Document ID: SEC-2016-0119-0001
Agency: sec
Document Type: Proposed Rule
Title: Access to Data Obtained by Security-Based Swap Data Repositories and Exemption From Indemnification Requirement
Posted Date: 2016-01-21T05:00Z

[Federal Register Volume 81, Number 13 (Thursday, January 21, 2016)]
[Proposed Rules]
[Pages 3354-3356]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01148]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 240

[Release No. 34-76922; File No. S7-15-15]
RIN 3235-AL74

Access to Data Obtained by Security-Based Swap Data Repositories 
and Exemption From Indemnification Requirement

AGENCY: Securities and Exchange Commission.

ACTION: Reopening of comment period.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
reopening the comment period for proposed amendments to rule 13n-4 
under the Securities Exchange Act of 1934 (``Exchange Act'') related to 
regulatory access to security-based swap data held by security-based 
swap data repositories. The proposed rule amendments would implement 
Exchange Act provisions that conditionally require that security-based 
swap data repositories make data available to certain regulators and 
other authorities. Recent legislation has modified certain underlying 
statutory provisions.

DATES: The comment period for the proposed rule published September 14, 
2015, at 80 FR 55182, is reopened. Submit comments on or before 
February 22, 2016.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/proposed.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number S7-15-15 on the subject line; or
     Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.

Paper Comments

     Send paper comments to Secretary, Securities and Exchange 
Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number S7-15-15. This file number 
should be included on the subject line if email is used. To help us 
process and review your comments more efficiently, please use only one 
method. The Commission will post all comments on the Commission's 
Internet Web site (http://www.sec.gov/rules/proposed.shtml). Comments 
are also available for Web site viewing and printing in the 
Commission's Public Reference Room, 100 F Street NE., Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly.
    Studies, memoranda, or other substantive items may be added by the 
Commission or staff to the comment file during this rulemaking. A 
notification of the inclusion in the comment file of any such materials 
will be made available on the SEC's Web site. To ensure direct 
electronic receipt of such notifications, sign up through the ``Stay 
Connected'' option at www.sec.gov to receive notifications by email.

FOR FURTHER INFORMATION CONTACT: Carol McGee, Assistant Director, 
Joshua Kans, Senior Special Counsel, or Kateryna P. Imus, Special 
Counsel, at (202) 551-5870; Division of Trading and Markets, Securities 
and Exchange

[[Page 3355]]

Commission, 100 F Street NE., Washington, DC 20549-7010.

SUPPLEMENTARY INFORMATION: 

I. Introduction

A. Proposed Rule

    Exchange Act sections 13(n)(5)(G) and (H), which were added by 
Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection 
Act of 2010, conditionally require security-based swap data 
repositories to make data available to certain regulators and other 
entities. The statute identifies certain entities as being eligible to 
access data, and states that the Commission may determine that other 
persons are appropriate to access such data. The statute further 
provides that the Commission must be notified of requests for access, 
and also conditions data access on the security-based swap data 
repository receiving certain confidentiality-related agreements. 
Moreover, under the statute as it was originally enacted in 2010, data 
access was conditional on the recipient entity agreeing to indemnify 
the repository and the Commission for expenses arising from litigation 
relating to the information provided.\1\
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    \1\ See generally Access to Data Obtained by Security-Based Swap 
Data Repositories and Exemption From Indemnification Requirement, 
Exchange Act Release No. 75845 (Sept. 14, 2015), 80 FR 55182 (Sept. 
14, 2015) (``Data Access Proposing Release'').
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    On September 14, 2015, the Commission proposed rules to implement 
those data access provisions.\2\ Key features of the proposal included:
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    \2\ The proposal built upon two prior Commission proposals to 
implement the data access provisions and to provide an exemption 
from the indemnification requirement. See id. at 55182-84.
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    (i) Designation of entities that may access data. The proposal 
provided that, in addition to the entities identified by the statute, 
the Federal Reserve Banks and the Office of Financial Research 
(``OFR'') may access data.\3\ The proposal also specified factors and 
conditions that the Commission would consider in making future 
determinations regarding entities eligible to access data and the scope 
of such entities' access to data. In that regard the Commission stated 
that it preliminarily expected that such determination orders 
``typically would incorporate conditions that specify the scope of a 
relevant authority's access to data, and that limit this access in a 
manner that reflects the relevant authority's regulatory mandates or 
legal responsibility or authority.'' \4\
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    \3\ See proposed Exchange Act rule 13n-4(b)(9)(ix).
    \4\ See Data Access Proposing Release, 80 FR 55187-88.
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    (ii) Confidentiality condition to data access. To implement the 
statutory confidentiality condition, the proposal provided that there 
must be a memorandum of understanding (``MOU'') or other arrangement 
between the Commission and the recipient of data to address the 
confidentiality of the data provided to the recipient.\5\ The 
Commission stated that it expected this approach would help avoid the 
possibility of uneven and potentially inconsistent application of the 
confidentiality condition.\6\
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    \5\ See proposed Exchange Act rule 13n-4(b)(10).
    \6\ See Data Access Proposing Release, 80 FR 55190.
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    (iii) Notification requirement. The proposal provided that a 
security-based swap data repository could satisfy the statutory 
notification requirement by notifying the Commission of the first data 
access request by an entity, and maintaining a record of subsequent 
requests.\7\
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    \7\ See id. at 55188-89; proposed Exchange Act rule 13n-4(e).
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    (iv) Indemnification exemption. The proposal included an exemption 
from the indemnification requirement. This exemption would have been 
conditioned, in part, on the information provided relating to ``persons 
or activities within the recipient entity's regulatory mandate, or 
legal responsibility or authority.'' \8\
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    \8\ See proposed Exchange Act rule 13n-4(d). The proposal also 
would require the Commission and the recipient of data to enter into 
an MOU or other arrangement to specify the type of information that 
would fall within this regulatory mandate, or legal responsibility 
or authority. See id.
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B. Statutory Amendment

    On December 4, 2015, President Obama signed into law Public Law 
114-94, the Surface Transportation Reauthorization and Reform Act of 
2015. This law, among other things, amended the statutory data access 
provisions by eliminating the indemnification requirement discussed 
above.\9\ The law also revised the data access provisions in two other 
ways.\10\
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    \9\ See Public Law 114-94, sec. 86011(c)(2).
    \10\ In part, the statutory revision clarified that the scope of 
the data access provision applies to security-based swap data, not 
all data maintained by the repository. See Public Law 114-94, sec. 
86011(c)(1)(A) (striking ``all'' and adding ``security-based swap'' 
in the introductory part of Exchange Act section 13(n)(5)(G)). That 
focus on security-based swaps already was incorporated into the 
proposal. See proposed Exchange Act rule 13n-4(b)(9).
    The statutory revision also added the term ``other foreign 
authorities'' to the nonexclusive statutory list of entities that 
the Commission may determine appropriate to access data under these 
provisions. See Public Law 114-94, sec. 86011(c)(1)(B). That change 
is consistent with the proposal, which used the term ``including, 
but not limited to'' in the relevant portion of the rule text 
(preceding the specific references to foreign financial supervisors, 
foreign central banks, and foreign ministries). See proposed 
Exchange Act rule 13n-4(b)(9)(x).
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    The elimination of the indemnification requirement makes 
unnecessary paragraph (d) of proposed rule 13n-4, which would have 
implemented the conditional exemption from the indemnification 
requirement.\11\ The statutory amendments, however, do not affect the 
proposed provisions: (i) Addressing the designation of additional 
entities as being eligible to access data (potentially including the 
Federal Reserve Banks and the OFR); (ii) implementing the 
confidentiality condition to data access; and (iii) implementing the 
statutory notification requirement.
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    \11\ See Data Access Proposing Release, 80 FR at 55211.
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II. Request for Comments

    Commenters are invited to discuss the proposal in light of the 
recent statutory amendments. Commenters particularly are invited to 
address the impact, on the remaining aspects of the proposal, arising 
from the elimination of the proposed indemnification exemption, 
including the exemption's proposed condition limiting access to 
security-based swap data to persons or authorities within a relevant 
authority's regulatory mandate or legal responsibility or authority. 
For example, to what extent should those criteria related to an 
entity's regulatory mandate or legal responsibility and authority be 
used by the Commission as it implements the confidentiality condition 
and/or the Commission's determination authority?
    Commenters further are invited to address whether the use of that 
limitation should vary depending on the type of recipient entity. For 
example, should those criteria be considered exclusively in conjunction 
with recipient authorities not specifically named in the statute, 
including the Federal Reserve Banks and the OFR, or should those 
criteria instead be considered in conjunction with access to data by 
all entities under these provisions? \12\
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    \12\ As noted above, the Commission stated that it preliminarily 
expected that subsequent determination orders under the statute and 
proposed rule ``typically would incorporate conditions that specify 
the scope of a relevant authority's access to data, and that limit 
this access in a manner that reflects the relevant authority's 
regulatory mandates or legal responsibility or authority.''
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    In addition, commenters are requested to address whether the 
proposal should be revised to address the other statutory changes to 
the data access provisions--such as addition of the term ``other

[[Page 3356]]

foreign authorities'' to the list of entities that the Commission may 
determine appropriate to access data. For example, should the 
Commission revise proposed paragraph (b)(9)(x) of rule 13n-4 to 
specifically note that it may determine that ``other foreign 
authorities'' also may access data pursuant to these provisions?
    Commenters are also invited to address the impact of the statutory 
amendments on the Commission's economic analysis.

    By the Commission.

    Dated: January 15, 2016.
Brent J. Fields,
Secretary.
[FR Doc. 2016-01148 Filed 1-20-16; 8:45 am]
BILLING CODE 8011-01-P