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Notice

Agency Information Collection Activities Under OMB Review

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Information about this document as published in the Federal Register.

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AGENCY:

Commodity Futures Trading Commission.

ACTION:

Notice.

SUMMARY:

In compliance with the Paperwork Reduction Act of 1995 (“PRA”), this notice announces that the Information Collection Request (“ICR”) abstracted below has been forwarded to Start Printed Page 74409the Office of Management and Budget (“OMB”) for review and comment. The ICR describes the nature of the information collection and its expected costs and burden.

DATES:

Comments must be submitted on or before November 25, 2016.

ADDRESSES:

Comments regarding the burden estimated or any other aspect of the information collection, including suggestions for reducing the burden, may be submitted directly to the Office of Information and Regulatory Affairs in OMB, within 30 days of publication of the notice, by email at OIRAsubmissions@omb.eop.gov. Please identify the comments by OMB Control No. 3038-0096. Please provide the Commission with a copy of all submitted comments at the address listed below. Please refer to OMB Reference No. 3038-0096, found on http://reginfo.gov. Comments may also be mailed to the Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for the Commodity Futures Trading Commission, 725 17th Street NW., Washington, DC 20503, and to the Commission through its Web site at http://comments.cftc.gov. Follow the instructions for submitting comments through the Web site.

Comments may also be mailed to: Christopher Kirkpatrick, Secretary of the Commission, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581, or by Hand Delivery/Courier at the same address.

A copy of the supporting statements for the collection of information discussed above may be obtained by visiting http://regInfo.gov. 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.

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FOR FURTHER INFORMATION CONTACT:

Andrew Ridenour, Special Counsel, (202) 418-5438, aridenour@cftc.gov, or Owen Kopon, Attorney-Advisor, (202) 418-5360, okopon@cftc.gov, Division of Market Oversight, and refer to OMB Control No. 3038-0096.

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SUPPLEMENTARY INFORMATION:

Title: Revised Collection, Comment Request: Amendments to Swap Data Recordkeeping and Reporting Requirements for Cleared Swaps, Final Rule (OMB Control No. 3038-0096). This is a request for a revision to a currently approved information collection.

Abstract: The Commission recently adopted a final rule regarding the reporting of cleared swap transactions (the “Cleared Swap Reporting Release”),[1] which will require entities reporting swaps to report certain additional data elements. This Cleared Swap Reporting Release will also require registered derivatives clearing organizations (“DCOs”) to terminate “original swaps” (as defined in that final rule), which may require DCOs to connect to multiple registered swap data repositories (“SDRs”). An 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 OMB control number. The Federal Register notice with a 60-day comment period soliciting comments on this collection of information (“60 Day Notice”), implicated by the requirements of the Cleared Swap Reporting Release, was published on July 21, 2016 (81 FR 47362). The 60 Day Notice included a burden estimate for (a) DCOs to connect to SDRs for purposes of terminating original swaps, estimated to require a one-time hours burden of 3,000 per DCO and a recurring annual cost of $250,000; and (b) changes to reporting systems by all reporting entities and SDRs to account for additional and amended primary economic terms (“PET”) data fields in the Cleared Swap Reporting Release and future changes required by changes to PET fields and developments in the swaps market, estimated as a recurring burden of 200 hours per year.[2]

The Commission received one comment letter in response to the 60 Day Notice. CME Group commented that the Commission's assumptions relating to economies of scale for connections to more than one SDR were erroneous. CME Group also commented that the Commission's assumption that DCOs would not need to connect to every SDR because not every SDR accepted every asset class of swaps was erroneous, because only the equities asset class was accepted by fewer than four SDRs. While not providing a specific number of burden hours associated with the Cleared Swap Reporting Release, CME Group estimated that the build to comply with the rule would be “almost 50% above the Commission's estimate[.]” CME Group also commented that the Commission's estimate of annual costs was low because the incorrect assumptions on economies of scale and limited numbers of SDR connections applied to costs as well as burden hours. (CME Group Sept. 19, 2016 Letter, at 2-5).[3] The CME Group letter did not address the 200 hour recurring burden for changes to PET fields, and the Commission received no other comments on the 60 Day Notice.

Burden Statement: Based on the comment letter received in response to the 60 Day Notice, the Commission is revising its estimate of the burden for this collection by increasing the estimated costs associated with the termination of original swaps by 50 percent. The Commission is not revising the burden estimate association with additional and amended PET fields.

Below are tables indicating the increase in burden hours and costs above those in the current collection 3038-0096:Start Printed Page 74410

Additional and Amended PET Fields

[Same as in 60 day notice]

Affected entitiesSDRs, SEFs, DCMs, DCOs, SD/MSPs, non-SD/MSP reporting entities
Burden typeBurden per respondentNumber of respondentsTotal burden
Annual hours burden200 hours44989,800 hours.
Annual costs$0449$0.

Termination of Original Swaps

[Increased by 50% from 60 day notice]

Affected entitiesDCOs
Burden typeBurden per respondentNumber of respondentsTotal burden
One-time hours burden4,500 hours1254,000 hours.
Annual costs$375,00012$4,500,000.

Increases in Hours Burdens and New Total Hours Burden

Based on an increase in annual burden hours of 89,800, Commission staff estimate that the revised aggreagate total annual time burden for the collection is 562,945 hours.

Increases in Aggregate Costs

There are three components to the aggregate increase in annual costs associated with this revision, (a) costs associated with changes to reporting systems, to be incurred by 449 entities; (b) annualized costs associated with establishing SDR connections by DCOs; and (c) costs associated with maintaining SDR connections by DCOs.

First, the Commission estimates that the costs associated with additional and amended PET fields will be $15,196 per entity (200 hours × $75.98 per hour).[4] The aggregate increase across all 449 reporting entities and SDRs for the additional and amended PET fields is therefore $6,823,004.

Second, the Commission estimates that DCO to SDR connections will require each DCO to incur a one-time start-up cost of $341,910 (4,500 hours x $75.98 per hour). The Commission estimates that DCOs will use these connections for 20 years, and therefore the annualized start-up cost for SDR connections will be $17,095 per DCO. Based on 12 DCOs, the aggregate annualized start-up cost for SDR connections will be $205,146.

Third, DCOs will incur an aggregate annual cost of $4,500,000 to maintain those SDR connections.

By combining these three components, the aggregate increase to annual costs associated with this collection will be $11,528,150.

Total Aggregate Costs

Commission staff estimate that the revised aggregate total annual cost for the collection is $99,462,062. The burden estimate represents the burden that SDRs, swap execution facilities (“SEFs”), designated contract markets (“DCMs”), DCOs, swap dealers (“SDs”), major swap participants (“MSPs”), and non-SD/MSP swap counterparties incur to operate and maintain swap recordkeeping and reporting systems to facilitate the recordkeeping and reporting of swaps.

Respondents/Affected Entities: SDRs, SEFs, DCMs, DCOs, SDs, MSPs, and non-SD/MSP swap counterparties.

Estimated Number of Respondents: 30,210.

Estimated Total Annual Burden on Respondents: 562,945 hours.

Estimated Total Annual Cost: $99,462,062.

Frequency of Collection: Ongoing.

(Authority: 44 U.S.C. 3501 et seq.)

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Dated: October 21, 2016.

Robert N. Sidman,

Deputy Secretary of the Commission.

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Footnotes

1.  See Amendments to Swap Data Recordkeeping and Reporting Requirements for Cleared Swaps, Final Rule, 81 FR 41736 (June 27, 2016).

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2.  While not connected to the Cleared Swap Reporting Release, the Commission also proposed in the 60 Day Notice to reduce the number of SDRs in collection 3038-0096 from 15 to 4. When submitting the original OMB information collection for part 45 reporting, the Commission had assumed that up to 15 entities would register as SDRs. Currently, there are four SDRs provisionally registered with the Commission. Three other entities had submitted SDR applications. Two withdrew applications in 2012 and 2014. One (GTR) withdrew its application and resubmitted under the corporate entity DTCC Data Repository (US) LLC, which currently operates as a provisionally registered SDR. As the Commission has not received any SDR applications since 2012, the Commission believes that four is a reasonable number of SDRs for calculating PRA burdens.

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3.  The Commission received a comment from Robert Rutkowski on Sept. 15, 2016 under this comment file. However, this comment letter related to the de minimis report, not the Cleared Swap Reporting Release or PRA Notice.

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4.  In calculating the cost figures associated with burden hours, the Commission estimated the appropriate wage rate based on salary information for the securities industry compiled by the Securities Industry and Financial Markets Association (“SIFMA”). Commission staff arrived at an hourly rate of $75.98 using figures from a weighted average of salaries and bonuses across different professions from the SIFMA Report on Management & Professional Earnings in the Securities Industry 2013, modified to account for an 1800-hour work-year and multiplied by 1.3 to account for overhead and other benefits. The Commission estimated appropriate wage rate is a weighted national average of salary and bonuses for professionals with the following titles (and their relative weight): “programmer (senior)” (30% weight); “programmer” (30%); “compliance advisor (intermediate)” (20%); “systems analyst” (10%), and “assistant/associate general counsel” (10%).

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[FR Doc. 2016-25925 Filed 10-25-16; 8:45 am]

BILLING CODE 6351-01-P