Federal Register / Vol. 82, No. 15 / Wednesday, January 25, 2017 / Proposed Rules 8369 

1 17 CFR 145.9. All Commission regulations cited 

herein are set forth in chapter I of Title 17 of the 

Code of Federal Regulations. 

2See 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. Title 

VII of the Dodd-Frank Act, which amended the 

Commodity Exchange Act (‘‘CEA’’ or the ‘‘Act’’), 

may be cited as the Wall Street Transparency and 

Accountability Act of 2010. 

3 7 U.S.C. 1 et seq. 

Dated at Rockville, Maryland, this 19th day 

of December, 2016. 

For the Nuclear Regulatory Commission. 

Victor M. McCree, 

Executive Director for Operations. 

[FR Doc. 2016–31987 Filed 1–24–17; 8:45 am] 

BILLING CODE 7590–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 49 

RIN 3038–AE44 

Proposed Amendments To Swap Data 

Access Provisions and Certain Other 

Matters 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: Pursuant to Title VII of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act of 2010 

(‘‘Dodd-Frank Act’’), as amended by the 

Fixing America’s Surface Transportation 

Act of 2015 (‘‘FAST Act’’), the 

Commodity Futures Trading 

Commission (‘‘Commission’’ or 

‘‘CFTC’’) is proposing amendments the 

Commission’s regulations relating to 

access to swap data held by Swap Data 

Repositories. The proposed 

amendments would implement 

pertinent provisions of the FAST Act 

and make associated changes to the 

Commission’s regulations governing the 

grant of access to swap data to certain 

foreign and domestic authorities by 

Swap Data Repositories and to certain 

other regulations unrelated to such 

access. 

DATES: Comments must be received on 

or before March 27, 2017. 

ADDRESSES: You may submit comments, 

identified by RIN 3038–AE44, by any of 

the following methods: 

• CFTC Web site: https://

comments.cftc.gov. Follow the 

instructions for submitting comments 

through the Comments Online process 

on the Web site. 

• Mail: 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. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Please submit your comments using 

only one method. 

All comments must be submitted in 

English, or if not, accompanied by an 

English translation. Comments will be 

posted as received to www.cftc.gov. You 

should submit only information that 

you wish to make available publicly. If 

you wish the Commission to consider 

information that you believe is exempt 

from disclosure under the Freedom of 

Information Act (‘‘FOIA’’), a petition for 

confidential treatment of the exempt 

information may be submitted according 

to the procedures established in § 145.9 

of the Commission’s regulations.1

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: 

Daniel Bucsa, Deputy Director, Division 

of Market Oversight—Data and 

Reporting Branch, (202) 418–5435, 

dbucsa@cftc.gov; Jeffrey P. Burns, 

Assistant General Counsel, Office of the 

General Counsel, (202) 418–5101, 

jburns@cftc.gov; David E. Aron, Special 

Counsel, Division of Market Oversight— 

Data and Reporting Branch, (202) 418– 

6621, daron@cftc.gov; or Owen J. 

Kopon, Special Counsel, Division of 

Market Oversight—Data and Reporting 

Branch, (202) 418–5360, okopon@

cftc.gov, Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1151 21st Street NW., Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background and Introduction 

A. Statutory Background: The Dodd-Frank 

Act 

B. Regulatory History: The Part 49 Rules 

and the Commission’s 2012 

Interpretative Statement 

1. Access to SDR Swap Data 

2. The Regulatory Indemnification 

Requirement 

C. FAST Act Amendments to CEA Section 

21 

D. CEA Section 8 Informs the 

Confidentiality Provisions of CEA 

Section 21 

E. Summary of Proposed Revisions to Part 

49 

F. Rescission of 2012 Interpretative 

Statement 

II. Discussion 

A. Definitions: Proposed Amendments to 

§ 49.2 

B. Domestic and Foreign Regulators With 

Regulatory Responsibility Over SDRs: 

Proposed Amendments to § 49.17(d)(2) 

and (3) 

1. The Current Rule 

2. Proposed Amendments 

3. Request for Comment 

C. Appropriateness Determination for 

Foreign Regulators and Non-Enumerated 

Domestic Regulators: Proposed § 49.17(h) 

and Proposed Amendments to § 49.17(b) 

1. The Current Rule 

2. The Proposed Amendments 

3. The Factors Required for a 

Determination Order 

a. Scope of Jurisdiction 

b. Robust Confidentiality Safeguards 

c. Additional Considerations 

d. Other Matters Regarding the 

Determination Order Process 

e. Request for Comment 

4. Proposed Amendments to § 49.17(d)(4)— 

SDR Notice and Verification Obligations 

5. Proposed New § 49.17(i)—Delegation of 

Authority 

6. Request for Comment 

D. CEA Section 21(d) Confidentiality 

Agreements: Proposed Amendments to 

§ 49.18 

1. Current § 49.18 

2. Proposed Amendments to § 49.18(a)— 

Confidentiality Arrangement Required 

Prior to Disclosure of Swap Data 

3. Proposed Amendments to § 49.18(b)— 

Required Elements of the Confidentiality 

Arrangement 

4. Removal of § 49.18(c)—ADRs and AFRs 

With Regulatory Responsibility Over an 

SDR 

5. Failure To Fulfill the Terms of a 

Confidentiality Arrangement: Proposed 

§ 49.18(c) and (d) 

6. Proposed § 49.18(e)—Delegation of 

Authority 

7. Conforming Changes 

8. Request for Comment 

E. Other Changes 

III. Request for Comment 

IV. Related Matters 

A. Regulatory Flexibility Act 

B. Paperwork Reduction Act 

1. Summary of the Proposed Requirements 

2. Collection of Information 

3. Request for Comments on Collection 

C. Cost-Benefit Considerations 

D. Antitrust Considerations 

I. Background and Introduction 

A. Statutory Background: The DoddFrank Act 

Title VII of the Dodd-Frank Act 2

amended the Commodity Exchange Act 

(‘‘CEA’’ or the ‘‘Act’’) 3 to establish a 

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8370 Federal Register / Vol. 82, No. 15 / Wednesday, January 25, 2017 / Proposed Rules 

4See Dodd-Frank Act section 728 (adding new 

CEA section 21, 7 U.S.C. 24(a), to establish a 

registration requirement and regulatory regime for 

SDRs). 5 7 U.S.C. 24a(c)(6). 

6As is discussed more fully below, CEA section 

8 describes circumstances under which public 

disclosure of information in the Commission’s 

possession is permitted and prohibited. As is 

particularly relevant here, CEA section 8(e) permits 

the Commission to disclose information in its 

possession and obtained in connection with the 

administration of the CEA, upon request, to Federal 

departments and agencies acting within the scope 

of their jurisdiction but prohibits such recipients 

from disclosing such information except in an 

action or proceeding under the laws of the United 

States to which the recipient, the Commission or 

the United States is a party. CEA section 8(e) further 

permits the Commission to disclose information in 

its possession obtained in connection with 

administration of the CEA, upon request, to any 

foreign futures authority, department, central bank 

and ministries, or agency of a foreign government 

or political subdivision thereof, acting within the 

scope of its jurisdiction, subject to the condition 

that the Commission is satisfied that the 

information will not be disclosed by such recipient 

other than in connection with an adjudicatory 

action or proceeding to which the foreign futures 

authority, department, central bank and ministries, 

or the foreign government or political subdivision 

or agency thereof is a party, and which is brought 

under the laws of the foreign government or its 

political subdivision, See 7 U.S.C. 12(e). 

7See 7 U.S.C. 24a(c)(7). See also Commission, 

Final Rulemaking: Swap Data Recordkeeping and 

Reporting Requirements, 77 FR 2136, Jan. 13, 2012 

(‘‘Data Final Rules’’). The Data Final Rules set forth, 

among others, regulations governing SDR data 

collection and reporting responsibilities under part 

45 of the Commission’s regulations. 

8 7 U.S.C. 24a(d). As noted above, the 

indemnification requirement was stricken from 

CEA section 21(d) by the FAST Act. See Public Law 

114–94, section 86001(b)(2). 

9Swap Data Repositories: Registration Standards, 

Duties and Core Principles; 76 FR 54538 (Sept. 1, 

2011) (‘‘SDR Final Rules’’); see also Swap Data 

Repositories: Registration Standards, Duties and 

Core Principles, 75 FR 80898 (Dec. 23, 2010) (the 

proposed SDR Final Rules) (‘‘SDR NPRM’’). 

10The domestic regulators enumerated in CEA 

section 21(c)(7)(A)–(D) are: (A) Each appropriate 

prudential regulator; (B) the Financial Stability 

Oversight Council (‘‘FSOC’’); (C) the Securities and 

Exchange Commission (‘‘SEC’’); and (D) the 

Department of Justice. The term ‘‘prudential 

regulator’’ is defined in CEA section 1a(39). 

11 In addition to enumerating certain domestic 

entities to which an SDR must grant swap data 

access, CEA section 21(c)(7)(E) identifies as an 

eligible recipient of such access ‘‘any other person 

that the Commission determines to be appropriate, 

including—foreign financial supervisors (including 

foreign futures authorities); foreign central banks; 

foreign ministries; and other foreign authorities[.]’’ 

7 U.S.C. 24a(c)(7)(E). Pursuant to this authority, in 

rules 49.17(b)(1)(v) and (vi), the Commission 

identified any Federal Reserve Bank and the Office 

of Financial Research (‘‘OFR’’), respectively, as 

‘‘Appropriate Domestic Regulators.’’ The 

Commission also defined as an ‘‘Appropriate 

Domestic Regulator’’ each prudential regulator 

identified in CEA section 1(a)(39), with respect to 

requests related to any such regulator’s statutory 

authority. See § 49.17(b)(1)(ii). The Commission 

further reserved the discretion, in § 49.17(b)(1)(vii), 

to recognize ‘‘[a]ny other person the Commission 

deems appropriate’’ to be an ‘‘Appropriate Domestic 

Regulator.’’ 

12Pursuant to § 49.17(d)(2), ADRs with regulatory 

jurisdiction over an SDR are not required to apply 

for access to SDR data or to execute a 

confidentiality and indemnification agreement if 

the regulator executes an information sharing 

arrangement with the Commission and the 

Commission designates the regulator to receive 

direct electronic access to SDR data pursuant to 

CEA section 21(c)(4). See also § 49.18(c). 

13The Commission established the category of 

AFRs pursuant to CEA section 21(c)(7)(E), which, 

among other things, includes a list of the types of 

foreign entities that the Commission may determine 

to be appropriate recipients of such swap data 

access. 

14The term ‘‘Foreign Regulator’’ is defined in 

§ 49.2(a)(5) to mean a foreign futures authority as 

defined in CEA section 1(a)(26), foreign financial 

supervisors, foreign central banks and foreign 

ministries. 

15 17 CFR 49.17(b)(2)(i)(B). 

16Current § 49.18(b) requires an SDR to receive 

such a Confidentiality and Indemnification 

Agreement from an ADR or AFR prior to releasing 

swap data to the ADR or AFR. 

17See SDR Final Rules at 54554. The Commission 

notes that, prior to passage of the FAST Act on 

December 4, 2015, no 21(c)(7) entity had entered 

into a confidentiality or indemnification agreement 

pursuant to CEA section 21(d) or the part 49 rules. 

comprehensive new regulatory 

framework for swaps including, in new 

CEA section 21, the registration and 

regulation of Swap Data Repositories 

(‘‘SDRs’’).4 CEA section 21 imposes on 

SDRs, among other duties and 

responsibilities, the duty to maintain 

the privacy of all swap transaction 

information received from a swap 

dealer, counterparty, or any other 

registered entity.5 CEA section 21(c)(7) 

directs SDRs to make swap data 

available ‘‘on a confidential basis 

pursuant to section 8 [of the CEA]’’ 6 to 

certain enumerated domestic authorities 

and any other person the Commission 

determines to be appropriate, which 

may include certain types of foreign 

authorities.7 Entities that are eligible to 

receive access to swap data from an SDR 

pursuant to CEA section 21(c)(7) are 

referred to herein, collectively, as the 

‘‘21(c)(7) entities’’). 

As originally enacted, CEA sections 

21(d)(1) and (2) of the Act mandated 

that, prior to receipt of any requested 

data or information from an SDR, a 

21(c)(7) entity agree in writing to abide 

by the confidentiality requirements 

described in CEA section 8 and, 

separately, to indemnify the SDR and 

the Commission for ‘‘any expenses 

arising from litigation relating to the 

information provided under section 

8.’’ 8 Congress’s repeal of the CEA 

section 21(d)(2) indemnification 

requirement in the FAST Act in 

December 2015 gave rise to the 

amendments proposed in this release. 

B. Regulatory History: The Part 49 Rules 

and the Commission’s 2012 

Interpretative Statement 

1. Access to SDR Swap Data 

In 2011, the Commission adopted 

rules implementing CEA section 21’s 

requirements for SDRs.9 The 

Commission implemented the SDR 

swap data access provisions of CEA 

sections 21(c)(7) and (d) by establishing 

processes by which various categories of 

entities could gain access to SDR swap 

data. The domestic entities enumerated 

in CEA section 21(c)(7)(A)–(D),10 and 

certain others deemed by the 

Commission to be appropriate recipients 

of such swap data pursuant to CEA 

section 21(c)(7)(E),11 were defined in 

§ 49.17(b)(1) of the Commission’s 

regulations as ‘‘Appropriate Domestic 

Regulators’’ (‘‘ADRs’’).12

The term ‘‘Appropriate Foreign 

Regulator’’ (‘‘AFR’’) 13 was defined in 

§ 49.17(b)(2) as a ‘‘Foreign Regulator’’ 14

with an existing memorandum of 

understanding (‘‘MOU’’) or similar type 

of arrangement with the Commission; 

no AFRs were specifically identified in 

the rule. The term ‘‘Appropriate Foreign 

Regulator’’ was also defined to include 

a Foreign Regulator without an existing 

MOU with the Commission, as 

determined by the Commission on a 

case-by-case basis. Such a Foreign 

Regulator was required to file with the 

Commission an application providing 

sufficient facts and procedures to permit 

the Commission to analyze whether the 

Foreign Regulator employs appropriate 

confidentiality procedures, and to 

satisfy the Commission that any SDR 

data accessed by the Foreign Regulator 

would be disclosed ‘‘only as permitted 

by [s]ection 8(e)’’ of the CEA.15

An ADR or AFR seeking access to 

SDR data is required by current 

§ 49.17(d)(1) to file an access request 

with the SDR certifying that it is acting 

within the scope of its jurisdiction and 

is required by current § 49.17(d)(6) to 

execute a ‘‘Confidentiality and 

Indemnification Agreement’’ with the 

SDR.16

2. The Regulatory Indemnification 

Requirement 

In the preamble to the SDR Final 

Rules, the Commission acknowledged 

commenters’ concerns that compliance 

with the statutory and regulatory 

indemnification requirements would be 

difficult for certain domestic and foreign 

regulators due to various home country 

laws and other regulations prohibiting 

such arrangements,17 and expressed its 

intent to continue to work to provide 

regulators sufficient access to SDR data. 

In this regard, the Commission outlined 

the circumstances under which it 

believed the indemnification provision 

of CEA section 21(d) and § 49.18 would 

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18 It was, in the Commission’s view, 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 CEA sections 21(c)(7) 

and (d). See SDR Final Rules at 54554, n163. 

Accordingly, pursuant to the Commission’s Part 49 

rules, these provisions did 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 an 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 49.17(d)(2). 

19See Swap Data Repositories: Interpretative 

Statement Regarding the Confidentiality and 

Indemnification Provisions of the Commodity 

Exchange Act, 77 FR 65177 (Oct. 25, 2012) 

(‘‘Interpretative Statement’’). 

20 Interpretative Statement at 65181. 

21Title LXXXVI (‘‘Repeal of Indemnification 

Requirements’’) of the FAST Act amends the CEA 

by: 

repeal[ing] the indemnification requirements 

added by the Dodd-Frank Wall Street Reform and 

Consumer Protection Act for regulatory authorities 

to obtain access to swap data. Foreign regulators 

and regulatory entities have indicated concerns 

regarding the indemnification requirements of 

Dodd-Frank. The title removes such requirements 

so data can be shared with foreign authorities. The 

title would still require the regulatory agencies 

requesting the information to agree to certain 

confidentiality requirements prior to receiving the 

data. 

FAST Act: Conference Report to Accompany H.R. 

22, Dec. 1, 2015 at 486–87. The repeal applied as 

well to the analogous provision in the Securities 

Exchange Act of 1934, 15 U.S.C. 78m(n)(5). 

22The legislation struck subsection (d) of CEA 

section 21 and inserted in its place a provision 

entitled, ‘‘Confidentiality Agreement,’’ that states 

that before a swap data repository may share 

information with any entity described in subsection 

(c)(7), the swap data repository shall receive a 

written agreement from each entity stating that the 

entity shall abide by the confidentiality 

requirements described in section 8 of the CEA 

relating to the information on swap transactions 

that is provided. See FAST Act, Public Law 114– 

94, 129 Stat. 1312 (Dec. 4, 2015). 

23 7 U.S.C. 12(e). 

24See, e.g., CEA section 21(f)(4) (Additional 

duties developed by Commission), 7 U.S.C. 

24a(f)(4). The Commission is also authorized by 

CEA section 8a(5), 7 U.S.C. 12a(5), to make such 

rules and regulations as, in the judgment of the 

Commission, are reasonably necessary to effectuate 

any of the provisions or to accomplish any of the 

purposes of the Act. 

25Section 752 of the Dodd-Frank Act directs the 

CFTC, the SEC and the prudential regulators, as 

appropriate, to consult and coordinate with foreign 

regulatory authorities in this regard and provides 

that these entities may agree to such informationsharing arrangements as may be deemed necessary 

or appropriate in the public interest or for the 

protection of investors, swap counterparties, and 

security-based swap counterparties. 

not apply. The Commission explained 

that, under the part 49 rules, certain 

Appropriate Domestic Regulators may 

in some circumstances obtain access to 

swap data reported and maintained by 

SDRs without regard to the notice and 

indemnification requirements of CEA 

sections 21(c)(7) and (d).18 With respect 

to foreign regulatory authorities, the 

Commission determined in the SDR 

Final Rules that swap data reported to 

and maintained by an SDR may be 

accessed by an AFR without the 

execution of a confidentiality and 

indemnification agreement when the 

AFR has supervisory authority over a 

Commission-registered SDR that is also 

registered with the AFR pursuant to 

foreign law and/or regulation. 

Concerns about the scope of the 

indemnification provision persisted, 

and in October 2012 the Commission 

issued an Interpretative Statement, 

which was designed to provide 

guidance and greater clarity to 

interested members of the public and 

foreign regulators with respect to the 

scope and application of CEA section 

21(d) and the part 49 rules.19 The 

Interpretative Statement clarified that a 

foreign regulatory authority’s access to 

swap data held in a CFTC-registered 

SDR would not be subject to the 

confidentiality and indemnification 

provisions of CEA section 21(d) or the 

part 49 regulations if (i) the registered 

SDR is also registered in, or recognized 

or otherwise authorized by, the foreign 

authority’s regulatory regime; and (ii) 

the data sought to be accessed by the 

foreign authority has been reported to 

the registered SDR pursuant to such 

foreign regulatory regime.20

C. FAST Act Amendments to CEA 

Section 21 

Congress responded to the regulators’ 

access concerns by including in the 

FAST Act a repeal of CEA section 

21(d)(2)’s indemnification 

requirement.21 The confidentiality 

requirement in CEA section 21(d)(1) was 

retained in CEA section 21(d), as 

amended.22

The FAST Act also modified CEA 

section 21(c)(7)(A) by specifying that 

‘‘swap’’ data—as opposed to ‘‘all’’ 

data—must be provided to 21(c)(7) 

entities, and added to CEA section 

21(c)(7)(E)’s non-exclusive list of 

persons that the Commission may 

determine to be appropriate recipients 

of SDR swap data the new category 

‘‘other foreign authorities.’’ 

D. CEA Section 8 Informs the 

Confidentiality Provisions of CEA 

Section 21 

CEA section 8 governs the 

Commission’s treatment of nonpublic 

information in its possession in a 

number of circumstances, and its 

disclosure restrictions and 

confidentiality standards expressly 

inform the access provisions of CEA 

sections 21(c)(7) and 21(d). As relevant 

here, CEA section 8(e) permits the 

Commission to furnish to the specified 

types of domestic or foreign entities— 

upon their request and acting within the 

scope of their jurisdiction—any 

information in its possession obtained 

in connection with the administration of 

the Act.23 CEA section 8(e) specifies, 

with respect to U.S. entities, that any 

information furnished thereunder shall 

not be disclosed except in an action or 

proceeding under the laws of the United 

States to which the entity, the 

Commission or the United States is a 

party. CEA section 8(e) further specifies, 

with respect to the specified types of 

foreign entities, that the Commission 

shall not furnish information thereunder 

unless the Commission is satisfied that 

the information will not be disclosed by 

the entity except in connection with an 

adjudicatory action or proceeding to 

which the entity is a party brought 

under the laws to which such entity is 

subject. 

The principles underlying CEA 

section 8(e) are also fundamental to CEA 

sections 21(c)(7) and (d) and to the 

access standards and confidentiality 

provisions proposed in this release. In 

proposing clearer and more robust 

access and confidentiality standards in 

§§ 49.17 and 49.18, the Commission is 

mindful of these foundational 

principles: Where information is sought 

to be accessed, the information must 

relate to the scope of the requesting 

entity’s jurisdiction or authority; and 

information provided by the SDR shall 

not be further disclosed except in 

limited, defined circumstances. 

E. Summary of Proposed Revisions to 

Part 49 

Pursuant to its authority under the 

Act,24 the Commission is proposing 

amendments to §§ 49.2, 49.9, 49.17, 

49.18, and 49.22 to (i) implement the 

statutory changes mandated by the 

FAST Act Amendments; (ii) make 

certain conforming and clarifying 

changes related to such implementation; 

(iii) revise the process by which 

appropriateness is determined for 

purposes of access to SDR swap data 

and clarify the standards in connection 

with the Commission’s appropriateness 

determinations; and (iv) establish the 

form and substance of the written 

agreement mandated by CEA section 

21(d), as amended. In formulating the 

following proposed amendments, the 

Commission has endeavored to balance 

the goal of effective and consistent 

global regulation of swaps 25 with the 

mandate of CEA sections 21(c)(7) and 

(d) that swap data be made available to 

a limited universe of regulators on a 

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8372 Federal Register / Vol. 82, No. 15 / Wednesday, January 25, 2017 / Proposed Rules 

26 17 CFR 49.2(a)(5). CEA Section 1a(26) defines 

‘‘foreign futures authority’’ as any foreign 

government, or any department, agency, 

governmental body, or regulatory organization 

empowered by a foreign government to administer 

or enforce a law, rule, or regulation as it relates to 

a futures or options matter, or any department or 

agency of a political subdivision of a foreign 

government empowered to administer or enforce a 

law, rule, or regulation as it relates to a futures or 

options matter. Section 723(a)(2) of the Dodd-Frank 

Act added section 2(d) to the CEA to provide that 

enumerated provisions, including CEA section 1a, 

apply to swaps. 

27See SDR Final Rules at 54554. 

28 Id. See also Interpretative Statement at 65181; 

section 752 of the Dodd-Frank Act. 

confidential basis pursuant to CEA 

section 8. The proposed rules and rule 

amendments would, if adopted: 

• Add ‘‘other foreign authorities’’ to 

the foreign regulators identified in 

§ 49.2(a)(5), consistent with the FAST 

Act’s amendment to CEA section 

21(c)(7)(E) to include this category 

among the entities that the Commission 

may deem appropriate to access SDR 

swap data; 

• Amend § 49.9 to make clarifying 

changes; 

• Amend § 49.17 to, among other 

things: (i) Delete all references to the 

indemnification requirement and/or 

indemnification agreement; (ii) establish 

a process and clarify the standards for 

determining whether certain entities not 

enumerated in § 49.17(b)(1)(i)–(vi) are 

appropriate to directly access swap data 

from an SDR; (iii) revise the SDR 

notification requirement so that SDRs 

notify the Commission only for each 

initial request for swap data by ADRs 

and AFRs and any subsequent request at 

variance with the ADR’s or AFR’s scope 

of jurisdiction; (iv) specify that the 

information available to ADRs and AFRs 

is ‘‘swap data’’—as distinguished from 

‘‘data,’’ to reflect the corresponding 

FAST Act amendment to CEA section 

21; and (v) add a delegation of authority 

provision so that Commission staff is 

able to efficiently administer certain 

functions related to SDR swap data 

access; 

• Amend § 49.18 to, among other 

things: (i) Delete all references to the 

indemnification requirement and/or 

indemnification agreement; (ii) require 

that SDRs receive, prior to providing 

SDR swap data access to an ADR or 

AFR, a written confidentiality 

arrangement between the Commission 

and such ADR or AFR; (iii) specify the 

required elements of such written 

confidentiality arrangement; (iv) require 

SDRs to notify the Commission of any 

known failures to fulfill the terms of a 

confidentiality arrangement required by 

§ 49.18(a); (v) inform ADRs, AFRs and 

SDRs that the Commission may direct 

an SDR to limit, suspend or revoke an 

ADR’s or AFR’s access to swap data 

held by an SDR if such ADR or AFR has 

failed to fulfill the terms of a 

confidentiality arrangement required by 

§ 49.18(a); and (vi) add a delegation of 

authority provision so that Commission 

staff is able to efficiently administer 

certain functions related to SDR swap 

data access; and 

• Amend § 49.22(d)(4) to omit a 

reference to indemnification in order to 

conform to the corresponding FAST Act 

amendment to the CEA. 

F. Rescission of 2012 Interpretative 

Statement 

The Commission has determined to 

rescind its 2012 Interpretative 

Statement. References to the 

indemnification requirement in the 

Interpretative Statement are no longer 

relevant as the indemnification 

requirement in CEA section 21(d) has 

been repealed by the FAST Act. 

Additionally, the modifications to 

§ 49.17(d)(3) that are proposed here are 

consistent with the clarifications 

provided in the Interpretative 

Statement. 

II. Discussion 

A. Definitions: Proposed Amendments 

to § 49.2 

As originally adopted, § 49.2(a)(5) 

defined the term ‘‘foreign regulator’’ to 

include a foreign futures authority as 

defined in CEA section 1a(26), foreign 

financial supervisors, foreign central 

banks and foreign ministries.26 The 

FAST Act amendments to the CEA 

added to subsection 21(c)(7)(E) a new 

category of entity—‘‘other foreign 

authorities’’—that the Commission may 

deem appropriate to obtain access to 

SDR swap data. The Commission 

proposes a corresponding amendment to 

the definition of ‘‘foreign regulator’’ in 

§ 49.2(a)(5) to conform this definition to 

amended subsection 21(c)(7)(E). 

B. Domestic and Foreign Regulators 

With Regulatory Responsibility ) Over 

SDRs: Proposed Amendments to 

§ 49.17(d)(2) and (3) 

1. The Current Rule 

Commission regulation 49.17(d)(2) of 

the Commission’s regulations currently 

provides that an ADR with regulatory 

jurisdiction over an SDR registered with 

it pursuant to a separate statutory 

authority that is also registered with the 

Commission is not subject to the 

requirements of § 49.17(d) (application 

and notice provisions) and § 49.18(b) 

(confidentiality and indemnification 

agreement) as long as the following 

conditions are met: (i) The ADR 

executes an MOU or similar information 

sharing arrangement with the 

Commission; and (ii) the Commission, 

consistent with CEA section 21(c)(4)(A), 

designates the ADR to receive direct 

electronic access. As described in the 

SDR Final Rules, the Commission 

provided that these ADRs may be 

provided access to the swap data 

reported and maintained by SDRs 

without being subject to the notice and 

indemnification provisions of CEA 

sections 21(c)(7) and (d).27

Commission regulation 49.17(d)(3) of 

the Commission’s regulations currently 

provides that an AFR with supervisory 

authority over an SDR registered with it 

pursuant to foreign law and/or 

regulation that is also registered with 

the Commission is not subject to the 

requirements of § 49.17(d) (application 

and notice provisions) and § 49.18(b) 

(confidentiality and indemnification 

agreement). As described in the SDR 

Final Rules and Interpretative 

Statement, the Commission believes that 

confidential swap data reported to, and 

maintained, by an SDR may be 

appropriately accessed by an AFR 

without the execution of a 

confidentiality and indemnification 

agreement when the AFR is acting in a 

regulatory capacity with respect to an 

SDR that is also registered with the AFR 

and with respect to data reported to 

such SDR pursuant to such AFR’s 

regulatory regime.28

2. Proposed Amendments 

With respect to domestic regulators 

with regulatory jurisdiction over an 

SDR, the Commission proposes to 

remove: (1) The reference to 

‘‘Appropriate Domestic Regulator’’ in 

§ 49.17(d)(2) and replace it with the 

term ‘‘domestic regulator’’ to clarify that 

all domestic regulators and not just 

ADRs would fall under § 49.17(d)(2); (2) 

subparagraph (i) to § 49.17(d)(2) (the 

information sharing arrangement 

condition) and (3) subparagraph (ii) to 

§ 49.17(d)(2) (the direct electronic 

access condition). Although the 

Commission in the original part 49 rules 

adopted the information sharing and 

direct electronic access conditions so 

that ADRs would not be subject to the 

then-existing confidentiality and 

indemnification requirements, the 

Commission through experience with 

SDR swap data access believes an 

additional refinement of these rules is 

necessary in order to promote greater 

efficiency and cooperation among 

domestic regulators. Accordingly, the 

Commission submits that a domestic 

regulator that has regulatory jurisdiction 

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29The Commission’s proposal is consistent with 

the principle previously set forth in its 

Interpretative Statement relating to the 

confidentiality and indemnification provisions of 

the CEA. In particular, the Commission stated ‘‘that 

a foreign regulator’s access to data from a registered 

SDR that is also registered, recognized, or otherwise 

authorized in a foreign jurisdiction’s regulatory 

regime, where the data to be accessed has been 

reported pursuant to that [other] regulatory regime, 

[such access] will be dictated by that jurisdiction’s 

regulatory regime and not by the CEA or 

Commission regulations.’’ See Interpretative 

Statement at 65181. 

30 Id. 

31See CEA section 21(c)(7); see also section 752 

of the Dodd-Frank Act. 

32The term ‘‘Foreign Regulator’’ is defined in 

§ 49.2(a)(5) to mean a foreign futures authority as 

defined in CEA section 1(a)(26), foreign financial 

supervisors, foreign central banks and foreign 

ministries. 

33No Foreign Regulators are enumerated in CEA 

section 21(c)(7) or specifically identified as 

Appropriate Foreign Regulators in § 49.17(b)(2). 

34To date the Commission has not specified a 

form and manner for the application referenced in 

current § 49.17(b)(2)(i)(A). 35 7 U.S.C. 24(c)(7). 

over an SDR registered with it pursuant 

to a separate statutory authority should 

be able to access SDR data reported to 

such SDR pursuant to such separate 

statutory authority irrespective of 

whether such domestic regulator has 

executed an MOU or similar 

information sharing arrangement with 

the Commission or been designated to 

receive direct electronic access by the 

Commission.29

In connection with foreign regulatory 

authorities that have supervisory 

authority over an SDR, the Commission 

proposes to (i) remove the reference to 

‘‘Appropriate Foreign Regulator’’ in 

§ 49.17(d)(3) and replace it with the 

term ‘‘Foreign Regulator’’ as defined in 

§ 49.2 to clarify that all Foreign 

Regulators, not only those that have 

been determined ‘‘appropriate’’ by the 

Commission would fall under 

§ 49.17(d)(3); and (ii) add qualifying 

language to § 49.17(d)(3) so that 

§ 49.17(d)(3) applies not only to SDRs 

that are ‘‘registered’’ with the Foreign 

Regulator but also to those SDRs that are 

‘‘registered, recognized, or otherwise 

authorized’’ by a foreign jurisdiction’s 

regulatory regime, and where such swap 

data has been reported to the SDR 

pursuant to the Foreign Regulator’s 

regulatory regime.30

As it was when adopting the SDR 

Final Rules, the Commission is mindful 

of the need to protect the confidentiality 

of swap data when such data is 

provided to another regulator. Under the 

proposal, the Commission believes that 

the proposed changes to § 49.17(d)(3) 

strike the appropriate balance in 

providing access to swap data consistent 

with the confidentiality protections set 

forth in the CEA.31

3. Request for Comment 

The Commission requests comment 

on all aspects of amendments to 

§ 49.17(d)(2) and (3). 

C. Appropriateness Determination for 

Foreign Regulators and Nonenumerated Domestic Regulators: 

Proposed § 49.17(h) and Proposed 

Amendments to § 49.17(b) 

1. The Current Rule 

CEA section 21(c)(7) specifies U.S. 

entities to which swap data must be 

released by an SDR, provided certain 

prerequisites are satisfied. Because 

Congress has determined that access to 

SDR swap data by these entities is 

appropriate when the prerequisites are 

satisfied, no further access 

consideration by the Commission is 

necessary. These U.S. entities, along 

with others determined to be 

appropriate by the Commission 

pursuant to CEA section 21(c)(7)(E), are 

identified in § 49.17(b)(1) as 

‘‘Appropriate Domestic Regulators.’’ 

The term ‘‘Appropriate Domestic 

Regulator’’ is also defined to include 

‘‘any other person the Commission 

deems appropriate.’’ The current part 49 

rules do not include a process for 

determining that a U.S. entity not 

specifically enumerated in § 49.17(b)(1) 

is an ‘‘Appropriate Domestic Regulator.’’ 

Under current § 49.17(b)(2)(i), in order 

for a Foreign Regulator 32 that does not 

have a current MOU with the 

Commission to be determined to be an 

‘‘Appropriate Foreign Regulator,’’ 33 it 

must file with the Commission an 

application in the form and manner 

specified by the Commission.34 The 

application must provide sufficient facts 

and procedures to permit the 

Commission to analyze whether the 

Foreign Regulator’s confidentiality 

procedures are appropriate and to 

satisfy the Commission that information 

provided by an SDR will not be 

disclosed by the Foreign Regulator 

except as permitted by CEA section 8(e). 

2. The Proposed Amendments 

The Commission proposes to 

eliminate the current filing 

requirements set forth in current 

§ 49.17(b)(2)(i) and establish new filing 

requirements in proposed § 49.17(h). 

The Commission also proposes to 

include in § 49.17(h), CEA section 8- 

related confidentiality considerations 

and the ability for the Commission to 

revisit or reassess appropriateness 

determinations. The filing requirements 

proposed in new § 49.17(h) would apply 

to all foreign regulators regardless of 

whether a current MOU or similar 

arrangement with the Commission 

exists, and to any domestic regulator 

that is not an ADR enumerated in 

§ 49.17(b)(1)(i)–(vi) (‘‘Enumerated 

ADR’’). Proposed § 49.17(h)(3) would 

specify two threshold requirements for 

a finding of appropriateness: (i) The 

requesting entity has in place 

appropriate safeguards to maintain the 

confidentiality of such swap data; and 

(ii) such entity is acting within the 

scope of its jurisdiction in seeking 

access to swap data maintained by an 

SDR. These requirements are necessary 

but may or may not be sufficient to 

support an appropriateness 

determination: The Commission 

proposes to evaluate each filing on a 

case-by-case basis with reference to 

these and other factors that the 

Commission may find germane to its 

determination. If the Commission finds 

on the basis of information submitted 

that access to SDR swap data is 

appropriate, the Commission would 

issue an order confirming the regulator’s 

status as an ADR or AFR and setting 

forth any conditions or limitations on 

access consistent with the relevant 

statutory and regulatory requirements 

(the proposed ‘‘Determination Order’’). 

The Commission is also proposing, 

through § 49.17(h)(4), to be able to 

revisit, reassess, limit, suspend or 

revoke a previously issued 

Determination Order. The Commission 

believes it is necessary to be able to 

revisit an appropriateness 

determination, and potentially take one 

of the foregoing remedial actions, in 

order to be able to address situations 

that may arise subsequent to the 

determination, such as where an AFR or 

ADR violates the term of a 

Determination Order or fails to properly 

keep SDR swap data confidential. 

3. The Factors Required for a 

Determination Order 

a. Scope of Jurisdiction 

CEA section 21(c)(7) directs SDRs to 

provide swap data to regulators ‘‘on a 

confidential basis pursuant to section 

8.’’ 35 The Commission interprets this 

provision to require consistency with 

CEA section 8(e)’s mandate that 

information may be furnished, on a 

confidential basis, only to other 

regulators acting within the scope of 

their jurisdiction. Accordingly, the 

Commission believes that an 

appropriateness determination must be 

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36The form of confidentiality arrangement set 

forth in proposed Appendix B to part 49 also would 

require such notices. 

37As is relevant here, proposed § 49.17(d)(5) 

would require that each SDR ‘‘shall, as directed by 

the Commission, limit, suspend or revoke . . . such 

access should the Commission . . . direct the [SDR] 

to limit, suspend or revoke such access.’’ 

38See CEA section 21(c)(7); see also Section 752 

of the Dodd-Frank Act (recognizing the goal of 

effective and consistent global regulation of swaps). 

39 17 CFR 49.17(b)(2). 40See Dodd-Frank Act section 752, supra. 

informed by reference to the regulator’s 

jurisdiction and to the entity’s 

legitimate regulatory or legal interest in 

the swap data to be sought. 

In this regard, the Commission 

proposes to add to part 49 new 

§ 49.17(h)(2), which would require an 

applicant seeking a Determination Order 

to provide the Commission sufficient 

information to permit the Commission 

to conclude that the applicant would be 

acting within the scope of its 

jurisdiction in seeking access to swap 

data maintained by an SDR. As part of 

this information, the Commission 

expects that an applicant would explain 

the relationship between its jurisdiction 

and its request for access to swap data 

maintained by SDRs, including an 

explanation of the applicant’s need for 

particular swap data to carry out its 

regulatory mandate, legal authority or 

responsibility. 

The Commission proposes in new 

§ 49.17(h)(3) to specify that the 

Commission will not issue a 

Determination Order unless it is 

satisfied that the regulator is acting 

within the scope of its jurisdiction in 

seeking access to SDR swap data, and 

that any grant of access will be limited 

to swap data appropriate to the entity’s 

regulatory mandate or legal authority. 

Each Determination Order would 

further require, as a condition of the 

appropriateness determination set forth 

therein, that a regulator that has 

received a Determination Order 

promptly notify the Commission, and 

each SDR from which it has received 

swap data, of any change to its 

jurisdiction that would relate to the 

swap data access requested.36 As 

described in proposed § 49.17(d)(5), the 

Commission would be able to direct 

SDRs to limit, suspend or revoke the 

scope of an ADR’s or AFR’s SDR swap 

data access to reflect the new scope of 

its jurisdiction.37 The Commission 

expects that this proposed limitation on 

access will reduce the risk of 

unauthorized or unnecessary 

disclosures because each appropriate 

regulator will have access to swap data 

only to the extent necessary to fulfill its 

jurisdictional mandate or regulatory 

responsibility. 

b. Robust Confidentiality Safeguards 

CEA section 21(c)(7) is explicit in 

requiring that SDRs make swap data 

available on a confidential basis 

pursuant to CEA section 8. Proposed 

§ 49.17(h)(2) accordingly would require 

that the applicant submit to the 

Commission information sufficient to 

permit a determination that the 

applicant employs adequate 

confidentiality safeguards to ensure that 

swap data the applicant receives from 

an SDR will not be disclosed other than 

as permitted by the confidentiality 

arrangement required by § 49.18(a). The 

Commission anticipates that this would 

involve the Commission considering 

whether the applicant’s confidentiality 

protocols, system safeguards and 

security compliance procedures can be 

expected to ensure the confidentiality of 

the swap data, and that the applicant 

has in place protections sufficient to 

prevent unauthorized intrusions into 

the systems that maintain the swap data. 

In this regard, the Commission would 

also expect to consider the applicant’s 

processes for limiting internal access to 

swap data to those persons with a need 

to know, as well as how the swap data 

will be stored and whether the swap 

data will be segregated from other 

information. 

It is the Commission’s view that 

reliance on these factors strikes an 

appropriate balance between realizing 

the benefits of data access by 

regulators 38 and the obligation to 

protect confidential information in 

accordance with the dictates of CEA 

section 8(e), as incorporated by 

reference in CEA section 21(c)(7) and (d) 

through those sections’ incorporation of 

CEA section 8. The Commission 

considers these factors essential to a 

determination of appropriateness. Other 

considerations, while not proposed to 

be codified in these proposed rules, may 

also contribute to the Commission’s 

appropriateness analysis. 

c. Additional Considerations 

Although the Commission proposes to 

eliminate the current regulatory 

provision conferring AFR status on a 

foreign regulator with ‘‘an existing 

[MOU] or other similar type of 

information sharing arrangement 

executed with the Commission . . ., ’’ 39

it nonetheless continues to believe that 

the existence of such an arrangement 

fosters a cooperative relationship and 

encourages the development of shared 

understandings related to regulatory 

responsibilities. Although not 

dispositive, indications of a strong 

cooperative relationship with another 

authority, as established by the 

existence of such an arrangement and 

the Commission’s experience working 

with such authority in finalizing and 

administering the arrangement, would 

likely be a factor supporting an 

appropriateness determination. Also, a 

failure to cooperate fully or to comply 

with the terms of an existing or prior 

arrangement might be expected to weigh 

against an appropriateness 

determination. 

Similarly, when assessing 

appropriateness, the Commission 

expects to consider whether it receives 

access to swap data maintained by trade 

repositories in that regulator’s 

jurisdiction. The Commission is 

mindful of the Dodd-Frank Act’s 

encouragement of coordination and 

cooperation with foreign regulatory 

authorities.40 The Commission believes 

that increased data access by regulators 

has the potential to provide the 

Commission and other authorities with 

more complete information with which 

to monitor risk exposures and should be 

expected to promote global market 

stability through enhanced regulatory 

transparency. Accordingly, Commission 

access to swap data maintained by trade 

repositories in such other regulator’s 

jurisdiction, an arrangement 

prospectively to assist the Commission 

in obtaining data from other 

jurisdictions, and a history of assistance 

from a foreign regulator, would be 

viewed favorably by the Commission in 

considering appropriateness. 

d. Other Matters Regarding the 

Determination Order Process 

The Commission preliminarily 

believes that the Determination Order 

process and factors discussed above 

offer a reasonable approach to providing 

requesting entities access to SDR swap 

data based on clearly articulated factors 

and any additional considerations or 

circumstances the Commission may 

deem relevant on a case-by-case basis. 

Both the required factors and the 

additional considerations support the 

mandate of CEA sections 8, 21(c)(7) and 

21(d) and are consistent with the 

express intent of Congress that the 

Commission coordinate and cooperate 

with foreign regulatory authorities on 

matters related to the regulation of 

swaps. Through the issuance of 

Determination Orders, the Commission 

will be able to impose appropriate 

conditions or restrictions on an entity’s 

access to SDR swap data such that the 

entity’s access is linked to its 

jurisdictional scope. Pursuant to 

proposed § 49.17(h)(4), the Commission 

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41See CEA section 21(c)(7), 7 U.S.C. 24a(c)(7). 

42Consistent with the current recordkeeping 

requirements for SDRs in § 45.2(f), SDRs are 

required to maintain records of all information 

related to the initial and all subsequent requests for 

swap data from ADRs/AFRs. Appropriate records 

would include, at a minimum, the identity of the 

ADR/AFR accessing the swap data; the date, time 

and substance of the request for access; 

confirmation that the request is consistent with the 

scope of the regulator’s jurisdiction; and copies of 

all swap data provided in connection with the 

request for access. Pursuant to CEA section 1.31, 

SDRs are required to maintain such records for a 

period of no less than five years after the date of 

such request and must provide this information to 

the Commission upon request. 

43The scope of jurisdiction would be described 

in Exhibit A to the form of confidentiality 

arrangement set forth in proposed Appendix B to 

part 49. 

may also, in its discretion, issue a 

Determination Order of limited 

duration, and may otherwise limit, 

suspend or revoke such an order if the 

entity fails to comply with its terms or 

the terms of the statutory confidentiality 

arrangements. The Commission would 

expect SDRs to take into account any 

conditions or restrictions contained in a 

Determination Order when providing 

access to swap data to an ADR or AFR. 

The Commission further believes it is 

appropriate to make the process and 

factors proposed in § 49.17(h) applicable 

to any domestic entities that are not 

enumerated as ADRs in § 49.17(b)(1)(i)– 

(vi), as scope of jurisdiction and 

confidentiality considerations are 

equally applicable to U.S. entities, and 

has drafted proposed § 49.17(h) 

accordingly. 

e. Request for Comment 

The Commission requests comment 

on all aspects of proposed § 49.17(h), 

particularly on whether the proposed 

regulatory and other factors are 

sufficient to determine whether access 

to SDR swap data is appropriate. 

4. Proposed Amendments to 

§ 49.17(d)(4)—SDR Notice and 

Verification Obligations 

CEA section 21(c)(7) requires each 

SDR to notify the Commission of a swap 

data request received from an ADR or 

AFR.41 Currently, this statutory 

requirement is implemented in 

§ 49.17(d)(4)(i), which provides that an 

SDR must promptly notify the 

Commission regarding ‘‘any’’ request 

received by an ADR or AFR to gain 

access to swap data maintained by the 

SDR. 

To reduce the burden on SDRs and 

provide greater operational efficiency 

consistent with the intent of CEA 

section 21(c)(7), the Commission is 

proposing to amend the SDR 

notification requirement in current 

§ 49.17(d)(4)(i) to require an SDR to 

notify the Commission (i) at the time 

that it receives the first request for swap 

data from a particular ADR or AFR and 

(ii) at any time that a request does not 

comport with the scope of the ADR’s or 

AFR’s jurisdiction, as described in the 

confidentiality arrangement required by 

proposed § 49.18(a). The proposed 

amendment would make the 

notification applicable only to the initial 

request for swap data and any 

subsequent request at variance with the 

ADR’s or AFR’s scope of jurisdiction: 

On receiving either such request for data 

by a particular ADR or AFR, the SDR 

would be required to provide prompt 

electronic notification to the 

Commission of the request, in a format 

specified by the Secretary of the 

Commission, pursuant to proposed 

§ 49.17(d)(4)(ii). The SDR would be 

required to keep such notification and 

related requests confidential consistent 

with the requirements of CEA sections 

21(c)(6) and (7) and related regulatory 

requirements set forth in §§ 49.16 and 

49.17. 

The Commission believes that the 

proposed approach to SDR notification 

supports the Commission’s need to be 

aware of who is able to access SDR swap 

data and what data has been accessed, 

while eliminating potentially costly, 

unwieldy and inefficient notice of every 

swap data request. Under the proposal, 

the Commission would be notified that 

a particular ADR or AFR has requested 

access to SDR swap data and will be 

able to examine records of the ADR’s or 

AFR’s individual swap data requests, 

and the swap data provided, as it deems 

necessary.42

The Commission also proposes to 

amend § 49.17(d)(4) by adding new 

subsection (iii) to require each SDR that 

receives a request for access to its swap 

data from an ADR or AFR to verify, 

prior to providing such access, that the 

request is consistent with the scope of 

the ADR’s or AFR’s jurisdiction, as 

described in the confidentiality 

arrangement required by proposed 

§ 49.18(a).43 This verification would 

need to incorporate any subsequent 

changes thereto. The Commission is also 

proposing to require an ADR or AFR 

that has executed a confidentiality 

arrangement with the Commission 

pursuant to § 49.18(a) and provided 

such confidentiality arrangement to one 

or more SDRs to notify the Commission 

and each such SDR of any change to 

such ADR’s or AFR’s scope of 

jurisdiction as described in such 

confidentiality arrangement. 

Additionally, the proposal would enable 

the Commission to direct a SDR to 

suspend, limit, or revoke access to swap 

data maintained by such SDR based on 

any such change to such ADR’s or AFR’s 

scope of jurisdiction, and that, if so 

directed, such SDR shall so suspend, 

limit, or revoke such access. 

As proposed, § 49.17(d)(4)(iv) would 

require SDR verification only once with 

respect to a request for ongoing or 

recurring access to particular data, 

provided that there has not been a 

change in the scope of the regulator’s 

jurisdiction (in which case an SDR 

would need to verify anew that the 

swap data requested is within the scope 

of the requesting ADR’s or AFR’s 

jurisdiction). The Commission 

recognizes that the proposed 

requirement imposes a burden on SDRs; 

however, it notes that SDRs are obliged 

by CEA section 21(c)(7) to provide 

access ‘‘pursuant to section 8’’ of the 

CEA, which requires a jurisdictional 

nexus to the information requested. In 

these circumstances, the Commission 

believes SDRs must take a role in 

ensuring compliance with these 

statutory restrictions. 

5. Proposed New § 49.17(i)—Delegation 

of Authority 

In the interests of expedience and 

efficiency in determining 

appropriateness of access by regulators, 

the Commission proposes to delegate all 

functions reserved to the Commission in 

§ 49.17 to the Director of the Division of 

Market Oversight and to such members 

of the Commission’s staff acting under 

his or her direction as he or she may 

designate from time to time. 

6. Request for Comment 

The Commission requests comment 

on all aspects of the proposed 

amendments to § 49.17, and particularly 

invites comments on: 

1. Whether commenters believe there 

are more cost-effective methods of 

notification and recordkeeping that 

would still provide the Commission 

with access to the information necessary 

for it to perform its regulatory functions 

in a manner consistent with CEA 

section 21(c)(7); and 

2. Whether a phase-in process is 

necessary to decrease the likelihood that 

a large number of new demands on 

SDRs’ systems from ADRs and AFRs 

seeking access to swap data will 

decrease SDR systems reliability, 

efficiency or speed. 

D. CEA Section 21(d) Confidentiality 

Agreements: Proposed Amendments to 

§ 49.18 

CEA section 21(d), as amended, 

requires that, prior to providing swap 

data to a 21(c)(7) entity, an SDR ‘‘shall 

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44See CEA section 21(d). 7 U.S.C. 24a(d) as 

amended by the FAST Act. 

45See current § 49.17(d)(6) and 49.18(b). 

46See proposed § 49.18(a) (requiring that an SDR 

received ‘‘an executed confidentiality arrangement 

between the Commission and the [ADR] or [AFR] 

. . . .’’). The Commission notes that the SEC has 

implemented a similar approach with respect to the 

execution of the required agreement. See Access to 

Data Obtained by Security-Based Swap Data 

Repositories, 81 FR 60585 at 60591 and 60608 

(Sept. 2, 2016) (SEC rule 13n–4(b)(10), 17 CFR 

240.13n–4(b)(10), and associated preamble text). 

47Current § 49.18(a) describes the purpose of 

§ 49.18. 

48Current § 49.18(b) requires an SDR to receive a 

confidentiality agreement from a 21(c)(7) entity 

before granting the 21(c)(7) entity access to swap 

data maintained by the SDR. As discussed above, 

the Commission proposes to address in proposed 

§ 49.18(a) the confidentiality arrangement condition 

to swap data access. 

49ADRs and AFRs seeking useful guidance for 

Confidential Information segregation can look to the 

data segregation standards contained in the 

National Institute of Standards and Technology 

(‘‘NIST’’) Special Publication 800–53, Revision 4, 

Security and Privacy Controls for Federal 

Information Systems and Organizations (April 

2013), available at http://nvlpubs.nist.gov/nistpubs/ 

SpecialPublications/NIST.SP.800-53r4.pdf or in the 

Federal Information Security Management Act of 

2002, as amended (‘‘FISMA’’). 44 U.S.C. 3541. As 

the Commission has previously noted in a different 

context, FISMA ‘‘is a source of cybersecurity best 

practices and also establishes legal requirements for 

federal government agencies . . . .’’ System 

Safeguards Testing Requirements, 80 FR 80139, 

80142 (Dec. 23, 2015) (‘‘Registered Entity Cyber 

NPRM’’). The Commission recently adopted final 

rules based on the Registered Entity Cyber NPRM. 

See System Safeguards Testing Requirements, 81 FR 

64271 (Sept. 19, 2016) (‘‘Final Registered Entity 

Cyber Rules’’). 

50This should include cybersecurity measures. 

As the Commission detailed in a different context 

in the Final Registered Entity Cyber Rules, ‘‘cyber 

threats to the financial sector continue to expand.’’ 

See Final Registered Entity Cyber Rules at 64272. 

See also System also Safeguards Testing 

Requirements for Derivatives Clearing 

Organizations, 80 FR 80113, 80114–80115 (Dec. 23, 

2015) (describing escalating and evolving 

cybersecurity threats); Registered Entity Cyber 

NPRM at 80140–80141 (Dec. 23, 2015) (describing, 

inter alia, the current cybersecurity threat 

environment). 

receive a written agreement from each 

entity stating that the entity shall abide 

by the confidentiality requirements 

described in CEA section 8 relating to 

the information on swap transactions 

that is provided.’’ 44 As originally 

adopted, the part 49 rules required that 

such confidentiality agreements be 

executed between the SDR and the 

21(c)(7) entity.45 The Commission 

proposes to add a new § 49.18(a) to 

require that a confidentiality 

arrangement be executed by and 

between the ADR or AFR and the 

Commission.46 Once the ADR or AFR 

and the Commission have executed a 

confidentiality arrangement, the ADR or 

AFR may present the executed 

document to any SDR from which it 

requests access to swap data in 

satisfaction of CEA section 21(d). 

The Commission recognizes that its 

proposed amendments to § 49.18 

represent a change in approach from the 

part 49 rules as adopted. Based on its 

experience with SDRs and swap data 

access since the adoption of part 49 in 

2011, and further consideration of the 

relationship between CEA sections 21 

and 8, however, the Commission 

believes this change is consistent with 

the statutory framework established by 

Congress in CEA section 21(d) and 

21(c)(7). Moreover, in the Commission’s 

view a confidentiality arrangement 

between the Commission and the 

regulator more directly supports the 

confidentiality mandate of CEA section 

8. Finally, the Commission believes that 

the proposed requirement will promote 

regulatory efficiency and reduce costs to 

SDRs, ADRs and AFRs while ensuring 

the confidentiality of SDR swap data by 

giving full effect to the strictures of CEA 

section 8(e). 

To further promote regulatory 

efficiency, the Commission is proposing 

to provide a form of confidentiality 

arrangement as Appendix B to Part 49, 

for use by ADRs and AFRs. The 

Commission would expect its use by 

ADRs and AFRs to reduce significantly 

the need for these entities to negotiate 

separate confidentiality arrangements 

with the Commission. This proposed 

change also would eliminate the costs 

and potential inefficiencies to SDRs 

inherent in requiring them to negotiate 

confidentiality agreements with a 

potentially large number of ADRs and 

AFRs. Finally, while its use is not 

required, the Commission believes that 

the proposed form of confidentiality 

arrangement in Appendix B to Part 49 

can be expected to conserve its limited 

staff resources by eliminating in many 

cases the need for the Commission and 

its staff to develop individualized 

confidentiality arrangements with 

multiple ADRs or AFRs seeking access 

to SDR swap data. 

1. Current § 49.18 

The Commission adopted § 49.18 to 

implement CEA section 21(d)(1) and (2) 

as originally enacted. Accordingly, the 

current rule sets forth the obligation for 

SDRs to execute a ‘‘Confidentiality and 

Indemnification Agreement’’ before 

providing SDR swap data to an ADR or 

AFR. Congress has repealed the 

indemnification requirement, and the 

Commission proposes to make 

conforming amendments to § 49.18 to 

remove references to indemnification. 

Separately, the Commission is 

proposing revisions to § 49.18 to modify 

the substantive requirements of the 

confidentiality arrangement and the 

parties to the confidentiality 

arrangement, to establish conditions for 

restricting or revoking access to SDR 

swap data, and to clarify the 

confidentiality obligations of ADRs and 

AFRs with regulatory responsibility 

over an SDR. 

2. Proposed Amendments to § 49.18(a)— 

Confidentiality Arrangement Required 

Prior to Disclosure of Swap Data 

The Commission proposes to remove 

current § 49.18(a) 47 and add a new 

§ 49.18(a) requiring that an SDR receive 

a confidentiality arrangement, executed 

by the Commission and the ADR or AFR 

seeking access to the swap data 

maintained by the SDR, that, at a 

minimum, contains all elements 

described in proposed § 49.18(b). 

3. Proposed Amendments to 

§ 49.18(b)—Required Elements of the 

Confidentiality Arrangement 

The Commission proposes to replace 

the text of current § 49.18(b) 48 with a 

requirement that the confidentiality 

arrangement required pursuant to 

§ 49.18(a) shall, at a minimum, include 

all elements included in the form of 

confidentiality arrangement set forth in 

proposed Appendix B to part 49. 

Paragraph 5 of the confidentiality 

arrangement would require the ADR or 

AFR to undertake that it will be acting 

within the scope of its jurisdiction each 

time it requests swap data from an SDR, 

and to promptly notify the Commission 

and each relevant SDR if the scope of 

the ADR’s or AFR’s jurisdiction 

changes. Paragraph 5 of the 

confidentiality arrangement also would 

require ADRs and AFRs to employ 

procedures to maintain the 

confidentiality of swap data and any 

information and analyses derived 

therefrom (the swap data and such 

information are referred to collectively 

as the ‘‘Confidential Information’’). 

Paragraph 6 of the confidentiality 

arrangement would require ADR and 

AFR signatories to employ the following 

safeguards to maintain the 

confidentiality of the Confidential 

Information: 

• To the maximum extent practicable, 

maintain Confidential Information 

received from SDRs separately from 

other data and information; 49

• Protect such Confidential 

Information from misappropriation and 

misuse; 50

• Ensure that only ADR or AFR 

personnel with a need to access 

particular Confidential Information to 

perform their job functions related to 

such Confidential Information have 

access thereto and that such access is 

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51One basic principle of data security is that only 

those with a need to access data to perform their 

work should be granted access to such data. See, 

e.g., Framework for Improving Critical 

Infrastructure Cybersecurity at 23 (Feb. 12, 2014), 

available at http://www.nist.gov/cyberframework/ 

upload/cybersecurity-framework-021214.pdf 

(characterizing the ‘‘Protect’’ element of a core 

cybersecurity framework as one where ‘‘[a]ccess to 

assets and associated facilities is limited to 

authorized users, processes, or devices, and to 

authorized activities and transactions.’’). 

52The Commission understands that ADRs and 

AFRs may want to use aggregated and anonymized 

information derived from SDR swap data in 

analyses that may be made public. Cf. U.S. Gov’t 

Accountability Office, GAO–16–175, Financial 

Regulation: Complex and Fragmented Structure 

Could Be Streamlined To Improve Effectiveness 71– 

75 (2016) (‘‘GAO Report’’), available at http://

www.gao.gov/assets/680/675400.pdf (discussing the 

OFR’s Financial Stability Monitor and related 

confidentiality issues and protections surrounding 

sharing aggregated and disaggregated information 

provided by other agencies). The Commission 

believes that, when properly aggregated and 

anonymized, information derived from SDR swap 

data generally can be disclosed without violating 

the requirement in CEA section 21(d) that a 

recipient of swap data agree, with respect to the 

information on swap transactions that is provided 

by an SDR, to abide by the confidentiality 

requirements described in CEA section 8. Cf. 

§ 49.16(c) (stating that ‘‘[s]ubject to Section 8 of the 

Act, [SDRs] may disclose aggregated swap data on 

a voluntary basis or as requested[ ] in the form and 

manner[ ] prescribed by the Commission.’’); SDR 

Final Rules at 54551 (stating that ‘‘the Commission 

believes that it is permissible under the Dodd-Frank 

Act and part 49 of the Commission’s regulations for 

an SDR to disclose, for non-commercial purposes, 

data on an aggregated basis such that the disclosed 

data reasonably cannot be attributed to individual 

transactions or market participants.’’). In certain 

cases, however, even aggregated information may 

enable a reader to determine a market participant’s 

business transactions, trade secrets (e.g., algorithms) 

or positions. Thus, the proposed form of 

confidentiality arrangement requires ADRs and 

AFRs to implement safeguards designed to 

appropriately limit the use of information that has 

been aggregated from SDR swap data and to prevent 

disaggregation or other derivations of a market 

participant’s business transactions, trade data or 

market positions. ADRs and AFRs can look to 

§ 43.4(d)(1), (d)(4) and (g) for guidance on 

anonymization principles. 

53The Commission interprets the restrictions on 

disclosure contained in CEA section 8 that are 

incorporated in CEA section 21(c)(7) and 21(d) as 

prohibiting an ADR or AFR from onward sharing 

swap data it obtains from an SDR. 

54Paragraph 12 of the confidentiality arrangement 

would also require ADR and AFR signatories to 

certify to the CFTC, upon request, that they have 

destroyed such swap data. 

permitted only to the minimum extent 

necessary to perform such job 

functions; 51

• Except as provided in paragraph 8 

of the confidentiality arrangement, 

prevent disclosure of Confidential 

Information unless sufficiently 

aggregated and anonymized to prevent 

identification, through disaggregation or 

otherwise, of a market participant’s 

business transactions, trade data, market 

positions, customers or 

counterparties; 52

• Prohibit the use of Confidential 

Information by ADR or AFR personnel 

for any improper purpose; and 

• Monitor compliance with the 

confidentiality safeguards and ensure 

prompt notification of the CFTC and 

each relevant SDR of any violation of 

the safeguards or failure to fulfill the 

terms of the confidentiality 

arrangement. 

Paragraph 7 of the confidentiality 

arrangement also would preclude, with 

limited exceptions, ADRs and AFRs 

from disclosing any Confidential 

Information, via onward sharing 53 or 

otherwise. The only permitted 

disclosures would be (1) in actions, 

adjudicatory actions or proceedings, as 

applicable, described in CEA section 

8(e), the operative language of which is 

included in paragraph 8 of the 

confidentiality arrangement and (2) 

aggregated SDR swap data that is 

anonymized to prevent identification 

(through disaggregation or otherwise) of 

a market participant’s business 

transactions, trade data, market 

positions, customers or counterparties. 

Paragraph 9 of the confidentiality 

arrangement contains certain provisions 

requiring ADRs and AFRs to notify the 

Commission, and take certain protective 

actions, prior to disclosing SDR swap 

data even where an ADR or AFR 

receives a legally enforceable demand to 

disclose Confidential Information. 

Paragraph 11 of the confidentiality 

arrangement would require ADRs and 

AFRs accessing swap data from SDRs to 

comply with all security-related 

requirements imposed by SDRs in 

connection with access to such swap 

data, as such requirements may be 

revised from time to time. Because, 

subject to specified conditions, CEA 

sections 21(c)(7) and 21(d) require SDRs 

to provide ADRs and AFRs access to 

swap data, the Commission expects that 

SDRs will not impose security-related 

access requirements beyond those that 

are necessary to ensure the privacy and 

confidentiality of SDR swap data. The 

Commission further expects that SDRs’ 

security-related access requirements for 

ADRs and AFRs would be akin, if not 

identical, to the requirements SDRs 

impose on others (e.g., the Commission, 

reporting counterparties) to whom SDRs 

provide swap data access. 

To further protect the confidentiality 

of SDR swap data, paragraph 12 of the 

confidentiality arrangement would 

require ADR and AFR signatories to 

promptly destroy all Confidential 

Information for which they no longer 

have a need or which no longer falls 

within their scope of jurisdiction.54

While it may be the case that ADRs or 

AFRs will use some or all Confidential 

Information in perpetuity, if they no 

longer have a need for Confidential 

Information, they should destroy such 

Confidential Information to prevent its 

misuse. Similarly, it is possible that an 

SDR may inadvertently provide swap 

data outside the scope of an ADR or 

AFR’s jurisdiction. In such 

circumstances, such swap data also 

should be destroyed immediately after 

the ADR or AFR discovers that such 

swap data is outside the scope of its 

jurisdiction. 

The proposed rule would require that 

the confidentiality arrangement must 

include an exhibit (Exhibit A) 

specifying the scope of jurisdiction of 

the ADR or AFR signatory. If such 

signatory is not an Enumerated ADR, 

the ADR or AFR would attach the 

Commission Determination Order 

described in § 49.17(h) as Exhibit A to 

the confidentiality arrangement. If such 

signatory is an Enumerated ADR, it 

would attach, as Exhibit A to the 

confidentiality arrangement, a detailed 

description of its scope of jurisdiction as 

it relates to the swap data maintained by 

SDRs that the ADR would seek pursuant 

to the confidentiality arrangement. This 

requirement is designed to assist SDRs 

in determining that the scope of each 

swap data request is within the scope of 

the requesting entity’s jurisdiction. 

While the Commission would impose 

certain obligations on ADRs and AFRs, 

with respect to swap data received from 

an SDR, in the proposed confidentiality 

arrangement, ADRs and AFRs retain the 

discretion to determine how to comply 

with those obligations. Additionally, to 

the extent that neither the proposal nor 

commenters address a relevant 

confidentiality issue that arises after an 

ADR or AFR commences accessing swap 

data, the Commission expects affected 

ADRs and AFRs to take appropriate 

measures to safeguard affected swap 

data and advise the Commission of such 

issue promptly so that the Commission 

may consider appropriate action. 

4. Removal of § 49.18(c)—ADRs and 

AFRs With Regulatory Responsibility 

Over an SDR 

The Commission proposes to remove 

current § 49.18(c), which provides that 

the indemnification and confidentiality 

requirements established in § 49.18(b) 

do not apply to certain ADRs and AFRs 

with regulatory jurisdiction or 

supervisory responsibilities over an 

SDR, but requires such regulators to 

comply with CEA section 8 and ‘‘any 

other relevant statutory confidentiality 

authorities.’’ As noted above in section 

II.B. relating to § 49.17(d)(2) and (3), the 

Commission believes that those 

domestic and foreign regulators that 

have regulatory responsibility over an 

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55Proposed § 49.18(d) provides that, if an ADR or 

AFR fails to fulfill the terms of a confidentiality 

arrangement under paragraph (a) of proposed 

§ 49.18, the Commission may direct each registered 

SDR to limit, suspend or revoke the ADR’s or AFR’s 

access to swap data held by the SDR Similarly, 

proposed § 49.17(d)(5) would require an SDR, as 

directed by the Commission, to limit, suspend or 

revoke an ADR’s or AFR’s swap data access should 

the Commission revoke the appropriateness 

determination for such ADR or AFR or otherwise 

direct the SDR to suspend or revoke such access. 

56Although § 49.17(e) uses the terms ‘‘data’’ and 

‘‘swap data’’ interchangeably, the Commission 

intended those paragraphs to reference the 

definition of ‘‘swap data’’ and, consequently, 

believes that these do not represent a change to the 

Commission’s original intent in promulgating 

SDR should be able to access SDR data 

reported to such SDR pursuant to such 

other regulator’s regulatory regime, 

without limitation. Therefore, the 

Commission submits that § 49.18(c) is 

not appropriate because it requires these 

domestic and foreign regulators with 

regulatory responsibility over SDRs to 

comply with CEA section 8 and any 

other relevant statutory confidentiality 

authorities. In addition, § 49.17(d)(2) 

and (3) already provide that the 

confidentiality and indemnification 

requirements of § 49.18(b) do not apply 

to these domestic and foreign regulators 

with regulatory responsibility over 

SDRs. However, insofar as a regulator 

sought swap data that was not reported 

to the SDR pursuant to that regulator’s 

regulatory regime, the exclusions set 

forth within § 49.17(d)(2) and (3) would 

not apply. 

The Commission accordingly submits 

that current § 49.18(c) is inappropriate 

and unnecessary, and therefore, should 

be eliminated. 

5. Failure to Fulfill the Terms of a 

Confidentiality Arrangement: Proposed 

§ 49.18(c) and (d) 

The Commission proposes in new 

§ 49.18(c) to require SDRs to promptly 

report to the Commission any known 

failure to fulfill the terms of a 

confidentiality arrangement that they 

receive pursuant to § 49.18(a). Proposed 

new § 49.18(d) would authorize the 

Commission to direct an SDR to limit, 

suspend or revoke an AFR’s or ADR’s 

access to swap data, if the Commission 

determines that the AFR or ADR has 

failed to fulfill the terms of its 

confidentiality arrangement with the 

Commission.55

6. Proposed § 49.18(e)—Delegation of 

Authority 

The Commission is proposing to add 

§ 49.18(e)(1) to delegate to the Director 

of the Division of Market Oversight, and 

to such staff acting under his or her 

direction as he or she may designate 

from time to time, all functions reserved 

to the Commission in § 49.18. Proposed 

§ 49.18(e)(2) would reserve to the 

Director of the Division of Market 

Oversight the authority to submit to the 

Commission for its consideration any 

matter which has been delegated to the 

Director under proposed § 49.18(e)(1). 

The Commission proposes in 

§ 49.18(e)(3) to expressly permit the 

Commission, at its election, to exercise 

the authority delegated to the Director of 

the Division of Market Oversight under 

proposed § 49.18(e)(1). 

This delegation is intended to 

conserve Commission resources and 

increase the effectiveness and efficiency 

of the Commission’s oversight and 

supervision of SDR swap data access. 

The Commission anticipates that the 

delegation of authority will help 

facilitate timely access to SDR swap 

data by ADRs and AFRs consistent with 

the requirements set forth in part 49 of 

the Commission’s regulations. However, 

the Division of Market Oversight may 

submit matters to the Commission for its 

consideration, as it deems appropriate. 

7. Conforming Changes 

As a result of the FAST Act 

Amendments, the Commission proposes 

conforming changes to § 49.17(d)(6), to 

delete references to an Indemnification 

Agreement. As a result of the proposed 

changes to § 49.18, and in particular, 

§ 49.18(a), the Commission proposes 

conforming changes to § 49.22(d)(4) 

relating to chief compliance officer 

compliance responsibilities and duties 

so that the appropriate section reflecting 

the confidentiality arrangement is 

referenced. 

8. Request for Comment 

1. The Commission requests comment 

on all aspects of the proposed 

amendments to § 49.18. Commenters are 

particularly invited to address the 

proposed amendments to § 49.18 

relating to the confidentiality provisions 

of CEA sections 21(c)(7) and 21(d), 

whether the Commission should 

prescribe specific processes to govern 

ADR and AFR requests for swap data 

access from an SDR; and whether the 

Commission should prescribe a process 

to govern an SDR’s treatment of requests 

for swap data access. 

2. In addition, commenters are invited 

to address the proposed rules 

implementing the notification 

requirement. In this regard, is there an 

alternative to requiring SDRs to 

maintain copies of all data they provide 

in connection with the data access 

provisions that would still permit the 

Commission to assess the SDR’s ongoing 

compliance with those provisions? For 

example, are alternative approaches 

available such that the Commission 

need not require SDRs to maintain 

actual copies of all information 

provided pursuant to the data access 

provisions? Would such an alternative 

approach reduce the burdens on SDRs 

while still permitting the Commission to 

assess ongoing compliance? 

E. Other Changes 

In addition to those changes 

discussed throughout this release, the 

Commission is proposing other changes 

to part 49, including a number of 

ministerial changes. The Commission 

proposes to amend § 49.9(a)(9) to change 

the reference in § 49.9(a)(9) from 

‘‘certain appropriate domestic regulators 

and foreign regulators’’ to ‘‘Appropriate 

Domestic Regulators and Appropriate 

Foreign Regulators’’ to make clear that 

an SDR is required to provide access to 

swap data, pursuant to § 49.17, only to 

ADRs and AFRs. The Commission is 

proposing to make a number of other 

changes to part 49 to more consistently 

refer to the defined term ‘‘swap data’’. 

The Commission is proposing to modify 

the references in existing §§ 49.9(a)(9) 

and 49.17(b)(2)(i) to ‘‘swap data or 

information’’; the reference in existing 

§ 49.17(d)(4)(i) to ‘‘swaps transaction 

data’’; and the reference in existing 

§ 49.17(d)(6) to ‘‘requested data,’’ to be 

references to ‘‘swap data’’ as that term 

is defined in § 49.2(a)(15). The 

Commission is proposing these changes 

to eliminate confusion and to conform 

part 49 to the FAST Act’s amendment 

of CEA section 21(c)(7) to refer to ‘‘swap 

data.’’ 

The Commission is also proposing to 

replace the reference in § 49.17(a) to 

‘‘swaps data’’ with a reference to ‘‘swap 

data’’ and to replace the reference in 

§ 49.17(a) to ‘‘Regulation’’ with a 

reference to ‘‘§ 49.17’’ to match the 

format of the reference in § 49.17(b). The 

Commission does not intend to effect 

any substantive changes with these 

proposed amendments. 

The Commission is proposing to 

change the references to ‘‘swap 

transaction data’’ and ‘‘swaps 

transaction data’’ in § 49.17(c)(2) and 

49.17(c)(3) to ‘‘swap data’’ as defined in 

§ 49.2(a)(15). The Commission is also 

proposing to change the references to 

‘‘data’’ in § 49.17(d)(5), (d)(6), (e), and 

(e)(1) to ‘‘swap data’’ in order to clarify 

the Commission’s intent to refer to 

‘‘swap data’’ within the meaning of 

§ 49.2(a)(15). For the same reason, the 

Commission is also proposing to add 

‘‘swap data and’’ before ‘‘information’’ 

in § 49.17(e)(2) to conform it to 

§ 49.17(e)(1), as proposed to be 

amended.56 The Commission also 

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§ 49.17(e). However, the term ‘‘swap data’’ is 

narrower than the terms ‘‘data’’ and ‘‘information.’’ 

Consequently, changing ‘‘data’’ to ‘‘swap data’’ 

arguably would narrow the scope of the 

confidentiality procedures and confidentiality 

arrangement required by § 49.17(e)(1) and (2). 

57These proposed changes appear in proposed 

§ 49.18(a). 

58See 5 U.S.C. 601 et seq. 

59See Policy Statement and Establishment of 

‘‘Small Entities’’ for purposes of the Regulatory 

Flexibility Act, 47 FR 18618 (Apr. 30, 1982) at 

18618–21. 

60See Part 49 Adopting Release at 54575 and 

Notice of Proposed Rulemaking: Swap Data 

Repositories, 75 FR 80898 (Dec. 23, 2010) at 80926. 

61 5 U.S.C. 601(5), (6). 

62 44 U.S.C. 3501 et seq. 

63See OMB Control Number 3038–0086 

(‘‘Information Collection 3038–0086’’). The most 

recent revision to OMB Control Number 3038–0086 

was approved November 30, 2015 and is available 

at: http://www.reginfo.gov/public/do/ 

PRAOMBHistory?ombControlNumber=3038–0086. 

proposes to add the term ‘‘and 

information’’ after the term ‘‘swap data’’ 

in the second sentence of § 49.17(e) so 

that such sentence is consistent with the 

first sentence of § 49.17(e), which 

permits access by third parties to both 

swap data and information maintained 

by a registered SDR, subject to certain 

conditions. 

In § 49.17(f)(2), the Commission is 

proposing to change both references to 

‘‘[d]ata and information’’ to ‘‘[S]wap 

data and information’’ in order to 

clarify, in each case, that the intended 

reference is to ‘‘swap data’’ as defined 

in § 49.2(a)(15). 

In addition to those changes related to 

references to swap data, the 

Commission is also proposing to amend 

§ 49.17(b)(1)(vii) to change ‘‘[a]ny other 

person the Commission deems 

appropriate[ ]’’ to ‘‘[a]ny other person 

the Commission determines to be 

appropriate pursuant to the process set 

forth in § 49.17(h)’’ to match the 

language in CEA section 21(c)(7). 

Commission regulation 49.17(f)(1) 

currently states, ‘‘Access of swap data 

maintained by the registered swap data 

repository to market participants is 

generally prohibited.’’ The Commission 

is proposing to amend § 49.17(f)(1) to 

state, ‘‘Access by market participants to 

swap data maintained by the registered 

swap data repository is prohibited other 

than as set forth in § 49.17(f)(2)’’ in 

order to clarify its meaning. The 

Commission does not intend this to be 

a substantive change to § 49.17(f)(1). 

Finally, the Commission is proposing 

several minor clarifying changes to 

§ 49.18(b).57 These changes include 

replacing ‘‘the swap data’’ with ‘‘swap 

data’’; replacing the ‘‘with any 

Appropriate Domestic Regulator or 

Appropriate Foreign Regulator’’ 

reference with ‘‘to any Appropriate 

Domestic Regulator or Appropriate 

Foreign Regulator’’; and adding ‘‘each’’ 

before ‘‘as defined in § 49.17(b)’’ to 

reflect that both ‘‘Appropriate Domestic 

Regulator’’ and ‘‘Appropriate Foreign 

Regulator’’ are defined terms in 

§ 49.17(b). 

III. Request for Comment 

In addition to the specific questions 

set forth in various sections above, the 

Commission requests comment on all 

aspects of the proposal, and particularly 

invites comment on the questions set 

forth below. 

(1) What, if any, impediments exist to 

accurately and cost-effectively 

determining whether swap data access 

requests are within the scope of an 

ADR’s/AFR’s jurisdiction? 

(2) Are there any particular elements 

the Commission has proposed to 

include in the confidentiality 

arrangement that are unnecessary? Has 

the Commission omitted particular 

element(s) that should be included in a 

confidentiality arrangement? 

(3) Do SDRs maintain swap data in a 

manner that permits accurate 

reproduction at a later date of the results 

of an ADR’s/AFR’s request for swap 

data? If so, is it necessary for the 

Commission to require that SDRs 

maintain records of the results of such 

requests, as opposed to merely 

maintaining the details of the request? 

IV. Related Matters 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(‘‘RFA’’) requires federal agencies, in 

promulgating rules, to consider the 

impact of those rules on small entities.58

The rules proposed herein will have a 

direct effect on the operations of SDRs 

and certain domestic and foreign 

regulators seeking access to swap data 

reported to, and maintained, by SDRs. 

The Commission has previously 

established certain definitions of ‘‘small 

entities’’ to be used by the Commission 

in evaluating the impact of its rules on 

small entities in accordance with the 

RFA.59 The Commission has previously 

determined that SDRs are not small 

entities for purpose of the RFA.60 For 

purposes of the Regulatory Flexibility 

Act, the definition of ‘‘small entity’’ also 

encompasses ‘‘small governmental 

jurisdictions,’’ which in relevant part 

means governments of locales with a 

population of less than fifty thousand.61

Although the Commission anticipates 

that this proposal may be expected to 

have an economic impact on various 

governmental entities that access data 

pursuant to Dodd-Frank’s data access 

provisions, the Commission does not 

anticipate that any of those 

governmental entities would be small 

governmental jurisdictions. Therefore, 

the Commission does not believe that 

this proposal will have a significant 

economic impact on a substantial 

number of small entities. Therefore, the 

Chairman, on behalf of the Commission, 

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

certifies that the proposed rules will not 

have a significant economic impact on 

a substantial number of small entities. 

B. Paperwork Reduction Act 

The proposed amendments to part 49 

would result in new ‘‘collection of 

information’’ requirements within the 

meaning of the Paperwork Reduction 

Act of 1995 (‘‘PRA’’).62 An agency may 

not conduct or sponsor, and a person is 

not required to respond to, a collection 

of information unless it displays a 

currently valid Office of Management 

and Budget (‘‘OMB’’) control number. 

The OMB control number for the 

information collection associated with 

part 49 swap reporting is 3038–0086.63

The Commission is seeking to revise 

Information Collection 3038–0086 

because the rule amendments proposed 

herein will impose information 

collection requirements that require 

approval from OMB under the PRA. The 

Commission is therefore submitting this 

proposal to OMB for review in 

accordance with 44 U.S.C. 3507(d) and 

5 CFR 1320.11. 

1. Summary of the Proposed 

Requirements 

The proposed modifications to part 49 

would require SDRs to make swap data 

available to requesting entities if certain 

conditions are satisfied. These 

conditions include the requesting entity 

executing a confidentiality arrangement 

and, in some cases, receiving a 

determination order from the 

Commission that it is an appropriate 

entity to receive SDR swap data. The 

proposed modifications would also 

require SDRs to report failures to fulfill 

the terms of confidentiality 

arrangements to the Commission. 

2. Collection of Information 

Currently, OMB Control Number 

3038–0086 sets out burden estimates 

relating to a broad range of SDR 

obligations associated with registration 

requirements, reporting requirements, 

recordkeeping requirements, and 

disclosure requirements. Where the 

information collection associated with 

those obligations would be modified by 

this proposed rule, the Commission is 

proposing to revise Information 

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64The Commission estimates that up to 

approximately 30 authorities in the United States 

may seek to access swap data from SDRs. In the 

context of potential AFRs, the Commission believes 

that most requests will come from authorities in 

G20 countries, each of which will have no more and 

likely fewer than 30 authorities that may request 

swap data from SDRs. In addition, certain 

authorities from outside the G20 also may request 

swap data from SDRs. Accounting for all of these 

entities, the Commission estimates that there likely 

will be a total of no more than 300 relevant 

domestic and foreign authorities that may request 

swap data from SDRs. 

Collection 3038–0086 accordingly. To 

the extent the proposed modifications to 

part 49 introduce new information 

collections that were not previously 

incorporated into Information 

Collection 3038–0086, the Commission 

is proposing to revise Information 

Collection 3038–0086 to account for the 

new information collections. Finally, 

many of the information collections 

discussed in Information Collection 

3038–0086 are not implicated or 

modified by the Commission’s proposed 

revisions to part 49 in this release. The 

Commission, therefore, is not proposing 

to revise the estimated burdens 

associated with such information 

collections. New or revised information 

collections contained in these proposed 

revisions to part 49 will affect SDRs as 

well as entities that request access to 

SDR swap data pursuant to these 

provisions. 

As discussed above, the proposed 

modifications to part 49 set out in this 

release are intended to provide a 

process by which other authorities may 

obtain access to SDR swap data. The 

information collections associated with 

this process are intended to ensure that 

SDR swap data is only accessed by 

appropriate entities and that the 

confidentiality of any accessed SDR 

swap data is adequately protected. The 

ultimate result of this process is 

intended to provide other authorities 

with information to assist with the 

oversight of the global swaps market 

and market participants. 

ADR/AFRs. As discussed throughout 

this release, certain conditions must be 

satisfied before a requesting entity is 

permitted to access SDR swap data. 

These conditions may implicate various 

PRA collections and burdens as 

discussed below. 

Pursuant to § 49.18(a), every 

requesting entity seeking access to SDR 

swap data must execute a 

confidentiality arrangement with the 

Commission prior to receiving access. 

This requirement applies to both those 

entities that are specifically enumerated 

as appropriate in § 49.17(b)(1) and those 

entities that require a determination 

from the Commission that they are 

appropriate entities to receive access to 

SDR swap data, regardless of whether 

the requesting entity is a domestic or 

foreign entity. 

In addition to executing a 

confidentiality arrangement, requesting 

entities that are not Enumerated ADRs 

will be required to seek a Determination 

Order from the Commission to have 

access to SDR swap data. Such 

Determination Orders will describe SDR 

swap data that is appropriate for the 

entity to access, based on the requesting 

entity’s scope of jurisdiction. For 

Enumerated ADRs, the Commission is 

proposing to require that the 

confidentiality arrangement describe the 

requesting entity’s scope of jurisdiction. 

The Commission believes the use of the 

form of confidentiality arrangement set 

out in Appendix B to part 49 will 

provide an efficient means to satisfy the 

requirements of § 49.18(a). 

The Commission, for PRA purposes, 

believes that it is reasonable to assume 

that 300 total entities will seek access to 

SDR swap data. This estimate is based 

on the Commission’s experience in 

receiving data requests from other 

regulators and its experience in 

coordinating and cooperating with other 

regulators.64 For PRA purposes, the 

Commission assumes there are four 

SDRs, which is the number of SDRs that 

are provisionally registered with the 

Commission. As the confidentiality 

arrangement will be between the ADR or 

AFR and the Commission and delivered 

to the SDR, AFRs and ADRs need not 

execute a separate confidentiality 

arrangement for each SDR. Accordingly, 

the Commission estimates, for PRA 

purposes, that the total number of 

confidentiality arrangements that will 

be executed under the proposed rules is 

300. Given that the Commission will 

have published a form of confidentiality 

arrangement as an appendix to part 49, 

the Commission estimates that the 

review and execution of each 

confidentiality arrangement by an ADR 

or AFR will take approximately 40 

hours, for a total burden of 12,000 

hours. The burden estimates associated 

with entering into such confidentiality 

arrangements are addressed in the 

proposed revised OMB Control Number 

3038–0086. 

An entity that seeks access to SDR 

swap data must be considered 

appropriate by the Commission prior to 

that entity receiving access to SDR swap 

data. For Enumerated ADRs, there is no 

burden associated with seeking to be 

deemed appropriate by the Commission 

as they are already enumerated as such. 

Those entities that are not Enumerated 

ADRs will be required to receive a 

Determination Order prior to receiving 

access to SDR swap data. The process 

for obtaining such a Determination 

Order is set out in general terms in 

proposed § 49.17(h) and requires the 

requesting entity to prepare and submit 

an application to the Commission. The 

preparation and submittal of this 

application constitutes an information 

collection under the PRA. 

As discussed above, the Commission 

believes that for PRA purposes it is 

reasonable to assume that 300 domestic 

and foreign entities will seek access to 

SDR swap data. Very few of these 

entities are specifically enumerated in 

§ 49.17(b)(1). The Commission 

estimates, for PRA purposes, that each 

such requesting entity would expend 

100 hours in connection with filing an 

application to receive an 

appropriateness determination, for a 

total initial burden of no more than 

30,000 hours, calculated as the product 

of 300 domestic and foreign entities 

seeking access to SDR swap data and 

100 hours per application). This 

estimate considers the relevant 

information that would be required to 

be provided in such an application, 

including information regarding the 

entity’s scope of jurisdiction, mutual 

assistance provided to the Commission, 

and the existence of cooperation related 

to an MOU or similar information 

sharing arrangement with the 

Commission, as well as any other 

information relevant for the 

Commission’s determination. This 

burden estimate is included in the 

Commission’s proposed revisions to 

Information Collection 3038–0086. 

Swap Data Repositories. As discussed 

throughout this release, SDRs are 

required to facilitate access to SDR swap 

data by requesting entities, provided 

certain conditions are met. This 

requirement may implicate PRA 

collections and burdens, some of which 

are already addressed in the existing 

OMB Control Number 3038–0086, and 

some of which constitute new 

collections, as discussed below. 

Currently, the burden on SDRs of 

making data available to ADRs and 

AFRs is accounted for in OMB Control 

Number 3038–0086, as this is an 

existing obligation under existing 

§ 49.17(d). However, the proposed rules 

set out in this release clarify and modify 

the requirements imposed on SDRs in 

providing access to SDR swap data to 

ADRs and AFRs. Consequently the 

Commission is revising Information 

Collection 3038–0086 to account for 

these modifications. 

The Commission expects to limit a 

requesting entity’s access to SDR swap 

data based on the entity’s scope of 

jurisdiction. In connection with this 

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limitation, the Commission expects 

SDRs to incur burdens and costs 

associated with setting up access to SDR 

swap data that is consistent with an 

ADR or AFR’s scope of jurisdiction. The 

Commission expects that each 

confidentiality arrangement will 

identify, either directly or through the 

attached Determination Order, the scope 

of access that is appropriate for a given 

requesting entity. The Commission 

expects SDRs to use these limitations to 

program their systems to reflect the 

scope of the ADR or AFR’s access to 

SDR swap data. These limits set out in 

the confidentiality arrangement are 

expected to reduce the burdens on SDRs 

of assessing whether a request satisfies 

the relevant conditions, particularly 

with regard to whether SDR swap data 

relates to persons or activities within 

the requesting entity’s scope of 

jurisdiction. The Commission estimates 

that the burden on an SDR associated 

with setting up access restrictions to 

match a requesting entity’s scope of 

jurisdiction will include 20 hours of 

programmer analyst time, five hours of 

senior programming time, and one hour 

of attorney time, for a total of 26 hours. 

Consequently, for PRA purposes, the 

Commission estimates that each SDR 

would incur a total burden of 7,800 

hours (i.e., the product of 300 entities 

and 26 hours of time) associated with 

setting up access for each ADR or AFR. 

The burdens associated with these 

permissioning requirements are 

addressed in proposed revised OMB 

Control Number 3038–0086. 

SDRs will also be required to provide 

electronic notice to the Commission of 

the first request for data from a 

particular requesting entity and 

promptly after receiving any request 

that does not comport with the scope of 

the ADR’s or AFR’s jurisdiction. In 

addition to notifying the Commission of 

the foregoing, the Commission is 

proposing, in §§ 49.17(d)(4)(i) and (iii), 

to require SDRs to maintain records of 

all information related to the initial and 

all subsequent requests for data from the 

requesting entity. These records shall 

include, at a minimum, the identity of 

the requestor or person accessing the 

data; the date, time and substance of the 

request or access; and copies of all data 

reports or other aggregation of data 

provided in connection with the request 

or access. The SDR shall maintain this 

information for a period of no less than 

five years after the date of such request 

and shall provide this information to the 

Commission upon request. 

Currently, OMB Control Number 

3038–0086 estimates burdens associated 

with various registration, reporting, 

recordkeeping, and disclosure 

requirements to which SDRs are subject. 

The proposed recordkeeping 

requirements relating to requesting 

entities’ data requests constitute an 

information collection for PRA purposes 

and require the Commission to revise 

the recordkeeping burden estimates 

contained in OMB Control Number 

3038–0086. The reporting and 

recordkeeping requirements proposed in 

this release may potentially impact each 

SDR. 

SDRs already have the ability to 

communicate electronically with the 

Commission and are subject to 

significant recordkeeping requirements 

pursuant to § 49.12. Therefore, the 

proposed requirements should not 

result in SDRs having to incur initial 

costs to implement systems to properly 

notify the Commission when a 

requesting entity submits a data request 

for the first time that are in excess of 

what is already accounted for in OMB 

Control Number 3038–0086. The 

Commission estimates that initially each 

SDR may incur a burden of 360 hours 

associated with these proposed 

recordkeeping requirements, for a total 

of 1,440 hours (i.e., the product of four 

SDRs and 360 hours). Additionally, the 

Commission estimates that each SDR 

would incur an annual burden of 280 

hours associated with the recordkeeping 

requirements, for a total of 1,120 hours 

annually (i.e., the product of four SDRs 

and 280 hours). The burdens associated 

with these notification requirements are 

addressed in proposed revised 

Information Collection 3038–0086. 

Finally, current Information 

Collection 3038–0086 accounts for the 

costs to SDRs of executing a 

‘‘Confidentiality and Indemnification 

Agreement’’ with each requesting ADR 

and AFR. Under the Commission’s 

proposal, the SDR is no longer required 

to execute such an agreement with the 

ADRs or AFRs. The proposed 

confidentiality arrangement shall be 

between the requesting ADR or AFR and 

the Commission. Accordingly, the total 

burden to SDRs, as currently reflected in 

Information Collection 3038–0086, is 

reduced by the cost to execute such 

agreements. The reduction in burden 

associated with this change in the 

confidentiality agreement is addressed 

in proposed revised Information 

Collection 3038–0086. 

3. Request for Comments on Collection 

The Commission invites the public 

and other Federal agencies to comment 

on any aspect of the reporting burdens 

discussed above. Pursuant to 44 U.S.C. 

3506(c)(2)(B), the Commission solicits 

comments in order to: (1) Evaluate 

whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information will have practical utility; 

(2) evaluate the accuracy of the 

Commission’s estimate of the burden of 

the proposed collection of information; 

(3) determine whether there are ways to 

enhance the quality, utility, and clarity 

of the information to be collected; and 

(4) minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of automated collection techniques 

or other forms of information 

technology. 

Comments may be submitted directly 

to the Office of Information and 

Regulatory Affairs, by fax at (202) 395– 

6566 or by email at OIRAsubmissions@

omb.eop.gov. Please provide the 

Commission with a copy of submitted 

comments so that all comments can be 

summarized and addressed in the final 

rule preamble. Refer to the ADDRESSES

section of this notice of proposed 

rulemaking for comment submission 

instructions to the Commission. A copy 

of the supporting statements for the 

collections of information discussed 

above may be obtained by visiting 

www.RegInfo.gov. OMB is required to 

make a decision concerning the 

collection of information between 30 

and 60 days after publication of this 

document in the Federal Register. 

Therefore, a comment is best assured of 

having its full effect if OMB receives it 

within 30 days of publication. 

C. Cost-Benefit Considerations 

1. Introduction 

As discussed in Section I, entitled 

‘‘Background and Introduction,’’ above, 

Congress passed the FAST Act to 

facilitate broader access to swap data by 

the regulatory community. Section 

86001(b) of the FAST Act amends CEA 

section 21 by, among other things, 

eliminating the requirement that, as a 

condition of receiving information from 

SDRs, each ADR or AFR agree to 

indemnify the SDR and the Commission 

for any expenses arising from litigation 

relating to the information provided 

under CEA Section 8. The Commission 

is issuing this proposed rulemaking to 

enable ADRs and AFRs to access swap 

data, subject to certain safeguards 

designed to protect swap data from 

misappropriation or misuse, and to 

advise the public of the practical 

implications of the changes to the CEA 

made by the FAST Act. The 

Commission preliminarily believes that 

the proposed safeguards are warranted 

based on the incorporation by reference 

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8382 Federal Register / Vol. 82, No. 15 / Wednesday, January 25, 2017 / Proposed Rules 

65 17 CFR 49.2(a)(5). 

66 17 CFR 49.17(b)(2). 

67 17 CFR 49.9(a)(9). 

68 17 CFR 49.17(a). 

69 17 CFR 49.17(b)(vii). 

70 17 CFR 49.17(d)(4)(i). 

in CEA sections 21(c)(7) and 21(d) of the 

strong protections of CEA section 8. 

CEA section 15(a) requires the 

Commission to consider the costs and 

benefits of its actions before 

promulgating a regulation under the 

CEA or issuing certain orders. CEA 

section 15(a) further specifies that the 

costs and benefits shall be evaluated in 

light of the following five broad areas of 

market and public concern: (1) 

Protection of market participants and 

the public; (2) efficiency, 

competitiveness, and financial integrity 

of futures markets; (3) price discovery; 

(4) sound risk management practices; 

and (5) other public interest 

considerations. The Commission 

considers the costs and benefits 

resulting from its discretionary 

determinations with respect to the CEA 

section 15(a) factors. 

As an initial matter, the Commission 

recognizes that there are benefits, 

discussed more fully below, for 

domestic and foreign regulators to have 

access to SDR swap data. Yet, there are 

inherent compromises between data 

access and data security. More directly, 

greater access leads to data being less 

secure from misappropriation or misuse. 

The Commission recognizes that there 

are costs associated with this proposed 

rulemaking. The Commission, however, 

lacks the requisite data and information 

to precisely estimate costs, in part, 

because the proposed rulemaking grants 

SDRs, ADRs, and AFRs discretion to 

implement the proposed regulations 

through alternative measures. 

Furthermore, the Commission does not 

know which approach SDRs, ADRs, and 

AFRs will take. As a consequence, 

where it is not feasible to quantify (e.g., 

because of the lack of accurate data or 

appropriate metrics), the Commission 

has considered the costs and benefits of 

this proposed rulemaking in qualitative 

terms. The Commission, nevertheless, 

requests that commenters provide any 

data or other information that would be 

useful in the estimation of the 

quantifiable costs and benefits of this 

proposed rulemaking. 

2. Baseline and Proposed Rule Summary 

a. Definition of Foreign Regulator— 

Proposed Amendment to § 49.2(a)(5) 

The status quo baseline definition for 

the term ‘‘foreign regulator’’ as defined 

in current § 49.2(a)(5) is a ‘‘foreign 

futures authority as defined in CEA 

Section 1a(26), foreign financial 

supervisors, foreign central banks and 

foreign ministries.’’ 65 The Commission 

is proposing to amend the term ‘‘foreign 

regulator’’ to add entities. Specifically, 

the Commission is adding the phrase 

‘‘other foreign authorities’’ to the 

definition. This approach is consistent 

with the FAST Act’s amendment to CEA 

section 21(c)(7)(E). 

b. Definition of Appropriate Foreign 

Regulator—Proposed Amendment to 

§ 49.17(b)(2) 

The status quo baseline definition for 

the term ‘‘Appropriate Foreign 

Regulator’’ (defined in current 

§ 49.17(b)(2)) is ‘‘those Foreign 

Regulators with an existing 

memorandum of understanding or other 

similar type of information sharing 

arrangement executed with the 

Commission and/or Foreign Regulators 

without an MOU as determined on a 

case-by-case basis by the 

Commission.’’ 66

The Commission is proposing to 

amend current § 49.17(b)(2) to require 

all ‘‘foreign regulators’’ to file an 

application with the Commission to 

become ‘‘Appropriate Foreign 

Regulators.’’ The existence of a current 

MOU or other information sharing 

arrangement with the Commission will 

not be dispositive to a determination of 

appropriateness. The proposed 

amendment would require the 

Commission to issue an order finding 

each foreign regulator ‘‘appropriate.’’ In 

this manner, the Commission will 

ensure that each ‘‘Appropriate Foreign 

Regulator’’ is acting within its scope of 

jurisdiction as mandated under CEA 

section 21(c)(7) through incorporation 

by reference of CEA section 8(e). The 

Commission believes that this proposal 

will provide greater control over the 

process by which foreign regulators 

obtain access to SDR swap data; 

specifically, it will help to ensure that 

only those foreign regulators who have 

a regulatory interest in SDR swap data 

can access such swap data. The 

limitation on swap data access proposed 

in this recommendation is expected to 

help reduce the risk of unauthorized 

disclosure, misappropriation or the 

misuse of swap data. 

c. Duties of Registered SDRs—Proposed 

Amendments to § 49.9(a)(9) 

The Commission has proposed 

conforming language changes to current 

§ 49.9(a)(9).67 There are no substantive 

changes with respect to costs and 

benefits. 

d. Purpose of Access to SDR Data— 

Proposed Amendment to § 49.17(a) 

The Commission has proposed 

conforming language changes to current 

§ 49.17(a).68 There are no substantive 

changes with respect to costs and 

benefits. 

e. Appropriate Domestic Regulator— 

Proposed Amendment to § 49.17(b)(vii) 

The Commission has proposed 

conforming language changes to current 

§ 49.17(b)(vii) to cross-reference the 

process under § 49.17(h).69 There are no 

substantive changes with respect to 

costs and benefits in proposed 

§ 49.17(b)(vii). If there are any costs or 

benefits associated with the changes in 

§ 49.17(b)(vii), they will be discussed in 

regards to the process defined under 

proposed § 49.17(h), which is the 

appropriateness-determination process. 

f. Domestic Regulator With Regulatory 

Responsibility—Proposed Amendment 

to § 49.17(d)(2) 

By way of this proposed rulemaking, 

the Commission has explained that if a 

domestic regulator receives swap data 

pursuant to its regulatory regime, that 

access is not subject to CEA sections 

21(c)(7) or 21(d), or Commission 

regulations § 49.17(d) or § 49.18. 

g. Foreign Regulator With Regulatory 

Responsibility—Proposed Amendment 

to § 49.17(d)(3) 

Foreign Regulators require data in 

order to fulfill their regulatory 

responsibilities. In proposed 

§ 49.17(d)(3) the Commission has 

explained that, if a foreign regulator 

receives swap data pursuant to its 

regulatory regime, that access is not 

subject to CEA sections 21(c)(7) or 21(d), 

or §§ 49.17(d) or 49.18. 

h. SDR Notification Requirement— 

Proposed Amendment to § 49.17(d)(4)(i) 

to (iv) 

Current § 49.17(d)(4)(i) requires an 

SDR to promptly notify the Commission 

regarding any request for swap data 

received by Appropriate Domestic or 

Foreign Regulators.70 SDRs under this 

current regulation are required to notify 

the Commission for each and every 

request of an Appropriate Domestic or 

Foreign Regulator (including ongoing 

swap data requests). 

The Commission proposes to amend 

current § 49.17(d)(4)(i)–(ii) to provide 

that SDRs notify the Commission at the 

time that such SDR receives the initial 

request for swap data from a particular 

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71See 17 CFR 49.17(d)(6) and 49.18. 

ADR or AFR and promptly after 

receiving any request that does not 

comport with the scope of the ADR’s or 

AFR’s jurisdiction. Consistent with 

current recordkeeping requirements set 

forth in § 49.12, SDRs are required to 

maintain books and records of all 

information related to the initial and 

any subsequent requests for swap data 

from an Appropriate Domestic or 

Foreign Regulator. The Commission also 

proposed electronic notification similar 

to the current rule requirement. In 

addition, the Commission placed a few 

obligations on SDRs under proposed 

§ 49.17(d)(4)(iii) and (iv) regarding data 

access to ADRs and AFRs, and 

determining an ADR’s or AFR’s 

jurisdiction. 

In addition, proposed § 49.17(d)(4)(iii) 

requires SDRs to limit, suspend, or 

revoke an ADR’s or AFR’s swap data 

access if the ADR’s or AFR’s scope of 

jurisdiction changes and the 

Commission directs the ADR or AFR to 

limit, suspend, or revoke an ADR’s or 

AFR’s swap data access. 

i. Timing; Limitation, Suspension or 

Revocation of Access—Proposed 

Amendments to § 49.17(d)(5) 

The changes to the rule text in current 

§ 49.17(d)(5) make clear that SDRs must 

notify the Commission of an ADR or 

AFR access request and the receipt of a 

confidentiality arrangement, among 

other things. In addition, proposed 

§ 49.17(d)(5) requires SDRs to limit, 

suspend, or revoke an ADR’s or AFR’s 

swap data access if the Commission 

limits, suspends or revokes the ADR’s or 

AFR’s appropriateness determination or 

otherwise directs the ADR or AFR to 

limit, suspend, or revoke an ADR’s or 

AFR’s swap data access. 

j. Confidentiality Agreement—Proposed 

Amendments to §§ 49.17(d)(6) and 

49.18(a)-(f) 

Current §§ 49.17(d)(6) and 49.18, 

adopted as part of the original part 49 

rules, provide that SDRs execute a 

‘‘Confidentiality and Indemnification 

Agreement’’ with a CEA section 21(c)(7) 

entity, prior to sharing swap transaction 

data and information.71 This Agreement 

is required to state that the other 

regulator will abide by the 

confidentiality provisions of CEA 

section 8 and agree to indemnify both 

the SDR and the Commission against 

any litigation expenses relating to 

information provided under CEA 

section 8. However, through the passage 

of the FAST Act, Congress has 

eliminated the requirement that certain 

domestic and foreign regulators execute 

the ‘‘Confidentiality and 

Indemnification Agreement’’ prior to 

obtaining SDR swap data. More 

specifically, Congress amended CEA 

section 21(d) to require only the 

execution of a written agreement by 

domestic and foreign regulators prior to 

receipt of swap data from SDRs so that 

these regulators will abide by the 

confidentiality requirements described 

in CEA section 8. 

The Commission proposes to amend 

current §§ 49.17(d)(6) and 49.18 to (i) 

reflect the FAST Act amendments to 

CEA sections 21(c)(7) and (d), and (ii) 

require SDRs to receive a confidentiality 

arrangement from a 21(c)(7) entity, 

before sharing swap data, to satisfy the 

requirements of CEA section 21(d). 

Unlike the current regulations, this 

confidentiality arrangement will not be 

executed by the SDR with the 21(c)(7) 

entity, but instead would be executed by 

the Commission and the 21(c)(7) entity. 

The Commission proposes to provide a 

form of confidentiality arrangement 

attached as Appendix B to part 49. Use 

of the form would not be mandatory but 

would provide an efficient and 

expeditious means of fulfilling the 

confidentiality requirement of 21(d) and 

§§ 49.17(d) and 49.18. 

k. Third-Party Service Providers— 

Proposed Amendments to § 49.17(e) 

The Commission modified the text in 

current § 49.17(e) for clarity. There are 

no substantive cost or benefit 

implications. 

l. Access by Market Participants 

Barred—Proposed Amendment to 

§ 49.17(f) 

The Commission modified the text in 

current § 49.17(f) for clarity. There are 

no substantive cost or benefit 

implications. 

m. Filing Requirements for Applicants 

To Be Determined Appropriate— 

Proposed Amendments to § 49.17(h) 

In this proposed rulemaking, the 

Commission has added proposed 

§ 49.17(h) to describe the application 

process for persons seeking an 

appropriateness determination. In subparagraph (2), the Commission explains 

that the applicant must provide 

sufficient detail to explain its 

jurisdiction and its confidentiality 

safeguards. Proposed § 49.17(h)(3) also 

outlines the standards by which the 

Commission will issue an 

appropriateness determination. Finally, 

the Commission explains in proposed 

§ 49.17(h)(4) that it reserves the right to 

‘‘revisit, reassess, limit, suspend or 

revoke’’ an appropriateness 

determination. 

n. Delegation of Authority—Addition of 

Proposed §§ 49.17(i) and 49.18(e) 

Current §§ 49.17 and 49.18 do not 

have delegation of authority provisions. 

The Commission proposes to amend 

§§ 49.17 and 49.18 to add a delegation 

of authority to the Director of the 

Division of Market Oversight (‘‘DMO’’) 

and the Director’s designee(s) of 

functions reserved to the Commission in 

§§ 49.17 and 49.18. The delegation of 

Commission authority would make the 

process more effective and efficient. 

o. SDR Chief Compliance Officer 

Duties—Proposed Amendment to 

§ 49.22(d)(4) 

The change to current § 49.22(d)(4) is 

the removal of the word 

‘‘indemnification’’ from the rule text. 

This is a conforming change to make the 

rule consistent with the FAST Act 

amendments. 

3. Benefits 

At a high level regarding benefits, the 

rulemaking is expected to assist 

regulators in performing their 

supervisory and regulatory functions by 

providing them access to swap data, 

which would help regulators better 

understand the risks their regulated 

entities are assuming and the impact of 

such risks on the broader markets. 

These supervisory and regulatory 

functions may include: Monitoring and 

mitigation of systemic risk; ensuring 

financial stability; registration and 

oversight of financial market 

infrastructures; registration and 

oversight of trading venues; registration 

and oversight of market participants; 

central bank activities; prudential 

supervision; restructuring or resolution 

of infrastructures and firms; and 

regulation of cash markets, in some of 

which swap counterparties are active. 

A more granular benefit to regulators 

flows from the Commission’s proposal 

to resolve a conflict or potential conflict 

between the Commission’s 

Interpretative Statement and current 

§ 49.18(c). In the Interpretative 

Statement, the Commission took the 

view that other regulators who access 

swap data based on their own authority 

over SDRs are not subject to the swap 

data access-related provisions of the 

CEA. On the other hand, current 

§ 49.18(c) provides that such regulators 

are required to comply with CEA 

section 8 and any other relevant 

statutory confidentiality provisions. The 

Commission proposes to delete the 

statement in current § 49.18(c) 

providing that other regulators are 

required to comply with CEA section 8 

and any other relevant statutory 

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8384 Federal Register / Vol. 82, No. 15 / Wednesday, January 25, 2017 / Proposed Rules 

72 17 CFR 49.18(c). 73See, e.g., Registered Entity Cyber proposed 

rulemaking at 80141 (observing that ‘‘there has . . . 

been a rise in attacks by . . . hacktivists . . . aimed 

at . . . [, among other things,] theft of data or 

intellectual property . . . .’’); Id. at 80189 

(Concurring Statement of Commissioner Bowen) 

(stating that ‘‘our firms are facing an unrelenting 

onslaught of attacks from hackers with a number of 

motives ranging from petty fraud to international 

cyberwarfare.’’). 

74While the same risks of misuse and 

misappropriation exist with respect to swap data 

maintained at SDRs, SDRs are regulated, and 

subject to sanctions, by the Commission, whereas 

ADRs and AFRs are not. 

75Enumerated domestic regulators also will have 

to demonstrate to the Commission the scope of their 

jurisdiction so that SDRs will know the contours of 

the swap data access they can provide to 

enumerated domestic regulators. 

confidentiality provisions even when 

they access swap data based on their 

own authority over SDRs.72 Other 

regulators will benefit both from the 

clarity this action provides and by the 

greater ease of access to swap data 

within their jurisdiction. 

4. Costs 

The Commission recognizes that there 

are different types of costs associated 

with this proposed rulemaking. One 

cost is the potential harm to market 

participants and the public if swap data 

is misused—for example, 

inappropriately disclosed by ADRs and 

AFRs. Or, another harmful scenario 

might involve misappropriated data 

where hackers pilfer swap data from 

ADRs and AFRs to learn the positions 

of market participants so that the 

hackers, or other interested parties who 

may even pay for such information, 

scam the market. Such bad actors might 

be able to anticipate such market 

participants’ trades and trade in front of 

them, raising swap trading costs to 

market participants, thereby reducing 

their profits.73 If the aforementioned 

scenario occurred frequently enough 

this might induce swap dealers to widen 

their spreads, making hedging more 

expensive. In turn, this might lead to 

sub-optimal business and investment 

strategies, as parties would be less 

willing to participate in swap markets, 

because it would be more costly. 

Further, the scenario posed could cause 

market participants to be concerned that 

their business strategies might be tipped 

to their competitors, because with stolen 

data, somebody might be able to infer 

their strategies from knowing their swap 

positions and how these positions 

change in response to relevant economic 

events.74 Such concerns could lead 

some market participants to withdraw to 

some extent from swap markets, 

reducing liquidity and potentially 

inducing them to use less effective 

hedging instruments or trading 

strategies in other markets. 

At a high level regarding costs to 

ADRs and AFRs, the less access to swap 

data granted to ADRs and AFRs, the less 

such swap data would help in 

performing ADRs’ and AFRs’ 

supervisory and other regulatory 

functions. Similarly, the more 

impediments to swap data access, the 

longer it would take ADRs and AFRs to 

use, or the less use ADRs and AFRs 

could make of, such swap data. 

At a more granular level, the 

Commission is proposing several new 

obligations applicable to foreign 

regulators and certain domestic 

regulators that will trigger costs for such 

regulators. The obligation for foreign 

regulators and unenumerated domestic 

regulators to apply for a Determination 

Order conferring AFR or ADR status so 

that such foreign regulators and 

unenumerated domestic regulators can 

receive access to SDR swap data will, at 

a minimum, require such applicants to 

dedicate personnel to drafting the 

application. Some applicants for ADR 

and AFR status may choose to retain 

outside counsel or another third party to 

draft the application, thereby incurring 

related costs. There also may be an 

additional cost associated with the 

complexity of the application because 

applicants for ADR and AFR status will 

have to explain their jurisdiction and 

link it to the sought swap data so that 

the Commission can provide swap data 

access parameters to SDRs in the 

Determination Orders.75 While 

applicants will need to expend 

resources developing their 

‘‘appropriateness’’ applications, the 

Commission expects that the 

requirements and guidance it has 

provided in the proposed rulemaking 

should reduce such expenditures to a 

certain extent. Nonetheless, such 

expenditures will depend on the 

particulars of a given applicant. Because 

the Commission lacks sufficient 

knowledge of the specific characteristics 

of the applicants, among other things, 

the Commission is unable to quantify 

these expenditures at this time. 

The proposed requirement in 

§ 49.18(a) that SDRs receive an executed 

confidentiality arrangement from an 

ADR or AFR before the SDR can provide 

the ADR or AFR swap data is based on 

a corresponding requirement set forth in 

CEA section 21(d) and will generate 

costs to ADRs and AFRs. CEA section 

21(d) does not specify any details of the 

required written agreement other than 

that it must state that the ADR or AFR 

shall abide by CEA section 8’s 

confidentiality requirements. The 

Commission, however, is proposing, in 

Appendix B to this part 49, to specify 

required elements as well as a form of 

confidentiality arrangement providing 

for ADRs and AFRs to implement a 

number of safeguards that would 

impose burdens on ADRs and AFRs. 

The confidentiality arrangement would 

include safeguards that: 

• To the maximum extent practicable, 

maintain Confidential Information 

separately from other data and 

information; 

• Protect Confidential Information 

from misappropriation and misuse; 

• Ensure that only ADR or AFR 

personnel with a need to access 

particular Confidential Information to 

perform their job functions related to 

such Confidential Information have 

access thereto and that such access is 

permitted only to the minimum extent 

necessary to perform such job functions; 

• Prevent disclosure of aggregated 

Confidential Information unless 

anonymized to prevent identification, 

through disaggregation or otherwise, of 

a market participant’s business 

transactions, trade data, market 

positions, customers or counterparties; 

• Prohibit the use of Confidential 

Information by ADR or AFR personnel 

for any improper purpose, including in 

connection with trading for their 

personal benefit or for the benefit of 

others or with respect to any 

commercial or business purpose; 

• Monitor compliance with the 

confidentiality safeguards and ensure 

prompt notification of the CFTC and 

each relevant SDR of any violation of 

the safeguards or failure to fulfill the 

terms of the confidentiality 

arrangement; 

• Prohibit the onward sharing or 

disclosing of Confidential Information 

unless exempted in paragraphs 6(d) or 

8 of the confidentiality arrangement; 

• Notify the CFTC in writing prior to 

complying with any legally enforceable 

demand for Confidential Information 

and assert all available appropriate legal 

exemptions or privileges with respect to 

such Confidential Information, and use 

its best efforts to protect the 

confidentiality of the Confidential 

Information; and 

• Promptly destroy all Confidential 

Information for which an ADR or AFR 

no longer has a need or for which the 

information no longer falls within the 

scope of its jurisdiction, and certify to 

the CFTC, upon request, that the ADR 

or AFR has destroyed such Confidential 

Information. 

The Commission preliminarily 

believes that the monetary costs of these 

burdens would be minor, and the other 

costs of complying with these burdens, 

such as the costs to develop policies, 

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76The Commission believes that potential ADRs 

and AFRs would likely have established safeguards 

to protect sensitive data other than swap data and 

that such safeguards could be adapted to address 

the requirements of the proposed form of 

confidentiality arrangement without great cost. 

77The need for these resource expenditures 

would flow from proposed § 49.17(d)(4)(iii), which 

would preclude SDRs from granting ADRs or AFRs 

access to swap data unless the SDR has determined 

that such swap data is within the then-current 

scope of such ADRs’ or AFRs’ jurisdiction. 78See, e.g., DMO No-Action Letter 16–03 (Jan. 15, 

2016), available at http://www.cftc.gov/idc/groups/ 

public/@lrlettergeneral/documents/letter/16-03.pdf, 

for further information regarding such privacy law 

restrictions. 

procedures and safeguards, are within 

the scope of ADRs’ and AFRs’ 

expertise.76 Given that ADRs and AFRs 

can elect not to seek access to swap data 

from SDRs and that ADRs and AFRs 

who do seek such access have some 

control over the manner in which they 

seek to access such swap data, ADRs 

and AFRs themselves can influence to 

some degree the costs they impose on 

themselves by seeking access to swap 

data from SDRs. 

The proposed rulemaking would 

prohibit ADRs and AFRs from onward 

sharing Confidential Information with 

other parties. This could impose some 

costs in that ADRs and AFRs would not 

be able to freely share swap data among 

themselves. This could reduce the 

utility of the swap data to ADRs and 

AFRs, possibly reducing the 

effectiveness thereof. In addition, the 

fact that the Commission is proposing 

not to specify a particular means of 

ADRs and AFRs accessing swap data 

could result in SDRs providing a means 

of access other than a means preferred 

by ADRs and AFRs. This might impose 

additional costs to ADRs and AFRs 

relative to the potentially lesser costs of 

their preferred means of access. Because 

of these uncertainties, the Commission 

is unable to quantify these costs but is 

able to identify such costs generally. 

For SDRs, providing swap data access 

to so many potential ADRs and AFRs 

may be expensive. For example, SDRs 

may be forced to purchase new servers, 

hire new system administrators to 

oversee the new swap data/system usage 

and troubleshoot related problems that 

may arise. New recordkeeping 

requirements would require more 

system resources. The proposed 

requirement to limit the swap data 

provided to ADRs and AFRs to only 

swap data that is within the scope of 

ADRs’ and AFRs’ jurisdiction may cause 

SDRs to elect to create new methods for 

parsing swap data to comply with the 

proposed requirement to so limit swap 

data. The proposed reporting obligations 

also will increase SDRs’ costs, although 

to the extent that such reporting 

obligations are not triggered, such cost 

increases would be tempered 

accordingly. Nevertheless, SDRs 

presumably would need to incur some 

costs to develop policies and 

procedures, and build out systems, to 

monitor potential events that would 

trigger the proposed new reporting 

requirements. 

Other SDR costs will include those 

related to SDRs verifying that each 

access request by an ADR or AFR is 

within the scope of the ADR’s or AFR’s 

jurisdiction. This will require SDRs to 

expend resources to ensure that they do 

not improperly disclose to an ADR or 

AFR swap data that such ADR or AFR 

is not entitled to see, in violation of CEA 

section 21(c)(7)’s requirement that SDRs 

disclose swap data to ADRs and AFRs 

‘‘on a confidential basis pursuant to 

[CEA] section 8 . . . .’’ 77 By stating that 

SDRs shall not provide ADRs or AFRs 

with swap data access unless such swap 

data is within the scope of a requesting 

ADR’s or AFR’s jurisdiction as 

described and appended to the 

confidentiality arrangement required by 

proposed § 49.18(a), proposed 

§ 49.17(d)(4)(iii) would narrow the 

scope of the sources SDRs must consult 

to determine the ADR’s or AFR’s scope 

of jurisdiction. The Commission 

anticipates that narrowing the scope of 

the sources that SDRs must review to 

determine an ADR’s or AFR’s scope of 

jurisdiction would limit the resources 

SDRs must expend to verify the scope 

of an ADR’s or AFR’s jurisdiction. The 

Commission also anticipates that lists of 

ADRs’ and AFRs’ regulated entities’ 

legal entity identifiers (‘‘LEIs’’) and 

uniform product identifiers (‘‘UPIs’’) of 

swaps within the scope of ADRs’ and 

AFRs’ jurisdiction would limit the 

resources SDRs must expend to verify 

whether swap data access requests are 

within the scope of an ADR’s or AFR’s 

jurisdiction—if ADRs and AFRs choose 

to develop such lists—which the 

Commission anticipates they would. 

The Commission understands that 

there are some blank data entries in LEI 

fields, however, despite the Commission 

having designated an LEI system in 

2012, and masked LEIs in a number of 

cases to reflect certain other 

jurisdictions’ privacy law limits on 

disclosure.78 In addition, UPIs are still 

evolving for many swap contracts. 

Specifically, UPIs are in widespread use 

for standardized swaps but less so for 

other swaps. In cases where there is no 

UPI for a class of swaps, § 45.7(c)(2) 

requires SDRs to create a UPI for such 

class and requires SDRs, all other 

registered entities and swap 

counterparties to use such SDR UPIequivalent contract identifiers to 

classify swaps. In such cases, ADRs and 

AFRs could use SDRs’ UPI-equivalents 

to identify swaps within the scope of 

ADRs’ and AFRs’ jurisdiction. 

In general, the blank or masked LEI 

data fields and UPI limits discussed 

above would raise the costs for SDRs 

and potentially for ADRs and AFRs. 

Inadequate data fields and UPIs hinder 

SDRs’ abilities to identify transactions 

and determine whether such 

transactions, in particular swap data, are 

within an ADR’s or AFR’s jurisdictional 

scope and interest. Even though the 

Commission believes these obstacles 

would increase costs, the Commission 

also believes that such costs are difficult 

to quantify at this time. The 

Commission specifically requests 

comment on this concern. Commenters 

are encouraged to quantify such costs, if 

practical. The Commission understands 

that lists of LEIs of ADRs’ and AFRs’ 

regulated entities and lists of UPIs or 

UPI-equivalents of swaps within ADRs’ 

and AFRs’ jurisdiction may have to be 

updated from time to time as regulated 

entities move in and out of ADRs’ and 

AFRs’ jurisdiction, ADRs’ and AFRs’ 

jurisdiction expands or contracts, swaps 

evolve, and new swaps are developed. 

In these cases, for example, an ADR or 

AFR likely would have to modify 

periodically the list of LEIs and UPIs it 

gives to SDRs. 

The proposal would further mitigate 

the costs to SDRs by permitting them to 

verify the scope of an ADR’s or AFR’s 

jurisdiction just once for a recurring 

request the details of which do not 

change. SDRs might incur additional 

costs, however, if the scope of 

jurisdiction changes for an ADR or AFR. 

Such additional costs include some 

fraction of the above costs as well as the 

cost to notify the Commission of the 

change in jurisdiction for the ADR or 

AFR. 

The Commission is proposing 

Appendix B to Part 49 to provide a form 

of confidentiality arrangement for 

execution by the Commission and by 

ADRs and AFRs seeking swap data 

access maintained by SDRs so that 

ADRs and AFRs can satisfy the 

confidentiality agreement requirement 

set forth in CEA § 21(d). The 

Commission believes that this form 

would eliminate SDRs’ costs and reduce 

ADRs’ and AFRs’ costs to negotiate the 

terms of such an arrangement relative to 

an alternative of negotiating and signing 

confidentiality arrangements with four 

separate SDRs. Otherwise, 

confidentiality arrangement costs could 

be substantial in terms of management 

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79Nevertheless, proposed § 49.18(a) would allow 

ADRs and AFRs to negotiate an alternative to the 

proposed form, provided that such alternative 

contains the elements required in proposed 

§ 49.18(b), which, in turn, requires that such 

alternative contain all the elements of the proposed 

form. 

80The Commission has on occasion used the 

SIFMA Report on Management and Professional 

Earnings in the Securities Industry to estimate these 

kinds of costs. For instance, on page 279 of the 

SIFMA Report for 2013, the mean salary for a 

compliance attorney is $100,840 with an average 

bonus of $26,666. This gives $127,506 in average 

total compensation for a compliance attorney. This 

number is divided by 1,800 hours and multiplied 

by 5.35 to account for overhead to get 

approximately $379 per hour. Next, multiplying by 

12,000 burden hours (from the Paperwork 

Reduction Act section of this release) results in 

approximately $4,500,000 in estimated costs. 

attention and expenditures.79 The 

Commission expects that reviewing and 

signing a confidentiality arrangement 

would not require substantial 

expenditures, but request public 

comments on such costs.80 Commenters 

are encouraged to quantify where 

practical. 

The Commission is proposing to 

permit SDRs to determine the means by 

which they will provide access to swap 

data to ADRs and AFRs. The 

Commission notes that SDRs already 

provide the Commission and the 

National Futures Association with data. 

Providing incremental access to ADRs 

and AFRs may permit SDRs to take 

advantage of economies of scale, thus 

mitigating SDRs’ costs. The proposal 

would also mitigate SDRs’ costs by 

permitting them to choose the means by 

which they will provide access to swap 

data to ADRs and AFRs. The 

Commission expects that SDRs would 

choose the lowest cost means of access 

consistent with their statutory 

obligation to provide ADRs and AFRs 

access to swap data and other 

constraints. The Commission cannot 

forecast what these costs would be at 

this time, however, because it depends 

on particulars of each SDR that the 

Commission does not know. 

Consequently, the Commission 

welcomes public comments on this 

requirement and how SDRs might 

satisfy this requirement. Commenters 

are encouraged to quantify where 

practical. 

CEA section 21(c)(7) requires SDRs to 

notify the Commission of requests for 

data from a particular ADR or AFR. 

Proposed § 49.17(d)(4)(i) would reduce 

that burden by permitting SDRs to 

notify the Commission only of the first 

such request by each ADR or AFR and 

promptly after receiving any request 

that does not comport with the scope of 

the ADR’s or AFR’s jurisdiction. In 

addition to the foregoing, the 

Commission is proposing to amend 

current § 49.17(d)(4)(i) to require SDRs 

to maintain records of all information 

related to the initial and all subsequent 

requests for data from the requesting 

entity. The SDR would have to maintain 

this information for the same period 

required for other SDR records. 

Although these costs may be relatively 

small, the Commission anticipates using 

such data to, for example, monitor 

ADRs’ and AFRs’ access requests from 

time to time to ensure that they remain 

within the scope of their jurisdiction 

and, relatedly, to ensure that SDRs have 

been monitoring this access issue. 

As one alternative to proposing 

comprehensive swap data safeguards, 

the Commission instead could have 

chosen to merely delete the 

indemnification references in its 

regulations. While that approach could 

have avoided imposing many of the 

costs to ADRs, AFRs, and SDRs related 

to protection of confidentiality 

discussed herein, it would have 

dramatically increased the risk of 

imposing on market participants and the 

public the costs discussed above in the 

first paragraph of this section IV.C.4. 

and below in section IV.C.5.a.–c., which 

the Commission preliminarily believes 

is inconsistent with the historical 

importance Congress and the 

Commission have placed on protecting 

information covered by CEA section 8. 

Consequently, the Commission has 

determined to take the proposed 

approach. 

5. Consideration of CEA Section 15(a) 

Factors 

a. Protection of Market Participants and 

the Public 

The Commission is proposing a 

number of safeguards to prevent market 

participants’ swap data maintained at 

SDRs from being misappropriated or 

misused, as discussed above. Those 

proposed safeguards include: Modifying 

the requirements for being an AFR; 

requiring both ADRs and AFRs to 

demonstrate the scope of their swapdata jurisdiction as a limit on the swap 

data to which an ADR or AFR may have 

access; having the Commission issue 

Determination Orders; imposing on 

ADRs and AFRs seeking access to swap 

data maintained by SDRs a number of 

required confidentiality safeguards; 

barring onward sharing of swap data; 

certain recordkeeping and reporting 

requirements; and ensuring the 

Commission’s ability to revoke an 

ADR’s or AFR’s swap data access. Some 

market participants, and the public, 

could be harmed if market participants’ 

proprietary swap data were 

misappropriated or misused. As 

detailed above in the ‘‘Cost’’ discussion, 

there is the potential harm that 

misappropriated swap data could be 

used to front run market participants 

whose swap data were misappropriated, 

raising their costs of completing swap 

transactions. More specifically, spreads 

could widen, which could deter some 

market participants from engaging in 

swap transactions trading and prevent 

prices from adjusting as quickly. 

Another possible misuse of market 

participants’ swap data is if those who 

obtained misappropriated swap data 

were to reverse engineer the trading 

strategies of the market participants 

whose data were misappropriated and 

use such strategies, potentially 

undermining their efficacy. 

b. Efficiency, Competitiveness, and 

Financial Integrity of Futures Markets 

The Commission believes that there 

will be little effect on efficiency, 

competiveness, and financial integrity 

of futures markets if swap data is 

properly protected from being 

misappropriated or misused. If swap 

data is not properly protected, however, 

competition might be affected, in that 

market participants might be less 

willing to engage in swap transactions if 

parties are trading in front of them, 

raising their costs, or misappropriating 

their trading strategies, lowering such 

strategies’ effectiveness. This could 

induce some swap dealers to charge 

higher fees (explicitly or implicitly) for 

their services and otherwise reduce 

profits. Such concerns may also 

encourage market participants to 

increase their use of futures contracts 

relative to swaps, because futures 

position data may be better protected. 

c. Price Discovery 

The Commission believes that price 

discovery would not be affected by this 

proposed rulemaking. There may be 

some indirect effects on price discovery 

if the safeguards in this proposed 

rulemaking prove ineffective, however. 

Price discovery could be negatively 

impacted if position data is 

misappropriated or misused to the 

disadvantage of some participants. For 

instance, as previously explained, some 

market participants might withdraw 

from swaps markets if they fear that 

their position data will be 

misappropriated or misused. This could 

lead to less frequent trading as well as 

reduced liquidity in swap markets. 

Furthermore, spreads could widen due 

to front-running concerns, which could 

make prices more volatile and harm 

price discovery. 

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d. Sound Risk Management Practices 

This proposed rulemaking will help 

regulators better understand the risks 

posed by their regulated entities. 

Without swaps data, it is impossible to 

comprehensively supervise entities that 

engage in swap trading. In this way, the 

proposed rulemaking helps to mitigate 

systemic risk. Allowing more ADRs and 

AFRs to access SDR swap data 

establishes the potential to improve SDR 

data by potentially facilitating research 

and analysis that ultimately leads to 

better risk management by market 

participants. This can occur through 

academic research that influences 

market participants to improve their risk 

management based on the research, or 

by ADRs and AFRs asserting their 

authority over their regulated entities to 

compel them to improve their swap data 

reporting and risk management. 

e. Other Public Interest Considerations 

The Commission does not believe that 

there are any other public interest 

considerations with respect to this 

proposed rulemaking. 

6. Request for Comment 

The Commission requests comment 

on all aspects of its cost and benefit 

considerations. Commenters are 

encouraged to quantify their comments, 

if practical. 

D. Antitrust Considerations 

CEA section 15(b) requires the 

Commission to take into consideration 

the public interest to be protected by the 

antitrust laws and endeavor to take the 

least anticompetitive means of 

achieving the objectives of the CEA, in 

issuing any order or adopting any 

Commission rule or regulation. 

The Commission does not anticipate 

that the proposed amendments to part 

49 will result in anticompetitive 

behavior. However, because the 

proposed amendments affect existing 

SDR procedures relating to data 

reporting validation and data accuracy, 

the Commission encourages comments 

from the public on any aspect of the 

proposal that may have the potential to 

be inconsistent with the antitrust laws 

or be anticompetitive in nature. 

List of Subjects in 17 CFR Part 49 

Access to swap data; Commodity 

Exchange Act section 8; Confidentiality; 

Registration and regulatory 

requirements; Swap data repositories. 

For the reasons stated in the 

preamble, the Commodity Futures 

Trading Commission proposes to amend 

17 CFR part 49 as set forth below: 

PART 49—SWAP DATA 

REPOSITORIES 

■ 1. The authority citation for part 49 is 

revised to read as follows: 

Authority: 7 U.S.C. 12a and 24a, unless 

otherwise noted. 

■ 2. In § 49.2, revise paragraph (a)(5) to 

read as follows: 

§ 49.2 Definitions. 

(a) * * * 

(5) Foreign Regulator. The term 

‘‘foreign regulator’’ means a foreign 

futures authority as defined in Section 

1a(26) of the Act, foreign financial 

supervisors, foreign central banks, 

foreign ministries and other foreign 

authorities. 

* * * * * 

■ 3. In § 49.9, revise paragraph (a)(9) to 

read as follows: 

§ 49.9 Duties of registered swap data 

repositories. 

(a) * * * 

(9) Upon request of Appropriate 

Domestic Regulators and Appropriate 

Foreign Regulators, provide access to 

swap data held and maintained by the 

swap data repository, as prescribed in 

§ 49.17; 

* * * * * 

■ 4. Amend § 49.17 as follows: 

■ a. Revise paragraphs (a), (b)(1)(vii), 

(b)(2), (c)(2) and (c)(3), (d)(2) through 

(d)(6), and (e) and (f); and 

■ b. Add paragraphs (h) and (i). 

The revisions and additions to read as 

follows: 

§ 49.17 Access to SDR data. 

(a) Purpose. This section provides a 

procedure by which the Commission, 

other domestic regulators and foreign 

regulators may obtain access to the swap 

data held and maintained by registered 

swap data repositories. Except as 

specifically set forth in this section, the 

Commission’s duties and obligations 

regarding the confidentiality of business 

transactions or market positions of any 

person and trade secrets or names of 

customers identified in Section 8 of the 

Act are not affected. 

(b) * * * 

(1) * * * 

(vii) Any other person the 

Commission determines to be 

appropriate pursuant to the process set 

forth in § 49.17(h). 

(2) Appropriate Foreign Regulator. 

The term ‘‘Appropriate Foreign 

Regulator’’ shall mean those Foreign 

Regulators the Commission determines 

to be appropriate pursuant to the 

process set forth in § 49.17(h). 

* * * * * 

(c) * * * 

(2) Monitoring tools. A registered 

swap data repository is required to 

provide the Commission with proper 

tools for the monitoring, screening and 

analyzing of swap data, including, but 

not limited to, Web-based services, 

services that provide automated transfer 

of data to Commission systems, various 

software and access to the staff of the 

swap data repository and/or third-party 

service providers or agents familiar with 

the operations of the registered swap 

data repository, which can provide 

assistance to the Commission regarding 

data structure and content. These 

monitoring tools shall be substantially 

similar in analytical capability as those 

provided to the compliance staff and the 

Chief Compliance Officer of the swap 

data repository. 

(3) Authorized users. The swap data 

provided to the Commission by a 

registered swap data repository shall be 

accessible only by authorized users. The 

swap data repository shall maintain and 

provide a list of authorized users in the 

manner and frequency determined by 

the Commission. 

(d) * * * 

(2) Domestic regulator with regulatory 

responsibility over a swap data 

repository. When a swap data repository 

that is registered with the Commission 

pursuant to this chapter is also 

registered with a domestic regulator 

pursuant to a separate statutory 

authority, and such domestic regulator 

seeks access to swap data that has been 

reported to such swap data repository 

pursuant to the domestic regulator’s 

regulatory regime, such access is not 

subject to the requirements of sections 

21(c)(7) or 21(d) of the Act, or of 

§§ 49.17(d) or 49.18. 

(3) Foreign Regulator with regulatory 

responsibility over a swap data 

repository. When a swap data repository 

that is registered with the Commission 

pursuant to this chapter is also 

registered with, or recognized or 

otherwise authorized by, a Foreign 

Regulator that has supervisory authority 

over such swap data repository pursuant 

to foreign law and/or regulation, and 

such Foreign Regulator seeks access to 

swap data that has been reported to 

such swap data repository pursuant to 

the Foreign Regulator’s regulatory 

regime, such access is not subject to the 

requirements of sections 21(c)(7) or 

21(d) of the Act, or of §§ 49.17(d) or 

49.18. 

(4) Obligations of the registered swap 

data repository in connection with 

appropriate domestic regulator or 

appropriate foreign regulator requests 

for data access. (i) A registered swap 

data repository shall notify the 

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8388 Federal Register / Vol. 82, No. 15 / Wednesday, January 25, 2017 / Proposed Rules 

Commission promptly after receiving an 

initial request from an Appropriate 

Domestic Regulator or Appropriate 

Foreign Regulator to gain access to swap 

data maintained by such swap data 

repository and promptly after receiving 

any request that does not comport with 

the scope of the ADR’s or AFR’s 

jurisdiction, as described and appended 

to the confidentiality arrangement 

required by § 49.18(a). Each registered 

swap data repository shall maintain 

records thereafter, pursuant to § 49.12, 

of the details of such initial request and 

of all subsequent requests by such 

Appropriate Domestic Regulator or 

Appropriate Foreign Regulator for such 

access. 

(ii) The registered swap data 

repository shall notify the Commission 

electronically, in a format specified by 

the Secretary of the Commission, of the 

receipt of a request specified in 

§ 49.17(d)(4)(i). 

(iii) The registered swap data 

repository shall not provide an 

Appropriate Domestic Regulator or 

Appropriate Foreign Regulator access to 

swap data maintained by the swap data 

repository unless the swap data 

repository has determined that the swap 

data to which the Appropriate Domestic 

Regulator or Appropriate Foreign 

Regulator seeks access is within the 

then-current scope of such Appropriate 

Domestic Regulator’s or Appropriate 

Foreign Regulator’s jurisdiction, as 

described and appended to the 

confidentiality arrangement required by 

§ 49.18(a). An Appropriate Domestic 

Regulator or Appropriate Foreign 

Regulator that has executed a 

confidentiality arrangement with the 

Commission pursuant to § 49.18(a) and 

provided such confidentiality 

arrangement to one or more swap data 

repositories shall notify the Commission 

and each such swap data repository of 

any change to such Appropriate 

Domestic Regulator’s or Appropriate 

Foreign Regulator’s scope of jurisdiction 

as described in such confidentiality 

arrangement. The Commission may 

direct a swap data repository to 

suspend, limit, or revoke access to swap 

data maintained by such swap data 

repository based on any such change to 

such Appropriate Domestic Regulator’s 

or Appropriate Foreign Regulator’s 

scope of jurisdiction, and, if so directed, 

such swap data repository shall so 

suspend, limit, or revoke such access. 

(iv) The registered swap data 

repository need not make the 

determination required pursuant to 

§ 49.17(d)(4)(iii) more than once with 

respect to a recurring swap data request. 

If such request changes, the swap data 

repository must make a new 

determination pursuant to 

§ 49.17(d)(4)(iii). 

(5) Timing; limitation, suspension or 

revocation of swap data access. Once a 

registered swap data repository has— 

(i) Notified the Commission, pursuant 

to § 49.17(d)(4)(i) and (ii), of an initial 

request for swap data access by an 

Appropriate Domestic Regulator or 

Appropriate Foreign Regulator, as 

applicable, that was submitted pursuant 

to § 49.17(d)(1); 

(ii) Received from such Appropriate 

Domestic Regulator or Appropriate 

Foreign Regulator a confidentiality 

arrangement executed by the 

Commission and such Appropriate 

Domestic Regulator or Appropriate 

Foreign Regulator as required by 

§ 49.18(a); and 

(iii) Satisfied its obligations under 

§ 49.17(d)(4)(iii), such swap data 

repository shall provide access to the 

requested swap data; provided, however, 

that such swap data repository shall, as 

directed by the Commission, limit, 

suspend or revoke such access should 

the Commission limit, suspend or 

revoke the appropriateness 

determination for such Appropriate 

Domestic Regulator or Appropriate 

Foreign Regulator or otherwise direct 

the swap data repository to limit, 

suspend or revoke such access. 

(6) Confidentiality arrangement. 

Consistent with § 49.18(a), the 

Appropriate Domestic Regulator or 

Appropriate Foreign Regulator shall, 

prior to receiving access to any 

requested swap data, execute a 

confidentiality arrangement with the 

Commission consistent with the 

requirements set forth in § 49.18(b). 

(e) Third-party service providers to a 

registered swap data repository. Access 

to the swap data and information 

maintained by a registered swap data 

repository may be necessary for certain 

third parties that provide various 

technology and data-related services to 

a registered swap data repository. Thirdparty access to the swap data and 

information maintained by a swap data 

repository is permissible subject to the 

following conditions: 

(1) Both the registered swap data 

repository and the third party service 

provider shall have strict confidentiality 

procedures that protect swap data and 

information from improper disclosure. 

(2) Prior to a registered swap data 

repository granting access to swap data 

or information to a third-party service 

provider, the third-party service 

provider and the registered swap data 

repository shall execute a 

confidentiality agreement setting forth 

minimum confidentiality procedures 

and permissible uses of the swap data 

and information maintained by the 

swap data repository that are equivalent 

to the privacy procedures for swap data 

repositories outlined in § 49.16. 

(f) Access by market participants—(1) 

General. Access by market participants 

to swap data maintained by the 

registered swap data repository is 

prohibited other than as set forth in 

§ 49.17(f)(2). 

(2) Exception. Swap data and 

information related to a particular swap 

that is maintained by the registered 

swap data repository may be accessed 

by either counterparty to that particular 

swap. However, the swap data and 

information maintained by the 

registered swap data repository that may 

be accessed by either counterparty to a 

particular swap shall not include the 

identity or the legal entity identifier (as 

such term is used in part 45 of this 

chapter) of the other counterparty to the 

swap, or the other counterparty’s 

clearing member for the swap, if the 

swap is executed anonymously on a 

swap execution facility or designated 

contract market, and cleared in 

accordance with Commission 

regulations in §§ 1.74, 23.610, and 

37.12(b)(7) of this chapter. 

* * * * * 

(h) Appropriateness determination 

process. (1) Each person seeking an 

appropriateness determination pursuant 

to this paragraph shall file an 

application with the Commission. 

(2) Each applicant seeking an 

appropriateness determination shall 

provide sufficient detail in its 

application to permit the Commission to 

analyze whether the applicant is acting 

within the scope of its jurisdiction in 

seeking access to swap data maintained 

by a registered swap data repository, 

and whether the applicant employs 

appropriate confidentiality safeguards to 

ensure that any swap data such 

applicant receives from a registered 

swap data repository will not, except as 

allowed for in the form of 

confidentiality arrangement set forth in 

Appendix B of this part, be disclosed. 

(3) If the Commission determines that 

an applicant pursuant to this paragraph 

is, conditionally or unconditionally, 

appropriate for purposes of CEA section 

21(c)(7), the Commission shall issue an 

order setting forth its appropriateness 

determination. The Commission shall 

not determine that an applicant 

pursuant to this paragraph is 

appropriate unless the Commission is 

satisfied that— 

(i) The applicant employs appropriate 

confidentiality safeguards to ensure that 

any swap data such applicant receives 

from a registered swap data repository 

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Federal Register / Vol. 82, No. 15 / Wednesday, January 25, 2017 / Proposed Rules 8389 

will not be disclosed, except as allowed 

for in the form of confidentiality 

arrangement set forth in Appendix B of 

this part and 

(ii) Such applicant is acting within 

the scope of its jurisdiction in seeking 

access to swap data from a registered 

swap data repository. 

(4) The Commission reserves the 

right, in connection with any 

appropriateness determination with 

respect to an Appropriate Domestic 

Regulator or Appropriate Foreign 

Regulator, to revisit, reassess, limit, 

suspend or revoke such determination 

consistent with the Act. 

(i) Delegation of authority relating to 

certain matters in this section. (1) The 

Commission hereby delegates, until 

such time as the Commission orders 

otherwise, the following functions to the 

Director of the Division of Market 

Oversight and to such members of the 

Commission’s staff acting under his or 

her direction as he or she may designate 

from time to time: All functions 

reserved to the Commission in this 

section. 

(2) The Director of the Division of 

Market Oversight may submit any 

matter which has been delegated under 

paragraph (i)(1) of this section to the 

Commission for its consideration. 

(3) Nothing in this section may 

prohibit the Commission, at its election, 

from exercising the authority delegated 

under paragraph (i)(1) of this section. 

■ 5. Revise § 49.18 to read as follows: 

§ 49.18 Confidentiality arrangement. 

(a) Confidentiality arrangement 

required prior to disclosure of swap data 

by a registered swap data repository to 

an Appropriate Domestic Regulator or 

Appropriate Foreign Regulator. Prior to 

a registered swap data repository 

providing access to swap data to any 

Appropriate Domestic Regulator or 

Appropriate Foreign Regulator, each as 

defined in § 49.17(b), the swap data 

repository shall receive, pursuant to 

Section 21(d) of the Act, an executed 

confidentiality arrangement between the 

Commission and the Appropriate 

Domestic Regulator or Appropriate 

Foreign Regulator, as applicable, in the 

form set forth in Appendix B of this part 

or, at a minimum, containing the 

elements required in paragraph (b) of 

this section, from such Appropriate 

Domestic Regulator or Appropriate 

Foreign Regulator. Such confidentiality 

arrangement must include, either as 

Exhibit A to the form set forth in 

Appendix B of this part or similarly 

appended, a description of the 

Appropriate Domestic Regulator’s or 

Appropriate Foreign Regulator’s 

jurisdiction. Once a registered swap 

data repository is notified that a 

confidentiality arrangement received 

from an Appropriate Domestic Regulator 

or Appropriate Foreign Regulator no 

longer is in effect, the swap data 

repository shall not provide access to 

swap data to such Appropriate Domestic 

Regulator or Appropriate Foreign 

Regulator. 

(b) Elements of confidentiality 

arrangement. The confidentiality 

arrangement required pursuant to 

paragraph (a) of this section shall, at a 

minimum, include all elements 

included in the form of confidentiality 

arrangement set forth in Appendix B of 

this part. 

(c) Reporting failures to fulfill the 

terms of a confidentiality arrangement. 

A registered swap data repository shall 

immediately report to the Commission 

any known failure to fulfill the terms of 

a confidentiality arrangement that it 

receives pursuant to paragraph (a) of 

this section. 

(d) Failures to fulfill the terms of the 

confidentiality arrangement. The 

Commission may, if an Appropriate 

Domestic Regulator or Appropriate 

Foreign Regulator fails to fulfill the 

terms of a confidentiality arrangement 

described in paragraph (a) of this 

section, direct each registered swap data 

repository to limit, suspend or revoke 

such Appropriate Domestic Regulator’s 

or Appropriate Foreign Regulator’s 

access to swap data held by such swap 

data repository. 

(e) Delegation of authority relating to 

certain matters in this section. (1) The 

Commission hereby delegates, until 

such time as the Commission orders 

otherwise, the following functions to the 

Director of the Division of Market 

Oversight and to such members of the 

Commission’s staff acting under his or 

her direction as he or she may designate 

from time to time: All functions 

reserved to the Commission in this 

section. 

(2) The Director of the Division of 

Market Oversight may submit any 

matter which has been delegated under 

paragraph (e)(1) of this section to the 

Commission for its consideration. 

(3) Nothing in this section may 

prohibit the Commission, at its election, 

from exercising the authority delegated 

under paragraph (e)(1) of this section. 

■ 6. In § 49.22, revise paragraph (d)(4) to 

read as follows: 

§ 49.22 Chief compliance officer. 

* * * * * 

(d) * * * 

(4) Taking reasonable steps to ensure 

compliance with the Act and 

Commission regulations in this chapter 

relating to agreements, contracts, or 

transactions, and with Commission 

regulations in this chapter under 

Section 21 of the Act, including 

confidentiality arrangements received 

by the chief compliance officer’s 

registered swap depository pursuant to 

§ 49.18(a); 

* * * * * 

■ 7. Add Appendix B to part 49, to read 

as follows: 

Appendix B to Part 49—Confidentiality 

Arrangement for Appropriate Domestic 

Regulators and Appropriate Foreign 

Regulators To Obtain Access To Swap 

Data Maintained by Registered Swap 

Data Repositories Pursuant to 

§§ 49.17(d)(6) and 49.18(a) 

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8390 Federal Register / Vol. 82, No. 15 / Wednesday, January 25, 2017 / Proposed Rules 

1The first bracketed paragraph will be used for 

ADRs; the second will be used for AFRs. The 

inapplicable paragraph will be deleted. 

The U.S. Commodity Futures Trading 

Commission (‘‘CFTC’’) and the [name of 

foreign/domestic regulator (‘‘ABC’’)] (each an 

‘‘Authority’’ and collectively the 

‘‘Authorities’’) have entered into this 

Confidentiality Arrangement 

(‘‘Arrangement’’) in connection with 

[whichever is applicable] [CFTC Regulation 

49.17(b)(1)[(i)–(vi)]/the determination order 

issued by the CFTC to [ABC] (‘‘Order’’)] and 

any request for swap data by [ABC] to any 

swap data repository (‘‘SDR’’) registered with 

the CFTC. 

Article One: General Provisions 

1. ABC is permitted to request and receive 

swap data directly from a registered SDR 

(‘‘Swap Data’’) on the terms and subject to 

the conditions of this Arrangement. 

2. This Arrangement is entered into to 

fulfill the requirements under Section 21(d) 

of the Commodity Exchange Act (‘‘Act’’) and 

CFTC Regulation 49.18. Upon receipt by a 

registered SDR, this Arrangement will satisfy 

the requirement for a written agreement 

pursuant to Section 21(d) of the Act and 

CFTC Regulation 49.17(d)(6). This 

Arrangement does not apply to information 

that is [reported to a registered SDR pursuant 

to [ABC]’s regulatory regime where the SDR 

also is registered with [ABC] pursuant to 

separate statutory authority, even if such 

information also is reported pursuant to the 

Act and CFTC regulations][reported to a 

registered SDR pursuant to [ABC]’s 

regulatory regime where the SDR also is 

registered with, or recognized or otherwise 

authorized by, [ABC], which has supervisory 

authority over the repository pursuant to 

foreign law and/or regulation, even if such 

information also is reported pursuant to the 

Act and CFTC regulations.] 1

3. This Arrangement is not intended to 

limit or condition the discretion of an 

Authority in any way in the discharge of its 

regulatory responsibilities or to prejudice the 

individual responsibilities or autonomy of 

any Authority. 

4. This Arrangement does not alter the 

terms and conditions of any existing 

arrangements. 

Article Two: Confidentiality of Swap Data 

5. ABC will be acting within the scope of 

its jurisdiction in requesting Swap Data and 

employs procedures to maintain the 

confidentiality of Swap Data and any 

information and analyses derived therefrom 

(collectively, the ‘‘Confidential 

Information’’). ABC undertakes to notify the 

CFTC and each relevant SDR promptly of any 

change to ABC’s scope of jurisdiction. 

6. ABC undertakes to treat Confidential 

Information as confidential and will employ 

safeguards that: 

a. To the maximum extent practicable, 

identify the Confidential Information and 

maintain it separately from other data and 

information; 

b. Protect the Confidential Information 

from misappropriation and misuse; 

c. Ensure that only authorized ABC 

personnel with a need to access particular 

Confidential Information to perform their job 

functions related to such Confidential 

Information have access thereto, and that 

such access is permitted only to the extent 

necessary to perform their job functions 

related to such particular Confidential 

Information; 

d. Prevent the disclosure of aggregated 

Confidential Information; provided, however, 

that ABC is permitted to disclose any 

sufficiently aggregated Confidential 

Information that is anonymized to prevent 

identification, through disaggregation or 

otherwise, of a market participant’s business 

transactions, trade data, market positions, 

customers or counterparties; 

e. Prohibit use of the Confidential 

Information by ABC personnel for any 

improper purpose, including in connection 

with trading for their personal benefit or for 

the benefit of others or with respect to any 

commercial or business purpose; and 

f. Include a process for monitoring 

compliance with the confidentiality 

safeguards described herein and for promptly 

notifying the CFTC, and each SDR from 

which ABC has received Swap Data, of any 

violation of such safeguards or failure to 

fulfill the terms of this Arrangement. 

7. Except as provided in Paragraphs 6.d. 

and 8, ABC will not onward share or 

otherwise disclose any Confidential 

Information. 

8. ABC undertakes that: 

a. If a department, central bank, or agency 

of the Government of the United States, it 

will not disclose Confidential Information 

except in an action or proceeding under the 

laws of the United States to which it, the 

CFTC, or the United States is a party; 

b. If a department or agency of a State or 

political subdivision thereof, it will not 

disclose Confidential Information except in 

connection with an adjudicatory action or 

proceeding brought under the Act or the laws 

of [name of either the State or the State and 

political subdivision] to which it is a party; 

or 

c. If a foreign futures authority or a 

department, central bank, ministry, or agency 

of a foreign government or subdivision 

thereof, or any other Foreign Regulator, as 

defined in Commission Regulation 49.2(a)(5), 

it will not disclose Confidential Information 

except in connection with an adjudicatory 

action or proceeding brought under the laws 

of [name of country, political subdivision, or 

(if a supranational organization) 

supranational lawmaking body] to which it 

is a party. 

9. Prior to complying with any legally 

enforceable demand for Confidential 

Information, ABC will notify the CFTC of 

such demand in writing, assert all available 

appropriate legal exemptions or privileges 

with respect to such Confidential 

Information, and use its best efforts to protect 

the confidentiality of the Confidential 

Information. 

10. ABC acknowledges that, if it does not 

fulfill the terms of this Arrangement, the 

CFTC may direct any registered SDR to 

suspend or revoke ABC’s access to Swap 

Data. 

11. ABC will comply with all applicable 

security-related requirements imposed by an 

SDR in connection with access to Swap Data 

maintained by the SDR, as such requirements 

may be revised from time to time. 

12. ABC will promptly destroy all 

Confidential Information for which it no 

longer has a need or which no longer falls 

within the scope of its jurisdiction, and will 

certify to the CFTC, upon request, that ABC 

has destroyed such Confidential Information. 

Article Three: Administrative Provisions 

13. This Arrangement may be amended 

with the written consent of the Authorities. 

14. The text of this Arrangement will be 

executed in English, and may be made 

available to the public. 

15. On the date this Arrangement is signed 

by the Authorities, it will become effective 

and may be provided to any registered SDR 

that holds and maintains Swap Data that falls 

within the scope of ABC’s jurisdiction. 


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Federal Register / Vol. 82, No. 15 / Wednesday, January 25, 2017 / Proposed Rules 8391 

16. This Arrangement will expire 30 days 

after any Authority gives written notice to the 

other Authority of its intention to terminate 

the Arrangement. In the event of termination 

of this Arrangement, Confidential 

Information will continue to remain 

confidential and will continue to be covered 

by this Arrangement. 

This Arrangement is executed in duplicate, 

this lllday of lll. 

lllllllllllllllllllll

[name of Chairman] 

Chairman 

U.S. Commodity Futures Trading 

Commission 

lllllllllllllllllllll

[name of signatory] 

[title] 

[name of foreign/domestic regulator] 

[Exhibit A: Description of Scope of 

Jurisdiction. If ABC is not enumerated in 

Commission Regulations 49.17(b)(1)(i)–(vi), it 

must attach the Determination Order 

received from the Commission pursuant to 

Commission Regulation 49.17(h). If ABC is 

enumerated in Commission Regulations 

49.17(b)(1)(i)–(vi), it must attach a 

sufficiently detailed description of the scope 

of ABC’s jurisdiction as it relates to Swap 

Data maintained by SDRs.] 

Issued in Washington, DC, on January 13, 

2017, by the Commission. 

Christopher J. Kirkpatrick, 

Secretary of the Commission. 

Note: The following appendices will not 

appear in the Code of Federal Regulations. 

Appendices to Proposed Amendments 

to the Swap Data Access Provisions of 

Part 49 and Certain Other Matters— 

Commission Voting Summary and 

Chairman’s Statement 

Appendix 1—Commission Voting 

Summary 

On this matter, Chairman Massad and 

Commissioners Bowen and Giancarlo 

voted in the affirmative. No 

Commissioner voted in the negative. 

Appendix 2—Statement of Chairman 

Timothy G. Massad 

The increased reporting of data on 

swaps transactions is an important 

reform of the derivatives markets agreed 

to by the G20 leaders in 2009. Today, 

thanks to this reporting, regulators 

across the globe are in a better position 

to assess exposures and risks related to 

this market. Because of the global nature 

of the market, it is critical for regulators 

to be able to share information, subject 

to appropriate confidentiality and other 

protections. 

That’s why I am pleased we are 

issuing this proposal, which will make 

it easier for other regulators, both 

domestic and foreign, to gain access to 

swap data repository (SDR) swap data. 

The proposal would conform our rules 

to various changes Congress made in the 

law and provide a process for sharing of 

information. Among other things, 

Congress removed a requirement that 

another regulator must indemnify both 

the Commission and the swap data 

repository for expenses related to 

litigation before data could be shared. 

To date, no domestic or foreign 

regulator has provided such an 

indemnification. Today’s proposal 

removes this requirement in the CFTC’s 

own rules, makes other changes 

consistent with Congressional action, 

and creates a process for when and how 

other regulators gain access to SDR 

information that will protect 

confidentiality. 

I thank my fellow Commissioners 

Bowen and Giancarlo for their 

unanimous support for this proposal. I 

also thank the hardworking CFTC staff 

for all their efforts. 

[FR Doc. 2017–01287 Filed 1–24–17; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF TRANSPORTATION 

National Highway Traffic Safety 

Administration 

49 CFR Part 571 

[Docket No. NHTSA–2017–0005] 

Federal Motor Vehicle Safety 

Standards; Automatic Emergency 

Braking 

AGENCY: National Highway Traffic 

Safety Administration (NHTSA), 

Department of Transportation (DOT). 

ACTION: Denial of petition for 

rulemaking. 

SUMMARY: This document denies a 

January 13, 2016 rulemaking petition 

jointly submitted by Consumer 

Watchdog, Center for Auto Safety, and 

Public Citizen. The petition requested 

NHTSA to begin a rulemaking 

proceeding to mandate that all light 

vehicles be equipped with three types of 

automatic emergency braking (AEB) 

technologies: Forward crash warning, 

crash imminent braking, and dynamic 

brake support. NHTSA is denying the 

petition because the Agency has already 

taken significant steps to incentivize the 

installation of these technologies in a 

way that allows for continued 

innovation and technological 

advancement. First, NHTSA has 

expanded its New Car Assessment 

Program (NCAP) so that the NCAP 

information for a vehicle notes whether 

the vehicle is equipped with one or 

more of these technologies. Second, it 

has sought public comment on its plans 

to revise NCAP so that the presence and 

level of performance of these 

technologies affects the overall rating of 

light motor vehicles. 

To reinforce these improvements to 

the NCAP program, NHTSA encouraged 

and facilitated a process that resulted in 

20 light vehicle manufacturers, 

representing more than 99 percent of 

light motor vehicle sales in the United 

States, committing to voluntarily 

installing forward crash warning and 

crash imminent braking. While 

NHTSA’s actions will help create 

availability and market push for AEB 

technologies, private sector 

organizations such as the Insurance 

Institute for Highway Safety and 

Consumer Reports are helping to create 

market pull through a variety of 

outreach activities that are helping 

consumers understand the benefits of 

AEB as well as differences among 

various vehicle models. Together with 

NCAP, the industry commitment and 

the actions of other stakeholders will 

lead to the installation of a growing 

array of AEB technologies in 

substantially all light vehicles and will 

foster innovation and competition in 

this technologically dynamic area. As 

the manufacturers respond to NCAP and 

carry out their commitments, the 

Agency is continuously monitoring their 

efforts to assess whether additional 

steps, including the possibility of a 

rulemaking to establish a new standard, 

might be needed in the future to ensure 

realization of the potential benefits from 

the full array of automatic emergency 

braking technologies. 

DATES: January 18, 2017. 

FOR FURTHER INFORMATION CONTACT: 

For Non-Legal Issues: Mr. David 

Hines, Director, Office of Crash 

Avoidance Standards, National 

Highway Traffic Safety Administration, 

1200 New Jersey Avenue SE., 

Washington, DC 20590, Telephone: 

(202) 493–0245, Facsimile: (202) 493– 

2990. 

For Legal Issues: Mr. Stephen P. 

Wood, Acting Chief Counsel, Office of 

Chief Counsel, National Highway Traffic 

Safety Administration, 1200 New Jersey 

Avenue SE., Washington, DC 20590, 

Telephone: (202) 366–2992, Facsimile: 

(202) 366–3820. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

A. National Traffic and Motor Vehicle 

Safety Act 

B. Automatic emergency braking 

technologies 

C. Chronology of NHTSA actions and other 

events related to automatic emergency 

braking 

II. Petition 

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