2011-17710

Federal Register, Volume 76 Issue 141 (Friday, July 22, 2011)[Federal Register Volume 76, Number 141 (Friday, July 22, 2011)]

[Rules and Regulations]

[Pages 43874-43879]

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

[FR Doc No: 2011-17710]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 160

RIN 3038-AD13

Privacy of Consumer Financial Information; Conforming Amendments

Under Dodd-Frank Act

AGENCY: Commodity Futures Trading Commission.

ACTION: Final rule.

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SUMMARY: The Commodity Futures Trading Commission (``Commission'' or

``CFTC'') is amending its rules implementing new statutory provisions

enacted by titles VII and X of the Dodd-Frank Wall Street Reform and

Consumer Protection Act (the ``Dodd-Frank Act''). Section 1093 of the

Dodd-Frank Act provides for certain amendments to title V of the Gramm-

Leach-Bliley Act (the ``GLB Act''). The GLB Act sets forth certain

protections for the privacy of consumer financial information and was

amended by the Dodd-Frank Act to affirm the Commission's jurisdiction

in this area. The Commission's amendments to its regulations, inter

alia, broaden the scope of part 160 to cover two new entities created

by title VII of the Dodd-Frank Act: swap dealers and major swap

participants.

DATES: Effective date: September 20, 2011.

Compliance dates: Futures commission merchants, commodity pool

operators, commodity trading advisors, introducing brokers, and retail

foreign exchange dealers shall be in compliance with these rules not

later than November 21, 2011. Swap dealers and major swap participants

shall be in compliance with these rules not later than 60 days after

the effective date of the final entities definition rulemaking, which

the Commission will publish in the Federal Register at a future date.

FOR FURTHER INFORMATION CONTACT: Carl E. Kennedy, Counsel, Office of

General Counsel, (202) 418-6625, e-mail: c_kennedy@cftc.gov, Commodity

Futures Trading Commission, Three Lafayette Centre, 1155 21st Street,

NW., Washington, DC 20581.

SUPPLEMENTARY INFORMATION:

I. Background

Section 5g(b) of the CEA provides the Commission with the authority

to

[[Page 43875]]

prescribe regulations that establish appropriate standards for

financial institutions subject to its jurisdiction to safeguard

customer records and information in accordance with title V of the GLB

Act.\1\ Pursuant to this authority, the Commission promulgated part 160

of its regulations to require certain CFTC-regulated entities \2\ to

adopt appropriate policies and procedures that address safeguards to

customer records and information, including initial and annual privacy

notice requirements, opt-out provisions to the extent that these

registrants wish to share such records and information with non-

affiliates, and other measures to protect nonpublic consumer

information.\3\

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\1\ See Gramm-Leach-Bliley Act, Public Law 106-102, 113 Stat.

1338 (1999) (codified in scattered sections of 12 U.S.C. and 15

U.S.C.). As enacted, title V of the GLB Act limits the instances in

which a financial institution may disclose nonpublic personal

information about a consumer to nonaffiliated third parties, and

requires a financial institution to disclose to all of its customers

the institution's privacy policies and practices with respect to

information sharing with both affiliates and nonaffiliated third

parties. Section 5g(b) of the CEA treats the Commission as a Federal

functional regulator within the meaning of title V of the GLB Act.

\2\ The Commission did not become subject to title V of the GLB

Act until 2000. Section 5g of the CEA was added by the Commodity

Futures Modernization Act of 2000 (7 U.S.C. 7b-2) to make the

Commission a ``Federal functional regulator'' subject to the GLB Act

Title V. Section 5g provides that the following entities are subject

to the Commission's jurisdiction for the purposes of title V of the

GLB Act: futures commission merchants (``FCMs''), commodity trading

advisors (``CTAs''), commodity pool operators (``CPOs''), and

introducing brokers (``IBs''). The scope of the part 160 rules

mirrors this list of entities.

The Commission jointly promulgated final rules with the Office

of the Comptroller of the Currency, the Board of Governors of the

Federal Reserve System, the Federal Depository Insurance

Corporation, the Office of Thrift Supervision, the National Credit

Union Administration, and the Securities and Exchange Commission

(collectively, the ``Agencies'') on April 27, 2001. See 66 FR 21236,

Apr. 27, 2001. On September 10, 2010, the Commission expanded the

scope of entities subject to the part 160 rules to include retail

foreign exchange dealers (``RFEDs'').

\3\ Section 160.3(h)(1) of the Commission's regulations defines

the term consumer to mean ``an individual who obtains or has

obtained a financial product or service from [a financial

institution] that is to be used primarily for personal, family or

household purposes, or that individual's legal representative.''

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On October 27, 2010, the Commission published for comment in the

Federal Register proposed amendments to part 160 of its regulations

(the ``Proposal'') \4\ to implement certain provisions in titles VII

and X of the Dodd-Frank Wall Street Financial Reform and Consumer

Protection Act (the ``Dodd-Frank Act'').\5\

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\4\ See 75 FR 66014, Oct. 27, 2010.

\5\ See Public Law 111-203, 124 Stat. 1376 (2010). The text of

the Dodd-Frank Act may be accessed at http://www.cftc.gov. Title X

of the Dodd-Frank Act creates a new consumer financial services

regulator, the Bureau of Consumer Financial Protection (the

``Bureau''), that will assume most of the consumer financial

services regulatory responsibilities currently spread among numerous

agencies. However, these rules will continue to apply to financial

institutions that are subject to the Commission's jurisdiction. In

addition, the Commission will continue to have plenary oversight

authority over such institutions.

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In the Proposal, the Commission sought comments on proposed

amendments to part 160 in accordance with section 1093 \6\ and title

VII of the Dodd-Frank Act to, inter alia, broaden the types of entities

that are subject to the Commission's jurisdiction \7\ to provide

certain privacy protections for consumer financial information to

include swap dealers (SDs) and major swap participants (MSPs). In

addition, the Commission proposed: (1) in accordance with the transfer

of authority in title X, changing all references in part 160 from the

FTC to the Bureau; and (2) renaming part 160 to ``Privacy of Consumer

Financial Information under the Gramm-Leach-Bliley Act'' to harmonize

the title of part 160 with a new part of the Commission's

regulations.\8\

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\6\ Specifically, section 1093 of the Dodd-Frank Act amends

section 504 of the GLB Act by providing that ``the [CFTC] shall have

the authority to prescribe such regulations as may be necessary to

carry out the purposes of [title V of the GLB Act] with respect to

any financial institutions and other persons subject to the

jurisdiction of the [CFTC] under section 5g of the [CEA].'' As

discussed in the proposing release, the Commission has determined

that section 1093 simply reaffirms its authority to prescribe

regulations under title V of the GLB Act.

\7\ Title VII of the Dodd-Frank Act creates two new entities

over which the Commission has jurisdiction: swap dealers (``SDs'')

and major swap participants (``MSPs''). The terms ``SD'' and ``MSP''

as used in this final rule refer to the statutory definitions of

such terms as defined in title VII of the Dodd-Frank Act, and as may

be further defined by the Commission in a future final rulemaking.

See section 721(b) of the Dodd-Frank Act, which provides that the

Commission has the authority to adopt rules further defining any

term in the CEA in a manner that is consistent with the Dodd-Frank

Act. See also section 721(c) which provides that the Commission is

required to adopt a rule to further define, inter alia, the terms

``swap dealer'' and ``major swap participant'' to include

transactions and entities that have been structured to evade

provisions in the Dodd-Frank Act.

\8\ In a forthcoming release, the Commission plans to promulgate

a new part 162, which provides privacy protections under the Fair

Credit Reporting Act, 15 U.S.C. 1681 et seq. (``FCRA'').

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The 60-day public comment period on the Proposal expired on

December 27, 2010. In response to the Proposal, the Commission received

a total of six comments: Two substantive comments and four other

comments that did not address the merits or substance of the Proposal.

The Securities Industry and Financial Markets Association

(``SIFMA'') commented on the following aspects of the proposal: (1) The

proposed compliance date; (2) the annual burden estimate for the

purpose of the Paperwork Reduction Act analysis and cost-benefit

analysis; and (3) the appropriate standard applicable with regard to

state laws.

The International Swaps and Derivatives Association, Inc.

(``ISDA'') and the Financial Services Roundtable (``FSR'') jointly

submitted a comment letter generally in support of the Proposal. That

is, ISDA and the FSR did not provide specific comments in response to

the Proposal. ISDA and the FSR, however, encouraged the Commission to

work collaboratively with other agencies to decrease duplication in

regulation and increase efficiency industry-wide.

The Commission's final rules, the specific comments noted above and

the Commission's responses to those specific comments are discussed in

greater detail below.\9\

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\9\ This final rule incorporates technical revisions to its

proposed amendments to add clarity. These revisions are not

substantive and are not of the nature for which notice and comment

must be provided under the Administrative Procedure Act. For

example, in Sec. 160.3(x)(7), the Commission deleted the language

``subject to the jurisdiction of the Commission'' after the term

``Any swap dealer,'' since the Commission believes that the

inclusion of such language was redundant and unnecessary.

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II. Rule Amendments

A. Renaming the Title of Part 160

The Commission is renaming the title of part 160 to reflect the

scope of the part 160 regulations. The Commission's part 160

regulations implement certain protections for the privacy of consumer

financial information under the GLB Act. To harmonize the title of part

160 with the new part 162 being adopted under a separate

rulemaking,\10\ Part 160 is renamed ``Privacy of Consumer Financial

Information under the Gramm-Leach-Bliley Act.''

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\10\ In a forthcoming release titled ``Business Affiliate

Marketing and Disposal of Consumer Information Rules,'' the

Commission will adopt a new part 162 of its regulations.

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B. Scope of 17 CFR 160.1(b)

Regulation 160.1(b) sets out the scope of the Commission's rules

and identifies the financial institutions covered by the rules that

include CFTC registrants regardless of whether they are required to

register with the Commission. As referenced above, the Commission is

amending the scope of part 160 to add SDs and MSPs.

C. Section 160.3--Definitions

Since the scope of the regulations extends to SDs and MSPs, the

Commission amends Sec. 160.3 to add the definitions of SDs and MSPs to

the list

[[Page 43876]]

of defined terms under Sec. 160.3. Specifically, the Commission

defines ``major swap participant'' to have the same meaning as in

section 1a(33) of the CEA, as further defined by the Commission's

regulations, and includes any person registered as such thereunder. The

Commission defines ``swap dealer'' to have the same meaning as in

section 1a(49) of the CEA, as further defined by the Commission's

regulations, and includes any person registered as such thereunder.

There are existing definitions and related provisions under part

160 that are amended to include these new registrants. Specifically,

the definitions of ``financial institution'', ``affiliate'', and

``you'' are amended to include swap dealers and major swap

participants.

D. Section 160.15--Other Exceptions to Notice and Opt-out Requirements

As noted above, title X of the Dodd-Frank Act transferred certain

authority from the FTC to the Bureau. Accordingly, the Commission is

changing the reference from the FTC to the Bureau in Sec. 160.15 to

reflect that the Bureau is now a Federal functional regulator.

E. Section 160.17(b)--Relation to State Laws

Existing Sec. 160.17(b) of the Commission's regulations clarifies

the relationship of title V to state consumer protection laws. As a

result of the creation of the Bureau and the transfer of certain

authority from the FTC to the Bureau, the Commission proposed to amend

Sec. 160.17(b) by replacing it with the standard set out in section

1041(a)(2) of the Dodd-Frank Act. In the Commission's view, while the

language of the standard in section 1041(a)(2) is structured slightly

different from the existing standard in Sec. 160.17(b), the Commission

believed that the proposed language was nearly identical in substance

to the current standard in Sec. 160.17(b).

SIFMA commented that the standard for relation to state laws should

be the same as the standard under section 507(b) of the GLB Act. SIFMA

asserted that the appropriate standard should more closely follow

section 507(b)--not section 1041 of the Dodd-Frank Act--because the

former standard would achieve maximum consistency with the rules of the

Office of the Comptroller of the Currency, the Board of Governors of

the Federal Reserve System, the Federal Depository Insurance

Corporation, the Office of Thrift Supervision, the National Credit

Union Administration, and the Securities and Exchange Commission

(collectively, the ``Agencies'') and would maintain the settled

expectations of the market participants, which have complied with the

standards of GLB Act for several years.

The Commission has carefully considered SIFMA's comment and has

amended Sec. 160.17(b) to use the language of section 507(b) of the

GLB Act, as amended by section 1093(6) of the Dodd-Frank Act. The

Commission recognizes that market participants are familiar with the

standard in section 507(b) of the GLB Act, and therefore, changing the

language of the standard ever so slightly from what is in section

507(b) may create unnecessary and unintended confusion.

F. Section 160.30--Procedures to Safeguard Customer Records and

Information

Section 160.30 requires CFTC registrants to adopt policies and

procedures that, among other things, address administrative, technical

and physical safeguards for the protection of customer records and

information. The Commission amends the introductory sentence of Sec.

160.30 to add SDs and MSPs to the list of CFTC registrants that must

comply with this requirement.

III. Effective Date

In the Proposal, the Commission proposed to adopt the amendments to

part 160 on July 21, 2011, which coincides with the designated transfer

date when various Federal agencies transfer their consumer protection

authority to the Consumer Financial Protection Bureau pursuant to

section 1100H of the Dodd-Frank Act.\11\ In response to the proposed

effective date, SIFMA expressed concern that this timeframe would not

provide covered entities with a reasonable amount of time to address

and implement the new rules. To address this concern, SIFMA requested

that the Commission extend the effective date of the final rules to

commence nine months from the date of the rules' publication in the

Federal Register to ensure a reasonable time for compliance.

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\11\ See 75 FR 57252-02, Sept. 20, 2010.

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The Commission partly agrees with SIFMA's comment in that SDs and

MSPs may need a reasonable amount of time to comply with the amendments

to part 160 since these are two new types of Commission-regulated

entities. The Commission, however, believes that nine months is more

time than is necessary for these new regulated entities to comply with

part 160. The Commission has decided to establish staggered compliance

dates for its regulated entities that fall within the scope of part

160.\12\ Specifically, with respect to those Commission-regulated

entities that were previously complying with part 160--FCMs, IBs, CPOs,

CTA, and RFEDs--the amendments to part 160 will not require that these

entities materially alter their compliance programs. Accordingly, in

the Commission's view, the appropriate compliance date for these

entities is 120 days from the date of publication in the Federal

Register. With respect to SDs and MSPs, the compliance date for these

entities is 60 days from the date of publication of the Commission's

final entities definitional rulemaking, which shall be published in the

Federal Register at a date in the future.\13\

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\12\ The effective date of the amendments to part 160 shall be

60 days from the date of publication in the Federal Register.

\13\ See the Commission's proposed entities definitional

rulemaking at 75 FR 80174, Dec. 21, 2010.

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IV. Related Matters

A. Cost-Benefit Considerations.

Section 15(a) of the CEA explicitly requires the Commission to

consider the costs and benefits of its actions before issuing a rule or

order under the CEA. By its terms, section 15(a) neither requires the

Commission to quantify the costs and benefits of amendments to

regulations, nor does it require the Commission to determine whether

the benefits of the amendments outweigh its costs. Section 15(a)

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 may in its discretion give greater

weight to any one of the five enumerated areas and could in its

discretion determine that, notwithstanding its costs, a particular

amendment 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.

Promulgated in 2001, part 160 of the Commission's regulations

currently applies to several types of Commission-regulated entities,

including FCMs, IBs, CTAs, CPOs and RFEDs. The Commission proposed and

later promulgated the rules in part 160 in concert with the Agencies in

order to broadly protect individual customers from all types of

regulated businesses

[[Page 43877]]

(including businesses that are regulated with the Commission) that have

access to nonpublic personal information. Part 160 imposes disclosure

and procedural requirements that are either mandated by or fully

consistent with the privacy provisions of the GLB Act and section 5g of

the CEA.

The Dodd-Frank Act created two new entities over which the

Commission has jurisdiction (i.e., SDs and MSPs), and specifically

mandated that the Commission has the authority to prescribe regulations

as necessary to carry out the purposes of title V of the GLB Act for

entities under its jurisdiction. In its Proposal, the Commission

primarily sought to expand the scope of part 160 to cover these new

entities because the Commission believes that, like FCMs, IBs, CTAs,

CPOs and RFEDs, these new entities are more likely to have access to

nonpublic personal information. The cost-benefit discussion in the

Proposal analyzed the costs and benefits of extending the existing

regulatory regime in part 160 to these new entities.

The Commission has considered the costs and benefits of the final

rule in light of comments received and the specific areas of concern

identified in section 15(a). An analysis of the section 15(a) factors

is set out immediately below, followed by a discussion of the comments

received in response to the Commission's cost-benefit discussion in the

Proposal.

1. Protection of market participants and the public. The

requirements to provide opt out notices and to protect customer

information will benefit market participants and the public by

protecting the privacy of their nonpublic personal information. The

Commission believes that extending these requirements to SDs and MSPs

will further ensure the protection of nonpublic personal information.

The Commission further believes that the costs, which will be placed on

these new entities will not exceed those costs currently placed on

FCMs, IBs, CTAs, CPOs and RFEDs. In the Commission's view, SDs and MSPs

will likely have similar resources and administrative infrastructure to

comply with the part 160 requirements. Moreover, while these new

entities will likely incur some incremental costs in complying with

part 160, the privacy protection benefits that will accrue to the

general public far outweigh those costs.

2. Efficiency and competition. The requirements to provide initial

and annual privacy notices will benefit efficiency and competition by

allowing customers to compare the privacy policies of financial

institutions. The Commission's final rules also will benefit efficiency

and competition by allowing SDs and MSPs flexibility to distribute

notices and to adopt policies and procedures to protect customer

information that are best suited to the institution's business and

needs. As noted above, the Commission believes that the costs, which

will be placed on these new entities will not exceed those costs

currently placed on FCMs, IBs, CTAs, CPOs and RFEDs. Indeed, SDs and

MSPs will likely have similar resources and administrative

infrastructure to comply with the part 160 requirements.

3. Price discovery and financial integrity of futures and swaps

markets, price discovery and sound risk management practices. The final

rules should have no effect, from the standpoint of imposing costs or

creating benefits, on the price discovery function or financial

integrity of the futures and swaps markets or on the risk management

practices of SDs or MSPs.

4. Other public interest considerations. In the same manner that

part 160 was designed to minimize the costs of compliance on FCMs, IBs,

CTAs, CPOs and RFEDs, part 160 will similarly provide SDs and MSPs with

maximum flexibility, consistent with legal requirements, to design

their own compliance systems. Ultimately, the Commission believes that

extending the scope of part 160 to SDs and MSPs will harmonize privacy

protections for individual customers across the futures and swaps

markets.

5. Response to comments. In its Proposal, the Commission solicited

comment on its consideration of these costs and benefits. The

Commission received one comment with respect to costs and benefits of

the Proposal. Specifically, SIFMA argued that the Commission also

should consider anticipated additional costs associated with monitoring

the privacy and opt-out notice process, addressing consumer issues, and

adjusting records to comport with consumer requests. SIFMA did not

provide specific cost information to support its comments.

Despite SIFMA's argument that the Commission did not consider the

additional costs identified above, there are several Commission-

regulated entities that already comply with part 160, and the final

rule simply extends this protection to new registrants, SDs and MSPs.

As noted above, the Commission believes that the costs, which will be

placed on these new entities will be no greater than those costs

currently placed on FCMs, IBs, CTAs, CPOs and RFEDs. In the

Commission's view, there is no reason why SDs and MSPs should be

excluded from these requirements to the extent that they conduct

business with a natural person. SDs and MSPs will likely have similar

resources and administrative infrastructure to comply with the part 160

requirements. The additional costs that SIFMA raised (but did not

articulate with specificity) were subsumed within the considerations

discussed in the Proposal.\14\

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\14\ See the Commission's cost-benefit discussion and Paperwork

Reduction Act analysis at 75 FR at 66016-17.

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In line with Section 15(a) of the CEA, the Commission believes that

extending these provisions to SDs and MSPs is in the public interest

and will further protect market the general public, promote efficiency

and competition, and address other public interest considerations such

as the harmonization of regulation across the futures and swaps

markets. In the Commission's view, these benefits far outweigh the

additional costs that SIFMA cited.

B. Paperwork Reduction Act.

This rule contains information collection requirements. As required

by the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq., the

Commission submitted a copy of the Proposal to the Office of Management

and Budget (``OMB'') for review. The Commission may not sponsor, and a

person is not required to respond to an information collection unless

it displays a currently valid OMB control number.

The final rule, affecting part 160, titled ``Privacy of Consumer

Financial Information,'' OMB Control Number 3038-0055, expands the

scope of this part to cover SDs and MSPs, two new classes of

registrants, now subject to Commission jurisdiction. The final rule

imposes mandatory requirements for these entities. SDs and MSPs must

provide initial and annual privacy and opt-out notices to all customers

that are natural persons.

In response to the Commission's request in the notice of proposed

rulemaking for comments on any potential paperwork burden associated

with this regulation, only one commenter provided a substantive comment

addressing the merits of the Commission's proposed PRA calculations. In

particular, SIFMA proposed that the burden estimate should be refined

to reflect anticipated additional burden hours associated with

monitoring the privacy and opt-out notice process, addressing consumer

issues, and adjusting records to comport with consumer requests.

[[Page 43878]]

Based on this comment, the Commission estimates that the

approximately 300 SDs and MSPs may incur additional burden hours.

Consequently, it is anticipated the 300 SDs and MSPs may incur an

additional aggregate of 1440 burden hours than what was stated in the

Proposal, monitoring an average of 20 notices per year, with an average

monitoring time of .24 hours per notice. Accordingly, the Commission

has submitted to the OMB an amended calculation of the annual burden

hours for SDs and MSPs. OMB has approved a revision to Control Number

3038-0055 to cover the revision in the Commission's annual burden

calculation.

C. Regulatory Flexibility Act.

The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires that

Federal agencies consider whether their proposed regulations will have

a significant economic impact on a substantial number of small

entities. The rule amendments adopted herein now will affect SDs and

MSPs, in addition to the certain Commission regulated entities that are

currently subject to Commission's regulations under part 160. These

regulations require periodic notice to be provided to individuals who

obtain financial products or services primarily for personal, family,

or household purposes from the institutions, and may be satisfied by

the use of a model notice developed by the Commission and other

regulatory agencies to minimize the burden of compliance. The

Commission certified in the Proposal that these rules will not have a

significant economic impact on a substantial number of small entities.

Accordingly, because the Commission received no substantive comments

from the public addressing the merits of the proposed rule, nothing

alters the Commission's determination that the obligations created by

these rule amendments will not create a significant economic impact on

a substantial number of small entities.

D. Regulatory Text.

List of Subjects in 17 CFR Part 160

Brokers, Dealers, Consumer protection, Privacy, Reporting and

recordkeeping requirements.

For the reasons articulated in the preamble, the Commission amends

part 160 of title 17 of the Code of Federal Regulations as follows:

0

1. The authority citation for part 160 is revised to read as follows:

Authority: 7 U.S.C. 7b-2 and 12a(5); 15 U.S.C 6801, et seq.,

and sec. 1093, Pub. L. 111-203, 124 Stat. 1376.

0

2. The heading for part 160 is revised to read as follows:

PART 160--PRIVACY OF CONSUMER FINANCIAL INFORMATION UNDER TITLE V

OF THE GRAMM-LEACH-BLILEY ACT

0

3. Amend section 160.1 by revising paragraph (b) to read as follows:

Sec. 160.1 Purpose and scope.

* * * * *

(b) Scope. This part applies only to nonpublic personal information

about individuals who obtain financial products or services primarily

for personal, family, or household purposes from the institutions

listed below. This part does not apply to information about companies

or about individuals who obtain financial products or services

primarily for business, commercial, or agricultural purposes. This part

applies to all futures commission merchants, retail foreign exchange

dealers, commodity trading advisors, commodity pool operators,

introducing brokers, major swap participants and swap dealers that are

subject to the jurisdiction of the Commission, regardless whether they

are required to register with the Commission. These entities are

hereinafter referred to in this part as ``you.'' This part does not

apply to foreign (non-resident) futures commission merchants, retail

foreign exchange dealers, commodity trading advisors, commodity pool

operators, introducing brokers, major swap participants and swap

dealers that are not registered with the Commission.

0

4. Amend Sec. 160.3 as follows:

0

a. Revise paragraphs (a), (n)(1)(i), (n)(1)(ii), and (o)(1)(i);

0

b. Redesignating paragraphs (w) and (x) as paragraphs (y) and (z);

0

c. Redesignating paragraphs (s) through (v) as paragraphs (t) through

(w);

0

d. Adding new paragraphs (s) and (x);

0

e. Revising new designated paragraphs (y)(4) and (y)(5); and

0

f. Adding new paragraph (y)(6) and (7) to read as follows:

Sec. 160.3 Definitions.

* * * * *

(a) Affiliate of a futures commission merchant, retail foreign

exchange dealer, commodity trading advisor, commodity pool operator,

introducing broker, major swap participant, or swap dealer means any

company that controls, is controlled by, or is under common control

with a futures commission merchant, retail foreign exchange dealer,

commodity trading advisor, commodity pool operator, introducing broker,

major swap participant, or swap dealer that is subject to the

jurisdiction of the Commission. In addition, a futures commission

merchant, retail foreign exchange dealer, commodity trading advisor,

commodity pool operator, introducing broker, major swap participant, or

swap dealer subject to the jurisdiction of the Commission will be

deemed an affiliate of a company for purposes of this part if:

(1) That company is regulated under title V of the GLB Act by the

Bureau of Consumer Financial Protection or by a Federal functional

regulator other than the Commission; and

(2) Rules adopted by the Bureau of Consumer Financial Protection or

another Federal functional regulator under title V of the GLB Act treat

the futures commission merchant, retail foreign exchange dealer,

commodity trading advisor, commodity pool operator, introducing broker,

major swap participant, or swap dealer as an affiliate of that company.

* * * * *

(n)(1) * * *

(i) Any futures commission merchant, retail foreign exchange

dealer, commodity trading advisor, commodity pool operator, introducing

broker, major swap participant, or swap dealer that is registered with

the Commission as such or is otherwise subject to the Commission's

jurisdiction; and

* * * * *

(2) * * *

(i) Any person or entity, other than a futures commission merchant,

retail foreign exchange dealer, commodity trading advisor, commodity

pool operator, introducing broker, major swap participant, or swap

dealer that, with respect to any financial activity, is subject to the

jurisdiction of the Commission under the Act.

* * * * *

(o)(1) * * *

(i) Any product or service that a futures commission merchant,

retail foreign exchange dealer, commodity trading advisor, commodity

pool operator, introducing broker, major swap participant, or swap

dealer could offer that is subject to the Commission's jurisdiction;

and

* * * * *

(s) Major swap participant. The term ``major swap participant'' has

the same meaning as in section 1a(33) of the Commodity Exchange Act, 7

U.S.C. 1 et seq., as may be further defined by this title, and includes

any person registered as such thereunder.

* * * * *

[[Page 43879]]

(x) Swap dealer. The term ``swap dealer'' has the same meaning as

in section 1a(49) of the Commodity Exchange Act, 7 U.S.C. 1 et seq., as

may be further defined by this title, and includes any person

registered as such thereunder.

* * * * *

(y) * * *

(4) Any commodity pool operator;

(5) Any introducing broker;

(6) Any major swap participant; and

(7) Any swap dealer.

* * * * *

0

5. Revise Sec. 160.15(a)(4) to read as follows:

Sec. 160.15 Other exceptions to notice and opt out requirements.

* * * * *

(4) To the extent specifically permitted or required under other

provisions of law and in accordance with the Right to Financial Privacy

Act of 1978, 12 U.S.C. 3401 et seq., to law enforcement agencies

(including a Federal functional regulator, the Secretary of the

Treasury, with respect to 31 U.S.C. Chapter 53, Subchapter II (Records

and Reports on Monetary Instruments and Transactions) and 12 U.S.C.

Chapter 21 (Financial Recordkeeping), a State insurance authority, with

respect to any person domiciled in that insurance authority's state

that is engaged in providing insurance, and the Bureau of Consumer

Financial Protection), self-regulatory organizations, or for an

investigation on a matter related to public safety;

* * * * *

0

6. Amend Sec. 160.17 by revising paragraph (b) to read as follows:

Sec. 160.17 Relation to state laws.

* * * * *

(b) Greater protection under state law. For purposes of this

section, a state statute, regulation, order or interpretation is not

inconsistent with the provisions of this part if the protection such

statute, regulation, order or interpretation affords any person is

greater than the protection provided under this part, as determined by

the Bureau of Consumer Financial Protection, after consultation with

the Commission, on its own motion or upon the petition of any

interested party.

0

7. Revise Sec. 160.30 to read as follows:

Sec. 160.30 Procedures to safeguard customer records and information.

Every futures commission merchant, retail foreign exchange dealer,

commodity trading advisor, commodity pool operator, introducing broker,

major swap participant, and swap dealer subject to the jurisdiction of

the Commission must adopt policies and procedures that address

administrative, technical and physical safeguards for the protection of

customer records and information.

Issued in Washington, DC on July 7, 2011 by the Commission.

David A. Stawick,

Secretary of the Commission.

Appendices to Privacy of Consumer Financial Information; Conforming

Amendments Under Dodd-Frank Act--Commission Voting Summary and

Statements of Commissioners

Note: The following appendices will not appear in the Code of

Federal Regulations.

Appendix 1--Commission Voting Summary

On this matter, Chairman Gensler and Commissioners Dunn,

Sommers, O'Malia and Chilton voted in the affirmative; no

Commissioner voted in the negative.

Appendix 2--Statement of Chairman Gary Gensler

I support the final rulemaking to expand the scope of privacy

protections for consumer financial information under the Gramm-

Leach-Bliley Act. The rulemaking expands the scope of the

Commission's existing privacy protections afforded to consumers'

information--under the Commission's Part 160 rules--to swap dealers

and major swap participants.

[FR Doc. 2011-17710 Filed 7-21-11; 8:45 am]

BILLING CODE 6351-01-P

Last Updated: July 22, 2011