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[Federal Register Volume 77, Number 144 (Thursday, July 26, 2012)]
[Proposed Rules]
[Pages 43968-44043]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-16180]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Parts 15, 17, 18, and 20

RIN 3038-AD31

Ownership and Control Reports, Forms 102/102S, 40/40S, and 71

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed rulemaking (``Notice'').

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SUMMARY: The Commodity Futures Trading Commission (``Commission'' or 
``CFTC'') is proposing new rules and related forms to enhance its 
identification of futures and swap market participants. The proposed 
rules would leverage the Commission's existing position and transaction 
reporting programs by requiring the electronic submission of trader 
identification and market participant data on amended Forms 102 and 40, 
and on new Form 71. The proposed rules also incorporate a revised 
approach to the Commission's previous initiative to collect ownership 
and control information, through a dedicated ownership and control 
report (``OCR''), for trading accounts active on reporting markets that 
are designated contract markets or swap execution facilities. The 
Commission welcomes public comment on all aspects of its proposal.

DATES: Comments must be received on or before September 24, 2012.

ADDRESSES: You may submit comments, identified by RIN number 3038-AD31, 
by any of the following methods:
     Agency Web site, via its Comments Online process: http://comments.cftc.gov. Follow the instructions for submitting comments 
through the Web site.
     Mail: David A. Stawick, Secretary of the Commission, 
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st 
Street NW., Washington, DC 20581.
     Courier: Same as mail above.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    Please submit your comments using only one method.
    All comments must be submitted in English, or if not, accompanied 
by an English translation. Comments will be posted as received to 
http://www.cftc.gov. You should submit only information that you wish 
to make available publicly. If you wish the CFTC to consider 
information that you believe is exempt from disclosure under the 
Freedom of Information Act, a petition

[[Page 43969]]

for confidential treatment of the exempt information may be submitted 
according to the procedures established in Sec.  145.9 of the CFTC's 
regulations.\1\
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    \1\ 17 CFR 145.9.
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    The CFTC reserves the right, but shall have no obligation, to 
review, pre-screen, filter, redact, refuse, or remove any or all of 
your submission from http://www.cftc.gov that it may deem to be 
inappropriate for publication, such as obscene language. All 
submissions that have been redacted or removed that contain comments on 
the merits of this Notice will be retained in the public comment file 
and will be considered as required under the Administrative Procedure 
Act and other applicable laws, and may be accessible under the Freedom 
of Information Act.

FOR FURTHER INFORMATION CONTACT: Sebastian Pujol Schott, Associate 
Director, Division of Market Oversight (``DMO''), at 202-418-5641 or 
sps@cftc.gov; Cody J. Alvarez, Attorney Advisor, DMO, at 202-418-5404 
or calvarez@cftc.gov; Mark Schlegel, Attorney Advisor, DMO, at 202-418-
5055 or mschlegel@cftc.gov; or James Outen, Industry Economist, DMO, at 
202-418-5710 or jouten@cftc.gov; Commodity Futures Trading Commission, 
Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581.

SUPPLEMENTARY INFORMATION:

I. Introduction
    A. Background
    B. Benefits Derived From the Proposed Rules
II. Statutory Framework for Position Reporting and Trader and 
Account Identification
III. Existing and Previously Proposed Trader and Account 
Identification Programs
    A. Futures Large Trader Reporting--Existing Forms 102 and 40
    i. Identification of Special Accounts--Existing Form 102
    ii. Statement of Reporting Trader--Existing Form 40
    B. Large Trader Reporting for Physical Commodity Swaps--102S and 
40S Filings
    C. Proposed OCR
    i. OCR Advanced Notice
    ii. OCR NPRM
    iii. OCR NPRM Comment Summary
IV. Forms
    A. Position Triggered 102
    i. Special Accounts and Reportable Positions
    ii. 102A Form Requirements
    iii. Timing of 102A Reporting
    iv. 102A Change Updates and Refresh Updates
    B. Volume Triggered 102
    i. 102B Form Requirements
    ii. Timing of 102B Reporting
    iii. 102B Change Updates and Refresh Updates
    C. 102S
    i. 102S Form Requirements
    ii. 102S Change Updates and Refresh Updates
    D. Form 71
    E. New Form 40
V. Data Submission Standards and Procedures
VI. Review and Summary of Regulatory Changes To Implement New and 
Amended Forms
    A. Part 15
    B. Part 17
    C. Part 18
    D. Part 20
VII. Questions and Request for Comment
VIII. Related Matters
    A. Cost Benefit Considerations
    B. Regulatory Flexibility Analysis
    C. Paperwork Reduction Act
    i. Overview
    ii. Information to be Provided
    iii. Reporting and Recordkeeping Burdens
    iv. Comments on Information Collection
Proposed Rules
Annex--Forms 102, 40 and 71

I. Introduction

A. Background

    The CFTC's large trader reporting rules (also referred to herein as 
the ``reporting rules'') are contained in parts 15 through 21 of the 
Commission's regulations.\2\ The reporting rules are currently 
structured to collect information with respect to positions in ``open 
contracts,'' \3\ including: (1) Information necessary to identify 
persons who hold or control ``reportable positions'' \4\ in open 
contracts (via existing Form 40); and (2) information necessary to 
identify ``special accounts'' \5\ (via existing Form 102). In this 
Notice, the Commission is proposing certain amendments to the existing 
reporting rules and forms as they pertain to positions in open 
contracts. In addition, the Commission is proposing a revised approach 
to the OCR, which previously had been proposed \6\ as a separate data 
collection.\7\ Specifically, the Commission proposes to expand the 
reporting rules and forms so that they may also be used to identify 
``volume threshold accounts,'' defined as individual trading accounts 
that trigger volume-based reporting thresholds on a reporting market 
\8\ that is a registered entity under Sec. Sec.  1a(40)(A) or 1a(40)(D) 
of the Commodity Exchange Act (``CEA'' or ``Act'') (i.e., a designated 
contract market (``DCM'') or a swap execution facility (``SEF'')), 
regardless of whether such activity results in reportable positions. 
Volume threshold accounts associated with DCMs and SEFs would be 
required to be reported by clearing members, as indicated in section IX 
below. The Commission notes that volume threshold accounts could 
reflect, without limitation, trading in futures, options on futures, 
swaps, and any other products traded on or subject to the rules of a 
DCM or SEF. However, the Commission also notes that the proposed rules 
generally reflect the Commission's knowledge and experience with 
trading practices and structures on DCMs. As a result, the Commission 
specifically requests public comment throughout this Notice on any 
revisions to the proposed rules that may be required to adequately 
address the identification and reporting of volume threshold accounts 
associated with SEFs.\9\
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    \2\ 17 CFR parts 15 through 21. The rule proposals contained in 
this Notice generally relate to parts 15, 17, 18 and 20 of the 
Commission's regulations.
    \3\ ``Open contract'' means any commodity or commodity option 
position ``held by any person on or subject to the rules of a board 
of trade which have not expired, been exercised, or offset.'' See 
Sec. Sec.  1.3(t) and 15.00(n).
    \4\ A ``reportable position'' is defined in Sec.  15.00(p) as 
``any open contract position that at the close of the market on any 
business day equals or exceeds the [Commission's reporting levels 
specified in Sec.  15.03].''
    \5\ A ``special account'' is defined in Sec.  15.00(r) as ``any 
commodity futures or option account in which there is a reportable 
position.''
    \6\ See Commission, Notice of Proposed Rulemaking: Ownership and 
Control Report, 75 FR 41775 (July 19, 2010) (``OCR NPRM'').
    \7\ As discussed in further detail below, the Commission is 
withdrawing the OCR NPRM contemporaneously with the publication of 
this Notice in the Federal Register.
    \8\ ``Reporting market'' is defined in existing Sec.  15.00(q) 
as ``a designated contract market, registered entity under Sec.  
1a(29) of the Act, and unless determined otherwise by the Commission 
[a derivatives transaction execution facility].'' By way of this 
Notice, the Commission proposes to revise Sec.  15.00(q) to define 
reporting market as a ``designated contract market or a registered 
entity under Sec.  1a(40) of the Act.'' This revision is technical 
in nature, and serves to conform Sec.  15.00(q) with recent 
amendments to the Act. See infra sections VI(A) and IX.
    \9\ See section VII, below.
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    The proposed amendments to the reporting rules and forms would 
achieve three primary purposes. First, they would broaden the utility 
of existing Form 102 through a new, expanded Form 102 (``New Form 
102''), partitioned into three sections: section 102A for the 
identification of position-based special accounts (``102A,'' ``Form 
102A,'' or ``New Form 102A''); section 102B--the former OCR component--
for the collection of ownership and control information from clearing 
members on volume threshold accounts associated with DCMs or SEFs 
(``102B,'' ``Form 102B,'' or ``New Form 102B''); \10\ and section 102S 
for the submission of 102S filings for swap counterparty and customer 
consolidated accounts with

[[Page 43970]]

reportable positions (``102S,'' ``Form 102S,'' or ``102S filings''). 
Second, the proposed amendments would enhance the Commission's 
surveillance and large trader reporting programs for futures, options 
on futures, and swaps by clarifying which accounts are required to be 
reported on Form 102A; requiring the reporting on Form 102A of the 
trading accounts that comprise each special account; requiring the 
reporting of certain omnibus account information on Form 71 (``Form 
71'' or ``New Form 71''); \11\ updating Form 40 (``New Form 40''); and 
integrating the submission of 102S and 40S filings into the general 
Form 102 and Form 40 reporting program. Finally, the proposed 
amendments would provide for the electronic submission of Forms 102, 
40, and 71.
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    \10\ As explained below, Form 102B incorporates the previously 
proposed OCR.
    \11\ As explained below, information regarding the owners and 
controllers of volume threshold accounts reported on Form 102B and 
that are identified as omnibus accounts (``omnibus volume threshold 
accounts'') would be collected by the Commission (via Form 71) 
directly from originating firms.
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B. Benefits Derived From the Proposed Rules

    The proposed rules would enhance the Commission's existing trade 
practice and market surveillance programs for futures and options on 
futures, and facilitate surveillance programs for swaps, by expanding 
the information presently collected on existing Forms 102 and 40, and 
introducing a new information collection for omnibus volume threshold 
accounts in New Form 71. The rules would also help implement the 102S 
and 40S filing requirements recently adopted in connection with the 
Commission's part 20 rules addressing large trader reporting for 
physical commodity swaps (discussed below).\12\ In the aggregate, the 
proposed rules would help the Commission to better deter and prevent 
market manipulation; deter and detect abusive or disruptive trading 
practices; and better perform risk-based monitoring and surveillance 
between related accounts. Ultimately, the proposed rules would 
significantly enhance the Commission's ability to identify participants 
in the derivatives markets and to understand relationships between 
trading accounts, special accounts, reportable positions, and market 
activity.
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    \12\ See 17 CFR 20.5(a) and (b), the 102S and 40S filing 
requirements, discussed in greater detail below. Final part 20 was 
published in the Federal Register on July 22, 2011. See Commission, 
Large Trader Reporting for Physical Commodity Swaps, 76 FR 43851 
(July 22, 2011) (``Large Trader Reporting for Physical Commodity 
Swaps'').
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    The proposed rules respond, in part, to the increased dispersion 
and opacity of trading in U.S. futures markets as they continue to 
transition from localized, open-outcry venues to global electronic 
platforms. While electronic trading has conferred important 
informational benefits upon regulators, the concomitant increases in 
trading volumes, products offered, and trader dispersion have created 
equally important regulatory challenges. Effective market surveillance 
now requires automated analysis and pattern and anomaly detection 
involving millions of daily trade records \13\ and hundreds of 
thousands of position records \14\ present in the surveillance data 
sets received daily by the Commission.\15\
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    \13\ For example, in November 2011, the Commission received an 
average of 7.4 million trade records per day from electronic trading 
on DCMs.
    \14\ For example, in November 2011, the Commission received an 
average of 617,000 position records per day from reporting firms and 
exchanges.
    \15\ Daily trade and position records are provided to the 
Commission pursuant to Sec. Sec.  16.02 and 17.00, respectively. For 
further discussion of the Commission's large trader reporting 
program, see sections III(A) and (B), below.
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    Commission staff utilizes two distinct data platforms to conduct 
market surveillance: the Trade Surveillance System (``TSS'') and the 
Integrated Surveillance System (``ISS''). Broadly speaking, TSS 
captures transaction-level details of trade data, while ISS facilitates 
the storage, analysis, and mining of large trader data from a position 
perspective. One important component of TSS is the Trade Capture Report 
(``TCR''). Trade Capture Reports contain trade and related order data 
for every matched trade facilitated by an exchange, whether executed 
via open-outcry, electronically, or non-competitively. Among the data 
included in the TCR are trade date, product, contract month, trade 
time, price, quantity, trade type (e.g., open outcry outright future, 
electronic outright option, give-up, spread, block, etc.), executing 
broker, clearing member, opposite broker and clearing member, customer 
type indicator, trading account numbers, and numerous other data 
points.
    Effective market surveillance requires that surveillance data sets 
received by the Commission be sufficiently comprehensive and contain 
sufficient identified reference points to uncover relationships where 
none appear to exist and to analyze information based on flexible 
criteria. The collection of additional trader identification and market 
participant data on the forms proposed in this Notice would help the 
Commission to better satisfy these data requirements. For example, 
elements of the proposed data collection would enable the Commission to 
link ISS data (which includes large traders' names, but not their 
trading account numbers) to TSS data (which includes trading account 
numbers but not names).
    The information proposed to be collected would also help the 
Commission to better identify and categorize individual trading 
accounts and market participants that triggered position or volume-
based reporting thresholds. For example, New Form 102A would, among 
other changes, require reporting firms to identify the constituent 
trading accounts of each reported special account. In this manner, New 
Form 102A would ensure a new level of interoperability between the 
Commission's large trader data and its trade data, and would permit 
Commission surveillance staff to quickly reconstruct trading for any 
special account. New Form 102B would, for the first time, require 
identification of trading accounts based solely on their gross trading 
volume. This new information collection would enhance the Commission's 
trade practice surveillance program by revealing connections of 
ownership or control between trading accounts that otherwise appear 
unrelated in the TCR. More generally, it would facilitate Commission 
efforts to deter and detect attempted market disruptions that may occur 
even in the absence of large open positions. Finally, the automated 
collection of such information via electronic forms, rather than 
through ad-hoc, manual processes, would permit both the Commission and 
market participants to administer the reporting programs and related 
work more efficiently and effectively. Additional information on the 
forms addressed by this Notice is provided below.

II. Statutory Framework for Position Reporting and Trader and Account 
Identification

    The Commission's existing reporting rules, and those proposed 
herein, are primarily implemented and/or proposed by the Commission 
pursuant to the authority of sections 4a, 4c(b), 4g, and 4i of the 
Act.\16\ Section 4a of the Act

[[Page 43971]]

permits the Commission to set and enforce speculative position limits, 
and to approve exchange-set position limits.\17\ Section 4c(b) gives 
the Commission plenary authority to regulate transactions that involve 
commodity options.\18\ Section 4g(a) of the Act requires, among other 
things, each futures commission merchant (``FCM''), introducing broker, 
floor broker, and floor trader to file such reports as the Commission 
may require on its proprietary and customer transactions and positions 
in commodities for future delivery on any board of trade in the United 
States or elsewhere.\19\ In addition, section 4g(b) requires registered 
entities to maintain daily trading records as required by the 
Commission, and section 4g(c) requires floor brokers, introducing 
brokers, and FCMs to maintain their own daily trading records for each 
customer in such manner and form as to be identifiable with the daily 
trading records maintained by registered entities. Section 4g(d) 
permits the Commission to require that such daily trading records be 
made available to the Commission.\20\ Lastly, section 4i of the Act 
requires the filing of such reports as the Commission may require when 
positions taken or obtained on designated contract markets equal or 
exceed Commission-set levels.\21\ Collectively, these CEA provisions 
warrant the maintenance of an effective and rigorous system of market 
and financial surveillance.
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    \16\ 7 U.S.C. 1 et seq. In addition, CEA Sec.  8a(5) authorizes 
the Commission to promulgate such regulations as, in its judgment, 
are reasonably necessary to effectuate any provision of the Act or 
to accomplish any of the purposes of the Act. 7 U.S.C. 12a(5). Also, 
pursuant to the purposes enumerated in CEA Sec.  3(b), the Act seeks 
to ensure the financial integrity of regulated transactions and to 
prevent price manipulation and other disruptions to market 
integrity. 7 U.S.C. 5(b).
    \17\ 7 U.S.C. 6a.
    \18\ 7 U.S.C. 6c(b).
    \19\ 7 U.S.C. 6g(a).
    \20\ See supra section I(B) for a discussion of the trade data 
transmitted daily to the Commission by registered entities.
    \21\ 7 U.S.C. 6i.
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    In addition to the CEA sections described above, on July 21, 2010, 
President Obama signed the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (``Dodd-Frank Act'').\22\ Title VII of the Dodd-Frank 
Act \23\ amended the CEA to establish a comprehensive new regulatory 
framework for swaps and security-based swaps. The legislation was 
enacted to reduce risk, increase transparency, and promote market 
integrity within the financial system by, among other things: (1) 
Providing for the registration and comprehensive regulation of swap 
dealers and major swap participants; (2) imposing clearing and trade 
execution requirements on standardized derivative products; (3) 
creating robust recordkeeping and real-time reporting regimes; and (4) 
enhancing the Commission's rulemaking and enforcement authority with 
respect to, among others, all registered entities and intermediaries 
subject to the Commission's oversight.
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    \22\ See 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.
    \23\ Pursuant to Sec.  701 of the Dodd-Frank Act, Title VII may 
be cited as the ``Wall Street Transparency and Accountability Act of 
2010.''
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    As part of the Commission's rulemaking program implementing the 
Dodd-Frank Act,\24\ the rule changes proposed herein also include 
swaps-related considerations in connection with the Commission's new 
large trader reporting rules for swaps.\25\ New CEA section 4t 
authorized the Commission to establish a large trader reporting system 
for significant price discovery function swaps; accordingly, the swaps-
related considerations in the rules proposed herein also rely in part 
on the Commission's authority in CEA section 4t.
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    \24\ See generally, http://www.cftc.gov/LawRegulation/DoddFrankAct/index.htm.
    \25\ As noted supra in note 12, 17 CFR 20.5(a) and (b) contain 
the 102S and 40S filing requirements, discussed in greater detail 
below. Final part 20 was published in the Federal Register on July 
22, 2011. See supra note 12.
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III. Existing and Previously Proposed Trader and Account Identification 
Programs

A. Futures Large Trader Reporting--Existing Forms 102 and 40

    Existing Sec.  17.00, in part 17 of the Commission's regulations, 
forms the basis of the Commission's large trader reporting program.\26\ 
It requires each FCM, clearing member, and foreign broker to submit a 
daily report to the Commission for each commodity futures or option 
account it carries that has a reportable position (called a ``special 
account''). Such ``Sec.  17.00 position reports'' must show the futures 
and option positions of traders with positions at or above specific 
reporting levels set by the Commission. Current reporting position 
trigger levels are located in Sec.  15.03(b).\27\ The daily report is 
sent to the Commission as a single data file from each reporting FCM, 
clearing member, and foreign broker pursuant to technical 
specifications identified in Sec.  17.00(g).\28\ The Commission's 
surveillance staff uses this report to, among other things, assess 
individual traders' activities and potential market power; enforce 
speculative position limits; monitor for disruptions to market 
integrity; and calculate statistics that the Commission publishes to 
enhance market transparency (e.g., in the Commitments of Traders 
reports).
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    \26\ 17 CFR 17.00.
    \27\ 17 CFR 15.03(b).
    \28\ 17 CFR 17.00(g).
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i. Identification of Special Accounts--Existing Form 102
    For each special account identified by an FCM, clearing member, or 
foreign broker and reported to the Commission in a Sec.  17.00 position 
report, existing Sec.  17.01 \29\ requires the FCM, clearing member, or 
foreign broker to separately identify such special accounts to the 
Commission on Form 102 and provide certain information with respect to 
each special account.\30\ Pursuant to existing Sec.  17.02(b),\31\ Form 
102 must be submitted by such parties within three days of an account 
becoming a special account; a Form 102 submission may also be required 
by the Commission or its designee via a special call. The text of 
existing Sec.  17.01 \32\ includes both the requirement to submit the 
form as well as the specific data fields that are required to be 
completed on Form 102. Currently, Form 102 requires the filing of a 
separate ``paper'' form for each special account. Forms are generally 
transmitted to the Commission via email, facsimile, or regular mail.
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    \29\ 17 CFR 17.01.
    \30\ Current Form 102 is titled Identification of Special 
Accounts. 17 CFR 15.02.
    \31\ 17 CFR 17.02(b).
    \32\ 17 CFR 17.01.
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    As noted above, Form 102 identifies and provides information with 
respect to special accounts carried by FCMs, clearing members, and 
foreign brokers. The form provides the Commission with contact 
information for the trader(s) who owns and/or controls trading in each 
special account included in the daily Sec.  17.00 position reports. The 
Form 102 questions, as currently detailed in Sec.  17.01(a) through 
(f),\33\ require the reporting firm to provide the following: a special 
account number; the name, address, and other identification information 
for the owner (if also the controller), controller, or originator (if 
an omnibus account) of the account; an indication whether trades and 
positions in the special account are usually associated with commercial 
activity of the account owner in a related cash commodity or activity; 
information regarding an FCM's relationship to the account; and name 
and address information for the firm submitting the Form 102.
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    \33\ 17 CFR 17.01(a) through (f).
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    Based on the Commission's experience in receiving, processing, and 
reviewing Form 102 submissions, and as discussed below in the context 
of the rules proposed herein, the Commission

[[Page 43972]]

has determined that the existing Form 102 questions would benefit from 
revisions designed to: (1) Provide more meaningful information to the 
Commission and (2) clarify for reporting firms the traders, accounts, 
and information required to be provided on Form 102. In addition, the 
Commission is also proposing (as discussed below) that the New Form 102 
submission process be modernized to facilitate electronic submission so 
that both the Commission and market participants may benefit from the 
efficiencies of automation.
ii. Statement of Reporting Trader--Existing Form 40
    For each trader holding or controlling a reportable position 
(generally, persons identified on Form 102), Sec.  18.04 requires that, 
after a special call of the Commission, such trader file with the 
Commission a ``Statement of Reporting Trader'' on existing Form 40 at 
such time and place as directed in the call.\34\ The Form 40 is most 
commonly submitted to the Commission via paper submission, email 
submission, or facsimile. When submitted in a timely and accurate 
manner, Form 40 submissions provide the Commission with basic 
information about each reportable trader in its markets.
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    \34\ 17 CFR 18.04.
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    As with existing Sec.  17.01 and Form 102, existing Sec.  18.04 
also specifically identifies the data fields required in a Form 40 
filing. Generally, Sec.  18.04 and Form 40 require every reporting 
trader to provide or indicate the following: Name and address; 
principal business and occupation; type of trader; registration status 
with the Commission; name and address of other persons whose trading 
the trader controls; name, address, and phone number for each 
controller of the reporting trader's trading; name and location of 
other reporting firms through which the reporting trader has accounts; 
name and locations of persons guaranteeing the trading accounts of the 
reporting trader or persons having a 10 percent or greater financial 
interest in the reporting trader or its accounts; other identification 
information regarding accounts which the reporting trader guarantees or 
in which the reporting trader has a financial interest of 10 percent or 
more; and whether the reporting trader has certain relationships with 
or owners that are foreign governments.
    Individuals completing existing Form 40 must also provide or 
indicate the following, as applicable: A business telephone number; 
employer and job title; description of trading activity related to 
physical activity in or commercial use of a commodity; name and address 
of any organization of which the reporting trader participates in the 
management, if such organization holds a trading account; the name and 
address of a partner and/or joint tenant on the account; and the name 
and address of the partner and/or joint tenant that places orders.
    Corporations and other non-individuals/non-partnerships/non-joint 
tenants completing existing Form 40 must also provide or indicate the 
following, as applicable: A U.S. entity indication, and if not a U.S. 
entity, an indication of where organized; names and locations of parent 
firms and their respective U.S. entity indication; names and locations 
of all subsidiary firms that trade in commodity futures and options and 
their respective U.S. entity indication; name and address of person(s) 
controlling trading, by commodity and transaction type; contact 
information for a contact person regarding trading; and description of 
trading activity related to physical activity in, or the commercial use 
of, a commodity.
    As with Form 102, and based on the Commission's experience in 
calling for, receiving, processing, and reviewing Form 40 submissions, 
the Commission has determined that the existing Form 40 questions could 
benefit from revisions designed to: (1) Provide more meaningful 
information to the Commission and (2) clarify for reporting traders the 
specific information required to be provided on Form 40. In addition, 
the Commission is also proposing, as discussed below, that the New Form 
40 submission process be modernized to facilitate Web-based electronic 
form submission and achieve the efficiencies (for both the Commission 
and market participants) associated with using a single Web-based 
submission format.

B. Large Trader Reporting for Physical Commodity Swaps--102S and 40S 
Filings

    As noted above, the Commission recently adopted rules pertaining to 
swaps large trader reporting as new part 20 of the Commission's 
regulations.\35\ In addition to establishing a position-based reporting 
scheme for swaps,\36\ the rules also require two trader identification 
filings--102S and 40S. For swap counterparties with reportable 
positions (as set forth in part 20), the 102S and 40S filings generally 
serve an analogous function to that served by the existing Form 102 and 
Form 40 for futures and option traders.
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    \35\ See supra note 12.
    \36\ See generally: Large Trader Reporting for Physical 
Commodity Swaps: Division of Market Oversight Guidebook for part 20 
Reports, available at: http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/ltrguidebook120711.pdf (hereafter, ``Swaps 
Large Trader Guidebook'').
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    Specifically, pursuant to Sec.  20.5(a), 102S filings must be filed 
by a part 20 reporting entity (a clearing firm or a swap dealer) for 
each reportable counterparty consolidated account and ``shall consist 
of the name, address, and contact information of the counterparty and a 
brief description of the nature of such person's paired swaps and 
swaptions market activity.'' \37\ In addition, pursuant to Sec.  
20.5(b), and in conjunction with Sec.  20.6, all clearing 
organizations, swap dealers, clearing members, and counterparties with 
reportable positions must, after a special call of the Commission, 
complete a Form 40 ``as if any references to futures or options 
contracts were references to paired swaps or swaptions as defined in 
Sec.  20.1'' and submit the same to the Commission as a 40S filing.\38\
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    \37\ 17 CFR 20.5(a).
    \38\ 17 CFR 20.5(b) and 20.6.
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    Building on the approach of this Notice to modernizing Form 102 and 
Form 40 submissions, the rules proposed herein would also provide for 
the electronic submission of both 102S and 40S filings. In order to 
provide clarity for market participants submitting these filings, the 
proposed rules also include provisions indicating the specific 
information required to be provided in each of these filings. In 
addition, the information requested in proposed Form 102S reflects 
considerations developed in the Swaps Large Trader Guidebook for 
compliance with part 20.\39\ For example, in addition to requiring 
information on counterparty consolidated accounts, as described above, 
proposed 102S would also collect information on ``customer'' 
consolidated accounts.\40\ Form 102S would also ask reporting firms to 
distinguish between ``house'' and ``customer'' consolidated accounts.
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    \39\ See supra note 36.
    \40\ As explained in the Swaps Large Trader Guidebook, 
acceptable part 20 data records include ``customer,'' ``agent,'' 
``principal,'' and ``counterparty'' records. Clearing firms and swap 
dealers submitting 102S filings would be expected to classify 
principal and counterparty consolidated accounts as counterparty 
accounts on Form 102S, and to classify customer consolidated 
accounts as customer accounts. Agent data records would not require 
a 102S filing.
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C. Proposed OCR

    In addition to existing trader and account identification filings 
summarized above, the Commission recently proposed to collect ownership

[[Page 43973]]

and control information for all trading accounts active on U.S. futures 
exchanges and other trading venues. The Commission proposed to collect 
such information via an account ownership and control report (``OCR'') 
submitted periodically by reporting entities that would primarily be 
DCMs. The Commission published an Advanced Notice of Proposed 
Rulemaking (``OCR Advanced Notice'' or ``Advanced Notice'') \41\ 
soliciting public comment on the OCR in 2009, and a Notice of Proposed 
Rulemaking (``OCR NPRM'') in 2010.\42\ Both notices are described in 
greater detail below.
---------------------------------------------------------------------------

    \41\ See Commission, Advanced Notice of Proposed Rulemaking: 
Ownership and Control Report, 74 FR 31642 (July 2, 2009).
    \42\ See OCR NPRM supra note 6.
---------------------------------------------------------------------------

i. OCR Advanced Notice
    In the OCR Advanced Notice, the Commission sought public comment on 
the concept of an OCR submitted periodically to the Commission by DCMs 
and other trading-venue reporting entities.\43\ As the Commission 
explained in the Advanced Notice, the OCR was designed to enhance 
market transparency, leverage the Commission's existing surveillance 
systems, and foster synergies between its market surveillance, trade 
practice, enforcement, and economic research programs. The OCR Advanced 
Notice provided a detailed explanation of the Commission's need and 
intended uses for ownership and control information. The Commission 
invited all interested parties to submit general comments regarding the 
Advanced Notice within a 45-day comment window. The Commission received 
a total of twelve comment letters from sixteen interested parties.
---------------------------------------------------------------------------

    \43\ The OCR Advanced Notice noted that ``most reporting 
entities will be designated contract markets, but they could be any 
registered entity that provides trade data to the Commission on a 
regular basis.'' See OCR Advanced Notice supra note 41 at 31642.
---------------------------------------------------------------------------

ii. OCR NPRM
    After carefully considering comments received in response to the 
OCR Advanced Notice, the Commission published its OCR NPRM, which was 
substantively similar to the Advanced Notice. Like the Advanced Notice, 
the OCR NPRM also provided for the collection of information through an 
OCR submitted to the Commission by trading-venue reporting 
entities.\44\ For each trading account, reporting entities were to 
collect and transmit specific OCR data points, including: the trading 
account number; the names and addresses of the account's owners and 
controllers; the owners' and controllers' date of birth; the special 
account number, if one had been assigned; an indication of whether the 
account was a reportable account pursuant to large trader thresholds; 
and other relevant information. The Commission understood that, to 
compile their OCRs, reporting entities would need to collect 
information from FCMs and introducing brokers (``IBs'') in possession 
of the underlying data required by the OCR. Consequently, much of the 
OCR's burden would have fallen on FCMs, IBs, and any other market 
participants providing data to the reporting entities. The OCR NPRM 
also proposed the form, manner, and frequency of OCR transmission by 
reporting entities.\45\
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    \44\ The OCR NPRM provided that reporting entities would include 
DCMs, derivatives transaction execution facilities, and exempt 
commercial markets with significant price discovery contracts. In 
addition, the OCR NPRM provided that should the Commission adopt the 
proposed rule, it would also collect ownership and control 
information from foreign boards of trade operating in the U.S. 
pursuant to staff direct access no-action letters, if such letters 
are conditioned on the regular reporting of trade data to the 
Commission. In the OCR NPRM, the Commission also noted that if given 
appropriate authority it would consider collecting OCR data for 
over-the-counter and exchange-traded swap transactions. See OCR NPRM 
supra note 6 at 41782.
    \45\ The OCR NPRM provided that the OCR be submitted weekly, in 
Financial Information eXchange Markup Language (``FIXML'') via 
secure file transfer protocol (``SFTP''). See OCR NPRM supra note 6 
at 41784.
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    The OCR NPRM sought public comment and provided for a 60-day 
comment period. Commission staff also led a public roundtable to 
facilitate in-person discussion between Commission staff and interested 
parties.\46\ The staff-led public roundtable was held on September 16, 
2010, and consisted of fifteen panelists.\47\ By the close of the OCR 
NPRM comment period, the Commission received eight comment letters from 
fourteen interested parties.\48\ Many of the comments presented by 
roundtable panelists raised the same issues as those raised by the 
comment letters responding to the Advanced Notice and the OCR NPRM.
---------------------------------------------------------------------------

    \46\ The comment period deadline was extended from September 17, 
2010 to October 7, 2010 in order to give interested parties time to 
prepare comments on matters discussed at the public roundtable. See 
75 FR 54801 (September 9, 2010).
    \47\ Panelists included representatives from: CME Group Inc.; 
ICE Futures U.S.; Kansas City Board of Trade; Katten Muchin Rosenman 
LLP; Millburn Ridgefield Corporation; National Introducing Brokers 
Association; NYSE Liffe U.S.; State Street Global Markets; Woodfield 
Fund Administration LLC; and an industry consultant.
    \48\ All OCR NPRM comment letters (``CL''), supplemental comment 
letters (``supplemental CL''), ex parte communications summaries, 
and a transcript of the public roundtable are available through the 
Commission's Web site at: http://comments.cftc.gov/PublicComments/CommentList.aspx?id=755. OCR NPRM comment letters were received 
from: (1) Air Transport Association of America, Inc. on September 
17, 2010 (``CL-ATA''); (2) CME Group Inc. on behalf of the Chicago 
Mercantile Exchange, Inc.; the Board of Trade of the City of 
Chicago, Inc.; the New York Mercantile Exchange, Inc.; and the 
Commodity Exchange, Inc. (collectively ``CME'') on October 7, 2010 
(``CL-CME''); (3) Darrell Cutshaw on September 13, 2010 (``CL-
DCT''); (4) Futures Industry Association on October 7, 2010 (``CL-
FIA''); (5) IntercontinentalExchange, Inc., ICE Futures Europe, and 
ICE Futures U.S., Inc. (collectively, ``ICE'') on October 7, 2010 
(``CL-ICE''); (6) International Assets Holding Corporation and 
FCStone, LLC on October 7, 2010 (``CL-FCS''); (7) Kansas City Board 
of Trade on October 7, 2010 (``CL-KCBT''); and (8) OneChicago, LLC 
on September 27, 2010 (``CL-OCX''). OCR NPRM supplemental comment 
letters were received from: (1) FIA on December 23, 2010 
(``Supplemental CL-FIA I''); and (2) FIA on March 22, 2011 
(``Supplemental CL-FIA II'').
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iii. OCR NPRM Comment Summary
    A number of commenters found merit in the proposed OCR. For 
example, IntercontinentalExchange, ICE Futures Europe, and ICE Futures 
U.S. collectively stated that they ``recognize[d] the value in 
collecting information regarding the identity of the owners and 
controllers of accounts that actively trade on reporting entities, and 
therefore suppor[t] the Commission's initiative to collect certain OCR 
information.'' \49\ Similarly, the Futures Industry Association 
(``FIA'') commented that it ``supports the underlying purposes of the 
proposed OCR.'' \50\ The Air Transport Association of America (``ATA'') 
``agree[d] that the proposed [OCR] will provide information the 
Commission needs to ensure that the U.S. futures markets accurately 
reflect supply and demand forces for products traded, and to ensure 
that the futures markets are not tainted by fraud, abuse or excessive 
speculation.'' \51\ The ATA further stated that, ``the OCR is critical 
to the Commission's ability to fulfill these responsibilities in a 
dynamic and evolving marketplace that has embraced new technologies.'' 
\52\ Finally, the Kansas City Board of Trade commented that ``Exchange 
Compliance staffs will benefit greatly from the wealth of information 
at their disposal regarding the identity of market participants and the 
relationships that exist among them.'' \53\
---------------------------------------------------------------------------

    \49\ CL-ICE supra note 48 at 1.
    \50\ CL-FIA supra note 48 at 2.
    \51\ CL-ATA supra note 48 at 1.
    \52\ Id.
    \53\ CL-KCBT supra note 48 at 1.
---------------------------------------------------------------------------

    Commenters also suggested possible modifications to the OCR as 
described in the OCR NPRM. Commenters recommended that the Commission 
utilize an updated and automated Form

[[Page 43974]]

102 to collect OCR data \54\; collaborate with industry representatives 
to design the OCR \55\; require the reporting of only those accounts 
that exceed certain volume thresholds \56\; and require that the 
Commission receive OCRs directly from clearing FCMs rather than from 
DCMs and other trading venues.\57\ In a series of supplemental comment 
letters, the FIA (working with a group of FCMs, U.S. exchanges and 
other experts (``Working Group'')) provided a ``Proposed OCR 
Alternative'' that expanded upon comments made by FIA and its members 
in response to the Advanced Notice, the OCR NPRM, and the public 
roundtable.\58\ The Working Group's Proposed OCR Alternative addressed, 
among other things, the OCR data points to be collected, the sources 
and flow of OCR data, and industry costs arising from the Commission's 
proposed OCR versus the costs associated with the Working Group's 
Proposed OCR Alternative.\59\ Specifically, the Working Group estimated 
that the Proposed OCR Alternative ``would result in an average first-
year cost saving of approximately $18.8 million'' when compared with 
the Commission's proposed OCR.\60\ The Commission found merit in many 
of the commenters' recommendations and has incorporated several of 
these recommendations in the proposed rules. For example, as further 
described below, the proposed rules would require OCR data submissions 
directly from clearing FCMs, and OCR data would only be required for 
those trading accounts that exceed a specified volume threshold. Also, 
in concurrence with the suggestions of commenters and as more fully 
described below, the Commission anticipates collaborating with 
reporting entities and other interested participants to develop the 
data format and submission process.
---------------------------------------------------------------------------

    \54\ See CL-CME supra note 48 at 6, CL-OCX supra note 49 at 2, 
and Supplemental CL-FIA I supra note 49 at 2 of Appendix A.
    \55\ See CL-CME supra note 48 at 5, CL-FIA supra note 49 at 8, 
CL-ICE supra note 49 at 2, and CL-KCBT supra note 49 at 4.
    \56\ See CL-ICE supra note 48 at 4, CL-FIA supra note 49 at 7, 
and Supplemental CL-FIA I supra note 49 at 2 of Appendix A.
    \57\ See CL-KCBT supra note 48 at 2.
    \58\ See generally Supplemental CL-FIA I supra note 48 and 
Supplemental CL-FIA II supra note 48.
    \59\ Id.
    \60\ Supplemental CL-FIA I supra note 48 at 5 of Appendix A.
---------------------------------------------------------------------------

    Concurrent with the publication of this Notice, the Commission is 
issuing a separate notice that serves to formally withdraw the OCR NPRM 
and to alert the public to the rulemaking proposed herein.

IV. Forms

    As noted above, this proposed rulemaking addresses three forms--New 
Form 102, New Form 71, and New Form 40. New Form 102 is proposed as a 
multi-function form, since the requirement to submit New Form 102 can 
arise from one of three separate triggers. The data required to be 
submitted on a New Form 102 is determined by the underlying triggering 
mechanism. A discussion of the three New Form 102 triggering 
mechanisms, the related sections of the form, and the information 
required to be provided in each section, follows. New Form 71 is 
proposed as a tool to be used, at the Commission's discretion, to learn 
more about certain volume threshold accounts identified as omnibus 
accounts on New Form 102B. New Form 40 would continue to serve its 
traditional purpose as a tool to be used, at the Commission's 
discretion, to learn more about traders and market participants 
identified on New Form 102, as well as on New Form 71. New Form 71 and 
New Form 40 are also described in detail below.

A. Position Triggered 102

i. Special Accounts and Reportable Positions
    New Form 102A is the section of New Form 102 that would serve a 
function most analogous to existing Form 102. New Form 102A requires an 
FCM, clearing member, or foreign broker to identify and report its 
special accounts. As discussed above, a special account is defined in 
existing Sec.  15.00(r), and means any commodity futures or option 
account in which there is a reportable position.\61\ For the purposes 
of part 17, reportable position is defined in existing Sec.  
15.00(p)(1), and generally includes any open contract position that at 
the close of the market on any given business day equals or exceeds the 
levels in existing Sec.  15.03.\62\ These proposed rules would not 
amend the definition of either special account or reportable position. 
The Commission notes that under existing regulations (e.g., Sec.  
17.00(b), citing Sec.  150.4),\63\ reporting firms are required to 
separately aggregate the positions of common owners and those of common 
controllers for the purpose of identifying special accounts on a Form 
102. By way of this proposed rulemaking, the Commission reiterates that 
its regulations require reporting firms to separately aggregate 
positions by common ownership and by common control for the purpose of 
identifying and reporting special accounts.
---------------------------------------------------------------------------

    \61\ 17 CFR 15.00(r).
    \62\ 17 CFR 15.00(p)(1) and 15.03.
    \63\ 17 CFR 17.00(b) and 150.4. In this regard, the Commission 
notes that upon the compliance date for part 151 of the Commission's 
regulations, the aggregation rules in Sec.  150.4 will be superseded 
by those in Sec.  151.7. The compliance date for part 151 is 60 days 
after the term ``swap'' is further defined pursuant to Sec.  721 of 
the Dodd-Frank Act (i.e., 60 days after the further definition of 
``swap'' as adopted by the Commission and the Securities Exchange 
Commission is published in the Federal Register). See Commission, 
Position Limits for Futures and Swaps, 76 FR 71626, 71632 (November 
18, 2011).
---------------------------------------------------------------------------

ii. 102A Form Requirements
    As compared to existing Form 102, the data fields in 102A would 
include new ownership and control information fields (or, in the case 
of special accounts that are omnibus accounts, omnibus account 
originator information fields) for position-based special accounts. 
Form 102A, as proposed, would also require reporting firms that are 
clearing members to identify the trading accounts that comprise a 
position-based special account and to provide ownership and control 
information, as well as TCR trading account numbers, for those trading 
accounts.\64\ To clarify, ``trading accounts that comprise a position-
based special account'' would include all of those trading accounts 
that: (1) Are used to execute trades cleared by the clearing member 
submitting the 102A; (2) are owned or controlled by the entity 
identified as owning or controlling the special account reported on a 
102A; and (3) execute transactions in the same commodity or commodities 
in which the special account has a reportable position. The 
Commission's objective in requiring reporting firms that are clearing 
members to identify the trading accounts that comprise a special 
account is to facilitate trade-level monitoring of the means by which 
special account owners or controllers establish and unwind their 
reportable positions. The Commission specifically requests comment on 
this definition of ``trading accounts that comprise the special 
account.'' The Commission welcomes proposals for alternative 
definitions that would still permit it to achieve the objective 
identified above. The Commission also requests public comment regarding 
whether Form 102S filings, discussed below, should require the 
identification of trading accounts that comprise a consolidated account 
in the same manner that Form 102A would require the identification of 
trading accounts that comprise a special account.
---------------------------------------------------------------------------

    \64\ See supra section I(B).
---------------------------------------------------------------------------

    The Commission notes that the requirement in 102A to identify a 
trading account number for trading

[[Page 43975]]

accounts that comprise a special account would only be a relevant/
applicable data field for clearing members identifying trading accounts 
that comprise a special account. Based on comments received in response 
to the OCR NPRM, it is the Commission's understanding that non-clearing 
FCMs, foreign brokers, and omnibus account originators (collectively, 
``non-clearing entities'') would generally not have the ability to 
match/identify a trading account number for their customers or sub-
accounts (hereafter, ``sub-accounts'') on the TCR.\65\
---------------------------------------------------------------------------

    \65\ See supra section I(B) for a discussion of the TCR.
---------------------------------------------------------------------------

    Notwithstanding these limitations, under this proposed rulemaking 
non-clearing entities would continue to be required to submit a 102A 
for their customers/sub-accounts that, if carried directly with a 
clearing member, would otherwise be required to be reported as a 
position-based special account. Existing Form 102 requires the 
reporting of such special accounts, and New Form 102A would not change 
that requirement.
    Form 102A would also require reporting firms to indicate whether a 
special account reported based on ownership or control of a reportable 
position is a house or customer account of the reporting firm. This 
indicator would allow the Commission to perform certain financial risk 
surveillance functions in a more automated and efficient manner by 
quickly identifying house positions that potentially create risk for 
the reporting firm. Form 102A also requires that reporting firms 
indicate whether any trading account identified on 102A has been 
granted direct market access (``DMA'') to the trade matching system of 
the relevant reporting market. The proposed definition of ``DMA'' 
appears in section IX below. Finally, 102A requires any reporting firm 
that indicates on 102A that it is a foreign broker to identify its U.S. 
FCM.
iii. Timing of 102A Reporting
    Pursuant to the proposed regulatory revisions discussed below, this 
rulemaking would require 102A submissions no later than the submission 
of the corresponding Sec.  17.00(a) position report for a special 
account. That is, the 102A for any particular special account would be 
due at the same time as the special account's reportable position is 
first sent to the Commission. The proposed rule text also includes an 
``on-call'' provision, which would require a 102A to be submitted on 
such other date as directed by special call of the Commission.
iv. 102A Change Updates and Refresh Updates
    The proposed rules provide that if any change causes the 
information filed on a 102A for a special account to no longer be 
accurate, that an updated 102A shall be filed with the Commission no 
later than 9:00 a.m. eastern time on the business day after such change 
occurs, or on such other date as directed by special call of the 
Commission (``change updates'').
    In addition to change updates, proposed Sec.  17.02(b) requires 
that, starting on a date specified by the Commission or its designee 
and at the end of each six month increment thereafter (or such later 
date specified by the Commission or its designee), each FCM, clearing 
member, or foreign broker resubmit every 102A that it has submitted to 
the Commission for each of its special accounts (``refresh updates''). 
As with the 102B, discussed below, the goal of the refresh update 
provision is to establish discreet points in time where all 102A data 
is considered accurate and reliable. The Commission is proposing the 
refresh update provision in an effort to maintain accurate 102A data, 
and to avoid the data drift which is often associated with long-term 
data collection efforts.
    Both the change update and refresh update provisions of Sec.  
17.02(b) include the following sunset provision: an FCM, clearing 
member, or foreign broker may stop providing change updates or refresh 
updates for a Form 102A that it has submitted to the Commission for any 
special account upon notifying the Commission that the account in 
question is no longer reportable as a special account.

B. Volume Triggered 102

    New Form 102B of New Form 102 provides a new volume-based reporting 
structure not found in existing 102. As background, the Commission 
received several comments in response to the OCR NPRM that suggested 
the Commission should only require the reporting of those trading 
accounts whose trading activity exceeded a volume threshold, thereby 
limiting the total number of reportable accounts, reducing reporting 
costs, and preventing the reporting of non-significant accounts. The 
Commission considered the comments it received regarding the 
establishment of volume thresholds for the OCR, and has modified its 
approach accordingly in this Notice. While existing Form 102 reporting 
requirements arise when an account (or collection of related accounts) 
has a reportable position, 102B reporting is triggered when an 
individual trading account meets a specified trading volume level in an 
individual product and, as a result, becomes a ``volume threshold 
account.'' Volume threshold accounts, as defined below in proposed 
Sec.  15.00(y), are trading accounts that execute, or receive via 
allocation or give-up, reportable trading volume on or subject to the 
rules of a reporting market, that is a DCM or an SEF.\66\ The 
reportable trading volume level (``RTVL'') is defined in proposed Sec.  
15.04 as 50 or more contracts in all instruments that a DCM or SEF 
designates with the same product identifier (including purchases and 
sales, and inclusive of all expiration months).\67\ As noted above, 
volume threshold accounts could reflect, without limitation, trading in 
futures, options on futures, swaps, and any other product traded on or 
subject to the rules of a DCM or SEF. The Commission requests public 
comment as to whether any final rule adopted by the Commission should 
raise, lower or maintain the proposed RTVL. The Commission also 
requests public comment regarding the suitability of the proposed RTVL, 
as defined in proposed Sec.  15.04, to volume threshold accounts 
associated with SEFs, and whether any changes are required to make the 
proposed RTVL suitable for volume threshold accounts associated with 
SEFs. Additional requests for public

[[Page 43976]]

comment with respect to the RTVL as currently proposed are in section 
VII, below.
---------------------------------------------------------------------------

    \66\ See supra section I(A) for an explanation of the reporting 
markets relevant to 102B filings, and infra sections VI(A) and IX 
and note 82 for proposed amendments to the definition of ``reporting 
market.''
    \67\ The proposed RTVL is based on the Commission's analysis of 
DCM trade data received through the TCR from a sample of DCMs during 
a recent six month period. It is calibrated to yield information 
with respect to those trading accounts that are responsible for a 
substantial majority of trading volume, while minimizing the 
proposed regulations' impact on low-volume accounts whose trading 
activity does not warrant inclusion in the proposed reporting and 
identification regime. Based on the sample data set used in the 
Commission's analysis, the proposed RTVL would result in the 
reporting and identification of approximately one-third of the 
trading accounts reported in the sample data set. However, due to 
the concentration of trading activity among a minority of accounts 
and some accounts' tendency to be active in more than one product, 
the proposed RTVL would nonetheless result in the identification of 
at least 85% of the trading volume in approximately 90% of the 
products in the sample data set, as measured at the conclusion of 
the six-month period sampled by the Commission. The Commission notes 
that any amendments it may make to the RTVL as it pertains to SEFs 
may be designed to ensure that the RTVL for SEFs achieves a similar 
level of identification as the RTVL for DCMs, i.e., identifying a 
substantial majority of the volume in a substantial majority of 
products while minimizing the impact on SEF accounts whose trading 
activity is too low to merit inclusion in the reporting and 
identification regime.
---------------------------------------------------------------------------

i. 102B Form Requirements
    As a threshold question, 102B requires that clearing members 
provide, in response to question 2, the trading account number of any 
trading account that meets the criteria for a volume threshold account; 
any related short code(s) for such account; and the name of the 
reporting market (i.e., the DCM or SEF) at which the volume threshold 
account had reportable trading volume. These data points are necessary 
to report and identify volume threshold accounts in TCRs received from 
DCMs or similar transaction-based reports that may be received by the 
Commission from SEFs, and to link the volume threshold account to 
transaction records in the Commission's surveillance databases.\68\ The 
data points will also assist the Commission in fulfilling its 
surveillance responsibilities.
---------------------------------------------------------------------------

    \68\ See supra section I(B).
---------------------------------------------------------------------------

    Second, and as with 102A, 102B requires that clearing members 
indicate, in response to question 3, whether the volume threshold 
account has been granted DMA to the trade matching system of the 
relevant reporting market.
    Third, 102B requires that clearing members provide, in response to 
question 4, the volume threshold account's associated special account 
number, if applicable. In the case of DCMs, this information will 
permit the Commission to more effectively and efficiently connect 
position data received via the large trader reporting system and trade 
data received via the TCR.
    Fourth, 102B requires that clearing members indicate, in response 
to question 5, whether the volume threshold account is an omnibus 
account, or used to execute trades for an omnibus account. If the 
account is an omnibus account or used to execute trades for an omnibus 
account, question 5 requires clearing members to indicate whether the 
account is a house or customer omnibus account, and to provide 
information sufficient to uniquely identify and contact the originator 
of the account (e.g., the originator's name, address and phone number, 
among other information). More detailed information regarding ownership 
and control with respect to a volume threshold account that is a 
customer omnibus account will be collected separately at the 
Commission's request, from the omnibus account's originating firm, via 
a New Form 71, also proposed in this Notice and described below.
    Fifth, 102B requires clearing members to provide information, in 
response to question 6, sufficient to uniquely identify and contact 
each owner of a volume threshold account that is not an omnibus account 
(e.g., the owner's name, address and phone number, among other 
information). For each account owner that is not a natural person, 
question 6 also requests, among other identifying information, a 
contact name, contact job title, and the relationship of the contact to 
the account owner.
    Finally, the Commission requests that clearing members provide 
information, in response to question 7, sufficient to uniquely identify 
and contact each volume threshold account controller of an account that 
is not an omnibus account. Pursuant to proposed Sec.  15.00(dd), a 
volume threshold account controller must be a natural person. The 
requested information includes the account controller's name, address, 
phone number and job title, together with the name of the controller's 
employer and other identifying information.
    The Commission requests public comment regarding the suitability of 
Form 102B to volume threshold accounts associated with SEFs. The 
Commission also requests comment regarding how Form 102B should be 
amended, if at all, to heighten its suitability with respect to SEFs.
ii. Timing of 102B Reporting
    In order to identify its volume threshold accounts and make a 
timely submission of 102B, a clearing firm must tabulate the gross 
trading activity of each account on its books. Once a volume threshold 
account is identified, proposed Sec.  17.02(c) requires that the 
clearing firm submit 102B to the Commission no later than 9:00 a.m. 
eastern time on the business day following the day on which the account 
in question became a volume threshold account.\69\
---------------------------------------------------------------------------

    \69\ Business days are Monday through Friday calendar days that 
are not Federal holidays. For example, if an account becomes a 
volume threshold account on a Friday, it must be reported to the 
Commission by 9:00 on Monday (the next business day).
---------------------------------------------------------------------------

iii. 102B Change Updates and Refresh Updates
    Once a clearing firm has identified a volume threshold account on 
102B, that clearing firm has an ongoing responsibility (under Sec.  
17.02(c)) to ensure the information reported on 102B remains accurate. 
If the clearing firm becomes aware of any changes that cause the 
information reported on 102B to no longer be accurate, then an updated 
102B must be filed no later than 9:00 a.m. on the business day after 
the clearing firm becomes aware of such change (``change updates'').
    In addition to change updates, proposed Sec.  17.02(c) requires 
that, starting on a date specified by the Commission or its designee 
and at the end of each six month increment thereafter (or such later 
date specified by the Commission or its designee), each clearing member 
shall resubmit every Form 102B that it has submitted to the Commission 
for each of its volume threshold accounts (``refresh updates''). As 
with Form 102A, the Commission is proposing the refresh update 
provision in Sec.  17.02(c) in an effort to maintain accurate 102B data 
and avoid the data drift which is often associated with long-term data 
collection efforts. The goal of the refresh update provision is to 
establish discrete points in time where all 102B data is considered 
accurate and reliable.
    Both the change update and refresh update provisions of Sec.  
17.02(c) include the following sunset provision: If, during the course 
of a six-month period, the subject volume threshold account executes no 
trades in any product on the reporting market at which the volume 
threshold account reached the reportable trading volume level, then the 
relevant clearing firm is no longer required to provide either change 
updates or refresh updates following the end of this six-month period.

C. 102S

i. 102S Form Requirements
    Section 102S of New Form 102 is proposed to formalize and 
facilitate the electronic submission of 102S filings as required in 17 
CFR 20.5(a). As noted above, pursuant to Sec.  20.5(a), 102S filings 
must be filed by a part 20 reporting entity (a clearing firm or a swap 
dealer) for each reportable counterparty consolidated account when such 
account first becomes reportable, and ``shall consist of the name, 
address, and contact information of the counterparty and a brief 
description of the nature of such person's paired swaps and swaptions 
market activity.''\70\ By including 102S in New Form 102, the proposed 
rules would enable the submission of futures and swaps large trade 
reporting via a single electronic submission, enable the Commission to 
integrate its analysis of the information provided on 102S filings with 
that

[[Page 43977]]

provided on New Form 102A and New Form 102B submissions, and clarify 
for market participants the specific information and data fields that 
should be submitted in a 102S filing. As explained above, 102S would 
also incorporate considerations developed in the Swaps Large Trader 
Guidebook for compliance with part 20. The Commission is proposing that 
these rules replace the 102S submission procedure and guidance in the 
Swaps Large Trader Guidebook.\71\
---------------------------------------------------------------------------

    \70\ 17 CFR 20.5(a).
    \71\ See Swaps Large Trader Guidebook at p. 21-23 and p. 88, 
Appendix D. See also supra note 25.
---------------------------------------------------------------------------

    The timing for submitting 102S filings would continue to be subject 
to existing Sec.  20.5(a)(3).\72\ The Commission specifically requests 
comment on its proposal to retain Sec.  20.5(a)(3) as the timing 
requirement for submitting 102S filings on New Form 102.
---------------------------------------------------------------------------

    \72\ 17 CFR 20.5(a)(3) provides: ``Reporting entities shall 
submit a 102S filing within three days following the first day a 
consolidated account first becomes reportable or at such time as 
instructed by the Commission upon special call.''
---------------------------------------------------------------------------

ii. 102S Change Updates and Refresh Updates
    Section 20.5(a)(4) of the proposed rules provide that, if any 
change causes the information filed on a 102S for a consolidated 
account to no longer be accurate, an updated 102S shall be filed with 
the Commission no later than 9:00 a.m. eastern time on the business day 
after such change occurs, or on such other date as directed by special 
call of the Commission (``change updates'').
    In addition to change updates, proposed Sec.  20.5(a)(5) requires 
that, starting on a date specified by the Commission or its designee 
and at the end of each six month increment thereafter (or such later 
date specified by the Commission or its designee), each clearing member 
or swap dealer resubmit every 102S that it has submitted to the 
Commission for each of its consolidated accounts (``refresh updates''). 
As with the 102A and 102B, discussed above, the goal of the refresh 
update provision is to establish discrete points in time where all 102S 
data is considered accurate and reliable. The Commission is proposing 
the refresh update provision in an effort to maintain accurate 102S 
data, and to avoid the data drift which is often associated with long-
term data collection efforts.
    Both the change update and refresh update provisions of Sec.  
20.5(a) include the following sunset provision: A clearing member or 
swap dealer may stop providing change updates or refresh updates for a 
Form 102S that it has submitted to the Commission for any consolidated 
account upon notifying the Commission that the account in question is 
no longer reportable as a consolidated account.

D. Form 71

    Proposed, New Form 71 (``Identification of Omnibus Accounts and 
Sub-Accounts'') would be sent to omnibus account originating firms, at 
the discretion of Commission staff, in the event that a volume 
threshold account is identified as a customer omnibus account on Form 
102B. The relevant account number and reporting market listed on the 
102B will be provided on Form 71. Recipients of a Form 71 would be 
required to provide information regarding any account to which the 
customer omnibus account allocated trades that resulted in reportable 
trading volume for the account receiving such allocations (a 
``reportable sub-account'') on a specified trading date.\73\ Form 71 is 
designed to permit originating firms to report the required information 
directly to the Commission without requiring such firms to disclose 
information regarding customers to potential competitors. If a 
reportable sub-account is itself an omnibus account (an ``omnibus 
reportable sub-account''), then the originating firm would be required 
to (a) indicate whether the omnibus reportable sub-account is a house 
or customer omnibus account and (b) identify the originator of the 
omnibus reportable sub-account. Another Form 71 (and a New Form 40) 
would be sent, at the discretion of Commission staff, to the originator 
of a customer omnibus reportable sub-account identified on Form 71. At 
its discretion, the Commission will continue to reach through layered 
customer omnibus reportable sub-accounts via successive Form 71s until 
reaching all reportable sub-accounts, if any, that are not omnibus sub-
accounts.
---------------------------------------------------------------------------

    \73\ The relevant trading date would be specified by Commission 
staff on Form 71 at the time the special call is made.
---------------------------------------------------------------------------

    If a reportable sub-account identified on Form 71 is not an omnibus 
sub-account, then the originating firm will be required to identify the 
owner(s) and controller(s) of the non-omnibus reportable sub-account. A 
New Form 40 will be sent at the discretion of Commission staff to such 
owner(s) and controller(s). Form 71 will therefore enable the 
Commission to collect the same level of information regarding owners 
and controllers (via a subsequent New Form 40) that the Commission 
would collect with respect to a non-omnibus volume threshold account 
identified on 102B. The key data points proposed to be collected in 
Form 71 are summarized below.
    As a threshold question, section A of Form 71 requires the 
originator of an omnibus volume threshold account or a reportable sub-
account to confirm certain identifying information regarding the 
originator. Such information would have been reported to the Commission 
by an omnibus account carrying firm on Form 102B or on a preceding Form 
71 (e.g., the originator's name, address and phone number), and used to 
auto-populate the present Form 71. The originator is prompted to update 
any incorrect information provided in Section A.
    Second, section B of Form 71 requires the originator to provide 
certain information regarding the allocation of trades from a specified 
account number, and on a specified date and reporting market, to 
another account (called a ``recipient account''). Specifically, the 
originator is required to indicate whether: (1) It allocated trades 
from the specified account number on the specified date and reporting 
market that resulted in reportable trading volume for a recipient 
account; (2) it allocated trades from the specified account number on 
the specified date and reporting market, but the allocations did not 
sum to reportable trading volume for a recipient account on such date; 
or (3) it did not allocate any trades from the specified account number 
on the specified date and reporting market.
    If condition (1) is met, the originator is required to indicate in 
section B whether the reportable sub-account is an omnibus reportable 
sub-account. If so, the originator is required to indicate whether the 
omnibus reportable sub-account is a house or customer omnibus account, 
and to provide information sufficient to identify and contact the 
originator of the sub-account (e.g., the originator's name, address and 
phone number, and a contact name, contact job title, and the 
relationship of the contact to the originator). As noted above, another 
Form 71 will be sent at the discretion of Commission staff to the 
originator of a customer omnibus reportable sub-account identified in 
response to section B of Form 71. Therefore, Form 71 may be sent to a 
chain of such originators if each originator allocated trades to 
another customer omnibus reportable sub-account.
    If the reportable sub-account is not an omnibus sub-account, the 
originator is required to provide information sufficient to identify 
and contact the owner(s) and controller(s) of such non-omnibus 
reportable sub-account (e.g.,

[[Page 43978]]

the name, address and phone number of the owner(s) and controller(s)). 
This information will enable the Commission, in its discretion, to send 
a New Form 40 to such owner(s) and controller(s).
    The Commission requests public comment regarding the suitability of 
Form 71 to omnibus volume threshold accounts and omnibus reportable 
sub-accounts associated with SEFs. The Commission also requests comment 
regarding how Form 71 should be amended, if at all, to heighten its 
utility with respect to SEFs.

E. New Form 40

    This Notice proposes a revised Form 40 that would be required to be 
completed, on special call of the Commission, by individuals, persons, 
and other entities identified on any of 102A, 102B, 102S, and Form 71. 
As proposed herein, New Form 40, still referred to as the ``Statement 
of Reporting Trader,'' would continue to serve the function 
traditionally met by existing Form 40 by providing the Commission with 
basic contact and trading activity information about those persons and 
entities identified in the Commission's New Form 102 program. New Form 
40 would also be the vehicle through which market participants subject 
to 17 CFR 20.5(b) submit their 40S filings. As part of its 
implementation plan related to this proposal, and described in more 
detail below, the Commission is proposing to develop a Web-based portal 
through which market participates would complete, submit, and (when 
necessary) update their New Form 40--thereby curing much of the 
inefficiency, inaccuracy, and uncertainty associated with the current 
paper or facsimile based submission process.
    Specifically, as proposed herein, New Form 40 (whether completed as 
a New Form 40 or as a 40S filing) would be required to be completed on 
call, as directed by Commission staff. Because the proposal anticipates 
a Web-based portal and user profile system, those entities required to 
complete a New Form 40 would also be under a continuing obligation, per 
direction in the special call, to update and maintain the accuracy of 
their profile information by periodically visiting the online New Form 
40 portal to review, verify, and/or update their information.
    Generally, New Form 40 would request basic information regarding 
the reporting trader; contact information for the individual(s) 
responsible for the reporting trader's trading activities, risk 
management operations, and the information on the New Form 40; if 
applicable, omnibus account information, foreign government affiliation 
information, and an indication regarding the reporting trader's status 
as a domestic or non-domestic entity; information regarding the 
reporting entity's ownership structure in connection with its parents 
and subsidiaries; information regarding the reporting trader's control 
relationships with other entities; information regarding other 
relationships with persons that influence or exercise authority over 
the trading of the reporting trader; an indication regarding swap 
dealer status and major swap participant status; and various 
indications regarding the nature of the reporting trader's derivatives 
trading activity. The form includes definitions of certain terms, 
including parent, subsidiary, and control, to be used for the purpose 
of completing New Form 40. The Commission specifically requests comment 
on the appropriateness of these definitions and whether the definitions 
should be changed in any way.
    New Form 40 would also require reporting traders who engage in 
commodity index trading (``CIT''), as defined in the new form, to 
identify themselves to the Commission. New Form 40 defines CIT as: (a) 
an investment strategy that consists of investing in an instrument 
(e.g., a commodity index fund, exchange-traded fund for commodities, or 
exchange-traded note for commodities) that enters into one or more 
derivative contracts to track the performance of a published index that 
is based on the price of one or more commodities, or commodities in 
combination with other securities; or (b) an investment strategy that 
consists of entering into one or more derivative contracts to track the 
performance of a published index that is based on the price of one or 
more commodities, or commodities in combination with other securities.
    An example of CIT described in clause (a) is the strategy of 
purchasing shares in an exchange-traded fund (ETF) that purchases 
futures contracts based on the amount of funds contributed by 
investors. It is typical for an ETF for commodities to track the 
performance of a widely cited commodity benchmark. An example of CIT 
described in clause (b) is the strategy of an investor entering into a 
total-return swap with a counterparty. The counterparty would agree to 
pay the investor the total return on (e.g.) a commodity index, and 
would hedge the swap by buying futures contracts. Reporting traders 
engaged in CIT as defined in (b) are required to indicate whether they 
are, in the aggregate, pursuing long exposure or short exposure with 
respect to the relevant commodities or commodity groups listed on the 
Form (see question 14ii(a) in New Form 40).
    The Commission requests public comment regarding the definition of 
CIT in New Form 40. The Commission also requests comment on whether the 
definition captures all forms of CIT present in the market, or if not, 
how the definition should be modified. Finally, the Commission requests 
comment regarding question 14ii(a) in New Form 40, and whether it will 
adequately capture reporting traders' exposure in the commodities in 
which they engage in CIT.

V. Data Submission Standards and Procedures

    During the comment period, the Commission anticipates that its data 
and technology staff will work with market participants and potential 
reporting entities to address potential information technology 
standards to be associated with the proposed rules. The Commission 
encourages interested parties to share information directly or through 
any industry working groups wishing to provide technical input 
pertaining to relevant data fields, formats, and submission 
requirements. The Commission may receive information through comment 
letters submitted according to the instructions above or through on-
the-record meetings with industry participants, including staff-led 
public roundtables.\74\ The Commission anticipates that this process 
may also include staff visits to market participant facilities in order 
to observe onsite demonstrations of existing and potential technology 
capabilities, operation processes, and, more generally, to gain more 
direct knowledge and understanding of what an implementation effort 
will require. Based on information gathered during the comment period, 
the Commission will direct its data and technology staff to develop 
data requirements so that the Commission can identify and define a data 
submission standard for each submission type (e.g., an XML data feed) 
in preparation for the implementation of any final rules that follow 
from this Notice.
---------------------------------------------------------------------------

    \74\ Staff-led public roundtables are included here only as a 
possible means by which the Commission may choose to receive public 
comments. The Commission has not yet determined whether any such 
roundtable(s) will be held in connection with this Notice.
---------------------------------------------------------------------------

    Specifically, the Commission anticipates creating a secure internet 
portal with the proposed electronic New Form 102, New Form 40, and New 
Form

[[Page 43979]]

71 for beta testing in the event that this Notice ultimately results in 
final rules. Industry participants would be encouraged to review, test, 
and comment on the portal and online form capabilities. Where 
appropriate, the Commission may direct its staff to work with 
international data standards authorities to officiate the defined 
standards. As part of the completion of the data standards and online 
forms, the Commission plans on publishing a data compliance guidebook 
with detailed submission instructions.\75\
---------------------------------------------------------------------------

    \75\ For a recent example of a similar undertaking, see the 
Swaps Large Trader Guidebook, linked supra at note 36.
---------------------------------------------------------------------------

    It is envisioned that once the rule is effective and all technology 
at the CFTC is in place, the following capabilities will be available:
    FCMs (including clearing members), foreign brokers, or swap dealers 
that trigger a position or volume based reporting obligation will 
generate the appropriate 102A, 102B, or 102S standard file and send it 
to the Commission via secure file transfer protocol (``FTP''). The 
Commission will provide the necessary FTP IP address, login, and 
password and will coordinate with the reporting entity to set up the 
secure FTP protocol handlers. Additionally, the Commission may provide 
file converters (such as CSV-to-XML) to simplify the data standard 
compliance requirements for the industry. Alternatively, the 102A, 102B 
and 102S data may be submitted through an electronic version of the 
form which would be available on the Commission's secure Web site 
portal.
    New accounts identified on the New Form 102 by the reporting entity 
will be evaluated by Commission staff to determine next step actions 
(i.e., requesting a New Form 40 or New Form 71). If it is determined 
that a New Form 40 or New Form 71 should be sent to an account 
identified on a New Form 102 submission, the Commission would contact 
the named account (generally via email, using the email address 
provided on the New Form 102) to request and provide instructions for 
the appropriate CFTC form. The instructions would include a Web site 
address, login, and password to access the specific form needed. The 
named account may be required to submit a completed online form upon 
receiving the request.
    Depending on the information provided in the Form 71, additional 
reportable sub-accounts named in the form may be asked to complete a 
New Form 40 or Form 71 using the same process described above.
    Finally, the Commission proposes that any final rules resulting 
from this Notice include separate ``effective'' and ``compliance'' 
dates. The effective date of any final rule would begin 60 days after 
such rule's publication in the Federal Register. The Commission 
proposes that any compliance date, however, would be delayed by an 
additional 90 days (for a total of 150 days after a final rule's 
publication in the Federal Register). Upon reaching the effective date 
of any final rule, market participants and reporting entities should be 
prepared to begin working with the Commission's data and technology 
staff to test and implement any information technology standards or 
systems associated with the final rules. Such cooperation would include 
providing all test data or form filings requested by the Commission's 
data and technology staff, in the form and manner requested by staff. 
In the absence of any further relief by the Commission, all market 
participants and reporting entities subject to final rules would be 
expected to be in full compliance by the compliance date, including 
having submitted complete and accurate filings using one of the two 
submission methods specified above. The Commission seeks public comment 
on the proposed schedule and procedures for the effective date and 
compliance date of any final rule resulting from this Notice.

VI. Review and Summary of Regulatory Changes To Implement New and 
Amended Forms

    To implement the new and amended forms described above, the 
Commission proposes to revise parts 15, 17, 18, and 20 of its 
regulations as follows.

A. Part 15

    Existing part 15 enumerates certain defined terms and other 
provisions applicable to parts 15 through 19 and 21 of the Commission's 
regulations. The Commission proposes to amend part 15 to effectuate the 
enhanced market participant and account identification regime proposed 
in this Notice, including new Forms 102B and 71. Specifically, the 
Commission proposes to do the following: Codify twelve new defined 
terms in Sec.  15.00; update the list of ``persons required to report'' 
in Sec.  15.01 to include persons identified on New Forms 102B and 71; 
revise Sec.  15.04 to provide the ``reportable trading volume level'' 
for volume threshold accounts and other new account types; and make 
conforming changes in Sec. Sec.  15.00(q) and 15.02.\76\ The proposed 
amendments to part 15 are summarized below.
---------------------------------------------------------------------------

    \76\ 17 CFR 15.00, 15.01, 15.04, 15.00(q) and 15.02.
---------------------------------------------------------------------------

    New Forms 102 and 71 would require the identification of a number 
of account types not currently addressed in the Commission's 
regulations. Accordingly, the Commission proposes to introduce the 
following new defined terms in Sec.  15.00:
     Sec.  15.00(w). Omnibus account, meaning any trading 
account that one FCM, clearing member or foreign broker carries for 
another and in which the transactions of multiple individual accounts 
are combined. The identities of the holders of the individual accounts 
are not generally known or disclosed to the carrying firm;
     Sec.  15.00(x). Omnibus account originator, meaning any 
FCM, clearing member or foreign broker that executes trades for one or 
more customers via one or more accounts that are part of an omnibus 
account carried by another FCM, clearing member or foreign broker;
     Sec.  15.00(y). Volume threshold account, meaning any 
trading account that executes, or receives via allocation or give-up, 
reportable trading volume on or subject to the rules of a reporting 
market that is a board of trade designated as a contract market under 
Sec.  5 of the Act or a swap execution facility registered under Sec.  
5h of the Act;
     Sec.  15.00(z). Omnibus volume threshold account, meaning 
any trading account that, on an omnibus basis, executes or receives via 
allocation or give-up, reportable trading volume on or subject to the 
rules of a reporting market that is a board of trade designated as a 
contract market under Sec.  5 of the Act or a swap execution facility 
registered under Sec.  5h of the Act;
     Sec.  15.00(aa). Omnibus reportable sub-account, meaning 
any trading sub-account of an omnibus volume threshold account, which 
sub-account executes reportable trading volume on an omnibus basis. 
Omnibus reportable sub-account also means any trading account that is 
itself an omnibus account, executes reportable trading volume, and is a 
sub-account of another omnibus reportable sub-account; and
     Sec.  15.00(bb). Reportable sub-account, meaning any 
trading sub-account of an omnibus volume threshold account or omnibus 
reportable sub-account, which sub-account executes reportable trading 
volume.
    Volume threshold accounts, omnibus volume threshold accounts, 
omnibus reportable sub-accounts, and reportable sub-accounts all 
reflect accounts that execute (or receives via allocation or give-up) 
``reportable trading volume.'' Accordingly, the Commission proposes

[[Page 43980]]

to codify a new Sec.  15.00(u) that defines reportable trading volume 
as contract trading volume that meets or exceeds the level specified in 
proposed Sec.  15.04. Section 15.04, in turn, would provide that 
reportable trading volume for a trading account is trading volume of 50 
or more contracts, during a single trading day, on a single reporting 
market that is a board of trade designated as a contract market under 
Sec.  5 of the Act or a swap execution facility registered under Sec.  
5h of the Act, in all instruments that such reporting market designates 
with the same product identifier (including purchases and sales, and 
inclusive of all expiration months).\77\
---------------------------------------------------------------------------

    \77\ Section 15.04 of part 15 is currently reserved.
---------------------------------------------------------------------------

    Notably, Sec.  15.04 addresses trading volume, not open positions, 
and would require that purchases and sales by a trading account be 
summed to determine whether such account has reached the reportable 
trading volume. Section 15.04 also stipulates that reportable trading 
volume should encompass all instruments that the reporting market 
designates with the same product identifier. In this regard, the 
Commission observes that if a reporting market utilizes the same 
identifier to designate both the open-outcry and electronically-traded 
variants of a product, then a clearing firm reporting on Form 102B 
should sum a trading account's activity in both the open-outcry and 
electronic venues to determine whether such trading account has reached 
the reportable trading volume. Similarly, if a reporting market uses 
the same identifier to designate the futures, options and swaps 
variants of a product, then a trading account's activity in futures, 
options and swaps in such product should be summed to determine whether 
the trading account has reached the reportable trading volume. 
Conversely, if a reporting market utilizes different product 
identifiers in these circumstances, then a clearing firm reporting on 
Form 102B should not sum a trading account's activity across venues or 
across futures, options and swaps. The Commission anticipates that its 
proposed approach, which relies on reporting markets' existing product 
identification practices, would be less burdensome than an approach 
which requires aggregation of the same product when traded under 
different identifiers. The Commission specifically requests public 
comment on its proposed account-type definitions in Sec.  15.00, and on 
its definition of reportable trading volume in Sec.  15.04.
    The Commission also proposes to add ``control'' to the list of 
defined terms in Sec.  15.00.\78\ The Commission's proposed definition, 
which would apply only to special accounts (New Form 102A) and 
consolidated accounts (Form 102S), would be codified in Sec.  15.00(t), 
and would define control as ``to actually direct, by power of attorney 
or otherwise, the trading of a special account or a consolidated 
account.'' The proposed definition specifies that special accounts and 
consolidated accounts may have more than one controller. The Commission 
notes that the proposed definition of ``control'' would apply solely 
for the purpose of satisfying the reporting obligations under parts 15 
through 19 and 21 of this chapter. The proposed definition would not 
limit or alter existing law with respect to the meaning of the term 
control for the purpose of enforcing other requirements under the Act 
and the Commission's regulations, including those relating to position 
limits or manipulation. Similarly, existing requirements regarding the 
aggregation of positions in separate accounts for reporting or other 
purposes under the Act and Commission regulations (e.g., Sec. Sec.  
17.00(b) and 150.4) would not be altered by the definition of 
``control'' proposed in Sec.  15.00(t).
---------------------------------------------------------------------------

    \78\ The proposed definition of ``control'' in Sec.  15.00 is 
based upon the definition of ``controlled account'' in Sec.  1.3(j) 
of part 1.
---------------------------------------------------------------------------

    The Commission also proposes to separately define the concept of 
control in the context of trading accounts, volume threshold accounts, 
and reportable sub-accounts. For these accounts, ``control'' may only 
be exercised by natural persons. Accordingly, the proposed definitions 
in Sec.  15.00(cc), 15.00(dd), and 15.00(ee) define trading account 
controllers, volume threshold account controllers, and reportable sub-
account controllers, respectively, as ``a natural person who by power 
of attorney or otherwise actually directs the trading of a [trading 
account, volume threshold account, or reportable sub-account].'' Each 
account type may have more than one controller. The proposed 
definitions in Sec.  15.00(cc), 15.00(dd), and 15.00(ee) would be 
relevant to the submission of New Forms 102A (trading accounts), 102B 
(volume threshold accounts), and 71 (reportable sub-accounts), 
respectively.\79\ The Commission specifically requests public comment 
on its proposed definition of control in Sec.  15.00(t), and on its 
proposed definitions of ``trading account controller,'' ``volume 
threshold account controller'' and ``reportable sub-account 
controller'' in Sec.  15.00(cc), (dd) and (ee).
---------------------------------------------------------------------------

    \79\ The proposed definitions also specify that volume threshold 
accounts and reportable sub-accounts may have more than one 
controller.
---------------------------------------------------------------------------

    Finally, the Commission proposes to define direct market access 
(``DMA'') in a new Sec.  15.00(v). The Commission proposes to define 
DMA as ``a connection method that enables a market participant to 
transmit orders to a DCM's electronic trade matching system without re-
entry by another person or entity, or similar access to the trade 
execution platform of a SEF.'' Pursuant to the proposed definition, 
such access could be provided directly by a DCM or SEF, or by a 3rd-
party platform.
    The introduction of new account and controller types in New Forms 
102A, 102B, and 71 would result in a corresponding expansion in the 
categories of persons required to provide New Form 40 reports. 
Accordingly, the Commission proposes to amend Sec.  15.01(c), which 
currently requires Form 40 reports only from persons who hold or 
control reportable positions.\80\ The proposed rules would expand Sec.  
15.01(c) to require New Form 40 reports from traders who own, hold, or 
control reportable positions (identified via New Form 102A); volume 
threshold account controllers (identified via New Form 102B); persons 
who own volume threshold accounts (identified via New Form 102B); 
reportable sub-account controllers (identified via New Form 71); and 
persons who own reportable sub-accounts (identified via New Form 71).
---------------------------------------------------------------------------

    \80\ 17 CFR 15.01(c).
---------------------------------------------------------------------------

    Other proposed amendments to part 15 include: A revision to the 
definition of ``reporting market'' in existing Sec.  15.00(q) to 
replace the provision's cross-reference to Sec.  1a(29) of the Act with 
a cross-reference to Sec.  1a(40); a further revision to existing Sec.  
15.00(q) to remove the provision's reference to derivatives transaction 
execution facilities (``DTEFs''); and the amendment of existing Sec.  
15.02, which contains a list of the forms contained in parts 15 through 
19, and 21.\81\ Section 15.02 would be revised to reflect the proposed 
introduction of new Form 71, the renaming of Form 102, and the new OMB 
control number that would be created by this rulemaking.
---------------------------------------------------------------------------

    \81\ 17 CFR 15.00(q) and 15.02. The Dodd-Frank Act modified 
Sec.  1a of the CEA. As a result, the definition of ``registered 
entity'' previously found in Sec.  1a(29) of the CEA is now in Sec.  
1a(40). The Commission proposes to revise existing Sec.  15.00(q) so 
that it cites to Sec.  1a(40) for the definition of registered 
entity. The Commission proposes to also revise existing Sec.  
15.00(q) by removing the provision's reference to DTEFs, a category 
of regulated markets that was eliminated by Sec.  734 of the Dodd-
Frank Act.

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[[Page 43981]]

B. Part 17

    The Commission is proposing a number of substantive, conforming and 
administrative amendments to Sec. Sec.  17.01, 17.02, and 17.03 of part 
17,\82\ and is also proposing new Sec. Sec.  17.02(c), 17.03(e), 
17.03(f), and 17.03(g). The proposed amendments and new provisions 
address: the identification of special accounts, volume threshold 
accounts, and omnibus volume threshold accounts (Sec.  17.01); the 
form, manner, and time of New Form 102A and 102B filings (Sec.  
17.02(b) and 17.02(c), respectively); and the delegation of related 
authorities from the Commission to the Director of the Division of 
Market Oversight (``DMO'') or the Director of the Office of Data and 
Technology (``ODT'') (Sec.  17.03).
---------------------------------------------------------------------------

    \82\ 17 CFR 17.01, 17.02 and 17.03.
---------------------------------------------------------------------------

i. Substantive Proposed Amendments to Sec.  17.01
    Existing Sec.  17.01 \83\ requires reporting entities (i.e., FCMs, 
clearing members, foreign brokers, and contract markets that list 
exclusively self-cleared contracts) to identify special accounts on 
existing Form 102, to provide for each special account the information 
required by paragraphs (a)-(f), and to comply with other requirements 
in paragraphs (g)-(h). The Commission proposes to amend Sec.  17.01 by 
replacing all of its existing provisions with the provisions described 
below.
---------------------------------------------------------------------------

    \83\ 17 CFR 17.01.
---------------------------------------------------------------------------

    First, the Commission proposes to codify a new Sec.  17.01(a) that 
would require reporting entities to identify special accounts on New 
Form 102A (``Sec.  17.01(a) reports''), and would also refer reporting 
entities directly to the new form for the required data points. Second, 
the Commission proposes to introduce a new Sec.  17.01(b) that would 
subject volume threshold accounts to an account identification regime 
comparable to the position-based regime already existing for special 
accounts.\84\ Proposed Section 17.01(b) would specifically require 
clearing firms to identify volume threshold accounts on New Form 102B 
(``Sec.  17.01(b) reports''). Similarly, the Commission proposes to 
introduce a new Sec.  17.01(c) that would subject omnibus accounts to 
their own volume-based account identification regime.\85\ Proposed 
Sec.  17.01(c) would require the originator of an omnibus volume 
threshold account (or the originator of an omnibus reportable sub-
account within such account) to file New Form 71 ``Identification of 
Omnibus Accounts and Sub-Accounts'' upon special call by the Commission 
or its designee.
---------------------------------------------------------------------------

    \84\ See supra section IV(B) and infra section IX.
    \85\ See supra section IV(D) and infra section IX.
---------------------------------------------------------------------------

    The fourth substantive amendment proposed for Sec.  17.01 would 
codify a new Sec.  17.01(d). Proposed Sec.  17.01(d) would require 
reporting markets that list exclusively self-cleared contracts to file 
Sec.  17.01(a) and Sec.  17.01(b) reports as if they were clearing 
members. Proposed Sec.  17.01(d) reflects the requirements of existing 
Sec.  17.01(g) \86\ with respect to special accounts, but also 
incorporates the new volume threshold accounts proposed herein. 
Finally, the Commission proposes to introduce a new Sec.  17.01(e) that 
would extend the Commission's special call authority--currently 
applicable to special accounts--to also include volume threshold 
accounts, omnibus volume threshold accounts and reportable sub-
accounts.\87\ Responses to special calls would be due within 24 hours.
---------------------------------------------------------------------------

    \86\ 17 CFR 17.01(g).
    \87\ The Commission's special call authority with respect to 
special accounts is currently found in Sec.  17.02(b)(1), which the 
Commission proposes to strike, as explained below.
---------------------------------------------------------------------------

ii. Substantive Proposed Amendments to Sec.  17.02(b); New Sec. Sec.  
17.02(c), 17.03(e), 17.03(f) and 17.03(g)
    Section 17.02(b) \88\ currently addresses the form, manner, and 
completion date requirements of existing 102 filings. Specifically, 
Sec.  17.02(b)(1) requires reporting entities to submit existing Form 
102 upon special call by the Commission; in the absence of a special 
call, Sec.  17.02(b)(2) requires reporting entities to submit existing 
Form 102 within three business days of the first day that a special 
account is reported to the Commission. The Commission proposes to 
replace both provisions as described below.
---------------------------------------------------------------------------

    \88\ 17 CFR 17.02(b).
---------------------------------------------------------------------------

    First, as explained above, the Commission proposes to strike 
existing Sec.  17.02(b)(1) and to shift its special call requirements 
to proposed Sec.  17.01(e). Second, the Commission proposes to strike 
existing Sec.  17.02(b)(2) and to replace its Form 102 submission 
requirements with a new Sec.  17.02(b)(1)-(4) to address the form and 
manner of New Form 102A filings for special accounts. Proposed Sec.  
17.02(b)(1) would direct reporting entities to the Commission's Web 
site (www.cftc.gov) for detailed instructions on the Form 102A filing 
process. Proposed Sec.  17.02(b)(2)-(4) would address the completion 
date requirements of initial Form 102A submissions, 102A change 
updates, and 102A refresh updates, respectively. The proposed timing 
requirements appurtenant to initial 102A filings and the change and 
refresh updates are discussed in detail in section IV(A), above.
    To address New Form 102B filings for volume threshold accounts, the 
Commission proposes to codify a new Sec.  17.02(c). Proposed Sec.  
17.02(c) would follow a structure similar to that of proposed Sec.  
17.02(b), with Sec.  17.02(c)(1) directing reporting entities to 
www.cftc.gov for detailed instructions on the Form 102B filing process, 
and proposed Sec.  17.02(c)(2) through (4) addressing the timing of 
initial Form 102B filings, 102B change updates, and 102B refresh 
updates, respectively. The proposed timing requirements appurtenant to 
initial 102B filings and change and refresh updates are discussed in 
detail in section IV(B), above.
    Finally, the Commission also proposes to codify a new Sec.  
17.03(e) that would provide the Director of ODT with delegated 
authority to make special calls to solicit information from omnibus 
volume threshold account originators and omnibus reportable sub-account 
originators on New Form 71. The Commission also proposes to codify (a) 
a new Sec.  17.03(f) that would provide the Director of DMO with 
delegated authority to determine the date on which each FCM, clearing 
member, or foreign broker shall update or otherwise resubmit every Form 
102 that it has submitted to the Commission for each of its special 
accounts and (b) a new Sec.  17.03(g) that would provide the Director 
of DMO with delegated authority to determine the date on which each 
clearing member shall update or otherwise resubmit every Form 102 that 
it has submitted to the Commission for each of its volume threshold 
accounts.
iii. Conforming and Administrative Amendments to Part 17
    The Commission is proposing a number of conforming and 
administrative amendments to part 17. First, the Commission proposes to 
revise Sec.  17.00(g)(2)(iii), which defines the ``account number'' 
field for position reports.\89\ The proposed revisions would eliminate 
the provision's cross-references to Sec.  17.00(c), which is reserved, 
and to existing Sec.  17.01(a), which the Commission proposes to 
strike.\90\ Section 17.00(g)(2)(iii) would incorporate a new cross-
reference to New Form 102.
---------------------------------------------------------------------------

    \89\ 17 CFR 17.00(g)(2)(iii).
    \90\ 17 CFR 17.00(c) and 17.01(a).
---------------------------------------------------------------------------

    Second, the Commission proposes to revise existing Sec.  17.03(a), 
which grants the Director of DMO the authority to determine whether 
FCMs, clearing

[[Page 43982]]

members and foreign brokers can report certain information on series 
`01 forms, or can use some other format upon a determination that such 
person is unable to report the information using the standard 
transmission format.\91\ More specifically, Sec.  17.03(a) would be 
revised to grant such authority to the Director of ODT, rather than the 
Director of DMO.
---------------------------------------------------------------------------

    \91\ 17 CFR 17.03(a).
---------------------------------------------------------------------------

    Third, the Commission proposes to revise existing Sec.  17.03(b), 
which grants the Director of DMO the authority to approve the late 
submission of position reports and Form 102.\92\ Section Sec.  17.03(b) 
would be revised to grant such authority to the Director of ODT, rather 
than the Director of DMO. Section 17.03(b) would be further revised to: 
(i) Replace the provision's cross-reference to Sec.  17.01,\93\ which 
the Commission proposes to strike, with cross-references to proposed 
Sec.  17.01(a) and 17.01(b); and (ii) eliminate the provision's cross-
reference to existing Sec.  17.01(g),\94\ which the Commission also 
proposes to strike.
---------------------------------------------------------------------------

    \92\ 17 CFR 17.03(b).
    \93\ 17 CFR 17.01.
    \94\ 17 CFR 17.01(g).
---------------------------------------------------------------------------

    Fourth, the Commission proposes to revise existing Sec.  17.03(c), 
which grants the Director of DMO the authority to permit reporting 
entities filing Form 102 to authenticate it through a means other than 
signing the form.\95\ Section 17.03(c) would be revised to grant such 
authority to the Director of ODT, rather than the Director of DMO. 
Section 17.03(c) would be further revised to replace the provision's 
existing cross-reference to Sec.  17.01(f),\96\ which the Commission 
proposes to strike, with a cross-reference to proposed Sec.  17.01, and 
to address New Form 71.
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    \95\ 17 CFR 17.03(c).
    \96\ 17 CFR 17.01(f).
---------------------------------------------------------------------------

    Finally, the Commission proposes to revise existing Sec.  17.03(d), 
which grants the Director of DMO the authority to approve a format and 
coding structure other than that set forth in Sec.  17.00(g).\97\ 
Section 17.03(d) would be revised to grant such authority to the 
Director of ODT, rather than the Director of DMO.
---------------------------------------------------------------------------

    \97\ 17 CFR 17.03(d) and 17.00(g).
---------------------------------------------------------------------------

C. Part 18

    Existing Sec.  18.04 (the ``Statement of Reporting Trader'') 
requires every trader who holds or controls a reportable position to 
file a Form 40 upon special call by the Commission or its designee and 
to provide on Form 40 information required by existing Sec.  18.04(a) 
thorugh (c).\98\ The Commission proposes to amend Sec.  18.04 by 
striking all of its existing provisions and replacing them as described 
below.
---------------------------------------------------------------------------

    \98\ 17 CFR 18.04(a) through (c).
---------------------------------------------------------------------------

    First, and consistent with its approach to New Form 102, the 
Commission proposes to transition existing Sec.  18.04(a) through (c)'s 
detailed form content requirements from the regulatory text to New Form 
40. Second, the Commission proposes to codify a new Sec.  18.04(a) 
that, as with existing Sec.  18.04, would require every trader who 
holds or controls a reportable position to file a New Form 40 upon 
special call by the Commission or its designee. Finally, to accommodate 
volume threshold accounts and reportable sub-accounts identified on New 
Forms 102 and 71, the Commission proposes to codify a new Sec.  
18.04(b) that would require volume threshold account controllers, 
persons who own a volume threshold account, reportable sub-account 
controllers, and persons who own a reportable sub-account to file New 
Form 40 upon special call by the Commission or its designee.
    Existing Sec.  18.05 requires traders who hold or control 
reportable positions to maintain books and records regarding all 
positions and transactions in the commodity in which they have 
reportable positions.\99\ In addition, existing Sec.  18.05 requires 
that the trader furnish the Commission with information concerning such 
positions upon request. The Commission proposes to expand Sec.  18.05 
to also impose books and records requirements upon (a) volume threshold 
account controllers and owners of volume threshold accounts reported on 
New Form 102B and (b) reportable sub-account controllers and persons 
who own a reportable sub-account reported on New Form 71.
---------------------------------------------------------------------------

    \99\ 17 CFR 18.05.
---------------------------------------------------------------------------

D. Part 20

    As with Forms 102 and 40, the Commission proposes to transfer the 
list of data points required in Form 102S data point from the relevant 
regulatory text (i.e., Sec.  20.5) \100\ to the form itself. More 
specifically, the Commission proposes to eliminate the data points 
specified in Sec.  20.5(a)(1), and to revise Sec.  20.5(a)(1) to 
provide that when a counterparty consolidated account first becomes 
reportable, the reporting entity shall submit a 102S filing (``initial 
102S filing''). The timing for submitting initial 102S filings would 
continue to be subject to existing Sec.  20.5(a)(3).\101\ Finally, the 
Commission proposes to codify new Sec.  20.5(a)(4) and 20.5(a)(5) to 
require change and refresh updates for Form 102S in the same manner as 
they are required for Form 102A. The Commission is also proposing a 
conforming amendment to Sec.  20.5(a)(2) to eliminate the existing 
instructions with respect to updating 102S filings.
---------------------------------------------------------------------------

    \100\ 17 CFR 20.5.
    \101\ 17 CFR 20.5(a)(3). See supra section III(B).
---------------------------------------------------------------------------

VII. Questions and Request for Comment

    The Commission requests public comment on the proposed forms and 
regulations described in this Notice, and welcomes specific 
alternatives to the regulatory text proposed to be implemented and the 
data points proposed to be collected herein. In addition to this 
general request for comments, the Commission specifically requests 
public comment on the questions below.
    1. With respect to DCMs, the Commission requests public comment 
regarding the RTVL proposed in Sec.  15.04, which is: 50 or more 
contracts, during a single trading day, on a single reporting market 
that is a board of trade designated as a contract market under Sec.  5 
of the Act or a swap execution facility registered under Sec.  5h of 
the Act, in all instruments that such reporting market designates with 
the same product identifier (including purchases and sales, and 
inclusive of all expiration months). If the RTVL or parameters proposed 
in Sec.  15.04 (e.g., a RTVL measured in ``contracts'' and set at 50 
contracts; a reliance on ``product identifiers;'' or the reference to 
``expiration months'') are inadequate with respect to DCMs, then the 
Commission requests public comment regarding how the RTVL or such 
parameters should be revised in any final rule arising from this 
Notice. See section IV(B), above, and section IX, below.
    2. The Commission requests public comment as to whether it should 
retain Sec.  20.5(a)(3) as the timing requirement for submitting 
initial 102S filings on New Form 102. See section IV(C), above.
    3. The Commission requests public comment on the proposed change 
and refresh updates for 102A, 102B, and 102S filings, including 
comments with respect to the timing, frequency, and contents of such 
updates. See section IX, below.
    4. The Commission requests public comment as to the appropriateness 
of the definitions of ``parent'' and ``subsidiary'' in New Form 40, and 
whether these definitions should be changed in any way. See section 
IV(E), above.
    5. The Commission requests public comment regarding the definition 
of ``commodity index trading'' (CIT) in New Form 40. The Commission 
also requests comment on whether the

[[Page 43983]]

definition captures all forms of CIT present in the market, or if not, 
how the definition should be modified. Finally, the Commission requests 
comment regarding question 14ii(a) in New Form 40, and whether it will 
adequately capture reporting traders' exposure in the commodities in 
which they engage in CIT. See section IV(E), above.
    6. The Commission requests public comment on the schedule and 
procedures proposed in section V above for the effective date and 
compliance date of any final rule resulting from this Notice.
    a. With respect to trading accounts associated with a DCM or a SEF 
that is not yet registered on the effective date or the compliance date 
proposed in section V, should the effective date or the compliance date 
for the reporting of such trading accounts be delayed for a certain 
period? If so, how long should the effective date or compliance date be 
delayed?
    7. The Commission requests public comment on whether it should 
codify a definition of ``trading account'' in Sec.  15.00 of the 
Commission's regulations. ``Trading accounts'' refers to accounts 
identified by a reporting market in daily transaction-level TCRs 
submitted to the Commission pursuant to Sec.  16.02 or any similar 
reports received from a SEF.\102\ If commenters recommend that the 
Commission codify a definition of ``trading account'' in Sec.  15.00, 
then the Commission requests that commenters offer a proposed 
definition, provided that such definition does not reference tags, 
Party Roles, or other specific data fields in the TCR. The Commission 
also requests public comment regarding the applicability of the 
proposed trading account concept to SEFs, including any alternatives to 
trading account that should be used with respect to SEFs.
---------------------------------------------------------------------------

    \102\ 17 CFR 16.02.
---------------------------------------------------------------------------

    8. The Commission requests public comment on its proposal to 
require that reporting firms that are clearing members identify, on 
Form 102A, the trading accounts that comprise a special account, and 
provide ownership and control information and TCR trading account 
numbers for such trading accounts. The Commission also requests public 
comment on the three factors offered in this Notice to determine 
whether a trading account comprises part of a special account. See 
section IV(A)(ii), above.
    9. The Commission requests public comment on whether ``trading 
account(s) that comprise a special account'' should be a defined term 
in Sec.  15.00 of the Commission's regulations, and how such definition 
should differ from the three factors discussed in this preamble, if at 
all. See section IV(A)(ii), above.
    10. The Commission intends that the definition of ``volume 
threshold account'' captures all possible categories of accounts with 
reportable trading volume, including give-ups and other instances in 
which trades do not `execute' on a DCM or SEF (e.g., block trades). The 
Commission requests public comment regarding whether the proposed 
definition of ``volume threshold account'' achieves this purpose, and 
if not, how the definition should be revised. See section IX, below.
    11. The definition of ``omnibus reportable sub-account'' captures 
``any trading sub-account, which sub-account executes reportable 
trading volume on an omnibus basis,'' while the definition of 
``reportable sub-account'' captures ``any trading sub-account, which 
sub-account executes reportable trading volume'' (emphasis added). See 
section IX, below. Is the reference to `executing' reportable trading 
volume the appropriate terminology in this context? Would it be 
preferable to refer instead to a sub-account that ``receives via 
allocation or give-up'' reportable trading volume? Is another 
terminology more appropriate?
    12. With respect to SEFs, the Commission requests public comment 
regarding whether proposed Sec.  15.04 contains the appropriate 
parameters for defining a RTVL for volume threshold accounts associated 
with a SEF (e.g., a RTVL measured in ``contracts'' and set at 50 
contracts; a reliance on ``product identifiers;'' or the reference to 
``expiration months''). If the RTVL or parameters proposed in Sec.  
15.04 are inadequate for SEFs, then the Commission requests public 
comment regarding how the RTVL or such parameters should be revised in 
any final rule arising from this Notice. If commenters propose 
alternative parameters for defining a RTVL for volume threshold 
accounts associated with SEFs (e.g., a parameter based on a notional 
value), please describe the proposed parameters in detail and indicate 
which products the parameters should apply to, in addition to other 
relevant criteria. The Commission also requests comment on the 
benchmarks that should be used to determine the RTVL for SEFs, 
including the percentage of trading accounts that should be identified 
and the percentage of products in which a given percentage of volume 
should be identified. In this regard, the Commission refers commenters 
to the proposed RTVL in the context of DCM trading accounts, products, 
and volume: an RTVL of 50 would identify approximately 33 percent of 
trading accounts, and at least 85 percent of volume in approximately 90 
percent of products. The Commission may determine that any alternative 
RTVL for SEFs should achieve similar coverage. If commenters propose 
alternative parameters for defining a RTVL for volume threshold 
accounts associated with a SEF, please also describe any alternative 
benchmarks that are relevant to such parameters (e.g., what the 
reportable notional value for a particular product should be). See 
section IV(B) and note 68, above, and section IX, below.
    13. The Commission requests public comment regarding proposed 
Sec. Sec.  17.01(b), 17.01(d), and 17.02(c)(2)-(4), which place certain 
102B reporting obligations on clearing members. Do the proposed 
regulations require any revision to adequately address 102B filings 
with respect to volume threshold accounts associated with SEFs? If so, 
how should proposed Sec. Sec.  17.01(b), 17.01(d), and 17.02(c)(2)-(4) 
be amended? Should other reporting entities be considered, and if so, 
which ones?
    14. The Commission requests public comment regarding whether the 
proposed constructs of ``trading account,'' ``volume threshold 
account,'' ``omnibus volume threshold account,'' and ``omnibus 
reportable sub-account'' are as applicable to SEFs as they are to 
trading on DCMs. See section IX, below.
    b. If these constructs are not applicable, then the Commission 
requests specific comments on the differences between trading practices 
and/or account structures at DCMs versus SEFs that would preclude their 
use with respect to SEFs. The Commission also requests specific 
comments on how these constructs should be amended or substituted so 
that they are usable with SEFs. For example, in the context of SEFs, 
should the construct of volume threshold accounts be modified to refer 
to reportable trading volume associated with a particular legal entity 
identifier, rather than reportable trading volume associated with a 
particular trading account?
    15. The Commission requests public comments on any defined terms or 
other provisions of the proposed rules that would require revision to 
accommodate the identification and reporting of volume threshold 
accounts, omnibus volume threshold accounts, and omnibus reportable 
sub-accounts associated with SEFs.
    a. For example, the Commission requests public comment regarding

[[Page 43984]]

whether the omnibus account structure, as proposed, is relevant and 
appropriate to SEFs. More specifically, the Commission requests public 
comment with respect to proposed Sec.  15.00(w) and 15.00(x), which 
define omnibus account and omnibus account originator, respectively. 
The proposed definitions are based on market participants known to 
carry or originate omnibus accounts on DCMs. The Commission requests 
comment regarding whether other market participants should be included 
in proposed Sec.  15.00(w) and 15.00(x) to account for market 
participants that may carry or originate omnibus accounts on SEFs.
    16. The Commission requests public comment as to whether Form 102S 
should require the reporting of trading accounts that comprise a 
consolidated account in the same manner that proposed 102A requires the 
reporting of trading accounts that comprise a special account. If not, 
why not? The Commission also requests public comment regarding: (1) 
Whether the three factors used to determine whether a trading account 
comprises a special account are equally applicable to consolidated 
accounts; (2) whether ``trading account(s) that comprise a consolidated 
account'' should be a defined term in the Commission's regulations; and 
(3) the appropriate definition of ``trading account(s) that comprise a 
consolidated account.'' See section IV(A)(ii), above.
    17. The Commission requests public comment as to whether New Forms 
102 (including, in particular, Form 102S), 71, or 40 should be provided 
to swap data repositories (``SDR'') registered pursuant to part 49 of 
the Commission's regulations to assist such SDRs in fulfilling any 
swaps data aggregation responsibilities assigned by the Commission. If 
not, then the Commission requests specific public comment regarding any 
reasons why the forms should not be provided to SDRs.
    a. If new Forms 102, 71, or 40 are provided to SDRs, should they be 
provided directly by reporting entities or by the Commission? The 
Commission specifically requests public comment regarding any reasons 
why the forms should not be provided to SDRs directly by reporting 
entities.
    b. The Commission requests public comment regarding any additional 
considerations relevant to the provision of New Forms 102, 71, or 40 to 
SDRs directly by reporting entities, including:
    i. the time, manner and format of submission to SDRs, including any 
necessary divergence from the time, manner, and format proposed herein 
for submission of the forms to the Commission;
    ii. additional data points that should be contained in the forms to 
heighten their utility in any data aggregation performed by SDRs; and
    iii. appropriate limitations on SDRs' use of any information 
received in Forms 102, 71, or 40, other than for data aggregation 
purposes specified by the Commission.

VIII. Related Matters

A. Cost Benefit Considerations

    Section 15(a) \103\ of the CEA requires the Commission to consider 
the costs and benefits of its actions before promulgating a regulation 
under the CEA or issuing an order. Section 15(a) further 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 futures markets; (3) price discovery; (4) sound 
risk management practices; and (5) other public interest 
considerations. To the extent that these proposed regulations reflect 
the statutory requirements of the Dodd-Frank Act, they will not create 
costs and benefits beyond those resulting from Congress's statutory 
mandates in the Dodd-Frank Act. However, to the extent that the 
proposed regulations reflect the Commission's own determinations 
regarding implementation of the Dodd-Frank Act's provisions, such 
Commission determinations may result in other costs and benefits. It is 
these other costs and benefits resulting from the Commission's own 
determinations pursuant to and in accordance with the Dodd-Frank Act 
that the Commission considers with respect to the Section 15(a) 
factors.
---------------------------------------------------------------------------

    \103\ 7 U.S.C. 19(a).
---------------------------------------------------------------------------

    The Commission requests comment on the costs and benefits 
associated with the Notice. As discussed below, the Commission has 
identified certain costs and benefits associated with the Notice and 
requests comment on all aspects of its proposed consideration of costs 
and benefits, including identification and assessment of any costs and 
benefits not discussed herein. In addition, the Commission requests 
that commenters provide data and any other information or statistics 
that the commenters relied on to reach any conclusions on the 
Commission's proposed consideration of costs and benefits.
    The Commission notes that the cost estimates provided herein for 
New Forms 102A, 102B, 102S, 71, and 40 reflect estimates of: (i) The 
costs associated with the reporting and identification of special and 
consolidated accounts for positions reported under parts 17 and 20, 
respectively, of the Commission's regulations; and (ii) the costs 
associated with the reporting and identification of volume threshold 
accounts associated with DCMs and SEFs. Cost estimates for these forms 
are based on extrapolations from current forms and reports received 
from FCMs, IBs, and foreign brokers; reporting entities pursuant to 
part 20; and DCMs pursuant to Sec.  16.02.
    The Commission understands that the costs and benefits of the 
proposed reporting regime for trading accounts, volume threshold 
accounts, omnibus volume threshold accounts, and omnibus reportable 
sub-accounts associated with SEFs may differ, possibly substantially, 
from the reporting regime for such accounts associated with DCMs. The 
Commission therefore requests specific quantitative estimates on the 
costs and benefits of Form 102B and 71 filings for volume threshold 
accounts, omnibus volume threshold accounts, omnibus reportable sub-
accounts, and market participants associated with SEFs.
    More generally, the Commission has requested public comment, in 
section VII above, regarding the applicability of volume threshold 
accounts, omnibus volume threshold accounts, and omnibus reportable 
sub-accounts to SEFs. The Commission has also requested comment on the 
appropriate design of a reportable trading volume level for volume 
threshold accounts associated with SEFs, and on the appropriate 
reporting entities for volume threshold accounts associated with SEFs.
    Finally, the Commission requests comment, including specific 
quantitative estimates, on the costs and benefits of associated with 
the identification of trading accounts associated with consolidated 
accounts.
i. Background
a. Description of the Statutory Authority
    Pursuant to the authority of sections 4a, 4c(b), 4g, 4i, and 4t of 
the CEA, the Commission is proposing these revisions and updates to its 
large trader reporting rules and forms.\104\ These CEA

[[Page 43985]]

provisions, described more fully above,\105\ authorize the Commission 
to require reporting and recordkeeping from a wide range of market 
participants, including registered entities, FCMs, brokers, clearing 
members, swap dealers, and traders, engaging in transactions subject to 
the Commission's jurisdiction. Collectively, these CEA provisions 
warrant the maintenance of an effective and vigorous system of market 
and financial surveillance.
---------------------------------------------------------------------------

    \104\ 7 U.S.C. 1 et seq. In addition, CEA Sec.  8a(5) authorizes 
the Commission to promulgate such regulations that in its judgment 
are reasonably necessary to effectuate any provision of the Act or 
to accomplish any of the purposes of the Act. 7 U.S.C. 12a(5). Also, 
pursuant to CEA Sec.  3(b), the Act seeks to ensure the financial 
integrity of regulated transactions and to prevent price 
manipulation and other disruptions to market integrity. 7 U.S.C. 
5(b).
    \105\ See supra section II.
---------------------------------------------------------------------------

b. Prior Rules; Existing Forms 102 and 40
    The existing rules and forms, described more fully above,\106\ 
require FCMs, clearing members, and foreign brokers to identify special 
account traders to the Commission on a Form 102. On special call of the 
Commission, a Form 40 is then sent to each trader identified on a Form 
102 submission, requiring the trader to provide the Commission with 
detailed contact information and to answer other questions designed to 
inquire into the nature of the trader's market activity. In both 
instances, the Form 102 and Form 40 are generally submitted on paper, 
via email, or via facsimile (i.e., via some manual submission process). 
The questions and data points on both existing forms only relate to the 
Commission's existing position-based reporting rules.
---------------------------------------------------------------------------

    \106\ See supra section IV.
---------------------------------------------------------------------------

c. The Proposed Rules
    As described in the preamble above, the Commission is proposing 
amendments to the existing reporting rules and forms as they pertain to 
reportable positions in Commission regulated contracts. In addition, 
the Commission is proposing to expand the reporting rules and forms so 
that they may also be used to identify traders and trading accounts 
exceeding a volume-based reporting threshold, regardless of the 
resulting positions (i.e., ``volume threshold accounts''). Finally, the 
proposed amendments would provide for the electronic submission of New 
Forms 102, 40, and 71.
ii. Costs and Benefits of the Proposed Rules
    The Commission's consideration of costs and benefits begins with 
certain general considerations applicable to all forms, followed by 
specific discussions of the costs and benefits of: (1) New Form 102A, 
(2) New Form 102B, (3) 102S filings, (4) New Form 71, (5) New Form 40, 
and (6) 40S filings.
    As a general matter, the Commission considers the incremental costs 
and benefits of the proposed regulations and forms, those costs that 
are above the baseline that is the Commission's existing regulations. 
As described in detail above, the proposed rule and form amendments 
would broaden the utility of existing forms.\107\ The proposed 
amendments would also enhance the Commission's surveillance and large 
trader reporting programs for futures, options on futures, and swaps by 
clarifying which accounts are required to be reported on Form 102A; 
requiring the reporting on Form 102A of the trading accounts that 
comprise each special account; requiring the reporting of certain 
omnibus account information on Form 71 in connection with omnibus 
volume threshold accounts reported on Form 102B, together with the 
reporting of certain reportable sub-accounts within such omnibus volume 
threshold accounts; updating Form 40; and integrating the submission of 
102S and 40S filings into the general Form 102 and Form 40 reporting 
program.
---------------------------------------------------------------------------

    \107\ New Form 102 is partitioned into: section 102A for the 
identification of position-based special accounts; section 102B for 
the collection of ownership and control information on individual 
trading accounts exceeding a volume-based reporting threshold; and 
section 102S for the submission of 102S filings for swap 
counterparty consolidated accounts with reportable positions.
---------------------------------------------------------------------------

    The Commission proposes that the costs the Notice would impose on 
market participants will vary depending on various factors, including 
the size and/or experience of the market participant; the scope 
(whether measured by position or volume) of the market participant's 
trading activity; and the number of distinct customer or proprietary 
special accounts, volume threshold accounts, and other account types 
required to be reported by each market participant. Given the range of 
factors relative to the potential costs of the proposed rules, 
reporting parties may face costs associated with one, more than one, 
or, in some instances, all of the revised rules and forms. For purposes 
of the Paperwork Reduction Act, the Commission has estimated the number 
of hours the average market participant would spend in connection with 
the information collection required by the Notice.\108\ Based on those 
burden hour estimates, and as further explained in the Paperwork 
Reduction Act discussion below, the Commission estimates that affected 
participants would incur the following approximate costs in (i) 
completing Forms 102A and 102S and any resulting Form 40s, (ii) 
completing Forms 102B and 71 for volume threshold accounts associated 
with DCMs and SEFs and any resulting Form 40s, and (iii) complying with 
the books and records obligations arising from proposed Sec.  18.05:
---------------------------------------------------------------------------

    \108\ See infra the detailed discussion of costs and burdens in 
section VIII(C), which has been prepared for the purpose of the 
Commission's responsibilities under the Paperwork Reduction Act.FNP>
[GRAPHIC] [TIFF OMITTED] TP26JY12.000

[[Page 43986]]

    The Commission's CEA Sec.  15(a) assessment of costs and benefits 
includes consideration of these estimated Paperwork Reduction Act 
information collection costs, as well as the range of factors that may 
increase or decrease these estimates.
---------------------------------------------------------------------------

    \109\ The estimated total cost includes annual reporting and 
recordkeeping costs, as well as annualized start-up costs and 
ongoing operating and maintenance costs. The estimated total costs 
for each form included in this chart are subject to the limitations 
described earlier in this section. The estimated total cost for each 
of New Form 102B, New Form 71 and New Form 40 in this chart 
represents the estimated total cost of completing Forms 102B and 71 
for volume threshold accounts associated with DCMs and SEFs and any 
resulting Form 40s.
---------------------------------------------------------------------------

    In anticipation of a wide range of technological capabilities among 
reporting entities (again, varying based on the relative size and 
experience of a given reporting entity), the Commission is proposing an 
implementation program that would permit multiple submission methods 
for each form. By allowing reporting entities to select the submission 
method most suited to their existing capabilities and business model, 
reporting entities will be able to mitigate their own reporting costs.
    While the Commission expects that an entity with a relatively 
larger number of reporting obligations (whether for the reportable 
accounts of its customers, or its own reportable accounts), would incur 
larger total costs in complying with the proposed reporting rules and 
submitting the related forms than a smaller firm, the Commission 
anticipates that these larger absolute costs will be mitigated by lower 
unit costs, and the marginal expense of reporting each additional 
reportable account would likely diminish once the entity established 
its data collection and reporting infrastructure. For high-volume 
reporting entities, the Commission is proposing an implementation 
program, to be conducted in conjunction with input from commenters, 
which will permit electronic submission of the forms to the Commission 
via a defined data submission standard. This transition from manual to 
automated form submission should reduce costs for high-volume reporters 
on a per-account basis.
    In addition to evaluating these proposed rules based on the 
Commission's experience and expertise in the derivatives markets, this 
Notice took into account comment letters by industry participants 
received in response to the OCR NPRM.\110\ In one such letter, the FIA 
offered a modified approach to the OCR reporting scheme proposed in the 
OCR NPRM, and offered cost estimates and projections for both the 
proposal contained in the OCR NPRM and the FIA alternative. FIA 
specifically expressed concerns about the implementation costs of the 
Commission's proposal in the OCR NPRM, stating that it would require 
firms to, among other things, re-negotiate all active customer 
agreements to require customers to provide and routinely update the 
necessary data points, build systems to enter the data, manually enter 
the data for each active account, put in place resources and processes 
to maintain the data, provide it to the reporting entity on a weekly 
basis, and monitor changes daily in order to update the database. In 
FIA's quantification of costs, gathered from interviews with member 
institutions, FIA provided the following estimates in relation to the 
proposal in the OCR NPRM:
---------------------------------------------------------------------------

    \110\ See supra section III(C)(ii)-(iii).

    Our sample of 12 firms represents approximately 16 percent of 
the approximately 70 FCMs that execute and clear customer accounts. 
These firms handle in excess of $83.8 billion of customer funds, or 
approximately 62 percent of customers' segregated funds (as of July 
31, 2010, according to monthly financial reports filed with the 
Commission). We found that the median firm would face total costs of 
roughly $18.8 million per firm, including implementation costs of 
roughly $13.4 million, and ongoing costs of $2.6 million annually. 
---------------------------------------------------------------------------
On a per account basis, the median cost would be $623 per account.

    In comparison, FIA estimated that its alternative would result in 
significant first year cost savings, with additional, incremental 
savings following initial implementation. Accordingly, and in order to 
realize potential cost savings identified by FIA, the Commission has 
incorporated elements of the FIA's alternative approach into this 
proposal. For example, this proposal incorporates FIA suggestions 
regarding setting a threshold for determining when a volume threshold 
account is reportable and integrating OCR reporting into the existing 
Form 102 process. As noted in the FIA letter, and as substantiated by a 
sample of their members, by incorporating these elements into this 
proposal, the Commission anticipates that the relative cost impact of 
these proposed rules should be significantly mitigated as compared to 
the relative cost impact of the proposal in the OCR NPRM.
    As stated above, the Commission anticipates potential additional 
cost savings (as compared to both the existing reporting program, as 
well as the OCR NRPM) will come through the proposed automated 
submission of Forms 102, 40, and 71; \111\ and, to the extent 
practicable, the auto-population of previously gathered information. As 
noted in the FIA comment letter, ``The end result of developing the 
alternative system could ultimately save the firms (and the Commission) 
significant time and money by automating the current manual process for 
filing out and submitting Form 102 information. * * * Once implemented, 
the average cost savings associated with automating the Form 102 was 
estimated to be $33,300 per firm on an annual basis.'' That is, 
electronic submission will allow for increased efficiency for both 
reporting firms and for the Commission. In addition, the proposed 
requirement that New Form 102 submissions be updated/refreshed on a 
regular basis (as proposed, on a semi-annual schedule) would use the 
previous submission as a template, meaning that for the majority of 
accounts there should be little or no change to prior reported 
information, reducing both the update burden on firms and the risk of 
potential errors in the reporting process.
---------------------------------------------------------------------------

    \111\ The Commission acknowledges that Form 71 is a completely 
new form, and so it is not meaningful to contrast the costs of this 
new Form 71 with the ``existing reporting program.'' However, Form 
71 would, in effect, replace a portion of the Commission's manual 
special call process. In that manner, providing for the automated 
submission of Form 71 does provide a much more efficient information 
gathering process for both the Commission and market participants, 
as compared the current efforts required to request and receive 
analogous information.
---------------------------------------------------------------------------

    The Commission proposes that infrastructure requirements for the 
revised Forms 40 and 102 and the additional Form 71 could be 
significant,\112\ but may be reduced in relationship to the ability of 
many firms to leverage existing systems to meet the requirements 
proposed herein. For example, reporting parties for New Form 102, which 
includes new sections 102A, 102B, and 102S, can be FCMs, foreign 
brokers, clearing members, and swap dealers. Many of these entities 
will already have standard data maintenance systems (based on either 
their own internal recordkeeping process or current reporting 
obligations other than those proposed herein), and these current 
systems could be leveraged for reporting purposes. However, because 
some entities may not have current systems, or only a portion of the 
necessary infrastructure, the Commission is proposing a phase-in period 
for compliance with these proposed rules. This period is designed to 
give entities a window of time for

[[Page 43987]]

systems development and to mitigate the cost burdens otherwise 
associated with a short-run implementation and compliance schedule.
---------------------------------------------------------------------------

    \112\ See infra section VIII(C) for a detailed review of burden 
and cost estimates been prepared for the purpose of the Commission's 
responsibilities under the Paperwork Reduction Act.
---------------------------------------------------------------------------

a. New Form 102A
(1) Costs
    New Form 102A is directly analogous to the existing Form 102 
currently in use, identifying owners and controllers of special 
accounts with reportable positions (the other sections of the New Form 
102 extend the Form to new categories of reportable traders). The 
requirement to submit a 102A remains the same as that for the current 
Form 102: a special account can be a position at a reporting entity 
that is under common control, common ownership, or some combination of 
common control and common ownership. Because reportable special 
accounts would not be materially different under the proposed forms and 
regulations from special accounts as they now exist, the Commission 
believes the incremental cost of reporting due to account status should 
be minimal. However, by re-emphasizing that entities must separately 
identify special accounts under common ownership and those under common 
control, the Commission may observe an increase in the number of 
special accounts to be identified at any given reporting entity.
    Although the definition of a special account will not change, the 
level of requested information per account will increase. Proposed Form 
102A requests (as applicable) information not currently collected, such 
as owner and controller NFA ID, LEI, trading account numbers for 
trading accounts comprising the special account, and DMA status. The 
commission expects that (as noted by comment letters on the OCR NPRM) 
the majority of these data points already reside with reporting 
entities. Depending on the availability of this information, costs may 
be higher or lower than the estimated average burden of 102A 
submission.\113\
---------------------------------------------------------------------------

    \113\ See infra section VIII(C), which provides burden and costs 
estimates in the context of a range of underlying factors.
---------------------------------------------------------------------------

    As noted above, the Commission anticipates that reporting for New 
Form 102, including Form 102A, will be made primarily through XML data 
submissions. Form 102A reporting will be triggered once an account 
becomes a special account (an account ``event'') and updates will be 
required on at least a semi-annual basis. Standards for the data 
submission will be flexible, developed in conjunction with market 
participants' and potential reporting entities' input, and will take 
into consideration the diversity of reporting entities' systems. Should 
this Notice lead to a final rule, the Commission will endeavor to 
provide flexibility in the required information technology systems and 
to avoid undue burdens for reporting entities, including those with 
relatively large or relatively small numbers of special accounts.\114\ 
The Commission specifically requests comment on the expected costs 
related to upgrading or obtaining systems to implement and comply with 
the reporting requirement under the 102A aspect of the proposal in this 
Notice.
---------------------------------------------------------------------------

    \114\ See infra section VIII(C), which provides burden and costs 
estimates related to two distinct submission methods.
---------------------------------------------------------------------------

(2) Benefits
    As with costs associated with Form 102A, the reporting benefit is 
mainly coincident with the benefits of the current reporting regime. 
However, additions to the form have been made to strengthen the 
robustness of the Commission's regulatory surveillance capabilities. By 
collecting information like the trading account numbers comprising a 
special account, the Commission will be able to compare intra-day 
account activity with position data held over longer periods of time. 
This will enable further market transparency and enhanced market review 
over both macro and micro scales. Micro-structure analysis, the 
economic analysis of account activity on a highly disaggregated level 
(such as via individual transactions), was shown to be uniquely helpful 
in event studies such as the Flash Crash of 2010.\115\
---------------------------------------------------------------------------

    \115\ See ``Findings Regarding the Market Events of May 6, 
2010,'' available at: http://www.sec.gov/news/studies/2010/marketevents-report.pdf.
---------------------------------------------------------------------------

    System robustness is also strengthened with the regular update 
schedule required for all special accounts. Updates provide additional 
data verification, improving the accuracy of account information on a 
standard, and sufficiently frequent, schedule. As discussed, automated 
submission should mean that regular updates come at relatively minimal 
cost to those reporting.
b. New Form 102B
(1) Costs
    As noted above, the Commission has attempted to mitigate the cost 
to the ultimate reporting entities that provide OCR data for trading 
accounts (as compared to the proposal in the OCR NPRM), while retaining 
similar reporting benefits. One significant revision relevant to Form 
102B is the introduction of a minimum reporting threshold of 50 
contracts in a given product, for any given trading day on any given 
reporting market that is a DCM or a SEF, as the trigger for required 
reporting (as compared to no minimum threshold in the OCR NPRM). The 
Commission believes that this approach would provide sufficient data 
coverage and benefits, but at a noticeably reduced cost (again, as 
compared the proposal in the OCR NPRM). In this regard, the FIA comment 
letter in response to the OCR NPRM noted that:

    Most FCMs found that adopting a volume threshold of 250 
contracts per week would decrease significantly the costs of 
implementing the alternative, by reducing the amount of data 
required to be processed and the associated cost of transmitting 
large amounts of data to the exchanges and the Commission. The 
average estimated cost of populating the OCR database using a volume 
threshold of 250 contracts per week is $1,783,750. In contrast, the 
estimated total cost for initially populating the OCR file based on 
a volume threshold that includes all accounts (referred to in our 
survey as option 1) is $2,134,375.

    Even with this revision, proposed Form 102B does cover a market 
category not covered under the existing reporting program and so should 
be considered as an additional cost on any baseline. As with Form 102A, 
since reporting entities will likely have existing data feed 
capabilities, a subset of reporting firms will likely not require 
significant infrastructure development. In particular, the Commission 
notes that Form 102B reporting firms are limited to clearing member 
firms, typically among the more technologically-sophisticated 
participants in the derivatives industry. As with Form 102A, low-volume 
reporters may choose to submit forms semi-manually through a web-based 
portal, which will reduce start-up costs but increase costs of 
individual submissions. Also, as discussed below, the incremental 
number of additional accounts due to volume reporting may be large. 
This may translate to significant costs for those who choose a manual 
submission method. The Commission specifically requests comment on the 
expected costs related to upgrading or obtaining systems to implement 
and comply with the reporting requirement under the 102B aspect of the 
proposal in this Notice.
(2) Benefits
    The addition of volume threshold accounts to the reporting 
structure will provide much needed information about a rapidly growing 
market segment, that of high volume but low end-of-day position 
traders. Many of these participants enter and exit a given

[[Page 43988]]

market position intraday, and so are not identified under the current 
position-reporting regime. The current reporting regime, though it 
captures over 90 percent of open interest in many markets, is not 
specifically designed to capture high-volume traders. The Commission 
anticipates that, with the introduction of volume threshold account 
reporting, New Form 102B would help provide trader identification for 
over 90 percent of market activity in many significant products, 
mirroring the current levels of position identification in the futures 
market.
    In addition to increasing the set of reporting entities on an 
absolute level, 102B reporting is likely to increase the types of 
market participants identified to the Commission. For example, it is 
expected that volume threshold accounts would identify trade ownership 
and control for market participants such as high-frequency traders 
(HFTs) and other algorithmic systems; in highly-liquid markets, 
participants of this type can make up a meaningful percentage of market 
activity. However, due to the current structure of the reporting 
system, many participants in these categories do not qualify as 
reportable special accounts. The 102B would expand the Commission's 
reporting program to include participant groups of this nature, and 
would also expand the reporting program to include trading accounts 
associated with SEFs.
c. New Form 71
(1) Costs
    Because the concept behind Form 71 is being introduced for the 
first time in this Notice, all costs associated with Form 71 reporting 
are incremental. The form identifies the ownership and control 
structure of omnibus accounts, from the level of originator to that of 
sub-account owners and controllers, for volume threshold accounts that 
are omnibus accounts. The Commission plans to provide a web-based 
portal for submission and, potentially, an XML submission standard like 
New Form 102.
    Because the structure of omnibus accounts is currently not known by 
the Commission, it cannot accurately quantify how many additional 
reports will be necessary due to the introduction of Form 71. However, 
the Commission has attempted to mitigate the cost of reporting, 
especially for larger institutions that may have a greater number of 
relevant accounts. Many of the data fields in Form 71 will be auto-
populated with data provided to the Commission on an associated Form 
102B or Form 71. This auto-population will be included in the web-based 
system for the benefit of the reporting party, and is intended to help 
mitigate, as much as possible, the submission burden. The Commission 
specifically requests comment on the expected costs related to 
upgrading or obtaining systems to implement and comply with the 
reporting requirement under the Form 71 aspect of the proposal in this 
Notice.
(2) Benefits
    Form 71 provides further granularity regarding the ownership 
hierarchy of omnibus accounts that are volume threshold accounts. Broad 
collection of omnibus account information can be used to aggregate and 
analyze all trading by an individual or trading entity, whether through 
a single account or through a number of accounts held with one or more 
intermediaries. In the absence of Form 71 information in connection 
with omnibus volume threshold accounts, the Commission would lose 
meaningful ownership and control information (and, therefore, 
usefulness of the 102B reports), including the structure of and 
dependence on intermediaries within a given market.
d. 102S filings
(1) Costs
    The increased relative cost of the 102S filings required in this 
proposal, as compared to existing 102S filing requirements, should be 
minimal. This proposal does not amend or change the subset of traders 
for which swap dealers and clearing members will be required to submit 
102S filings. However, by updating existing Form 102 to include 102S 
filings and by creating a new submission framework for New Form 102, 
entities submitting 102S filings may encounter costs similar to those 
encountered by entities filing New Form 102 for other purposes (whether 
under 102A or 102B). The Commission anticipates that many 102S filing 
entities will also be submitting New Form 102 in connection with their 
futures trading business. In addition, the Commission is proposing to 
work with potential filing entities during the comment period in order 
to achieve a 102S filing submission process that leverages as much as 
possible off of the existing infrastructure and practice at reporting 
entities, including the resources that will be used for analogous 
futures filings. The Commission specifically requests comment on the 
expected costs related to upgrading or obtaining systems to implement 
and comply with the reporting requirement under the 102S aspect of the 
proposal in this Notice.
(2) Benefits
    Form 102S, like 102B, is designed to expand the set of reporting 
entities beyond those of the current Form 102. The identification of 
accounts via 102S will provide trader information for participants in 
swaps. For the purposes of tracking aggregated position exposure in a 
product or commodity, or market activity of a specific trader, swap 
reporting significantly extends the Commission's market surveillance 
capabilities. The inclusion of swap activity aligns with the recently 
finalized rules on real-time public and regulatory reporting of swap 
trades, and provides further transparency in what are currently often 
opaque and/or over-the-counter markets. As further changes arise in the 
commodity swap market, such as the introduction of SEFs, special 
account identification will allow universal market monitoring of 
activity across traditional futures exchanges and SEFs. This can 
provide quantifications of the balance of activity in a given product 
across different execution platforms and changes in this balance over 
time. In addition, disruptive market activity transferred across 
multiple trading facilities could now be more easily, and more quickly, 
identified with the information requested in 102S filings.
e. New Form 40
(1) Costs
    The proposed changes to Form 40 extend the level of information 
collected about account ownership and the business practices of 
reporting traders. Given the new subsections of New Form 102 (i.e., 
102A, 102B, and 102S, as well as Form 71), the number of traders 
required to submit a Form 40 is likely to increase. As with existing 
Form 40, New Form 40 will be required from a wide range of market 
participants (from individual traders up to large financial 
institutions). Because of this wide range of form respondents, New Form 
40, like Form 71, will be offered in a web-based format, and will be 
auto-populated with the related account information provided on the 
associated New Form 102 or Form 71, as applicable. Because of the more 
detailed questions in New Form 40, as compared to existing Form 40, the 
initial reporting burden per form is likely to increase beyond the 
estimate for the current form.\116\ However, necessary updates may 
occasion a

[[Page 43989]]

reduced incremental burden, given the introduction of an electronic 
submission format through a portal that stores prior form submissions. 
The Commission specifically requests comment on the expected costs 
related to implementing and complying with the reporting requirement 
under the New Form 40 aspect of the proposal in this Notice.
---------------------------------------------------------------------------

    \116\ See infra section VIII(C).
---------------------------------------------------------------------------

(2) Benefits
    Through the expansion of Form 40, the Commission will have more 
detailed data on reporting traders, including information regarding 
reporting trader's control relationships with other entities and other 
relationships with persons that influence or exercise authority over 
the trading of a reporting trader. This data set will include an 
expansion of the list of business purposes for futures and swaps 
activity and requests for detailed information about the business 
sector and physical commodity market participation of a given trader. 
Responses to these questions can provide a broader view concerning 
relationships and relative interest in related markets by business 
sector, and overlaps in activity across different product groups. It 
can also provide the Commission a check, or confirmation, to assess 
whether market activity matches the self-reported trading goals of a 
reporting trader.
f. 40S filings
(1) Costs
    The increased relative cost of the 40S filings in this proposal, as 
compared to existing 40S filing requirements, should be minimal. This 
proposal does not amend or change the subset of traders who will be 
required to submit 40S filings, and the existing 40S filings must be 
completed using existing Form 40. By updating existing Form 40 
questions and providing for web-based form submission, the Commission 
does not anticipate any significant increase or change in costs related 
to the 40S filing provisions of this Notice. The Commission 
specifically requests comment on the expected costs related to 
implementing and complying with the reporting requirement under the 40S 
filing aspect of the proposal in this Notice.
(2) Benefits
    Similar to the New Form 40 benefits discussion above, 40S filings 
under this proposal would provide the Commission with a broader view 
(as compared to existing Form 40 and 40S filings) concerning relative 
interest in related markets by business sector, and overlaps in 
activity across different product groups. It can also provide the 
agency a means to check that observed market activity matches the self-
reported trading goals of the entity.
iii. Section 15(a) Factors
a. Protection of Market Participants and the Public
    Although potentially costly, the Commission proposes that the data 
collection under these rules and forms are necessary to assist the 
Commission in protecting market participants and the public by, inter 
alia: identifying as many accounts as feasible that are under common 
ownership or control; identifying trading accounts whose owners or 
controllers are also included in the Commission's large trader 
reporting program or that demonstrate independently significant trading 
activity; and identifying the entities or persons which the Commission 
should contact if additional information is required, including the 
owner and controller, and related contact persons, for reported 
accounts and traders.
    The Commission proposes that revised Form 102 will protect market 
participants and the public by expanding data collection in three major 
areas: (1) By providing additional information regarding special 
accounts reported on 102A, including the trading accounts that comprise 
a special account; (2) by increasing the number of identified futures, 
options, and swaps accounts through the new volume threshold trigger in 
102B; and (3) by identifying ownership and control information for a 
new market sector, that of swaps.
    The proposed rule will protect market participants and the public 
by permitting the Commission to integrate transactions (and associated 
trading accounts) identified on daily trade capture reports with 
special accounts holding reportable positions; identifying traders of 
all sizes whose open interest does not reach reportable levels, but 
whose intra-day trading reaches significant levels and may adversely 
affect markets during concentrated periods of intra-day trading; 
reducing the time-consuming process of requesting and awaiting 
information from outside the Commission to identify the entity 
associated with a given trading account number on a trade capture 
report and aggregating all identified entities that relate to a common 
owner; linking traders' intra-day transactions with their end-of-day 
special account positions; calculating how different categories of 
traders contribute to market-wide open interest; and categorizing 
market participants based on their actual trading behavior on a 
contract-by-contract basis, supplementing the self-reported 
classifications on Form 40.
    The proposed forms will be submitted in either an XML-based data 
feed or via a web-based submission. This modifies the process of form 
submission from the current manual systems at both the Commission and 
reporting entities. As compared to manual entry, automated systems 
should decrease the possibility of transcription error or errors in 
cross identification and reduce labor costs, aiding the accuracy and 
efficiency of agency market monitoring and enforcement.
    Additional identifiers, such as those requested in New Form 102, 
will also allow for data integrity checks within and between the 
Commission's databases. For example, requests for NFA and LEI numbers 
provide independently assigned identifiers for ownership hierarchy 
verification. Also, New Form 40 information will be a direct check on 
much of the ownership and control information provided on New Form 102. 
In sum, the proposed rules would greatly increase the ability of the 
Commission to carry out its regulatory function and its protection of 
the public in an efficient manner. By leveraging available technology, 
these revisions should ultimately mitigate the long term cost to market 
participants of providing the requested information.
b. Efficiency, Competitiveness, and Financial Integrity of the Markets
    Collecting ownership and control information for the identified 
market participants allows the Commission to aggregate positions for a 
specific underlying trader across multiple products and markets and to 
identify aggregate activity levels. This identification provides 
additional market transparency for regulators and a clearer 
quantification of risk within and across firms, aiding the surveillance 
and monitoring functions of the Commission. Thus, while done at a cost, 
as described above, it aids in monitoring, over longer periods of time, 
risk exposure by institution, market class, or asset class. The 
proposed forms also allow for easy identification of the individual, or 
individuals, to be contacted if additional transaction information is 
needed for further review. As noted in a comment letter from the 
Petroleum Marketers Association of America (PMAA) on the OCR NRPM, 
``Efficient integration of large trader and trade register data from 
DCMs, ECMS, and [other markets] will improve market transparency and 
ensure that no one trader, investment fund or other entity controls a 
large

[[Page 43990]]

percentage of the interest on commodity futures exchanges. Increased 
reporting requirements will help to identify those who possibly attempt 
to corner the market by taking huge positions in the futures markets 
which can move futures prices beyond what supply and demand 
fundamentals dictate.'' Similarly, the Air Transport Association (ATA) 
included a list of market and regulatory benefits of the ownership and 
control report, including allowing staff to aggregate trading accounts 
under common ownership or control, allowing large trader reports and 
exchange trade registers to be linked, allowing expanded oversight of 
trading by widely dispersed individuals and accounts, helping staff 
link traders' intra-day transactions with end-of-day positions, 
assisting investigations into intra-day manipulation and other trade 
practice abuses, and, bridging gaps in current data reporting systems.
    Under the proposed rules, strengthened ties between end-of-day 
position and trade execution account registers received by the 
Commission can allow for a more accurate and timely accounting of 
market position by account. In addition, the increased depth of trader 
information allows for more robust research and analytics, encompassing 
a much greater segment of market volume traded on exchange platforms. 
The additional information could also aid in anticipating and/or 
monitoring market disruptions that can come at high costs to the 
investing and general public.
c. Price Discovery
    The Commission does not anticipate that the proposed rules will 
have an impact on price discovery in markets regulated by the 
Commission.
d. Sound Risk Management Procedures
    The expansion of both requested information and reportable accounts 
in the proposed forms requires firms to collect more information on 
each threshold account for appropriate risk monitoring. While the 
technology and personnel required for this collection will come at some 
cost to both market participants and the Commission, as described 
above, this collection of information is of benefit not just for 
regulatory oversight but for effective internal risk management at the 
level of the firm. Identification of account control and related 
contact information can provide timely responses to market disruptive 
events from multiple parties. It can also allow for prophylactic 
classification of market categories which could provide unique risks to 
market systems.
    One specific area for which enhanced monitoring may be of benefit 
is that of direct market access (DMA). Briefly, DMA allows a trading 
entity to submit orders directly to an exchange matching engine. It is 
anticipated that this decreased distance between trade entry and 
ultimate execution on the exchange may carry additional transaction 
risk. A recent IOSCO report \117\ notes that direct market access could 
implicitly contain any of the following market risks: (1) A user may 
access markets outside of the infrastructure and/or control of market 
intermediaries, (2) there may be an incentive for intermediaries/
customers to gain execution advantages based on the type and geographic 
location of their connectivity arrangements, and (3) algorithmic 
trading through automated systems may imply issues of capacity and the 
potential need for rationing bandwidth. Similarly, a CSA Report 
outlined the risks associated with dealers/exchanges providing DMA to 
clients/customers, including risks to market integrity and to related 
technological systems.\118\ The Commission feels it is useful, from 
both a market monitoring and analysis standpoint, to identify those 
accounts which have been provided with this enhanced trading 
capability. Highlighting potential concerns with market integrity, both 
at the firm and at the exchange level, will be aided by knowledge of 
non-intermediated access.
---------------------------------------------------------------------------

    \117\ See http://www.iosco.org/library/pubdocs/pdf/IOSCOPD332.pdf.
    \118\ See http://www.osc.gov.on.ca/documents/en/Securities-Category2/ni_20110408_23-103_pro-electronic-trading.pdf.
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e. Other Public Interest Considerations
    Form 40 now contains the relevant North American Industry 
Classification System (NAICS) categories to aid in business sector 
identification. The form includes two other selection lists: (1) 
Commodity groups and individual commodities (a classification defined 
by the CFTC) and (2) trading purposes that further detail the business 
practices of a reporting firm. These identifications can aid in 
analytical studies (developing categories of trading activity beyond 
those currently used by the agency), in cross-validation of trading 
intent, and in analysis of risk exposure across business sectors.
    In addition, and as discussed throughout this document, the move to 
electronic submission of the forms addressed by these proposed rules 
will increase efficiencies for both market participants and the 
Commission. Specifically, data will be more reliable, will be received 
and reviewed faster, and will be capable of being updated faster than 
in the current paper based submission process. By embracing available 
technology to carry out its surveillance and market monitoring 
functions in this manner, market participants and the public will 
benefit from a more efficient and effective Commission.
    The Commission specifically requests comment on its cost and 
benefit considerations of the proposed rules, as discussed above, and 
the proposed rule's impact (or the relative impact of any alternative 
rules) on: (1) The protection of market participants and the public; 
(2) the efficiency, competitiveness, and financial integrity of the 
futures markets; (3) the market's price discovery functions; (4) sound 
risk management practices; and (5) other public interest 
considerations.

B. Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (``RFA'') requires that agencies 
consider whether the rules they propose will have a significant 
economic impact on a substantial number of small entities and, if so, 
provide a regulatory flexibility analysis regarding the impact.\119\ A 
regulatory flexibility analysis or certification is typically required 
for ``any rule for which the agency publishes a general notice of 
proposed rulemaking'' pursuant to the notice-and-comment provisions of 
the Administrative Procedure Act, 5 U.S.C. 553(b).\120\
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    \119\ 5 U.S.C. 601 et seq.
    \120\ 5 U.S.C. 601(2), 603, 604 and 605.
---------------------------------------------------------------------------

    The rules proposed in this Notice would require FCMs, clearing 
members, foreign brokers, swap dealers and other reporting traders 
(including natural persons) to complete New Forms 102 or 71, and to 
submit them to the Commission as specified in the proposes rules or 
upon special call by the Commission. The Commission has previously 
determined that FCMs, clearing members, foreign brokers, swap dealers, 
and natural persons are not small entities for purposes of the 
RFA.\121\ Accordingly, the rules proposed in this Notice with respect 
to Forms 102 and 71 would not have a significant economic impact on a 
substantial number of small entities.
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    \121\ See respectively and as indicated: 47 FR 18618 (April 30, 
1982) (FCMs and large traders); 72 FR 34417 at 34418 (June 22, 2007) 
(foreign brokers); 76 FR 71626 at 71680 (November 18, 2011) (swap 
dealers); and 76 FR 71626 at 71680 (November 18, 2011) and 76 FR 
43851 at 43860 (July 22, 2011) (clearing members). See also 5 U.S.C. 
601(6) (natural persons are not entities for purposes of the RFA).
---------------------------------------------------------------------------

    The proposed rules would also require certain reporting traders to 
complete and submit New Form 40

[[Page 43991]]

upon special call by the Commission. Some of these reporting traders 
may be ``small entities'' under the RFA. In 2010, the Commission 
required approximately 3,320 reporting traders to complete a Form 40, 
from a total population of approximately 10,000 reporting traders. Of 
these 3,320 Form 40s, approximately 2,500 were completed by 
institutions, a portion of which could potentially be small entities 
under the RFA. For example, the Commission has received comments on its 
Dodd-Frank Act rulemakings indicating that certain entities that may be 
required to comply with the reporting and recordkeeping requirements in 
this Notice have been determined by the Small Business Administration 
to be small entities. In particular, the Commission understands that 
some not-for-profit electric generators, transmitters, and distributors 
that may be required to comply with the proposed rules have been 
determined to be small entities by the SBA, because they are 
``primarily engaged in the generation, transmission, and/or 
distribution of electric energy for sale and [their] total electric 
output for the preceding fiscal year did not exceed 4 million megawatt 
hours.'' \122\
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    \122\ Small Business Administration, Table of Small Business 
Size Standards (Nov. 5, 2010). See also the regulatory flexibility 
analysis regarding such entities in 77 FR 1182 at 1240 (January 9, 
2012), 77 FR 2136 at 2170 (January 13, 2012), and 77 FR 2613 at 2620 
(January 19, 2012).
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    The Commission believes that, due to the limited number of 
institutions likely to receive a New Form 40 request in any given year, 
as well as the limited nature of the New Form 40 reporting burden, the 
rules proposed in this Notice with respect to New Form 40 would not 
have a significant economic impact on a substantial number of small 
entities. New Form 40 would not be required on a routine and ongoing 
basis, but rather would be sent by the Commission on a discretionary 
basis in response to the reporting of an account that reaches a minimum 
position or volume threshold. As summarized above, in 2010 the 
Commission made Form 40 requests to only 25% of all reporting traders 
that could potentially be small entities; furthermore, some of these 
reporting traders were not in fact small entities. As a result, New 
Form 40 would be expected to affect only a small subset of the entities 
that may be small entities under the RFA. In addition, New Form 40 is 
not lengthy or complex, and would require reporting traders to provide 
only limited information to the Commission. The Commission estimates 
that a reporting trader would require only 3 hours to complete a New 
Form 40.
    The rules proposed in this Notice regarding revised Sec.  18.05 
would also impose books and records obligations upon a new category of 
market participants--specifically, certain owners (but not controllers) 
of a volume threshold account or a reportable sub-account. Such owners 
may be small entities under the RFA. The Commission does not believe 
that the obligation to maintain books and records under revised Sec.  
18.05 would impose significant costs on the additional small entities 
subject to the recordkeeping requirements of such section. The 
Commission expects that such account owners may largely rely on the 
books and records that they maintain in the ordinary course of business 
to fulfill the requirements of revised Sec.  18.05. The Commission also 
expects that a portion of the account owners subject to revised Sec.  
18.05 are subject to the position-based recordkeeping requirements of 
current Sec.  18.05,\123\ and would not incur significant costs 
expanding their recordkeeping practices to comply with revised Sec.  
18.05. To the extent that certain small entities are required to modify 
their practices to comply with the volume-based recordkeeping 
requirements of revised Sec.  18.05, the Commission believes that this 
will not impose a significant economic burden, because this requirement 
would: (a) Ensure that (i) owners of volume threshold accounts and 
reportable sub-accounts and (ii) owners of reportable positions are 
subject to equivalent recordkeeping obligations under Sec.  18.05, and 
therefore maintain books and records in a consistent format; and (b) 
promote the Commission's market surveillance and investigatory 
functions to better deter price manipulation and other disruptions of 
market integrity.
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    \123\ 17 CFR 18.05.
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    Accordingly, for the reasons set forth above, the Chairman, on 
behalf of the Commission, hereby certifies pursuant to 5 U.S.C. 605(b) 
that the rules proposed in this Notice would not have a significant 
economic impact on a substantial number of small entities. The 
Commission invites public comment on this determination.

C. Paperwork Reduction Act

i. Overview
    The Paperwork Reduction Act (``PRA'') \124\ imposes certain 
requirements on Federal agencies in connection with their conducting or 
sponsoring any collection of information as defined by the PRA. An 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless it displays a currently 
valid control number. This proposed rulemaking would result in new 
collection of information requirements within the meaning of the PRA. 
The Commission is therefore submitting this proposal to the Office of 
Management and Budget (``OMB'') for review in accordance with 44 U.S.C. 
3507(d) and 5 CFR 1320.11. The title for this collection of information 
is ``Trader and Account Identification Reports'' (OMB control number 
3038-NEW). If adopted, responses to this collection of information 
would be mandatory. The Commission would protect proprietary 
information in accordance with the Freedom of Information Act and 17 
CFR part 145, ``Commission Records and Information.'' In addition, 
Sec.  8(a)(1) of the Act strictly prohibits the Commission, unless 
specifically authorized by the Act, from making public ``data and 
information that would separately disclose the business transactions or 
market positions of any person and trade secrets or names of 
customers.'' \125\ The Commission is also required to protect certain 
information contained in a government system of records according to 
the Privacy Act of 1974, 5 U.S.C. 552a.
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    \124\ 44 U.S.C. 3501 et seq.
    \125\ 7 U.S.C. 12(a)(1).
---------------------------------------------------------------------------

    The proposed rulemaking would create new information collection 
requirements via proposed Sec. Sec.  17.01, 18.04, 18.05, and 20.5. 
Currently, OMB control number 3038-0009 covers, among other things, the 
collection requirements arising from existing Sec. Sec.  17.01, 18.04, 
and 18.05.\126\ Also, OMB control number 3038-0095 covers, among other 
things, the collection requirements arising from existing Sec.  
20.5.\127\ Accordingly, the Commission is requesting a new OMB control 
number for the purpose of consolidating the collections into a common 
control number. Collection requirements arising from proposed 
Sec. Sec.  17.01, 18.04, 18.05, and 20.5 would be covered by 3038-NEW. 
Once the collections covered by control number 3038-NEW become 
operational, OMB control number 3038-0009 would no longer cover 
collection requirements arising from Sec. Sec.  17.01, 18.04, and 
18.05. In addition, OMB control number 3038-0095 would no longer cover 
collection requirements arising from Sec.  20.5. The remaining 
collection requirements covered by

[[Page 43992]]

3038-0009 and 3038-0095 would not be affected.
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    \126\ 17 CFR 17.01, 18.04 and 18.05.
    \127\ 17 CFR 20.5.
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ii. Information To Be Provided
    Proposed Sec.  17.01 would result in the collection of information 
regarding the following types of accounts: (a) Special accounts (as 
defined in existing Sec.  15.00(r)); \128\ and (b) volume threshold 
accounts, omnibus volume threshold accounts, and omnibus reportable 
sub-accounts (each as defined in proposed Sec.  15.00). Specifically, 
proposed Sec.  17.01 would provide for the filing of New Form 102A, New 
Form 102B and New Form 71, as follows:
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    \128\ 17 CFR 15.00(r).
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    1. Pursuant to proposed Sec.  17.01(a), FCMs, clearing members, and 
foreign brokers would identify new special accounts to the Commission 
on New Form 102A; \129\
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    \129\ See supra sections III(A) and IV(A) for a description of 
existing Form 102 and a comparison to New Form 102A.
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    2. Pursuant to proposed Sec.  17.01(b), clearing members would 
identify volume threshold accounts to the Commission on New Form 102B; 
\130\ and
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    \130\ See supra section IV(B) for a description of New Form 
102B.
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    3. Pursuant to proposed Sec.  17.01(c), omnibus volume threshold 
account originators and omnibus reportable sub-account originators 
would identify reportable sub-accounts to the Commission on New Form 71 
when requested via a special call by the Commission or its 
designee.\131\
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    \131\ See supra section IV(D) for a description of New Form 71.
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    Additional reporting requirements would arise from proposed Sec.  
18.04, which would result in the collection of information from and 
regarding traders who own, hold, or control reportable positions; 
volume threshold account controllers; persons who own volume threshold 
accounts; reportable sub-account controllers; and persons who own 
reportable sub-accounts. Specifically, proposed Sec.  18.04 would 
provide for the filing of New Form 40, as follows:
    1. Pursuant to proposed Sec.  18.04(a), a trader who owns, holds, 
or controls a reportable position would file New Form 40, when 
requested via a special call by the Commission or its designee; and
    2. Pursuant to proposed Sec.  18.04(b), a volume threshold account 
controller, person who owns a volume threshold account, reportable sub-
account controller, and person who owns a reportable sub-account would 
file New Form 40 when requested via a special call by the Commission or 
its designee.\132\
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    \132\ See supra sections III(A) and IV(E) for a description of 
existing Form 40 and a comparison to New Form 40.
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    Reporting requirements would also arise from proposed Sec.  
20.5(a), which would require all reporting entities to submit 102S 
filings for swap counterparty or customer consolidated accounts with 
reportable positions.\133\ In addition, existing Sec.  20.5(b) requires 
every person subject to books or records under existing Sec.  20.6 to 
complete a 40S filing after a special call upon such person by the 
Commission.\134\ However, existing Sec.  20.5(b) also provides that a 
40S filing shall consist of the submission of Form 40. As discussed 
above, the proposed rules provide for the creation of New Form 40, 
which would expand and replace existing Form 40. Accordingly, the 
proposed rules would require additional information from 40S filers.
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    \133\ ``Reporting entity,'' ``counterparty,'' and ``consolidated 
account'' are each defined in Sec.  20.1 of the Commission's 
regulations. See supra sections III(B) and IV(C) for a description 
of 102S.
    \134\ 17 CFR 20.5(b) and 20.6. See supra sections III(B) and 
IV(E) for a description of 40S.
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    In addition to the reporting requirements summarized above, 
proposed Sec.  18.05 would impose recordkeeping requirements for: (1) 
Traders who own, hold, or control a reportable futures or option 
position; (2) volume threshold account controllers; (3) persons who own 
volume threshold accounts; (4) reportable sub-account controllers; and 
(5) persons who own reportable sub-accounts. These provisions extend 
the recordkeeping requirements of current Sec.  18.05, which are 
applicable to traders who hold or control reportable positions in 
futures contracts, to owners and controllers of accounts with 
reportable trading volume.\135\
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    \135\ 17 CFR 18.05.
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iii. Reporting and Recordkeeping Burdens
    Set forth below is the estimated total annual industry cost for 
affected participants to (i) complete Forms 102A and 102S and any 
resulting Form 40s, (ii) complete Forms 102B and 71 for volume 
threshold accounts associated with DCMs and SEFs and any resulting Form 
40s, and (iii) comply with the books and records obligations arising 
from proposed Sec.  18.05:
[GRAPHIC] [TIFF OMITTED] TP26JY12.001

    \136\ The estimated total cost includes annual reporting and 
recordkeeping costs, as well as annualized start-up costs and 
ongoing operating and maintenance costs. The estimated total costs 
for each form included in this chart are subject to the limitations 
described in section VIII(A), above. The estimated total cost for 
each of New Form 102B, New Form 71 and New Form 40 in this chart 
represents the estimated total cost of completing Forms 102B and 71 
for volume threshold accounts associated with DCMs and SEFs and any 
resulting Form 40s.

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[[Page 43993]]

    Total reporting and recordkeeping costs for the proposed rules 
reflect the sum of estimated burdens, multiplied by the wage rate 
provided below, for: (1) New Form 102A; (2) New Form 102B; (3) New Form 
71; (4) New Form 40 (pursuant to 18.04(a)); \137\ (5) New Form 40 
(pursuant to 18.04(b)); \138\ (6) the reporting and recordkeeping 
requirements of proposed Sec.  18.05; (7) 102S filings; and (8) 40S 
filings. However, the Commission notes that reporting and recordkeeping 
burdens arising from each regulation and associated form were estimated 
independently of the requirements of the other regulations and 
associated forms, and that substantial synergies are likely to exist 
across the systems and data necessary to meet the reporting 
requirements. As a result, the total reporting and recordkeeping costs 
for the proposed rules are likely to be substantially lower than 
estimated. For example, many reporting firms filing New Form 102A would 
also file New Form 102B, and would be able to leverage systems and 
information necessary for filing one form to meet the requirements of 
the other. Accordingly, total reporting and recordkeeping costs are 
likely to be lower than the sum of the costs associated with each form 
individually, as the Commission has calculated herein.
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    \137\ 17 CFR 18.04(a).
    \138\ 17 CFR 18.04(b).
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    All burden estimates assume that information required by each form 
is generally available within the reporting entity; however, in 
preparing its estimates, the Commission did make an effort to account 
for the added burden associated with assembling data distributed among 
multiple systems and/or databases within a reporting entity.
a. Reporting Burdens
    Proposed Sec.  17.01(a)--New Form 102A: The Commission estimated 
the reporting burden associated with this proposed regulation by 
considering the two distinct filing methods that it will accommodate 
should a final rule be adopted. With two methods of submission, 
reporting entities (i.e., FCMs, clearing members, and foreign brokers) 
would have the flexibility to select the submission method that works 
best with their existing data and technology infrastructure and the 
number of filings they expect to make. In general, the Commission 
believes that Method 1 would be more cost effective for reporting 
entities with a large number of filings, while Method 2 would be more 
cost effective for reporting entities with a small number of filings.
    Method 1: This method assumes that each reporting entity would use 
an automated program to submit its New Form 102As via secure FTP. Each 
Method 1 submission would likely contain numerous 102A records. The 
Commission estimates that the total initial development burden would 
average 264 hours per reporting entity. The Commission also estimates 
that the highly automated nature of this option would virtually 
eliminate the marginal costs associated with each additional submission 
or each additional record contained in a submission. Accordingly, the 
Commission estimates that 102A change and refresh updates would not 
increase a reporting entity's burden when using Method 1. The 
Commission further estimates that ongoing operation and maintenance 
costs would average 53 hours per year no matter how many records are 
contained in a submission. The total Method 1 annualized development 
burden and the ongoing operation and maintenance cost burden (total 
yearly costs) would equal approximately 106 hours per reporting 
entity.\139\
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    \139\ All annualized development burden estimates are based on 5 
year, straight line depreciation. The 106 hour figure is arrived at 
by dividing 264 hours (initial development burden per reporting 
entity) by 5 years, which results in an estimated annualized initial 
development burden of 52.8 hours per reporting entity. 52.8 hours 
plus 53 hours (annualized ongoing operation and maintenance costs 
per reporting entity) equals 106 hours per reporting entity.
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    A recent assessment of Commission data collection efforts 
demonstrated that the Commission receives Form 102 submissions from 
approximately 250 reporting entities annually. The Commission 
anticipates that it would receive New Form 102A submissions from a 
similar number of reporting entities. Assuming all New Form 102A 
reporting entities utilize Method 1, the Commission estimates that the 
total annual industry burden for New Form 102A would equal 26,500 
hours. Using an estimated wage rate of $78.61 per hour,\140\ annual 
costs for 102A filings made pursuant to Method 1 are estimated at 
$2,083,165.\141\
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    \140\ The Commission staff's estimates concerning the wage rates 
are based on salary information for the securities industry compiled 
by the Securities Industry and Financial Markets Association 
(``SIFMA''). The $78.61 per hour is derived from figures from a 
weighted average of salaries and bonuses across different 
professions from the SIFMA Report on Management & Professional 
Earnings in the Securities Industry 2010, modified to account for an 
1800-hour work-year and multiplied by 1.3 to account for overhead 
and other benefits. The wage rate is a weighted national average of 
salary and bonuses for professionals with the following titles (and 
their relative weight): ``programmer (senior)'' (30% weight); 
``programmer'' (30% weight); ``compliance advisor (intermediate)'' 
(20%), ``systems analyst'' (10%), and ``assistant/associate general 
counsel'' (10%).
    \141\ The $2,083,165 figure is arrived at by multiplying 106 
hours by 250 reporting entities (equals 26,500 hours) by $78.61 
(equals $2,083,165).
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    Method 2: This method assumes that each reporting entity would 
complete and submit each New Form 102A online via a secure portal 
provided by the Commission. The Commission estimates that the total 
initial development burden would average 20 hours per New Form 102A 
record. The Commission also estimates that annual ongoing costs, which 
include change and refresh filings, would average 7 hours per year for 
each New Form 102A record. The estimated Method 2 total annualized 
development burden and the ongoing operation and maintenance cost 
burden (total yearly cost) equals approximately 11 hours per New Form 
102A record.\142\
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    \142\ All annualized development burden estimates are based on 5 
year, straight line depreciation.
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    A recent assessment of Commission data collection efforts 
demonstrated that the Commission receives approximately 4,700 Form 102 
records annually. However, by reiterating that Commission regulations 
require reporting firms to separately aggregate positions by common 
ownership and by common control for the purpose of identifying and 
reporting special accounts, the Commission may observe an increase in 
the number of 102A filings. The Commission anticipates that the number 
of annual New Form 102A records may increase by 75% to 8,225.\143\ 
Assuming each of the 8,225 New Form 102A records are provided via 
Method 2, the Commission estimates that the total annual industry 
burden for New Form 102A would equal 90,475 hours. Using an estimated 
wage rate of $78.61 per hour, annual costs for 102A filings made 
pursuant to Method 2 are estimated at $7,112,240.\144\
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    \143\ The Commission believes that about 25% of special accounts 
reported on Form 102 have the same owner and controller. In such 
case, the reporting entity need only submit one New Form 102. 
Accordingly, the annual number of New Form 102A records would 
increase, as compared to current annual Form 102 submissions, only 
to the extent that the owner and the controller of a special account 
are different.
    \144\ The $7,112,240 figure is arrived at by multiplying 11 
hours by 8,225 records (equals 90,475 hours) by $78.61 (equals 
$7,112,240).
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    The Commission understands that providing filing options to the 
industry should lower costs relative to failing to provide such 
options. Because of this, estimated total costs to the industry for 
102A filings should be lower than any cost associated with mandating 
either Method 1 or Method 2. Given the cost estimates for the two 
individual

[[Page 43994]]

methods discussed above, the Commission anticipates 102A filing costs 
to be no more than approximately $2,083,165 (Method 1), the lower of 
the two estimated filing methods. In developing this estimate, the 
Commission does not make any assumptions about the behavior of an 
individual reporting entity. Reporting entities, given their own 
individualized needs, are assumed to make the most cost-effective 
choice for them, which may be any one of the two methods.
    Proposed Sec.  17.01(b)--New Form 102B: The Commission estimated 
the reporting burden associated with this proposed regulation by 
considering the two distinct filing methods that it will accommodate 
should a final rule be adopted. With two methods of submission, 
reporting entities (i.e., clearing members) will have the flexibility 
to select the submission method that works best with their existing 
data and technology infrastructure and the number of filings they 
expect to make. In general, the Commission believes that Method 1 would 
be more cost effective for reporting entities with a large number of 
filings, while Method 2 would be more cost effective for reporting 
entities with a small number of filings.
    Method 1: This method assumes that each reporting entity would use 
an automated program to submit its 102B filings via secure FTP. Each 
Method 1 submission would likely contain numerous 102B records. The 
Commission estimates that the total initial development burden should 
average 264 hours per reporting entity. The Commission also estimates 
that the highly automated nature of this option would virtually 
eliminate the marginal costs associated with each additional submission 
or each additional record contained in a submission. Accordingly, the 
Commission estimates that 102B change and refresh updates will not 
increase a reporting entity's burden when using Method 1. The 
Commission further estimates that ongoing operation and maintenance 
costs would average 53 hours per year no matter how many records are 
contained in a submission. The total Method 1 annualized development 
burden and the ongoing operation and maintenance cost burden (total 
yearly costs) equals approximately 106 hours per reporting entity.\145\
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    \145\ All annualized development burden estimates are based on 5 
year, straight line depreciation.
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    Because New Form 102B provides a new volume-based reporting 
structure not found in existing Form 102, the Commission is unable to 
refer to historical reporting statistics. Instead, the Commission 
estimated the number of New Form 102B reporting entities by estimating 
the number of clearing members associated with trading accounts that 
the Commission projects will qualify as volume threshold accounts. For 
volume threshold accounts associated with DCMs, the Commission 
anticipates that it would receive New Form 102B submissions from 
approximately 100 reporting entities annually. For volume threshold 
accounts associated with SEFs, the Commission anticipates that it would 
receive New Form 102B submissions from approximately 75 reporting 
entities annually. Assuming that all Form 102B reporting entities for 
volume threshold accounts associated with DCMs utilize Method 1, the 
Commission estimates that the total annual industry burden for the 
reporting of such accounts on New Form 102B would equal 10,600 
hours.\146\ Assuming that all Form 102B reporting entities for volume 
threshold accounts associated with SEFs utilize Method 1, the 
Commission estimates that the total annual industry burden for the 
reporting of such accounts on New Form 102B would equal 7,950 
hours.\147\ Using an estimated wage rate of $78.61 per hour, annual 
costs for DCM-related 102B filings made pursuant to Method 1 are 
estimated at $833,266, while annual costs for SEF-related 102B filings 
made pursuant to Method 1 are estimated at $624,950.\148\ Collectively, 
annual costs for 102B filings made pursuant to Method 1 are estimated 
at $1,458,216.
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    \146\ The 10,600 hour figure is arrived at by multiplying 106 
hours (annualized development burden and ongoing operation and 
maintenance cost burden per reporting entity) by 100 reporting 
entities.
    \147\ The 7,950 hour figure is arrived at by multiplying 106 
hours (annualized development burden and ongoing operation and 
maintenance cost burden per reporting entity) by 75 reporting 
entities.
    \148\ The $833,266 figure is arrived at by multiplying 10,600 by 
$78.61, while the $624,950 figure is arrived at by multiplying 7,950 
by $78.61.
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    Method 2: This method assumes that each reporting entity would 
complete and submit each New Form 102B online via a secure portal 
provided by the Commission. The Commission estimates that the total 
initial development burden would average 20 hours per New Form 102B 
record. The Commission also estimates that annual ongoing costs, which 
include both change and refresh updates, would average 7 hours per year 
for each New Form 102B record. The estimated Method 2 total annualized 
development burden and the ongoing operation and maintenance cost 
burden (total yearly cost) equals approximately 11 hours per New Form 
102B record.\149\
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    \149\ Id.
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    Because New Form 102B provides a new volume-based reporting 
structure not found in existing Form 102, the Commission is unable to 
refer to historical reporting statistics to directly estimate the 
number of New Form 102B records it might receive. Instead, the 
Commission estimated the number of distinct volume threshold accounts 
across a sample of several contract markets, and then extrapolated the 
total number of volume threshold accounts across all markets. For 
volume threshold accounts associated with DCMs, the Commission 
anticipates that it would receive approximately 126,000 New Form 102B 
records annually. For volume threshold accounts associated with SEFs, 
the Commission anticipates that it would receive approximately 62,015 
New Form 102B records annually. Assuming each New Form 102B record for 
a volume threshold account associated with a DCM is provided via Method 
2, the Commission estimates that the total annual industry burden for 
the reporting of such accounts on New Form 102B would equal 1,386,000 
hours. Assuming each New Form 102B record for a volume threshold 
account associated with a SEF is provided via Method 2, the Commission 
estimates that the total annual industry burden for the reporting of 
such accounts on New Form 102B would equal 682,165 hours. Using an 
estimated wage rate of $78.61 per hour, annual costs for DCM-related 
102B filings made pursuant to Method 2 are estimated at $ 
108,953,460,\150\ while annual costs for SEF-related 102B filings made 
pursuant to Method 2 are estimated at $53,624,991.\151\ Collectively, 
annual costs for 102B filings made pursuant to Method 2 are estimated 
at $162,578,451.
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    \150\ The $108,953,460 figure is arrived at by multiplying 11 
hours by 126,000 records (equals 1,386,000 records) by $78.61 
(equals $108,953,460).
    \151\ The $53,624,991figure is arrived at by multiplying 11 
hours by 62,015 records (equals 682,165 records) by $78.61 (equals 
$53,624,991).
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    The Commission understands that providing filing options to the 
industry should lower costs relative to failing to provide such 
options. Because of this, estimated total costs to the industry for 
102B filings should be lower than any cost associated with mandating 
either Method 1 or Method 2. Given the cost estimates for the two 
individual methods discussed above, the Commission anticipates DCM and 
SEF-related 102B filing costs to be no more than approximately 
$1,458,216 (Method 1), the lower of the two estimated filing

[[Page 43995]]

methods. In developing this estimate, the Commission does not make any 
assumptions about the behavior of an individual reporting entity. 
Reporting entities, given their own individualized needs, are assumed 
to make the most cost-effective choice for them, which may be any one 
of the two methods.
    Proposed Sec.  17.01(c)--New Form 71: New Form 71 reporting 
entities (i.e., originators of omnibus volume threshold accounts or 
omnibus reportable sub-accounts) would, upon special call by the 
Commission or its designee, complete and submit New Form 71 online via 
a secure portal provided by the Commission. The Commission estimates 
that, on average, New Form 71 would create an annual reporting burden 
of 8 hours per filing. The Commission notes that New Form 71 filings do 
not require change or refresh updates. Accordingly, the burdens and 
costs associated with such updates in the case of other forms proposed 
herein are not relevant to the calculation of burdens and costs for New 
Form 71 filings. The Commission also notes that it is likely to request 
the resubmission of New Form 71 filings annually.
    The number of New Form 71 filings per year would vary according to 
the number of special calls for the form made by the Commission. In 
order to estimate the annual number of New Form 71 filings (i.e., the 
number of special calls made), the Commission considered the number of 
existing Form 102 omnibus special accounts and estimated that New Form 
102B would capture a similar number of DCM-related omnibus volume 
threshold accounts.\152\ Further, the Commission estimated that it 
would require a New Form 71 for every such omnibus volume threshold 
account. Commission records indicate 526 omnibus special accounts in 
2010, and the Commission anticipates an equal number of DCM-related 
omnibus volume threshold accounts. Because the Commission does not 
presently receive filings pertaining to SEF-related omnibus volume 
threshold accounts, the Commission is unable to refer to historical 
reporting statistics to directly estimate the number New Form 71 
filings it might require. To estimate the number of SEF-related omnibus 
volume threshold accounts, the Commission assumed that SEF transactions 
will likely be intermediated to a lesser extent than DCM transactions. 
The Commission estimates that there may be 35 percent as many SEF-
related omnibus volume threshold accounts as DCM-related omnibus volume 
threshold accounts. Accordingly, the Commission estimates that there 
will be 184 SEF-related omnibus volume threshold accounts. Based on an 
estimated 526 DCM-related New Form 71 filings per year, the Commission 
estimates an aggregate reporting burden of 4,208 hours annually for 
such filings. Based on an estimated 184 SEF-related New Form 71 filings 
per year, the Commission estimates an aggregate reporting burden of 
1,472 hours annually for such filings. Using an estimated wage rate of 
$78.61 per hour, annual costs for DCM-related New Form 71 filings are 
estimated at $330,791, while annual costs for SEF-related New Form 71 
filings are estimated at $115,714. Collectively, annual costs for New 
Form 71 filings are estimated at $446,505.
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    \152\ The Commission is estimating the number of New Form 71 
filings in this manner because New Form 71 provides for an omnibus 
account reporting structure that does not currently exist, making 
direct estimates unfeasible.
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    Proposed Sec.  18.04(a)--New Form 40: New Form 40 reporting 
entities arising from New Form 102A filings (i.e., special account 
owners and controllers) would, upon special call by the Commission, 
complete and submit New Form 40 online via a secure portal provided by 
the Commission. The Commission's special call would typically be in the 
form of an email request that would contain a URL for the portal, and a 
unique login and password for access to the portal.
    The number of New Form 40 filings arising from New Form 102A 
filings would vary according to the number of special calls made by the 
Commission. An analysis of the Commission's existing Form 40 practices 
demonstrates that the Commission makes approximately 3,000 special 
calls annually. However, as explained above, the Commission is 
reiterating that its regulations require reporting firms to separately 
aggregate positions by common ownership and by common control for the 
purpose of identifying and reporting special accounts. The Commission 
anticipates that the number of special calls made annually as a result 
of New Form 102A filings may increase by 75 percent. The Commission 
estimates that New Form 40 would result in annual filings from 5,250 
reporting entities.
    The Commission estimates that each filing estimated above would 
require 3 hours to complete,\153\ resulting in an estimated total 
annual reporting burden of 15,750 hours. Using an estimated wage rate 
of $78.61 per hour, annual costs for New Form 40 filings arising from 
New Form 102A filings are estimated at $1,238,108.\154\ Because the 
proposed rules anticipate a web-based portal and user profile system, 
those entities required to complete a New Form 40 would also be under a 
continuing obligation, per direction in the special call, to update and 
maintain the accuracy of their profile information by periodically 
visiting the online New Form 40 portal to review, verify, and/or update 
their information. However, the Commission believes that the time 
required to update information contained in New Form 40 using the 
online portal would be de minimis.
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    \153\ The Commission's estimate of 3 hours per response reflects 
an initial, one-time burden of 10 hours, annualized over a five-year 
period, plus an additional hour per year for change updates.
    \154\ As discussed in the introduction to this section, the 
Commission is evaluating the burden associated with each regulation 
and associated form separately. It should be noted that the burdens 
estimated for New Form 40 filings, arising from proposed Sec.  
18.04(a) and Sec.  18.04(b), are especially duplicative. For 
example, many of the traders that complete New Form 40 pursuant to 
18.04(a) may also be volume threshold account controllers that could 
receive New Form 40 pursuant to 18.04(b). In practice, if the 
Commission possesses a recent Form 40 filing from a reporting 
entity, it may elect not to request a second Form 40 filing from 
that same entity if the entity becomes reportable under an 
additional provision of the proposed regulations and there is no 
additional information to be gained.
---------------------------------------------------------------------------

    Proposed Sec.  18.04(b)--New Form 40: New Form 40 reporting 
entities arising from New Form 102B and New Form 71 filings (i.e., 
volume threshold account controllers, persons who own volume threshold 
accounts, reportable sub-account controllers, and persons who own 
reportable sub-accounts) would, upon special call by the Commission, 
file New Form 40 online via a secure portal provided by the Commission. 
The Commission's special call would typically be in the form of an 
email request that would contain a URL for the portal, and a unique 
login and password for access to the portal.
    The number of New Form 40 filings arising from volume threshold 
accounts and reportable sub-accounts would vary according to the number 
of special calls made by the Commission. An analysis of the 
Commission's existing Form 40 practices demonstrates that the 
Commission makes approximately 3,000 special calls annually; however, 
such calls were made to special account owners and controllers 
identified via existing DCM-related Form 102. The Commission estimates 
there could be a much greater number of New Form 102B and New Form 71 
filings. As a result, the Commission estimates that the number of 
potential New Form 40 reporting entities (arising from New Form 102B 
and New Form 71 filings) would increase as well. The Commission 
anticipates that it would

[[Page 43996]]

receive approximately 12,000 DCM-related New Form 40 filings annually 
arising from New Form 102B and approximately 1,550 SEF-related New Form 
40 filings annually arising from New Form 102B, including filings 
arising from control of volume threshold accounts and filings arising 
from ownership of such accounts.\155\ Each filing is estimated to 
require 3 hours,\156\ resulting in an estimated total annual reporting 
burden of 36,000 hours for DCM-related New Form 40 filings and 4,650 
hours for SEF-related New Form 40 filings. The Commission estimates 
that the time required to update information contained in New Form 40 
would be de minimis. Using an estimated wage rate of $78.61 per hour, 
annual costs for DCM-related New Form 40 filings arising from volume 
threshold accounts and reportable sub-accounts are estimated at 
$2,829,960, while annual costs for SEF-related New Form 40 filings 
arising from volume threshold accounts and reportable sub-accounts are 
estimated at $365,537. Collectively, annual costs for New Form 40 
filings are estimated at $3,195,497.
---------------------------------------------------------------------------

    \155\ As with 102A records, the Commission estimates that in 
approximately 25 percent of filings, the owner and the controller of 
a volume threshold account reported on New Form 102B will be the 
same, and that accordingly, only one New Form 40 would be required. 
Similarly, a number of potential New Form 40 reporting entities are 
likely to own or control both DCM-related and SEF-related volume 
threshold accounts, but only one New Form 40 would be required.
    \156\ The Commission's estimate of 3 hours per response reflects 
an initial, one-time burden of 10 hours, annualized over a five-year 
period, plus an additional hour per year for change updates.
---------------------------------------------------------------------------

    Proposed Sec.  18.05: Existing Sec.  18.05 requires traders who 
hold or control reportable positions to maintain books and records 
regarding all positions and transactions in the commodity in which they 
have reportable positions.\157\ In addition, existing Sec.  18.05 
requires that the trader furnish the Commission with information 
concerning such positions upon request. The Commission proposes to 
expand Sec.  18.05 to also impose books and records requirements upon 
volume threshold account controllers and owners of volume threshold 
accounts, and upon reportable sub-account controllers and persons who 
own reportable sub-accounts. Proposed Sec.  18.05 would likely result 
in an increased reporting burden, as compared to existing Sec.  18.05. 
An analysis of the Commission's special call practices demonstrates 
that, in connection with existing Sec.  18.05, the Commission typically 
makes 12 special calls a month to approximately 45 traders, resulting 
in a total of 540 special calls.\158\ The Commission estimates that 
proposed Sec.  18.05 would result in an additional six special calls to 
six different traders.\159\ In total, the Commission anticipates that 
it would make 546 special calls a year to 51 respondents under Sec.  
18.05 and that each response would take approximately 5 hours for a 
total aggregate annual reporting burden of 2,730 hours. Using an 
estimated wage rate of $78.61 per hour, annual reporting costs are 
estimated at $214,605.
---------------------------------------------------------------------------

    \157\ 17 CFR 18.05.
    \158\ The Commission estimates that each response takes 
approximately 5 hours. Existing Sec.  18.05 therefore results in an 
annual reporting burden of approximately 2,700 hours. Using an 
estimated wage rate of $78.61 per hour, annual reporting costs in 
connection with existing Sec.  18.05 are approximately $212,247.
    \159\ Proposed Sec.  18.05 would result in an additional annual 
reporting burden of approximately 30 hours. Using an estimated wage 
rate of $78.61 per hour, proposed Sec.  18.05 would result in 
additional annual reporting costs of approximately $2,358.
---------------------------------------------------------------------------

    Proposed Sec.  20.5(a)--102S Filing: The Commission estimated the 
reporting burden associated with proposed Sec.  20.5(a) by considering 
the two distinct filing methods that it will accommodate should a final 
rule be adopted. With two methods of submission, reporting entities 
(i.e., clearing members and swap dealers) will have the flexibility to 
select the submission method that works best with their existing data 
and technology infrastructure and the number of filings they expect to 
make.
    Method 1: This method assumes that each reporting entity would use 
an automated program to submit its 102Ss via secure FTP. Each Method 1 
submission would likely contain numerous 102S records. The Commission 
estimates that the total initial development burden would average 264 
hours per reporting entity. The Commission also estimates that the 
highly automated nature of this option would virtually eliminate the 
marginal costs associated with each additional submission or each 
additional record contained in a submission. The Commission believes 
that the timing requirements for 102S filings in existing Sec.  
20.5(a)(3),\160\ or any new submission procedures arising from the 
Swaps Large Trader Guidebook (i.e., frequency of 102S filing 
submission), would not increase a reporting entity's burden when using 
Method 1. The Commission further estimates that ongoing operation and 
maintenance costs would average 53 hours per year no matter how many 
records are contained in a submission. The total Method 1 annualized 
development burden and the ongoing operation and maintenance cost 
burden (total yearly costs) would equal approximately 106 hours per 
reporting entity.\161\
---------------------------------------------------------------------------

    \160\ 17 CFR 20.5(a)(3).
    \161\ All annualized development burden estimates are based on 5 
year, straight line depreciation.
---------------------------------------------------------------------------

    The 102S filing requirements in existing Sec.  20.5 \162\ are 
nearly identical to the filing requirements proposed herein for 102S; 
accordingly, the Commission used its experience to date with 102S 
filings to estimate the number of 102S reporting entities. The 
Commission anticipates that it would receive 102S filings from 
approximately 75 \163\ reporting entities annually. Assuming 102S 
reporting entities utilize Method 1, the Commission estimates that the 
total annual industry burden for 102S filing would equal 7,950 hours. 
Using an estimated wage rate of $78.61 per hour, annual costs for 102S 
filings are estimated at $624,950.
---------------------------------------------------------------------------

    \162\ 17 CFR 20.5.
    \163\ The Commission notes that this estimate for the number of 
102S reporting entities is lower than the estimate provided in the 
Commission's final rules for part 20. The lower estimate is based on 
the Commission's experience with position reports pursuant to part 
20 since the rules were made final.
---------------------------------------------------------------------------

    Method 2: This method assumes that each reporting entity would 
complete and submit each New Form 102S online via a secure portal 
provided by the Commission. The Commission estimates that the total 
initial development burden would average 17 hours per 102S record. The 
Commission also estimates that annual ongoing costs, including change 
and refresh updates, would average 7 hours per year for each 102S 
record. The sum of the Method 2 annualized development burden and the 
ongoing operation and maintenance cost burden (total yearly cost) 
equals approximately 10 hours per 102S record.\164\
---------------------------------------------------------------------------

    \164\ All annualized development burden estimates are based on 5 
year, straight line depreciation.
---------------------------------------------------------------------------

    Based on a recent assessment of expected 102S filings, the 
Commission anticipates that it would receive approximately 500 102S 
records annually. Assuming each of the estimated 500 102S records are 
provided via Method 2, the Commission estimates that the total annual 
industry burden for 102S filings would equal 5,000 hours. Using an 
estimated wage rate of $78.61 per hour, annual costs for 102S filings 
made pursuant to Method 2 are estimated at $393,050.
    The Commission understands that providing options to the industry 
should lower costs relative to failing to provide these options. 
Because of this, estimated total costs to the industry for 102S filing 
should be lower than any cost associated with mandating either Method 1 
or Method 2. Given the cost estimates for the two individual

[[Page 43997]]

methods discussed above, the Commission anticipates 102S filing costs 
to be no more than $393,050 (Method 2), the lower of the two estimated 
submission costs. In developing this estimate, the Commission does not 
make any assumptions about the behavior of an individual reporting 
entity. Reporting entities, given their own individualized needs, are 
assumed to make the most cost-effective choice for them, which may be 
either of the two methods.
    40S Filings: \165\ Persons that are subject to books and records 
requirements under existing Sec.  20.6 \166\ and receive a special call 
from the Commission, would file New Form 40 via an online portal. The 
Commission's special call would likely be in the form of an email 
request that would contain a URL for the portal, and a unique login and 
password for access to the portal. Existing Sec.  20.5(b),\167\ which 
requires the 40S filing, would not be altered by this proposed 
rulemaking; as a result, the Commission estimates that a similar number 
of persons would be required to submit a 40S filing. Accordingly, the 
Commission anticipates that it would receive 40S submissions from 
approximately 500 filers annually. Each response is estimated to 
require 3 hours,\168\ resulting in an estimated total annual reporting 
burden of 1,500 hours. Time required to update information contained in 
40S filings would be de minimis on average. Using an estimated wage 
rate of $78.61 per hour, annual costs are estimated at $117,915.
---------------------------------------------------------------------------

    \165\ The proposed rulemaking does not include provisions to 
revise Sec.  20.5(b); however, current Sec.  20.5(b) requires a 
person, after special call by the Commission, to submit a 40S filing 
which shall consist of the submission of Form 40. The proposed 
rulemaking does include changes to Form 40. Accordingly, the 
reporting burden associated with Sec.  20.5(b) and the 40S filing is 
being recalculated to account for variations between current and New 
Form 40.
    \166\ 17 CFR 20.6.
    \167\ 17 CFR 20.5(b).
    \168\ The Commission's estimate of 3 hours per response reflects 
an initial, one-time burden of 10 hours, annualized over a five-year 
period, plus an additional hour per year for change updates.
---------------------------------------------------------------------------

    b. Recordkeeping burdens:
    As discussed above, the Commission proposes to expand Sec.  18.05 
\169\ to also impose books and records requirements upon volume 
threshold account controllers and owners of volume threshold accounts 
reported on New Form 102B, and on reportable sub-account controllers 
and persons who own a reportable sub-account reported on New Form 71 
(in addition to traders who hold or control reportable positions). As a 
result, proposed Sec.  18.05 would likely impose a recordkeeping burden 
on a larger number of persons than existing Sec.  18.05. However, any 
additional persons subject to proposed Sec.  18.05 may be able to rely 
on books and records already kept in the ordinary course of business to 
meet the requirements of the proposed regulation. Accordingly, the 
Commission believes that proposed Sec.  18.05 would not meaningfully 
increase recordkeeping burdens on persons brought under its scope.
---------------------------------------------------------------------------

    \169\ 17 CFR 18.05.
---------------------------------------------------------------------------

iv. Comments on Information Collection
    The Commission invites the public and other federal agencies to 
comment on any aspect of the reporting and recordkeeping burdens 
discussed above. Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission 
solicits comments in order to: (i) Evaluate whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information 
would have practical utility; (ii) evaluate the accuracy of the 
Commission's estimate of the burden of the proposed collection of 
information; (iii) determine whether there are ways to enhance the 
quality, utility, and clarity of the information to be collected; and 
(iv) mitigate the burden of the collection of information on those who 
are required to respond, including through the use of automated 
collection techniques or other forms of information technology.
    Comments may be submitted directly to the Office of Information and 
Regulatory Affairs, by fax at (202) 395-6566 or by email at 
OIRAsubmissions@omb.eop.gov. Please provide the Commission with a copy 
of submitted comments so that all comments can be summarized and 
addressed in the final regulation preamble. Refer to the ADDRESSES 
section of this Notice for comment submission instructions to the 
Commission. A copy of the supporting statements for the collections of 
information discussed above may be obtained by visiting RegInfo.gov. 
OMB is required to make a decision concerning the collection of 
information between 30 and 60 days after publication of this Notice. 
Consequently, a comment to OMB is most assured of being fully effective 
if received by OMB (and the Commission) within 30 days after 
publication of this Notice.

Proposed Rules

List of Subjects

17 CFR Part 15

    Brokers, Commodity futures, Reporting and recordkeeping 
requirements.

17 CFR Part 17

    Brokers, Commodity futures, Reporting and recordkeeping 
requirements.

17 CFR Part 18

    Commodity futures, Reporting and recordkeeping requirements.

17 CFR Part 20

    Physical commodity swaps, Swap dealers, Reporting and recordkeeping 
requirements.
    In consideration of the foregoing and pursuant to the authority 
contained in the Act, as indicated herein, the Commission hereby 
proposes to amend chapter I of title 17 of the Code of Federal 
Regulations as follows:

PART 15--REPORTS--GENERAL PROVISIONS

    1. The authority citation for part 15 continues to read as follows:

    Authority:  7 U.S.C. 2, 5, 6a, 6c, 6f, 6g, 6i, 6k, 6m, 6n, 7, 
7a, 9, 12a, 19, and 21, as amended by Title VII of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 
Stat. 1376 (2010).

    2. In Sec.  15.00, revise paragraph (q) and add paragraphs (t) 
through (ee) to read as follows:

Sec.  15.00  Definitions of terms used in parts 15 to 19, and 21 of 
this chapter.

* * * * *
    (q) Reporting market means a designated contract market or a 
registered entity under Sec.  1a(40) of the Act.
* * * * *
    (t) Control means to actually direct, by power of attorney or 
otherwise, the trading of a special account or a consolidated account. 
A special account or a consolidated account may have more than one 
controller.
    (u) Reportable trading volume means contract trading volume that 
meets or exceeds the level specified in Sec.  15.04 of this part.
    (v) Direct Market Access (``DMA'') means a connection method that 
enables a market participant to transmit orders to a DCM's electronic 
trade matching system without re-entry by another person or entity, or 
similar access to the trade execution platform of a SEF. DMA can be 
provided directly by a DCM or SEF, or by a 3rd-party platform.

[[Page 43998]]

    (w) Omnibus account means any trading account that one futures 
commission merchant, clearing member or foreign broker carries for 
another and in which the transactions of multiple individual accounts 
are combined. The identities of the holders of the individual accounts 
are not generally known or disclosed to the carrying firm.
    (x) Omnibus account originator means any futures commission 
merchant, clearing member or foreign broker that executes trades for 
one or more customers via one or more accounts that are part of an 
omnibus account carried by another futures commission merchant, 
clearing member or foreign broker.
    (y) Volume threshold account means any trading account that 
executes, or receives via allocation or give-up, reportable trading 
volume on or subject to the rules of a reporting market that is a board 
of trade designated as a contract market under Sec.  5 of the Act or a 
swap execution facility registered under Sec.  5h of the Act.
    (z) Omnibus volume threshold account means any trading account 
that, on an omnibus basis, executes or receives via allocation or give-
up, reportable trading volume on or subject to the rules of a reporting 
market that is a board of trade designated as a contract market under 
Sec.  5 of the Act or a swap execution facility registered under Sec.  
5h of the Act.
    (aa) Omnibus reportable sub-account means any trading sub-account 
of an omnibus volume threshold account, which sub-account executes 
reportable trading volume on an omnibus basis. Omnibus reportable sub-
account also means any trading account that is itself an omnibus 
account, executes reportable trading volume, and is a sub-account of 
another omnibus reportable sub-account.
    (bb) Reportable sub-account means any trading sub-account of an 
omnibus volume threshold account or omnibus reportable sub-account, 
which sub-account executes reportable trading volume.
    (cc) Trading account controller means, for reports specified in 
Sec.  17.01(a) of this chapter, a natural person who by power of 
attorney or otherwise actually directs the trading of a trading 
account. A trading account may have more than one controller.
    (dd) Volume threshold account controller means a natural person who 
by power of attorney or otherwise actually directs the trading of a 
volume threshold account. A volume threshold account may have more than 
one controller.
    (ee) Reportable sub-account controller means a natural person who 
by power of attorney or otherwise actually directs the trading of a 
reportable sub-account. A reportable sub-account may have more than one 
controller.
    3. Revise Sec.  15.01 (c) to read as follows:

Sec.  15.01  Persons required to report.

* * * * *
    (c) As specified in part 18 of this chapter:
    (1) Traders who own, hold, or control reportable positions;
    (2) Volume threshold account controllers;
    (3) Persons who own volume threshold accounts;
    (4) Reportable sub-account controllers; and
    (5) Persons who own reportable sub-accounts.
* * * * *
    4. Revise Sec.  15.02 to read as follows:

Sec.  15.02  Reporting forms.

    Forms on which to report may be obtained from any office of the 
Commission or via the Internet (http://www.cftc.gov). Forms to be used 
for the filing of reports follow, and persons required to file these 
forms may be determined by referring to the rule listed in the column 
opposite the form number.
[GRAPHIC] [TIFF OMITTED] TP26JY12.002

(Approved by the Office of Management and Budget under control 
numbers 3038-0007, 3038-0009, and 3038-[NEW])

    5. Add Sec.  15.04 to read as follows:

Sec.  15.04  Reportable trading volume level.

    The volume quantity for the purpose of reports filed under parts 17 
and 18 of this chapter is trading volume of 50 or more contracts, 
during a single trading day, on a single reporting market that is a 
board of trade designated as a contract market under section 5 of the 
Act or a swap execution facility registered under section 5h of the 
Act, in all instruments that such reporting market designates with the 
same product identifier (including purchases and sales, and inclusive 
of all expiration months).

PART 17--REPORTS BY REPORTING MARKETS, FUTURES COMMISSION 
MERCHANTS, CLEARING MEMBERS, AND FOREIGN BROKERS

    6. The authority citation for part 17 is revised to read as 
follows:

    Authority:  7 U.S.C. 2, 6a, 6c, 6d, 6f, 6g, 6i, 6t, 7, 7a, and 
12a, as amended by Title VII of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010).

    7. Revise Sec.  17.00(g)(2)(iii) to read as follows:

Sec.  17.00  Information to be furnished by futures commission 
merchants, clearing members and foreign brokers.

* * * * *
    (g) * * *
    (2) * * *
    (iii) Account Number. A unique identifier assigned by the reporting 
firm to each special account. The field is zero

[[Page 43999]]

filled with the account number right-justified. Assignment of the 
account number is subject to the provisions of Sec.  17.00(b) and Form 
102.
* * * * *
    8. Revise Sec.  17.01 to read as follows:

Sec.  17.01  Identification of special accounts, volume threshold 
accounts, and omnibus accounts.

    (a) Identification of special accounts. When a special account is 
reported for the first time, the futures commission merchant, clearing 
member, or foreign broker shall identify the special account to the 
Commission on Form 102, in accordance with the form instructions and as 
specified in Sec.  17.02(b).
    (b) Identification of volume threshold accounts. Each clearing 
member shall identify and report its volume threshold accounts to the 
Commission on Form 102, in accordance with the form instructions and as 
specified in Sec.  17.02(c).
    (c) Identification of omnibus accounts and sub-accounts. Each 
originator of an omnibus volume threshold account identified in Form 
102 or an omnibus reportable sub-account identified in Form 71 shall, 
after a special call upon such originator by the Commission or its 
designee, file with the Commission an ``Identification of Omnibus 
Accounts and Sub-Accounts'' on Form 71, to be completed in accordance 
with the instructions thereto, at such time and place as directed in 
the call.
    (d) Exclusively self-cleared contracts. Unless determined otherwise 
by the Commission, reporting markets that list exclusively self-cleared 
contracts shall meet the requirements of paragraphs (a) and (b) of this 
section, as they apply to trading in such contracts by all clearing 
members, on behalf of all clearing members.
    (e) Special call provision. Upon a call by the Commission or its 
designee, the reports required to be filed by futures commission 
merchants, clearing members, foreign brokers, and reporting markets 
under paragraphs (a), (b), (c), and (d) of this section shall be 
submitted within 24 hours of the Commission or its designee's request 
in accordance with the instructions accompanying the request.
    9. In Sec.  17.02, revise the introductory text and paragraph (b) 
and add paragraph (c) to read as follows:

Sec.  17.02  Form, manner and time of filing reports.

    Unless otherwise instructed by the Commission or its designee, the 
reports required to be filed by reporting markets, futures commission 
merchants, clearing members, and foreign brokers under Sec. Sec.  17.00 
and 17.01 shall be filed as specified in paragraphs (a), (b), and (c) 
of this section.
* * * * *
    (b) Section 17.01(a) reports. For data submitted pursuant to Sec.  
17.01(a) on Form 102:
    (1) Form of submission. Form 102 must be submitted to the 
Commission in the form and manner provided on www.cftc.gov.
    (2) Time of submission. For each account that is a special account, 
the futures commission merchant, clearing member, or foreign broker, as 
appropriate, shall submit a completed Form 102 to the Commission, in 
accordance with the instructions thereto, and in the manner specified 
by the Commission or its designee. Such form shall be submitted no 
later than the corresponding Sec.  17.00(a) report filed pursuant to 
instructions in Sec.  17.02(a), or on such other date as directed by 
special call of the Commission or its designee, and as periodically 
required thereafter by Sec.  17.02(b)(3) and (4).
    (3) Change updates. If any change causes the information filed by a 
futures commission merchant, clearing member, or foreign broker on a 
Form 102 for a special account to no longer be accurate, then such 
futures commission merchant, clearing member, or foreign broker shall 
file an updated Form 102 with the Commission no later than 9 a.m. 
eastern time on the business day after such change occurs, or on such 
other date as directed by special call of the Commission, provided 
that, a futures commission merchant, clearing member, or foreign broker 
may stop providing change updates for a Form 102 that it has submitted 
to the Commission for any special account upon notifying the Commission 
that the account in question is no longer reportable as a special 
account.
    (4) Refresh updates. For Special Accounts--Starting on a date 
specified by the Commission or its designee and at the end of each six 
month increment thereafter (or such later date specified by the 
Commission or its designee), each futures commission merchant, clearing 
member, or foreign broker shall resubmit every Form 102 that it has 
submitted to the Commission for each of its special accounts, provided 
that, a futures commission merchant, clearing member, or foreign broker 
may stop providing refresh updates for a Form 102 that it has submitted 
to the Commission for any special account upon notifying the Commission 
that the account in question is no longer reportable as a special 
account.
    (c) Section 17.01(b) reports. For data submitted pursuant to Sec.  
17.01(b) on Form 102:
    (1) Form of submission. Form 102 must be submitted to the 
Commission in the form and manner provided on www.cftc.gov.
    (2) Time of submission. For each account that is a volume threshold 
account, the clearing member shall submit a completed Form 102 to the 
Commission, in accordance with the instructions thereto, and in the 
manner specified by the Commission or its designee, no later than 9 
a.m. eastern time on the business day following the day in which the 
account in question becomes a volume threshold account, or on such 
other date as directed by special call of the Commission or its 
designee, and as periodically required thereafter by Sec.  17.02(c)(3) 
and (4).
    (3) Change updates. If any change causes the information filed by a 
clearing member on a Form 102 for a volume threshold account to no 
longer be accurate, then such clearing member shall file an updated 
Form 102 with the Commission no later than 9 a.m. eastern time on the 
business day after such clearing member is aware of such change, or on 
such other date as directed by special call of the Commission, provided 
that, a clearing member may stop providing Form 102 change updates for 
a volume threshold account upon notifying the Commission that the 
volume threshold account executed no trades in any product in the past 
six months on the reporting market at which the volume threshold 
account reached the reportable trading volume level.
    (4) Refresh updates. For Volume Threshold Accounts--Starting on a 
date specified by the Commission or its designee and at the end of each 
six month increment thereafter (or such later date specified by the 
Commission or its designee), each clearing member shall resubmit every 
Form 102 that it has submitted to the Commission for each of its volume 
threshold accounts, provided that, a clearing member may stop providing 
refresh updates for a Form 102 that it has submitted to the Commission 
for any volume threshold account upon notifying the Commission that the 
volume threshold account executed no trades in any product in the past 
six months on the reporting market at which the volume threshold 
account reached the reportable trading volume level.
    10. Revise section 17.03 to read as follows:

[[Page 44000]]

Sec.  17.03  Delegation of authority to the Director of the Office of 
Data and Technology or the Director of the Division of Market 
Oversight.

    The Commission hereby delegates, until the Commission orders 
otherwise, the authority set forth in the paragraphs below to either 
the Director of the Office of Data and Technology or the Director of 
the Division of Market Oversight, as indicated below, to be exercised 
by such Director or by such other employee or employees of such 
Director as designated from time to time by such Director. The Director 
of the Office of Data and Technology or the Director of the Division of 
Market Oversight may submit to the Commission for its consideration any 
matter which has been delegated to such Director in this paragraph. 
Nothing in this paragraph prohibits the Commission, at its election, 
from exercising the authority delegated in this paragraph.
    (a) Pursuant to Sec.  17.00(a) and (h), the authority shall be 
designated to the Director of the Office of Data and Technology to 
determine whether futures commission merchants, clearing members and 
foreign brokers can report the information required under Sec.  
17.00(a) and (h) on series `01 forms or using some other format upon a 
determination that such person is unable to report the information 
using the format, coding structure or electronic data transmission 
procedures otherwise required.
    (b) Pursuant to Sec.  17.02, the authority shall be designated to 
the Director of the Office of Data and Technology to instruct or 
approve the time at which the information required under Sec. Sec.  
17.00 and 17.01(a) and (b) must be submitted by futures commission 
merchants, clearing members and foreign brokers provided that such 
persons are unable to meet the requirements set forth in Sec.  17.02.
    (c) Pursuant to Sec.  17.01, the authority shall be designated to 
the Director of the Office of Data and Technology to determine whether 
to permit an authorized representative of a firm filing the Form 102 or 
person filing the Form 71 to use a means of authenticating the report 
other than by signing the Form 102 or Form 71 and, if so, to determine 
the alternative means of authentication that shall be used.
    (d) Pursuant to Sec.  17.00(a), the authority shall be designated 
to the Director of the Office of Data and Technology to approve a 
format and coding structure other than that set forth in Sec.  
17.00(g).
    (e) Pursuant to Sec.  17.01(c), the authority shall be designated 
to the Director of the Office of Data and Technology to make special 
calls on omnibus volume threshold account originators and omnibus 
reportable sub-account originators for information as set forth in 
Sec.  17.01(c).
    (f) Pursuant to Sec.  17.02(b)(4), the authority shall be 
designated to the Director of the Division of Market Oversight to 
determine the date on which each futures commission merchant, clearing 
member, or foreign broker shall update or otherwise resubmit every Form 
102 that it has submitted to the Commission for each of its special 
accounts.
    (g) Pursuant to Sec.  17.02(c)(4), the authority shall be 
designated to the Director of the Division of Market Oversight to 
determine the date on which each clearing member shall update or 
otherwise resubmit every Form 102 that it has submitted to the 
Commission for each of its volume threshold accounts.

PART 18--REPORTS BY TRADERS

    11. The authority citation for part 18 is revised to read as 
follows:

    Authority:  7 U.S.C. 2, 4, 5, 6a, 6c, 6f, 6g, 6i, 6k, 6m, 6n, 
6t, 12a, and 19, as amended by Title VII of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 
Stat. 1376 (2010).

    12. Revise Sec.  18.04 to read as follows:

Sec.  18.04  Statement of reporting trader.

    (a) Every trader who owns, holds, or controls a reportable futures 
and option position shall after a special call upon such trader by the 
Commission or its designee file with the Commission a ``Statement of 
Reporting Trader'' on the Form 40, to be completed in accordance with 
the instructions thereto, at such time and place as directed in the 
call.
    (b) Every volume threshold account controller, person who owns a 
volume threshold account, reportable sub-account controller, and person 
who owns a reportable sub-account shall after a special call upon such 
person by the Commission or its designee file with the Commission a 
``Statement of Reporting Trader'' on the Form 40, to be completed in 
accordance with the instructions thereto, at such time and place as 
directed in the call.
    13. In Sec.  18.05 revise paragraph (a) introductory text and 
paragraphs (b) and (c), to read as follows:

Sec.  18.05  Maintenance of books and records.

    (a) Every volume threshold account controller, person who owns a 
volume threshold account, reportable sub-account controller, person who 
owns a reportable sub-account, and trader who owns, holds, or controls 
a reportable futures or option position, shall keep books and records 
showing all details concerning all positions and transaction in the 
commodity:
* * * * *
    (b) Every such volume threshold account controller, person who owns 
a volume threshold account, reportable sub-account controller, person 
who owns a reportable sub-account, and trader who owns, holds, or 
controls a reportable futures or option position shall also keep books 
and records showing all details concerning all positions and 
transactions in the cash commodity, its products and byproducts, and 
all commercial activities that it hedges in the futures or option 
contract in which it is reportable.
    (c) Every volume threshold account controller, person who owns a 
volume threshold account, reportable sub-account controller, person who 
owns a reportable sub-account, and trader who owns, holds, or controls 
a reportable futures or option position shall upon request furnish to 
the Commission any pertinent information concerning such positions, 
transactions, or activities in a form acceptable to the Commission.

PART 20--LARGE TRADER REPORTING FOR PHYSICAL COMMODITY SWAPS

    14. The authority citation for part 20 continues to read as 
follows:

    Authority:  7 U.S.C. 1a, 2, 5, 6, 6a, 6c, 6f, 6g, 6t, 12a, 19, 
as amended by Title VII of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010).

    15. In Sec.  20.5, revise paragraphs (a)(1) and (2) and add 
paragraphs (a)(4) and (5) to read as follows:

Sec.  20.5  Series S filings.

    (a) * * *
    (1) When a counterparty consolidated account first becomes 
reportable, the reporting entity shall submit a 102S filing, as set 
forth in Appendix A to part 17, in accordance with the form 
instructions and as specified in this section, including Sec.  20.5.
    (2) A reporting entity may submit a 102S filing only once for each 
counterparty, even if such persons at various times have multiple 
reportable positions in the same or different paired swaps or 
swaptions.
* * * * *
    (4) Change updates. If any change causes the information filed by a 
clearing member or swap dealer on a Form 102 for a consolidated account 
to no longer be accurate, then such clearing member or swap dealer 
shall file an updated Form 102 with the

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Commission no later than 9 a.m. eastern time on the business day after 
such change occurs, or on such other date as directed by special call 
of the Commission, provided that, a clearing member or swap dealer may 
stop providing change updates for a Form 102 that it has submitted to 
the Commission for any consolidated account upon notifying the 
Commission that the account in question is no longer reportable as a 
consolidated account.
    (5) Refresh updates. For Consolidated Accounts--Starting on a date 
specified by the Commission or its designee and at the end of each six 
month increment thereafter (or such later date specified by the 
Commission or its designee), each clearing member or swap dealer shall 
resubmit every Form 102 that it has submitted to the Commission for 
each of its consolidated accounts, provided that, a clearing member or 
swap dealer may stop providing refresh updates for a Form 102 that it 
has submitted to the Commission for any consolidated account upon 
notifying the Commission that the account in question is no longer 
reportable as a consolidated account.
* * * * *

    Issued in Washington, DC, on June 27, 2012 by the Commission.
David A. Stawick,
Secretary of the Commission.

    Note: The following Annex will not appear in the Code of Federal 
Regulations.

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[FR Doc. 2012-16180 Filed 7-25-12; 8:45 am]
BILLING CODE C
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