Federal Register / Vol. 76, No. 47 / Thursday, March 10, 2011 / Proposed Rules 13101 

p. 303. Sec. 315.607 also issued under 22 

U.S.C. 2560. Sec. 315.608 also issued under 

E.O. 12721, 3 CFR, 1990 Comp. p. 293. Sec. 

315.610 also issued under 5 U.S.C. 3304(c). 

Sec. 315.611 also issued under 5 U.S.C. 

3304(f). Sec. 315.612 also under E.O. 13473. 

Sec. 315.708 also issued under E.O. 13318, 3 

CFR, 2004 Comp. p. 265. Sec. 315.710 also 

issued under E.O. 12596, 3 CFR, 1978 Comp. 

p. 264. 

Subpart F—Career or Career 

Conditional Appointment Under 

Special Authorities 

2. In § 315.612, revise paragraph (d)(1) 

to read as follows: 

§ 315.612 Noncompetitive appointment of 

certain military spouses. 

* * * * * 

(d) Conditions. (1) In accordance with 

the provisions of this section, spouses 

are eligible for noncompetitive 

appointment: 

(i) For a maximum of 2 years from the 

date of the service member’s permanent 

change of station orders; 

(ii) From the date of documentation 

verifying the member of the armed 

forces is 100 percent disabled; or 

(iii) From the date of documentation 

verifying the member of the armed 

forces was killed while on active duty. 

* * * * * 

[FR Doc. 2011–5459 Filed 3–9–11; 8:45 am] 

BILLING CODE 6325–39–P 

DEPARTMENT OF ENERGY 

10 CFR Part 430 

[Docket No. EERE–2011–BT–BC–0009] 

Building Energy Codes Program: 

Presenting and Receiving Comments 

to DOE Proposed Changes to the 

International Green Construction Code 

(IgCC) 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Notice of public meeting. 

SUMMARY: The U. S. Department of 

Energy’s Office of Energy Efficiency and 

Renewable Energy (EERE) is seeking 

input on potential proposed changes to 

the draft International Green 

Construction Code (IgCC). The first 

edition of the IgCC is currently being 

developed by the International Code 

Council (ICC) for anticipated 

publication in 2012. EERE will be 

holding a public meeting to present and 

solicit public comment on proposed 

changes. 

DATES: DOE will hold a public meeting 

on 14 April, 2011, from 9 a.m. to 4 p.m., 

in Washington, DC. 

ADDRESSES: The public meeting will be 

held at the Holiday Inn, 550 C Street, 

SW., Washington, DC 20585–0121. If a 

foreign national wishes to participate in 

the meeting, please inform DOE as soon 

as possible by contacting Ms. Brenda 

Edwards at (202) 586–2945 so that the 

necessary procedures can be completed. 

Background Materials and Submitting 

Comments: For access to the IgCC code 

change proposals filed by DOE, visit the 

Web site: http://www.energycodes.gov/ 

development/IgCC/. Written comments 

may be filed to each DOE IgCC code 

change proposal by using the ‘‘submit 

input’’ function on this Web site. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Robert Dewey, U.S. Department of 

Energy, Energy Efficiency and 

Renewable Energy, Building 

Technologies Program, EE–2J, 1000 

Independence Avenue, SW., 

Washington, DC 20585–0121. Tel.: (202) 

287–1534. E-mail: 

Robert.Dewey@ee.doe.gov. 

Mr. Chris Calamita, U.S. Department 

of Energy, Office of the General Counsel, 

GC–72, 1000 Independence Avenue, 

SW., Washington, DC 20585–0121. Tel.: 

(202) 586–1777. E-mail: 

Christopher.Calamita@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: The 

public meeting announced in today’s 

notice is for DOE to present and receive 

comments on DOE’s proposed changes 

to the IgCC. 

The IgCC is being developed to 

provide a baseline of codes addressing 

green construction, and provide a 

framework linking sustainability with 

safety and performance. 

The IgCC is intended to provide a 

green model building code provisions 

for new and existing commercial 

buildings and would include American 

Society of Heating, Refrigerating and 

Air-Conditioning Engineers ASHRAE 

189.1–2009 as an alternate compliance 

option in its current form. It is currently 

being developed as a voluntary 

‘‘overlay’’ code with energy conservation 

and efficiency provisions intended to 

exceed those in the 2012 IECC. It also 

contains provisions for regulating site 

development and land use, material 

resource conservation and efficiency, 

water resource conservation and 

efficiency, indoor environmental quality 

and commissioning. The IgCC also 

currently provides for jurisdictional 

requirements and is intended to provide 

compliance flexibility through a variety 

of optional project electives. 

The International Codes Council will 

conduct hearings on the IgCC from May 

16 through May 22, 2011, in Dallas, 

Texas, for consideration of the proposed 

changes. The complete set of all 1400 

proposed changes to the IgCC will be 

available from the ICC in mid-March. 

It is not the object of this public 

meeting to obtain any group position or 

consensus. Rather, the EERE is seeking 

as many recommendations as possible 

from all individuals at this meeting. The 

meeting will be conducted in a 

conference style. 

Written comments to the IgCC code 

change proposals filed by DOE may be 

submitted by using the ‘‘submit input’’ 

function assigned to each DOE proposal 

on the Web site: http:// 

www.energycodes.gov/development/ 

IgCC/. 

Issued in Washington, DC, on March 4, 

2011. 

Roland J. Risser, 

Program Manager, Building Technologies 

Program, Energy Efficiency and Renewable 

Energy. 

[FR Doc. 2011–5494 Filed 3–9–11; 8:45 am] 

BILLING CODE 6450–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Parts 23, 37, 38, and 39 

RIN 3038–AC98 

Requirements for Processing, 

Clearing, and Transfer of Customer 

Positions 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Commodity Futures 

Trading Commission (Commission) is 

proposing regulations to implement 

Title VII of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act 

(Dodd-Frank Act). Proposed regulations 

would establish the time frame for a 

swap dealer (SD), major swap 

participant (MSP), futures commission 

merchant (FCM), swap execution 

facility (SEF), and designated contract 

market (DCM) to submit contracts, 

agreements, or transactions to a 

derivatives clearing organization (DCO) 

for clearing. Proposed regulations also 

would facilitate compliance with DCO 

Core Principle C (Participant and 

Product Eligibility) in connection with 

standards for cleared products and the 

prompt and efficient processing of all 

contracts, agreements, and transactions 

submitted for clearing. The Commission 

is further proposing related regulations 

implementing SEF Core Principle 7 

(Financial Integrity of Transactions) and 

DCM Core Principle 11 (Financial 

Integrity of Transactions), requiring 

coordination with DCOs in the 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1
13102 Federal Register / Vol. 76, No. 47 / Thursday, March 10, 2011 / Proposed Rules 

1Commission 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. 

2See 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. 

3Pursuant 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. 

5See e.g., 76 FR 6715, Feb. 8, 2011 (proposed 

rules for SD and MSP documentation); 76 FR 3698, 

Jan. 20, 2011, (proposed rules for DCO Core 

Principles C and F); 76 FR 1214, Jan. 7, 2011 

(proposed rules for SEF Core Principle 7; 75 FR 

81519, Dec. 28, 2010, (proposed rules for SD and 

MSP confirmation, portfolio reconciliation, and 

portfolio compression); 75 FR 80572, Dec. 22, 2010 

(proposed rules for DCM Core Principle 11). 

6A clearinghouse becomes the counterparty to 

trades with market participants through novation, 

an open offer system, or an analogous legally 

binding arrangement. Through novation, the 

original contract between the buyer and seller is 

extinguished and replaced by two new contracts, 

one between the clearinghouse and the buyer and 

the other between the clearinghouse and the seller. 

In an open offer system, a clearinghouse is 

automatically and immediately interposed in a 

transaction at the moment the buyer and seller 

agree on the terms. 

development of rules and procedures to 

facilitate clearing. Additionally, the 

Commission is proposing a regulation to 

implement DCO Core Principle F 

(Treatment of Funds), requiring a DCO, 

upon customer request, to promptly 

transfer customer positions and related 

funds from one clearing member to 

another, without requiring the close-out 

and re-booking of the positions. 

DATES: Submit comments on or before 

April 11, 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 § 145.9 of the 

Commission’s regulations.1 The 

Commission reserves the right, but shall 

have no obligation, to review, prescreen, 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. 

FOR FURTHER INFORMATION CONTACT: John 

C. Lawton, Deputy Director, 202–418– 

5480, jlawton@cftc.gov; Phyllis P. Dietz, 

Associate Director, 202–418–5449, 

pdietz@cftc.gov; Sarah E. Josephson, 

Associate Director, 202–418–5684, 

sjosephson@cftc.gov, Division of 

Clearing and Intermediary Oversight; 

Riva Spear Adriance, Associate Director, 

202–418–5494, radriance@cftc.gov; 

Nancy Markowitz, Assistant Deputy 

Director, 202–418–5453, 

nmarkowitz@cftc.gov; Nadia Zakir, 

Attorney-Advisor, 202–418–5720, 

nzakir@cftc.gov; Mauricio Melara, 

Attorney-Advisor, 202–418–5719, 

mmelara@cftc.gov; Division of Market 

Oversight, Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Title VII of the Dodd-Frank Act 

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 by, 

among other things: (1) Providing for the 

registration and comprehensive 

regulation of SDs and MSPs; (2) 

imposing clearing and trade execution 

requirements on standardized derivative 

products; (3) creating rigorous 

recordkeeping and real-time reporting 

regimes; and (4) enhancing the 

Commission’s rulemaking and 

enforcement authorities with respect to 

all registered entities and intermediaries 

subject to the Commission’s oversight. 

In this notice of proposed rulemaking, 

the Commission proposes to adopt 

regulations to establish the time frame 

for an SD, MSP, FCM, SEF, or DCM to 

process and submit contracts, 

agreements, or transactions to a DCO for 

clearing; to establish certain product 

standards and a time frame for a DCO 

to clear such contracts, agreements, and 

transactions; and to facilitate a DCO’s 

transfer of open positions from a 

carrying clearing member to another 

clearing member without unwinding 

and re-booking the position. These 

supplement proposed regulations that 

were previously published for public 

comment.5

B. Existing Swap Clearing Practices 

1. Time Frame for Clearing 

Currently, a significant number of 

swaps are not cleared and, for those that 

are cleared, there may be a delay in the 

substitution of a DCO as the 

counterparty to the transaction through 

a novation of the original contract, 

agreement, or transaction.6 In many 

instances, this delay can be up to a 

week. For example, some 

clearinghouses accept bilateral trades 

for clearing on a batched basis once a 

week. This time lag potentially presents 

credit risk to the swap counterparties 

and the DCO because the value of a 

position may change significantly 

between the time of execution and the 

time of novation, thereby allowing 

financial exposure to accumulate in the 

absence of daily mark-to-market. Among 

the purposes of clearing are the 

reduction of risk and the enhancement 

of financial certainty, and this delay 

diminishes these benefits of clearing 

swaps that Congress sought to promote 

in the Dodd-Frank Act. Delay in clearing 

is also inconsistent with other proposed 

regulations concerning product 

eligibility and financial integrity of 

transactions insofar as the delay 

constrains liquidity and increases risk. 

The Commission recognizes that there 

may be instances when a delay in 

acceptance of a transaction by a DCO is 

unavoidable. For instance, when new 

products are first listed for clearing, 

existing legacy transactions may have to 

be moved into clearing incrementally. 

However, this process, sometimes 

referred to as backloading or migration, 

should be accomplished as quickly as 

possible. 

The swap market infrastructure 

established by the Dodd-Frank Act 

provides for the trading of swaps on a 

SEF or DCM. The Dodd-Frank Act also 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1
Federal Register / Vol. 76, No. 47 / Thursday, March 10, 2011 / Proposed Rules 13103 

7 7 U.S.C. 6s(h)(1)(D); 7 U.S.C. 6s(h)(3)(D); 7 

U.S.C. 6s(i); and 7 U.S.C. 12a(5). Section 8a(5) of 

the CEA authorizes the Commission to promulgate 

such regulations as, in the judgment of the 

Commission, are reasonably necessary to effectuate 

any of the provisions or to accomplish any of the 

purposes of the CEA. 

8See discussion in section II.B. of this notice. 

9See 76 FR at 81531. 

10See 75 FR 76574, Dec. 8, 2010 (proposed rules 

for swap data recordkeeping and reporting 

requirements). 

establishes certain parameters for the 

bilateral execution of swaps among 

entities registered as SDs or MSPs and 

their counterparties. Swaps traded on a 

SEF or DCM, as well as swaps executed 

bilaterally, that are subject to mandatory 

clearing (and have not been electively 

excepted from mandatory clearing by an 

end user under section 2(h)(7) of the 

CEA), must be cleared by a registered 

DCO. For swaps executed bilaterally 

that are not required to be cleared, if the 

parties to the transaction agree to clear, 

they may submit the swap to a 

registered DCO for clearing. 

Through this proposed rulemaking, 

the Commission seeks to expand access 

to, and to strengthen the financial 

integrity of, the swap markets subject to 

Commission oversight by requiring, and 

establishing uniform standards for, 

prompt processing, submission, and 

acceptance of swaps eligible for clearing 

by DCOs. This requires setting an 

appropriate time frame for the 

processing and submission of swaps for 

clearing, as well as a time frame for the 

clearing of swaps by the DCO. 

2. Transfer of Swaps Positions and 

Related Funds 

Currently, in the futures industry, a 

request by a customer to transfer its 

open positions and related funds from 

its carrying FCM to another FCM is 

accomplished within a reasonable 

period of time (typically within two 

business days). However, under current 

practice for some cleared swaps, a 

customer’s request to transfer all or a 

portion of its swap positions and related 

funds may be subject to a more 

significant delay. (A party to a cleared 

swap may wish to transfer its positions 

from its current clearing member to 

another clearing member because there 

is concern about the carrying clearing 

member’s financial strength or for 

competitive reasons relating to customer 

service or pricing). In these instances, a 

party must either enter into an offsetting 

position without terminating its original 

position, thereby creating economically 

unnecessary trades, or ‘‘unwind’’ the 

position with the clearinghouse. 

In proposing a new regulation to 

implement DCO Core Principle F 

(Treatment of Funds), the Commission 

seeks to ensure that DCOs do not 

impose economic or operational 

obstacles to the prompt transfer of 

customer positions and related funds 

from one clearing member to another, 

upon the request of a customer. The 

Commission’s purpose in this regard is 

to formalize and apply to swaps 

clearing, the futures clearinghouse 

practice of transferring customer 

positions and related funds without 

close-out and re-booking of the 

positions. 

II. Proposed Regulations 

A. Proposed § 23.506—SD and MSP 

Submission of Swaps for Processing and 

Clearing 

1. Proposed Regulations 

Section 731 of the Dodd-Frank Act 

amends the CEA by adding a new 

section 4s, which sets forth a number of 

requirements for SDs and MSPs. 

Specifically, section 4s(i) of the CEA 

establishes swap documentation 

standards for SDs and MSPs and 

requires them to ‘‘conform with such 

standards as may be prescribed by the 

Commission by rule or regulation that 

relate to timely and accurate 

confirmation, processing, netting, 

documentation, and valuation of all 

swaps.’’ Accordingly, the Commission is 

proposing regulations on swap 

processing and clearing discussed 

below, pursuant to the authority granted 

under sections 4s(h)(1)(D), 4s(h)(3)(D), 

4s(i), and 8a(5) of the CEA.7 These 

proposed regulations for SDs and MSPs 

are intended to complement the 

proposed regulations for DCOs, which 

require timely acceptance of swaps for 

clearing.8

In order to ensure compliance with 

any mandatory clearing requirement 

issued pursuant to section 2(h)(1) of the 

CEA and to promote the mitigation of 

counterparty credit risk through the use 

of central clearing, the Commission is 

proposing § 23.506(a)(1), which would 

require that SDs and MSPs have the 

ability to route swaps that are not 

executed on a SEF or DCM to a DCO in 

a manner that is acceptable to the DCO 

for the purposes of risk management. 

Under § 23.506(a)(2), SDs and MSPs 

would also be required to coordinate 

with DCOs to facilitate prompt and 

efficient processing in accordance with 

proposed regulations related to the 

timing of clearing by DCOs. 

Proposed § 23.506(a) does not 

prescribe the manner by which SDs or 

MSPs route their swaps to DCOs and 

provide for prompt and efficient 

processing. Indeed, in many instances, 

it is likely that DCOs will enable SDs 

and MSPs to submit their swaps to 

clearing via third-party platforms and 

other service providers. In this manner, 

privately negotiated swaps may be 

submitted to DCOs with minimal 

burden on market participants. 

Proposed § 23.506(b) would set forth 

timing requirements for submitting 

swaps to DCOs in those instances where 

the swap is subject to a clearing 

mandate and in those instances when a 

swap is not subject to a mandate. Under 

§ 23.506(b)(1), an SD or MSP would be 

required to submit a swap that is not 

executed on a SEF or DCM, but is 

subject to a clearing mandate under 

section 2(h)(1) of the CEA (and has not 

been electively excepted from 

mandatory clearing by an end user 

under section 2(h)(7) of the CEA) as 

soon as technologically practicable 

following execution of the swap, but no 

later than the close of business on the 

day of execution. 

For those swaps that are not subject 

to a clearing mandate, but both 

counterparties to the swap have elected 

to clear the swap, under proposed 

§ 23.506(b)(2), the SD or MSP would be 

required to submit the swap for clearing 

not later than the next business day after 

execution of the swap or the agreement 

to clear, if later than execution. This 

time frame reflects the possibility that, 

unlike a trade that takes place on a 

DCM, in the case of a bilateral swap, the 

parties may need time to agree to terms 

that would conform with a DCO’s 

template for swaps it will accept for 

clearing. As noted previously, any delay 

between execution and novation to a 

clearinghouse potentially presents 

credit risk to the swap counterparties 

and the DCO because the value of the 

position could change significantly 

between the time of execution and the 

time of novation, thereby allowing 

financial exposure to accumulate in the 

absence of daily mark-to-market. The 

proposed regulation would serve to 

limit this delay as much as reasonably 

possible. 

Proposed § 23.506 is consistent with 

regulations previously proposed for SDs 

and MSPs, including proposed § 23.501, 

which requires confirmation of all 

swaps.9 In fact, by providing for 

confirmation upon acceptance for 

clearing pursuant to proposed 

§ 39.12(b)(7)(v), SDs and MSPs would be 

able to satisfy proposed § 23.501. 

Proposed § 23.506 is consistent with 

the Commission’s proposed regulations 

requiring reporting of swap transaction 

data to a registered swap data 

repository.10 Under these proposed 

regulations, SDs and MSPs are required 

to report certain information about a 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1
13104 Federal Register / Vol. 76, No. 47 / Thursday, March 10, 2011 / Proposed Rules 

11Proposed § 45.3(a)(1)(iii)(A), 75 FR at 76600. 

12Proposed § 45.1(q)(20), 75 FR at 76598. 

13See 75 FR 76140, Dec. 7, 2010 (proposed rules 

for real-time public reporting of swap transaction 

data). 

14Proposed § 43.3(a)(3), 75 FR at 76172. 

15Proposed § 43.4 and Appendix A to part 43, 75 

FR at 76174 and 76177. 

16Section 5b(c)(2)(C)(i)(II) of the CEA; 7 U.S.C. 

7a–1(c)(2)(C)(i)(II). 

17See 76 FR 3698. 

18 7 U.S.C. 7a–1(c)(2)(A); and 7 U.S.C. 12a(5). 

19See 76 FR at 3720. 

20 Id. Section 2(h)(1)(B) of the CEA, 7 U.S.C. 

2(h)(1)(B), requires a DCO to adopt rules providing 

that all swaps with the same terms and conditions 

submitted to the DCO for clearing are economically 

equivalent within the DCO and may be offset with 

each other within the DCO. Section 2(h)(1)(B) 

further requires a DCO to provide for nondiscriminatory clearing of a swap executed 

bilaterally or on or subject to the rules of an 

unaffiliated SEF or DCM. 

21See 76 FR at 3720. 

22 Id. 

23To provide additional clarity regarding open 

access to clearing, the Commission is proposing to 

renumber the second sentence of proposed 

§ 39.12(b)(2) as § 39.12(b)(3) and to insert a new 

paragraph (b)(4). Accordingly, proposed paragraphs 

(b)(3) and (b)(4) would be renumbered as 

paragraphs (b)(5) and (b)(6), respectively. 

24See 76 FR at 3720. 

25 Id. 

swap that is not executed on a SEF or 

DCM to a registered swap data 

repository ‘‘promptly following 

verification of the primary economic 

terms by the counterparties with each 

other at or immediately following 

execution of the swap, but in no event 

later than: 30 minutes after execution of 

the swap if verification of primary 

economic terms occurs electronically; or 

24 hours after execution of a swap if 

verification of primary economic terms 

does not occur electronically.’’ 11 One of 

the ‘‘primary economic terms’’ required 

to be reported under such proposed 

regulations is an indication of whether 

or not the swap will be cleared by a 

DCO.12

The proposed regulation also is 

consistent with the Commission’s 

proposed regulations requiring real-time 

public reporting of swap transaction and 

pricing data.13 Under these proposed 

regulations, SDs and MSPs are required 

to report certain information about a 

swap that is not executed on a SEF or 

DCM to a registered swap data 

repository that accepts and publicly 

disseminates swap transaction and 

pricing data, as soon as technologically 

practicable following execution of such 

swap.14 The information required to be 

reported under the proposed regulations 

includes an indication of whether or not 

a swap is cleared by a DCO.15

2. Solicitation of Comments 

The Commission solicits comment on 

all aspects of the proposed § 23.506. It 

further requests responses to the 

following specific questions: Should the 

regulations specify how an SD or MSP 

must ensure that it has the capacity to 

route swaps to a DCO? Are there any 

systemic obstacles to the DCO, SD, and 

MSP coordination required under the 

proposed regulation? 

Are the proposed time frames in 

§ 23.506(b) appropriate? Are they 

operationally feasible? What is the 

operational feasibility of same-day 

clearing for swaps executed bilaterally 

that are required to be cleared and those 

that will not be required to be cleared? 

The Commission further requests 

comment on the use of the phrase ‘‘as 

soon as technologically practicable.’’ 

B. Proposed § 39.12—Acceptance and 

Clearing of Swaps by a DCO 

1. Recently Proposed Product Eligibility 

Standards Under Core Principle C 

Core Principle C requires each DCO to 

establish ‘‘appropriate standards for 

determining the eligibility of 

agreements, contracts, or transactions 

submitted to the [DCO] for clearing.’’ 16

The Commission has previously 

proposed § 39.12(b) to implement this 

provision,17 pursuant to its rulemaking 

authority under sections 5b(c)(2)(A) and 

8a(5) of the CEA.18

As previously published for public 

notice and comment, proposed 

§ 39.12(b)(1) would require a DCO to 

establish appropriate requirements for 

determining the eligibility of 

agreements, contracts, or transactions 

submitted to the DCO for clearing, 

taking into account the DCO’s ability to 

manage the risks associated with such 

agreements, contracts, or transactions.19

Proposed § 39.12(b)(2) would codify the 

requirements of section 2(h)(1)(B) of the 

CEA regarding a DCO’s offset of 

economically equivalent swaps.20

Proposed § 39.12(b)(3) would require a 

DCO to select contract unit sizes that 

maximize liquidity, open access, and 

risk management.21 Finally, proposed 

§ 39.12(b)(4) would require each DCO 

that clears swaps to have rules stating 

that upon acceptance of a swap by the 

DCO for clearing, (i) the original swap 

is extinguished, (ii) it is replaced by 

equal and opposite swaps between 

clearing members and the DCO, (iii) all 

terms of the cleared swaps must 

conform to templates established under 

DCO rules, and (iv) if a swap is cleared 

by a clearing member on behalf of a 

customer, all terms of the swap, as 

carried in the customer account on the 

books of the clearing member, must 

conform to the terms of the cleared 

swap established under the DCO’s 

rules.22

2. Re-Proposed and Newly Proposed 

Regulations 

To refine and supplement the 

previously proposed regulations 

implementing Core Principle C, the 

Commission is (1) re-proposing 

§ 39.12(b)(2) to clarify the role of a DCO 

in establishing the terms and conditions 

for swaps that it accepts for clearing; 23

(2) proposing a new § 39.12(b)(4) that 

would prohibit a DCO from refusing to 

clear a product where neither party to 

the original contract, agreement, or 

transaction is a clearing member; (3) reproposing § 39.12(b)(3) (renumbered as 

§ 39.12(b)(5)) to clarify a DCO’s role and 

objectives in selecting contract units for 

clearing purposes that are smaller than 

the contract units in which trades 

submitted for clearing were executed; 

and (4) proposing a new § 39.12(b)(7) 

that would clarify the timing of the 

actions described in previously 

proposed §§ 39.12(b)(4)(i) and (ii) 

(renumbered as paragraph (b)(6)), i.e., 

requirements that upon acceptance of a 

swap by the DCO for clearing, (i) the 

original swap is extinguished and (ii) it 

is replaced by equal and opposite swaps 

between clearing members and the DCO. 

(a) Section 39.12(b)(2) 

As previously proposed, § 39.12(b)(2) 

required a DCO to ‘‘adopt rules 

providing that all swaps with the same 

terms and conditions submitted to the 

derivatives clearing organization for 

clearing are economically equivalent 

within the derivatives clearing 

organization and may be offset with 

each other within the derivatives 

clearing organization.’’ 24 It also required 

that a DCO provide for nondiscriminatory clearing of a swap 

executed bilaterally or on or subject to 

the rules of an unaffiliated SEF or 

DCM.25

The Commission is proposing to 

revise the first provision of § 39.12(b)(2) 

to clarify that a DCO must adopt rules 

to establish templates for the terms and 

conditions of swaps that it will clear. 

Accordingly, the proposed provision 

now reads: ‘‘A derivatives clearing 

organization shall adopt rules providing 

that all swaps with the same terms and 

conditions, as defined by templates 

established under derivatives clearing 

organization rules, submitted to the 

derivatives clearing organization for 


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26See Section 5b(c)(2)(N) of the CEA, which 

provides that ‘‘Unless necessary or appropriate to 

achieve the purposes of this Act, a derivatives 

clearing organization shall not— 

(i) Adopt any rule or take any action that results 

in any unreasonable restraint of trade; or 

(ii) Impose any material anticompetitive burden.’’ 

27See 76 FR at 3720. 

28 Id. 

clearing are economically equivalent 

within the derivatives clearing 

organization and may be offset with 

each other within the derivatives 

clearing organization.’’ 

As noted above, the second provision 

of previously proposed § 39.12(b)(2) 

would be unchanged, and would be 

renumbered as § 39.12(b)(3). 

(b) Section 39.12(b)(4) 

Some clearinghouses have indicated 

that they intend to require that, for a 

transaction to be eligible for clearing, 

one of the executing parties must be a 

clearing member. This has the effect of 

preventing trades between two parties 

who are not clearing members from 

being cleared. Such a restriction of open 

access serves no apparent risk 

management purpose and operates to 

keep certain trades out of the clearing 

process and to constrain liquidity for 

cleared trades. Moreover, such 

restrictions also may raise competitive 

issues under Core Principle N (Antitrust 

Considerations).26

Accordingly, the Commission is 

proposing new § 39.12(b)(4) to prohibit 

a DCO from refusing to clear a product 

where neither party to the original 

contract, agreement, or transaction is a 

clearing member. The Commission 

notes that parties that are not clearing 

members would still have to submit 

their bilateral trades for clearing through 

a clearing member of the DCO. 

(c) Section 39.12(b)(5) 

The Commission previously proposed 

§ 39.12(b)(3), now proposed to be 

renumbered at § 39.12(b)(5), which 

would require a DCO to ‘‘select contract 

unit sizes that maximize liquidity, open 

access, and risk management.’’ 27 To the 

extent appropriate to further these 

objectives, a DCO would be further 

required to select contract units for 

clearing purposes that are smaller than 

the contract units in which trades 

submitted for clearing were executed.28

The purpose of this provision is to 

require the DCO to split a cleared swap 

into smaller units in order to promote 

liquidity by permitting more parties to 

trade the product, to facilitate open 

access by permitting more clearing 

members to clear the product, and to aid 

risk management by enabling a DCO, in 

the event of a default, to have more 

potential counterparties to take on 

positions during a liquidation. 

The Commission is now proposing to 

expand its description of the actions to 

be undertaken by the DCO and the 

objectives to be served. Accordingly, the 

Commission proposes that the 

introductory sentence of § 39.12(b)(5) 

read as follows: ‘‘A derivatives clearing 

organization shall select contract unit 

sizes and other terms and conditions 

that maximize liquidity, facilitate 

transparency in pricing, promote open 

access, and allow for effective risk 

management.’’ This would clarify that, 

in establishing product templates under 

its rules, the DCO is required to select 

other terms and conditions in addition 

to unit size, such as termination or 

maturity period, settlement features, 

and cash flow conventions, to facilitate 

price transparency in addition to 

liquidity, open access, and risk 

management. 

(d) Section 39.12(b)(7) 

Proposed § 39.12(b)(7)(i) would 

establish general standards for the 

adoption of rules that establish a time 

frame for clearing. The DCO would have 

to coordinate with each SEF and DCM 

that lists for trading a product that is 

cleared by the DCO, in developing rules 

and procedures to facilitate prompt and 

efficient processing of all contracts, 

agreements, and transactions submitted 

to the DCO for clearing. 

For prompt and efficient clearing to 

occur, the rules, procedures, and 

operational systems of the trading 

platform and the clearinghouse must 

mesh. Vertically integrated trading and 

clearing systems currently process high 

volumes of transactions quickly and 

efficiently. The Commission believes 

that trading platforms and DCOs under 

separate control should be able to 

coordinate with one another to achieve 

similar results. The Commission also 

recognizes that there may be issues of 

connectivity between and among 

trading platforms and clearinghouses. 

The Commission requests comment on 

how best to facilitate the development 

of infrastructure, systems, and 

procedures to address these issues. 

Proposed paragraph (ii) would require 

a DCO to have rules that provide that 

the DCO will accept for clearing, 

immediately upon execution, all 

contracts, agreements, and transactions 

that are listed for clearing by the DCO 

and (A) that are entered into on or 

subject to the rules of a SEF or DCM; (B) 

for which the executing parties have 

clearing arrangements in place with 

clearing members of the DCO; and (C) 

for which the executing parties identify 

the DCO as the intended clearinghouse. 

Rules, procedures, and operational 

systems along these lines currently work 

well for many exchange-traded futures. 

Similar requirements could be applied 

across multiple exchanges and 

clearinghouses for swaps. The parties 

would need to have clearing 

arrangements in place with clearing 

members in advance of execution. In 

cases where more than one DCO offered 

clearing services, the parties also would 

need to specify in advance where the 

trade should be sent for clearing. 

Proposed paragraph (iii), which 

governs swaps subject to mandatory 

clearing, would require a DCO to have 

rules that provide that the DCO will 

accept for clearing, upon submission, all 

contracts, agreements, and transactions 

that are listed for clearing by the DCO 

and (A) That are not executed on or 

subject to the rules of a SEF or DCM; (B) 

that are subject to mandatory clearing 

pursuant to section 2(h) of the CEA; (C) 

that are submitted by the parties to the 

DCO, in accordance with § 23.506 of the 

Commission’s regulations; (D) for which 

the executing parties have clearing 

arrangements in place with clearing 

members of the DCO; and (E) for which 

the executing parties identify the DCO 

as the intended clearinghouse. 

Proposed paragraph (iv) would 

provide for a longer time frame for 

clearing swaps not executed on or 

subject to the rules of a SEF or DCM and 

not subject to mandatory clearing. It 

would require a DCO to have rules that 

provide that the DCO will process for 

clearing, no later than the close of 

business on the day of submission to the 

DCO, all swaps that are listed for 

clearing by the DCO and (A) that are not 

executed on a SEF or a DCM; (B) that 

are not subject to mandatory clearing 

pursuant to section 2(h) of the CEA; (C) 

that are submitted by the parties to the 

DCO in accordance with proposed 

§ 23.506; (D) for which the executing 

parties have clearing arrangements in 

place with clearing members of the 

DCO; and (E) for which the executing 

parties identify the DCO as the intended 

clearinghouse. 

Because the execution of bilateral 

trades might not be automated and 

because the parties to a trade might not 

decide that they want to clear the trade 

until some time after execution, 

immediate clearing might not be 

feasible. However, a DCO should 

provide sufficient clarity about its 

participant and product eligibility 

requirements to enable swap 

counterparties to determine whether a 

bilateral trade would be acceptable to be 

cleared within one day of submission. 

Proposed § 39.12(b)(7)(v) would 

require that DCOs accepting a swap for 


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13106 Federal Register / Vol. 76, No. 47 / Thursday, March 10, 2011 / Proposed Rules 

29See 76 FR at 1240. 

30See 75 FR 76140; and 75 FR 76574. 

31See 76 FR 1214; 7 U.S.C. 7b–3(h); and 7 U.S.C. 

12a(5). 

32Section 5h(f)(7) of the CEA, 7 U.S.C. 7b–3(f)(7). 

33See 76 FR at 1248. Section 37.702(b), as 

originally proposed, referred to ‘‘ongoing’’ risk 

management. In renumbering and re-proposing this 

provision herein, the Commission is deleting the 

term ‘‘ongoing’’ because it is superfluous and could 

create confusion when read in conjunction with 

other Commission regulations that refer to ‘‘risk 

management.’’ See, e.g., proposed § 39.13 relating to 

risk management for DCOs, 76 FR at 3720. 

34See 75 FR 80572; 7 U.S.C. 7(d)(1); and 7.U.S.C. 

12a(5). 

35Section 5(d)(11) of the CEA, 7 U.S.C. 7(d)(11). 

36See 75 FR at 80618. 

37Section 5b(c)(2)(F) of the CEA; 7 U.S.C. 7a– 

1(c)(2)(F) (Core Principle F). 

38Prior to amendment by the Dodd-Frank Act, 

Core Principle F provided that ‘‘[t]he applicant shall 

have standards and procedures designed to protect 

and ensure the safety of member and participant 

funds.’’ 

39See 76 FR at 3723. 

40 In connection with the proposed addition of 

new paragraph (d), the Commission also proposes 

to renumber previously proposed paragraph (d) as 

paragraph (e). 

clearing provide the counterparties with 

a definitive written record of the terms 

of their agreement, which will serve as 

a confirmation of the swap. This 

requirement would facilitate the timely 

processing and confirmation of swaps 

not executed on a SEF or DCM by 

allowing parties to confirm their 

transaction by submitting it to a DCO for 

clearing. Swaps executed on a SEF or 

DCM are confirmed upon execution.29

In other regulations proposed by the 

Commission, a swap confirmation is 

defined as the consummation 

(electronically or otherwise) of legally 

binding documentation (electronic or 

otherwise) that memorializes the 

agreement of the counterparties to all of 

the terms of a swap.30 By providing for 

confirmation upon acceptance for 

clearing, SDs and MSPs would be able 

to satisfy proposed § 23.501, which 

requires timely confirmation of all 

swaps. 

(e) Proposed §§ 37.702 and 38.601— 

Reciprocal Requirements for SEFs and 

DCMs 

In connection with proposing that a 

DCO coordinate the development of 

rules and procedures with each SEF and 

DCM that lists for trading a product that 

is cleared by the DCO, the Commission 

is re-proposing certain amendments to 

parts 37 and 38 of the Commission’s 

regulations to include reciprocal 

coordination obligations for SEFs and 

DCMs. 

The Commission previously proposed 

§§ 37.700 to 703 to implement SEF Core 

Principle 7 (Financial Integrity of 

Transactions), pursuant to its 

rulemaking authority under sections 

5h(h) and 8a(5) of the CEA.31 Core 

Principle 7 requires a SEF to ‘‘establish 

and enforce rules and procedures for 

ensuring the financial integrity of swaps 

entered on or through the facilities of 

the swap execution facility, including 

the clearing and settlement of the swaps 

pursuant to section 2(h)(1) [of the 

CEA].’’ 32 As previously proposed, 

§ 37.702(b) would require a SEF to 

provide for the financial integrity of its 

transactions cleared by a DCO by 

ensuring that the SEF has the capacity 

to route transactions to the DCO in a 

manner acceptable to the DCO for 

purposes of risk management.33 In this 

notice, the Commission proposes to 

renumber previously proposed 

§ 37.702(b) as paragraph (b)(1) and add 

a new paragraph (b)(2) to require the 

SEF to additionally provide for the 

financial integrity of cleared 

transactions by coordinating with each 

DCO to which it submits transactions 

for clearing, in the development of rules 

and procedures to facilitate prompt and 

efficient transaction processing in 

accordance with the requirements of 

§ 39.12(b)(7) of the Commission’s 

regulations. 

Similarly, the Commission previously 

proposed §§ 38.600 to 607 to implement 

DCM Core Principle 11 (Financial 

Integrity of Transactions) pursuant to its 

rulemaking authority under sections 

5(d)(1) and 8a(5) of the CEA.34 Core 

Principle 11 requires a DCM to 

‘‘establish and enforce—(A) rules and 

procedures for ensuring the financial 

integrity of transactions entered into on 

or through the facilities of the contract 

market (including the clearance and 

settlement of the transactions with a 

derivatives clearing organization); and 

(B) rules to ensure—(i) the financial 

integrity of any—(I) futures commission 

merchant; and (II) introducing broker; 

and (ii) the protection of customer 

funds.’’ 35 As previously proposed, 

§ 38.601 would require that transactions 

executed on or through a DCM, other 

than transactions in security futures 

products, must be cleared through a 

registered DCO in accordance with the 

provisions of part 39 of the 

Commission’s regulations.36 In this 

notice, the Commission proposes to 

renumber this provision as paragraph (a) 

of proposed § 38.601 and add a new 

paragraph (b) to specifically require the 

DCM to coordinate with each DCO to 

which it submits transactions for 

clearing, in the development of DCO 

rules and procedures to facilitate 

prompt and efficient transaction 

processing in accordance with the 

requirements of § 39.12(b)(7) of the 

Commission’s regulations. 

3. Solicitation of Comments 

The Commission solicits comment on 

all aspects of the proposed regulations. 

It further requests responses to the 

following specific questions: Are there 

any systemic or legal obstacles to the 

DCO, SEF, and DCM coordination 

required under the proposed regulation? 

Are the proposed time frames 

appropriate? Are they operationally 

feasible? More specifically, for futures 

traded on a DCM, rules and procedures 

are in place under which bunched 

orders are accepted for clearing 

immediately upon execution, with 

allocation to individual customer 

accounts occurring before the end of the 

day. Are similar procedures 

operationally feasible for swaps 

executed as block trades? What amount 

of time is necessary for asset managers 

to allocate block trades to the individual 

entities on whose behalf they manage 

money, prior to the allocated trades 

being sent to clearing (i.e. end of day, 

two hours, etc.)? Should the submission 

of block trades to a DCO be treated 

differently than other trades executed 

on or subject to the rules of a SEF or 

DCM? What is the operational feasibility 

of same-day clearing for bilateral swaps 

that are not required to be cleared? 

C. Proposed § 39.15—Transfer of 

Customer Positions and Related Funds 

1. Recently Proposed Treatment of 

Funds Standards Under Core Principle 

F 

Core Principle F, as amended by the 

Dodd-Frank Act,37 requires a DCO to: (a) 

Establish standards and procedures that 

are designed to protect and ensure the 

safety of its clearing members’ funds 

and assets; (b) hold such funds and 

assets in a manner by which to 

minimize the risk of loss or of delay in 

the DCO’s access to the assets and 

funds; and (c) only invest such funds 

and assets in instruments with minimal 

credit, market, and liquidity risks.38 The 

Commission has proposed § 39.15 to 

establish standards for compliance with 

Core Principle F.39

2. Newly-Proposed Regulations 

To supplement the previously 

proposed regulations implementing 

Core Principle F, the Commission is 

proposing a new § 39.15(d) to require a 

DCO to facilitate the prompt transfer of 

customer positions from one clearing 

member of the DCO to another clearing 

member of the DCO.40

Efficient and complete portability of 

customer positions and the funds 


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41See, e.g., National Futures Association Rule 2– 

27 ‘‘Transfer of Customer Accounts’’ (requiring that 

in response to a customer’s request to transfer its 

account, the carrying member must confirm the 

account balances and positions to the receiving 

member and then effect the requested transfer); and 

Chicago Mercantile Exchange Rule 853 ‘‘Transfer of 

Trades’’ (permitting existing trades to be transferred 

either on the books of a clearing member or from 

one clearing member to another clearing member 

provided 1. the transfer merely constitutes a change 

from one account to another account where the 

underlying beneficial ownership in the accounts 

remains the same; or 2. an error has been made in 

the clearing of a trade and the error is discovered 

and the transfer is completed within two business 

days after the trade date). 

42 5 U.S.C. 601 et seq. 

43 47 FR 18618, Apr. 30, 1982. 

44 Id. at 18619. 

45 Id. 

46 Id. at 18620. 

related to those positions is important in 

both pre-default and post-default 

scenarios. A DCO should therefore 

structure its portability arrangements in 

a way that facilitates the prompt and 

efficient transfer of all or a portion of a 

customer’s positions and funds from 

one clearing member to one or more 

other clearing members. A DCO’s rules 

and procedures should require clearing 

members to facilitate the transfer of 

customer positions and funds upon the 

customer’s request, subject to any notice 

or other contractual requirements. 

Proposed § 39.15(d) would require a 

DCO to have rules providing that, upon 

the request of a customer and subject to 

the consent of the receiving clearing 

member, the DCO will promptly transfer 

all or a portion of such customer’s 

portfolio of positions and related funds 

from the carrying clearing member of 

the DCO to another clearing member of 

the DCO, without requiring the closeout and re-booking of the positions prior 

to the requested transfer. The term 

‘‘promptly,’’ as used in this provision is 

intended to mean as soon as possible 

and within a reasonable period of time. 

Based on current futures industry 

standards, this time frame is typically 

no more than two business days. The 

requirement that a DCO not require 

close-out and re-booking of positions 

eliminates a source of unnecessary 

delay and market disruption, and 

conforms with current futures industry 

practice.41 The Commission is unaware 

of any reason that the transfer of cleared 

swaps positions cannot be 

accomplished by means of the same 

process that has been used for futures 

positions. 

3. Solicitation of Comments 

The Commission requests comment 

on whether the use of the term 

‘‘promptly’’ provides adequate guidance 

or whether another descriptive term or 

phrase, such as ‘‘within a reasonable 

period of time’’ or ‘‘as soon as 

practicable’’ would better convey the 

intended meaning. The Commission is 

not proposing that a specific time frame 

be included in § 39.15(d) because as 

technology evolves, it is likely that the 

transfer of customer positions and 

related funds can be accomplished more 

quickly and with greater operational 

efficiency. The Commission requests 

comment on the proposed time frame 

and possible alternative standards that 

could be applied. 

As noted above, the Commission 

believes that the transfer of cleared 

customer swap positions can be 

processed in the same manner as futures 

positions. The Commission requests 

comment on whether there are 

distinctions between futures and cleared 

swaps positions that would require a 

different type of processing such that 

the cleared swaps positions would have 

to be closed out and re-booked prior to 

transfer from the carrying clearing 

member to another clearing member. 

The proposed regulation places an 

obligation on the DCO to promptly 

transfer customer positions and related 

funds, and the Commission requests 

comment on whether the regulation also 

should require that a DCO adopt rules 

that would require its clearing members 

to facilitate prompt transfer of customer 

accounts. 

III. Related Matters 

A. Regulatory Flexibility Act 

1. Swap Dealers and Major Swap 

Participants 

The Regulatory Flexibility Act (RFA) 

requires that agencies consider whether 

the regulations they propose will have 

a significant economic impact on a 

substantial number of small entities.42

The Commission previously has 

established certain definitions of ‘‘small 

entities’’ to be used in evaluating the 

impact of its regulations on small 

entities in accordance with the RFA.43

The proposed regulations would affect 

SDs and MSPs. 

SDs and MSPs are new categories of 

registrants. Accordingly, the 

Commission has not previously 

addressed the question of whether such 

persons are, in fact, small entities for 

purposes of the RFA. The Commission 

previously has determined, however, 

that futures commission merchants 

(FCMs) should not be considered to be 

small entities for purposes of the RFA.44

The Commission’s determination was 

based, in part, upon the obligation of 

FCMs to meet the minimum financial 

requirements established by the 

Commission to enhance the protection 

of customers’ segregated funds and 

protect the financial condition of FCMs 

generally.45 Like FCMs, SDs will be 

subject to minimum capital and margin 

requirements and are expected to 

comprise the largest global financial 

firms. The Commission is required to 

exempt from SD registration any entities 

that engage in a de minimis level of 

swaps dealing in connection with 

transactions with or on behalf of 

customers. The Commission anticipates 

that this exemption would tend to 

exclude small entities from registration. 

Accordingly, for purposes of the RFA 

for this rulemaking, the Commission is 

hereby proposing that SDs not be 

considered ‘‘small entities’’ for 

essentially the same reasons that FCMs 

have previously been determined not to 

be small entities and in light of the 

exemption from the definition of SD for 

those engaging in a de minimis level of 

swap dealing. 

The Commission also has previously 

determined that large traders are not 

‘‘small entities’’ for RFA purposes.46 In 

that determination, the Commission 

considered that a large trading position 

was indicative of the size of the 

business. MSPs, by statutory definition, 

maintain substantial positions in swaps 

or maintain outstanding swap positions 

that create substantial counterparty 

exposure that could have serious 

adverse effects on the financial stability 

of the United States banking system or 

financial markets. Accordingly, for 

purposes of the RFA for this 

rulemaking, the Commission is hereby 

proposing that MSPs not be considered 

‘‘small entities’’ for essentially the same 

reasons that large traders have 

previously been determined not to be 

small entities. 

Moreover, the Commission is carrying 

out Congressional mandates by 

proposing this regulation. Specifically, 

the Commission is proposing these 

regulations to comply with the DoddFrank Act, the aim of which is to reduce 

systemic risk presented by SDs and 

MSPs through comprehensive 

regulation. The Commission does not 

believe that there are regulatory 

alternatives to those being proposed that 

would be consistent with the statutory 

mandate. Accordingly, the Chairman, on 

behalf of the Commission, hereby 

certifies pursuant to 5 U.S.C. 605(b) that 

the proposed regulations will not have 

a significant economic impact on a 

substantial number of small entities. 

The Commission invites the public to 

comment on whether SDs and MSPs 

should be considered small entities for 

purposes of the RFA. 


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13108 Federal Register / Vol. 76, No. 47 / Thursday, March 10, 2011 / Proposed Rules 

47 75 FR 63745–46 (Oct. 18, 2010). 

48See section 1a(50) of the CEA. In addition, the 

Commission proposed regulations regarding the 

types of entities that must register as SEFs. See 76 

FR 1214. The Commission does not believe that 

such proposals would alter its determination that a 

SEF is not a ‘‘small entity’’ for purposes of the RFA. 

49See 76 FR 1214. 

50 Id. 

51 Id. at 1235. 

52See 47 FR 18618, 18621, Apr. 30, 1982 (DCM 

determination); 66 FR 45605, 45609, Aug. 29, 2001 

(DCO determination). 

53 44 U.S.C. 3501 et seq. 

2. Swap Execution Facilities 

As noted above, the RFA requires that 

agencies consider whether the 

regulations they propose will have a 

significant economic impact on a 

substantial number of small entities. 

The Commission previously has 

established certain definitions of ‘‘small 

entities’’ to be used in evaluating the 

impact of its regulations on small 

entities in accordance with the RFA. 

The regulations adopted herein will 

affect SEFs. While SEFs are new entities 

to be regulated by the Commission 

pursuant to the Dodd-Frank Act, in a 

recent rulemaking proposal,47 the 

Commission proposed that SEFs should 

not be considered as small entities for 

the purpose of the RFA. The DoddFrank Act defines a SEF to mean ‘‘a 

trading system or platform in which 

multiple participants have the ability to 

execute or trade swaps by accepting 

bids and offers made by multiple 

participants in the facility or system, 

through any means of interstate 

commerce, including any trading 

facility, that—(A) facilitates the 

execution of swaps between persons; 

and (B) is not a designated contract 

market.’’ 48

In such rulemaking, the Commission 

proposed that SEFs not be considered to 

be ‘‘small entities’’ for essentially the 

same reasons that DCMs and DCOs have 

previously been determined not to be 

small entities. These reasons include the 

fact that the Commission designates a 

DCM or registers a DCO only when it 

meets specific criteria including the 

expenditure of sufficient resources to 

establish and maintain adequate selfregulatory programs. Likewise, the 

Commission will register an entity as a 

SEF only after it has met specific criteria 

including the expenditure of sufficient 

resources to establish and maintain an 

adequate self-regulatory program.49

Once registered, a SEF will be required 

to comply with the additional 

requirements set forth in the final form 

of the proposed Part 37 rulemaking.50

Under such rulemaking, the 

Commission proposed that SEFs should 

also not be considered small entities 

based on, among other things, the 

central role SEFs will play in the 

national regulatory scheme overseeing 

the trading of swaps.51 Not only will 

SEFs play a vital role in the national 

economy, but they will be subject to 

Commission oversight with statutory 

duties to enforce the regulations 

adopted by their own governing bodies. 

Accordingly, the Commission does 

not expect the regulations, as proposed 

herein, to have a significant economic 

impact on a substantial number of small 

entities. Therefore, the Chairman, on 

behalf of the Commission, hereby 

certifies, pursuant to 5 U.S.C. 605(b), 

that the proposed regulations will not 

have a significant economic impact on 

a substantial number of small entities. 

The Commission invites the public to 

comment on whether SEFs should be 

considered small entities for purposes of 

the RFA. 

3. Designated Contract Markets and 

Derivatives Clearing Organizations 

The regulations proposed by the 

Commission will affect DCMs and DCOs 

(some of which will be designated as 

systemically important DCOs). As noted 

above, the Commission has previously 

established certain definitions of ‘‘small 

entities’’ to be used by the Commission 

in evaluating the impact of its 

regulations on small entities in 

accordance with the RFA. The 

Commission has previously determined 

that DCMs and DCOs are not small 

entities for the purpose of the RFA.52

Accordingly, the Chairman, on behalf of 

the Commission, hereby certifies 

pursuant to 5 U.S.C. 605(b) that the 

proposed regulations will not have a 

significant economic impact on a 

substantial number of small entities. 

B. Paperwork Reduction Act 

The Paperwork Reduction Act 

(PRA) 53 imposes certain requirements 

on Federal agencies in connection with 

their conducting or sponsoring any 

collection of information as defined by 

the PRA. Under the PRA, 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 control number from the 

Office of Management and Budget 

(OMB). The Commission believes that 

these proposed regulations will not 

impose any new information collection 

requirements that require approval of 

OMB under the PRA. 

C. Cost-Benefit Analysis 

Section 15(a) of the CEA requires the 

Commission to consider the costs and 

benefits of its actions before issuing a 

rulemaking under the CEA. By its terms, 

Section 15(a) does not require the 

Commission to quantify the costs and 

benefits of a regulation or to determine 

whether the benefits of the rulemaking 

outweigh its costs; rather, it requires 

that the Commission ‘‘consider’’ the 

costs and benefits of its action. 

Section 15(a) further 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 

regulation is necessary or appropriate to 

protect the public interest or to 

effectuate any of the provisions or to 

accomplish any of the purposes of the 

CEA. 

Summary of proposed requirements. 

The proposed regulations would 

establish the time frame for SDs, MSPs, 

FCMs, DCMs, and SEFs to submit 

contracts, agreements, or transactions to 

a DCO for clearing. The proposed 

regulations would implement new 

section 4s(i) of the CEA by establishing 

standards for SDs and MSPs related to 

the timely processing and clearing of 

swaps. The proposed regulations also 

would implement SEF Core Principle 7 

(Financial Integrity of Transactions) and 

DCM Core Principle 11 (Financial 

Integrity of Transactions), requiring 

coordination with DCOs in the 

development of rules and procedures to 

facilitate clearing. Additionally, the 

proposed regulations would facilitate 

compliance with DCO Core Principle C 

(Participant and Product Eligibility) in 

connection with the prompt and 

efficient processing of all contracts, 

agreements, and transactions submitted 

for clearing. Finally, the proposed 

regulations would implement DCO Core 

Principle F (Treatment of Funds), 

requiring a DCO, upon customer 

request, to promptly transfer customer 

positions and related funds from one 

clearing member to another, without 

requiring the close-out and re-booking 

of the positions. 

Costs. The Commission has 

determined that the costs borne by SDs, 

MSPs, FCMs, SEFs, DCMs, and DCOs to 

implement the new timing requirements 

for processing and clearing positions 

and for transferring customer positions 

and related funds, may be limited and 

far outweighed by the accrual of benefits 

to the financial system as a result of the 


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Federal Register / Vol. 76, No. 47 / Thursday, March 10, 2011 / Proposed Rules 13109 

regulations’ implementation. Indeed, as 

discussed in Section I.B.2., the timely 

transfer of futures positions and funds is 

currently practiced; thus, the additional 

costs of similar processes for swaps may 

not be too significant. Rather, timely 

transfers of positions and funds between 

clearing members would reduce 

economic and operational obstacles. 

Moreover, the Commission has 

determined that the costs of 

implementing new timing requirements 

for clearing would not be significantly 

burdensome to a DCO given that 

immediate processing and clearing of 

futures contracts is the current industry 

standard. Furthermore, the clearing 

delays in the swaps market (as 

discussed in Sections I.B.1, above) 

creates a credit risk because the value of 

position may change between execution 

and novation, thereby allowing financial 

exposure to accumulate in the absence 

of daily mark-to-market, and 

additionally can have negative effects 

on liquidity and the market’s price 

discovery function. 

Benefits. The Commission has 

determined that the benefits of the 

proposed regulations are considerable. 

Through this proposed rulemaking, 

market access will be expanded by 

requiring and establishing uniform 

standards for, prompt processing and 

clearing of swaps eligible for clearing by 

DCOs. Other benefits of timely clearing 

include the promotion of centralized 

trading and clearing; increased financial 

and legal certainty; and the timely 

notice of information so that parties and 

market participants can gauge risk 

exposure, liquidity, and market 

integrity. Timely clearing increases 

liquidity, enhances price discovery for 

traders, and reduces risk to markets by 

informing market participants of margin 

concerns and whether safeguards 

should be triggered. Significantly, the 

Commission notes that these regulations 

would aid market participants in fully 

complying with Dodd-Frank’s 

overarching mandate to promote 

clearing of swaps. The proposed new 

regulation regarding a DCO’s timely 

transfer of swaps positions and related 

funds would benefit market participants 

by eliminating economic or operational 

obstacles to customer transfers between 

clearing members. In addition, the 

standardization of swaps clearing and 

procedures for customer account 

transfer will be more akin to valuable 

practices used in the futures market. 

The Commission believes it is prudent 

to employ similar practices in the swaps 

markets. 

List of Subjects 

17 CFR Part 23 

Antitrust, Commodity futures, 

Conduct standards, Conflicts of 

interests, Major swap participants, 

Reporting and recordkeeping, Swap 

dealers, Swaps. 

17 CFR Part 37 

Swaps, Swap execution facilities, 

Registration application, Registered 

entities, Reporting and recordkeeping 

requirements. 

17 CFR Part 38 

Block transaction, Commodity 

futures, Designated contract markets, 

Reporting and recordkeeping 

requirements, Transactions off the 

centralized market. 

17 CFR Part 39 

Commodity futures, Participant and 

product eligibility, Risk management, 

Swaps. 

In light of the foregoing, the 

Commission hereby proposes to amend 

part 23, as proposed to be added at 75 

FR 71390, November 23, 2010, and 

further amended at 75 FR 81530, 

December 28, 2010; part 37, as proposed 

to be revised at 76 FR 1237, January 7, 

2011; part 38, as proposed to be 

amended at 75 FR 80606, December 22, 

2010; and part 39, as proposed to be 

amended at 76 FR 3717, January 20, 

2011, of Title 17 of the Code of Federal 

Regulations as follows: 

PART 23—SWAP DEALERS AND 

MAJOR SWAP PARTICIPANTS 

1. The authority citation for part 23 is 

revised to read as follows: 

Authority: 7 U.S.C. 1a, 2, 6, 6a, 6b, 6b–1, 

6c, 6p, 6r, 6s, 6t, 9, 9a, 12, 12a, 13b, 13c, 16a, 

18, 19, 21. 

2. Revise the table of contents for part 

23, subpart I to read as follows: 

Subpart I—Swap Documentation 

Sec. 

23.500 Definitions. 

23.501 Swap confirmation. 

23.502 Portfolio reconciliation. 

23.503 Portfolio compression. 

23.504 Swap trading relationship 

documentation. 

23.505 End user exception documentation. 

23.506 Swap processing and clearing. 

3. Add § 23.506 to part 23, subpart I, 

to read as follows: 

§ 23.506 Swap processing and clearing. 

(a) Swap processing. (1) Each swap 

dealer and major swap participant shall 

ensure that it has the capacity to route 

swap transactions not executed on a 

swap execution facility or designated 

contract market to a derivatives clearing 

organization in a manner acceptable to 

the derivatives clearing organization for 

the purposes of risk management; and 

(2) Each swap dealer and major swap 

participant shall coordinate with each 

derivatives clearing organization to 

which the swap dealer, major swap 

participant, or its clearing member, 

submits transactions for clearing, to 

facilitate prompt and efficient swap 

transaction processing in accordance 

with the requirements of § 39.12(b)(7) of 

this chapter. 

(b) Swap clearing. With respect to 

each swap that is not executed on a 

swap execution facility or a designated 

contract market, each swap dealer and 

major swap participant shall: 

(1) If such swap is subject to a 

mandatory clearing requirement 

pursuant to section 2(h)(1) of the Act 

and an exception pursuant to 2(h)(7) is 

not applicable, submit such swap for 

clearing to a derivatives clearing 

organization as soon as technologically 

practicable after execution of the swap, 

but no later than the close of business 

on the day of execution; or 

(2) If such swap is not subject to a 

mandatory clearing requirement 

pursuant to section 2(h)(1) of the Act 

but is accepted for clearing by any 

derivatives clearing organization and 

the swap dealer or major swap 

participant and its counterparty agree 

that such swap will be submitted for 

clearing, submit such swap for clearing 

not later than the next business day after 

execution of the swap, or the agreement 

to clear, if later than execution. 

PART 37—SWAP EXECUTION 

FACILITIES 

4. Revise the authority citation for 

part 37 to read as follows: 

Authority: 7 U.S.C. 1a, 2, 5, 6, 6c, 7, 7a– 

2, 7b–3 and 12a, as amended by the DoddFrank Wall Street Reform and Consumer 

Protection Act, Pub. L. 111–203, 124 Stat. 

1376. 

Subpart H—Financial Integrity of 

Transactions 

5. Amend § 37.702 by revising 

paragraph (b) to read as follows: 

§ 37.702 General financial integrity. 

* * * * * 

(b) For transactions cleared by a 

derivatives clearing organization: 

(1) By ensuring that the swap 

execution facility has the capacity to 

route transactions to the derivative 

clearing organization in a manner 

acceptable to the derivatives clearing 

organization for purposes of risk 

management; and 


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13110 Federal Register / Vol. 76, No. 47 / Thursday, March 10, 2011 / Proposed Rules 

(2) By coordinating with each 

derivatives clearing organization to 

which it submits transactions for 

clearing, in the development of rules 

and procedures to facilitate prompt and 

efficient transaction processing in 

accordance with the requirements of 

§ 39.12(b)(7) of this chapter. 

* * * * * 

PART 38—DESIGNATED CONTRACT 

MARKETS 

6. Revise the authority citation for 

part 38 to read as follows: 

Authority: 7 U.S.C. 1a, 2, 6, 6a, 6c, 6d, 6e, 

6f, 6g, 6i, 6j, 6k, 6l, 6m, 6n, 7, 7a–2, 7b, 7b– 

1, 7b–3, 8, 9, 15, and 21, as amended by the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act, Pub. L. 111–203, 

124 Stat. 1376. 

Subpart L—Financial Integrity of 

Transactions 

7. Revise § 38.601 to read as follows: 

§ 38.601 Mandatory clearing. 

(a) Transactions executed on or 

through the designated contract market, 

other than transactions in security 

futures products, must be cleared 

through a Commission-registered 

derivatives clearing organization, in 

accordance with the provisions of part 

39 of this chapter. 

(b) A designated contract market must 

coordinate with each derivatives 

clearing organization to which it 

submits transactions for clearing, in the 

development of rules and procedures to 

facilitate prompt and efficient 

transaction processing in accordance 

with the requirements of § 39.12(b)(7) of 

this chapter. 

PART 39—DERIVATIVES CLEARING 

ORGANIZATIONS 

8. Revise the authority citation for 

part 39 to read as follows: 

Authority: 7 U.S.C. 1a, 2, 5, 6, 6d, 7a–1, 

7a–2, and 7b as amended by the Dodd-Frank 

Wall Street Reform and Consumer Protection 

Act, Pub. L. 111–203, 124 Stat. 1376. 

Subpart B—Compliance With Core 

Principles 

9. Amend § 39.12 by revising 

paragraphs (b)(2) through (b)(4), and 

adding paragraphs (b)(5) through (b)(7), 

to read as follows: 

§ 39.12 Participant and product eligibility. 

(a) * * * 

(b) * * * 

(2) A derivatives clearing organization 

shall adopt rules providing that all 

swaps with the same terms and 

conditions, as defined by templates 

established under derivatives clearing 

organization rules, submitted to the 

derivatives clearing organization for 

clearing are economically equivalent 

within the derivatives clearing 

organization and may be offset with 

each other within the derivatives 

clearing organization. 

(3) A derivatives clearing organization 

shall provide for non-discriminatory 

clearing of a swap executed bilaterally 

or on or subject to the rules of an 

unaffiliated swap execution facility or 

designated contract market. 

(4) A derivatives clearing organization 

shall not require that one of the original 

executing parties must be a clearing 

member in order for a contract, 

agreement, or transaction to be eligible 

for clearing. 

(5) A derivatives clearing organization 

shall select contract unit sizes and other 

terms and conditions that maximize 

liquidity, facilitate transparency in 

pricing, promote open access, and allow 

for effective risk management. To the 

extent appropriate to further these 

objectives, a derivatives clearing 

organization shall select contract units 

for clearing purposes that are smaller 

than the contract units in which trades 

submitted for clearing were executed. 

(6) A derivatives clearing organization 

that clears swaps shall have rules 

providing that, upon acceptance of a 

swap by the derivatives clearing 

organization for clearing: 

(i) The original swap is extinguished; 

(ii) The original swap is replaced by 

equal and opposite swaps between 

clearing members and the derivatives 

clearing organization; 

(iii) All terms of the cleared swaps 

must conform to templates established 

under derivatives clearing organization 

rules; and 

(iv) If a swap is cleared by a clearing 

member on behalf of a customer, all 

terms of the swap, as carried in the 

customer account on the books of the 

clearing member, must conform to the 

terms of the cleared swap established 

under the derivatives clearing 

organization’s rules. 

(7) Time frame for clearing. (i) 

General. Each derivatives clearing 

organization shall coordinate with each 

swap execution facility and designated 

contract market that lists for trading a 

product that is cleared by the 

derivatives clearing organization, in 

developing rules and procedures to 

facilitate prompt and efficient 

processing of all contracts, agreements, 

and transactions submitted to the 

derivatives clearing organization for 

clearing. 

(ii) Transactions executed on or 

subject to the rules of a swap execution 

facility or designated contract market. A 

derivatives clearing organization shall 

have rules that provide that the 

derivatives clearing organization will 

accept for clearing, immediately upon 

execution, all contracts, agreements, and 

transactions that are listed for clearing 

by the derivatives clearing organization 

and 

(A) That are entered into on a swap 

execution facility or designated contract 

market; 

(B) For which the executing parties 

have clearing arrangements in place 

with clearing members of the 

derivatives clearing organization; and 

(C) For which the executing parties 

identify the derivatives clearing 

organization as the intended 

clearinghouse. 

(iii) Swaps not executed on or subject 

to the rules of a swap execution facility 

or a designated contract market and 

subject to mandatory clearing. A 

derivatives clearing organization shall 

have rules that provide that the 

derivatives clearing organization will 

accept for clearing, upon submission to 

the derivatives clearing organization, all 

swaps that are listed for clearing by the 

derivatives clearing organization and 

(A) That are not executed on a swap 

execution facility or a designated 

contract market; 

(B) That are subject to mandatory 

clearing pursuant to section 2(h) of the 

Act; 

(C) That are submitted by the parties 

to the derivatives clearing organization, 

in accordance with § 23.506 of this 

chapter; 

(D) For which the executing parties 

have clearing arrangements in place 

with clearing members of the 

derivatives clearing organization; and 

(E) For which the executing parties 

identify the derivatives clearing 

organization as the intended 

clearinghouse. 

(iv) Swaps not executed on or subject 

to the rules of a swap execution facility 

or a designated contract market and not 

subject to mandatory clearing. A 

derivatives clearing organization shall 

have rules that provide that the 

derivatives clearing organization will 

accept for clearing, no later than the 

close of business on the day of 

submission to the derivatives clearing 

organization, all swaps that are listed for 

clearing by the derivatives clearing 

organization and 

(A) That are not executed on a swap 

execution facility or a designated 

contract market; 

(B) That are not subject to mandatory 

clearing pursuant to section 2(h) of the 

Act; 


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Federal Register / Vol. 76, No. 47 / Thursday, March 10, 2011 / Proposed Rules 13111 

(C) That are submitted by the parties 

to the derivatives clearing organization, 

in accordance with § 23.506 of this 

chapter; 

(D) For which the executing parties 

have clearing arrangements in place 

with clearing members of the 

derivatives clearing organization; and 

(E) For which the executing parties 

identify the derivatives clearing 

organization as the intended 

clearinghouse. 

(v) All swaps not executed on a swap 

execution facility or a designated 

contract market and submitted for 

clearing. A derivatives clearing 

organization shall have rules that 

provide that all swaps submitted to the 

derivatives clearing organization for 

clearing shall include written 

documentation that memorializes all of 

the terms of the transaction and legally 

supersedes any previous agreement. The 

confirmation of all terms of the 

transaction shall take place at the same 

time as the swap is accepted for 

clearing. 

10. Amend § 39.15 by revising 

paragraph (d) and adding paragraph (e) 

to read as follows: 

§ 39.15 Treatment of funds. 

* * * * * 

(d) Transfer of customer positions. A 

derivatives clearing organization shall 

have rules providing that, upon the 

request of a customer and subject to the 

consent of the receiving clearing 

member, the derivatives clearing 

organization will promptly transfer all 

or a portion of such customer’s portfolio 

of positions and related funds from the 

carrying clearing member of the 

derivatives clearing organization to 

another clearing member of the 

derivatives clearing organization, 

without requiring the close-out and rebooking of the positions prior to the 

requested transfer. 

(e) Permitted investments. Funds and 

assets belonging to clearing members 

and their customers that are invested by 

a derivatives clearing organization shall 

be held in instruments with minimal 

credit, market, and liquidity risks. Any 

investment of customer funds or assets 

by a derivatives clearing organization 

shall comply with § 1.25 of this part, as 

if all such funds and assets comprise 

customer funds subject to segregation 

pursuant to section 4d(a) of the Act and 

Commission regulations thereunder. 

Issued in Washington, DC, on February 24, 

2011, by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

Note: The following appendices will not 

appear in the Code of Federal Regulations 

Appendices to Requirements for 

Processing, Clearing and Transfer of 

Customer Positions—Commission 

Voting Summary and Statements of 

Commissioners 

Appendix 1—Commission Voting 

Summary 

On this matter, Chairman Gensler and 

Commissioners Dunn, Sommers, Chilton and 

O’Malia voted in the affirmative; no 

Commissioner voted in the negative. 

Appendix 2—Statement of Chairman 

Gary Gensler 

I support the proposed rulemaking 

regarding straight-through processing 

because it furthers the goal of expanding 

access to and strengthening the financial 

integrity of the swap markets. These 

proposed regulations would require and 

establish uniform standards for prompt 

processing, submission and acceptance for 

clearing of swaps eligible for clearing. Such 

uniform standards, similar to the practices in 

the futures markets, lower risk because they 

allow market participants to get the prompt 

benefit of clearing rather than having to first 

enter into a bilateral transaction that would 

subsequently be moved into a clearinghouse. 

In addition, I support the requirement for 

prompt and efficient transfer of customer 

positions from a carrying clearing member of 

a clearinghouse to another clearing member 

of the clearinghouse, upon a customer’s 

request. This would promote efficiency and 

avoid unnecessary delay and market 

disruption. Furthermore, users of derivatives 

could get the benefit of greater competition 

amongst clearing members. 

[FR Doc. 2011–4707 Filed 3–9–11; 8:45 am] 

BILLING CODE P 

SOCIAL SECURITY ADMINISTRATION 

20 CFR Parts 404, 405, and 416 

[Docket No. SSA–2007–0053] 

Compassionate Allowances for 

Autoimmune Disease, Office of the 

Commissioner; Hearing 

AGENCY: Social Security Administration. 

ACTION: Announcement of public 

hearing. 

SUMMARY: We developed 

‘‘Compassionate Allowances’’ to provide 

benefits quickly to applicants whose 

medical conditions obviously meet the 

definition of disability under the Social 

Security Act (Act) and can be identified 

with minimal objective medical 

information. In December 2007, April 

2008, November 2008, July 2009, 

November 2009, and November 2010, 

we held Compassionate Allowance 

public hearings to help us identify the 

diseases and other serious medical 

conditions that we should consider 

under the Compassionate Allowance 

process. These hearings concerned rare 

diseases, cancers, traumatic brain injury 

and stroke, early-onset Alzheimer’s 

disease and related dementias, 

schizophrenia, and cardiovascular 

disease and multiple organ transplants, 

respectively. We will hold our next 

hearing on March 16 to address the 

advisability and possible methods of 

identifying and implementing 

compassionate allowances for both 

adults and children with autoimmune 

diseases. While the public is welcome to 

attend the hearing, only scheduled 

witnesses will present testimony. We 

plan to address other medical 

conditions at subsequent hearings. 

DATES: This hearing will be held on 

March 16, 2011, between 8:30 a.m. and 

5 p.m., Eastern Standard Time (EST), in 

Baltimore, Maryland. The hearing will 

be held at the Sheraton Baltimore City 

Center Hotel in the International 

Ballroom. The hotel’s address is 101 

West Fayette St., Baltimore, MD 21201– 

3703. You may also watch the 

proceedings live via Webcast beginning 

at 9 a.m., Eastern Standard Time (EST). 

You may access the Webcast line for the 

hearing on the Social Security 

Administration Web site at http:// 

www.socialsecurity.gov/ 

compassionateallowances/. 

ADDRESSES: You may submit written 

comments about the compassionate 

allowances initiative with respect to 

adults and children with autoimmune 

diseases, as well as topics covered at the 

hearing by: 

• E-mail addressed to 

Compassionate.Allowances@ssa.gov; or 

• Mail to Jamillah Jackson, Deputy 

Director, Office of Compassionate 

Allowances and Disability Outreach, 

ODP, ORDP, Social Security 

Administration, 4671 Annex Building, 

6401 Security Boulevard, Baltimore, 

Maryland 21235–6401. We welcome 

your comments, but we may not 

respond directly to comments sent in 

response to this notice of hearing. 

FOR FURTHER INFORMATION CONTACT: 

Compassionate.Allowances@ssa.gov. 

You may also mail inquiries about this 

hearing to Jamillah Jackson, Deputy 

Director, Office of Compassionate 

Allowances and Disability Outreach, 

ODP, ORDP, Social Security 

Administration, 4671 Annex Building, 

6401 Security Boulevard, Baltimore, 

Maryland 21235–6401. For information 

on eligibility or filing for benefits, call 

our national toll-free number 1–800– 

772–1213 or TTY 1–800–325–0778, or 

visit Social Security online, at http:// 

www.socialsecurity.gov. 

SUPPLEMENTARY INFORMATION: 


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