[Federal Register Volume 85, Number 232 (Wednesday, December 2, 2020)]
[Notices]
[Pages 77435-77437]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26556]


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COMMODITY FUTURES TRADING COMMISSION


Agency Information Collection Activities: Proposed Revised 
Collection, Comment Request: ``Swap Data Recordkeeping and Reporting 
Requirements''

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice.

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SUMMARY: The Commodity Futures Trading Commission (``CFTC'' or 
``Commission'') is announcing an opportunity for public comment on the 
revision of an information collection by the agency. Under the 
Paperwork Reduction Act of 1995 (``PRA''), Federal agencies are 
required to publish notice in the Federal Register concerning each 
revised collection of information and to allow 60 days for public 
comment. The Commission recently adopted a final rule amending 
requirements for swap data recordkeeping and reporting. This notice 
solicits additional comments on certain estimated costs and burdens 
associated with the amended requirements.

DATES: Comments must be submitted on or before February 1, 2021.

ADDRESSES: You may submit comments, identified by ``Swap Data 
Recordkeeping and Reporting Requirements, OMB Control No. 3038-0096,'' 
by any of the following methods:
    <bullet> The Agency's website, at http://comments.cftc.gov/. Follow 
the instructions for submitting comments through the website.
    <bullet> Mail: Christopher Kirkpatrick, Secretary of the 
Commission, Commodity Futures Trading Commission, Three Lafayette 
Centre, 1155 21st Street NW, Washington, DC 20581.
    <bullet> Hand Delivery/Courier: Same as Mail above.
    Please submit your comments using 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.

FOR FURTHER INFORMATION CONTACT: Meghan Tente, Acting Deputy Director, 
Division of Market Oversight, Commodity Futures Trading Commission, 
(202) 418-5785, email: <a href="/cdn-cgi/l/email-protection#761b0213180213361510021558111900"><span class="__cf_email__" data-cfemail="137e67767d677653707567703d747c65">[email protected]</span></a>, and refer to OMB Control No. 
3038-0096.

SUPPLEMENTARY INFORMATION: Under the PRA, 44 U.S.C. 3501 et seq., 
Federal agencies must obtain approval from the Office of Management and 
Budget (``OMB'') for each collection of information they conduct or 
sponsor. ``Collection of Information'' is defined in 44 U.S.C. 3502(3) 
and 5 CFR 1320.3 and includes agency requests or requirements that 
members of the public submit reports, keep records, or provide 
information to a third party. Section 3506(c)(2)(A) of the PRA, 44 
U.S.C. 3506(c)(2)(A), requires Federal agencies to provide a 60-day 
notice in the Federal Register concerning each proposed information 
collection including each proposed revision or extension of an existing 
information collection, before submitting the collection to OMB for 
approval. To comply with this requirement, the CFTC is publishing 
notice of the proposed collection of information listed below. 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.
    Title: Swap Data Recordkeeping and Reporting Requirements (OMB 
Control No. 3038-0096). This is a request for comment on a currently 
approved information collection.
    Abstract: The collection of information is needed to ensure that 
the CFTC and other regulators have access to swap data as required by 
the Commodity Exchange Act, as amended by the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (``Dodd-Frank Act''). The Dodd-Frank 
Act directed the CFTC to adopt rules providing for the reporting of 
data relating to swaps.
    On September 17, 2020, the Commission adopted a rulemaking amending 
its part 45 regulations.\1\ In the release accompanying the final rule, 
the Commission included some estimated costs and burdens that were not 
included in the proposal and made corrections to some of its previous 
estimates. The Commission explains these cost and burden estimates 
below and invites comment on any new or revised estimates.
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    \1\ The Commission proposed the amendments to Part 45 in 
February 2020. Swap Data Recordkeeping and Reporting Requirements, 
75 FR 21578 (Apr. 17, 2020) (the ``Proposal''). The final rule was 
published in the Federal Register on November 25, 2020.
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1. Amendments to Regulation 45.3

    Amended Sec.  45.3 creates costs for swap data repositories 
(``SDRs''), swap execution facilities (``SEFs''), designated contract 
markets (``DCMs''), and reporting counterparties to update systems for 
reporting required swap creation data reports. For the proposal, the 
Commission estimated SDRs, SEFs, DCMs, and reporting counterparties 
would incur a one-time initial burden of 10 hours per entity to modify 
their systems to adopt the changes, for a total estimated hours burden 
of 17,320 hours. The cost per entity was estimated to be $722.30 for a 
total cost across entities of $1,251,024. The Commission additionally 
estimated 5 hours per entity annually to perform any needed maintenance 
or adjustments to reporting systems, at a cost of $361.15 per entity 
and $625,512 across entities.\2\ The Commission re-evaluated the 
analysis in the final rule and instead used a wage estimate of between 
$48 and $101 \3\ per

[[Page 77436]]

hour and revised its estimate of the one-time initial cost per SDR to 
be in a range of $144,000 to $1,010,000 for PRA purposes, based on 
3,000 to 10,000 hours of work per SDR.\4\ Using these revised 
estimates, the Commission estimated an average estimated cost of 
$577,000 per SDR to update their systems, or estimated capital/start-up 
costs of $1,731,000 across all 3 SDRs.
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    \2\ The PRA section of the Proposal included one-time and 
ongoing burden hour estimates for entities to modify their systems. 
The associated cost estimates referenced above were included in the 
related Supporting Statement filed with OMB for the Proposal.
    \3\ Hourly wage rates for this aspect came from the Software 
Developers and Programmers category of the May 2019 National 
Occupational Employment and Wage Estimates Report produced by the 
U.S. Bureau of Labor Statistics, available at https://www.bls.gov/oes/current/oes_nat.htm. The 25th percentile was used for the low 
range and the 90th percentile was used for the upper range ($36.89 
and $78.06, respectively). Each number was multiplied by an 
adjustment factor of 1.3 for overhead and benefits (rounded to the 
nearest whole dollar) which is in line with adjustment factors the 
CFTC has used for similar purposes in other final rules adopted 
under the Dodd-Frank Act. See, e.g., 77 FR at 2173 (using an 
adjustment factor of 1.3 for overhead and other benefits). These 
estimates are intended to capture and reflect U.S. developer hourly 
rates market participants are likely to pay when complying with the 
changes. Individual entities may, based on their circumstances, 
incur costs substantially greater or less than the estimated 
averages.
    \4\ The lower estimate of $144,000 represents 3,000 working 
hours at the $48 rate. The higher estimate of $1,010,000 represents 
10,000 working hours at the $101 rate. The PRA section of the final 
rule incorrectly stated that the $1,010,000 estimate at the higher 
end of the range was based on 5,000 working hours. However, in 
response to a comment indicating that the commenter expected its 
costs to be 8,000 to 10,000 developer hours, the Commission expanded 
the range of potential costs per SDR to between $144,000 and 
$1,010,000 for PRA purposes.
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    With regard to reporting entities, the PRA section of the proposal 
inadvertently did not include any estimates of initial costs to update 
systems for SEFs, DCMs, and reporting counterparties. In the final 
rule, the Commission estimated that SEFs, DCMs, and reporting 
counterparties will incur a one-time initial cost per reporting entity 
in a range of $24,000 to $73,225 per reporting entity, with each 
reporting entity spending approximately 500 to 725 hours on the 
updates.\5\ Rather than base the Commission's PRA estimates of the 
total upfront implementation cost for reporting entities on arithmetic 
averages, the Commission recognized that reporting entities are already 
subject to existing swaps data reporting and recordkeeping obligations 
pursuant to Part 45, so it is likely that reporting entities will only 
need to reprogram their existing reporting systems, instead of building 
new reporting systems, to comply with the final rule. Furthermore, 
through the Commission's eight years of experience in administering 
Part 45, the Commission believes that the 1,732 reporting entities are 
a relatively consistent group, such that most entities that are 
currently reporting entities under Part 45 will continue to be 
reporting entities under the final rule, and few entities that are not 
currently reporting entities under Part 45 will become reporting 
entities under the final rule. Because most reporting entities will 
only need to reprogram their existing reporting systems, the Commission 
believes that the upfront cost to reporting entities to implement the 
final rule will be on the lower end of the range, closer to $24,000 
than to $73,225. Therefore, the Commission based its PRA estimates on a 
more realistic split of 90%/10% between existing reporting entities and 
new reporting entities, which resulted in a weighted average cost of 
$28,923 per reporting entity ($24,000 * 0.9 + $73,225 * 0.1), or a 
total upfront implementation cost of $50,094,636 for the 1,732 
reporting entities.
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    \5\ The lower estimate of $24,000 represents 500 working hours 
at the $48 rate. The higher estimate of $73,225 represents 725 
working hours at the $101 rate.
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    Together, the Commission estimated the total aggregate upfront 
implementation cost in the final rule to be $51,825,636 ($50,094,636 
for reporting entities and $1,731,000 for SDRs). The Commission does 
not expect any ongoing costs for SDRs or reporting entities after the 
initial builds.

2. Amendments to Regulation 45.4

    The Commission amended Sec.  45.4, which requires reporting 
counterparties to report data to SDRs when swap terms change and daily 
swap valuation data. The PRA section of the Proposal estimated that 
proposed Sec.  45.4 would apply to 1,705 respondents, with 97,341 
reports per respondent, .004 average hours per report, and a gross 
annual reporting burden of 664,479 hours. In the final rule, the 
Commission expanded the daily valuation data reporting requirement for 
SD/MSP reporting counterparties to report margin and collateral data in 
addition to valuation data. This is a change from the Proposal, in 
which the Commission proposed requiring derivatives clearing 
organization (``DCO'') counterparties to report the information as 
well. The frequency of the report will not change for SD/MSP reporting 
counterparties, but the Commission estimated SD/MSP/DCO reporting 
counterparties would require more time to prepare each report. However, 
since all of this information is reported electronically, the 
Commission expected the increase per report to be small, from .003 to 
.004 hours per report. Since the Commission is not requiring DCO 
reporting counterparties to report the information, the Commission 
revised its estimate to .0035 hours per report. As a result, in the 
final rule the aggregate burden under Sec.  45.4 was estimated to apply 
to 1,705 respondents, with 97,341 reports per respondent, .0035 average 
hours per report, and a gross annual reporting burden of 581,419 hours.
    Amended Sec.  45.4 creates costs for SDRs and reporting 
counterparties to update systems for reporting required swap 
continuation data. For the proposal, the Commission estimated SDRs and 
reporting counterparties would incur a one-time initial burden of 10 
hours per entity to modify their systems to adopt the changes to Sec.  
45.4, for a total estimated hours burden of 17,050 hours. The cost per 
entity was estimated to be $722.30 for a total cost across entities of 
$1,231,522. The Commission additionally estimated 5 hours per entity 
annually to perform any needed maintenance or adjustments to reporting 
systems, at a cost of $361.15 per entity and $615,761 across entities. 
However, the Commission re-evaluated the analysis for the final rule 
and realized that since the costs relate to reporting certain swap data 
elements, they are covered in the start-up and initial costs for Sec.  
45.3 described above. To avoid double-counting, the Commission removed 
the estimates for Sec.  45.4.

2. Amendments to Regulation 45.5

    Amended Sec.  45.5 creates costs for entities that were previously 
required to generate Unique Swap Identifiers (``USIs'') to update their 
systems to generate Uniform Transaction Identifiers (``UTIs''). The PRA 
section of the Proposal estimated that SDRs and reporting 
counterparties required to generate UTIs would incur a one-time initial 
burden of 1 hour per entity to modify their systems to adopt the 
changes to Sec.  45.5, for a total estimated hours burden of 940 hours. 
The Commission additionally estimated 1 hour per entity annually to 
perform any needed maintenance or adjustments to reporting systems. The 
related Supporting Statement filed with OMB for the Proposal estimated 
that the cost per entity for the one-time initial burden would be 
$72.23 for a total cost across entities of $67,896, and an additional 
cost of $72 per entity and $67,680 across entities annually to perform 
any needed maintenance or adjustments to reporting systems. The PRA 
section of the final rule did not make any changes to the Commission's 
burden hour estimates for SDRs and reporting counterparties to modify 
their systems to adopt the changes to final Sec.  45.5 in connection 
with either its estimates of either the one-time initial burden 
estimate or the burden of ongoing maintenance or adjustments to 
reporting systems. The final rule also did not change the estimated 
cost per entity of $72.23 per entity or a total cost across entities of 
$67,896 in connection with the Commission's estimate of the one-time

[[Page 77437]]

initial burden costs for SDRs and reporting counterparties required to 
generate UTIs. However, the PRA section of the final rule corrected the 
estimated cost per entity for ongoing maintenance or adjustment to 
reporting systems in the supporting statement for the Proposal from a 
cost of $72 per entity and $67,680 across entities to a cost of $72.23 
per entity and $67,896 across entities for final Sec.  45.5.
    With respect to the collection of information, the Commission 
invites comments on:
    <bullet> Whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information will have a practical 
use;
    <bullet> The accuracy of the Commission's estimate of the burden of 
the proposed collection of information, including the validity of the 
methodology and assumptions used;
    <bullet> Ways to enhance the quality, usefulness, and clarity of 
the information to be collected; and
    <bullet> Ways to minimize the burden of collection of information 
on those who are to respond, including through the use of appropriate 
electronic, or other forms of information technology, e.g., permitting 
electronic submission of responses.
    You should submit only information that you wish to make available 
publicly. If you wish the CFTC to consider information that you believe 
is exempt from disclosure under the Freedom of Information Act 
(``FOIA''), a petition for confidential treatment of the exempt 
information may be submitted according to the procedures established in 
Sec.  145.9 of the CFTC's regulations.\6\
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    \6\ 17 CFR 145.9.
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    The CFTC reserves the right, but shall have no obligation, to 
review, pre-screen, filter, redact, refuse or remove any or all of your 
submission from https://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 Information Collection Request 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.
    Burden Statement: Provisions of CFTC Regulations 45.2, 45.3, 45.4, 
45.5, 45.6, 45.10 and 45.14 result in information collection 
requirements within the meaning of the PRA. With respect to the ongoing 
reporting and recordkeeping burdens associated with swaps, the CFTC 
believes that SEFs, DCMs, DCOs, SDRs, swap dealers (``SDs''), major 
swap participants (``MSPs''), and non-SD/MSP/DCO counterparties incur 
an annual time-burden of 1,226,021 hours. This time-burden represents a 
proportion of the burden respondents incur to operate and maintain 
their swap data recordkeeping and reporting systems.
    Respondents/Affected Entities: SDs, MSPs, SDRs, DCMs, SEFs, and 
other counterparties to a swap transaction (i.e., non-SD/MSP/DCO 
counterparties).
    Estimated number of respondents: 1,732.
    Estimated average burden hours per respondent: 708.
    Estimated total annual burden hours on respondents: 1,226,021 
hours.
    Frequency of collection: Ongoing.
    Capital or Operating and Maintenance Costs: $ 51,961,428.

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

    Dated: November 27, 2020.
Robert Sidman,
Deputy Secretary of the Commission.
[FR Doc. 2020-26556 Filed 12-1-20; 8:45 am]
BILLING CODE 6351-01-P


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