### 65177 Federal Register / Vol. 77, No. 207 / Thursday, October 25, 2012 / Notices

1 See Dodd-Frank Wall Street Reform and

Consumer Protection Act, Public Law 111–203, 124
Stat. 1376 (2010), available at http://www.cftc.gov/ LawRegulation/OTCDERIVATIVES/index.htm.

2 Pursuant to section 701 of the Dodd-Frank Act, Title VII may be cited as the ‘‘Wall Street Transparency and Accountability Act of 2010;’’ 7

U.S.C. 1 et seq. **SUMMARY :**  The Science Advisory Board (SAB) was established by a Decision Memorandum dated September 25, 1997, and is the only Federal Advisory Committee with responsibility to advise the Under Secretary of Commerce for Oceans and Atmosphere on strategies for research, education, and application of science to operations and information

services. SAB activities and advice provide necessary input to ensure that National Oceanic and Atmospheric
Administration (NOAA) science programs are of the highest quality and provide optimal support to resource

management.

**DATES :**  Time and Date: The meeting will be held Wednesday, November 14, 2012 from 9:15 a.m. to 5:00 p.m. and Thursday, November 15, 2012 from 8:00 a.m. to 2:30 p.m. These times and the agenda topics described below are subject to change. Please refer to the web page http://www.sab.noaa.gov/ Meetings/meetings.html for the most upto-date meeting agenda.

**ADDRESSES :**  Place: The meeting will be
held at the Hilton Doubletree Hotel, 8727 Colesville Road, Silver Spring, Maryland 20910. Please check the SAB

Web site http://www.sab.noaa.gov/ Meetings/meetings.html for directions to the meeting location.

Status: The meeting will be open to public participation with a 15-minute public comment period on November 14 at 4:45 p.m. (check Web site to confirm time). The SAB expects that public statements presented at its meetings will not be repetitive of previously

submitted verbal or written statements. In general, each individual or group making a verbal presentation will be
limited to a total time of five (5) minutes. Individuals or groups planning to make a verbal presentation should contact the SAB Executive Director by
November 7, 2012 to schedule their presentation. Written comments should

be received in the SAB Executive Director’s Office by November 7, 2012 to provide sufficient time for SAB review. Written comments received by the SAB
Executive Director after November 7,
2012 will be distributed to the SAB, but may not be reviewed prior to the meeting date. Seating at the meeting
will be available on a first-come, firstserved basis.

Special Accommodations: These meetings are physically accessible to people with disabilities. Requests for special accommodations may be directed no later than 12 p.m. on November 7, 2012, to Dr. Cynthia
Decker, SAB Executive Director,

SSMC3, Room 11230, 1315 East-West Hwy., Silver Spring, MD 20910. Matters To Be Considered: The meeting will include the following topics: (1) Review Report on the Cooperative Institute for North Atlantic Research (CINAR); (2) Preliminary

Recommendations from the SAB R&D Portfolio Review Task Force; (3) Report from the Ecosystem Sciences and Management Working Group on Ecosystem-Based Fisheries Management; (4) Final Report from the SAB Satellite Task Force (pending review of public comments); (5) Final Report of the Review of the Ocean Exploration Program by the Ocean Exploration Advisory Working Group; (6) Review of the Terms of Reference for

the Environmental Information Services Working Group; (7) NOAA Response to the SAB Report from the Climate Partnership Task Force and NOAA Response to the SAB White Paper ‘‘Towards Open Weather and Climate Services’’; (8) Sea Grant Advisory Board Annual Report to Congress; (9)

Presentation on the National Research Council Report ‘‘Weather Services for the Nation: Becoming Second to None’’; (10) Presentation on ‘‘The Scientific Challenge on Predicting the Initiation and Morphology of Thunderstorms for Aviation Weather Forecasts; and (11) Updates from SAB Working Groups.

**FOR FURTHER INFORMATION CONTACT :**  Dr. Cynthia Decker, Executive Director, Science Advisory Board, NOAA, Rm. 11230, 1315 East-West Highway, Silver Spring, Maryland 20910. (Phone: 301–
734–1156, Fax: 301–713–1459. Email: Cynthia.Decker@noaa.gov; or visit the

NOAA SAB Web site at http:// www.sab.noaa.gov.

Dated: October 19, 2012.

Andy Baldus,

Acting Chief Financial Officer/Chief Administrative Officer, Office of Oceanic and Atmospheric Research, National Oceanic and Atmospheric Administration.

[FR Doc. 2012–26249 Filed 10–24–12; 8:45 am]

**BILLING CODE 3510–KD–P**

**COMMODITY FUTURES TRADING**

**COMMISSION**

**Swap Data Repositories: Interpretative Statement Regarding the**  **Confidentiality and Indemnification Provisions of the Commodity**  **Exchange Act**

**AGENCY :**  Commodity Futures Trading

Commission.

**ACTION :**  Interpretative statement.

**SUMMARY :**  The Commodity Futures Trading Commission (‘‘Commission’’ or ‘‘CFTC’’) is issuing this interpretative statement (‘‘Statement’’) to provide guidance regarding the applicability of the confidentiality and indemnification provisions set forth in new section 21(d) of the Commodity Exchange Act (‘‘CEA’’) added by section 728 of the

Dodd-Frank Wall Street Reform and
Consumer Protection Act (‘‘Dodd-Frank
Act’’). This Statement clarifies that the provisions of CEA section 21(d) should not operate to inhibit or prevent foreign regulatory authorities from accessing data in which they have an independent and sufficient regulatory interest, even if that data also has been reported pursuant to the CEA and Commission regulations.

**DATES :**  Effective date: October 25, 2012

**FOR FURTHER INFORMATION CONTACT :**  Adedayo Banwo, Counsel, Office of the
General Counsel, at (202) 418.6249, abanwo@cftc.gov; With respect to questions relating to international

consultation and coordination: Jacqueline Mesa, Director, at (202)

418.5386, jmesa@cftc.gov , or Mauricio Melara, Attorney-Advisor, at (202)

418.5719, mmelara@cftc.gov , Office of International Affairs, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581.

**SUPPLEMENTARY INFORMATION :** 

I. Background: Statutory and Regulatory Authorities

On July 21, 2010, President Obama signed into law the Dodd-Frank Act. 1

Title VII amended the CEA to establish a comprehensive new regulatory framework for swaps and security-based

swaps. 2 The legislation was enacted to reduce risk, increase transparency and promote market integrity within the financial system by, among other things: (i) Providing for the registration and comprehensive regulation of swap dealers and major swap participants; (ii) imposing clearing and trade execution requirements on standardized derivative products; (iii) creating robust recordkeeping and real-time reporting regimes; and (iv) enhancing the Commission’s rulemaking and enforcement authorities with respect to, among others, all registered entities and intermediaries subject to the Commission’s oversight.

To enhance transparency, promote standardization and reduce systemic
risk, section 727 of the Dodd-Frank Act


### 65178 Federal Register / Vol. 77, No. 207 / Thursday, October 25, 2012 / Notices

3 7 U.S.C. 2(a)(13)(G).

4 Section 721 of the Dodd-Frank Act amends

section 1a of the CEA to add a definition of the term ‘‘swap data repository.’’ Pursuant to CEA section 1a(48), the term ‘‘swap data repository means any person that collects and maintains information or records with respect to transactions or positions in, or the terms and conditions of, swaps entered into by third parties for the purpose of providing a centralized recordkeeping facility for swaps.’’ 7
U.S.C. 1a(48).

5 See 7 U.S.C. 24a(c). See also Commission, Final Rulemaking: Swap Data Recordkeeping and Reporting Requirements, 77 FR 2136, Jan. 13, 2012 (‘‘Data Final Rules’’). The Data Final Rules, among other things, set forth regulations governing SDR data collection and reporting responsibilities under part 45 of the Commission’s regulations.

6 The Commission’s regulations designate such regulators as either an ‘‘Appropriate Domestic Regulator’’ or an ‘‘Appropriate Foreign Regulator’’
in § 49.17(b). See Swap Data Repositories: Registration Standards, Duties and Core Principles, 76 FR 54538, 54554 (Sep. 1, 2011) (‘‘SDR Final
Rules’’).

7 7 U.S.C. 24a(c)(7).

8 7 U.S.C. 12.

9 7 U.S.C. 24a(d).

10 See section 752(a) of the Dodd-Frank Act. 11 See letter from Gary Gensler, Chairman of the Commission, and Mary Schapiro, Chairman of the SEC, to Michel Barnier, European Commissioner for Internal Markets and Services, European Commission, dated June 8, 2011.

12 See, generally, SDR Final Rules.

13 See SDR Final Rules at 54554.

14 The term ‘‘Appropriate Domestic Regulator’’ is
defined in 17 CFR 49.17(b)(1) as the Securities and Exchange Commission; each prudential regulator
identified in section 1a(39) of the CEA. 7 U.S.C. 1a(39); the Financial Stability Oversight Council; the Department of Justice; any Federal Reserve Bank; the Office of Financial Research; and any other person the Commission deems appropriate.

15 In the Commission’s view, it is appropriate to permit access to the swap data maintained by SDRs to Appropriate Domestic Regulators that have concurrent regulatory jurisdiction over such SDRs, without the application of the notice and indemnification provisions of sections 21(c)(7) and
(d) of the CEA. See SDR Final Rules at 54554 n.163. Accordingly, these provisions do not apply to an Appropriate Domestic Regulator that has regulatory jurisdiction over an SDR registered with it pursuant to a separate statutory authority that is also registered with the Commission, if the Appropriate Domestic Regulator executes a memorandum of understanding (‘‘MOU’’) or similar information sharing arrangement with the Commission and the

Commission, consistent with CEA section 21(c)(4)(A), designates the Appropriate Domestic Regulator to receive direct electronic access. See 17 CFR 17(d)(2). 16 The term ‘‘Appropriate Foreign Regulator’’ is defined in 17 CFR 49.17(b)(2) as a foreign regulator with an existing MOU or similar type of information sharing arrangement executed with the Commission, and/or a foreign regulator without an MOU as determined on a case-by-case basis by the

Commission.

17 Section 725(f) of the Dodd-Frank Act amended section 8(e) of the CEA to include foreign central

banks and ministries.

18 See SDR Final Rules at 54554.

19 Id.

20 See 17 CFR 49.3(b).

21 See 77 FR 26709 (May 7, 2012). added to the CEA new section 2(a)(13)(G), 3 which requires all swaps—

whether cleared or uncleared—to be reported to swap data repositories (‘‘SDRs’’). SDRs are new registered entities created by section 728 of the

Dodd-Frank Act. 4 SDRs are required to perform specified functions related to the collection and maintenance of swap

transaction data and information. 5

CEA section 21(c)(7) requires that

SDRs make data available to certain domestic and foreign regulators 6 under specified circumstances. 7 Separately, CEA section 21(d) mandates that prior to receipt of any requested data or information from an SDR, a regulatory authority described in section 21(c)(7) shall agree in writing to abide by the confidentiality requirements described
in section 8 of the CEA, 8 and to indemnify the SDR and the Commission for any expenses arising from litigation relating to the information provided

under section 8 of the CEA. 9

Section 752 of the Dodd-Frank Act seeks to ‘‘promote effective and consistent global regulation of swaps,’’ and provides that the CFTC and foreign regulatory authorities ‘‘may agree to such information-sharing arrangements as may be deemed to be necessary or appropriate in the public interest.

* * *.’’ 10 In light of this statutory
directive, and consistent with section 21
of the CEA, the Commission has been working to provide sufficient access to SDR data to domestic and foreign regulators.

In that regard, the Chairman of the

CFTC and the Chairman of the Securities and Exchange Commission (‘‘Chairmen’’) jointly submitted a letter to Michel Barnier, European Commissioner for Internal Markets and

Services, 11 highlighting their desire for international cooperation. In the letter, the Chairmen expressed their belief that

indemnification and notice requirements need not apply when a registered SDR is also registered in a foreign jurisdiction and the foreign regulatory authority, acting within the scope of its jurisdiction, seeks information directly from the SDR.

On September 1, 2011, the Commission adopted regulations implementing CEA section 21’s registration standards, duties, and core principles for SDRs. 12 To implement the provisions of sections 21(c)(7) and (d), the Commission adopted definitions and standards for determining access by domestic and foreign regulators to data maintained by SDRs.

The Commission acknowledged in the

SDR Final Rules that the CEA’s indemnification requirement could have the unintended effect of inhibiting direct access by other regulators to data maintained by SDRs due to various home country laws and regulations. 13 The SDR Final Rules provided that under specified circumstances, certain ‘‘Appropriate Domestic Regulators’’ 14 may gain access to the swap data reported and maintained by SDRs without being subject to the notice and indemnification requirements of CEA sections 21(c)(7) and (d). 15 In connection with foreign regulatory
authorities, the Commission determined

in the SDR Final Rules that confidential swap data reported to and maintained by an SDR may be accessed by an Appropriate Foreign Regulator 16

without the execution of a confidentiality and indemnification agreement when the Appropriate Foreign Regulator has supervisory authority over an SDR registered with it pursuant to foreign law and/or regulation that is also registered with

the Commission.

The confidentiality and indemnification provisions of new CEA section 21 apply only when a regulatory authority seeks access to data from an
SDR. In the SDR Final Rules, the
Commission noted that section 8(e) of the CEA permits the Commission (as opposed to an SDR) to share

confidential information in its possession with any department or agency of the Government of the United States, or with any foreign futures authority, department or agency of any foreign government or political
subdivision thereof, 17 acting within the scope of its jurisdiction. 18

The SDR Final Rules became effective
on October 31, 2011. 19 Under these rules, trade repositories may apply to the Commission for full registration as SDRs. Pending the full implementation of other, related regulatory provisions
and definitions, however, such registrations are deemed ‘‘provisional.’’ 20

II. The Proposed Interpretative

Statement

On May 1, 2012, the Commission issued a proposed interpretative statement (‘‘Proposed Statement’’) to address issues raised by interested members of the public and foreign regulatory authorities with respect to the scope and application of the confidentiality and indemnification provisions of new section 21(d) of the

CEA. 21 Under the Proposed Statement,

the Commission clarified that the confidentiality and indemnification provisions of CEA section 21(d) should not operate to inhibit or prevent foreign regulatory authorities from accessing data in which they have an independent and sufficient regulatory interest.


### 65179 Federal Register / Vol. 77, No. 207 / Thursday, October 25, 2012 / Notices

22 See public comment file in response to the Proposed Statement, available at http:// comments.cftc.gov/PublicComments/ CommentList.aspx?id=1198.

23 Legislation has been introduced in Congress

that would amend the CEA to eliminate or substantially limit the SDR indemnification provision. As discussed in Section III.B., commenters expressed the general view that a ‘‘legislative fix’’ would be the best course of action to resolve issues regarding the section 21(d) requirements.

24 See section 752(a) of the Dodd-Frank Act. 25 See public comment file in response to the proposal for the SDR Final Rules, available at http://comments.cftc.gov/PublicComments/ CommentList.aspx?id=939 and SDR Final Rules

note 6 at 54539, supra.

26 This working group was jointly established by the Committee on Payment and Settlement Systems
(‘‘CPSS’’) of the Bank of International Settlements

and the Technical Committee of the International Organization of Securities Commissions (‘‘IOSCO’’). The Working Group Report presented a set of factors to consider in connection with the design, operation and regulation of SDRs. A significant focus of the Working Group Report is access to SDR data by appropriate regulators. The Working Group Report urges that a trade repository ‘‘should support market transparency by making data available to relevant authorities and the public in line with their respective information needs.’’ The Working Group Report is available at http://www.bis.org/publ/ cpss90.pdf. See also CPSS–IOSCO Consultative Report, Principles of Financial Market
Infrastructures (March 2011) available at http:// www.bis.org/publ/cpss94.pdf (‘‘PFMI Report’’). See

also Financial Stability Board (‘‘FSB’’), Implementing OTC Derivatives Market Reforms, Oct. 25, 2010 (‘‘FSB Report’’); FSB, Derivative Market Reforms, Progress Report on Implementation, Apr. 15, 2010 (‘‘FSB Progress Report’’).

27 The Commission received five comments, four of which regard the Proposed Statement. All

comment letters are available on the Commission

Web site at http://comments.cftc.gov/ PublicComments/CommentList.aspx?id=1198. Specific comment letters are identified by the submitter. Comments addressing the Proposed Statement were received from: (i) The European Securities and Markets Authority, June 5, 2012; (ii) the Financial Services Roundtable, June 6, 2012; (iii) Cloud Strategix, LLC, June 5, 2012; and (iv) the Depository Trust & Clearing Corporation, June 6, 2012. The fifth comment regards the implementation of section 619 of the Dodd-Frank

Act. 28 DTCC suggested that the Commission consider the following modifications to the Proposed Statement: (i) Provide that no registration or licensing would be necessary with respect to the condition that a registered SDR is also registered, recognized or otherwise authorized in a foreign jurisdiction’s regulatory regime; (ii) provide that SDRs operating in accordance with principles relevant to trade repositories under the PFMI Report should be deemed authorized; and (iii) provide that with respect to the condition that the SDR data sought to be accessed by a foreign regulator is reported pursuant to the foreign jurisdiction’s regulatory regime, the meaning attributed to regulatory regime includes a foreign jurisdiction’s adherence to the PFMI Report provisions outlined for market regulators. The Proposed Statement provided that a registered SDR would not be subject to the confidentiality and indemnification provisions of CEA section 21(d) if: (i) such registered SDR is also registered, recognized or otherwise authorized in a foreign jurisdiction’s regulatory regime; and (ii) the data sought to be accessed by a foreign regulatory authority has been reported to such registered SDR pursuant to the foreign jurisdiction’s regulatory regime. In addition, because some registered SDRs might also be registered, recognized or otherwise authorized in a foreign jurisdiction and may accept swap data reported pursuant to a foreign regulatory regime, the

Commission concluded that the confidentiality and indemnification provisions of CEA section 21(d) generally apply only to such data reported pursuant to the CEA and Commission regulations.

As detailed in Section III.B., interested members of the public and a foreign regulatory authority responded to the Commission’s request to receive public comments on all aspects of the Proposed Statement. 22 In adopting this
Statement, the Commission has carefully considered these comments.

III. Considerations Relevant to the

Commission’s Statement 23

A. International Considerations

As noted above, section 752(a) of the

Dodd-Frank Act directs the Commission to consult and coordinate with foreign regulatory authorities regarding the

establishment of consistent

international standards for the regulation of swaps and various ‘‘swap entities.’’ Section 752(a) also provides that the Commission ‘‘may agree to such information-sharing arrangements [ with foreign regulatory authorities ] as may be deemed to be necessary or appropriate in the public interest’’ or for the protection of investors and counterparties. 24

The Commission is committed to a cooperative international approach to the registration and regulation of SDRs, and consulted extensively with various foreign regulatory authorities in promulgating both its proposed and final regulations concerning SDRs and in the finalization of the Proposed

Statement. 25 The Commission notes that the SDR Final Rules are largely

consistent with the recommendations and goals of the May 2010 ‘‘CPSS– IOSCO Consultative Report, Considerations for Trade Repositories in the OTC Derivatives Market’’ (‘‘Working Group Report’’). 26

Consistent with the international harmonization envisioned by section
752 of the Dodd-Frank Act, the Commission has engaged in consultations with foreign regulatory authorities regarding the Commission’s adoption and implementation of regulations and the issuance of interpretative guidance relating to the Dodd-Frank Act. In this context, foreign regulatory authorities have expressed concern about the difficulty in complying with the indemnification provisions of CEA section 21(d).

B. Comments on the Proposed

Statement 27

The Depository Trust & Clearing Corporation (‘‘DTCC’’) stated its support of the adoption of the Proposed Statement as a ‘‘necessary first step.’’ Nevertheless, DTCC concluded that the statutory language at issue requires a ‘‘legislative fix’’ to clarify the scope and applicability of the confidentiality and indemnification provisions of CEA section 21(d) because ‘‘the indemnification requirement’’ would limit the sharing of trade repository data

across borders. DTCC noted that a foreign regulator might have an interest in SDR data related to a swap transaction entered into by parties not subject to the foreign regulator’s ‘‘oversight authority.’’ In this regard, DTCC noted concerns expressed by foreign regulatory authorities who believe that a ‘‘jurisdictional nexus’’ would nonetheless exist with respect to the terms of swap transactions (e.g., swap transactions using currencies or underlying reference entities subject to a foreign regulator’s oversight authority) that are not reported ‘‘pursuant to the foreign jurisdiction’s regulatory regime.’’ DTCC pointed out that access to such swap transaction data that is not reported ‘‘pursuant to the foreign jurisdiction’s regulatory regime’’ would not be available unless the foreign regulator enters into a confidentiality and indemnification agreement with the

SDR.

DTCC also suggested certain

substantive modifications to the Proposed Statement. 28 Among them, DTCC suggested that the Commission expand on the meaning of ‘‘registered, recognized or otherwise authorized’’ in the Proposed Statement or, alternatively, state that operation in accordance with the PFMI Report would

mean that an SDR is ‘‘authorized’’ for purposes of this Statement.

The European Securities and Markets Authority (‘‘ESMA’’) noted that it

considers the Commission’s ‘‘recognition of foreign regimes and the access to data requirements originating from them’’ under the Proposed Statement as a ‘‘step in the right

direction’’ that would allow relevant European authorities to obtain data in accordance with relevant European Union laws and forthcoming


### 65180 Federal Register / Vol. 77, No. 207 / Thursday, October 25, 2012 / Notices

29 ESMA suggested that the Commission consider the following alternative modifications to the Proposed Statement: (i) delete the second condition of the Proposed Statement (i.e., ‘‘The data sought to be accessed by a foreign regulatory authority is reported to such registered SDR pursuant to the foreign regulatory regime.’’); or (ii) add the following bracketed language to the second

condition such that it would read as follows: ‘‘The data sought to be accessed by a foreign regulatory authority has been reported to such registered SDR pursuant to the foreign jurisdiction’s regulatory regime [or the foreign regulatory authority is entitled to access such data pursuant to its regulatory regime to fulfill its respective responsibilities and mandates.]’’ 30 Among the working groups the Commission is actively participating in to develop consistent

international standards are the FSB, CPSS and IOSCO working group on data access ( see infra n. 36), the Technical Committee of IOSCO which developed the ‘‘Report on OTC derivatives and aggregation requirements,’’ and the FSB’s Legal Entity Identifier Expert Group.

31 See SDR Final Rules, supra n. 6

, at 54572.

32 See Data Final Rules, supra n. 5, at 2176. regulations. However, ESMA noted its

concern that the Commission’s interpretation of the indemnification provision of CEA section 21(d) ‘‘cannot

overrule the [Dodd-Frank] Act itself’’ and concluded that ‘‘the confidentiality and indemnification issue could only be fully addressed with a legislative amendment by repealing the original provision in the Dodd-Frank Act.’’ In addition, consistent in part with DTCC’s

comment, ESMA noted that relevant European Union authorities could have
an interest in accessing swap transaction data reported to a registered SDR pursuant to the Dodd-Frank Act, but not reported pursuant to European Union laws and forthcoming regulations. Accordingly, ESMA suggested certain modifications to the Proposed Statement. 29

The Financial Services Roundtable (‘‘FSR’’) requested that the Commission support a legislative solution which

would remove the indemnification provision from CEA section 21(d). FSR also requested that the Commission continue its discussions with regulators in other jurisdictions as well as its participation in standard-setting bodies to develop international standards relevant to the swap markets.

Cloud Strategix, LLC (‘‘Cloud Strategix’’), representing the data hosting and cloud computing industry, in relevant part expressed a general concern with respect to the ‘‘several costs, unintended consequences, and impracticalities’’ related to the Proposed

Statement and the SDR Final Rules. Specifically, Cloud Strategix noted that the Proposed Statement ‘‘does not seem to consider the great cost to the data center that hosts the SDR in assisting the SDR with compliance with foreign regulators.’’ In this context, Cloud Strategix suggested that the Commission ‘‘provide an exemption for all data centers to indemnify SDRs for regulatory inquiries, enforcement proceedings, or litigation for both foreign and domestic regulators.’’ C. Commission Determination

After considering the comments received to the Proposed Statement and following the aforementioned consultations with foreign regulatory authorities pursuant to the Congressional mandate for cooperation
in section 752 of the Dodd-Frank Act,

the Commission has concluded that the guidance described in the Proposed Statement is necessary to ensure that appropriate access by foreign regulatory authorities is not unnecessarily inhibited. Accordingly, while the SDR Final Rules address foreign regulators with supervisory authority and regulatory responsibility, the Commission is issuing this Statement to ensure that foreign regulators receive sufficient access to data reported to SDRs where such foreign regulators have an independent and sufficient regulatory interest.

In response to DTCC’s comment regarding expanding on the meaning of ‘‘registered, recognized or otherwise authorized’’ of the Proposed Statement or, alternatively, stating that operation in accordance with the PFMI Report

would mean that an SDR is ‘‘authorized’’ for purposes of this
Statement, the Commission believes,
consistent with DTCC’s comment, that a foreign regulator with ‘‘oversight responsibilities’’ of an SDR pursuant to the regulatory regime of the applicable foreign jurisdiction would meet the ‘‘registered, recognized or otherwise authorized’’ prong herein. Nonetheless, the Commission declines to express a more detailed view on the regulatory or jurisdictional structures applicable to SDRs governed within foreign jurisdictions that would meet the ‘‘registered, recognized or otherwise authorized’’ prong herein. As the Commission indicated in its Proposed Statement, access by foreign regulatory authorities ‘‘should be governed by such foreign jurisdiction’s regulatory regime,’’ and the Commission believes that ‘‘registered, recognized or otherwise authorized’’ is sufficiently broad to cover a wide variety of foreign regulatory structures and regimes.

Similarly, and in response to DTCC’s and ESMA’s comment regarding accessing data which is not reported pursuant to European Union laws and forthcoming regulations, the Commission acknowledges the difficulty that certain foreign regulators may face in this regard. The Commission reiterates that foreign and domestic regulators may nonetheless be

able to receive confidential data from

the Commission without the execution of a confidentiality and indemnification

agreement.

In response to FSR’s comment regarding consultations and participation with standard-setting bodies, the Commission agrees and notes its participation in variousinternational regulatory and industryled working groups. 30

In response to the cost-benefit considerations raised by Cloud Strategix, the Commission has previously acknowledged such costs in

its consideration of the costs and benefits of compliance with its SDR

Final Rules 31 and Data Final Rules. 32

The Commission does not believe that the Proposed Statement changes or

modifies its earlier consideration of the costs and benefits of the applicable final

rules.

IV. Interpretative Statement

In consideration of the foregoing, the Commission is providing guidance regarding the confidentiality and indemnification provisions of CEA section 21(d) by adopting the substance of the Proposed Statement. In this regard, the Commission seeks to ensure an orderly transition to the Dodd-Frank Act’s swap data reporting regime by providing certainty to market participants and regulators with respect to the confidentiality and indemnification provisions of CEA
section 21(d).

A. Data Reported to Registered SDRs

The Commission understands that some registered SDRs also may be registered, recognized or otherwise authorized in a foreign jurisdiction and may accept swap data reported pursuant to the foreign regulatory regime. The

Commission concludes that the confidentiality and indemnification provisions of CEA section 21(d) generally apply only to such data reported pursuant to the CEA and Commission regulations.

The Commission further concludes that the confidentiality and indemnification provisions should not operate to inhibit or prevent foreign regulatory authorities from accessing data in which they have an independent and sufficient regulatory interest (even if that data also has been reported


### 65181 Federal Register / Vol. 77, No. 207 / Thursday, October 25, 2012 / Notices

33 F. Hoffmann-LaRoche, Ltd. v. Empagran S.A.,
542 U.S. 155, 164 (2004). In Hoffmann-LaRoche, the Supreme Court also stated that canons of statutory construction ‘‘assume that legislators take account of the legitimate sovereign interests of other nations when they write American laws.’’ Id.

34 Id. at 164–165. 35 Rest. 3d., Third Restatement Foreign Relations Law section 403 (scope of a statutory grant of authority must be construed in the context of international law and comity including, as appropriate, the extent to which regulation is

consistent with the traditions of the international system).

36 The Commission notes that access to data held by trade repositories is a concept under discussion and development among international regulators. At the request of the FSB, CPSS and IOSCO have established a working group of relevant authorities to produce a forthcoming report regarding authorities’ access to trade repository data.

37 Regarding the Commission’s access to SDR
data, section 21(b)(1)(A) of the CEA states that the Commission ‘‘shall prescribe standards that specify the data elements for each swap that shall be collected and maintained by each registered swap data repository.’’ Section 21(c)(1) of the CEA requires registered SDRs to ‘‘accept data prescribed by the Commission for each swap under subsection (b).’’ With respect to Commission access to data held in registered SDRs, the Commission concludes that the direct electronic access provisions of CEA section 21(c)(4) apply only to such data that the SDR is required to accept under section 21(c)(1), which is further defined by part 45 of the Commission’s regulations. In this respect, the

Commission concludes that its direct electronic access applies only to such data reported pursuant to section 21 and Commission regulations promulgated thereunder.

38 CEA section 8(e), 7 U.S.C. 12(e), allows the

Commission to share confidential information in its possession obtained in connection with the administration of the CEA with ‘‘any department or agency of the Government of the United States’’ or with any foreign futures authority or a department, central bank or ministry, or agency of a foreign government or political subdivision thereof, acting within the scope of its jurisdiction.

39 7 U.S.C. 12. pursuant to the CEA and Commission regulations).

Accordingly, and consistent with the
Commission’s SDR Final Rules, the Commission interprets CEA section 21(d) such that a registered SDR would not be subject to the confidentiality and indemnification provisions of that

section if:

• Such registered SDR also is registered, recognized or otherwise authorized in a foreign jurisdiction’s regulatory regime; and

• The data sought to be accessed by a foreign regulatory authority has been reported to such registered SDR pursuant to the foreign jurisdiction’s regulatory regime.

This Statement is grounded in principles of international law and comity. For example, in F. Hoffmann-La

Roche Ltd. v. Empagran S.A., the U.S. Supreme Court, in reviewing the extraterritorial applicability of a
different federal statute, stated that extraterritorial jurisdiction should be construed, where ambiguous, ‘‘to avoid

unreasonable interference with the sovereign authority of other nations.’’ 33 In cases considering concepts of international law and comity in evaluating the extraterritorial scope of federal statutes, the Supreme Court has noted that the principles in the Third Restatement of Foreign Relations Law are relevant to the interpretation of U.S.

law. 34

Specifically, section 403 of the Third Restatement of Foreign Relations Law states, in relevant part:

Whether exercise of jurisdiction over a person or activity is unreasonable is determined by evaluating all relevant factors, including, where appropriate:

(a) The link of the activity to the territory of the regulating state, i.e., the extent to which the activity takes place within the territory, or has substantial, direct, and foreseeable effect upon or in the territory;

(b) The connections, such as nationality, residence, or economic activity, between the regulating state and the person principally responsible for the activity to be regulated, or

between that state and those whom the regulation is designed to protect;

(c) The character of the activity to be regulated, the importance of regulation to the regulating state, the extent to which other states regulate such activities, and the degree to which the desirability of such regulation is generally accepted;

(d) The existence of justified expectations that might be protected or hurt by the regulation; (e) The importance of the regulation to the international political, legal, or economic

system;

(f) The extent to which the regulation is

consistent with the traditions of the international system;

(g) The extent to which another state may have an interest in regulating the activity;

and

(h) The likelihood of conflict with regulation by another state. 35

To avoid unnecessary interference with the sovereign authority of foreign regulatory authorities, this Statement is supported and underpinned by principles of international law and comity.

B. Foreign Regulatory Access

In the Commission’s view, a foreign regulator’s access to data held in a registered SDR that also is registered, recognized, or otherwise authorized in a foreign jurisdiction’s regulatory regime, should be governed by such foreign jurisdiction’s regulatory regime where the data sought to be accessed has been reported pursuant to that regulatory regime. The Commission concludes that it is appropriate not to apply the requirements of CEA section 21(d) in these circumstances, in light of, among other things, the importance of such data to the foreign jurisdiction’s regulatory regime, foreign regulators’

interest in unfettered access to such
data, and the traditions of mutual trust and cooperation among international regulators. 36

Therefore, the Commission concludes that a foreign regulator’s access to data from a registered SDR that also is registered, recognized, or otherwise authorized in a foreign jurisdiction’s regulatory regime, where the data to be accessed has been reported pursuant to that regulatory regime, will be dictated by that foreign jurisdiction’s regulatory regime and not by the CEA or Commission regulations. Such access is appropriate, in the Commission’s view, even if the applicable data is also reported to the registered SDR pursuant

to the Commission’s Data Final Rules. 37 Additionally, the Commission reiterates that a foreign regulatory authority, like domestic regulators, can
nonetheless receive confidential data,

without the execution of a confidentiality and indemnification agreement, from the Commission (as opposed to an SDR) pursuant to section 8(e) of the CEA. 38 Such data sharing and access would be governed by the confidentiality provisions of section 8 of

the CEA. 39 The Commission is committed to continuing its close cooperation with: (i) foreign regulatory authorities to promptly address such information requests; and (ii) registered SDRs that request the Commission’s assistance in determining if a foreign regulatory authority has an independent and regulatory interest in data that has been reported to such registered SDR pursuant to the relevant foreign jurisdiction’s regulatory regime.

* * * * *

Issued in Washington, DC on October 22, 2012 by the Commission.

Stacy D. Yochum,

Counsel.

Appendices to Swap Data Repositories: Interpretative Statement Regarding the Confidentiality and

Indemnification Provisions of Section 21(d) of the Commodity Exchange Act—

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

Appendix 1—Commission Voting Summary

On this matter, Chairman Gensler and Commissioners Chilton and Wetjen voted in
the affirmative; Commissioners Sommers and O’Malia voted in the negative.

Appendix 2—Statement of Chairman Gary Gensler

I support the final interpretative guidance regarding the confidentiality and


### 65182 Federal Register / Vol. 77, No. 207 / Thursday, October 25, 2012 / Notices

indemnification provisions of the DoddFrank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act).

The confidentiality and indemnification provisions in the Dodd-Frank Act state that before a registered swap data repository (SDR) may share information with certain domestic and foreign regulators, those regulators must first agree in writing to abide by the confidentiality provisions of Section 8 of the Commodity Exchange Act (CEA). In addition, the Dodd-Frank Act requires that regulators also must indemnify both the SDR and the Commodity Futures Trading Commission (Commission) for any expenses arising from litigation relating to the information provided under Section 8 of the

CEA.

The Commission recognizes the importance to foreign regulators of swap data reported under foreign regulatory regimes. The Commission’s final SDR rules specified that confidential swap data reported to and maintained by an SDR may be accessed by an ‘‘appropriate foreign regulator’’ without a confidentiality and indemnification agreement when the SDR is also registered with that foreign regulator.

To provide further clarity for foreign regulators, the Commission is issuing this interpretative guidance on the Dodd-Frank Act confidentiality and indemnification provisions. The final interpretative guidance makes clear that a foreign regulator will not be prevented from accessing data in which it has an independent and sufficient regulatory authority over the SDR and such data has been reported pursuant to the foreign jurisdiction’s regulatory regime.

With this interpretive guidance, the Commission has taken another important step to ensure appropriate access to SDRs by foreign regulatory authorities consistent with the provisions of the Dodd-Frank Act.

Appendix 3—Statement of Commissioners Jill E. Sommers and

Scott D. O’Malia

We respectfully dissent from issuing this Final Interpretative Statement Regarding the Confidentiality and Indemnification Provisions of Section 21(d) of the Commodity Exchange Act (CEA) (Final Interpretative
Statement). When the Commission issued the proposed guidance (Proposed Interpretative Statement) in May of this year, we were concerned that the statement did not actually solve the problem with the statutory language beyond providing some additional clarity to the Swap Data Repository (SDR) rules and we called for a permanent solution by way of a legislative repeal of the indemnification provisions.

When finalizing the SDR rules, the Commission stated that a foreign regulator may have direct access to confidential swap data reported to and maintained by an SDR registered with the Commission without executing a Confidentiality and Indemnification Agreement when the SDR is also registered with the foreign regulator and the foreign regulator is acting in a regulatory capacity with respect to the SDR. See Swap Data Repositories: Registration Standards, Duties and Core Principles, 76 FR 54,538, 54,554 (Sept. 1, 2011). The Final Interpretative Statement expands this to SDRs that are registered, recognized or otherwise authorized in a foreign regulator’s regulatory regime and clarifies that direct access to data should be granted even if the data the foreign regulator seeks also has been reported pursuant to the CEA and Commission regulations.

The Commission received a comment from the European Securities and Markets Authority (ESMA) suggesting that we consider modifying the conditions that would need to be met so that a foreign regulator could escape being subject to the indemnification provisions. Specifically, ESMA suggested that the Commission consider the following alternative
modifications: (1) delete the second condition of the Proposed Interpretative Statement, (i.e., ‘‘The data sought to be accessed by a foreign regulatory authority is reported to such registered SDR pursuant to the foreign regulatory regime’’), which would

leave the sole condition that the SDR be registered, recognized or otherwise authorized in the foreign regulatory regime; or (2) add language to the second condition

such that it would read as follows: ‘‘The data sought to be accessed by a foreign regulatory authority has been reported to such registered SDR pursuant to the foreign jurisdiction’s regulatory regime or the foreign regulatory authority is entitled to access such data pursuant to its regulatory regime to fulfill its respective responsibilities and

mandates.’’ Although the Commission acknowledges the comment in the Final Interpretative Statement, we do not adopt either suggestion and do not justify their

exclusion.

Our second concern involves the

distinction the Commission made in the SDR rules between an Appropriate Domestic Regulator and an Appropriate Domestic Regulator with Regulatory Responsibilities. Under the current rules only the CFTC and the SEC are able to directly access SDR data absent an indemnification agreement. All other U.S. Regulators (i.e. ‘‘Appropriate Domestic Regulators’’) would have to execute an indemnification agreement—something that we are told they are prohibited from doing. Adopting the second ESMA option and extending it to Appropriate Domestic Regulators would allow them direct access to data they believe is necessary to fulfill their regulatory mandate, and in our view is something that is within the Commission’s
discretion. Instead, the Commission has purposely chosen to interpret the statute in

a manner that constrains other domestic regulators’ ability to examine swap market data. For these reasons we cannot support the guidance issued today by the Commission.

[FR Doc. 2012–26298 Filed 10–24–12; 8:45 am]

**BILLING CODE 6351–01–P**

**CONSUMER PRODUCT SAFETY**

**COMMISSION**

**Sunshine Act Meeting Notice**

**TIME AND DATE :**  Wednesday, October 31,

2012, 10:00 a.m.–11:00 a.m. **PLACE :**  Room 420, Bethesda Towers, 4330 East West Highway, Bethesda, Maryland.

**STATUS :**  Commission Meeting—Open to

the Public.

**MATTERS TO BE CONSIDERED :**  Briefing

Matter: Safety Standard for Bedside Sleepers.

A live webcast of the Meeting can be

viewed at www.cpsc.gov/webcast

For a recorded message containing the latest agenda information, call (301)

504–7948.

**CONTACT PERSON FOR MORE INFORMATION :**  Todd A. Stevenson, Office of the Secretary, U.S. Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814, (301)

504–7923.

Dated: October 23, 2012.

Todd A. Stevenson,

Secretary.

[FR Doc. 2012–26369 Filed 10–23–12; 4:15 pm]

**BILLING CODE 6355–01–P**

**CORPORATION FOR NATIONAL AND**

**COMMUNITY SERVICE**

**Proposed Information Collection; Comment Request** 

**AGENCY :**  Corporation for National and Community Service.

**ACTION :**  Notice.

**SUMMARY :**  The Corporation for National and Community Service (CNCS), as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and federal agencies with an opportunity to comment on proposed and/or continuing collections of

information in accordance with the Paperwork Reduction Act of 1995
(PRA95) (44 U.S.C. 3506(c)(2)(A)). This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and
financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirement on respondents can be properly assessed.

Currently, CNCS is soliciting comments concerning its proposed

revision of the National Service Trust Interest Payment Form to update the

burden hour information. This form is used by AmeriCorps members to request interest payments on qualified loans based on their AmeriCorps service, by schools and lenders to verify their eligibility, and by both parties to satisfy certain legal requirements.