Supporting statement for remainder of regulations under 0086

SUPPORTING STATEMENT FOR NEW AND

REVISED INFORMATION COLLECTIONS

OMB CONTROL NUMBER 3038-0086

Swap Data Repositories: Registration and Regulatory Requirements

Justification

1. Explain the circumstances that make the collection of information necessary. Identify any legal or administrative requirements that necessitate the collection. Attach a copy of the appropriate section of each statute and regulation mandating or authorizing the collection of information.

Section 21 of the Commodity Exchange Act (“CEA”) requires that the Commission establish certain standards for the registration and governance (“SDRs”), including regulations regarding SDRs reporting data to the Commission and to the public. The Commission established these regulations in Part 49 of the Commission’s regulations.

The Commission is adopting amendments to Part 49 to streamline reporting requirements and clarify and update certain provisions. The Commission is amending Information Collection 3038-0086 to account for any additions and revisions. As explained further below, most information collections discussed in existing Information Collection 3038-0086 are being amended by a separate release, and the Commission is not revising the estimated burdens associated with those collections in this release.

The Commission is amending Part 49 of the Commission’s regulations in order to improve the quality of swap data and to streamline regulatory requirements governing data reporting. The modified collections will affect SDRs that collect swap data for the Commission to perform its regulatory duties of risk monitoring and ensuring compliance with its rules, among other things. The information sent to the Commission is necessary for the Commission to ensure that SDR data is stored and sent to the Commission properly when an SDR withdraws its registration. In addition, the information sent to SEFs, DCMs, and reporting counterparties by SDRs will enable these entities to ensure they have reported SDR data to SDRs in accordance with the Commission’s regulations. Without accurate reporting of SDR data as set forth in the Commission’s regulations, the Commission would be unable to fulfill its regulatory mandate of monitoring systemic risk.

The Commission is adding or modifying information collections for the following regulations:

• Regulation 49.4(a)(1)(iv) requires that a request to withdraw specify, among other items, a statement that the custodial SDR is authorized to make such data and records available in accordance with § 1.44. The Commission is removing this requirement from 49.4.

• Regulation 49.4(a)(2) requires that prior to filing a request to withdraw, a registered SDR shall file an amended Form SDR to update any inaccurate information. The Commission is eliminating the requirement for SDRs to file an amended Form SDR prior to filing a request to withdraw.

• The Commission is adding new § 49.4(a)(2) to require SDRs to execute an agreement with the custodial SDR governing the custody of the withdrawing SDR’s data and records prior to filing a request to withdraw with the Commission.

• Regulation 49.10(a) requires SDRs to accept and promptly record all swap data. The Commission is amending § 49.10(a) to further specify that SDRs must send validation acceptance and rejection messages to SEFs, DCMs, and reporting counterparties after validating SDR data.

2. Indicate how, by whom, and for what purpose the data would be used. Except for a new collection, indicate the actual use the agency has made of the information received from the current collection.

The information sent to the Commission in § 49.4 is necessary for the Commission to ensure that SDR data is stored and sent to the Commission properly when an SDR withdraws its registration. The information sent to SEFs, DCMs, reporting counterparties, and third-party service providers by SDRs as required by § 49.10 will be used by these entities to ensure they have reported SDR data to SDRs in accordance with the Commission’s regulations.

3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g. permitting electronic submission of responses, and the basis for the decision for adopting this means of collection. Also describe any consideration of using information technology to reduce burden.

All of the information collections within Information Collection 3038-0086 involve the use of electronic collection protocols. All required data submissions to the Commission must be electronic.

4. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item 2 above.

The information collected pursuant to Part 49 of the Commission’s regulations is not already collected by the Commission or other regulator for any other purpose and is not publicly available through another source.

5. If the collection of information involves small business or other small entities (Item 5 of OMB Form 83-I), describe the methods used to minimize burden.

This collection of information will not involve any small business or other small entities. The Commission has previously established that the SDRs that will be affected by this collection are not small entities.

6. Describe the consequence to the Federal Program or policy activities if the collection were conducted less frequently as well as any technical or legal obstacles to reducing burden.

Without accurate reporting of SDR data as set forth in the Commission’s regulations, the Commission would be unable to fulfill its regulatory mandate of monitoring systemic risk.

7. Explain any special circumstances that require the collection to be conducted in a manner:

• requiring respondents to report information to the agency more often than quarterly;

SDR withdrawals are not a regular or common occurrence. However, SDR validation of swap data, and the associated rejection and acceptance messages that § 49.10 requires SDRs to send to entities submitting data, will be more often than quarterly.

• requiring respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it:

This does not apply.

• requiring respondents to submit more than an original and two copies of any document;

Not applicable, respondents are not required to submit more than an original and two copies of any document.

• requiring respondents to retain records other than health, medical, government contract, grant-in-aid, or tax records, for more than three years;

The amendments to Part 49 will not modify Information Collection 3038-0086 in regards to recordkeeping requirements.

• in connection with a statistical survey, that is not designed to produce valid and reliable results that can be generalized to the universe of study;

Not applicable, the collection is not connected or related to any statistical survey.

• requiring the use of a statistical data classification that has not been reviewed and approved by OMB;

Not applicable, the collection does not involve the use of any statistical data classification.

• that includes a pledge of confidentiality that is not supported by authority established in statue or regulation, that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily impedes sharing of data with other agencies for compatible confidential use; or

Not applicable, the collection does not include any pledges of confidentiality that are not supported by authority established in statute or regulation.

• The collection does not involve any pledge of confidentiality, requiring respondents to submit proprietary trade secrets, or other confidential information unless the agency can demonstrate that it has instituted procedures to protect the information's confidentiality to the extent permitted by law.

All requirements in the collection to submit proprietary or other confidential information are subject to the Commission’s existing statutory, regulatory, and procedural requirements to protect the confidentiality of such information. This includes the requirements of sections 8(a) and 21(c)(6) of the Act as well as in §§ 43.4, 49.16, 49.17, and 49.18, and parts 145 and 147 of the Commission’s regulations.

8. If applicable, provide a copy and identify the date and page number of publication in the Federal Register of the agency's notice required by 5 CFR 1320.8(d), soliciting comments on the information collection prior to submission to OMB. Summarize public comments received in response to that notice and describe actions taken by the agency in response to these comments. Specifically address comments received on cost and hour burden.

As part of the rulemaking process, the proposed amendments were published in the Federal Register at 85 FR 21578 (Apr. 17, 2020). Thus, members of the public, including respondents, have been provided an opportunity to comment on the rule and related matters, including issues and other paperwork burdens. The Commission did not receive any comments on the information collection.

9. Explain any decision to provide any payment or gift to respondents, other than remuneration of contractors or grantees.

Not applicable, no payment or gift will be provided to respondents.

10. Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulations, or agency policy.

The Commission does not provide respondents with an assurance of confidentiality beyond that provided by applicable law. All requirements in the collection to submit proprietary or other confidential information are subject to the Commission’s existing statutory, regulatory, and procedural requirements to protect the confidentiality of such information. This includes the requirements of sections 8(a) and 21(c)(6) of the Act as well as in §§ 43.4, 49.16, 49.17, and 49.18, and parts 145 and 147 of the Commission’s regulations.

11. Provide additional justification for any questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private. This justification should include the reasons why the agency considers the questions necessary, the specific uses to be made of the information, the explanation to be given to persons from whom the information is requested, and any steps to be taken to obtain their consent.

Not applicable, the collection does not involve any questions of a sensitive nature, as the term is used in this question.

12. Provide estimates of the hour burden of the collection of information. The Statement should:

• Indicate the number of respondents, frequency of response, annual hour burden and an explanation of how the burden was estimated. Unless directed to do so, agencies should not conduct special surveys to obtain information on which to base hour burden estimates. Consultation with a sample (fewer than ten) of potential respondents is desirable. If the hour burden on respondents is expected to vary widely because of differences in activity, size or complexity, show the range of estimated hour burden, and explain the reasons for the variance. Generally, estimates should not include burden hours for customary and usual business practices.

• If the request for approval covers more than one form, provide separate hour burden estimates for each form and aggregate the hour burdens in Item 13 of OMB Form 83-I.

• Provide estimates of annualized cost to respondents for the hours burdens for collections of information, identifying and using appropriate wage rate categories. The cost of contracting out or paying outside parties for information collection activities should not be included here. Instead, this cost should be included in Item 13.

Please see Attachment A for the estimated hour burden adjustments to the collections of information discussed in this supporting statement related to 85 Fed. Reg. 75503, (Nov. 25, 2020), which finalized amendments to § 49.4 and § 49.10 of the Commission Regulations.

As an initial matter, the Commission is separately adopting amendments to regulations that will impact the collections of information under OMB 3038-0086. The Commission proposed these amendments in a separate release: Certain Swap Data Repository and Data Reporting Requirements, 84 Fed. Reg. 21044, May 13, 2019 (the “May 2019 release”). The Commission re-opened the comment period for that proposal to align with the comment period for the proposal associated with this supporting statement (the “April 2020 release”) (85 Fed. Reg. 21578, Apr. 17, 2020.). The April 2020 release proposed additional amendments to regulations that would impact the collections of information under OMB 3038-0086.

The two rulemakings are related: the May 2019 release proposed amendments to most of the regulations in part 49 and created new regulations in part 49, while the April 2020 release proposed amendments to § 49.4 and § 49.10. Commenters were able to comment on both releases at the same time so they could comment on all of the amendments to the part 49 regulations proposed in both releases. As intended, the Commission finalized the rulemakings together. The May 19 release was finalized on Nov. 25, 2020, 85 Fed. Reg. 75601 . The April 2020 release (85 Fed. Reg. 21578, Apr. 17, 2020) was finalized on Nov. 25, 2020, 85 Fed. Reg. 75503. Both discuss the Commission’s adoption of changes to OMB 3038-0086. The final rule for 85 Fed. Reg. 75503 finalized amendments to collections in § 49.4 and § 49.10. The final rule for 85 Fed. Reg. 75601 finalized amendments to collections in §§ 49.3, 49.5, 49.9, 49.10, 49.11, 49.12, 49.26, 49.28, and 49.29. In addition to changes to OMB 3038-0086 due to amendments to the regulations, OMB collection 3038-0086 has been updated to reflect the current estimated number of entities impacted by the collection requirements. The total updated burden requirements for OMB 3038-0086, taking into account the changes proposed and adopted in the two rulemakings, are 4,809,003,137‬ total annual number of responses; 189,680 total burden hours; $43,338 annual cost burden. Below is a discussion of the specific burden and costs associated with those changes adopted in 85 Fed. Reg. 75503. ¹

In the April 2020 release, as noted above, the Commission did not propose any amendments to the regulations in part 49 outside of the amendments to § 49.4 and § 49.10. Since the Commission finalized the majority of the collections of information in OMB 3038-0086 in 85 Fed. Reg. 75601, Nov. 25,2020 , Attachment A shows only the adjustment to the burden estimates for OMB 3038-0086 resulting from the amendments to § 49.4 and § 49.10 that were proposed in the April 2020 release. As shown in Attachment A, the Commission estimates the amendments to § 49.4 and § 49.10 will result in an additional 9,000,001 responses added to the total number of responses, and an additional 4,990 burden hours with a total additional cost of $360,428 to OMB 3038-0086. More detail regarding the burden estimates for each regulatory requirement affected is provided below.

In calculating this cost estimate, the Commission estimates the appropriate wage rate based on salary information for the securities industry compiled by the Department of Labor’s Bureau of Labor Statistics (“BLS”). Commission staff arrived at an hourly rate of $72.23 using figures from a weighted average of salaries and bonuses across different professions contained in the most recent BLS Occupational Employment and Wages Report (May 2018) multiplied by 1.3 to account for overhead and other benefits. The Commission estimated appropriate wage rate is a weighted national average of mean hourly wages for the following occupations (and their relative weight): “computer programmer – industry: securities, commodity contracts, and other financial investment and related activities” (50% weight); “compliance officer – industry: securities, commodity contracts, and other financial investment and related activities” (25%); and “lawyer – legal services” (25%). Commission staff chose this methodology to account for the variance in skill sets that may be used to accomplish the collection of information.

Each of the amendments to the information collections relating to § 49.4 and § 49.10 is discussed below.

• Regulation 49.4(a)(1)(iv) currently requires that a request to withdraw from SDR registration specify, among other items, a statement that the custodial SDR is authorized to make such data and records available in accordance with § 1.44. The Commission is removing this requirement from 49.4(a)(1)(iv).

• Regulation 49.4(a)(2) requires that prior to filing a request to withdraw, a registered SDR shall file an amended Form SDR to update any inaccurate information. The Commission is eliminating the requirement for SDRs to file an amended Form SDR prior to filing a request to withdraw.

• Separately, the Commission is adding new § 49.4(a)(2) to require SDRs to execute an agreement with the custodial SDR governing the custody of the withdrawing SDR’s data and records prior to filing a request to withdraw with the Commission. The Commission had not previously provided a burden estimate for § 49.4. While the Commission is amending § 49.4 to remove the requirement to file a Form SDR upon withdrawal from registration, the Commission is also requiring SDRs to execute custodial agreements with the SDR to which they will be transferring all of their data. This is not expected to result in any net change to the number of reports SDRs are required to file pursuant to § 49.4 (1 report). However, the Commission is now adding an estimate for § 49.4, because it had not done so before. The Commission is estimating that 1 SDR will file a report pursuant to § 49.4, at an estimated 40 hours per report for a total cost of $2,889.20 to the SDR.

• Regulation 49.10(a) requires SDRs to accept and promptly record all swap data. The regulation is further specifying that SDRs must send validation acceptance and rejection messages after validating SDR data. In the proposal, the Commission misstated the current burden estimate for § 49.10 as 5,652,000 messages per SDR respondent, for a total of almost 17,000,000 messages. The correct current estimate for § 49.10 is 2,652,000 messages per SDR. However, the Commission is updating this estimate in the final rulemaking under § 49.10(c) to account for the amendment requiring SDRs to submit new acceptance and rejection messages. The Commission estimates SDRs will each be required to report an additional 3,000,000 messages from the new requirement to submit acceptance and validation messages which, when added to the current estimate of 2,652,000 messages, results in 5,652,000 reports per respondent. The 3,000,000 additional messages for each SDR will add an additional 4,950 burden hours at a cost of $357,538.50 to the current estimate for § 49.10.

13. Provide an estimate of the total annual cost burden to respondents or recordkeepers resulting from the collection of information. (Do not include the cost of any hour burden shown in Items 12 and 14).

• The cost estimate should be split into two components; (a) a total capital and start-up cost component (annualized over its expected useful life) and (b) a total operation and maintenance and purchase of services component. The estimates should take into account costs associated with generating, maintaining, and disclosing or providing the information. Include descriptions of methods used to estimate major costs factors including system and technology acquisition, expected useful life of capital equipment, the discount rate(s), and the time period over which costs will be incurred. Capital and start-up costs include, among other items, preparations for collecting information such as purchasing computers and software, monitoring, sampling, drilling and testing equipment, and record storage facilities.

• If cost estimates are expected to vary widely, agencies should present ranges of cost burdens and explain the reasons for the variance. The cost of purchasing or contracting out information collection services should be a part of this cost burden estimate, agencies may consult with a sample of respondents (fewer than ten), utilize the 60-day pre-OMB submission public comment process and use existing economic or regulatory impact analysis associated with the rulemaking containing the information collection, as appropriate.

• Generally, estimates should not include purchases of equipment or services, or portions thereof, made: (1) prior to October 1, 1995, (2) to achieve regulatory compliance with requirements not associated with the information collection, (3) for reasons other than to provide information or keep records for the government, or (4) as part of customary and usual business or private practices.

The amendments to § 49.10 will require SDRs to send validation acceptance and rejection messages after validating SDR data. This is expected to create costs for SDRs to update systems for sending these messages. The Commission estimates that SDRs will incur a one-time initial burden of 100 hours per entity to modify their systems to adopt the changes described below, for a total estimated hour burden of 300 hours, at a total cost of $21,669 across the SDRs (based on a labor cost of $72.23). The Commission additionally estimates 100 hours per entity annually to perform any needed maintenance or adjustments to reporting systems, for a total estimated hour burden of 300 hours, at a total cost of $21,669 across the SDRs.

The total capital/start-up costs for amended § 49.10 are shown in Attachment B.

14. Provide estimates of the annualized costs to the Federal Government. Also provide a description of the method used to estimate cost, which should include quantification of hours, operational expenses (such as equipment, overhead, printing and support staff), and any other expense that would not have been incurred without this collection of information. Agencies may also aggregate cost estimates from Items 12, 13, and 14 in a single table.

The Commission does not anticipate that the changes will require additional staff time or technology resources beyond what is already dedicated to this collection, as discussed in previous filings related to Information Collection 3038-0086.

15. Explain the reasons for any program changes or adjustments reported in Items 13 or 14 of the OMB Form 83-I.

The Commission is amending Part 49 of the Commission’s regulations in order to improve the quality of swap data and to streamline regulatory requirements governing data reporting. This supporting statement discusses adjustments to burden hours calculations for Information Collection 3038-0086 to account for modified and new burdens associated with the changes to the regulation. The remainder of the collections covered by collection 3038-0086 were finalized at 85 FR 75601, Nov. 25, 2020.

16. For collection of information whose results are planned to be published for statistical use, outline plans for tabulation, statistical analysis, and publication. Provide the time schedule for the entire project, including beginning and ending dates of the collection of information, completion of report, publication dates, and other actions.

Not applicable, the results of this collection of information are not planned to be published for statistical use.

17. If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.

Not applicable, the Commission is not seeking such approval for this publication.

18. Explain each exception to the certification statement identified in Item 19, "Certification for Paperwork Reduction Act Submissions," of OMB Form 83-I.

Not applicable, there are no exceptions.

Attachment A

OMB Control Number 3038-0086

Swap Data Repositories: Registration and Regulatory Requirements

Reporting Burden

1. Regulation(s)	2. Estimated Number of Respondents	3. Estimated Number of Reports by Each Respondent	4. Estimated Average Number of Burden Hours per Response	5. Annual Number of Burden Hours per Respondent (3 x 4)	6. Estimated Average Burden Hour Cost2	7. Total Average Hour Burden Cost Per Respondent (5 x 6)	8. Total Annual Responses (2 x 3)	9. Total Annual No. of Burden Hours (2 x 5)	10. Total Annual Burden Hour Cost of All Responses (2 x 7)
49.4 – Withdrawal from Registration3	1	1	40	40	$72.23	$2,889.20	1	40	$2,889.20
49.10 – Acceptance of Data4	3	3,000,0005	0.00055	1,650	$72.23	$ 119,179.50	9,000,000	4,950	$ 357,538.50
Total Adjustment from the Amendments67							9,000,001	4,990	$ 360,427.7‬0

Attachment B

Capital/Start-Up Costs

Regulation	Capital/Start-Up Costs
49.10	$ 21,669

Operational/Maintenance Costs

Regulation	Operational/Maintenance Costs
49.10	$ 21,669

1 In addition to the changes to 3038-0086 associated with the changes to § 49.4 and § 49.10 adopted in 85 Fed. Reg. 75503, Nov. 25, 2020, which are set out here, the changes to 3038-0086 associated with the changes set out in the May 2019 proposal (84 Fed. Reg. 21044) were finalized in 85 Fed. Reg. 75601, Nov. 25, 2020.

2 As described above in the answer to question 12, the Commission calculated the average wage rate to $72.23.

3 The Commission has not previously provided a burden estimate for § 49.4. While the Commission is amending § 49.4 to remove the requirement to file a Form SDR upon withdrawal from registration, the Commission is also requiring SDRs to execute custodial agreements with the SDR to which they will be transferring all of their data. This is not expected to result in any net change to the number of reports SDRs are required to file pursuant to § 49.4 (1 report). However, the Commission is now adding an estimate for § 49.4, because it had not done so before. The Commission is estimating that 1 SDR will file a report pursuant to § 49.4, at an estimated 40 hours per report for a total cost of $2,889.20 to the SDR.

4 The Commission had previously estimated the burden for § 49.10 as follows: 3 SDRs each annually report 2,652,000 reports at an estimated .00055 hours per report, for a total burden estimate of 7,956,000 responses at 4,376 hours and $316,064 total costs. Attachment A shows the changes to this estimate that are expected to result from the changes to § 49.10 that the Commission is adopting in the final rule.

5 The Commission estimates SDRs will each be required to report an additional 3,000,000 messages from the new requirement to submit acceptance and validation messages. The 3,000,000 additional messages for each SDR will add an additional 4,950 burden hours at a cost of $357,538.50 to the current estimate for § 49.10, as shown above.

6 The Commission is not amending the other regulations in part 49 outside of the amendments to § 49.4 and § 49.10 in the final rule. Since the Commission is not amending the majority of the burden estimates for part 49, the Commission is providing a total of the changes to the burden estimates resulting from the amendments the Commission is adopting to § 49.4 and § 49.10. See Item 12 above for further explanation.

7 In addition to the changes to 3038-0086 associated with the changes to § 49.4 and § 49.10 adopted in 85 Fed. Reg. 75503, which are set out here, the changes to 3038-0086 associated with the changes set out in the May 2019 proposal (84 Fed. Reg. 21044) were finalized in 85 Fed. Reg. 75601.