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contains regulatory documents having general

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Rules and Regulations Federal Register

80563 

Vol. 81, No. 221 

Wednesday, November 16, 2016 

1Chief Compliance Officer Annual Report 

Requirements for Futures Commission Merchants, 

Swap Dealers, and Major Swap Participants; 

Amendments to Filing Dates, 81 FR 53343 (Aug. 12, 

2016). 

2CEA section 4s(k)(3)(A)(i), 7 U.S.C. 

6s(k)(3)(A)(i), requires CCOs for SDs and MSPs, in 

accordance with rules prescribed by the 

Commission, to prepare and sign an annual report 

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

compliance with the CEA and CFTC regulations. 

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

requires the CCO Annual Report to accompany each 

appropriate financial report of the SD or MSP 

required to be furnished to the Commission. CEA 

section 4d(d), 7 U.S.C. 6d(d), requires CCOs of 

FCMs to ‘‘perform such duties and responsibilities’’ 

as are established by Commission regulation or 

rules of a registered futures association. Regulations 

3.3(e) and (f), 17 CFR 3.3(e) and (f), codify the duty 

to furnish the CCO Annual Report to the 

Commission for all Registrants. 

3CFTC Letter No. 15–15, No-Action Relief for 

Futures Commission Merchants, Swap Dealers, and 

Major Swap Participants from Compliance with the 

Timing Requirements of Commission Regulation 

3.3(f)(2) Relating to Annual Reports by Chief 

Compliance Officers (Mar. 27, 2015), available at 

http://www.cftc.gov/idc/groups/public/@

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

4See 81 FR at 53346. 

5Letter from FIA, ISDA, and SIFMA (Sept. 12, 

2016). This comment letter is available on the 

Commission’s Web site at http://comments.cftc.gov/ 

PublicComments/CommentList.aspx?id=1729. 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 3 

RIN 3038–AE49 

Chief Compliance Officer Annual 

Report Requirements for Futures 

Commission Merchants, Swap Dealers, 

and Major Swap Participants; 

Amendments to Filing Dates 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Final rule. 

SUMMARY: The Commodity Futures 

Trading Commission (‘‘Commission’’ or 

‘‘CFTC’’) is amending its regulations 

regarding the timing for furnishing to 

the Commission the chief compliance 

officer (‘‘CCO’’) annual reports of 

futures commission merchants 

(‘‘FCMs’’), swap dealers (‘‘SDs’’), and 

major swap participants (‘‘MSPs’’) 

(collectively, ‘‘Registrants’’). The 

Commission is also amending its 

regulations by delegating to the Director 

of the Division of Swap Dealer and 

Intermediary Oversight (‘‘DSIO’’) 

authority to grant extensions to the CCO 

annual report filing deadline. 

DATES: This rule will become effective 

November 16, 2016. 

FOR FURTHER INFORMATION CONTACT: 

Eileen T. Flaherty, Director, 202–418– 

5326, eflaherty@cftc.gov; Erik Remmler, 

Deputy Director, 202–418–7630, 

eremmler@cftc.gov; Laura Gardy, 

Associate Director, 202–418–7645, 

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

Special Counsel, 202–418–5634, 

pgeraghty@cftc.gov, Division of Swap 

Dealer and Intermediary Oversight, 

Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street NW., Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION: 

I. Proposed Rule 

On August 12, 2016, the Commission 

published a Notice of Proposed 

Rulemaking (‘‘Proposal’’) 1 to amend 

Commission Regulation 3.3(f) regarding 

when Registrants must furnish to the 

Commission annual reports describing, 

among other things, their compliance 

with the Commodity Exchange Act 

(‘‘CEA’’) and CFTC regulations (the 

‘‘CCO Annual Reports’’).2 The Proposal 

sought to extend the time period for 

furnishing the CCO Annual Report to 

the Commission from 60 days to 90 days 

after a Registrant’s fiscal year-end by 

codifying the ongoing relief most 

recently provided to Registrants in 

CFTC Staff Letter No. 15–15.3 The 

Proposal would permit an FCM to 

furnish its CCO Annual Report to the 

Commission not more than 30 days after 

submission of its Form 1–FR–FCM or 

Financial Operational Combined 

Uniform Single Report (‘‘FOCUS 

Report’’), and would permit an SD or 

MSP to furnish its CCO Annual Report 

to the Commission not more than 90 

days after its fiscal year-end until such 

time as the Commission adopts and 

implements rules establishing the time 

for filing the annual financial condition 

report required under CEA section 4s(f). 

The Proposal also contemplated adding 

new paragraph (f)(2)(ii) to clarify the 

filing requirements for SDs and MSPs 

located in a jurisdiction for which the 

Commission has issued a comparability 

determination and which elect to file 

reports in accordance with that 

determination (‘‘Substituted 

Compliance Registrants’’). Finally, the 

Proposal added new paragraph (h) to 

delegate to the Director of DSIO 

authority to grant extensions to the CCO 

Annual Report filing deadline. 

The Commission generally requested 

comments on the Proposal and also 

solicited comments on certain specific 

matters.4 For example, the Commission 

solicited comments on the 

appropriateness of permitting 

Registrants an additional 30 days to 

furnish their CCO Annual Reports to the 

Commission, as well as the 

Commission’s application of Regulation 

3.3(f)(2) to Substituted Compliance 

Registrants. 

II. Summary of Comments 

In response to the Proposal, the 

Commission received one comment 

submitted jointly by the Futures 

Industry Association (the ‘‘FIA’’), 

International Swaps and Derivatives 

Association (‘‘ISDA’’), and the 

Securities Industry and Financial 

Markets Association (‘‘SIFMA’’) 

(collectively, ‘‘Commenters’’) on behalf 

of their FCM, SD, and MSP member 

firms.5 The Commenters were generally 

supportive of the Proposal and agreed 

with the basic premise that the statutory 

requirement under CEA section 

4s(k)(3)(B)(i) requiring CCO Annual 

Reports to ‘‘accompany’’ each 

appropriate financial report does not 

require a simultaneous filing of the two 

reports. 

The Commenters made several 

suggestions aimed at more closely 

aligning the Proposal with the relief 

provided in CFTC Staff Letter No. 15– 

15 and providing greater certainty for all 

SDs. First, Commenters cautioned 

against linking the filing deadline for 

the CCO Annual Report to the 

submission date for the applicable 

annual financial reports. The 

Commenters stated that using the 

submission date as a reference point, 

rather than the deadline date, could 

have the practical effect of reducing the 

time period for filing the CCO Annual 

Report if a Registrant chose to submit 

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80564 Federal Register / Vol. 81, No. 221 / Wednesday, November 16, 2016 / Rules and Regulations 

6 Id. at 2. 

7 Id. 

8 Id. 

9See Capital Requirements of Swap Dealers and 

Major Swap Participants, 76 FR 27802, 27838 

(proposed May 12, 2011). 

10Letter from FIA, ISDA, and SIFMA at 2. 

11 Id. 

12 Id. 

13 Id. at 3. 

14See 81 FR 53343, 53344 n.7. 

15 Id. at 53345 n.14. 

16See Designation of a Chief Compliance Officer; 

Required Compliance Policies; and Annual Report 

of a Futures Commission Merchant, Swap Dealer, 

or Major Swap Participant, 75 FR 70881, 70883 

(proposed Nov. 19, 2010). 

their financial report early.6

Commenters asserted that this outcome 

would be problematic because the 

inherent differences, in both substance 

and process, between CCO Annual 

Reports and financial reports affect the 

time required to adequately prepare 

each report. As a result, linking the CCO 

Annual Report deadline to the 

submission of financial reports would 

require new coordination and processes 

between the distinct groups responsible 

for each report’s preparation.7 To 

address this technical timing issue, the 

Commenters recommended that the 

filing of the CCO Annual Report be 

required 30 days after the regulatory 

deadline for filing the financial reports.8

The Commenters further noted that 

under the Commission’s proposed 

Capital Requirements of Swap Dealers 

and Major Swap Participants 

rulemaking,9 prudentially regulated SDs 

would not be required to comply with 

the Commission’s financial condition 

report requirement.10 As such, 

Commenters explained that under 

language in the Proposal, which ties the 

submission of the CCO Annual Report 

with the submission of applicable 

financial reports, prudentially regulated 

SDs would have a different CCO Annual 

Report deadline than other SDs.11

Commenters suggested that, in order to 

achieve consistency among all SDs, the 

Commission should ‘‘set a 90-day 

deadline for SDs that are not subject to 

the Commission’s proposed financial 

reporting rule.’’ 12

Finally, regarding application of the 

Proposal to Substituted Compliance 

Registrants, the Commenters requested 

that the Commission provide 

‘‘supplemental guidance as to what 

constitutes a ‘specifically identifiable 

completion date’’’ for Substituted 

Compliance Registrants who file 

comparable annual reporting 

information (hereinafter, ‘‘Comparable 

Annual Report’’).13 The Commenters 

indicated that different jurisdictions 

address reporting deadlines in many 

different ways that can change over time 

and from year to year. Accordingly, it 

was not clear to Commenters how the 

Proposal language would apply in all 

instances. 

III. The Final Rule 

The Commission has considered the 

comments it received in response to the 

Proposal. Upon consideration of 

Commenters’ suggestions, the 

Commission’s implementation 

experience,14 and the current absence of 

financial condition reporting 

requirements for SDs under Commission 

regulations,15 the Commission is 

adopting a final rule that modifies 

Regulation 3.3(f)(2)(i) to give all 

Registrants up to 90 days after their 

fiscal year-end to furnish the CCO 

Annual Report to the Commission. 

Because the CEA section 4s(k)(3)(B) 

contemplates year-end filing for 

financial reports and CCO Annual 

Reports, the final rule ensures that the 

two reports will accompany one another 

at the Commission within a proximate 

and predictable timeframe. The 

Commission believes that providing all 

Registrants a deadline that follows their 

annual fiscal year meets Congressional 

intent and achieves fairness and 

consistency across all Registrants, while 

also codifying longstanding no-action 

relief. The final rule text effectively 

results in the same outcome as the 

Proposal, but does so in a manner that 

is simple and direct. The Commission is 

adopting Regulation 3.3(f)(2)(ii) as 

proposed, which incorporates the 

modified language of Regulation 

3.3(f)(2)(i), and also clarifying its 

application to Substituted Compliance 

Registrants. The Commission received 

no comments on the proposed 

delegation of authority to the Director of 

DSIO to grant extensions to the CCO 

annual report filing deadline, and is 

adopting Regulation 3.3(h) as proposed. 

A. CCO Annual Report Filing Deadline 

The Commission believes that the 

language in CEA section 4s(k)(3)(B) 

requiring the CCO to ‘‘annually’’ 

prepare a compliance report to 

accompany each ‘‘appropriate’’ financial 

report does not require a simultaneous 

filing of the two reports to achieve its 

intended purpose. Rather, the intention 

of the statute is to require the CCO 

Annual Report to follow an annual 

reporting cycle in line with the financial 

reporting cycle aimed at providing the 

Commission, and a Registrant’s senior 

management, with a timely selfevaluation and internal assessment of 

the Registrant’s compliance program.16

In a similar manner, under Commission 

regulations, when entities are subject to 

capital adequacy requirements, periodic 

financial reporting is the mechanism 

employed to demonstrate compliance. 

Annual and other financial reporting 

requirements provide the Commission 

and self-regulatory organizations 

information about the financial 

condition of the registrant. As observed 

by the Commission and highlighted by 

Commenters, the CCO Annual Report 

and annual financial reports, though 

they serve similar informational goals, 

are inherently different and require 

different processes and expertise to 

produce. Accordingly, while each ought 

to be completed on an annual reporting 

cycle and provided to the Commission 

in temporal proximity, their submission 

to the Commission need not occur 

simultaneously to achieve their 

intended purpose. 

Permitting all Registrants to submit 

their CCO Annual Report to the 

Commission within 90 days after their 

fiscal year-end meets the statutory 

intent of having the CCO Annual Report 

follow an annual reporting cycle in line 

with the financial reporting cycle while 

providing fair and consistent treatment 

across all Registrants. The final rule also 

ensures that Registrants may continue to 

leverage their existing report 

preparation processes that were 

developed while the Commission’s noaction relief was in place. This ensures 

that there is effectively no change in the 

burden and expense of preparing the 

CCO Annual Reports as a result of the 

final rule. 

B. Deadline for Substituted Compliance 

Registrants 

With respect to the application of new 

paragraph (f)(2)(ii) to Substituted 

Compliance Registrants, the Proposal 

provided that Substituted Compliance 

Registrants whose home jurisdictions’ 

regulations identify a specific 

completion or due date have 15 days 

after that date to submit their 

Comparable Annual Report to the CFTC. 

If a Substituted Compliance Registrant’s 

home jurisdiction does not require or is 

silent as to a particular completion or 

due date for the Comparable Annual 

Report, then the Substituted 

Compliance Registrant must furnish its 

Comparable Annual Report to the 

Commission not more than 90 days after 

its fiscal year-end. 

As described above, the Commenters 

requested additional guidance on the 

meaning of ‘‘specifically identifiable 

completion date.’’ The Commission is 

clarifying that the completion or due 

date could be set by the Substituted 

Compliance Registrant’s home 

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Federal Register / Vol. 81, No. 221 / Wednesday, November 16, 2016 / Rules and Regulations 80565 

17 5 U.S.C. 601 et seq. 

18See Policy Statement and Establishment of 

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

Regulatory Flexibility Act, 47 FR 18618, 18619 

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

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

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

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

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

19 44 U.S.C. 3501 et seq. 

20The CCO Annual Report must contain a 

description of material non-compliance events that 

occurred over the review period. However, 

reporting on those events in the CCO Annual Report 

provides transparency regarding the effectiveness of 

the implementation of the compliance program over 

the preceding year for management and the CFTC. 

jurisdiction’s regulations, or that the 

Substituted Compliance Registrant’s 

applicable regulatory authority could 

otherwise announce a modified 

completion or due date consistent with 

the practices and procedures of the 

applicable regulatory regime. The 

Commission anticipates a Substituted 

Compliance Registrant will timely 

inform DSIO of any such modifications 

to their completion or due date. 

Whether the completion or due date 

remains static from year to year, or is 

subject to annual modification, the 

Commission intends to defer to the 

Substituted Compliance Registrant’s 

home jurisdiction in this regard. 

The Commission, however, is 

concerned about the possibility of 

significant reporting delays or deferrals 

that may apply to a specific Registrant. 

Accordingly, the Commission expects 

that a Substituted Compliance 

Registrant will inform the Commission 

of any delays or deferrals beyond the 

deadlines set by their home jurisdiction 

regulations or applicable regulatory 

authority that would extend that 

particular Registrant’s Comparable 

Annual Report filing date, and seek 

appropriate relief under Regulation 

3.3(f)(5), as necessary. 

C. Delegation of Authority to the 

Director of DSIO 

The Commission received no 

comments on its proposal to delegate to 

the Director of DSIO, or such other 

employee(s) that the Director may 

designate, the authority to grant 

extensions of time to file CCO Annual 

Reports. Accordingly, the Commission 

is adopting new paragraph (h) as 

proposed. 

IV. Related Matters 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act 17

(‘‘RFA’’) requires that agencies consider 

whether the rules they propose will 

have a significant economic impact on 

a substantial number of small entities 

and, if so, provide a regulatory 

flexibility analysis reflecting the impact. 

In the Proposal, the Commission 

certified that the Proposal would not 

have a significant economic impact on 

those entities. The Commission received 

no comments with respect to the RFA. 

As discussed in the Proposal, the final 

rule amends the filing deadline for CCO 

Annual Reports of FCMs, SDs, and 

MSPs and clarifies the filing deadline 

for Comparable Annual Reports. The 

final rule affects FCMs, SDs, and MSPs 

that are required to be registered with 

the Commission. The Commission has 

previously established certain 

definitions of ‘‘small entities’’ to be used 

in evaluating the impact of its 

regulations on small entities in 

accordance with the RFA, and has 

previously determined that FCMs, SDs, 

and MSPs are not small entities for 

purposes of the RFA.18 Therefore, the 

Commission believes that the final rule 

will not have a significant economic 

impact on a substantial number of small 

entities. Accordingly, the Chairman, on 

behalf of the Commission, hereby 

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

that the final rule being published today 

by this Federal Register release will not 

have a significant economic impact on 

a substantial number of small entities. 

B. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(‘‘PRA’’) 19 provides that a federal 

agency may not conduct or sponsor, and 

a person is not required to respond to, 

a collection of information unless it 

displays a currently valid control 

number issued by the Office of 

Management and Budget (‘‘OMB’’). As 

discussed in the Proposal, the final rule 

contains a collection of information for 

which the Commission has previously 

received a control number from the 

Office of Management and Budget 

(‘‘OMB’’). The title for this collection of 

information is ‘‘Annual Report for Chief 

Compliance Officer of Registrants, OMB 

control number 3038–0080.’’ As 

discussed in the Proposal, the 

Commission believes that this final rule 

will not impose any new information 

collection requirements that require 

approval of OMB under the PRA. As a 

general matter, the final rule allows 

Registrants up to 90 days after the end 

of their fiscal years, and certain 

Substituted Compliance Registrants 

with up to 15 days after the date on 

which the Comparable Annual Report 

must be completed under the 

requirements of their home jurisdiction, 

to file the CCO Annual Report and 

Comparable Annual Reports, 

respectively. As such, the final rule does 

not, by itself, impose any new burden or 

any new information collection 

requirements in addition to those that 

already exist in connection with the 

preparation and delivery of the CCO 

Annual Report pursuant to part 3 of the 

Commission’s regulations. 

C. Cost-Benefit Considerations 

1. Background 

As discussed above, the Commission 

is adopting amendments to the filing 

requirements for CCO Annual Reports 

in Regulation 3.3 that: (1) Increase the 

amount of time registrants have to file 

their CCO Annual Reports with the 

Commission; and (2) clarify the filing 

requirements for Comparable Annual 

Reports. The baseline for this cost and 

benefit consideration is existing 

Commission Regulation 3.3. 

2. Costs 

The final rule does not change the 

report contents or require any additional 

actions to be taken by Registrants. The 

90 days (or up to 15 days after the date 

on which a Comparable Annual Report 

must be completed under applicable 

home jurisdiction standards that allow 

more time) provided by the final rule 

lengthens the time before senior 

management or the board of the 

Registrants and the Commission may 

receive the CCO Annual Reports. The 

additional time to furnish the reports 

should not materially impact regulatory 

oversight given that the purpose of the 

reports is to provide a status update for 

the Registrant’s compliance activities 

over the course of the preceding fiscal 

year and planned changes for the 

coming year. The reports generally do 

not serve to address crisis situations for 

which immediacy is critical. Therefore, 

the additional time allowed should not 

materially impact the usefulness of the 

information in the reports.20 The 

Commission had no other information 

available to it indicating that changing 

the filing deadline would measurably 

change the cost to prepare the CCO 

Annual Reports. Accordingly, the 

Commission believes that the final rule 

does not impose any additional costs on 

any other market participants, the 

markets themselves, or the general 

public. In the Proposal, the Commission 

solicited comments regarding how the 

costs associated with the CCO Annual 

Reports could change as a result of 

adopting the Proposal, but did not 

receive any. 

3. Benefits 

The Commission believes that the 

final rule provides relief for Registrants 

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80566 Federal Register / Vol. 81, No. 221 / Wednesday, November 16, 2016 / Rules and Regulations 

21Letter from FIA, ISDA, and SIFMA at 1. 

22 7 U.S.C. 19(a). 

from time pressures in preparing and 

filing their CCO Annual Reports. The 

additional time provided will allow 

Registrants to more carefully complete 

their internal processes used to develop 

the broad variety of information needed 

for the reports resulting in more 

accurate and complete reports. The 

Commission solicited comments 

regarding the nature of any benefits that 

could result from adoption of the 

Proposal, but did not receive any 

specific comments. Commenters were 

generally appreciative of the 

Commission’s effort to improve the 

process.21

4. Section 15(a) Factors 

Section 15(a) of the CEA requires the 

Commission to consider the costs and 

benefits of its actions before 

promulgating a regulation under the 

CEA or issuing certain orders.22 Section 

15(a) further specifies that the costs and 

benefits shall be evaluated in light of 

five broad areas of market and public 

concern: (1) Protection of market 

participants and the public; (2) 

efficiency, competitiveness, and 

financial integrity of futures markets; (3) 

price discovery; (4) sound risk 

management practices; and (5) other 

public interest considerations. The 

Commission considered the costs and 

benefits resulting from its discretionary 

determinations with respect to the 

section 15(a) factors. 

a. Protection of Market Participants and 

the Public 

The Commission recognizes that there 

are trade-offs between reducing 

regulatory burdens and ensuring that 

the Commission has sufficient, timely 

information to fulfill its regulatory 

mission. The final rule is intended to 

reduce some of the regulatory burdens 

on Registrants. While the final rule will 

delay the time in which the Commission 

will receive the CCO Annual Reports, 

the delay is relatively short given that 

the information in the reports looks 

back over the entire year-long reporting 

period, and identifies planned 

improvements for the coming year. 

Accordingly, the Commission believes 

that the short delay will not affect the 

protection of market participants and 

the public. 

b. Efficiency, Competitiveness, and 

Financial Integrity of Markets 

The Commission believes that the 

final rule could improve allocational 

efficiency for participants in the market 

by reducing the burden of preparing the 

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

compliance resources more efficiently 

over the report preparation period. The 

Commission believes that the final rule 

will not have any market efficiency, 

competitiveness, or market integrity 

impacts because the reports address 

internal compliance programs of each 

Registrant and are not publicly 

available. 

c. Price Discovery 

The Commission believes that the 

final rule does not impact on price 

discovery. Given that the final rule 

affects only the timing of when the CCO 

Annual Reports are filed with the 

Commission and the CCO Annual 

Reports generally would not contain 

trade information or be available to the 

public, the final rule does not affect 

price discovery. 

d. Sound Risk Management Practices 

The Commission believes that the 

final rule will not have a meaningful 

effect on the risk management practices 

of Registrants. While the CCO Annual 

Reports may discuss certain risk 

management aspects related to 

Registrants’ compliance programs, the 

final rule only amends the timing of 

delivery of the reports to the 

Commission, not the contents of the 

reports. As described above under 

subsection 4.a, the short delay in 

delivery of the reports provided for by 

the final rule is not significant given the 

nature of the information included in 

the report and allowing additional time 

to prepare CCO Annual Reports might 

allow Registrants to prepare better 

reports that more effectively address the 

information contained therein. 

e. Other Public Interest Considerations 

The Commission has not identified 

any other public interest considerations 

for this rulemaking. 

List of Subjects in 17 CFR Part 3 

Administrative practice and 

procedure, Brokers, Commodity futures, 

Major swap participants, Reporting and 

recordkeeping requirements, Swap 

dealers. 

For the reasons stated in the 

preamble, the Commodity Futures 

Trading Commission amends 17 CFR 

part 3 as follows: 

PART 3—REGISTRATION 

■ 1. The authority citation for part 3 is 

revised to read as follows: 

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

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

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

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

VII of Pub. L. 111–203, 124 Stat. 1376. 

■ 2. Amend § 3.3 as follows: 

■ a. Revise paragraph (f)(2); and 

■ b. Add paragraph (h). 

The revision and addition read as 

follows: 

§ 3.3 Chief compliance officer. 

* * * * * 

(f) * * * 

(2)(i) Except as provided in paragraph 

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

report shall be furnished electronically 

to the Commission not more than 90 

days after the end of the fiscal year of 

the futures commission merchant, swap 

dealer, or major swap participant. 

(ii) The annual report of a swap dealer 

or major swap participant that is eligible 

to comply with a substituted 

compliance regime for paragraph (e) of 

this section pursuant to a comparability 

determination of the Commission may 

be furnished to the Commission 

electronically up to 15 days after the 

date on which the comparable annual 

report must be completed under the 

requirements of the applicable 

substituted compliance regime. If the 

substituted compliance regime does not 

specify a date by which the comparable 

annual report must be completed, then 

the annual report shall be furnished to 

the Commission by the date specified in 

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

* * * * * 

(h) Delegation of authority. The 

Commission hereby delegates to the 

Director of the Division of Swap Dealer 

and Intermediary Oversight, or such 

other employee or employees as the 

Director may designate from time to 

time, the authority to grant extensions of 

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

this section. Notwithstanding such 

delegation, in any case in which a 

Commission employee delegated 

authority under this paragraph believes 

it appropriate, he or she may submit to 

the Commission for its consideration the 

question of whether an extension of 

time should be granted. The delegation 

of authority in this paragraph shall not 

prohibit the Commission, at its election, 

from exercising the authority set forth in 

paragraph (f)(5) of this section. 

Issued in Washington, DC, on November 

10, 2016, by the Commission. 

Robert N. Sidman, 

Deputy Secretary of the Commission. 

Note: The following appendix will not 

appear in the Code of Federal Regulations. 

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Federal Register / Vol. 81, No. 221 / Wednesday, November 16, 2016 / Rules and Regulations 80567 

Appendix to Chief Compliance Officer 

Annual Report Requirements for 

Futures Commission Merchants, Swap 

Dealers, and Major Swap Participants; 

Amendments to Filing Dates— 

Commission Voting Summary 

On this matter, Chairman Massad and 

Commissioners Bowen and Giancarlo voted 

in the affirmative. No Commissioner voted in 

the negative. 

[FR Doc. 2016–27525 Filed 11–15–16; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 1105 

[Docket No. FDA–2016–N–1555] 

Refuse To Accept Procedures for 

Premarket Tobacco Product 

Submissions; Withdrawal 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Direct final rule; withdrawal. 

SUMMARY: The Food and Drug 

Administration (FDA) published in the 

Federal Register of August 8, 2016, a 

direct final rule regarding procedures 

for refusing to accept premarket tobacco 

product submissions. The comment 

period closed October 24, 2016. FDA is 

withdrawing the direct final rule 

because the Agency received significant 

adverse comment. FDA will consider 

the comments we received on the direct 

final rule to be comments on the 

companion proposed rule published at 

81 FR 52371 (August 8, 2016). 

DATES: The direct final rule published at 

81 FR 52329 (August 8, 2016), is 

withdrawn effective November 16, 2016. 

FOR FURTHER INFORMATION CONTACT: 

Annette Marthaler or Paul Hart, Office 

of Regulations, Center for Tobacco 

Products, Food and Drug 

Administration, Document Control 

Center, Bldg. 71, Rm. G335, 10903 New 

Hampshire Ave., Silver Spring, MD 

20993–0002, 877–287–1373, 

CTPRegulations@fda.hhs.gov. 

SUPPLEMENTARY INFORMATION: Therefore, 

under the Federal Food, Drug, and 

Cosmetic Act, and under authority 

delegated to the Commissioner of Food 

and Drugs, the direct final rule 

published on August 8, 2016, (81 FR 

52329) is withdrawn. 

Dated: November 9, 2016. 

Peter Lurie, 

Associate Commissioner for Public Health 

Strategy and Analysis. 

[FR Doc. 2016–27456 Filed 11–15–16; 8:45 am] 

BILLING CODE 4164–01–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Parts 888, 982, 983, and 985 

[Docket No. FR–5855–F–03] 

RIN 2501–AD74 

Establishing a More Effective Fair 

Market Rent System; Using Small Area 

Fair Market Rents in the Housing 

Choice Voucher Program Instead of 

the Current 50th Percentile FMRs 

AGENCY: Office of the Secretary, HUD. 

ACTION: Final rule. 

SUMMARY: This final rule applies the use 

of Small Area Fair Market Rents (Small 

Area FMRs) in the administration of the 

Housing Choice Voucher (HCV) program 

for certain metropolitan areas. This final 

rule provides for the use of Small Area 

FMRs, in place of the 50th percentile 

rent, the currently codified regulations, 

to address high levels of voucher 

concentration in certain communities. 

The use of Small Area FMRs is expected 

to give HCV tenants access to areas of 

high opportunity and lower poverty 

areas by providing a subsidy that is 

adequate to cover rents in those areas, 

thereby reducing the number of voucher 

families that reside in areas of high 

poverty concentration. 

DATES: Effective: January 17, 2017. 

FOR FURTHER INFORMATION CONTACT: For 

information about this rule, contact 

Peter B. Kahn, Director, Economic and 

Market Analysis Division, Office of 

Economic Affairs, Office of Policy 

Development and Research, U.S. 

Department of Housing and Urban 

Development, 451 7th Street SW., 

Washington, DC 20410, telephone (202) 

402–2409 or Becky L. Primeaux, 

Director, Housing Voucher Management 

and Operations Division, U.S. 

Department of Housing and Urban 

Development, 451 7th Street SW., 

Washington, DC 20410, telephone (202) 

708–0477; email: SAFMR_Rule@

hud.gov. The listed telephone numbers 

are not toll-free numbers. Persons with 

hearing or speech impairments may 

access this number through TTY by 

calling Federal Relay Service at (800) 

877–8339 (this is a toll-free number). 

SUPPLEMENTARY INFORMATION: Under this 

final rule, public housing agencies 

(PHAs) operating in designated 

metropolitan areas are required to use 

Small Area FMRs, while PHAs not 

operating in the designated areas have 

the option to use Small Area FMRs in 

administering their HCV programs. 

Other programs that use FMRs would 

continue to use area-wide FMRs. This 

final rule also provides for regulatory 

implementation of certain provisions of 

the Housing Opportunity Through 

Modernization Act (HOTMA) related to 

FMRs, as well as conforming regulatory 

changes to part 982 concerning the 

reduction in payment standards during 

the term of the Housing Assistance 

Payment (HAP) contract in the HCV 

program. Specifically, the final rule 

provides for publication of FMRs by 

way of the World Wide Web, and 

provides that PHAs are no longer 

required to reduce the payment 

standard for a family under HAP 

contract when the PHA is required to 

reduce the payment standard for its 

program as the result of a reduction in 

the FMR. 

I. Executive Summary 

A. Purpose of the Regulatory Action 

This final rule establishes a more 

effective means for HCV tenants to move 

into areas of higher opportunity and 

lower poverty by providing the tenants 

with a subsidy adequate to make such 

areas accessible and, consequently, help 

reduce the number of voucher families 

that reside in areas of high poverty 

concentration. Prior to this rule, subsidy 

for HUD’s HCV program is determined 

by a formula that considers rent prices 

across an entire metropolitan area. 

However, rents can vary widely within 

a metropolitan area depending upon the 

size of the metropolitan area and the 

neighborhood in the metropolitan area 

within which one resides. The result of 

determining rents on the basis of an 

entire metropolitan area is that a 

voucher subsidy may be too high or may 

be too low to cover market rent in a 

given neighborhood. To date, HUD’s 

policy for addressing high 

concentrations of voucher holders raises 

the level of the FMR from the 40th 

percentile to the 50th percentile 

(roughly a 7—8 percent increase) in the 

whole FMR area. This level of added 

subsidy has not been targeted to areas of 

opportunity, and consequently, this 

formula has not proven effective in 

addressing the problem of concentrated 

poverty and economic and racial 

segregation in neighborhoods. 

Experience with the 50th percentile 

regime has shown that the majority of 

HCV tenants use their vouchers in 

neighborhoods where rents are low but 

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