[Federal Register Volume 75, Number 207 (Wednesday, October 27, 2010)]
[Proposed Rules]
[Pages 66014-66018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-26912]


=======================================================================
-----------------------------------------------------------------------

COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 160

RIN 3038-AD13


Privacy of Consumer Financial Information; Conforming Amendments 
Under Dodd-Frank Act

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Commodity Futures Trading Commission (``Commission'' or 
``CFTC'') is proposing to amend its rules under part 160 of its 
Regulations to implement new statutory provisions enacted by Titles VII 
and X of the Dodd-Frank Wall Street Reform and Consumer Protection Act 
(``Dodd-Frank Act''). Section 1093 of the Dodd-Frank Act provides for 
certain amendments to Title V of the Gramm-Leach-Bliley Act (``GLB 
Act'')--which sets forth certain protections for the privacy of 
consumer financial information--affirming the Commission's jurisdiction 
in this area. This proposal broadens the scope of Part 160 to cover two 
new entities created by Title VII of the Dodd-Frank Act: Swap dealers 
and major swap participants. In addition, the Commission proposes to 
rename Part 160 as ``Privacy of Consumer Financial Information under 
the Gramm-Leach-Bliley Act'' to harmonize the title of this part with 
other parts of the Commission's Regulations.

DATES: Comments must be received on or before December 27, 2010.

ADDRESSES: You may submit comments, identified by RIN number 3038-AD13, 
by any of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#8fe6e1e9e0fffde6f9eeecf6cfece9fbeca1e8e0f9"><span class="__cf_email__" data-cfemail="5d34333b322d2f342b3c3e241d3e3b293e733a322b">[email protected]</span></a>.
    <bullet> Mail: David A. Stawick, Secretary of the Commission, 
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st 
Street, NW., Washington, DC 20581.
    <bullet> Hand Delivery/Courier: Same as mail above.
    All comments must be submitted in English, or if not, accompanied 
by an English translation. Comments will be posted as received to 
http://www.cftc.gov. You should submit only information that you wish 
to make available publicly. If you wish the Commission to consider 
information that is exempt from disclosure under the Freedom of 
Information Act, 5 U.S.C. 552, a petition for confidential treatment of 
the exempt information may be submitted according to the established 
rules in section 145.9 of the Commission's Regulations.\1\
---------------------------------------------------------------------------

    \1\ 17 CFR 145.9.
---------------------------------------------------------------------------

    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 http://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, 5 U.S.C. 551 et seq., and other applicable laws, and may 
be accessible under the Freedom of Information Act.

FOR FURTHER INFORMATION CONTACT: Carl E. Kennedy, Counsel, Office of 
General Counsel, (202) 418-6625, e-mail: <a href="/cdn-cgi/l/email-protection#6d0e32060803030809142d0e0b190e430a021b"><span class="__cf_email__" data-cfemail="71122e1a141f1f14150831121705125f161e07">[email protected]</span></a>, Commodity 
Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, 
NW., Washington, DC 20581.

SUPPLEMENTARY INFORMATION:

I. Background

    On July 21, 2010, President Obama signed the ``Dodd-Frank Wall 
Street Reform and Consumer Protection Act'' (``Dodd-Frank Act'').\2\ 
Title VII of the Dodd-Frank Act,\3\ which substantially amended the 
Commodity Exchange Act (``CEA''),\4\ established a comprehensive new 
regulatory framework for swaps and security-based swaps. It lowers risk 
in the financial system, increases transparency, and promotes market 
integrity by, among other things: (1) Providing for the comprehensive 
regulation of swap dealers and major swap participants; (2) imposing 
clearing and trade execution requirements on standardized products; (3) 
creating a robust real-time reporting regime; and (4) enhancing the 
Commission's enforcement authorities.
---------------------------------------------------------------------------

    \2\ See Dodd-Frank Wall Street Reform and Consumer Protection 
Act, Public Law 111-203, 124 Stat. 1376 (2010). The text of the 
Dodd-Frank Act may be accessed at http://www.cftc.gov.
    \3\ Under Section 701 of the Dodd-Frank Act, Title VII may be 
cited as the ``Wall Street Transparency and Accountability Act of 
2010.''
    \4\ 7 U.S.C. 1 et seq.
---------------------------------------------------------------------------

    Title X of the Dodd-Frank Act creates a new consumer financial 
services regulator, the Bureau of Consumer Financial Protection (the 
``Bureau''), that will assume most of the consumer financial services 
regulatory responsibilities currently spread among numerous agencies. 
More specifically, the Dodd-Frank Act removes from the jurisdiction of 
the Federal Trade Commission (``FTC'') its rulemaking and other 
authorities granted pursuant to Federal consumer law, and cedes that 
authority to the Bureau. In addition, section 1093 of the Dodd-Frank 
Act amends Title V of the GLB Act (15 U.S.C. 6801 et seq.), to, inter 
alia, reaffirm the Commission's authority to promulgate regulations to 
require entities that are subject to the Commission's jurisdiction to 
provide certain privacy protections for consumer financial information. 
Specifically, section 1093 of the Dodd-Frank Act amends section 504 of 
the GLB Act by providing that ``the [CFTC] shall have the authority to 
prescribe such regulations as may be necessary to carry out the 
purposes of [Title V of the GLB

[[Page 66015]]

Act] with respect to any financial institutions and other persons 
subject to the jurisdiction of the [CFTC] under section 5g of the 
[CEA].'' (Emphasis added.)
    As enacted, Title V of the GLB Act \5\ (``Title V''), inter alia, 
limits the instances in which a financial institution may disclose 
nonpublic personal information about a consumer to nonaffiliated third 
parties, and requires a financial institution to disclose to all of its 
customers the institution's privacy policies and practices with respect 
to information sharing with both affiliates and nonaffiliated third 
parties.\6\
---------------------------------------------------------------------------

    \5\ Public Law 106-102, 113 Stat. 1338 (1999) (codified in 
scattered sections of 12 U.S.C. and 15 U.S.C.).
    \6\ GLB Act sections 501-510, 15 U.S.C. 6801-6809.
---------------------------------------------------------------------------

    In 2000, the Commodity Futures Modernization Act of 2000 (``CFMA'') 
created section 5g of the CEA, providing that the Commission be treated 
as a Federal functional regulator within the meaning of Title V.\7\ 
Section 5g also granted the Commission the authority to adopt rules 
that establish appropriate standards for financial institutions subject 
to its jurisdiction to safeguard customer records and information. 
Section 5g provides that the following entities are subject to the 
Commission's jurisdiction for the purposes of Title V: Futures 
commission merchants (``FCMs''), commodity trading advisors (``CTAs''), 
commodity pool operators (``CPOs''), and introducing brokers (``IBs'') 
(collectively, ``CFTC registrants'').
---------------------------------------------------------------------------

    \7\ The other agencies subject to GLB Act jurisdiction include 
the Office of the Comptroller of the Currency (``OCC''); Board of 
Governors of the Federal Reserve System (``Board''); Federal Deposit 
Insurance Corporation (``FDIC''); Office of Thrift Supervision 
(``OTS''); National Credit Union Administration (``NCUA''); FTC; and 
Securities and Exchange Commission (``SEC'').
---------------------------------------------------------------------------

    The Commission's consumer information privacy rules are set out in 
Part 160 of the Commission's regulations, which require CFTC 
registrants to adopt appropriate policies and procedures that address 
safeguards to customer records and information, including initial and 
annual privacy notice requirements, opt-out provisions to the extent 
that these registrants wish to share such records and information with 
non-affiliates and other measures to protect nonpublic consumer 
information. The protections provided in Part 160 inure to the benefit 
of individual consumers.\8\ The Commission recently amended the scope 
of Part 160 and the definition of ``financial institution'' to include 
retail foreign exchange dealers (``RFEDs'').\9\
---------------------------------------------------------------------------

    \8\ Section 160.3(h)(1) of the Commission's Regulations defines 
the term consumer to mean ``an individual who obtains or has 
obtained a financial product or service from [a financial 
institution] that is to be used primarily for personal, family or 
household purposes, or that individual's legal representative.''
    \9\ See 75 FR 55410, 55450 (Sept. 10, 2010).
---------------------------------------------------------------------------

    Title VII of the Dodd-Frank Act creates two new entities over which 
the Commission has jurisdiction: Swap dealers (``SDs'') and major swap 
participants (``MSPs'').\10\ The Commission proposes in this rulemaking 
to: (1) Expand the scope of Part 160 of its Regulations to apply to SDs 
and MSPs; (2) in accordance with the transfer of authority in Title X, 
changing all references in Part 160 from the FTC to the Bureau; and (3) 
rename Part 160 to ``Privacy of Consumer Financial Information under 
the Gramm-Leach-Bliley Act'' to harmonize the title of part 160 with 
the new part of the Commission's Regulations, which provide protections 
to certain customer information under the FCRA.
---------------------------------------------------------------------------

    \10\ The terms ``SD'' and ``MSP'' as used in this proposed 
regulation refer to the statutory definitions of such terms as 
defined in Title VII of the Dodd-Frank Act, and as may be further 
defined by the Commission in a future rulemaking. See section 721(b) 
of the Dodd-Frank Act, which provides that the Commission has the 
authority to adopt rules further defining any term in an amendment 
to the CEA in the Dodd-Frank Act. See also section 721(c) which 
provides that the Commission is required to adopt a rule to further 
define, inter alia, the terms ``swap dealer'' and ``major swap 
participant'' to include transactions and entities that have been 
structured to evade provisions in the Dodd-Frank Act.
---------------------------------------------------------------------------

    The Commission requests comment on all aspects of these conforming 
amendments, as well as comment on specific provisions and issues 
highlighted in the section-by-section analysis below.

II. Section-by-Section Analysis

A. Specific Section Amendments

Renaming Part 160
    Another provision in Title X of the Dodd-Frank Act, section 1088, 
provides that the Commission promulgate regulations under various 
sections of the Fair Credit Reporting Act, 15 U.S.C. 1608 et seq. 
Similar to Title V of the GLB Act, the FCRA sets forth safeguards for 
the protection of a broader range of consumer information. Under a 
separate rulemaking, the Commission proposes to create a new part in 
its Regulations to provide protections under the FCRA. To harmonize the 
title of Part 160 with the new part being adopted by the Commission 
promulgated under Title X of the Dodd-Frank Act, the Commission 
proposes to rename Part 160 as ``Privacy of Consumer Financial 
Information under the Gramm-Leach-Bliley Act.'' \11\
---------------------------------------------------------------------------

    \11\ Section 1088 of the Dodd-Frank Act provides the CFTC with 
authority to implement regulations under sections 624 and 628 of the 
FCRA.
---------------------------------------------------------------------------

Regulation 160.1(b) Scope
    Regulation 160.1(b) sets out the scope of the Commission's rules 
and identifies the financial institutions covered by the rules that 
include CFTC registrants regardless whether they are required to 
register with the Commission. The Commission proposes to add SDs and 
MSPs to the scope of Part 160 (and to the definition of ``financial 
institution'' therein) because, for example, these new entities may 
enter into swap transactions with individuals who qualify as ``eligible 
contract participants''.\12\ Section 1a(18)(A)(xi) defines ``eligible 
contact participant'' to include any individual who has amounts 
invested on a discretionary basis, the aggregate of which is in excess 
of either $10,000,000 or, if certain other qualifications are met, 
$5,000,000. As a result of this addition, SDs and MSPs that transact 
swaps with individuals would have to comply with the various provisions 
under Part 160, including requirements to protect the nonpublic 
personal information of these individuals. Of course, if any SD or MSP 
has no business interactions with natural persons, no obligations would 
arise under this proposal. This proposal would ensure that all CFTC 
registrants that enter into swap transactions with natural persons 
would provide privacy protections to any nonpublic, consumer 
information.
---------------------------------------------------------------------------

    \12\ New section 2(e) of the CEA--as enacted under 723(a)(2) of 
the Dodd-Frank Act--provides that it is ``unlawful for any person, 
other than an eligible contract participant, to enter into a swap 
unless the swap is entered into on, or subject to the rules of, a 
board of trade designated as a contract market under section 5 [of 
the CEA].''
---------------------------------------------------------------------------

Section 160.3--Definitions
    Since the scope of the proposed regulations would extend to SDs and 
MSPs, the Commission proposes to amend section 160.3 to add the 
definitions of SDs and MSPs to the list of defined terms under section 
160.3. Specifically, the Commission proposes to define ``major swap 
participant'' to have the same meaning as in section 1a(33) of the CEA, 
as further defined by the Commission's Regulations, and includes any 
person registered as such thereunder. The Commission proposes to define 
``swap dealer'' to have the same meaning as in section 1a(49) of the 
CEA, as further defined by the Commission's Regulations, and includes 
any person registered as such thereunder. There are existing 
definitions and related

[[Page 66016]]

provisions under Part 160 that must be amended to include these new 
registrants. Specifically, the definitions of ``financial 
institution'', ``affiliate'', and ``you'' must be amended to include 
swap dealers and major swap participants.
Section 160.15--Other Exceptions to Notice and Opt Out Requirements
    As noted above, Title X of the Dodd-Frank Act transferred certain 
authority from the FTC to the Bureau. Accordingly, we changed the 
reference from the FTC to the Bureau in section 160.15 to reflect that 
the Bureau is now a Federal functional regulator.
Section 160.17(b)--Relation to State Laws
    As a result of the creation of the Bureau and the transfer of 
certain authority from the FTC to the Bureau, the Commission proposes 
to amend paragraph (b) by replacing it with the language similar to 
section 1041(a)(2) of the Dodd-Frank Act. This section clarifies the 
relationship of Title V to state consumer protection laws. 
Specifically, section 1041(a)(2) provides, ``For the purposes of this 
section, a [State] statute, regulation, order, or interpretation * * * 
is not inconsistent with the provisions of [Title V] if the protection 
that such statute, regulation, order, or interpretation affords to 
consumers is greater than the protection provided under [Title V]. A 
determination regarding whether a [State] statute, regulation, order, 
or interpretation * * * is inconsistent with the provisions of [Title 
V] may be made by the Bureau on its own motion or in response to a 
nonfrivolous petition initiated by any interested person.''
Section 160.30--Procedures To Safeguard Customer Records and 
Information
    Section 160.30 requires CFTC registrants to adopt policies and 
procedures that, among other things, address administrative, technical 
and physical safeguards for the protection of customer records and 
information. The Commission proposes to amend the introductory sentence 
of section 160.30 to add SDs and MSPs to the list of CFTC registrants 
that must comply with this requirement.

B. Effective Date

    Pursuant to section 1100H of the Dodd-Frank Act, the Commission 
proposes to make the proposed regulations--the affiliate marketing 
rules and the disposal rules--become effective on the ``designated 
transfer date'' of authority from various Federal agencies to the 
Bureau. Section 1062 of the Dodd-Frank Act provides that the 
``designated transfer date'' is a date designated in the Federal 
Register no later than 60 days after the enactment of the Dodd-Frank 
Act by the Secretary of the Treasury, the Chairman of the Board of 
Governors, the Chairman of the Federal Trade Commission, and several 
other Federal agencies.\13\ On September 20, 2010, these Federal 
agencies issued a notice designating July 21, 2011 as the designated 
transfer date.\14\ As a result, the Commission proposes to adopt the 
affiliate marketing rules and the disposal rules on that date.
---------------------------------------------------------------------------

    \13\ The heads of the other Federal agencies are: The 
Comptroller of the Currency; the Director of the Office of Thrift 
Supervision; the Secretary of the Department of Housing and Urban 
Development; the Director of the Office of Management and Budget; 
the Chairman of the National Credit Union Administration Board; and 
the Chairperson of the Corporation.
    \14\ See 75 FR 57252-02 (Sept. 20, 2010).
---------------------------------------------------------------------------

III. Related Matters

A. Cost-Benefit Analysis

    Section 15(a) of the CEA \15\ requires the Commission to consider 
the costs and benefits of its actions before issuing an order under the 
CEA. By its terms, section 15(a) does not require the Commission to 
quantify the costs and benefits of amendments to regulations to 
determine whether the benefits of the amendments outweigh its costs; 
rather, it requires that the Commission ``consider'' the costs and 
benefits of its actions. 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 
may in its discretion give greater weight to any one of the five 
enumerated areas and could in its discretion determine that, 
notwithstanding its costs, a particular amendment is necessary or 
appropriate to protect the public interest or to effectuate any of the 
provisions or accomplish any of the purposes of the Act. The proposed 
conforming rule amendments would broaden the scope of Part 160 to cover 
SDs and MSPs.
---------------------------------------------------------------------------

    \15\ 7 U.S.C. 19(a).
---------------------------------------------------------------------------

    With respect to costs, the Commission has determined that the 
proposed conforming amendments are necessary to implement various 
consumer financial information privacy provisions as they relate to SDs 
and MSPs, by adding these new registrants to the list of financial 
institutions responsible for complying with its provisions under part 
160 of its Regulations.
    The Commission has determined that market participants and the 
public may be harmed if these new registrants are not added to part 
160. The notice requirements under part 160 were established to protect 
individual customers who do business with CFTC registrants. There is no 
reason why SDs and MSPs should be excluded from these requirements to 
the extent that they conduct business with a natural person. With 
respect to benefits, the Commission has determined that requiring 
financial institutions to protect the privacy of nonpublic personal 
information about consumers is a benefit that must be maintained given 
the risks to the public if it is not, given the minor costs to the 
financial institutions affected by the conforming amendments.
    The Commission invites public comment on its cost-benefit 
considerations. Commenters are also invited to submit any data or other 
information that they may have quantifying or qualifying the costs and 
benefits of the proposal.

B. Paperwork Reduction Act

    Under the Paperwork Reduction Act (``PRA'') 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 control 
number.\16\ The proposed amendments to Part 160 of the Commission's 
Regulations include a collection of information within the meaning of 
the PRA. The Commission therefore is submitting this proposal to the 
Office of Management and Budget (``OMB'') for review in accordance with 
44 U.S.C. 3507(d) and 5 CFR 1320.11, together with a request for 
approval of a revision to the Commission's currently approved 
collection associated with part 160. The title of the collection of 
information to be revised is ``Privacy of Consumer Financial 
Information,'' OMB Control Number 3038-0055. If approved, the provision 
of notice to this revised collection of information would be mandatory 
for SDs and MSPs.
---------------------------------------------------------------------------

    \16\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

1. Information Provided by Reporting Entities
    The proposed rule would require SDs and MSPs to provide initial and 
annual privacy and opt-out notices to all customers that are natural 
persons. It is not currently known how many SDs and MSPs will be 
required to register as such with the Commission, and this will

[[Page 66017]]

not be known to the Commission until registration requirements for 
these entities become effective after July 15, 2011, the date on which 
the Dodd-Frank Act becomes effective.
    Nonetheless, for purposes of calculating PRA burden, the Commission 
estimates that there will be approximately 300 SDs and MSPs who would 
be required to provide notices under part 160 on an initial and then on 
an annual basis.\17\ It is anticipated that most SDs and MSPs will not 
transact business with a significant number of natural persons, causing 
the Commission to estimate that each SD and MSP will issue an average 
of 20 notices per year. As previously estimated, the average time per 
notice will be .24 hours. This will result in an annual aggregate of 
1,440 burden hours.
---------------------------------------------------------------------------

    \17\ While staff believes that there may likely be approximately 
200 swap dealers, we have taken a conservative approach in 
estimating that there will be 250 swap dealers for PRA purposes.
---------------------------------------------------------------------------

2. Information Collection Comments
    The Commission invites the public and other Federal agencies to 
comment on any aspect of the reporting and recordkeeping burdens 
discussed above. Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission 
solicits comments in order to: (i) 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; (ii) evaluate the accuracy of the Commission's 
estimate of the burden of the proposed collection of information; (iii) 
determine whether there are ways to enhance the quality, utility, and 
clarity of the information to be collected; and (iv) 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 e-mail at <a href="/cdn-cgi/l/email-protection#a5eaecf7e4d6d0c7c8ccd6d6cccacbd6e5cac8c78bc0cad58bc2cad3"><span class="__cf_email__" data-cfemail="76393f24370503141b1f05051f19180536191b145813190658111900">[email protected]</span></a>. Please provide the 
Commission with a copy of submitted comments so that they can be 
summarized and addressed in the final rule. 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 RegInfo.gov. OMB is required to make a decision concerning the 
collection of information between 30 and 60 days after publication of 
this release. Consequently, a comment to OMB is most assured of being 
fully effective if received by OMB (and the Commission) within 30 days 
after publication of this notice of proposed rulemaking.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA'') requires that agencies 
consider whether their proposed regulations will have a significant 
economic impact on a substantial number of small entities and, if so, 
provide a regulatory flexibility analysis respecting the impact.\18\ 
The Commission's proposed regulations now will affect SDs and MSPs, in 
addition to the CFTC registrants that are currently subject to 
Commission's Regulations under Part 160. These regulations require 
periodic notice to be provided to individuals who obtain financial 
products or services primarily for personal, family, or household 
purposes from the institutions, and may be satisfied by the use of a 
model notice developed by the Commission and other regulatory agencies 
to minimize the burden of compliance. Accordingly, the Commission has 
determined that the obligations created by these rule amendments will 
not create a significant economic impact on a substantial number of 
small entities. Accordingly, the Chairman, on behalf of the Commission, 
hereby certifies pursuant to 5 U.S.C. 605(b) that the proposed rules 
will not have a significant impact on a substantial number of small 
entities.
---------------------------------------------------------------------------

    \18\ 5 U.S.C. 601 et seq.
---------------------------------------------------------------------------

List of Subjects in 17 CFR Part 160

    Brokers, Dealers, Consumer protection, Privacy, Reporting and 
recordkeeping requirements.

    For the reasons articulated in the preamble, the Commission 
proposes to amend Part 160 of Title 17 of the Code of Federal 
Regulations as follows:
    1. The heading of part 160 is revised to read as follows:

PART 160--PRIVACY OF CONSUMER FINANCIAL INFORMATION UNDER TITLE V 
OF THE GRAMM-LEACH-BLILEY ACT

    2. The authority citation for part 160 is revised to read as 
follows:

    Authority:  7 U.S.C. 7b-2 and 12a(5); 15 U.S.C 6801, et seq., 
and title X, sec. 1093, Pub. L. 111-203, 124 Stat. 1376.

    3. Amend Sec.  160.1 by revising paragraph (b) to read as follows:


Sec.  160.1  Purpose and scope.

* * * * *
    (b) Scope. This part applies only to nonpublic personal information 
about individuals who obtain financial products or services primarily 
for personal, family, or household purposes from the institutions 
listed below. This part does not apply to information about companies 
or about individuals who obtain financial products or services 
primarily for business, commercial, or agricultural purposes. This part 
applies to all futures commission merchants, retail foreign exchange 
dealers, commodity trading advisors, commodity pool operators, 
introducing brokers, major swap participants and swap dealers that are 
subject to the jurisdiction of the Commission, regardless whether they 
are required to register with the Commission. These entities are 
hereinafter referred to in this part as ``you.'' This part does not 
apply to foreign (non-resident) futures commission merchants, retail 
foreign exchange dealers, commodity trading advisors, commodity pool 
operators, introducing brokers, major swap participants and swap 
dealers that are not registered with the Commission.
* * * * *
    4. Amend Sec.  160.3 as follows:
    a. Revise paragraphs (a), (n)(1)(i), (n)(2)(i), and (o)(1)(i);
    b. Redesignating paragraphs (w) and (x) as paragraphs (y) and (z);
    c. Redesignating paragraphs (s) through (v) as paragraphs (t) 
through (w);
    d. Adding new paragraphs (s) and (x); and
    e. Revising newly designated paragraphs (y)(4) and (5) and adding 
new paragraphs (y)(6) and (7) to read as follows:


Sec.  160.3  Definitions.

* * * * *
    (a) Affiliate of a futures commission merchant, retail foreign 
exchange dealer, commodity trading advisor, commodity pool operator, 
introducing broker, major swap participant, or swap dealer means any 
company that controls, is controlled by, or is under common control 
with a futures commission merchant, retail foreign exchange dealer, 
commodity trading advisor, commodity pool operator, introducing broker, 
major swap participant, or swap dealer that is subject to the 
jurisdiction of the Commission. In addition, a futures commission 
merchant, retail foreign exchange dealer, commodity trading advisor, 
commodity pool operator, introducing broker, major swap participant, or 
swap dealer subject to the jurisdiction of the Commission will

[[Page 66018]]

be deemed an affiliate of a company for purposes of this part if:
    (1) That company is regulated under Title V of the GLB Act by the 
Bureau of Consumer Financial Protection or by a Federal functional 
regulator other than the Commission; and
    (2) Rules adopted by the Bureau of Consumer Financial Protection or 
another Federal functional regulator under Title V of the GLB Act treat 
the futures commission merchant, retail foreign exchange dealer, 
commodity trading advisor, commodity pool operator, introducing broker, 
major swap participant, or swap dealer as an affiliate of that company.
* * * * *
    (n)(1) * * *
    (i) Any futures commission merchant, retail foreign exchange 
dealer, commodity trading advisor, commodity pool operator, introducing 
broker, major swap participant, or swap dealer that is registered with 
the Commission as such or is otherwise subject to the Commission's 
jurisdiction; and
    (ii) * * *
    (2) * * *:
    (i) Any person or entity, other than a futures commission merchant, 
retail foreign exchange dealer, commodity trading advisor, commodity 
pool operator, introducing broker, major swap participant, or swap 
dealer that, with respect to any financial activity, is subject to the 
jurisdiction of the Commission under the Act.
* * * * *
    (o)(1) * * *:
    (i) Any product or service that a futures commission merchant, 
retail foreign exchange dealer, commodity trading advisor, commodity 
pool operator, introducing broker, major swap participant, or swap 
dealer could offer that is subject to the Commission's jurisdiction; 
and
* * * * *
    (s) Major swap participant. The term ``major swap participant'' has 
the same meaning as in section 1a(33) of the Commodity Exchange Act, 7 
U.S.C. 1 et seq., as may be further defined by this title, and includes 
any person registered as such thereunder.
* * * * *
    (x) Swap dealer. The term ``swap dealer'' has the same meaning as 
in section 1a(49) of the Commodity Exchange Act, 7 U.S.C. 1 et seq., as 
may be further defined by this title, and includes any person 
registered as such thereunder.
    (y) * * *
    (4) Any commodity pool operator;
    (5) Any introducing broker;
    (6) Any major swap participant; and
    (7) Any swap dealer subject to the jurisdiction of the Commission.
* * * * *
    5. Amend Sec.  160.15 by revising paragraph (a)(4) to read as 
follows:


Sec.  160.15  Other exceptions to notice and opt out requirements.

    (a) * * *
    (4) To the extent specifically permitted or required under other 
provisions of law and in accordance with the Right to Financial Privacy 
Act of 1978, 12 U.S.C. 3401 et seq., to law enforcement agencies 
(including a Federal functional regulator, the Secretary of the 
Treasury, with respect to 31 U.S.C. Chapter 53, Subchapter II (Records 
and Reports on Monetary Instruments and Transactions) and 12 U.S.C. 
Chapter 21 (Financial Recordkeeping), a State insurance authority, with 
respect to any person domiciled in that insurance authority's state 
that is engaged in providing insurance, and the Bureau of Consumer 
Financial Protection), self-regulatory organizations, or for an 
investigation on a matter related to public safety;
* * * * *
    6. Amend Sec.  160.17 by revising paragraph (b) to read as follows:


Sec.  160.17  Relation to state laws.

* * * * *
    (b) Greater protection under state law. For purposes of this 
section, a state statute, regulation, order or interpretation is not 
inconsistent with the provisions of this part if the protection such 
statute, regulation, order or interpretation affords to any consumer is 
greater than the protection provided under this part. A determination 
regarding whether a state statute, regulation, order, or interpretation 
is inconsistent with the provisions of this part may be made by the 
Bureau of Consumer Financial Protection, after consultation with the 
Commission, on its own motion or in response to a nonfrivolous petition 
initiated by any interested person.
    7. Revise Sec.  160.30 to read as follows:


Sec.  160.30  Procedures to safeguard customer records and information.

    Every futures commission merchant, retail foreign exchange dealer, 
commodity trading advisor, commodity pool operator, introducing broker, 
major swap participant, and swap dealer subject to the jurisdiction of 
the Commission must adopt policies and procedures that address 
administrative, technical and physical safeguards for the protection of 
customer records and information.

    By the Commission.

    Dated: October 19, 2010.
David A. Stawick,
Secretary.
Statement of Chairman Gary Gensler
Privacy of Consumer Financial Information; Conforming Amendments Under 
Dodd-Frank Act
October 19, 2010
    I support today's Commission vote on the notice of public 
rulemaking, which expands the scope of the Commission's existing 
protections afforded to consumers' information to two new entities 
created by the Dodd-Frank Act. The proposed rulemaking expands the 
Commission's Part 160 rules to customers of swap dealers and major swap 
participants. Part 160 includes the Commission's existing privacy rules 
for consumers.

[FR Doc. 2010-26912 Filed 10-26-10; 8:45 am]
BILLING CODE 6351-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>