Federal Register / Vol. 81, No. 156 / Friday, August 12, 2016 / Proposed Rules 53343 

operations descending below 1,500 feet 

above the surface, and IFR departure 

operations below 1,200 feet above the 

surface. 

This proposal would also remove 

reference to the Maui VORTAC from the 

airspace legal descriptions for the Class 

E3 airspace area designated as an 

extension to the Class C surface area, 

and the Class E5 airspace area extending 

upward from 700 feet above the surface. 

Changes to the available instrument 

flight procedures since the last review, 

advances in GPS mapping accuracy, and 

a reliance on precise geographic 

coordinates to define airport and 

airspace reference points have made the 

proposed airspace redesign necessary 

for the safety and management of 

Instrument Flight Rules (IFR) 

operations. 

Class E airspace designations are 

published in paragraphs 6003, and 

6005, respectively, of FAA Order 

7400.9Z, dated August 6, 2015, and 

effective September 15, 2015, which is 

incorporated by reference in 14 CFR 

71.1. The Class E airspace designations 

listed in this document will be 

published subsequently in the Order. 

Regulatory Notices and Analyses 

The FAA has determined that this 

regulation only involves an established 

body of technical regulations for which 

frequent and routine amendments are 

necessary to keep them operationally 

current, is non-controversial and 

unlikely to result in adverse or negative 

comments. It, therefore: (1) Is not a 

‘‘significant regulatory action’’ under 

Executive Order 12866; (2) is not a 

‘‘significant rule’’ under DOT 

Regulatory Policies and Procedures (44 

FR 11034; February 26, 1979); and (3) 

does not warrant preparation of a 

regulatory evaluation as the anticipated 

impact is so minimal. Since this is a 

routine matter that will only affect air 

traffic procedures and air navigation, it 

is certified that this rule, when 

promulgated, would not have a 

significant economic impact on a 

substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

Environmental Review 

This proposal will be subject to an 

environmental analysis in accordance 

with FAA Order 1050.1F, 

‘‘Environmental Impacts: Policies and 

Procedures’’ prior to any FAA final 

regulatory action. 

List of Subjects in 14 CFR Part 71 

Airspace, Incorporation by reference, 

Navigation (air). 

The Proposed Amendment 

Accordingly, pursuant to the 

authority delegated to me, the Federal 

Aviation Administration proposes to 

amend 14 CFR part 71 as follows: 

PART 71—DESIGNATION OF CLASS A, 

B, C, D, AND E AIRSPACE AREAS; AIR 

TRAFFIC SERVICE ROUTES; AND 

REPORTING POINTS 

■ 1. The authority citation for 14 CFR 

part 71 continues to read as follows: 

Authority: 49 U.S.C. 106(f), 106(g), 40103, 

40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 

1959–1963 Comp., p. 389. 

§ 71.1 [Amended] 

■ 2. The incorporation by reference in 

14 CFR 71.1 of FAA Order 7400.9Z, 

Airspace Designations and Reporting 

Points, dated August 6, 2015, and 

effective September 15, 2015, is 

amended as follows: 

Paragraph 6003 Class E Airspace Areas 

Designated as an Extension to a Class C 

Surface Area. 

* * * * * 

AWP HI E3 Kahului, HI [Modified] 

Kahului Airport, HI 

(Lat. 20°53′55′′ N., long. 156°25′50′′ W.) 

That airspace extending upward from the 

surface within 3 miles each side of the 

Kahului Airport 203° bearing extending from 

the 5-mile radius of the airport to 7 miles 

southwest of the airport. This Class E 

airspace area is effective during the specific 

dates and times established in advance by a 

Notice to Airmen. The effective date and time 

will thereafter be continuously published in 

the Pacific Chart Supplement. 

Paragraph 6005 Class E Airspace Areas 

Extending Upward From 700 Feet or More 

Above the Surface of the Earth. 

* * * * * 

AWP HI E5 Kahului, HI [Modified] 

Kahului Airport, HI 

(Lat. 20°53′55′′ N., long. 156°25′50′′ W.) 

That airspace extending upward from 700 

feet above the surface within a 5-mile radius 

of Kahului Airport, and within 3.6 miles each 

side of the airport 038° bearing extending 

from the 5-mile radius of the airport to 11.7 

miles northeast of the airport, and within 2 

miles each side of the airport 065° bearing 

extending from the 5-mile radius of the 

airport to 10 miles northeast of the airport, 

and within 3 miles each side of the airport 

203° bearing extending from the 5-mile 

radius of the airport to 10.3 miles southwest 

of the airport, and within the area bounded 

by the airport 318° bearing clockwise to the 

airport 013° bearing extending from the 5- 

mile radius of the airport to 8.5-miles 

northeast of the airport, excluding that 

airspace beyond 12 miles from the coast. 

Issued in Seattle, Washington, on August 1, 

2016. 

Tracey Johnson, 

Manager, Operations Support Group, Western 

Service Center. 

[FR Doc. 2016–19004 Filed 8–11–16; 8:45 am] 

BILLING CODE 4910–13–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 3 

RIN 3038–AE49 

Chief Compliance Officer Annual 

Report Requirements for Futures 

Commission Merchants, Swap Dealers, 

and Major Swap Participants; 

Amendments to Filing Dates 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘Commission’’ or 

‘‘CFTC’’) is proposing to amend certain 

provisions of its regulations concerning 

Chief Compliance Officers (‘‘Proposal’’). 

The regulation that is the subject of the 

Proposal addresses chief compliance 

officers (‘‘CCOs’’) of futures commission 

merchants (‘‘FCMs’’), swap dealers 

(‘‘SDs’’), and major swap participants 

(‘‘MSPs’’) (collectively, ‘‘Registrants’’). 

The proposed amendments would: 

Codify existing no-action relief 

regarding the timing of when a 

Registrant must furnish its CCO annual 

report to the Commission; clarify filing 

requirements for Registrants located in a 

jurisdiction for which the Commission 

has issued a comparability 

determination; and delegate to the 

Director of the Division of Swap Dealer 

and Intermediary Oversight (‘‘DSIO’’) 

authority to grant extensions to the CCO 

annual report filing deadline. 

DATES: Comments must be received on 

or before September 12, 2016. 

ADDRESSES: You may submit comments, 

identified by RIN 3038–AE49, by any of 

the following methods: 

• CFTC Web site: http://

comments.cftc.gov. Follow the 

instructions for submitting comments 

through the Comments Online process 

on the Web site. 

• Mail: Send to Christopher 

Kirkpatrick, Secretary of the 

Commission, Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st Street NW., 

Washington, DC 20581. 

• Hand Delivery/Courier: Same as 

Mail, above. 


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1 5 U.S.C. 552. 

2 17 CFR 145.9. The Commission’s regulations are 

found at 17 CFR Chapter I and can be accessed 

through the Commission’s Web site at www.cftc.gov. 

3 7 U.S.C. 6s(k)(3)(A)(i). The CEA can be accessed 

through the Commission’s Web site. 

4 7 U.S.C. 6s(k)(3)(B)(i). 

5 7 U.S.C. 6d(d). 

6 17 CFR 3.3(e) and (f). 

7See CFTC Letter No. 13–84, Time-Limited NoAction Relief for Futures Commission Merchants, 

Swap Dealers, and Major Swap Participants from 

Compliance with the Timing Requirements of 

Commission Regulation 3.3(f)(2) Relating to Annual 

Reports by Chief Compliance Officers (Dec. 30, 

2013), available at: http://www.cftc.gov/idc/groups/ 

public/@lrlettergeneral/documents/letter/13-84.pdf; 

CFTC Letter No. 14–154, Time-Limited No-Action 

Relief for Futures Commission Merchants, Swap 

Dealers, and Major Swap Participants from 

Compliance with the Timing Requirements of 

Commission Regulation 3.3(f)(2) Relating to Annual 

Reports by Chief Compliance Officers (Dec. 22, 

2014), available at: http://www.cftc.gov/idc/groups/ 

public/@lrlettergeneral/documents/letter/14- 

154.pdf; and CFTC Letter No. 15–15, No-Action 

Relief for Futures Commission Merchants, Swap 

Dealers, and Major Swap Participants from 

Compliance with the Timing Requirements of 

Commission Regulation 3.3(f)(2) Relating to Annual 

Reports by Chief Compliance Officers (Mar. 27, 

2015), available at: http://www.cftc.gov/idc/groups/ 

public/@lrlettergeneral/documents/letter/15-15.pdf 

(‘‘CFTC Staff Letter No. 15–15’’). 

8FIA and ISDA Letter, Request for no-action relief 

concerning certain requirements of CFTC Rule 3.3 

relating to the timing of the Annual Report (Mar. 

10, 2015) (on file with the CFTC, available for 

inspection and copying). 

9Business Conduct Standards for Security-Based 

Swap Dealers and Major Security-Based Swap 

Participants, 81 FR 29959 (May 13, 2016). 

10See id. at 30150. 

11See Comparability Determination for Canada: 

Certain Entity-Level Requirements, 78 FR 78839, 

78843 (Dec. 27, 2013); Comparability Determination 

for the European Union: Certain Entity-Level 

Requirements, 78 FR 78923, 78928 (Dec. 27, 2013); 

Comparability Determination for Hong Kong: 

Certain Entity-Level Requirements, 78 FR 78852, 

78856 (Dec. 27, 2013); Comparability Determination 

for Japan: Certain Entity-Level Requirements, 78 FR 

78910, 78915 (Dec. 27, 2013); Comparability 

Determination for Switzerland: Certain Entity-Level 

Requirements, 78 FR 78899, 78903 (Dec. 27, 2013). 

It should be noted that while Australia was granted 

a determination of comparability for some entitylevel requirements, it was not granted a 

determination of comparability with respect to the 

requirements of Regulation 3.3(e). See 

Comparability Determination for Australia: Certain 

Entity-Level Requirements, 78 FR 78864, 78869 

(Dec. 27, 2013). 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Please submit your comments using 

only one of these methods. 

All comments must be submitted in 

English, or if not, accompanied by an 

English translation. Comments will be 

posted as received to http://

www.cftc.gov. You should submit only 

information that you wish to make 

available publicly. If you wish the 

Commission to consider information 

that is exempt from disclosure under the 

Freedom of Information Act (‘‘FOIA’’),1

a petition for confidential treatment of 

the exempt information may be 

submitted according to the procedures 

set forth in § 145.9 of the Commission’s 

regulations.2

The Commission reserves the right, 

but shall have no obligation, to review, 

pre-screen, filter, redact, refuse or 

remove any or all of your submission 

from www.cftc.gov that it may deem to 

be inappropriate for publication, such as 

obscene language. All submissions that 

have been redacted or removed that 

contain comments on the merits of the 

rulemaking will be retained in the 

public comment file and will be 

considered as required under the 

Administrative Procedure Act and other 

applicable laws, and may be accessible 

under the FOIA. 

FOR FURTHER INFORMATION CONTACT: 

Eileen Flaherty, Director, 202–418– 

5326, eflaherty@cftc.gov; Erik Remmler, 

Deputy Director, 202–418–7630, 

eremmler@cftc.gov; Laura Gardy, 

Associate Director, 202–418–7645, 

lgardy@cftc.gov; or Pamela M. Geraghty, 

Special Counsel, 202–418–5634, 

pgeraghty@cftc.gov, Division of Swap 

Dealer and Intermediary Oversight, 

Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street NW., Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Commission Requirements for 

Submission of CCO Annual Reports 

Section 4s(k)(3) of the Commodity 

Exchange Act (‘‘CEA’’) requires CCOs 

for SDs and MSPs, in accordance with 

rules prescribed by the Commission, to 

prepare and sign an annual report 

(‘‘CCO Annual Report’’) describing, 

among other things, the SD’s or MSP’s 

compliance with the CEA and CFTC 

regulations.3 CEA section 4s(k)(3)(B) 

requires the CCO Annual Report to 

accompany each appropriate financial 

report of the SD or MSP required to be 

furnished to the Commission.4 CEA 

section 4d(d) requires CCOs of FCMs to 

‘‘perform such duties and 

responsibilities’’ as are established by 

Commission regulation or rules of a 

registered futures association.5

Regulations 3.3(e) and (f) codify the 

duty to prepare and furnish to the 

Commission a CCO Annual Report for 

all Registrants.6 Regulation 3.3(e) 

requires the CCO Annual Report to 

cover the most recently completed fiscal 

year of the Registrant and specifies 

certain reporting elements for 

Registrants in describing their 

compliance with the CEA and 

Commission regulations. Regulation 

3.3(f)(1) requires the furnishing of the 

CCO Annual Report to the board or 

senior officer prior to its submission to 

the Commission. Regulation 3.3(f)(2) 

currently requires the CCO Annual 

Report to be furnished to the 

Commission electronically not more 

than 60 days after a Registrant’s fiscal 

year-end. 

B. Regulation 3.3(f)(2) Implementation 

Experience 

Since the adoption of the 60-day filing 

requirement, DSIO has continuously 

provided no-action relief for CCO 

Annual Reports submitted to the 

Commission within 90 days of a 

Registrant’s fiscal year-end.7 The noaction letter currently in effect, CFTC 

Staff Letter No. 15–15, responds to a 

request for relief on behalf of FCM and 

SD firms, which stated that having an 

additional 30 days to file the CCO 

Annual Report allows each Registrant to 

conduct a more substantive and 

complete review of its compliance 

program.8

Recently, the U.S. Securities and 

Exchange Commission (‘‘SEC’’) adopted 

final rules corresponding to Regulation 

3.3, and implementing a provision of 

Title VII of the Dodd-Frank Act the text 

of which is effectively identical to CEA 

section 4s(k)(3)(B).9 The SEC’s 

corresponding rule requires that the 

equivalent chief compliance officer 

annual report for security-based swap 

dealers and major security-based swap 

participants be submitted to the SEC 

within 30 days following the deadline 

for filing each entity’s annual financial 

report.10

C. Application of Regulation 3.3(f)(2) to 

Entities Located in Certain Non-U.S. 

Jurisdictions 

In December 2013, the Commission 

issued comparability determinations 

deeming an SD or MSP located in 

Canada, the European Union, Hong 

Kong, Japan, or Switzerland 

(‘‘Substituted Compliance Registrants’’) 

to be in compliance with Regulation 

3.3(e) if it complies with the applicable 

corresponding regulation in its home 

jurisdiction.11 Specifically, a 

Substituted Compliance Registrant may 

elect to furnish the Commission with 

the comparable annual reporting 

information (hereinafter, ‘‘Comparable 

Annual Report’’) specified under the 

standards of its home jurisdiction. 

However, the Commission did not 

provide a comparability determination 

with respect to Regulation 3.3(f) 

regarding the timing of when the 


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12See note 11, supra. 

13The proposed amendment also makes a 

technical correction in Regulation 3.3(f)(2) by 

correcting the cross reference to the Commission 

regulation that requires the filing of Form 1–FR– 

FCM to Regulation 1.10(b)(1)(ii). 

14See Capital Requirements of Swap Dealers and 

Major Swap Participants, 76 FR 27802, 27838 

(proposed May 12, 2011). 

15The Proposal would remove the obligation of 

Registrants to file their CCO Annual Reports 

‘‘simultaneously’’ with the applicable FCM 

financial report or financial condition report. 

16 In the adopting release, the SEC addresses the 

statutory language that links the filing of the CCO 

Annual Report with the filing of appropriate 

financial reports by stating, ‘‘The Commission is 

interpreting ‘accompany’ in Section 15F(k)(3)(B)(i) 

to mean follow within 30 days.’’ 81 FR 29959, 

30059, n.1238. 

17While each of the jurisdictions that have been 

granted a comparability determination with respect 

to Regulation 3.3(e) requires Substituted 

Compliance Registrants to produce and complete 

comparable annual reporting information, there is 

variation among the foreign jurisdictions as to 

whether and/or when a Comparable Annual Report 

must be furnished to the home regulator. Therefore, 

the Commission is using the date on which the 

Comparable Annual Report must be completed as 

the benchmark for determining when the 

Comparable Annual Report must be furnished to 

the Commission. 

18 In addition, notwithstanding any such 

delegation, in any case in which a Commission 

employee delegated authority under this section 

believes it is appropriate, the employee may submit 

the question to the Commission for its 

consideration. 

Comparable Annual Report must be 

furnished to the CFTC.12

II. The Proposal 

A Proposed Amendments to Regulation 

3.3(f)(2) 

The Commission is proposing to 

codify the current no-action relief by 

amending Regulation 3.3(f)(2). The 

amendments would permit an FCM to 

furnish its CCO Annual Report to the 

Commission not more than 30 days after 

submission of the Form 1–FR–FCM 13 or 

Financial Operational Combined 

Uniform Single Report (‘‘FOCUS 

Report’’). The Proposal would also 

permit an SD or MSP to furnish its CCO 

Annual Report to the Commission not 

more than 90 days after its fiscal yearend until such time as the Commission 

adopts and implements rules 

establishing the time for filing the 

annual financial condition report 

required under CEA section 4s(f). The 

Commission has proposed, but not yet 

adopted, a financial condition report 

requirement comprised of an annual 

audited financial report for SDs and 

MSPs.14 Once the Commission adopts 

and implements a financial condition 

report rule, like FCMs, an SD or MSP 

will have up to 30 days after the 

submission of its annual financial 

condition report to submit the CCO 

Annual Report to the Commission. 

Regulation 3.3(e) requires a broad and 

detailed assessment of each Registrant’s 

compliance program over the preceding 

year as well as a discussion of planned 

changes and remedial steps to be taken 

for non-compliance matters. The 

Commission believes that providing up 

to 30 days after a Registrant’s applicable 

financial reports are due would provide 

Registrants an appropriate amount of 

time to complete the in-depth review 

and analyses required by Regulation 

3.3(e). As a policy matter, the 

Commission recognizes that the 

periodic self-evaluation that underlies 

each CCO Annual Report is a critical 

step in promoting an active and robust 

compliance culture within firms. 

In codifying the relief provided in 

CFTC Staff Letter No. 15–15, the 

Commission is clarifying that the 

statutory requirement for an SD or 

MSP’s CCO Annual Report to 

‘‘accompany each appropriate financial 

report’’ allows for the CCO Annual 

Report to be furnished to the 

Commission not more than 30 days after 

the submission of a Registrant’s annual 

financial report.15 The Commission 

recognizes the separate and distinct 

nature and purposes of the two reports, 

and believes that allowing Registrants to 

submit their CCO Annual Reports not 

more than 30 days after their financial 

reports are due satisfies the statutory 

requirement that the CCO Annual 

Report ‘‘accompany’’ the other financial 

report. This is also consistent with the 

SEC’s approach in its corresponding 

rule for delivery of chief compliance 

officer annual reports by security-based 

swap dealers and major security-based 

swap participants.16

B. Registrants Located in Substituted 

Compliance Jurisdictions 

The Commission is also proposing to 

amend Regulation 3.3(f) to address the 

timing of the filing requirement for 

Comparable Annual Reports. If the 

requirements of the Substituted 

Compliance Registrant’s home 

jurisdiction identify a specific date by 

which the Comparable Annual Reports 

must be completed, then the 

Commission is proposing that 

Comparable Annual Reports may be 

furnished to the Commission 

electronically up to 15 days after the 

date on which the Comparable Annual 

Report must be completed.17 The 

additional 15 days would allow time for 

translation of the report text into 

English. If the Substituted Compliance 

Registrant’s home jurisdiction does not 

establish a specifically identifiable 

completion date, then the Substituted 

Compliance Registrant must comply 

with the standard time frames provided 

in Regulation 3.3(f), as amended. A 

specifically identifiable completion date 

would be a date that can be clearly 

identified such as a specific calendar 

date or a set number of days after the 

Substituted Compliance Registrant’s 

fiscal year-end. A home jurisdiction 

requirement to complete the 

Comparable Annual Report only if some 

event occurs or upon request, or which 

does not specify a deadline, is not 

considered comparable to the 

Commission’s annual delivery 

requirement. 

C. Proposed Amendments Regarding a 

Delegation From the Commission to the 

Division 

Pursuant to Regulation 3.3(f)(5), 

Registrants may request from the 

Commission an extension of time to 

furnish their CCO Annual Reports if the 

failure to timely furnish the report could 

not be avoided absent ‘‘unreasonable 

effort or expense.’’ The rule provides the 

Commission with discretion in granting 

such extensions. To expedite review 

and consideration of requests for 

extensions, the Commission is 

proposing to delegate to the Director of 

DSIO, or such other employee(s) that the 

Director may designate, the authority to 

grant extensions of time subject to the 

same standard set forth in Regulation 

3.3(f)(5). The Commission notes that the 

exercise of such delegated authority 

would need to be consistent with 

Regulation 3.3(f)(5) and therefore would 

be limited to unique facts and 

circumstances that clearly demonstrate 

that the inability to timely furnish the 

report to the Commission could not 

have been eliminated absent 

unreasonable effort or expense. The 

Commission believes that such 

delegation is prudent given that the 

decision to provide an extension 

requires consideration of specific facts 

and circumstances and often this 

consideration needs to occur within a 

relatively short period of time. As is the 

case with existing delegations to staff, 

the Commission would continue to 

reserve the right to perform the 

functions described in Regulation 

3.3(f)(5) itself at any time.18

The Commission requests comment 

on the appropriateness of the proposed 

delegation and whether additional 

procedural detail is necessary. 

D. Request for Comment 

The Commission seeks comments 

regarding the following matters: 

• Given the current filing 

requirements for the Form 1–FR–FCM 

and FOCUS Reports, and the anticipated 


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19 5 U.S.C. 601 et seq. 

20See Policy Statement and Establishment of 

Definitions of ‘‘Small Entities’’ for Purposes of the 

Regulatory Flexibility Act, 47 FR 18618, 18619 

(Apr. 30, 1982) (FCMs); Further Definition of ‘‘Swap 

Dealer,’’ ‘‘Security-Based Swap Dealer,’’ ‘‘Major 

Swap Participant,’’ ‘‘Major Security-Based Swap 

Participant’’ and ‘‘Eligible Contract Participant,’’ 77 

FR 30596, 30701 (May 23, 2012) (SDs and MSPs). 

21 44 U.S.C. 3501 et seq. 

22See 17 CFR 140.99(a)(2). See also CFTC Staff 

Letter No. 15–15 at 4. 

23The CCO Annual Report must contain a 

description of material non-compliance events that 

occurred over the review period. However, 

reporting on those events in the CCO Annual Report 

provides transparency regarding the effectiveness of 

the implementation of the compliance program over 

the preceding year for management and the CFTC. 

filing requirements for the financial 

condition report, is it appropriate to 

permit FCMs, SDs, and MSPs an 

additional 30-days to furnish their CCO 

Annual Report to the Commission? Are 

there any practical or policy reasons for 

not permitting the additional 30 days? 

• Does codifying the relief granted in 

CFTC Staff Letter No. 15–15 sufficiently 

address Registrants’ concerns? 

• Should the Commission provide 

any further clarification of the 

requirements of Regulation 3.3(f) as they 

apply to entities located in jurisdictions 

for which comparability determinations 

have been issued? 

III. Related Matters 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act 19

(‘‘RFA’’) requires that agencies consider 

whether the rules they propose will 

have a significant economic impact on 

a substantial number of small entities 

and, if so, provide a regulatory 

flexibility analysis reflecting the impact. 

Section 3.3(f)(2), as proposed, amends 

the filing deadline for CCO Annual 

Reports of FCMs, SDs, and MSPs and 

clarifies the filing deadline for 

Comparable Annual Reports. The 

proposed amendments would affect 

FCMs, SDs, and MSPs that are required 

to be registered with the Commission. 

The Commission has previously 

established certain definitions of ‘‘small 

entities’’ to be used in evaluating the 

impact of its regulations on small 

entities in accordance with the RFA, 

and has previously determined that 

FCMs, SDs, and MSPs are not small 

entities for purposes of the RFA.20

Therefore, the Commission believes that 

the amendments to Regulation 3.3 

would not have a significant economic 

impact on a substantial number of small 

entities. Accordingly, the Chairman, on 

behalf of the Commission, hereby 

certifies, pursuant to 5 U.S.C. 605(b), 

that the proposed amendments will not 

have a significant economic impact on 

a substantial number of small entities. 

B. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(‘‘PRA’’) 21 provides that a federal 

agency may not conduct or sponsor, and 

a person is not required to respond to, 

a collection of information unless it 

displays a currently valid control 

number issued by the Office of 

Management and Budget (‘‘OMB’’). The 

collection of information related to this 

proposed rule is OMB control number 

3038–0080—Annual Report for Chief 

Compliance Officer of Registrants. The 

Commission believes that this proposed 

rule will not impose any new 

information collection requirements that 

require approval of OMB under the 

PRA. As a general matter, the proposed 

rule would allow Registrants up to 90 

days after the end of their fiscal years, 

and certain Substituted Compliance 

Registrants with up to 15 days after the 

date on which the Comparable Annual 

Report must be completed under the 

requirements of their home jurisdiction, 

to file the CCO Annual Report and 

Comparable Annual Reports, 

respectively. As such, this proposed 

rule does not, by itself, impose any new 

burden or any new information 

collection requirements in addition to 

those that already exist in connection 

with the preparation and delivery of the 

CCO Annual Report pursuant to part 3 

of the Commission’s regulations. 

C. Cost-Benefit Considerations 

1. Background 

As discussed above, the Commission 

is proposing amendments to the filing 

requirements for CCO Annual Reports 

in Regulation 3.3 that would: (1) 

Increase the amount of time registrants 

have to file their CCO Annual Reports 

with the Commission; and (2) clarify the 

filing requirements for Comparable 

Annual Reports. The baseline for this 

cost and benefit consideration is 

existing Regulation 3.3. Although CFTC 

Staff Letter No. 15–15, as discussed 

above, currently offers no-action relief 

that is substantially similar to the relief 

that the proposed amendments would 

grant Registrants, as a no-action letter, it 

only represents the position of the 

issuing Division or Office and cannot 

bind the Commission or other 

Commission staff.22 Consequently, the 

Commission believes that CFTC Staff 

Letter No. 15–15 should not set or affect 

the baseline against which the 

Commission considers the costs and 

benefits of the proposal. 

2. Costs 

The Commission received no 

comments during the rulemaking 

process for Regulation 3.3 regarding 

costs associated with the timing of the 

filing deadline for the CCO Annual 

Report. The proposed amendment does 

not change the report contents or 

require any additional actions to be 

taken by Registrants. The additional 30 

days (or up to 15 days after the date on 

which a Comparable Annual Report 

must be completed under applicable 

home jurisdiction standards that allow 

more time) provided by the proposal 

lengthens the time before senior 

management or the board of the 

Registrants and the Commission may 

receive the CCO Annual Reports. The 

additional time to furnish the reports 

should not materially impact regulatory 

oversight given that the purpose of the 

reports is to provide a status update for 

the Registrant’s compliance activities 

over the course of the preceding fiscal 

year and planned changes for the 

coming year. The reports generally do 

not serve to address crisis situations for 

which immediacy is critical. Therefore, 

the additional time allowed will not 

materially impact the usefulness of the 

information in the reports.23 The 

Commission has no other information 

available to it that would indicate that 

changing the filing deadline would 

measurably change the cost to prepare 

the CCO Annual Reports. Accordingly, 

the Commission preliminarily believes 

that the proposal would not impose any 

additional costs on any other market 

participants, the markets themselves, or 

the general public. The Commission 

invites comment regarding the nature of, 

and the extent to which, costs 

associated with the CCO Annual 

Reports could change as a result of the 

adoption of the proposal and, to the 

extent they can be quantified, monetary 

and other numerical estimates thereof. 

3. Benefits 

The Commission believes that the 

proposal would provide relief for 

Registrants from time pressures in 

preparing and filing their CCO Annual 

Reports. The additional time provided 

will allow Registrants to more carefully 

complete their internal processes used 

to develop the broad variety of 

information needed for the reports 

resulting in more accurate and complete 

reports. The Commission invites 

comment regarding the nature and 

extent of these and any other benefits 

that could result from adoption of the 

proposal—including benefits to other 

market participants, the market itself, or 

the general public—and, to the extent 

they can be quantified, monetary and 

other numerical estimates thereof. 


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Federal Register / Vol. 81, No. 156 / Friday, August 12, 2016 / Proposed Rules 53347 

24 7 U.S.C. 19(a). 

4. Section 15(a) Factors 

Section 15(a) of the CEA requires the 

Commission to consider the costs and 

benefits of its actions before 

promulgating a regulation under the 

CEA or issuing certain orders.24 Section 

15(a) further specifies that the costs and 

benefits shall be evaluated in light of 

five broad areas of market and public 

concern: (1) Protection of market 

participants and the public; (2) 

efficiency, competitiveness, and 

financial integrity of futures markets; (3) 

price discovery; (4) sound risk 

management practices; and (5) other 

public interest considerations. The 

Commission considers the costs and 

benefits resulting from its discretionary 

determinations with respect to the 

section 15(a) factors. 

a. Protection of Market Participants and 

the Public 

The Commission recognizes that there 

are trade-offs between reducing 

regulatory burdens and ensuring that 

the Commission has sufficient, timely 

information to fulfill its regulatory 

mission. The proposed amendments to 

Regulation 3.3 are intended to reduce 

some of the regulatory burdens on 

Registrants. While the amendment will 

delay the time by which the 

Commission will receive the CCO 

Annual Reports, the delay is relatively 

short given that the information in the 

reports looks back over the entire yearlong reporting period and identifies 

planned improvements for the coming 

year. Accordingly, the Commission 

preliminarily believes that the short 

delay will not affect the protection of 

market participants and the public. 

b. Efficiency, Competitiveness, and 

Financial Integrity of Markets 

The Commission believes that the 

proposed amendments to Regulation 3.3 

could improve allocational efficiency 

for participants in the market by 

reducing the burden of preparing the 

CCO Annual Report in a shorter timeframe, thereby allowing them to allocate 

compliance resources more efficiently 

over the report preparation period. The 

Commission preliminarily believes that 

the proposed amendments to Regulation 

3.3 will not have any market efficiency, 

competitiveness, or market integrity 

impacts because the reports address 

internal compliance programs of each 

Registrant and are not publicly 

available. 

c. Price Discovery 

The Commission preliminarily 

believes that the proposed amendments 

to Regulation 3.3 would not impact on 

price discovery. Given the fact that the 

proposed amendments affect only the 

timing of when the CCO Annual Reports 

are filed with the Commission and the 

CCO Annual Reports generally would 

not contain trade information or be 

available to the public, the proposed 

amendments would not affect price 

discovery. 

d. Sound Risk Management Practices 

The Commission preliminarily 

believes that the proposed amendments 

would not have a meaningful effect on 

the risk management practices of 

Registrants. While the CCO Annual 

Reports may discuss certain risk 

management aspects related to the 

compliance programs of the Registrants, 

the proposal would only amend the 

timing of delivery of the reports to the 

Commission, not the contents of the 

reports. As described above under 

subsection 4.a, the short delay in 

delivery of the reports provided for by 

the proposal is not significant given the 

nature of the information included in 

the report and allowing additional time 

to prepare the CCO Annual Reports 

might allow the Registrants to prepare 

better reports that more effectively 

address the information contained 

therein. 

e. Other Public Interest Considerations 

The Commission has not identified 

any other public interest considerations 

for this rulemaking. 

5. Request for Comment 

The Commission invites comment on 

all aspects of its preliminary 

consideration of the costs and benefits 

associated with the proposal and the 

five factors the Commission is required 

to consider under CEA section 15(a). In 

addressing these areas and any other 

aspect of the Commission’s preliminary 

cost-benefit considerations, the 

Commission encourages commenters to 

submit any data or other information 

they may have quantifying and/or 

qualifying the costs and benefits of the 

proposal. 

List of Subjects in 17 CFR Part 3 

Administrative practice and 

procedure, Brokers, Commodity futures, 

Major swap participants, Reporting and 

recordkeeping requirements, Swap 

dealers. 

For the reasons stated in the 

preamble, the Commodity Futures 

Trading Commission proposes to amend 

17 CFR part 3 as follows: 

PART 3—REGISTRATION 

■ 1. The authority citation for part 3 is 

revised to read as follows: 

Authority: 5 U.S.C. 552, 552b; 7 U.S.C. 1a, 

2, 6a, 6b, 6b–1, 6c, 6d, 6e, 6f, 6g, 6h, 6i, 6k, 

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

16a, 18, 19, 21, 23, as amended by Title VII 

of the Dodd-Frank Wall Street Reform and 

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

124 Stat. 1376 (Jul. 21, 2010). 

■ 2. Amend § 3.3 as follows: 

■ a. Revise paragraph (f)(2); and 

■ b. Add paragraph (h). 

The revision and addition to read as 

follows: 

§ 3.3 Chief compliance officer. 

* * * * * 

(f) * * * 

(2)(i) Except as provided in paragraph 

(f)(2)(ii) of this section, the annual 

report shall be furnished electronically 

to the Commission not more than 30 

days after the submission of Form 1– 

FR–FCM, as required under 

§ 1.10(b)(1)(ii) of this chapter, the 

Financial and Operational Combined 

Uniform Single Report, as required 

under § 1.10(h) of this chapter, or the 

financial condition report, as required 

under section 4s(f) of the Act, as 

applicable. Until such time as the 

Commission adopts and implements a 

regulation establishing the time for 

filing the financial condition report, a 

swap dealer or major swap participant 

shall furnish the annual report 

electronically to the Commission not 

more than 90 days after the end of its 

fiscal year. 

(ii) The annual report of a swap dealer 

or major swap participant that is eligible 

to comply with a substituted 

compliance regime for paragraph (e) of 

this section pursuant to a comparability 

determination of the Commission may 

be furnished to the Commission 

electronically up to 15 days after the 

date on which the comparable annual 

report must be completed under the 

requirements of the applicable 

substituted compliance regime. If the 

substituted compliance regime does not 

specify a date by which the comparable 

annual report must be completed, then 

the annual report shall be furnished to 

the Commission by the date specified in 

paragraph (f)(2)(i) of this section. 

* * * * * 

(h) Delegation of Authority. The 

Commission hereby delegates to the 

Director of the Division of Swap Dealer 

and Intermediary Oversight, or such 

other employee or employees as the 

Director may designate from time to 

time, the authority to grant extensions of 

time, as set forth in paragraph (f)(5) of 

this section. Notwithstanding such 


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53348 Federal Register / Vol. 81, No. 156 / Friday, August 12, 2016 / Proposed Rules 

delegation, in any case in which a 

Commission employee delegated 

authority under this paragraph believes 

it appropriate, he or she may submit to 

the Commission for its consideration the 

question of whether an extension of 

time should be granted. The delegation 

of authority in this paragraph shall not 

prohibit the Commission, at its election, 

from exercising the authority set forth in 

paragraph (f)(5) of this section. 

Issued in Washington, DC, on August 8, 

2016, by the Commission. 

Christopher J. Kirkpatrick, 

Secretary of the Commission. 

Note: The following appendix will not 

appear in the Code of Federal Regulations. 

Appendix to Chief Compliance Officer 

Annual Report Requirements for 

Futures Commission Merchants, Swap 

Dealers, and Major Swap Participants; 

Amendments to Filing Dates— 

Commission Voting Summary 

On this matter, Chairman Massad and 

Commissioners Bowen and Giancarlo voted 

in the affirmative. No Commissioner voted in 

the negative. 

[FR Doc. 2016–19231 Filed 8–11–16; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF THE INTERIOR 

Bureau of Safety and Environmental 

Enforcement 

30 CFR Part 250 

[Docket ID: BSEE–2016–0004; 16XE1700DX 

EEEE500000 EX1SF0000.DAQ000] 

RIN 1014–AA32 

Oil and Gas and Sulfur Operations in 

the Outer Continental Shelf— 

Decommissioning Costs for Pipelines 

AGENCY: Bureau of Safety and 

Environmental Enforcement, 

Department of the Interior. 

ACTION: Proposed rule. 

SUMMARY: The Bureau of Safety and 

Environmental Enforcement (BSEE) 

proposes to amend the regulations 

requiring lessees and owners of 

operating rights to submit summaries of 

actual decommissioning expenditures 

incurred for certain decommissioning 

activities related to oil and gas and 

sulfur operations on the Outer 

Continental Shelf (OCS). The proposed 

rule would expand the scope of the 

current regulations to require lessees, 

owners of operating rights, and right-ofway (ROW) holders to submit 

summaries of actual expenditures 

incurred for pipeline decommissioning 

activities. 

DATES: Submit comments by September 

12, 2016. BSEE may not fully consider 

comments received after this date. You 

may submit comments to the Office of 

Management and Budget (OMB) on the 

information collection burden in this 

proposed rule by September 12, 2016. 

ADDRESSES: You may submit comments 

on this proposed rulemaking by any of 

the following methods. Please use the 

Regulation Identifier Number (RIN) 

1014–AA32 as an identifier in your 

message. BSEE may post all submitted 

comments on a public Web site. 

1. Submit comments electronically via 

the Federal eRulemaking Portal: http:// 

www.regulations.gov. In the entry titled 

‘‘Enter Keyword or ID,’’ enter BSEE– 

2016–0004, then click ‘‘Search.’’ Follow 

the instructions to submit public 

comments and view supporting and 

related materials available for this 

proposed rulemaking. 

2. Mail or hand-carry comments to the 

Department of the Interior (DOI); Bureau 

of Safety and Environmental 

Enforcement; Attention: Regulations 

and Standards Branch; 45600 Woodland 

Road, Sterling, VA 20166, VAE–ORP. 

Please reference ‘‘Decommissioning 

Costs for Pipelines, 1014–AA32’’ in 

your comments and include your name 

and return address. 

3. Comments on the information 

collection contained in this proposed 

rule should be submitted separately 

from those on the substance of the 

proposed rule. Send comments on the 

information collection burden in this 

proposed rule to: OMB, Interior Desk 

Officer 1014–AA32, 202–395–5806 

(fax); or email: OIRA_submission@

omb.eop.gov. Please send a copy of your 

comments to BSEE using one of the 

methods previously described. 

FOR FURTHER INFORMATION CONTACT: 

Betty Cox, Regulatory Analyst, 

Regulations and Standards Branch, 

Betty.Cox@bsee.gov, (703) 787–1616. 

SUPPLEMENTARY INFORMATION: 

BSEE’s Functions and Authority 

BSEE promotes safety, protects the 

environment, and conserves natural 

resources through vigorous regulatory 

oversight and enforcement of certain 

activities on the OCS. BSEE derives its 

authority primarily from the Outer 

Continental Shelf Lands Act (OCSLA), 

43 U.S.C. 1331–1356a. Congress enacted 

OCSLA in 1953, codifying Federal 

control over the OCS and authorizing 

the Secretary of the Interior (Secretary) 

to regulate oil and natural gas 

exploration, development, and 

production operations on the OCS. The 

Secretary has authorized BSEE to 

perform certain of these functions, 

including overseeing decommissioning. 

(See 30 CFR 250.101; 30 CFR part 250, 

subpart Q.) To carry out its 

responsibilities, BSEE regulates 

exploration, development, and 

production of oil and natural gas to 

enhance safety and environmental 

protection in a way that reflects 

advancements in technology and new 

information. BSEE also conducts onsite 

inspections to ensure compliance with 

regulations, lease terms, and approved 

plans or permits. Detailed information 

concerning BSEE’s regulations and 

guidance for the offshore industry may 

be found on BSEE’s Web site at: 

www.bsee.gov/Regulations-andGuidance/index. 

Public Participation and Availability of 

Comments 

BSEE encourages you to participate in 

this proposed rulemaking by submitting 

written comments, as discussed in the 

ADDRESSES and DATES sections of this 

proposed rule. This proposed rule 

provides 30 days for public comment for 

the following reasons. The need for 

submission of actual decommissioning 

cost information for plugging wells, 

removing platforms, and clearing of 

sites was explained in a proposed rule 

published on May 27, 2009 (74 FR 

25177) and a final rule published on 

December 4, 2015 (80 FR75806). That 

final rule addressed and responded to 

all of the relevant comments submitted 

on the proposed rule. This proposed 

rule would extend the existing 

requirements for submitting summaries 

of actual decommissioning costs (30 

CFR 250.1704(i) and (j)) to pipelines. 

The reasons for this proposed rule, as 

discussed in the Background and 

Purpose of Proposed Amendment 

sections of this notice are effectively the 

same for pipelines as the reasons 

discussed in the December 4, 2016 rule 

for the reporting of decommissioning 

costs for other facilities. BSEE does not 

expect that public comments on this 

proposed rule are likely to raise any 

significant issues that were not raised in 

the earlier decommissioning cost 

reporting rulemaking. Moreover, the 

affected stakeholders in the oil and gas 

industry are already familiar with the 

terms and requirements of the existing 

decommissioning cost reporting rule, 

which would apply without change to 

pipelines under this proposed rule. 

Accordingly, BSEE has determined that 

30 days provides a reasonable and 

adequate opportunity for the public to 

comment on this proposed rule. 

Before including your address, phone 

number, email address, or other 

personal identifying information in your 

comment on this proposed rule, 


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