20788 Federal Register / Vol. 78, No. 67 / Monday, April 8, 2013 / Rules and Regulations 

1See Dodd-Frank Wall Street Reform and 

Consumer Protection Act, Pub. L. No. 111–203, 124 

Stat. 1376 (2010). The text of the Dodd-Frank Act 

may be accessed through the Commission’s Web 

site, http://www.cftc.gov. 

2 7 U.S.C. 1 et seq. (2006). The Commission’s 

regulations are found at 17 CFR Part 1 et seq. 

(2012). Both the CEA and the Commission’s 

regulations also may be accessed through the 

Commission’s Web site. 

3CEA Section 4s(a). 

4CEA Section 4s(b). 

5 75 FR 71379. 

6 77 FR 2613. Concurrently, through a separate 

Notice and Order, the Commission delegated to the 

National Futures Association (NFA) the authority to 

perform the full range of registration functions with 

respect to SDs and MSPs. 77 FR 2708 (Jan. 19, 

2012). 

Subsequently, the Commission issued regulations 

that further define the terms ‘‘swap dealer’’ and 

‘‘major swap participant.’’ 77 FR 30596 (May 23, 

2012). In this regard, the Commission notes that 

pursuant to CEA Section 1a(49)(D), CFTC 

Regulation 1.3(ggg)(4) establishes a de minimis 

exception from the SD definition, thereby allowing 

a person who otherwise meets the criteria for being 

an SD to engage in a certain amount of swap dealing 

activity without being required to register as an SD. 

If a person exceeds the de minimis amount of swap 

dealing at the effective date of the swap definition, 

then CFTC Regulation 1.3(ggg)(4)(iii) provides that 

the person must register as an SD by no later than 

two months from the end of the month in which 

it exceeded the de minimis threshold, i.e., 

December 31, 2012. Similarly, the definition of MSP 

in CFTC Regulation 1.3(hhh)(3) generally requires 

a person that meets the MSP definition as a result 

of its swaps activity in a fiscal quarter to register 

as an MSP no later than two months after the end 

of that quarter, with the earliest possible date by 

which the person should be registered as an MSP 

being February 28, 2013 (i.e., two months from the 

quarter end on December 31, 2012). 

7See, e.g., CEA Section 4k and Commission 

Regulation 3.12(a). Regulation 3.12(c) provides that 

application is made through the filing of a Form 8– 

R, accompanied by a specified certification from the 

registrant who will be employing the AP—i.e., the 

AP’s sponsor. 

8As is the case for other categories of 

Commission registrants, the term ‘‘associated 

person,’’ when used with respect to an SD or MSP, 

means a natural person (as opposed to an entity, 

such as a partnership or corporation). See 

Regulation 1.3(aa)(6) for a definition of the term 

‘‘associated person’’ of an SD or MSP to mean a 

natural person who is associated with an SD or 

MSP as a partner, officer, employee, agent (or any 

natural person occupying a similar status or 

performing similar functions), in any capacity that 

involves the solicitation or acceptance of swaps 

(other than in a clerical or ministerial capacity); or 

the supervision of any person or persons so 

engaged. 

9Section 731 did not direct the Commission to 

adopt regulations that provide for the registration of 

APs of SDs and MSPs, and, thus, the Commission 

has not done so. See 77 FR at 2613. 

Airway segment Changeover points 

From To Distance From 

V187 Is Amended To Modify Changeover Point 

MISSOULA, MT VOR/DME ............................................ NEZ PERCE, ID VOR/DME .......................................... 30 MISSOULA 

V2 Is Amended To Add Changeover Point 

ELLENSBURG, WA VORTAC ....................................... MOSES LAKE, WA VOR/DME ..................................... 28 ELLENSBURG 

V290 Is Amended To Delete Changeover Point 

TAR RIVER, NC VORTAC ............................................. PAMLICO/DCMSND, NC NDB/DME ............................ 44 TAR RIVER 

V494 Is Amended To Add Changeover Point 

SANTA ROSA, CA VOR/DME ....................................... SACRAMENTO, CA VORTAC ...................................... 25 SANTA ROSA 

ALASKA V317 Is Amended To Modify Changeover Point 

ANNETTE ISLAND, AK VOR/DME ISLAND .................. LEVEL ISLAND, AK VOR/DME .................................... 64 ANNETTE 

LEVEL ISLAND, AK VOR/DME ..................................... SISTERS ISLAND, AK VORTAC .................................. 74 LEVEL ISLAND 

# UNUSABLE. 

[FR Doc. 2013–08081 Filed 4–5–13; 8:45 am] 

BILLING CODE 4910–13–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Parts 3 and 23 

RIN 3038–AD66 

Dual and Multiple Associations of 

Persons Associated With Swap 

Dealers, Major Swap Participants and 

Other Commission Registrants 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Final rules. 

SUMMARY: The Commodity Futures 

Trading Commission (Commission or 

CFTC) is adopting regulations to make 

clear that each swap dealer (SD), major 

swap participant (MSP), and other 

Commission registrant with whom an 

associated person (AP) is associated is 

required to supervise the AP and is 

jointly and severally responsible for the 

activities of the AP with respect to 

customers common to it and any other 

SD, MSP or other Commission 

registrant. 

DATES: Effective June 7, 2013. 

FOR FURTHER INFORMATION CONTACT: 

Israel J. Goodman, Special Counsel, or 

Barbara S. Gold, Associate Director, 

Division of Swap Dealer and 

Intermediary Oversight, 1155 21st Street 

NW., Washington, DC 20581. Telephone 

number: 202–418–6700 and electronic 

mail: igoodman@cftc.gov or 

bgold@cftc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

A. Background 

On July 21, 2010, President Obama 

signed the Dodd-Frank Act.1 Section 

731 of the Dodd-Frank Act amended the 

Commodity Exchange Act (CEA) 2 by 

adding Section 4s, which, among other 

things, prohibits any person from acting 

as a ‘‘swap dealer’’ or ‘‘major swap 

participant’’ unless the person is 

registered with the Commission.3 To 

effectuate the Congressional directive 

that an SD or MSP apply for registration 

in such form and manner as prescribed 

by the Commission,4 on November 23, 

2010, the Commission proposed 

regulations to establish a registration 

process for SDs and MSPs (Proposed 

Registration Regulations),5 and on 

January 19, 2012, the Commission 

adopted regulations that establish a 

registration process for SDs and MSPs 

(Final Registration Regulations).6

Although APs of other Commission 

registrants are generally required to 

register with the Commission,7 APs of 

SDs and MSPs 8 are not required to 

register as such.9 However, an SD or 

MSP is prohibited from permitting any 

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Federal Register / Vol. 78, No. 67 / Monday, April 8, 2013 / Rules and Regulations 20789 

10See CEA Section 4s(b)(6) and Regulation 

23.22(b). 

11Comment letter from the National Futures 

Association at page 10 (Jan. 24, 2011). 

12 77 FR at 2616. 

13Regulation 3.12(f)(1)(i) provides that a person 

who is already registered as an AP in any capacity 

may become associated with another sponsor if the 

new sponsor files with the NFA a Form 8–R. 

14The term ‘‘sponsor’’ is defined in Regulation 

3.1(c) to mean ‘‘the futures commission merchant, 

retail foreign exchange dealer, introducing broker, 

commodity trading advisor, commodity pool 

operator or leverage transaction merchant which 

makes the certification required by § 3.12 of [Part 

3] for the registration of an associated person of 

such sponsor.’’ 

15The Commission adopted this joint and several 

responsibility provision in 1992 in connection with 

amendments to Regulation 3.12(f) that eliminated 

then-existing restrictions on dual and multiple 

associations in many circumstances. 57 FR 23136 

(June 2, 1992) (1992 Amendments). The 

Commission first adopted a prohibition on dual and 

multiple associations in 1980, with respect to APs 

of futures commission merchants (FCMs), 

explaining that it was necessary ‘‘[i]n view of the 

obvious difficulties of supervision in such a 

situation and in view of the inherent possibilities 

for conflicts of interest that might arise if an AP 

were to have more than one sponsor.’’ 45 FR 80485, 

80489 (Dec. 5, 1980) (footnote omitted). 

Subsequently, the Commission amended and 

broadened the scope of Regulation 3.12(f) such that, 

prior to the 1992 Amendments, Regulation 3.12(f) 

prohibited a person from associating as an AP with: 

(1) MORe than one FCM or more than one 

introducing broker (IB); (2) an FCM and an IB or 

a leverage transaction merchant (LTM); and (3) an 

IB and an LTM. Subject to certain exceptions, the 

regulations also prohibited a person from 

associating as an AP with: (1) An FCM and a 

commodity trading advisor (CTA); (2) an FCM and 

a commodity pool operator (CPO); (3) an IB and a 

CTA; and (4) an IB and a CPO. See 56 FR 37026, 

37033 (Aug. 2, 1991). In proposing to eliminate 

most of these restrictions, the Commission 

explained that, in its experience, these regulations 

had been ‘‘difficult to understand and follow, even 

for experienced practitioners’’ and that, in certain 

cases, they could have perverse effects, such as 

limiting the choice of which FCM a customer could 

use to carry his managed account. Id. Moreover, the 

Commission explained, the concerns raised by dual 

and multiple associations could be better addressed 

through an alternative approach, as further 

discussed below. Id. 

16See 56 FR at 37033; see, e.g., In Re Global 

Telecom, et al., [2005–2007 Transfer Binder] Comm. 

Fut. L. Rep. (CCH) ¶ 30,143 (CFTC Oct. 4, 2005) 

(holding an FCM liable for the activities of its APs 

who were also APs of a CTA, and noting that 

holding otherwise would ‘‘bring about the very 

situation the rule is aimed at preventing—one in 

which a futures customer who contracts with two 

entities to receive two products or services is left 

with nobody minding the store’’). 

17 77 FR 35892. 

18Under Regulation 3.12(f)(1), a person registered 

as an AP may become an AP of another sponsor if 

the new sponsor files a Form 8–R with NFA, and 

NFA, in turn, is required to notify any existing 

sponsor of the AP that the person has applied to 

become associated with another sponsor. This 

notification puts sponsors on notice that their 

registered APs will subject them to additional 

supervisory and joint and several responsibility 

requirements under Regulation 3.12(f). Employment 

as an AP of an SD or MSP, however, does not 

require registration with the Commission and, thus, 

the filing of a Form 8–R with NFA. 

More recently (and subsequent to the Proposal), 

NFA amended NFA Bylaw 301 to add a new 

paragraph 301(l) (Eligibility to Conduct Swaps 

Activities), which requires NFA Member FCMs, IBs, 

CPOs and CTAs and their APs that engage in swaps 

activity that is subject to Commission jurisdiction 

to be approved by NFA as a ‘‘swaps firm’’ or ‘‘swaps 

associated person,’’ as applicable. The amendments 

also provide that in order to obtain NFA approval 

as a swaps firm, at least one of the firm’s principals 

must be registered as an AP and approved as a 

swaps associated person. The amendments are 

intended to enable NFA to identify entities and 

individuals that are engaging in swaps activities. 

However, these requirements do not apply to SDs, 

MSPs or their APs, nor do they apply with respect 

to APs of an FCM that is also registered as an SD 

if the APs do not engage in swaps activity on behalf 

of the firm in its capacity as an FCM. See NFA 

Notice to Members I–12–24 (Oct. 3, 2012). 

19Comment letter from Chris Barnard at page 1 

(July 24, 2012). 

person associated with it to effect or be 

involved in effecting swaps on its behalf 

if such person is subject to a statutory 

disqualification.10

B. The Proposed Regulations 

The Commission adopted the Final 

Registration Regulations after 

considering the comments it received 

from the public on the Proposed 

Registration Regulations. One 

commenter recommended that the 

Commission expand the scope of the 

provisions on dual and multiple 

associations in Regulation 3.12(f), or 

adopt a new regulation, ‘‘to address the 

situations in which an individual 

conducts swaps-related activity on 

behalf of more than one Swap Entity 

[i.e., an SD and/or MSP] or conducts 

swaps activity on behalf of a Swap 

Entity and is also registered as an AP of 

a different firm.’’ 11 When adopting the 

Final Registration Regulations, the 

Commission stated that ‘‘[w]hile the 

Commission agrees with the 

commenter’s recommendation, it 

anticipates promptly addressing this 

issue in a future rulemaking.’’ 12

Regulation 3.12(f)(1)(i) permits dual 

and multiple associations of a person 

registered as an AP.13 Regulation 

3.12(f)(1)(iii) provides that each 

sponsor 14 of the AP is required to 

supervise the AP, and that each sponsor 

is jointly and severally responsible for 

the AP’s activities with respect to any 

customers common to it and any other 

sponsor with which the AP is 

associated.15 This joint and several 

responsibility provision is intended to 

prevent situations where each sponsor 

might disclaim responsibility for the 

AP’s activities—that is, that each 

sponsor would claim that the dually 

associated AP was not acting on its 

behalf but, rather, for the other sponsor, 

and therefore the other sponsor should 

be held responsible for the conduct in 

question.16 However, because, as noted 

above, the Commission has not adopted 

regulations requiring the registration of 

APs of SDs and MSPs, the provisions of 

Regulation 3.12(f)(1), which apply to a 

sponsoring registrant with respect to its 

APs who are registered or seeking to 

register as such, do not apply to SDs and 

MSPs and their APs. 

To address this issue, on June 15, 

2012, the Commission proposed 

amendments to Regulation 3.12(f) and 

Regulation 23.22 (Proposal) to provide 

that an AP of an SD or MSP may 

associate with one or more other SDs, 

MSPs or other Commission registrants 

(i.e., FCMs, retail foreign exchange 

dealers (RFEDs), IBs, CTAs, CPOs, and 

LTMs), and that each SD, MSP or other 

Commission registrant with whom the 

AP is associated is required to supervise 

the AP and is jointly and severally 

responsible for the conduct of the AP 

with respect to customers common to it 

and any other SD, MSP or other 

Commission registrant with whom the 

AP is associated.17

II. Comments on the Proposal 

In the Proposal, the Commission 

requested comment on all aspects of the 

Proposal and, in particular, on whether 

it should adopt a provision (in both new 

Regulation 3.12(f)(5) and new 

Regulation 23.22(c)) that would provide 

a mechanism to notify SDs, MSPs and 

existing sponsors of registered APs 

when one of their APs seeks to become 

associated with another SD or MSP (or, 

in the case of an AP of an SD or MSP, 

seeks to register as an AP of another 

Commission registrant).18

The Commission received one 

comment letter on the Proposal. The 

letter supported the Proposal, stating 

that: 

[The] proposal will help to ensure that 

SDs, MSPs and other Commission registrants 

do not avoid supervision of and 

responsibility for the activities of their APs 

with such dual or multiple associations; 

increase transparency of lines of 

responsibility and promote accountability 

thereon; improve internal consistency with 

the other Commission regulations pertaining 

to such dual or multiple associations; and 

improve protection for both market 

participants and the public by obligating 

each SD, MSP or other Commission registrant 

to supervise its APs who have such dual or 

multiple associations.19

The comment letter also supported 

the adoption of a regulation that would 

provide a mechanism to notify SDs, 

MSPs and existing sponsors of 

registered APs when one of their APs 

seeks to become associated with another 

SD or MSP. After further considering 

this issue, the Commission has 

determined not to adopt such a 

regulation. The Commission believes 

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20790 Federal Register / Vol. 78, No. 67 / Monday, April 8, 2013 / Rules and Regulations 

20As discussed in the Proposal, two separate 

regulations addressing dual and multiple 

associations of APs of SDs and MSPs are necessary 

because, as noted above, the term ‘‘sponsor’’ and 

the provisions of Regulation 3.12(f) do not apply to 

SDs and MSPs with respect to their APs (who are 

not subject to a registration requirement). 

21Thus, for example, Regulation 3.12(f)(5)(i)(B) 

provides that where an AP of an SD or MSP seeks 

to register as an AP of another Commission 

registrant, the new sponsor must meet the 

requirements of Regulation 3.60(b)(2)(i)(A) and (B), 

as is required of a new sponsor under current 

Regulation 3.12(f)(1). However, Regulation 

3.12(f)(5)(i)(A) provides that an SD or MSP seeking 

to associate with an already registered AP must 

meet the requirements of Regulation 

3.60(b)(2)(i)(A), but not also the requirements of 

Regulation 3.60(b)(2)(i)(B). This is because the 

requirements of the former regulation concern 

specified adjudicatory proceedings which would be 

applicable to SDs and MSPs while the requirements 

of the latter regulation concern financial 

requirements which are not applicable to SDs and 

MSPs. 

22 5 U.S.C. 601 et seq. 

23 5 U.S.C. 601(2), 603, 604 and 605. 

24 47 FR 18618 (Apr. 30, 1982). 

25To the extent the regulations being published 

by this Federal Register release (specifically, new 

Regulation 3.12(f)(5)) would have an impact on 

CPOs, it would only impact registered CPOs, since 

Regulation 3.12(f), by its terms, would not apply 

where an AP’s new or existing association is with 

a person who is not registered with the 

Commission. 

26See 47 FR at 18619–20 (discussing FCMs and 

CPOs); 54 FR 19556, 19557 (May 8, 1989) 

(discussing LTMs); 75 FR 55410, 55416 (Sept. 19, 

2010) (discussing RFEDs). 

27See 77 FR 2613, 2620 (Jan. 19, 2012) (adopting 

the Final Registration Regulations). 

28See 47 FR at 18619 (discussing CTAs); 48 FR 

35248, 35276–77 (Aug. 3, 1983) (discussing IBs). 

29This is because, as noted above, Regulation 

3.12(f) would not apply where an AP’s new or 

existing association is with a person (e.g., a CTA or 

an IB) who is not registered with the Commission. 

30See Amendments to Commodity Pool Operator 

and Commodity Trading Advisor Regulations 

Resulting from the Dodd-Frank Act, 76 FR 11701, 

11703 (Mar. 3, 2011) (noting with regard to RFA 

considerations that the regulations proposed therein 

would only impact registered CTAs). As of October 

19, 2012, less than three percent of all registered 

APs (or approximately 1500 APs) were associated 

on a dual or multiple basis with Commission 

registrants. 

31 44 U.S.C. 3501 et seq. 

32 77 FR 35892, 35895 (June 15, 2012). 

33 7 U.S.C. 19(a). 

that each SD, MSP and other 

Commission registrant is best positioned 

to determine the policies and 

procedures it will need to implement in 

order to determine whether any of its 

APs are associated with another SD or 

MSP. 

III. The Final Regulations 

A. Regulations 3.12(f)(5) and 23.22(c) 

In light of the foregoing, the 

Commission is adopting as proposed 

regulations to provide for dual and 

multiple associations of persons 

associated with SDs, MSPs and other 

Commission registrants. Specifically, 

Regulation 3.12(f)(5)(i)(A) applies where 

a person associated as a registered AP of 

one or more (other) Commission 

registrants seeks to become associated as 

an AP of one or more SDs or MSPs; 

Regulation 3.12(f)(5)(i)(B) applies where 

a person associated as an AP of one or 

more SDs or MSPs seeks to become 

associated as a registered AP of one or 

more other Commission registrants; and 

Regulation 23.22(c) applies where a 

person associated as an AP of an SD or 

MSP seeks to become associated as an 

AP of one or more other SDs or MSPs.20

The regulations make clear that each 

SD, MSP and other Commission 

registrant with whom the AP is 

associated is required to supervise the 

AP and is jointly and severally 

responsible for the activities of the AP 

with respect to customers common to it 

and any other SD, MSP or other 

Commission registrant. As proposed and 

as adopted, the regulations are based on 

the form and text of current Regulation 

3.12(f)(1).21

IV. Related Matters 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(RFA) 22 requires federal agencies, in 

promulgating regulations, to consider 

whether those regulations will have a 

significant economic impact on a 

substantial number of small entities 

and, if so, to provide a regulatory 

flexibility analysis respecting the 

impact. A regulatory flexibility analysis 

or certification typically is required for 

‘‘any rule for which the agency 

publishes a general notice of proposed 

rulemaking pursuant to’’ the notice-andcomment provisions of the 

Administrative Procedure Act, 5 U.S.C. 

553(b).23 As discussed in the Proposal, 

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.24 The 

Commission previously has determined 

that FCMs, registered CPOs,25 LTMs and 

RFEDs are not small entities for 

purposes of the RFA, and, thus, the 

requirements of the RFA do not apply 

to those entities.26 In addition, in 

connection with its adoption of the 

Final Registration Regulations, the 

Commission determined that SDs and 

MSPs are not small entities for purposes 

of the RFA.27 Therefore, the 

requirements of the RFA do not apply 

to SDs and MSPs. With respect to CTAs 

and IBs, the Commission previously has 

stated that it would evaluate within the 

context of a particular rule proposal 

whether all or some of the affected 

CTAs and IBs would be considered to be 

small entities and, if so, the economic 

impact on them of the particular 

regulation.28 The Commission notes that 

the regulations being published by this 

Federal Register release will only 

impact, potentially, registered CTAs and 

registered IBs,29 and the number of such 

impacted entities, if any, should likely 

be very small.30

The Commission did not receive any 

comments regarding its RFA analysis in 

the Proposal. Accordingly, pursuant to 5 

U.S.C. 605(b), the Chairman, on behalf 

of the Commission, certifies that the 

regulations being published today by 

this Federal Register release will not 

have a significant economic impact on 

a substantial number of small entities. 

B. Paperwork Reduction Act 

The Paperwork Reduction Act 

(PRA) 31 imposes certain requirements 

on federal agencies (including the 

Commission) in connection with their 

conducting or sponsoring any collection 

of information as defined by the PRA. 

The regulations being published by this 

Federal Register release expressly 

obligate each SD, MSP and other 

Commission registrant to supervise their 

APs who have dual and multiple 

associations and make each SD, MSP 

and other Commission registrant jointly 

and severally responsible for the 

activities of such APs with respect to 

customers common to it and any other 

SD, MSP or other Commission 

registrant. As discussed in the Proposal, 

the regulations contain no provision 

that would impose a ‘‘burden’’ or 

‘‘collection of information’’ as those 

terms are defined in the PRA.32

The Commission did not receive any 

comments regarding its PRA analysis in 

the Proposal. Accordingly, for purposes 

of the PRA, the Chairman, on behalf of 

the Commission, certifies that the 

regulations being published today by 

this Federal Register release will not 

impose any new reporting or 

recordkeeping requirements. 

C. Cost-Benefit Considerations 

Section 15(a) of the CEA 33 requires 

the Commission to consider the costs 

and benefits of its actions before 

promulgating a regulation under the 

CEA or issuing certain orders. 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 

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Federal Register / Vol. 78, No. 67 / Monday, April 8, 2013 / Rules and Regulations 20791 

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 considers the costs and 

benefits resulting from its discretionary 

determinations with respect to the 

section 15(a) factors. 

As discussed above, the Commission 

is adopting regulations to specify the 

responsibilities applicable with respect 

to dual and multiple associations of APs 

of SDs and MSPs, and particularly, that 

such associations are permitted, but that 

they implicate the joint and several 

supervisory and responsibility 

provisions applicable with respect to 

such associations under Regulation 

3.12(f). As noted above, prior to the 

adoption of these regulations, no 

regulations addressed dual and multiple 

associations of APs of SDs and MSPs 

and the obligations of those persons 

with whom they are associated 

concerning common customers. 

Thus, the primary benefits of the 

regulations being adopted by the 

Commission include the same benefits 

noted by the Commission when it first 

adopted the supervisory and joint and 

several responsibility provisions under 

Regulation 3.12(f), namely, the 

prevention of circumstances where an 

SD, MSP or other Commission registrant 

seeks to avoid responsibility for the 

activities of an AP who has dual or 

multiple associations by asserting the 

conduct in question was not within the 

purview of its supervisory 

responsibilities with respect to the AP. 

Therefore, the Commission believes the 

regulations being published by this 

Federal Register release will provide 

protection to market participants and 

the public by ensuring that such APs 

will be adequately supervised, and 

those charged with supervising them 

will be held responsible for failing to do 

so. The Commission does not believe 

that compliance with the regulations 

being adopted will impose any 

significant, new cost on SDs or MSPs. 

By this rulemaking, APs of SDs and 

MSPs that have dual or multiple 

associations will be subject to the same 

regulatory regime as APs of other 

Commission registrants that have dual 

or multiple associations, and SDs and 

MSPs (or other Commission registrants) 

employing an AP with dual or multiple 

associations will be prevented from 

attempting to disclaim responsibility for 

the activities of the AP by asserting that 

the AP was not acting on its behalf, but 

rather on behalf of another SD or MSP 

with whom the AP was associated (with 

respect to their common customers). 

These amendments will yield a 

substantial if unquantifiable benefit to 

the public because they will prevent 

SDs, MSPs and other Commission 

registrants from seeking to avoid 

supervision of and responsibility for the 

activities of their APs who have dual or 

multiple associations with respect to 

their common customers. 

Section 15(a) Factors 

Section 15(a) specifies that the costs 

and benefits shall be evaluated in light 

of the following five broad areas of 

market and public concern: (1) 

Protection of market participants and 

the public; (2) efficiency, 

competitiveness, and financial integrity 

of the futures markets; (3) price 

discovery; (4) sound risk management 

practices; and (5) other public interest 

considerations. 

(1) The Protection of Market 

Participants and the Public 

As discussed above, the Commission 

believes the regulations it is adopting by 

this Federal Register release will 

provide protection to market 

participants and the public by expressly 

obligating each SD, MSP or other 

Commission registrant to supervise its 

APs who have dual or multiple 

associations and by subjecting each SD, 

MSP and other Commission registrant to 

joint and several responsibility for the 

activities of such APs with respect to 

customers common to it and any other 

SD, MSP or other Commission 

registrant. More specifically, the 

regulations will prevent SDs, MSPs and 

other Commission registrants from 

disclaiming responsibility for the 

activities of their APs who have dual 

and multiple associations. 

(2) The Efficiency, Competitiveness, and 

Financial Integrity of the Futures 

Markets 

The Commission does not expect the 

regulations to have an impact on the 

efficiency, competitiveness and 

financial integrity of the futures market. 

(3) The Market’s Price Discovery 

Functions 

The Commission does not expect the 

regulations to have an impact on the 

market’s price discovery functions. 

(4) Sound Risk Management Practices. 

The Commission does not expect the 

regulations to have an impact on risk 

management practices by SDs, MSPs 

and other Commission registrants. 

(5) Other Public Interest Considerations. 

The Commission has not identified 

any other public interest considerations 

in light of which it should consider the 

costs and benefits of the regulations. 

List of Subjects 

17 CFR Part 3 

Associated persons, Brokers, 

Commodity futures, Customer 

protection, Major swap participants, 

Registration, Swap dealers. 

17 CFR Part 23 

Associated persons, Commodity 

futures, Customer protection, Major 

swap participants, Registration, 

Reporting and recordkeeping 

requirements, Swap dealers. 

For the reasons presented above, the 

Commission hereby amends Chapter I of 

Title 17 of the Code of Federal 

Regulations as follows: 

PART 3—REGISTRATION 

■ 1. The authority citation for part 3 

continues to read as follows: 

Authority: 5 U.S.C. 522, 522b; 7 U.S.C. 1a, 

2, 6, 6a, 6b, 6c, 6d, 6e, 6f, 6g, 6h, 6i, 6k, 6m, 

6n, 6o, 6p, 6s, 8, 9, 9a, 12, 12a, 13b, 13c, 16a, 

18, 19, 21, and 23, as amended by Title VII 

of the Dodd-Frank Wall Street Reform and 

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

124 Stat. 1376 (July 21, 2010). 

■ 2. Section 3.12 is amended by adding 

new paragraph (f)(5) to read as follows: 

§ 3.12 Registration of associated persons 

of futures commission merchants, retail 

foreign exchange dealers, introducing 

brokers, commodity trading advisors, 

commodity pool operators and leverage 

transaction merchants. 

* * * * * 

(f) * * * 

(5)(i)(A) A person who is already 

registered as an associated person in any 

capacity whose registration is not 

subject to conditions or restrictions may 

become associated as an associated 

person of a swap dealer or major swap 

participant if the swap dealer or major 

swap participant meets the 

requirements set forth in 

§ 3.60(b)(2)(i)(A). 

(B) A person who is already 

associated as an associated person of a 

swap dealer or major swap participant 

may become registered as an associated 

person of a futures commission 

merchant, retail foreign exchange 

dealer, introducing broker, commodity 

trading advisor, commodity pool 

operator, or leverage transaction 

merchant if the futures commission 

merchant, retail foreign exchange 

dealer, introducing broker, commodity 

trading advisor, commodity pool 

operator, or leverage transaction 

merchant with which the person 

intends to associate meets the 

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20792 Federal Register / Vol. 78, No. 67 / Monday, April 8, 2013 / Rules and Regulations 

requirements set forth in 

§ 3.60(b)(2)(i)(A) and (B). 

(ii) Each sponsor and each swap 

dealer and/or major swap participant 

with whom the person is associated 

shall supervise that associated person, 

and each sponsor and each swap dealer 

and/or major swap participant is jointly 

and severally responsible for the 

conduct of the associated person with 

respect to the: 

(A) Solicitation or acceptance of 

customer orders, 

(B) Solicitation of funds, securities or 

property for a participation in a 

commodity pool, 

(C) Solicitation of a client’s or 

prospective client’s discretionary 

account, 

(D) Solicitation or acceptance of 

leverage customers’ orders for leverage 

transactions, 

(E) Solicitation or acceptance of 

swaps, and 

(F) Associated person’s supervision of 

any person or persons engaged in any of 

the foregoing solicitations or 

acceptances, with respect to any 

customers common to it and any futures 

commission merchant, retail foreign 

exchange dealer, introducing broker, 

commodity trading advisor, commodity 

pool operator, leverage transaction 

merchant, swap dealer, or major swap 

participant with which the associated 

person is associated. 

* * * * * 

PART 23—SWAP DEALERS AND 

MAJOR SWAP PARTICIPANTS 

■ 3. The authority citation for Part 23 

continues to read as follows: 

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

6s, 9, 9a, 13b, 13c, 16a, 18, 19, 21 as amended 

by Title VII of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act, Pub. L. 

111–203, 124 Stat. 1376 (July 21, 2010). 

■ 4. Section 23.22 is amended by adding 

paragraph (c) to read as follows: 

§ 23.22 Associated persons of swap 

dealers and major swap participants. 

* * * * * 

(c) Dual and multiple associations. (1) 

A person who is already associated as 

an associated person of a swap dealer or 

major swap participant may become 

associated as an associated person of 

another swap dealer or major swap 

participant if the other swap dealer or 

major swap participant meets the 

requirements set forth in 

§ 3.60(b)(2)(i)(A) of this chapter. 

(2) Each swap dealer and major swap 

participant associated with such 

associated person shall supervise that 

associated person, and each swap dealer 

and major swap participant is jointly 

and severally responsible for the 

conduct of the associated person with 

respect to the: 

(i) Solicitation or acceptance of 

customer orders, 

(ii) Solicitation of funds, securities or 

property for a participation in a 

commodity pool, 

(iii) Solicitation of a client’s or 

prospective client’s discretionary 

account, 

(iv) Solicitation or acceptance of 

leverage customers’ orders for leverage 

transactions, 

(v) Solicitation or acceptance of 

swaps, and 

(vi) Associated person’s supervision 

of any person or persons engaged in any 

of the foregoing solicitations or 

acceptances, with respect to any 

customers common to it and any other 

swap dealer or major swap participant. 

Issued in Washington, DC, on March 29, 

2013, by the Commission. 

Christopher J. Kirkpatrick, 

Deputy Secretary of the Commission. 

[FR Doc. 2013–07755 Filed 4–5–13; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[Docket No. USCG–2013–0132] 

Safety Zone; San Francisco Giants 

Fireworks Display, San Francisco, CA 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of enforcement of 

regulation. 

SUMMARY: The Coast Guard will enforce 

the safety zone for the San Francisco 

Giants Fireworks Display in the Captain 

of the Port, San Francisco area of 

responsibility during the dates and 

times noted below. This action is 

necessary to protect life and property of 

the maritime public from the hazards 

associated with the fireworks display. 

During the enforcement period, 

unauthorized persons or vessels are 

prohibited from entering into, transiting 

through, or anchoring in the safety zone, 

unless authorized by the Patrol 

Commander (PATCOM). 

DATES: The regulations in 33 CFR 

165.1191, Table 1, Item 1, are effective 

from 11 a.m. to 10:25 p.m. on April 19, 

2013. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this notice, call 

or email Lieutenant Junior Grade 

William Hawn, U.S. Coast Guard Sector 

San Francisco; telephone (415) 399– 

7442 or email at D11-PFMarineEvents@uscg.mil. 

SUPPLEMENTARY INFORMATION: The Coast 

Guard will enforce a 100 foot safety 

zone around the fireworks barge off of 

Pier 50 in approximate position 

37°46′28′′ N, 122°23′06′′ W (NAD 83) 

from 11 a.m. until 9:30 p.m. on April 19, 

2013. From 8:30 p.m. to 8:40 p.m. on 

April 19, 2013 the loaded barge will 

transit from Pier 50 to the launch site 

near Pier 48 in position 37°46′38′′ N, 

122°23′01′′ W (NAD83). The 100 foot 

safety zone applies to the navigable 

waters around and under the fireworks 

barge within a radius of 100 feet during 

the loading, transit, and arrival of the 

fireworks barge to the display location 

and until the start of the fireworks 

display. Upon the commencement of the 

15 minute fireworks display, scheduled 

to take place between 9:30 p.m. and 

10:15 p.m. on April 19, 2013, the safety 

zone will increase in size and 

encompass the navigable waters around 

and under the fireworks barge within a 

radius 1,000 feet around the launch site 

near Pier 48 in position 37°46′38′′ N, 

122°23′01′′ W (NAD83) for the San 

Francisco Giants Fireworks Display in 

33 CFR 165.1191, Table 1, Item number 

1. 

Under the provisions of 33 CFR 

165.1191, unauthorized persons or 

vessels are prohibited from entering 

into, transiting through, or anchoring in 

the safety zone during all applicable 

effective dates and times, unless 

authorized to do so by the PATCOM. 

Additionally, each person who receives 

notice of a lawful order or direction 

issued by an official patrol vessel shall 

obey the order or direction. The 

PATCOM is empowered to forbid entry 

into and control the regulated area. The 

PATCOM shall be designated by the 

Commander, Coast Guard Sector San 

Francisco. The PATCOM may, upon 

request, allow the transit of commercial 

vessels through regulated areas when it 

is safe to do so. 

This notice is issued under authority 

of 33 CFR 165.1191 and 5 U.S.C. 552 (a). 

In addition to this notice in the Federal 

Register, the Coast Guard will provide 

the maritime community with extensive 

advance notification of the safety zone 

and its enforcement period via the Local 

Notice to Mariners. 

If the Captain of the Port determines 

that the regulated area need not be 

enforced for the full duration stated in 

this notice, a Broadcast Notice to 

Mariners may be used to grant general 

permission to enter the regulated area. 

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