Core Principles & Other Requirements for DCMs

ICR 201906-3038-007

OMB: 3038-0052

Federal Form Document

Forms and Documents
Document
Name
Status
Supplementary Document
2019-06-26
Supplementary Document
2019-06-25
Supporting Statement A
2019-06-25
ICR Details
3038-0052 201906-3038-007
Active 201804-3038-006
CFTC
Core Principles & Other Requirements for DCMs
Revision of a currently approved collection   No
Regular
Approved without change 08/28/2019
Retrieve Notice of Action (NOA) 06/26/2019
  Inventory as of this Action Requested Previously Approved
08/31/2022 36 Months From Approved 05/31/2021
98 0 105
6,853 0 7,358
0 0 0

In January 2018, the Commission adopted regulation 9.11(b)(3)(ii) requiring a designated contract market (DCM) or swap execution facility (SEF) (collectively, “exchange”) to include two additional elements in the disciplinary or access denial notice action provided to the National Futures Association. First, an exchange must include the type of product (as applicable) involved in the adverse action. Requiring an exchange to provide this information in the disciplinary or access denial notice will provide the Commission, market participants, the public, and other exchanges with greater transparency concerning where market abuses originate and whether the abuses are concentrated among certain product types. Second, an exchange must indicate in its notice of disciplinary or access denial actions whether the violation underlying the notice resulted in financial harm to any customers. The Commission believes that the inclusion of customer harm is essential because it cannot effectively perform its regulatory and oversight functions without knowledge of those instances in which brokers violate their fiduciary duty to customers by taking advantage of customer orders and engaging in fraudulent activity. The Commission concluded that the additional burden for an exchange to add the two additional elements in the contents of the disciplinary or access denial notice is de minimis and will not change the burden hours for the collection. In addition, The Commission has recently amended its regulation 1.52 to revise the scope and potential frequency of a third-party expert’s evaluation of SROs’ financial surveillance programs. The evaluation report requirement is a portion of the existing information collection of requirements for SROs under Commission regulation 1.52, including Designated Contract Markets and the National Futures Association. The Commission is eliminating the requirement that the examinations expert must review the SRO’s ongoing application of its supervisory program during periodic reviews and the analysis of the supervisory program’s design to detect material weaknesses in internal controls during both periodic reviews and the initial review prior to the program’s initial use. The Commission also is revising the frequency of when an SRO must engage an examinations expert. The changes to the examinations expert reviews impact the resulting expert reports information collection burden. The information collection is necessary to enhance the ability of the Commission and the designated self-regulatory organization to identify problematic financial matters in time to avoid market disruptions when an FCM may fail, particularly with respect to the tie-up of customer funds that may result.

US Code: 7 USC 6, 6a, 6c, 6d, 6f, 6g, 6i, 6j Name of Law: CEA
   US Code: 7 USC 6k, 6l, 6m, 6n 6o 6p 6r 6s Name of Law: CEA
   US Code: 7 USC 7, 7a-s, 7b, 7b-1, 7b-3 Name of Law: CEA
   US Code: 7 USC 8, 9, 10a, 12, 12a, 12c, 15 Name of Law: CEA
   US Code: 7 USC 13a, 13a-1, 15, 16, 16a, 19 Name of Law: CEA
   US Code: 7 USC 21, 23, 24 Name of Law: CEA
   US Code: 7 USC 1a, 2 Name of Law: CEA
  
None

Not associated with rulemaking

  84 FR 13008 04/03/2019
84 FR 30096 06/26/2019
No

  Total Approved Previously Approved Change Due to New Statute Change Due to Agency Discretion Change Due to Adjustment in Estimate Change Due to Potential Violation of the PRA
Annual Number of Responses 98 105 0 -7 0 0
Annual Time Burden (Hours) 6,853 7,358 0 -505 0 0
Annual Cost Burden (Dollars) 0 0 0 0 0 0
No
Yes
Changing Regulations
The Commission amended certain portions of Regulation 1.52 to reduce the scope of the third-party examinations expert’s review and permit a longer period of minimum engagement of the examinations expert by certain DCMs. These amendments reduce slightly the current burden hour estimate from 50 hours per respondent on an annual basis to 49 hours. Changes in the Final rules adopted herein only pertain to IC: Enhancing Protections Afforded Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations and relate only to amendments to Regulation 1.52. Additionally, unrelated to the 2018 NPRM, the number of registered DCMs has decreased from 15 to 14, which will also decrease the total aggregate burden hours across all registered DCMs from 7,357.5 burden hours to 6,853 burden hours

$0
No
    No
    No
No
Yes
No
Uncollected
Herminio Castro 202 418-6705 hcastro@cftc.gov

  No

On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
 
 
 
 
 
 
 
    (i) Why the information is being collected;
    (ii) Use of information;
    (iii) Burden estimate;
    (iv) Nature of response (voluntary, required for a benefit, or mandatory);
    (v) Nature and extent of confidentiality; and
    (vi) Need to display currently valid OMB control number;
 
 
 
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
06/26/2019


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