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

1See 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. 

2Pursuant 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 


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

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

4Section 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). 

5See 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. 

6The 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). 

10See section 752(a) of the Dodd-Frank Act. 

11See 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. 

12See, generally, SDR Final Rules. 

13See SDR Final Rules at 54554. 

14The 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). 

16The 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. 

17Section 725(f) of the Dodd-Frank Act amended 

section 8(e) of the CEA to include foreign central 

banks and ministries. 

18See SDR Final Rules at 54554. 

19 Id. 

20See 17 CFR 49.3(b). 

21See 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. 


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

22See public comment file in response to the 

Proposed Statement, available at http:// 

comments.cftc.gov/PublicComments/ 

CommentList.aspx?id=1198. 23Legislation 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. 

24See section 752(a) of the Dodd-Frank Act. 

25See 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. 

26This 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’’). 

27The 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 


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

29ESMA 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.]’’ 

30Among 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. 

31See SDR Final Rules, supra n. 6, at 54572. 

32See 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 various 

international 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 


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

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. 

35Rest. 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). 

36The 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. 

37Regarding 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. 

38CEA 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 


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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. 


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