. 39.19(c)(1)(iv) to additionally require a DCO,

for the customer origin, to report the gross positions of each

beneficial owner.\8\

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\8\ Id.

It has come to the attention of the Commission that there was an

omission in the Federal Register publication of the proposed rule text

setting forth the requirement for end-of-day reporting of customer

positions by the gross positions of each beneficial owner. The text of

proposed Sec. 39.19(c)(1)(iv), which read ``End-of-day positions for

each clearing member, by customer origin and house origin'' should have

read, ``End-of-day positions for each clearing member, by customer

origin and house origin; and for customer origin, separately, the gross

positions of each beneficial owner.''

In order to provide an adequate opportunity for comment on this

reporting requirement, the Commission has determined to extend the

comment period for proposed Sec. 39.19(c)(1)(iv), as corrected

elsewhere in this issue of the Federal Register, until April 25, 2011.

Issued in Washington, DC, on March 17, 2011, by the Commission.

David A. Stawick,

Secretary of the Commission.

[FR Doc. 2011-6972 Filed 3-23-11; 8:45 am]

BILLING CODE 6351-01-P

Last Updated: March 24, 2011