28244 Federal Register / Vol. 80, No. 95 / Monday, May 18, 2015 / Notices 

contract. Because a forward contract is a 

commercial merchandising transaction, intent to 

deliver historically has been an element of the 

CFTC’s analysis of whether a particular contract is 

a forward contract. In assessing the parties’ 

expectations or intent regarding delivery, the CFTC 

consistently has applied a ‘‘facts and 

circumstances’’ test. Therefore, the CFTC reads the 

‘‘intended to be physically settled’’ language in the 

swap definition with respect to nonfinancial 

commodities to reflect a directive that intent to 

deliver a physical commodity be a part of the 

analysis of whether a given contract is a forward 

contract or a swap, just as it is a part of the CFTC’s 

analysis of whether a given contract is a forward 

contract or a futures contract. Proposed Rule on 

‘‘Further Definition of ‘Swap,’ ‘Security-Based 

Swap,’ and ‘Security-Based Swap Agreement’; 

Mixed Swaps; Security-Based Swap Agreement 

Recordkeeping, 76 FR 29818, 29828 (May 23, 2011) 

(‘‘Proposed Products Release’’). 

This interpretation was ratified in the final rule, 

‘‘Further Definition of ‘Swap,’ ‘Security-Based 

Swap,’ and ‘Security-Based Swap Agreement’; 

Mixed Swaps; Security-Based Swap Agreement 

Recordkeeping, 77 FR 48208, 48227–48228 (August 

13, 2012) (‘‘Products Release’’). 2See also, Products Release at 4236–37. 

An option, in contrast, is only the option 

to undertake such a ‘‘sale’’, not the sale itself. 

The sale occurs only when the option is 

exercised. The option to buy or sell a 

commodity at some later point simply is not 

the same thing as the sale of that commodity 

itself. The Commission’s Office of the 

General Counsel memorialized this 

interpretation in 1985: 

[T]he [forward] contract must be a binding 

agreement on both parties to the contract: 

One must agree to make delivery and the 

other to take delivery of the commodity. 

Second, because forward contracts are 

commercial, merchandizing transactions 

which result in delivery, the courts and the 

Commission have looked for evidence of the 

transactions’ use in commerce. Thus, the 

courts and the Commission have examined 

whether the parties to the contracts are 

commercial entities that have the capacity to 

make or take delivery and whether delivery, 

in fact, routinely occurs under such contracts 

* * * * * 

Thus, an option is a contract in which only 

the grantor is obligated to perform. As a 

result, the option purchaser has a limited risk 

from adverse price movements. This 

characteristic distinguishes an option from a 

forward contract in which both parties must 

routinely perform and face the full risk of 

loss from adverse price changes since one 

party must make and the other take delivery 

of the commodity. In contrast, in an option, 

only the grantor of a call (put) is required to 

sell (buy) a given quantity of a commodity (or 

a futures contract on that commodity) on or 

by a specified date in the future if the option 

is exercised. ‘‘Characteristics Distinguishing 

Cash and Forward Contracts and ‘Trade 

Options’ ’’, 50 FR 39656–02 (September 30, 

1985) 

The Commission ratified this interpretation 

in 1990 in its ‘‘Statutory Interpretation 

Concerning Forward Transactions’’, 55 FR 

39188–03 (September 25, 1990) (‘‘Brent 

Interpretation’’) and again in 2012 its final 

rule, ‘‘Further Definition of ‘Swap,’ ‘SecurityBased Swap,’ and ‘Security-Based Swap 

Agreement’; Mixed Swaps; Security-Based 

Swap Agreement Recordkeeping, 77 FR 

48208, 48227–48235 (August 13, 2012) 

(‘‘Products Release’’). In doing so, the 

Commission explicitly rejected the argument 

that physically-delivered commodity options 

could fall within the forward contract 

exclusion.2

The interpretation being promulgated 

today does not change this, and therein lays 

my concern regarding this interpretation’s 

limits. 

I think much of the confusion regarding the 

seven-part test has been based upon a failure 

to recognize the difference between forward 

and option contracts under the Commodity 

Exchange Act. The fact that a forward 

contract element and a commodity option are 

packaged together does not change the 

regulatory treatment of the different 

components. Hybrid or packaged instruments 

are common throughout the industry. There 

are hybrid or packaged instruments which 

may have characteristics of futures contracts 

and securities, swaps and security-based 

swaps, futures and forward transactions, and 

even forward contracts and commodity 

options. Each portion of the contract might 

be subject to different regulatory treatment. A 

security does not become a future, nor does 

a future become a security simply by virtue 

of being packaged in the same instrument. 

Relevant to the instruments we are 

discussing today, forward contracts with 

embedded volumetric optionality, it seems 

that most of them, as described in the 

comments, have at least two separate, 

identifiable contractual obligations, each of 

which must be considered on their own 

merits. There is a forward contract element 

which binds the parties to make and take 

delivery of a set amount of a commodity. In 

addition, there is an embedded volumetric 

optionality element that binds the forward 

contract offeror to make or take delivery of 

an additional amount of the commodity if the 

embedded volumetric optionality is 

exercised by the forward contract offeree. 

The latter contractual obligation looks like a 

classic option. 

The difficulty this interpretation faces in 

providing the relief industry seeks is this: 

Even though the embedded optionality has 

the form of an option, can it somehow fit 

within the forward exclusion? The answer 

this interpretation gives is, essentially, yes, it 

can, if it can be demonstrated that, despite 

the embedded optionality having the form of 

an option, it is utilized, in practice, as a 

forward contract. While the seven-prong test 

and the interpretive guidance around it do 

not provide an exact roadmap for 

determining when embedded volumetric 

optionality included in a forward contract 

may or may not fall into the option 

definition, or when embedded volumetric 

optionality may undermine a forward 

contract, I think it does provide a good sense 

of the factors that parties must consider in 

making those determinations for themselves. 

Such a test, however, is necessarily a facts 

and circumstances test with no bright lines. 

Ensuring compliance with this interpretation 

poses a challenge, and, therefore, that is an 

area where I would like to see greater legal 

certainty for these contracts. 

In closing, I support this final 

interpretation, but I think industry would 

benefit from broader relief that provides 

greater legal certainty. I look forward to 

continuing to work with my fellow 

Commissioners and staff to make sure that 

commercial entities have access to the tools 

they need to manage the commercial risks of 

their operations. 

[FR Doc. 2015–11946 Filed 5–15–15; 8:45 am] 

BILLING CODE 8011–01–p 6351–01–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

[Docket No. CFPB–2015–0020] 

Agency Information Collection 

Activities: Comment Request 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Notice and request for comment. 

SUMMARY: In accordance with the 

Paperwork Reduction Act of 1995 

(PRA), the Consumer Financial 

Protection Bureau (Bureau) is requesting 

to renew the approval for an existing 

information collection titled, ‘‘Mortgage 

Acts and Practices (Regulation N) 12 

CFR 1014.’’ 

DATES: Written comments are 

encouraged and must be received on or 

before July 17, 2015 to be assured of 

consideration. 

ADDRESSES: You may submit comments, 

identified by the title of the information 

collection, OMB Control Number (see 

below), and docket number (see above), 

by any of the following methods: 

• Electronic: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Consumer Financial 

Protection Bureau (Attention: PRA 

Office), 1700 G Street NW., Washington, 

DC 20552. 

• Hand Delivery/Courier: Consumer 

Financial Protection Bureau (Attention: 

PRA Office), 1275 First Street NE., 

Washington, DC 20002. 

Please note that comments submitted 

after the comment period will not be 

accepted. In general, all comments 

received will become public records, 

including any personal information 

provided. Sensitive personal 

information, such as account numbers 

or social security numbers, should not 

be included. 

FOR FURTHER INFORMATION CONTACT: 

Documentation prepared in support of 

this information collection request is 

available at www.regulations.gov. 

Requests for additional information 

should be directed to the Consumer 

Financial Protection Bureau, (Attention: 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 95 / Monday, May 18, 2015 / Notices 28245 

PRA Office), 1700 G Street NW., 

Washington, DC 20552, (202) 435–9575, 

or email: PRA@cfpb.gov. Please do not 

submit comments to this mailbox. 

SUPPLEMENTARY INFORMATION: 

Title of Collection: Mortgage Acts and 

Practices (Regulation N) 12 CFR 1014. 

OMB Control Number: 3170–0009. 

Type of Review: Extension without 

change of a currently approved 

collection. 

Affected Public: Businesses and other 

for-profit institutions. 

Estimated Number of Respondents: 

483. 

Estimated Total Annual Burden 

Hours: 242. 

Abstract: Regulation N (12 CFR 1014), 

prohibits misrepresentations about the 

terms of mortgage credit products in 

commercial communications and 

requires that covered persons keep 

certain related records for a period of 

twenty-four (24) months from last 

dissemination. The information that 

Regulation N requires covered persons 

to retain is necessary to ensure efficient 

and effective law enforcement to 

address deceptive practices that occur 

in the mortgage advertising area. 

Request for Comments: Comments are 

invited on: (a) Whether the collection of 

information is necessary for the proper 

performance of the functions of the 

Bureau, including whether the 

information will have practical utility; 

(b) The accuracy of the Bureau’s 

estimate of the burden of the collection 

of information, including the validity of 

the methods and the assumptions used; 

(c) Ways to enhance the quality, utility, 

and clarity of the information to be 

collected; and (d) Ways to minimize the 

burden of the collection of information 

on respondents, including through the 

use of automated collection techniques 

or other forms of information 

technology. Comments submitted in 

response to this notice will be 

summarized and/or included in the 

request for Office of Management and 

Budget (OMB) approval. All comments 

will become a matter of public record. 

Dated: May 15, 2015. 

Ashwin Vasan, 

Chief Information Officer, Bureau of 

Consumer Financial Protection. 

[FR Doc. 2015–11985 Filed 5–15–15; 8:45 am] 

BILLING CODE 4810–AM–P 

CORPORATION FOR NATIONAL AND 

COMMUNITY SERVICE 

Proposed Information Collection; 

Comment Request 

AGENCY: Corporation for National and 

Community Service. 

ACTION: Notice. 

SUMMARY: The Corporation for National 

and Community Service (CNCS), as part 

of its continuing effort to reduce 

paperwork and respondent burden, 

conducts a pre-clearance consultation 

program to provide the general public 

and federal agencies with an 

opportunity to comment on proposed 

and/or continuing collections of 

information in accordance with the 

Paperwork Reduction Act of 1995 

(PRA95) (44 U.S.C. 3506(c)(2)(A)). This 

program helps to ensure that requested 

data can be provided in the desired 

format, reporting burden (time and 

financial resources) is minimized, 

collection instruments are clearly 

understood, and the impact of collection 

requirement on respondents can be 

properly assessed. 

Currently, CNCS is soliciting 

comments concerning its proposed 

renewal of the AmeriCorps Member 

Application Form. Applicants will 

respond to the questions included in 

this ICR in order to apply to serve as 

AmeriCorps members. 

Copies of the information collection 

request can be obtained by contacting 

the office listed in the ADDRESSES

section of this Notice. 

DATES: Written comments must be 

submitted to the individual and office 

listed in the ADDRESSES section by July 

17, 2015. 

ADDRESSES: You may submit comments, 

identified by the title of the information 

collection activity, by any of the 

following methods: 

(1) By mail sent to: Corporation for 

National and Community Service, 

AmeriCorps State & National; ATTN: 

Erin Dahlin, Deputy Chief of Program 

Operations, 1201 New York Avenue 

NW., Washington, DC 20525. 

(2) By hand delivery or by courier to 

the CNCS mailroom at Room 8100 at the 

mail address given in paragraph (1) 

above, between 9:00 a.m. and 4:00 p.m. 

Eastern Time, Monday through Friday, 

except Federal holidays. 

(3) Electronically through 

www.regulations.gov. 

Individuals who use a 

telecommunications device for the deaf 

(TTY–TDD) may call 1–800–833–3722 

between 8:00 a.m. and 8:00 p.m. Eastern 

Time, Monday through Friday. 

FOR FURTHER INFORMATION CONTACT: Erin 

Dahlin, 202–606–6931 or EDahlin@

cns.gov. 

SUPPLEMENTARY INFORMATION: CNCS is 

particularly interested in comments 

that: 

• Evaluate whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of CNCS, including whether 

the information will have practical 

utility; 

• Evaluate the accuracy of the 

agency’s estimate of the burden of the 

proposed collection of information, 

including the validity of the 

methodology and assumptions used; 

• Enhance the quality, utility, and 

clarity of the information to be 

collected; and 

• Minimize the burden of the 

collection of information on those who 

are expected to respond, including the 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology 

(e.g., permitting electronic submissions 

of responses). 

Background 

This Member Application Form will 

be used by applicants who are 

interested in serving as AmeriCorps 

members. The information requested in 

the application form makes it possible 

for programs to select members to serve. 

Programs also use this form as an 

example that they customize to develop 

their own recruitment materials. 

Current Action 

Changes have been made align form 

with program and technological needs 

and resources. The information 

collection will otherwise be used in the 

same manner as the existing 

application. CNCS also seeks to 

continue using the current application 

until the revised application is 

approved by OMB. The current 

application is due to expire on July 31, 

2015. 

Type of Review: Renewal. 

Agency: Corporation for National and 

Community Service. 

Title: AmeriCorps Member 

Application Form. 

OMB Number: 3045–0054. 

Agency Number: None. 

Affected Public: Applicants applying 

to serve in AmeriCorps. 

Total Respondents: 225,000. 

Frequency: Ongoing. 

Average Time per Response: Averages 

1.25 hours. 

Estimated Total Burden Hours: 

281,250. 

Total Burden Cost (capital/startup): 

None. 

Total Burden Cost (operating/

maintenance): None. 

Comments submitted in response to 

this notice will be summarized and/or 

included in the request for Office of 

Management and Budget approval of the 

information collection request; they will 

also become a matter of public record. 


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