Supporting_Statement

SUPPORTING STATEMENT FOR NEW AND REVISED INFORMATION COLLECTIONS

OMB CONTROL NUMBER 3038-NEW

Justification

1. Explain the circumstances that make the collection of information necessary. Identify any legal or administrative requirements that necessitate the collection.

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) was enacted.¹ Title VII of the Dodd-Frank Act amends the Commodity Exchange Act (“CEA”)² to establish a comprehensive new regulatory framework for swaps and security-based swaps. Section 727 of the Dodd-Frank Act specifically requires the Commodity Futures Trading Commission (“CFTC” or “Commission”) to establish certain standards for the real-time reporting of swap transaction and pricing data. The Commission is proposing new rules in Part 43 of its regulations that would impose certain recordkeeping and public reporting requirements on the following entities: swap execution facilities (“SEFs”); designated contract markets (“DCMs”); swap data repositories (“SDRs”); major swap participants (“MSPs”); swap dealers (“SDs”); and, to the extent that one exists, a third-party entity that consolidates and disseminates real-time swap transaction and pricing data in real-time (a “third-party service provider”).

This supporting statement concerns new collections of information required by these new regulations. The following new regulations would require collections of information:

• Proposed Section 43.3 provides that for swaps executed on a swap market’s trading platform, a reporting party shall satisfy its reporting requirement by executing such reportable transaction on the swap market. Additionally, proposed Section 43.3 would require a reporting party in an off-facility swap (i.e., MSP, SD, or end user) to report the swap transaction and pricing data to a registered SDR that accepts and publicly disseminates swap transaction and pricing data. Upon receiving the swap transaction and pricing data, the SDR shall publish the data on its Internet web site in accordance with any applicable time delay.

• Proposed Section 43.3 provides that a swap market may satisfy its public dissemination requirement by either sending swap transaction information to a registered SDR that accepts and publicly disseminates swap transaction and pricing data or by sending swap transaction information through a third-party service provider for public dissemination. However, if a swap market sends swap transaction information to a third-party service provider to publicly disseminate such data in real-time, such swap market does not satisfy its requirement under Proposed Section 43.3 until such data is publicly disseminated.

• Proposed Section 43.3 requires that if an SDR has been not been established to accept the swap transaction and pricing data for an off-facility swap, the reporting party to such off facility swap shall satisfy the real time reporting requirement by publicly disseminating such swap transaction and pricing data through a third-party service provider in the same manner that a swap market may report through a third-party service provider.

• Proposed Section 43.3 would require a registered SDR that accepts and public disseminates swap transaction and pricing data in real-time to perform, on an annual basis, an independent review in accordance with established audit procedures and standards of the registered SDR’s security and other system controls for the purposes of ensuring compliance with the requirement in proposed Part 43 are met.

• Proposed Section 43.4 and Appendix A to proposed Part 43 provide the data fields and format for public dissemination. Additionally, proposed Section 43.4 provides that a registered SDR that accepts and public disseminates swap transaction and pricing data in real-time may require reporting parties and swap markets to report to the registered SDR such information that is necessary to match the swap transaction and pricing data that was publicly disseminated in real-time to the data reported to a registered SDR pursuant to Section 2(a)(13)(G) of the Act or to confirm that the parties to a swap have reported in a timely manner pursuant to proposed Section 43.3.

• Proposed Section 43.3 would provide that if an reporting party to a swap becomes aware of an error or omission in the swap transaction and pricing data which it reported to a swap market or real-time disseminator with respect to such swap, either through its own initiative or through notice by the other party to the swap, the reporting party must submit corrected data to the same market or real-time disseminator. If a swap market becomes aware of an error or omission, or receives notification from the reporting party, the swap market shall promptly submit corrected data to the same real-time disseminator.

• Under proposed Section 43.3, any swap market and any registered SDR that accepts and publicly disseminates swap transaction and pricing data in real-time shall retain all data received from reporting parties, including data related to block trades and large notional swaps that is received by a swap market or registered SDR but does not publicly report pursuant to proposed Section 43.4(c), for a period of not less than five years following the time from which the reportable swap transaction is publicly disseminated. Additionally, any SD or MSP shall retain all data relating to a reportable swap transaction that such SD or MSP sends to a swap market or registered SDR that accepts and publicly disseminates such data in real time or that such SD or MSP retains in accordance with proposed Section 43.5.

• Under proposed Section 43.5(g), registered SDRs will be required to determine the appropriate minimum block size for swaps for which these registered SDRs receive data in accordance with Section 2(a)(13)(G) of the CEA. A registered SDR shall set and publish annually the appropriate minimum block size for each swap instrument (existing and any newly listed swaps) as the greater of the numbers derived from two formulas: a distribution test and a multiple test as described in the proposal. Additionally, under proposed Section 43.5(i), the SDR shall set the appropriate minimum block size for newly-listed swaps one month after the registered SDR receives data in accordance with Section 2(a)(13)(G). The registered SDR may set the appropriate minimum block size for newly-listed swaps by placing them in a category of existing swap instrument with an appropriate minimum block size or by creating a new category of swap instrument and performing the calculations described in 43.5(g).
  
  

Estimated numbers of respondents and projected total annual responses and average number of hours per response are provided in Attachment A.

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.

Section 727 and the Commission’s proposal require reporting parties to publish the real-time swap transaction and pricing data to the general public. The Commission does not intend to collect this data. The Commission may, however, use the real-time swap transaction and pricing data in connection with an enforcement action against a reporting party. Additionally, the data reported to the registered SDRs may be used by the CFTC, SEC, Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Farm Credit Administration and Federal Housing Finance Agency, Financial Stability Oversight Council, Securities and Exchange Commission, Department of Justice , and any other person the Commission determines to be appropriate, including foreign financial supervisors, foreign central banks, and foreign ministries as a variable in measuring systematic risk.

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.

This proposal contemplates the sole use of certain electronic collection protocols, such as e-mail and the Internet, for the publication of real-time swap transaction and pricing data. Additionally, the proposal requires reporting parties to maintain all real-time swap transaction and pricing data for access and inspection to the Commission for a period of no less than five years. The proposal does not include a requirement that a reporting party publish or maintain any related information or data on printed paper.

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 type of information required to be collected under the proposed regulations is not currently collected and is not available for public disclosure through any other source. Prior to the adoption of the Dodd-Frank Act, the Commission did not have the authority to require the real-time reporting of swap transaction and pricing data from market participants. There are no existing regulations that could be modified to serve a similar purpose.

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

The Commission has established certain definitions of “small entities” to be used by the Commission in evaluating the impact of its regulations on such entities in accordance with the Regulatory Flexibility Act. None of the entities that are required to publish or accept real-time swap transaction and pricing data under this proposal include 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.

Section 727 of the Dodd-Frank Act provides that the purpose of the real-time reporting requirement is to enhance price discovery for the benefit of the general public. Without the frequency of reporting set forth in the proposed regulations, the general public would not receive swap transaction and pricing data in real-time, and thus, such data would not enhance price discovery as intended by the legislation.

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;

Real-time swap transaction and pricing data is not required to be reported to the Commission.

- 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;

This does not apply.

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

All data related to a reportable swap transaction shall be maintained for a period of not less than five years following the time at which such reportable swap transaction is publicly disseminated. Any swap market and any registered SDR that accepts and publicly disseminates swap transaction and pricing data in real-time shall retain all data that is received from reporting parties for public dissemination.

All time stamps related to block trades or large notional swaps shall be maintained by the swap market and a registered SDR that accepts and publicly disseminates the swap transaction and pricing data for a period of at least five years from the execution of the block trade or large notional swap.

- 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;

This does not apply.

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

This does not apply.

- that includes a pledge of confidentiality that is not supported by authority established in statute 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

This does not apply.

- 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.

Section 8(a) of the CEA provides that, “unless specifically authorized in this Act, the Commission may not publish data and information that would separately disclose the business transactions or market positions of any person and trade secrets or names of customers.” A number of narrow exceptions are set forth in Sections 8(b) and (e) of the CEA permitting the Commission to disclose “Section 8 material” for (i) prior public disclosures, (ii) congressional, administrative and/or judicial proceedings, (iii) other federal departments and agencies, individual states and foreign futures authorities, and (iv) registered entity investigations.

Additionally, Section 2(a)(13)(E)(i) of the CEA provides that the rule promulgated by the Commission shall contain provisions “to ensure such information does not identify the participants[.]” Further Section 2(a)(13)(C)(iii) of the CEA provides “the Commission shall require real-time public reporting for such transactions, in a manner that does not disclose the business transactions and market positions of any person. Accordingly, proposed Part 43 prohibits the disclosure of the names of the parties to a swap transaction when publicly disseminating swap transaction and pricing data in real-time. Additionally, proposed Section 43.4(i) provides that the actual notional amount of a swap will not be disseminated as and anonymity will be provided as transaction sizes become larger. Further, the proposed rules provide that information that would enable other market participants to infer one or more parties to a swap should not be publicly disseminated in order to protect the identities of the parties.

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 C.F.R. 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.

. The Commission is affirmatively seeking comment from the public and federal agencies on the proposed information collection. A copy of the proposed regulation as it appears in the Federal Register (75 FR 76140 12/07/2010), including the explicit solicitation of comment on all aspects of the reporting and recordkeeping burdens imposed, is accompanied with this submission

Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping disclosure, or reporting format (if any, and on the data elements to be recorded, disclosed, or reported.

A joint public roundtable (coordinated with the SEC) was held on September 14, 2010 at the CFTC’s headquarters where representatives from affected sectors of the swap markets were asked questions and were able to provide answers to those questions. Specifically, the September 14 roundtable addressed real-time reporting, data and recordkeeping and SDRs. The public transcript of these roundtable discussions is available on the Commission’s Internet web site at: http://www.cftc.gov/ucm/groups/public/@swaps/documents/file/derivative18sub091410.pdf.

In addition, in advance of the publication of the proposed regulations the Commission solicited general comments from the public on its Internet web site. The Commission did not receive any public comments to the proposed regulations prior to the publication of such regulations in the Federal Register.

Consultation with representatives of those from whom information is to be obtained or those who must compile records should occur at least once every three years—even if the collection of information activity is the same as in prior periods. There may be circumstances that may preclude consultation in a specific situation. These circumstances should be explained.

As part of the rulemaking process, the Commission met with representatives of financial banking firms, risk analysts, attorneys, trade associations, and other regulators. The Commission expects these efforts to continue as swap transaction reporting is implemented following the publication of final rules for the public reporting of real-time swap transaction and pricing data.

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

This question does not apply.

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

See the response to Question 7. Section 8(a) of the CEA generally prohibits the Commission from separately disclosing the “business transactions or market positions of any person and trade secrets or names of customers.” The Commission also has adopted Freedom of Information Act regulations, 17 C.F.R. Part 145 which implements the federal statute set forth in 5 U.S.C. §552, including exemptions to disclosure which permit a federal agency to withhold information prohibited from disclosure by another statute. See 5 U.S.C. § 552(b)(3) and Commission Regulation 145.5(c), 17 C.F.R. § 145(c).

Additionally, Section 2(a)(13)(E)(i) of the CEA provides that the “rule promulgated by the Commission shall contain provisions – (i) to ensure such information does not identify the participants[.]” Further Section 2(a)(13)(C)(iii) of the CEA provides “the Commission shall require real-time public reporting for such transactions, in a manner that does not disclose the business transactions and market positions of any person. Accordingly, proposed Part 43 prohibits the disclosure of the names of the parties to a swap transaction when publicly disseminating swap transaction and pricing data in real-time. Additionally, proposed Section 43.4(i) provides that the actual notional amount of a swap will not be disseminated as and anonymity will be provided as transaction sizes become larger. Further, the proposed rules provide that information that would enable other market participants to infer one or more parties to a swap should not be publicly disseminated in order to protect the identities of the parties.

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.

The regulations covered by the collections do not require the giving of sensitive information, as that term is used in Question 11.

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.

See Attachment A. In calculating the cost figures in Attachment A, the Commission based its calculations on an hourly wage rate³ of $72.75 to comply with the proposed regulations.

Additionally, in determining the burden hours for SDs, MSPs, SEFs, DCMs, end-users, and SDRs (and third party service providers), the Commission differentiated between those persons who are expected to have higher level of swap reporting activity versus those entities or persons who will have lower levels of swap reporting activity. For this purpose, the Commission estimates that “high activity” entities or person are those who process or enter into hundreds or thousands of swaps per week that are subject to the Commission’s jurisdiction. Low activity users would be those who process or enter into substantially fewer swaps than the high activity users. The Commission requests comments on its estimate.

“High activity” persons or entities are MSPs, SDs, DCMs, or SEFs. For purposes of this regulation, the Commission estimates that their average annual burden may be approximately 2,080 hours.⁴ “Low activity” persons or entities are end-users or other non-SD/MSP reporting counterparties who would be required to report. The Commission estimates that their annual burden hours may be approximately 4 hours for reporting and 2 hours for recordkeeping. This estimate is based on both the lower levels of activity end-users are anticipated to engage in and that end-users will hire or contract out to another entity/law firm to comply with this regulation.

Additionally, SDRs and third party service providers will be required to be open and operating 24 hours a day. In light of that expectation, the Commission estimates the burden hours associated with their public dissemination duties to be 6,900 burden hours annually.

To determine the total cost imposed by this regulation, the Commission summed the appropriate estimated aggregate total cost from the reporting and public dissemination table with the total aggregate cost to perform the recordkeeping function in the “Recordkeeping” table and total aggregate cost to calculate and publish the appropriate minimum block size by an SDR as listed in the “Determination of Appropriate Minimum Block Size” table. The estimated total cost imposed by this regulation is: $ 153,394,252.50.⁵

13. Provide an estimate of the total annual cost burden to respondents or record keepers 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.

See Attachment A.

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 will have the following costs relating to the information collections required by proposed Part 43 of the Commission’s regulations: (1) costs relating to the need of Commission staff to review and analyze the collected documents and information; (2) costs relating to the technology that must be set up and maintained by the Commission to receive and process the information collected.

With respect to Commission staff analyzing and reviewing the collected data/information, existing staff may be used to some extent to perform this function. However, Commission staff estimates that at least 5-10 new employees will need to be hired and be dedicated full-time to analysis of the information/data being collected. The estimated annual cost to the Commission per new hire is $120,000.⁶ Therefore, the total annual aggregate cost to the Commission is estimated to be between $600,000 and $1,200,000.

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With respect to the technology necessary for the Commission to receive and process the information collected, Commission staff estimates the cost of this technology to be between $4 million and $7 million annually.⁷

Therefore, the total cost (new staff plus technology) is estimated to be between $4,600,000.00 and $8,200,000.00 annually.

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

These are new collections and the question, therefore, this question does not apply.

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.

This question does not apply.

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.

This question does not apply.

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

No exceptions exist.

Attachment A

Real-time Public Reporting under Section 727 of the Dodd-Frank Act

Estimated Annual Hour and Cost Burden of the Collection of Information

Reporting and Public Dissemination

Est’d # of Covered Entities (a)8	Est’d Avg. # of Hrs. to Report per entity (b)9	Est’d Total Annual Burden Hrs. (a)x(b)	Est’d Cost for Burden Hours ((a)x(b)) x$72.75	Est’d Capital and Start-up Costs per entity ($)10	Useful Life (years)	Capital Start up cost annualized over useful life per entity	Est’d Avg. Total Operation-al Cost per year per entity ($)11	Est’d Annual Total Cost per entity ($)	Estimated aggregate annual cost for Reporting or Public Dissemination ($)
15 SDRs	6,90012	103,500	$7,529,625	$300,000	6	$50,000	$150,000	$200,000	$10,529,625
50 MSPs	2,080	104,000	$7,566,000	$300,000	6	$50,000	$150,000	$200,000	$17,566,000
250 SDs	2,080	520,000	$37,830,000	$300,000	6	$50,000	$150,000	$200,000	$87,830,000
40 SEFs	2,080	83,200	$6,052,800	$300,000	6	$50,000	$150,000	$200,000	$14,052,800
17DCMs13	2,080	35,360	$2,572,440	$300,000	6	$50,000	$150,000	$200,000	$5,972,440
15 Third Party service provider	6,900	103,500	$7,529,625.00	$300,000	6	$50,000	$150,000	$200,000	$10,529,626
1,500 End-Users14	4	6,000	$436,500.00	N/A	N/A	N/A	N/A	$2,00015	$4,036,500.00

Estimated Total Annual Burden Hours: 955,560

Real-time Public Reporting under Section 727 of the Dodd-Frank Act

Estimated Annual Hour and Cost Burden of the Collection of Information

Recordkeeping

Est’d # of Covered Entities (a)16	Est’d Avg. # of Hrs. to Report per entity (b)	Est’d Total Annual Burden Hrs. (a)x(b)	Total Aggregate cost to perform recordkeeping function (x $72.75)
15 SDRs	250	3,750	$ 272,812.5
50 MSPs17	NA	NA	NA
250 SDs	NA	NA	NA
40 SEFs	250	10,000	$727,500
1718 DCMs	250	18,750	$1,364,062.5
15 Third Party Service Providers	250	3,750	$ 272,812.50
1, 500 End-Users	2	3,000	$ 218,250

Estimated Total Annual Burden Hours: 39,250

Real-time Public Reporting under Section 727 of the Dodd-Frank Act

Estimated Annual Hour and Cost Burden of the Collection of Information

Determination of Appropriate Minimum Block Size

Est’d # of Covered Entities (a)19	Est’d Avg. # of Hrs. to Report per entity (b)	Est’d Total Annual Burden Hrs. (a)x(b)	Total Aggregate cost to perform recordkeeping function (x $72.75)
15 SDRs	20	300	$ 21,825.00

Estimated Total Annual Burden Hours: 300 annual burden hours

1 See Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010).

2 7 U.S.C. § 1 et seq.

3 In arriving at a wage rate for the hourly costs imposed, Commission staff used the Management & Professional Earnings in the Securities Industry Report, published in 2010 by the Securities Industry and Financial Markets Associations (2010 Report). The wage rate used is a composite (blended) wage rate by averaging the mean annual salaries of an Assistant/Associate General Counsel, an Assistant Compliance Director, and a Programmer (Senior) as published in the 2010 report and dividing that figure by 2000 annual working hours to arrive at the hourly rate of $72.75.

4 The Commission estimated 2,080 hours by assuming that a significant number of SEFs, DCMs, MSP, and SDs will dedicate the equivalent of least one full-time employee to ensuring compliance with the reporting obligations of Regulation 45.3 (2,080 hours = 52 weeks × 5 days × 8 hours). The Commission believes that this is a reasonable assumption due to the volume of swap transactions that will be processed by these entities, the varied nature of the information required to be reported by Regulation 43.3 and 43.4, and the frequency (daily) with which some reports must be made. The Commission has requested comment on its estimate.

5 $ 153,394,252.50 (Total) = $ 10,824,262.50 (SDRs) + $17,566,000.00 (MSPs, excluding recordkeeping burden) + $87,830,000.00 (SDs excluding recordkeeping burden) + $14,780,300.00 (SEFs) + $7,336,502.5 (DCMs) + $10,802,437.50 (Third Party service providers) + $4,254,750.00 (End-Users).

6 This figure is a composite of the salaries for economists (Grade 11-13) and attorneys (Grade 11-14) in the Commission’s Division of Market Oversight. In obtaining the composite, Commission staff used the CFTC 2010 Washington Pay Chart (with adjusted locality pay).

7 This number was obtained in consultation with CFTC’s Information Technology staff.

8 For purposes of the Paperwork Reduction Act, the Commission estimates that there would be 15 SDRs, 50 MSPs, 250 SDs, 40 SEFs, and 1,000 end users who would annually be subject to the reporting and recordkeeping requirements of proposed Part 43.  Because the Commission has not regulated the swap market, it has not collected data relevant to this estimate. Therefore, the Commission requests comment on this estimate.

9 Estimates exclude hours devoted to customary and usual business practices. Because the Commission has not regulated the swap market, it has not collected data relevant to this estimate. Therefore, the Commission requests comment on this estimate

10 The capital and start up cost for proposed Part 43’s requirements for high activity respondents was estimated as 5% of the entities’ estimated average total capital and start up cost, $6 million. The costs for proposed Part 43’s requirements for end-users is estimated to be a flat $2,000 because end-users will outsource almost the entirety of their responsibilities as it related to this regulation. The estimated cost for outside legal services as it relates to this regulation is $400 per hour.

11 The Estimated Average Total Operational Cost Per Year Per Entity was estimated to be 50% of the capital and start up cost.

12 Registered SDRs that accept and publicly disseminate swap transaction and pricing data in real shall maintain hours of operation to receive and publicly disseminate swap transaction and pricing data at all times, twenty-four hours a day, with some leeway allowed for closing due to system maintenance.

13 As of October 18, 2010. See http://services.cftc.gov/SIRT/SIRT.aspx?Topic=TradingOrganizations&implicit=true&type=DCM&CustomColumnDisplay=TTTTTTT.

14 This is the estimated number of end users and other non-SD/MSP counterparties who would be required to report in a given year. Only one party to a swap is required to report, typically an SD or a MSP as determined by proposed Section 43.3. The Commission has requested comment on this estimate.

15 This estimate is based on the expectation that end users who will be required to report swap data will contract with another entity to report the swap transaction and pricing data to the appropriate registered SDR or, if no registered SDR is available, to the third-party service provider.

16 For purposes of the Paperwork Reduction Act, the Commission estimates that there would be 15 SDRs, 50 MSPs, 250 SDs, 40 SEFs, and 1,000 end users who would annually be subject to the reporting and recordkeeping requirements of proposed Part 43.  Because the Commission has not regulated the swap market, it has not collected data relevant to this estimate. Therefore, the Commission requests comment on this estimate

17 The Commission addresses the recordkeeping requirements of SDs and MSPs in a separate, but related rulemaking relating to its internal business conduct standards of these entities as part of the Commission’s overall rulemaking initiative implementing the Dodd-Frank Act.

18 As of October 18, 2010. See http://services.cftc.gov/SIRT/SIRT.aspx?Topic=TradingOrganizations&implicit=true&type=DCM&CustomColumnDisplay=TTTTTTT.

19 For purposes of the Paperwork Reduction Act, the Commission estimates that there would be 15 SDRs, 50 MSPs, 250 SDs, 40 SEFs, and 1,000 end users who would annually be subject to the reporting and recordkeeping requirements of proposed Part 43.  Because the Commission has not regulated the swap market, it has not collected data relevant to this estimate. Therefore, the Commission requests comment on this estimate