43874 Federal Register / Vol. 76, No. 141 / Friday, July 22, 2011 / Rules and Regulations 

Data records 

Cleared/ 

uncleared 

indicator 

CFTC clearing org identifier 

Commodity reference price Execution 

facility 

Long swap 

position 

Short swap 

position 

Data record 2 ............................................. C ................. CCO_ID_1 .. NYMEX Light Sweet .................................. EX1 ............ 103 

Data record 3 ............................................. C ................. CCO_ID_1 .. NYMEX Light Sweet .................................. EX1 ............ 93 

Data record 4 ............................................. C ................. CCO_ID_1 .. NYMEX Light Sweet .................................. EX1 ............ 103 

Data record 5 ............................................. C ................. CCO_ID_1 .. NYMEX Light Sweet .................................. EX1 ............ 99 

Data record 6 ............................................. C ................. CCO_ID_1 .. NYMEX Light Sweet .................................. EX1 ............ 103 

Data record 7 ............................................. C ................. CCO_ID_1 .. NYMEX Light Sweet .................................. EX1 ............ 27 

Data record 8 ............................................. C ................. CCO_ID_1 .. NYMEX Light Sweet .................................. EX1 ............ 70 

Data record 9 ............................................. C ................. CCO_ID_1 .. NYMEX Light Sweet .................................. EX1 ............ 103 

Data record 10 ........................................... C ................. CCO_ID_1 .. NYMEX Light Sweet .................................. EX1 ............ 93 

Data record 11 ........................................... C ................. CCO_ID_1 .. NYMEX Light Sweet .................................. EX1 ............ 103 

Data record 12 ........................................... C ................. CCO_ID_1 .. NYMEX Light Sweet .................................. EX1 ............ 99 

Data record 13 ........................................... C ................. CCO_ID_1 .. NYMEX Light Sweet .................................. EX1 ............ 103 

Data record 14 ........................................... C ................. CCO_ID_1 .. NYMEX Light Sweet .................................. EX1 ............ 27 

Data records Put/call indicator 

Swaption expiration date 

Swaption 

strike 

price 

Non-delta 

adjusted 

long 

swaption 

position 

Non-delta 

adjusted 

short 

swaption 

position 

Delta adjusted 

long 

swaption 

position 

Delta adjusted 

long 

swaption 

position 

Long swap or 

swaption notional value 

position 

Short swap or 

swaption notional value 

position 

Data record 1 .................................. .................. ....................... ................ .................. .................. ................ ................ $6,650,000 

Data record 2 .................................. .................. ....................... ................ .................. .................. ................ ................ $9,785,000 

Data record 3 .................................. .................. ....................... ................ .................. .................. ................ ................ $8,835,000 

Data record 4 .................................. .................. ....................... ................ .................. .................. ................ ................ $9,785,000 

Data record 5 .................................. .................. ....................... ................ .................. .................. ................ ................ $9,405,000 

Data record 6 .................................. .................. ....................... ................ .................. .................. ................ ................ $9,785,000 

Data record 7 .................................. .................. ....................... ................ .................. .................. ................ ................ $2,565,000 

Data record 8 .................................. .................. ....................... ................ .................. .................. ................ ................ $6,650,000 

Data record 9 .................................. .................. ....................... ................ .................. .................. ................ ................ $9,785,000 

Data record 10 ................................ .................. ....................... ................ .................. .................. ................ ................ $8,835,000 

Data record 11 ................................ .................. ....................... ................ .................. .................. ................ ................ $9,785,000 

Data record 12 ................................ .................. ....................... ................ .................. .................. ................ ................ $9,405,000 

Data record 13 ................................ .................. ....................... ................ .................. .................. ................ ................ $9,785,000 

Data record 14 ................................ .................. ....................... ................ .................. .................. ................ ................ $2,565,000 

Issued by the Commission this 7th day of 

July, 2011 in Washington, DC. 

David Stawick, 

Secretary of the Commission. 

Appendices to Large Trader Reporting 

for Physical Commodity Swaps— 

Commission Voting Summary and 

Statements of Commissioners 

Note: The following appendices will not 

appear in the Code of Federal Regulations. 

Appendix 1—Commission Voting 

Summary 

On this matter, Chairman Gensler and 

Commissioners Dunn, Sommers, O’Malia and 

Chilton voted in the affirmative; no 

Commissioner voted in the negative. 

Appendix 2—Statement of Chairman 

Gary Gensler 

I support the final rulemaking to establish 

large trader reporting for physical commodity 

swaps. This is a significant rulemaking that, 

for the first time, enables the CFTC to receive 

data from large traders in the commodity 

swaps markets. 

The American public has benefited for 

decades by the Commission’s ability to gather 

large trader data in the futures market and 

use that data to police the markets. Today’s 

large trader reporting rulemaking establishes 

that clearinghouses and swap dealers will 

have to report to the CFTC about the swaps 

activities of large traders in the physical 

swaps markets. 

Over time, as a result of the Dodd-Frank 

Act, the markets will benefit from swap data 

repositories. Today’s rulemaking will enable 

the Commission to gather important swaps 

data until there are robust, well-regulated 

swap data repositories. This data will be 

useful for the Commission to monitor and 

police the markets, including establishing 

and enforcing position limits. 

[FR Doc. 2011–18054 Filed 7–21–11; 8:45 am] 

BILLING CODE P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 160 

RIN 3038–AD13 

Privacy of Consumer Financial 

Information; Conforming Amendments 

Under Dodd-Frank Act 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Final rule. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘Commission’’ or 

‘‘CFTC’’) is amending its rules 

implementing new statutory provisions 

enacted by titles VII and X of the DoddFrank Wall Street Reform and Consumer 

Protection Act (the ‘‘Dodd-Frank Act’’). 

Section 1093 of the Dodd-Frank Act 

provides for certain amendments to title 

V of the Gramm-Leach-Bliley Act (the 

‘‘GLB Act’’). The GLB Act sets forth 

certain protections for the privacy of 

consumer financial information and was 

amended by the Dodd-Frank Act to 

affirm the Commission’s jurisdiction in 

this area. The Commission’s 

amendments to its regulations, inter 

alia, broaden the scope of part 160 to 

cover two new entities created by title 

VII of the Dodd-Frank Act: swap dealers 

and major swap participants. 

DATES: Effective date: September 20, 

2011. 

Compliance dates: Futures 

commission merchants, commodity 

pool operators, commodity trading 

advisors, introducing brokers, and retail 

foreign exchange dealers shall be in 

compliance with these rules not later 

than November 21, 2011. Swap dealers 

and major swap participants shall be in 

compliance with these rules not later 

than 60 days after the effective date of 

the final entities definition rulemaking, 

which the Commission will publish in 

the Federal Register at a future date. 

FOR FURTHER INFORMATION CONTACT: Carl 

E. Kennedy, Counsel, Office of General 

Counsel, (202) 418–6625, e-mail: 

c_kennedy@cftc.gov, Commodity 

Futures Trading Commission, Three 

Lafayette Centre, 1155 21st Street, NW., 

Washington, DC 20581. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 5g(b) of the CEA provides the 

Commission with the authority to 


emcdonald on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 76, No. 141 / Friday, July 22, 2011 / Rules and Regulations 43875 

1See Gramm-Leach-Bliley Act, Public Law 106– 

102, 113 Stat. 1338 (1999) (codified in scattered 

sections of 12 U.S.C. and 15 U.S.C.). As enacted, 

title V of the GLB Act limits the instances in which 

a financial institution may disclose nonpublic 

personal information about a consumer to 

nonaffiliated third parties, and requires a financial 

institution to disclose to all of its customers the 

institution’s privacy policies and practices with 

respect to information sharing with both affiliates 

and nonaffiliated third parties. Section 5g(b) of the 

CEA treats the Commission as a Federal functional 

regulator within the meaning of title V of the GLB 

Act. 

2The Commission did not become subject to title 

V of the GLB Act until 2000. Section 5g of the CEA 

was added by the Commodity Futures 

Modernization Act of 2000 (7 U.S.C. 7b–2) to make 

the Commission a ‘‘Federal functional regulator’’ 

subject to the GLB Act Title V. Section 5g provides 

that the following entities are subject to the 

Commission’s jurisdiction for the purposes of title 

V of the GLB Act: futures commission merchants 

(‘‘FCMs’’), commodity trading advisors (‘‘CTAs’’), 

commodity pool operators (‘‘CPOs’’), and 

introducing brokers (‘‘IBs’’). The scope of the part 

160 rules mirrors this list of entities. 

The Commission jointly promulgated final rules 

with the Office of the Comptroller of the Currency, 

the Board of Governors of the Federal Reserve 

System, the Federal Depository Insurance 

Corporation, the Office of Thrift Supervision, the 

National Credit Union Administration, and the 

Securities and Exchange Commission (collectively, 

the ‘‘Agencies’’) on April 27, 2001. See 66 FR 

21236, Apr. 27, 2001. On September 10, 2010, the 

Commission expanded the scope of entities subject 

to the part 160 rules to include retail foreign 

exchange dealers (‘‘RFEDs’’). 

3Section 160.3(h)(1) of the Commission’s 

regulations defines the term consumer to mean ‘‘an 

individual who obtains or has obtained a financial 

product or service from [a financial institution] that 

is to be used primarily for personal, family or 

household purposes, or that individual’s legal 

representative.’’ 

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

5See Public Law 111–203, 124 Stat. 1376 (2010). 

The text of the Dodd-Frank Act may be accessed at 

http://www.cftc.gov. Title X of the Dodd-Frank Act 

creates a new consumer financial services regulator, 

the Bureau of Consumer Financial Protection (the 

‘‘Bureau’’), that will assume most of the consumer 

financial services regulatory responsibilities 

currently spread among numerous agencies. 

However, these rules will continue to apply to 

financial institutions that are subject to the 

Commission’s jurisdiction. In addition, the 

Commission will continue to have plenary 

oversight authority over such institutions. 

6Specifically, section 1093 of the Dodd-Frank Act 

amends section 504 of the GLB Act by providing 

that ‘‘the [CFTC] shall have the authority to 

prescribe such regulations as may be necessary to 

carry out the purposes of [title V of the GLB Act] 

with respect to any financial institutions and other 

persons subject to the jurisdiction of the [CFTC] 

under section 5g of the [CEA].’’ As discussed in the 

proposing release, the Commission has determined 

that section 1093 simply reaffirms its authority to 

prescribe regulations under title V of the GLB Act. 

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

entities over which the Commission has 

jurisdiction: swap dealers (‘‘SDs’’) and major swap 

participants (‘‘MSPs’’). The terms ‘‘SD’’ and ‘‘MSP’’ 

as used in this final rule refer to the statutory 

definitions of such terms as defined in title VII of 

the Dodd-Frank Act, and as may be further defined 

by the Commission in a future final rulemaking. See 

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

provides that the Commission has the authority to 

adopt rules further defining any term in the CEA 

in a manner that is consistent with the Dodd-Frank 

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

Commission is required to adopt a rule to further 

define, inter alia, the terms ‘‘swap dealer’’ and 

‘‘major swap participant’’ to include transactions 

and entities that have been structured to evade 

provisions in the Dodd-Frank Act. 

8 In a forthcoming release, the Commission plans 

to promulgate a new part 162, which provides 

privacy protections under the Fair Credit Reporting 

Act, 15 U.S.C. 1681 et seq. (‘‘FCRA’’). 

9This final rule incorporates technical revisions 

to its proposed amendments to add clarity. These 

revisions are not substantive and are not of the 

nature for which notice and comment must be 

provided under the Administrative Procedure Act. 

For example, in § 160.3(x)(7), the Commission 

deleted the language ‘‘subject to the jurisdiction of 

the Commission’’ after the term ‘‘Any swap dealer,’’ 

since the Commission believes that the inclusion of 

such language was redundant and unnecessary. 

10 In a forthcoming release titled ‘‘Business 

Affiliate Marketing and Disposal of Consumer 

Information Rules,’’ the Commission will adopt a 

new part 162 of its regulations. 

prescribe regulations that establish 

appropriate standards for financial 

institutions subject to its jurisdiction to 

safeguard customer records and 

information in accordance with title V 

of the GLB Act.1 Pursuant to this 

authority, the Commission promulgated 

part 160 of its regulations to require 

certain CFTC-regulated entities 2 to 

adopt appropriate policies and 

procedures that address safeguards to 

customer records and information, 

including initial and annual privacy 

notice requirements, opt-out provisions 

to the extent that these registrants wish 

to share such records and information 

with non-affiliates, and other measures 

to protect nonpublic consumer 

information.3

On October 27, 2010, the Commission 

published for comment in the Federal 

Register proposed amendments to part 

160 of its regulations (the ‘‘Proposal’’) 4

to implement certain provisions in titles 

VII and X of the Dodd-Frank Wall Street 

Financial Reform and Consumer 

Protection Act (the ‘‘Dodd-Frank Act’’).5

In the Proposal, the Commission 

sought comments on proposed 

amendments to part 160 in accordance 

with section 1093 6 and title VII of the 

Dodd-Frank Act to, inter alia, broaden 

the types of entities that are subject to 

the Commission’s jurisdiction 7 to 

provide certain privacy protections for 

consumer financial information to 

include swap dealers (SDs) and major 

swap participants (MSPs). In addition, 

the Commission proposed: (1) in 

accordance with the transfer of 

authority in title X, changing all 

references in part 160 from the FTC to 

the Bureau; and (2) renaming part 160 

to ‘‘Privacy of Consumer Financial 

Information under the Gramm-LeachBliley Act’’ to harmonize the title of part 

160 with a new part of the 

Commission’s regulations.8

The 60-day public comment period on 

the Proposal expired on December 27, 

2010. In response to the Proposal, the 

Commission received a total of six 

comments: Two substantive comments 

and four other comments that did not 

address the merits or substance of the 

Proposal. 

The Securities Industry and Financial 

Markets Association (‘‘SIFMA’’) 

commented on the following aspects of 

the proposal: (1) The proposed 

compliance date; (2) the annual burden 

estimate for the purpose of the 

Paperwork Reduction Act analysis and 

cost-benefit analysis; and (3) the 

appropriate standard applicable with 

regard to state laws. 

The International Swaps and 

Derivatives Association, Inc. (‘‘ISDA’’) 

and the Financial Services Roundtable 

(‘‘FSR’’) jointly submitted a comment 

letter generally in support of the 

Proposal. That is, ISDA and the FSR did 

not provide specific comments in 

response to the Proposal. ISDA and the 

FSR, however, encouraged the 

Commission to work collaboratively 

with other agencies to decrease 

duplication in regulation and increase 

efficiency industry-wide. 

The Commission’s final rules, the 

specific comments noted above and the 

Commission’s responses to those 

specific comments are discussed in 

greater detail below.9

II. Rule Amendments 

A. Renaming the Title of Part 160 

The Commission is renaming the title 

of part 160 to reflect the scope of the 

part 160 regulations. The Commission’s 

part 160 regulations implement certain 

protections for the privacy of consumer 

financial information under the GLB 

Act. To harmonize the title of part 160 

with the new part 162 being adopted 

under a separate rulemaking,10 Part 160 

is renamed ‘‘Privacy of Consumer 

Financial Information under the 

Gramm-Leach-Bliley Act.’’ 

B. Scope of 17 CFR 160.1(b) 

Regulation 160.1(b) sets out the scope 

of the Commission’s rules and identifies 

the financial institutions covered by the 

rules that include CFTC registrants 

regardless of whether they are required 

to register with the Commission. As 

referenced above, the Commission is 

amending the scope of part 160 to add 

SDs and MSPs. 

C. Section 160.3—Definitions 

Since the scope of the regulations 

extends to SDs and MSPs, the 

Commission amends § 160.3 to add the 

definitions of SDs and MSPs to the list 


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43876 Federal Register / Vol. 76, No. 141 / Friday, July 22, 2011 / Rules and Regulations 

11See 75 FR 57252–02, Sept. 20, 2010. 

12The effective date of the amendments to part 

160 shall be 60 days from the date of publication 

in the Federal Register. 

13See the Commission’s proposed entities 

definitional rulemaking at 75 FR 80174, Dec. 21, 

2010. 

of defined terms under § 160.3. 

Specifically, the Commission defines 

‘‘major swap participant’’ to have the 

same meaning as in section 1a(33) of the 

CEA, as further defined by the 

Commission’s regulations, and includes 

any person registered as such 

thereunder. The Commission defines 

‘‘swap dealer’’ to have the same 

meaning as in section 1a(49) of the CEA, 

as further defined by the Commission’s 

regulations, and includes any person 

registered as such thereunder. 

There are existing definitions and 

related provisions under part 160 that 

are amended to include these new 

registrants. Specifically, the definitions 

of ‘‘financial institution’’, ‘‘affiliate’’, 

and ‘‘you’’ are amended to include swap 

dealers and major swap participants. 

D. Section 160.15—Other Exceptions to 

Notice and Opt-out Requirements 

As noted above, title X of the DoddFrank Act transferred certain authority 

from the FTC to the Bureau. 

Accordingly, the Commission is 

changing the reference from the FTC to 

the Bureau in § 160.15 to reflect that the 

Bureau is now a Federal functional 

regulator. 

E. Section 160.17(b)—Relation to State 

Laws 

Existing § 160.17(b) of the 

Commission’s regulations clarifies the 

relationship of title V to state consumer 

protection laws. As a result of the 

creation of the Bureau and the transfer 

of certain authority from the FTC to the 

Bureau, the Commission proposed to 

amend § 160.17(b) by replacing it with 

the standard set out in section 

1041(a)(2) of the Dodd-Frank Act. In the 

Commission’s view, while the language 

of the standard in section 1041(a)(2) is 

structured slightly different from the 

existing standard in § 160.17(b), the 

Commission believed that the proposed 

language was nearly identical in 

substance to the current standard in 

§ 160.17(b). 

SIFMA commented that the standard 

for relation to state laws should be the 

same as the standard under section 

507(b) of the GLB Act. SIFMA asserted 

that the appropriate standard should 

more closely follow section 507(b)—not 

section 1041 of the Dodd-Frank Act— 

because the former standard would 

achieve maximum consistency with the 

rules of the Office of the Comptroller of 

the Currency, the Board of Governors of 

the Federal Reserve System, the Federal 

Depository Insurance Corporation, the 

Office of Thrift Supervision, the 

National Credit Union Administration, 

and the Securities and Exchange 

Commission (collectively, the 

‘‘Agencies’’) and would maintain the 

settled expectations of the market 

participants, which have complied with 

the standards of GLB Act for several 

years. 

The Commission has carefully 

considered SIFMA’s comment and has 

amended § 160.17(b) to use the language 

of section 507(b) of the GLB Act, as 

amended by section 1093(6) of the 

Dodd-Frank Act. The Commission 

recognizes that market participants are 

familiar with the standard in section 

507(b) of the GLB Act, and therefore, 

changing the language of the standard 

ever so slightly from what is in section 

507(b) may create unnecessary and 

unintended confusion. 

F. Section 160.30—Procedures to 

Safeguard Customer Records and 

Information 

Section 160.30 requires CFTC 

registrants to adopt policies and 

procedures that, among other things, 

address administrative, technical and 

physical safeguards for the protection of 

customer records and information. The 

Commission amends the introductory 

sentence of § 160.30 to add SDs and 

MSPs to the list of CFTC registrants that 

must comply with this requirement. 

III. Effective Date 

In the Proposal, the Commission 

proposed to adopt the amendments to 

part 160 on July 21, 2011, which 

coincides with the designated transfer 

date when various Federal agencies 

transfer their consumer protection 

authority to the Consumer Financial 

Protection Bureau pursuant to section 

1100H of the Dodd-Frank Act.11 In 

response to the proposed effective date, 

SIFMA expressed concern that this 

timeframe would not provide covered 

entities with a reasonable amount of 

time to address and implement the new 

rules. To address this concern, SIFMA 

requested that the Commission extend 

the effective date of the final rules to 

commence nine months from the date of 

the rules’ publication in the Federal 

Register to ensure a reasonable time for 

compliance. 

The Commission partly agrees with 

SIFMA’s comment in that SDs and 

MSPs may need a reasonable amount of 

time to comply with the amendments to 

part 160 since these are two new types 

of Commission-regulated entities. The 

Commission, however, believes that 

nine months is more time than is 

necessary for these new regulated 

entities to comply with part 160. The 

Commission has decided to establish 

staggered compliance dates for its 

regulated entities that fall within the 

scope of part 160.12 Specifically, with 

respect to those Commission-regulated 

entities that were previously complying 

with part 160—FCMs, IBs, CPOs, CTA, 

and RFEDs—the amendments to part 

160 will not require that these entities 

materially alter their compliance 

programs. Accordingly, in the 

Commission’s view, the appropriate 

compliance date for these entities is 120 

days from the date of publication in the 

Federal Register. With respect to SDs 

and MSPs, the compliance date for these 

entities is 60 days from the date of 

publication of the Commission’s final 

entities definitional rulemaking, which 

shall be published in the Federal 

Register at a date in the future.13

IV. Related Matters 

A. Cost-Benefit Considerations. 

Section 15(a) of the CEA explicitly 

requires the Commission to consider the 

costs and benefits of its actions before 

issuing a rule or order under the CEA. 

By its terms, section 15(a) neither 

requires the Commission to quantify the 

costs and benefits of amendments to 

regulations, nor does it require the 

Commission to determine whether the 

benefits of the amendments outweigh its 

costs. Section 15(a) specifies that the 

costs and benefits shall be evaluated in 

light of five broad areas of market and 

public concern: (1) Protection of market 

participants and the public; (2) 

efficiency, competitiveness and 

financial integrity of futures markets; (3) 

price discovery; (4) sound risk 

management practices; and (5) other 

public interest considerations. The 

Commission may in its discretion give 

greater weight to any one of the five 

enumerated areas and could in its 

discretion determine that, 

notwithstanding its costs, a particular 

amendment is necessary or appropriate 

to protect the public interest or to 

effectuate any of the provisions or 

accomplish any of the purposes of the 

CEA. 

Promulgated in 2001, part 160 of the 

Commission’s regulations currently 

applies to several types of Commissionregulated entities, including FCMs, IBs, 

CTAs, CPOs and RFEDs. The 

Commission proposed and later 

promulgated the rules in part 160 in 

concert with the Agencies in order to 

broadly protect individual customers 

from all types of regulated businesses 


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Federal Register / Vol. 76, No. 141 / Friday, July 22, 2011 / Rules and Regulations 43877 

14See the Commission’s cost-benefit discussion 

and Paperwork Reduction Act analysis at 75 FR at 

66016–17. 

(including businesses that are regulated 

with the Commission) that have access 

to nonpublic personal information. Part 

160 imposes disclosure and procedural 

requirements that are either mandated 

by or fully consistent with the privacy 

provisions of the GLB Act and section 

5g of the CEA. 

The Dodd-Frank Act created two new 

entities over which the Commission has 

jurisdiction (i.e., SDs and MSPs), and 

specifically mandated that the 

Commission has the authority to 

prescribe regulations as necessary to 

carry out the purposes of title V of the 

GLB Act for entities under its 

jurisdiction. In its Proposal, the 

Commission primarily sought to expand 

the scope of part 160 to cover these new 

entities because the Commission 

believes that, like FCMs, IBs, CTAs, 

CPOs and RFEDs, these new entities are 

more likely to have access to nonpublic 

personal information. The cost-benefit 

discussion in the Proposal analyzed the 

costs and benefits of extending the 

existing regulatory regime in part 160 to 

these new entities. 

The Commission has considered the 

costs and benefits of the final rule in 

light of comments received and the 

specific areas of concern identified in 

section 15(a). An analysis of the section 

15(a) factors is set out immediately 

below, followed by a discussion of the 

comments received in response to the 

Commission’s cost-benefit discussion in 

the Proposal. 

1. Protection of market participants 

and the public. The requirements to 

provide opt out notices and to protect 

customer information will benefit 

market participants and the public by 

protecting the privacy of their 

nonpublic personal information. The 

Commission believes that extending 

these requirements to SDs and MSPs 

will further ensure the protection of 

nonpublic personal information. The 

Commission further believes that the 

costs, which will be placed on these 

new entities will not exceed those costs 

currently placed on FCMs, IBs, CTAs, 

CPOs and RFEDs. In the Commission’s 

view, SDs and MSPs will likely have 

similar resources and administrative 

infrastructure to comply with the part 

160 requirements. Moreover, while 

these new entities will likely incur some 

incremental costs in complying with 

part 160, the privacy protection benefits 

that will accrue to the general public far 

outweigh those costs. 

2. Efficiency and competition. The 

requirements to provide initial and 

annual privacy notices will benefit 

efficiency and competition by allowing 

customers to compare the privacy 

policies of financial institutions. The 

Commission’s final rules also will 

benefit efficiency and competition by 

allowing SDs and MSPs flexibility to 

distribute notices and to adopt policies 

and procedures to protect customer 

information that are best suited to the 

institution’s business and needs. As 

noted above, the Commission believes 

that the costs, which will be placed on 

these new entities will not exceed those 

costs currently placed on FCMs, IBs, 

CTAs, CPOs and RFEDs. Indeed, SDs 

and MSPs will likely have similar 

resources and administrative 

infrastructure to comply with the part 

160 requirements. 

3. Price discovery and financial 

integrity of futures and swaps markets, 

price discovery and sound risk 

management practices. The final rules 

should have no effect, from the 

standpoint of imposing costs or creating 

benefits, on the price discovery function 

or financial integrity of the futures and 

swaps markets or on the risk 

management practices of SDs or MSPs. 

4. Other public interest 

considerations. In the same manner that 

part 160 was designed to minimize the 

costs of compliance on FCMs, IBs, 

CTAs, CPOs and RFEDs, part 160 will 

similarly provide SDs and MSPs with 

maximum flexibility, consistent with 

legal requirements, to design their own 

compliance systems. Ultimately, the 

Commission believes that extending the 

scope of part 160 to SDs and MSPs will 

harmonize privacy protections for 

individual customers across the futures 

and swaps markets. 

5. Response to comments. In its 

Proposal, the Commission solicited 

comment on its consideration of these 

costs and benefits. The Commission 

received one comment with respect to 

costs and benefits of the Proposal. 

Specifically, SIFMA argued that the 

Commission also should consider 

anticipated additional costs associated 

with monitoring the privacy and opt-out 

notice process, addressing consumer 

issues, and adjusting records to comport 

with consumer requests. SIFMA did not 

provide specific cost information to 

support its comments. 

Despite SIFMA’s argument that the 

Commission did not consider the 

additional costs identified above, there 

are several Commission-regulated 

entities that already comply with part 

160, and the final rule simply extends 

this protection to new registrants, SDs 

and MSPs. As noted above, the 

Commission believes that the costs, 

which will be placed on these new 

entities will be no greater than those 

costs currently placed on FCMs, IBs, 

CTAs, CPOs and RFEDs. In the 

Commission’s view, there is no reason 

why SDs and MSPs should be excluded 

from these requirements to the extent 

that they conduct business with a 

natural person. SDs and MSPs will 

likely have similar resources and 

administrative infrastructure to comply 

with the part 160 requirements. The 

additional costs that SIFMA raised (but 

did not articulate with specificity) were 

subsumed within the considerations 

discussed in the Proposal.14

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

the Commission believes that extending 

these provisions to SDs and MSPs is in 

the public interest and will further 

protect market the general public, 

promote efficiency and competition, 

and address other public interest 

considerations such as the 

harmonization of regulation across the 

futures and swaps markets. In the 

Commission’s view, these benefits far 

outweigh the additional costs that 

SIFMA cited. 

B. Paperwork Reduction Act. 

This rule contains information 

collection requirements. As required by 

the Paperwork Reduction Act of 1995, 

44 U.S.C. 3501 et seq., the Commission 

submitted a copy of the Proposal to the 

Office of Management and Budget 

(‘‘OMB’’) for review. The Commission 

may not sponsor, and a person is not 

required to respond to an information 

collection unless it displays a currently 

valid OMB control number. 

The final rule, affecting part 160, 

titled ‘‘Privacy of Consumer Financial 

Information,’’ OMB Control Number 

3038–0055, expands the scope of this 

part to cover SDs and MSPs, two new 

classes of registrants, now subject to 

Commission jurisdiction. The final rule 

imposes mandatory requirements for 

these entities. SDs and MSPs must 

provide initial and annual privacy and 

opt-out notices to all customers that are 

natural persons. 

In response to the Commission’s 

request in the notice of proposed 

rulemaking for comments on any 

potential paperwork burden associated 

with this regulation, only one 

commenter provided a substantive 

comment addressing the merits of the 

Commission’s proposed PRA 

calculations. In particular, SIFMA 

proposed that the burden estimate 

should be refined to reflect anticipated 

additional burden hours associated with 

monitoring the privacy and opt-out 

notice process, addressing consumer 

issues, and adjusting records to comport 

with consumer requests. 


emcdonald on DSK2BSOYB1PROD with RULES
43878 Federal Register / Vol. 76, No. 141 / Friday, July 22, 2011 / Rules and Regulations 

Based on this comment, the 

Commission estimates that the 

approximately 300 SDs and MSPs may 

incur additional burden hours. 

Consequently, it is anticipated the 300 

SDs and MSPs may incur an additional 

aggregate of 1440 burden hours than 

what was stated in the Proposal, 

monitoring an average of 20 notices per 

year, with an average monitoring time of 

.24 hours per notice. Accordingly, the 

Commission has submitted to the OMB 

an amended calculation of the annual 

burden hours for SDs and MSPs. OMB 

has approved a revision to Control 

Number 3038–0055 to cover the revision 

in the Commission’s annual burden 

calculation. 

C. Regulatory Flexibility Act. 

The Regulatory Flexibility Act, 5 

U.S.C. 601 et seq., requires that Federal 

agencies consider whether their 

proposed regulations will have a 

significant economic impact on a 

substantial number of small entities. 

The rule amendments adopted herein 

now will affect SDs and MSPs, in 

addition to the certain Commission 

regulated entities that are currently 

subject to Commission’s regulations 

under part 160. These regulations 

require periodic notice to be provided to 

individuals who obtain financial 

products or services primarily for 

personal, family, or household purposes 

from the institutions, and may be 

satisfied by the use of a model notice 

developed by the Commission and other 

regulatory agencies to minimize the 

burden of compliance. The Commission 

certified in the Proposal that these rules 

will not have a significant economic 

impact on a substantial number of small 

entities. Accordingly, because the 

Commission received no substantive 

comments from the public addressing 

the merits of the proposed rule, nothing 

alters the Commission’s determination 

that the obligations created by these rule 

amendments will not create a significant 

economic impact on a substantial 

number of small entities. 

D. Regulatory Text. 

List of Subjects in 17 CFR Part 160 

Brokers, Dealers, Consumer 

protection, Privacy, Reporting and 

recordkeeping requirements. 

For the reasons articulated in the 

preamble, the Commission amends part 

160 of title 17 of the Code of Federal 

Regulations as follows: 

■ 1. The authority citation for part 160 

is revised to read as follows: 

Authority: 7 U.S.C. 7b–2 and 12a(5); 15 

U.S.C 6801, et seq., and sec. 1093, Pub. L. 

111–203, 124 Stat. 1376. 

■ 2. The heading for part 160 is revised 

to read as follows: 

PART 160—PRIVACY OF CONSUMER 

FINANCIAL INFORMATION UNDER 

TITLE V OF THE GRAMM–LEACH– 

BLILEY ACT 

■ 3. Amend section 160.1 by revising 

paragraph (b) to read as follows: 

§ 160.1 Purpose and scope. 

* * * * * 

(b) Scope. This part applies only to 

nonpublic personal information about 

individuals who obtain financial 

products or services primarily for 

personal, family, or household purposes 

from the institutions listed below. This 

part does not apply to information about 

companies or about individuals who 

obtain financial products or services 

primarily for business, commercial, or 

agricultural purposes. This part applies 

to all futures commission merchants, 

retail foreign exchange dealers, 

commodity trading advisors, commodity 

pool operators, introducing brokers, 

major swap participants and swap 

dealers that are subject to the 

jurisdiction of the Commission, 

regardless whether they are required to 

register with the Commission. These 

entities are hereinafter referred to in this 

part as ‘‘you.’’ This part does not apply 

to foreign (non-resident) futures 

commission merchants, retail foreign 

exchange dealers, commodity trading 

advisors, commodity pool operators, 

introducing brokers, major swap 

participants and swap dealers that are 

not registered with the Commission. 

■ 4. Amend § 160.3 as follows: 

■ a. Revise paragraphs (a), (n)(1)(i), 

(n)(1)(ii), and (o)(1)(i); 

■ b. Redesignating paragraphs (w) and 

(x) as paragraphs (y) and (z); 

■ c. Redesignating paragraphs (s) 

through (v) as paragraphs (t) through 

(w); 

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

■ e. Revising new designated 

paragraphs (y)(4) and (y)(5); and 

■ f. Adding new paragraph (y)(6) and (7) 

to read as follows: 

§ 160.3 Definitions. 

* * * * * 

(a) Affiliate of a futures commission 

merchant, retail foreign exchange 

dealer, commodity trading advisor, 

commodity pool operator, introducing 

broker, major swap participant, or swap 

dealer means any company that 

controls, is controlled by, or is under 

common control with a futures 

commission merchant, retail foreign 

exchange dealer, commodity trading 

advisor, commodity pool operator, 

introducing broker, major swap 

participant, or swap dealer that is 

subject to the jurisdiction of the 

Commission. In addition, a futures 

commission merchant, retail foreign 

exchange dealer, commodity trading 

advisor, commodity pool operator, 

introducing broker, major swap 

participant, or swap dealer subject to 

the jurisdiction of the Commission will 

be deemed an affiliate of a company for 

purposes of this part if: 

(1) That company is regulated under 

title V of the GLB Act by the Bureau of 

Consumer Financial Protection or by a 

Federal functional regulator other than 

the Commission; and 

(2) Rules adopted by the Bureau of 

Consumer Financial Protection or 

another Federal functional regulator 

under title V of the GLB Act treat the 

futures commission merchant, retail 

foreign exchange dealer, commodity 

trading advisor, commodity pool 

operator, introducing broker, major 

swap participant, or swap dealer as an 

affiliate of that company. 

* * * * * 

(n)(1) * * * 

(i) Any futures commission merchant, 

retail foreign exchange dealer, 

commodity trading advisor, commodity 

pool operator, introducing broker, major 

swap participant, or swap dealer that is 

registered with the Commission as such 

or is otherwise subject to the 

Commission’s jurisdiction; and 

* * * * * 

(2) * * * 

(i) Any person or entity, other than a 

futures commission merchant, retail 

foreign exchange dealer, commodity 

trading advisor, commodity pool 

operator, introducing broker, major 

swap participant, or swap dealer that, 

with respect to any financial activity, is 

subject to the jurisdiction of the 

Commission under the Act. 

* * * * * 

(o)(1) * * * 

(i) Any product or service that a 

futures commission merchant, retail 

foreign exchange dealer, commodity 

trading advisor, commodity pool 

operator, introducing broker, major 

swap participant, or swap dealer could 

offer that is subject to the Commission’s 

jurisdiction; and 

* * * * * 

(s) Major swap participant. The term 

‘‘major swap participant’’ has the same 

meaning as in section 1a(33) of the 

Commodity Exchange Act, 7 U.S.C. 1 et 

seq., as may be further defined by this 

title, and includes any person registered 

as such thereunder. 

* * * * * 


emcdonald on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 76, No. 141 / Friday, July 22, 2011 / Rules and Regulations 43879 

1See 75 FR 66018, Oct. 27, 2010. 

2See the 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. 

(x) Swap dealer. The term ‘‘swap 

dealer’’ has the same meaning as in 

section 1a(49) of the Commodity 

Exchange Act, 7 U.S.C. 1 et seq., as may 

be further defined by this title, and 

includes any person registered as such 

thereunder. 

* * * * * 

(y) * * * 

(4) Any commodity pool operator; 

(5) Any introducing broker; 

(6) Any major swap participant; and 

(7) Any swap dealer. 

* * * * * 

■ 5. Revise § 160.15(a)(4) to read as 

follows: 

§ 160.15 Other exceptions to notice and 

opt out requirements. 

* * * * * 

(4) To the extent specifically 

permitted or required under other 

provisions of law and in accordance 

with the Right to Financial Privacy Act 

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

enforcement agencies (including a 

Federal functional regulator, the 

Secretary of the Treasury, with respect 

to 31 U.S.C. Chapter 53, Subchapter II 

(Records and Reports on Monetary 

Instruments and Transactions) and 12 

U.S.C. Chapter 21 (Financial 

Recordkeeping), a State insurance 

authority, with respect to any person 

domiciled in that insurance authority’s 

state that is engaged in providing 

insurance, and the Bureau of Consumer 

Financial Protection), self-regulatory 

organizations, or for an investigation on 

a matter related to public safety; 

* * * * * 

■ 6. Amend § 160.17 by revising 

paragraph (b) to read as follows: 

§ 160.17 Relation to state laws. 

* * * * * 

(b) Greater protection under state law. 

For purposes of this section, a state 

statute, regulation, order or 

interpretation is not inconsistent with 

the provisions of this part if the 

protection such statute, regulation, 

order or interpretation affords any 

person is greater than the protection 

provided under this part, as determined 

by the Bureau of Consumer Financial 

Protection, after consultation with the 

Commission, on its own motion or upon 

the petition of any interested party. 

■ 7. Revise § 160.30 to read as follows: 

§ 160.30 Procedures to safeguard 

customer records and information. 

Every futures commission merchant, 

retail foreign exchange dealer, 

commodity trading advisor, commodity 

pool operator, introducing broker, major 

swap participant, and swap dealer 

subject to the jurisdiction of the 

Commission must adopt policies and 

procedures that address administrative, 

technical and physical safeguards for 

the protection of customer records and 

information. 

Issued in Washington, DC on July 7, 2011 

by the Commission. 

David A. Stawick, 

Secretary of the Commission. 

Appendices to Privacy of Consumer 

Financial Information; Conforming 

Amendments Under Dodd-Frank Act— 

Commission Voting Summary and 

Statements of Commissioners 

Note: The following appendices will not 

appear in the Code of Federal Regulations. 

Appendix 1—Commission Voting 

Summary 

On this matter, Chairman Gensler and 

Commissioners Dunn, Sommers, O’Malia and 

Chilton voted in the affirmative; no 

Commissioner voted in the negative. 

Appendix 2—Statement of Chairman 

Gary Gensler 

I support the final rulemaking to expand 

the scope of privacy protections for consumer 

financial information under the GrammLeach-Bliley Act. The rulemaking expands 

the scope of the Commission’s existing 

privacy protections afforded to consumers’ 

information—under the Commission’s Part 

160 rules—to swap dealers and major swap 

participants. 

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

BILLING CODE 6351–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 162 

RIN 3038–AD12 

Business Affiliate Marketing and 

Disposal of Consumer Information 

Rules 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Final rule. 

SUMMARY: The Commodity Futures 

Trading Commission is adopting 

regulations to implement new statutory 

provisions enacted by title X of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act. These 

regulations apply to futures commission 

merchants, retail foreign exchange 

dealers, commodity trading advisors, 

commodity pool operators, introducing 

brokers, swap dealers and major swap 

participants. The Dodd-Frank Act 

provides the Commission with authority 

to implement regulations under sections 

624 and 628 of the Fair Credit Reporting 

Act. The regulations implementing 

section 624 of the Fair Credit Reporting 

Act require CFTC-regulated entities to 

provide consumers with the opportunity 

to prohibit affiliates from using certain 

information to make marketing 

solicitations to consumers. The 

regulations implementing section 628 of 

the FCRA require CFTC-regulated 

entities that possess or maintain 

consumer report information in 

connection with their business activities 

to develop and implement written 

policies and procedures for the proper 

disposal of such information. 

DATES: Effective date: September 20, 

2011. 

Compliance dates: Futures 

commission merchants, commodity 

pool operators, commodity trading 

advisors, introducing brokers, and retail 

foreign exchange dealers shall be in 

compliance with these rules not later 

than November 21, 2011. Swap dealers 

and major swap participants shall be in 

compliance with these rules not later 

than 60 days after the effective date of 

the final entities definition rulemaking, 

which the Commission will have 

published in the Federal Register at a 

future date. 

FOR FURTHER INFORMATION CONTACT: Carl 

E. Kennedy, Counsel, (202) 418–6625, 

Commodity Futures Trading 

Commission, Office of the General 

Counsel, Three Lafayette Centre, 1155 

21st Street, NW., Washington, DC 

20581, facsimile number (202) 418– 

5524, e-mail: c_kennedy@cftc.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

II. Rule Amendments 

A. Affiliate Marketing Rules 

B. Disposal Rules 

II. Cost-Benefit Analysis 

III. Paperwork Reduction Act 

IV. Regulatory Flexibility Act 

V. Text of Final Rules 

I. Background 

On October 27, 2010, the Commodity 

Futures Trading Commission 

(‘‘Commission’’ or ‘‘CFTC’’) proposed in 

the Federal Register the addition of a 

new part 162 to its Regulations (the 

‘‘Proposal’’).1 New part 162 was 

proposed to implement section 1088 of 

the Dodd-Frank Wall Street Reform and 

Consumer Protection Act 2 (‘‘DoddVerDate Mar<15>2010 18:10 Jul 21, 2011 Jkt 223001 PO 00000 Frm 00077 Fmt 4700 Sfmt 4700 E:\FR\FM\22JYR1.SGM 22JYR1

emcdonald on DSK2BSOYB1PROD with RULES