60-day FRN (Proposed Rulel)

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Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Proposed Rules

COMMODITY FUTURES TRADING
COMMISSION
17 CFR Part 16
RIN 3038–AC63

Account Ownership and Control
Report; Withdrawal
Commodity Futures Trading
Commission (‘‘Commission’’).
ACTION: Proposed rule; withdrawal.
AGENCY:

On July 19, 2010, the
Commission published for public
comment a Notice of Proposed
Rulemaking that proposed to collect
certain account ownership and control
information for all trading accounts
active on U.S. futures exchanges and
other reporting entities (‘‘OCR NPRM’’).
After considering all comments received
in response to the OCR NPRM, the
Commission is withdrawing the OCR
NPRM and instead pursuing the
collection of account ownership and
control information through a separate
proposed rulemaking published today
elsewhere in the notice section of the
Federal Register.
DATES: Effective July 26, 2012, the
proposed rule published July 19, 2010,
at 75 FR 41775, is withdrawn.
FOR FURTHER INFORMATION CONTACT:
Sebastian Pujol Schott, Associate
Director, at 202–418–5641 or
[email protected]; or Cody J. Alvarez,
Attorney Advisor, at 202–418–5404 or
[email protected]; Division of Market
Oversight, Commodity Futures Trading
Commission, Three Lafayette Centre,
1155 21st Street NW., Washington, DC
20581.
SUPPLEMENTARY INFORMATION: On July
19, 2010, the Commission published the
OCR NPRM,1 which provided for the
collection of trading account
information via an account ownership
and control report (‘‘OCR’’).2 In
addition, the OCR NPRM sought public
comment and provided for a public
roundtable meeting during the 60-day
comment period.3 The staff-led public
roundtable was held September 16,
2010.4
SUMMARY:

1 75

FR 41775 (July 19, 2010).
July 2, 2009, prior to the publication of the
OCR NPRM, the Commission published an
Advanced Notice of Proposed Rulemaking
(‘‘Advanced Notice’’). In the Advanced Notice the
Commission proposed to collect certain ownership,
control, and related information for all trading
accounts active on U.S. futures exchanges. See 74
FR 31642 (July 2, 2009).
3 The comment period deadline was extended
from September 17, 2010 to October 7, 2010 in
order to give interested parties time to prepare
comments on matters discussed at the roundtable
meeting. See 75 FR 54801 (September 9, 2010).
4 75 FR 54802 (September 9, 2010).

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The Commission received eight
comment letters from fourteen
interested parties in response to the
OCR NPRM and the public roundtable.5
A number of commenters raised
concerns regarding the costs they were
likely to incur as a result of the OCR.
For example, designated contract market
group stated in its comment letter that
‘‘the Commission’s proposed OCR will
result in very substantial capital and
human resource costs being incurred by
all [r]eporting [e]ntities on a one-time
and on-going basis.’’ 6 Many
commenters argued that certain OCR
data points would be difficult to collect.
For example, an industry association
representing numerous large futures
commission merchants (‘‘FCMs’’) stated
that FCMs would have difficulty
providing date of birth information
because ‘‘[a]n FCM generally does not
record the date of birth of a customer or
account controller.’’ 7 Many comment
letters also included alternative
recommendations for proceeding with
the development of the OCR.8
In light of the comments received and
the Commission’s intention to collect
trading account ownership and control
information through a separate
proposed rulemaking, the Commission
has determined to withdraw the OCR
NPRM. Concurrent with this
withdrawal, the Commission is
publishing elsewhere in this issue of the
Federal Register a separate proposed
rule that incorporates many of the OCR
NPRM comments.
Issued in Washington, DC, on June 27,
2012 by the Commission.
David A. Stawick,
Secretary of the Commission.
[FR Doc. 2012–16178 Filed 7–25–12; 8:45 am]
BILLING CODE P
5 On December 23, 2010 and March 22, 2011, the
Commission received supplemental comment
letters from the Futures Industry Association
(‘‘FIA’’). All OCR NPRM comment letters,
supplemental comment letters, ex parte
communications summaries, and a transcript of the
public roundtable are available at: http://
comments.cftc.gov/PublicComments/
CommentList.aspx?id=755.
6 CME Group Inc. comment letter on behalf of the
Chicago Mercantile Exchange, Inc., the Board of
Trade of the City of Chicago, Inc., the New York
Mercantile Exchange, Inc., and the Commodity
Exchange, Inc. (collectively ‘‘CME’’) dated October
7, 2010 at 3.
7 FIA Comment Letter dated October 7, 2010 at
15.
8 See CME Comment Letter dated October 7, 2010
at 4 and FIA Comment Letter dated October 7, 2010
at 7. See generally FIA Supplemental Comment
Letter dated December 23, 2010 and FIA
Supplemental Comment Letter dated March 22,
2011.

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COMMODITY FUTURES TRADING
COMMISSION
17 CFR Parts 15, 17, 18, and 20
RIN 3038–AD31

Ownership and Control Reports,
Forms 102/102S, 40/40S, and 71
Commodity Futures Trading
Commission.
ACTION: Notice of proposed rulemaking
(‘‘Notice’’).
AGENCY:

The Commodity Futures
Trading Commission (‘‘Commission’’ or
‘‘CFTC’’) is proposing new rules and
related forms to enhance its
identification of futures and swap
market participants. The proposed rules
would leverage the Commission’s
existing position and transaction
reporting programs by requiring the
electronic submission of trader
identification and market participant
data on amended Forms 102 and 40, and
on new Form 71. The proposed rules
also incorporate a revised approach to
the Commission’s previous initiative to
collect ownership and control
information, through a dedicated
ownership and control report (‘‘OCR’’),
for trading accounts active on reporting
markets that are designated contract
markets or swap execution facilities.
The Commission welcomes public
comment on all aspects of its proposal.
DATES: Comments must be received on
or before September 24, 2012.
ADDRESSES: You may submit comments,
identified by RIN number 3038–AD31,
by any of the following methods:
• Agency Web site, via its Comments
Online process: http://
comments.cftc.gov. Follow the
instructions for submitting comments
through the Web site.
• Mail: David A. Stawick, Secretary of
the Commission, Commodity Futures
Trading Commission, Three Lafayette
Centre, 1155 21st Street NW.,
Washington, DC 20581.
• Courier: Same as mail above.
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
Please submit your comments using
only one method.
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 CFTC
to consider information that you believe
is exempt from disclosure under the
Freedom of Information Act, a petition
SUMMARY:

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for confidential treatment of the exempt
information may be submitted according
to the procedures established in § 145.9
of the CFTC’s regulations.1
The CFTC reserves the right, but shall
have no obligation, to review, prescreen, 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 this
Notice will be retained in the public
comment file and will be considered as
required under the Administrative
Procedure Act and other applicable
laws, and may be accessible under the
Freedom of Information Act.
FOR FURTHER INFORMATION CONTACT:
Sebastian Pujol Schott, Associate
Director, Division of Market Oversight
(‘‘DMO’’), at 202–418–5641 or
[email protected]; Cody J. Alvarez, Attorney
Advisor, DMO, at 202–418–5404 or
[email protected]; Mark Schlegel,
Attorney Advisor, DMO, at 202–418–
5055 or [email protected]; or James
Outen, Industry Economist, DMO, at
202–418–5710 or [email protected];
Commodity Futures Trading
Commission, Three Lafayette Centre,
1155 21st Street NW., Washington, DC
20581.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Background
B. Benefits Derived From the Proposed
Rules
II. Statutory Framework for Position
Reporting and Trader and Account
Identification
III. Existing and Previously Proposed Trader
and Account Identification Programs
A. Futures Large Trader Reporting—
Existing Forms 102 and 40
i. Identification of Special Accounts—
Existing Form 102
ii. Statement of Reporting Trader—Existing
Form 40
B. Large Trader Reporting for Physical
Commodity Swaps—102S and 40S
Filings
C. Proposed OCR
i. OCR Advanced Notice
ii. OCR NPRM
iii. OCR NPRM Comment Summary
IV. Forms
A. Position Triggered 102
i. Special Accounts and Reportable
Positions
ii. 102A Form Requirements
iii. Timing of 102A Reporting
iv. 102A Change Updates and Refresh
Updates
B. Volume Triggered 102
i. 102B Form Requirements
ii. Timing of 102B Reporting
iii. 102B Change Updates and Refresh
Updates
1 17

CFR 145.9.

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C. 102S
i. 102S Form Requirements
ii. 102S Change Updates and Refresh
Updates
D. Form 71
E. New Form 40
V. Data Submission Standards and
Procedures
VI. Review and Summary of Regulatory
Changes To Implement New and
Amended Forms
A. Part 15
B. Part 17
C. Part 18
D. Part 20
VII. Questions and Request for Comment
VIII. Related Matters
A. Cost Benefit Considerations
B. Regulatory Flexibility Analysis
C. Paperwork Reduction Act
i. Overview
ii. Information to be Provided
iii. Reporting and Recordkeeping Burdens
iv. Comments on Information Collection
Proposed Rules
Annex—Forms 102, 40 and 71

I. Introduction
A. Background
The CFTC’s large trader reporting
rules (also referred to herein as the
‘‘reporting rules’’) are contained in parts
15 through 21 of the Commission’s
regulations.2 The reporting rules are
currently structured to collect
information with respect to positions in
‘‘open contracts,’’ 3 including: (1)
Information necessary to identify
persons who hold or control ‘‘reportable
positions’’ 4 in open contracts (via
existing Form 40); and (2) information
necessary to identify ‘‘special
accounts’’ 5 (via existing Form 102). In
this Notice, the Commission is
proposing certain amendments to the
existing reporting rules and forms as
they pertain to positions in open
contracts. In addition, the Commission
is proposing a revised approach to the
OCR, which previously had been
proposed 6 as a separate data
collection.7 Specifically, the
2 17 CFR parts 15 through 21. The rule proposals
contained in this Notice generally relate to parts 15,
17, 18 and 20 of the Commission’s regulations.
3 ‘‘Open contract’’ means any commodity or
commodity option position ‘‘held by any person on
or subject to the rules of a board of trade which
have not expired, been exercised, or offset.’’ See
§§ 1.3(t) and 15.00(n).
4 A ‘‘reportable position’’ is defined in § 15.00(p)
as ‘‘any open contract position that at the close of
the market on any business day equals or exceeds
the [Commission’s reporting levels specified in
§ 15.03].’’
5 A ‘‘special account’’ is defined in § 15.00(r) as
‘‘any commodity futures or option account in which
there is a reportable position.’’
6 See Commission, Notice of Proposed
Rulemaking: Ownership and Control Report, 75 FR
41775 (July 19, 2010) (‘‘OCR NPRM’’).
7 As discussed in further detail below, the
Commission is withdrawing the OCR NPRM

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43969

Commission proposes to expand the
reporting rules and forms so that they
may also be used to identify ‘‘volume
threshold accounts,’’ defined as
individual trading accounts that trigger
volume-based reporting thresholds on a
reporting market 8 that is a registered
entity under §§ 1a(40)(A) or 1a(40)(D) of
the Commodity Exchange Act (‘‘CEA’’ or
‘‘Act’’) (i.e., a designated contract
market (‘‘DCM’’) or a swap execution
facility (‘‘SEF’’)), regardless of whether
such activity results in reportable
positions. Volume threshold accounts
associated with DCMs and SEFs would
be required to be reported by clearing
members, as indicated in section IX
below. The Commission notes that
volume threshold accounts could
reflect, without limitation, trading in
futures, options on futures, swaps, and
any other products traded on or subject
to the rules of a DCM or SEF. However,
the Commission also notes that the
proposed rules generally reflect the
Commission’s knowledge and
experience with trading practices and
structures on DCMs. As a result, the
Commission specifically requests public
comment throughout this Notice on any
revisions to the proposed rules that may
be required to adequately address the
identification and reporting of volume
threshold accounts associated with
SEFs.9
The proposed amendments to the
reporting rules and forms would achieve
three primary purposes. First, they
would broaden the utility of existing
Form 102 through a new, expanded
Form 102 (‘‘New Form 102’’),
partitioned into three sections: section
102A for the identification of positionbased special accounts (‘‘102A,’’ ‘‘Form
102A,’’ or ‘‘New Form 102A’’); section
102B—the former OCR component—for
the collection of ownership and control
information from clearing members on
volume threshold accounts associated
with DCMs or SEFs (‘‘102B,’’ ‘‘Form
102B,’’ or ‘‘New Form 102B’’); 10 and
section 102S for the submission of 102S
filings for swap counterparty and
customer consolidated accounts with
contemporaneously with the publication of this
Notice in the Federal Register.
8 ‘‘Reporting market’’ is defined in existing
§ 15.00(q) as ‘‘a designated contract market,
registered entity under § 1a(29) of the Act, and
unless determined otherwise by the Commission [a
derivatives transaction execution facility].’’ By way
of this Notice, the Commission proposes to revise
§ 15.00(q) to define reporting market as a
‘‘designated contract market or a registered entity
under § 1a(40) of the Act.’’ This revision is
technical in nature, and serves to conform
§ 15.00(q) with recent amendments to the Act. See
infra sections VI(A) and IX.
9 See section VII, below.
10 As explained below, Form 102B incorporates
the previously proposed OCR.

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Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Proposed Rules

reportable positions (‘‘102S,’’ ‘‘Form
102S,’’ or ‘‘102S filings’’). Second, the
proposed amendments would enhance
the Commission’s surveillance and large
trader reporting programs for futures,
options on futures, and swaps by
clarifying which accounts are required
to be reported on Form 102A; requiring
the reporting on Form 102A of the
trading accounts that comprise each
special account; requiring the reporting
of certain omnibus account information
on Form 71 (‘‘Form 71’’ or ‘‘New Form
71’’); 11 updating Form 40 (‘‘New Form
40’’); and integrating the submission of
102S and 40S filings into the general
Form 102 and Form 40 reporting
program. Finally, the proposed
amendments would provide for the
electronic submission of Forms 102, 40,
and 71.
B. Benefits Derived From the Proposed
Rules

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The proposed rules would enhance
the Commission’s existing trade practice
and market surveillance programs for
futures and options on futures, and
facilitate surveillance programs for
swaps, by expanding the information
presently collected on existing Forms
102 and 40, and introducing a new
information collection for omnibus
volume threshold accounts in New
Form 71. The rules would also help
implement the 102S and 40S filing
requirements recently adopted in
connection with the Commission’s part
20 rules addressing large trader
reporting for physical commodity swaps
(discussed below).12 In the aggregate,
the proposed rules would help the
Commission to better deter and prevent
market manipulation; deter and detect
abusive or disruptive trading practices;
and better perform risk-based
monitoring and surveillance between
related accounts. Ultimately, the
proposed rules would significantly
enhance the Commission’s ability to
identify participants in the derivatives
markets and to understand relationships
between trading accounts, special
accounts, reportable positions, and
market activity.
11 As explained below, information regarding the
owners and controllers of volume threshold
accounts reported on Form 102B and that are
identified as omnibus accounts (‘‘omnibus volume
threshold accounts’’) would be collected by the
Commission (via Form 71) directly from originating
firms.
12 See 17 CFR 20.5(a) and (b), the 102S and 40S
filing requirements, discussed in greater detail
below. Final part 20 was published in the Federal
Register on July 22, 2011. See Commission, Large
Trader Reporting for Physical Commodity Swaps,
76 FR 43851 (July 22, 2011) (‘‘Large Trader
Reporting for Physical Commodity Swaps’’).

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The proposed rules respond, in part,
to the increased dispersion and opacity
of trading in U.S. futures markets as
they continue to transition from
localized, open-outcry venues to global
electronic platforms. While electronic
trading has conferred important
informational benefits upon regulators,
the concomitant increases in trading
volumes, products offered, and trader
dispersion have created equally
important regulatory challenges.
Effective market surveillance now
requires automated analysis and pattern
and anomaly detection involving
millions of daily trade records 13 and
hundreds of thousands of position
records 14 present in the surveillance
data sets received daily by the
Commission.15
Commission staff utilizes two distinct
data platforms to conduct market
surveillance: the Trade Surveillance
System (‘‘TSS’’) and the Integrated
Surveillance System (‘‘ISS’’). Broadly
speaking, TSS captures transaction-level
details of trade data, while ISS
facilitates the storage, analysis, and
mining of large trader data from a
position perspective. One important
component of TSS is the Trade Capture
Report (‘‘TCR’’). Trade Capture Reports
contain trade and related order data for
every matched trade facilitated by an
exchange, whether executed via openoutcry, electronically, or noncompetitively. Among the data included
in the TCR are trade date, product,
contract month, trade time, price,
quantity, trade type (e.g., open outcry
outright future, electronic outright
option, give-up, spread, block, etc.),
executing broker, clearing member,
opposite broker and clearing member,
customer type indicator, trading account
numbers, and numerous other data
points.
Effective market surveillance requires
that surveillance data sets received by
the Commission be sufficiently
comprehensive and contain sufficient
identified reference points to uncover
relationships where none appear to exist
and to analyze information based on
flexible criteria. The collection of
additional trader identification and
market participant data on the forms
13 For example, in November 2011, the
Commission received an average of 7.4 million
trade records per day from electronic trading on
DCMs.
14 For example, in November 2011, the
Commission received an average of 617,000
position records per day from reporting firms and
exchanges.
15 Daily trade and position records are provided
to the Commission pursuant to §§ 16.02 and 17.00,
respectively. For further discussion of the
Commission’s large trader reporting program, see
sections III(A) and (B), below.

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proposed in this Notice would help the
Commission to better satisfy these data
requirements. For example, elements of
the proposed data collection would
enable the Commission to link ISS data
(which includes large traders’ names,
but not their trading account numbers)
to TSS data (which includes trading
account numbers but not names).
The information proposed to be
collected would also help the
Commission to better identify and
categorize individual trading accounts
and market participants that triggered
position or volume-based reporting
thresholds. For example, New Form
102A would, among other changes,
require reporting firms to identify the
constituent trading accounts of each
reported special account. In this
manner, New Form 102A would ensure
a new level of interoperability between
the Commission’s large trader data and
its trade data, and would permit
Commission surveillance staff to
quickly reconstruct trading for any
special account. New Form 102B would,
for the first time, require identification
of trading accounts based solely on their
gross trading volume. This new
information collection would enhance
the Commission’s trade practice
surveillance program by revealing
connections of ownership or control
between trading accounts that otherwise
appear unrelated in the TCR. More
generally, it would facilitate
Commission efforts to deter and detect
attempted market disruptions that may
occur even in the absence of large open
positions. Finally, the automated
collection of such information via
electronic forms, rather than through adhoc, manual processes, would permit
both the Commission and market
participants to administer the reporting
programs and related work more
efficiently and effectively. Additional
information on the forms addressed by
this Notice is provided below.
II. Statutory Framework for Position
Reporting and Trader and Account
Identification
The Commission’s existing reporting
rules, and those proposed herein, are
primarily implemented and/or proposed
by the Commission pursuant to the
authority of sections 4a, 4c(b), 4g, and
4i of the Act.16 Section 4a of the Act
16 7 U.S.C. 1 et seq. In addition, CEA § 8a(5)
authorizes the Commission to promulgate such
regulations as, in its judgment, are reasonably
necessary to effectuate any provision of the Act or
to accomplish any of the purposes of the Act. 7
U.S.C. 12a(5). Also, pursuant to the purposes
enumerated in CEA § 3(b), the Act seeks to ensure
the financial integrity of regulated transactions and
to prevent price manipulation and other disruptions
to market integrity. 7 U.S.C. 5(b).

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Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Proposed Rules
permits the Commission to set and
enforce speculative position limits, and
to approve exchange-set position
limits.17 Section 4c(b) gives the
Commission plenary authority to
regulate transactions that involve
commodity options.18 Section 4g(a) of
the Act requires, among other things,
each futures commission merchant
(‘‘FCM’’), introducing broker, floor
broker, and floor trader to file such
reports as the Commission may require
on its proprietary and customer
transactions and positions in
commodities for future delivery on any
board of trade in the United States or
elsewhere.19 In addition, section 4g(b)
requires registered entities to maintain
daily trading records as required by the
Commission, and section 4g(c) requires
floor brokers, introducing brokers, and
FCMs to maintain their own daily
trading records for each customer in
such manner and form as to be
identifiable with the daily trading
records maintained by registered
entities. Section 4g(d) permits the
Commission to require that such daily
trading records be made available to the
Commission.20 Lastly, section 4i of the
Act requires the filing of such reports as
the Commission may require when
positions taken or obtained on
designated contract markets equal or
exceed Commission-set levels.21
Collectively, these CEA provisions
warrant the maintenance of an effective
and rigorous system of market and
financial surveillance.
In addition to the CEA sections
described above, on July 21, 2010,
President Obama signed the Dodd-Frank
Wall Street Reform and Consumer
Protection Act (‘‘Dodd-Frank Act’’).22
Title VII of the Dodd-Frank Act 23
amended the CEA to establish a
comprehensive new regulatory
framework for swaps and security-based
swaps. The legislation was enacted to
reduce risk, increase transparency, and
promote market integrity within the
financial system by, among other things:
(1) Providing for the registration and
comprehensive regulation of swap
dealers and major swap participants; (2)
17 7

U.S.C. 6a.
U.S.C. 6c(b).
19 7 U.S.C. 6g(a).
20 See supra section I(B) for a discussion of the
trade data transmitted daily to the Commission by
registered entities.
21 7 U.S.C. 6i.
22 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./
LawRegulation/OTCDERIVATIVES/index.htm.
23 Pursuant to § 701 of the Dodd-Frank Act, Title
VII may be cited as the ‘‘Wall Street Transparency
and Accountability Act of 2010.’’

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imposing clearing and trade execution
requirements on standardized derivative
products; (3) creating robust
recordkeeping and real-time reporting
regimes; and (4) enhancing the
Commission’s rulemaking and
enforcement authority with respect to,
among others, all registered entities and
intermediaries subject to the
Commission’s oversight.
As part of the Commission’s
rulemaking program implementing the
Dodd-Frank Act,24 the rule changes
proposed herein also include swapsrelated considerations in connection
with the Commission’s new large trader
reporting rules for swaps.25 New CEA
section 4t authorized the Commission to
establish a large trader reporting system
for significant price discovery function
swaps; accordingly, the swaps-related
considerations in the rules proposed
herein also rely in part on the
Commission’s authority in CEA section
4t.
III. Existing and Previously Proposed
Trader and Account Identification
Programs
A. Futures Large Trader Reporting—
Existing Forms 102 and 40
Existing § 17.00, in part 17 of the
Commission’s regulations, forms the
basis of the Commission’s large trader
reporting program.26 It requires each
FCM, clearing member, and foreign
broker to submit a daily report to the
Commission for each commodity futures
or option account it carries that has a
reportable position (called a ‘‘special
account’’). Such ‘‘§ 17.00 position
reports’’ must show the futures and
option positions of traders with
positions at or above specific reporting
levels set by the Commission. Current
reporting position trigger levels are
located in § 15.03(b).27 The daily report
is sent to the Commission as a single
data file from each reporting FCM,
clearing member, and foreign broker
pursuant to technical specifications
identified in § 17.00(g).28 The
Commission’s surveillance staff uses
this report to, among other things, assess
individual traders’ activities and
potential market power; enforce
speculative position limits; monitor for
disruptions to market integrity; and
calculate statistics that the Commission
24 See generally, http://www.cftc.gov/
LawRegulation/DoddFrankAct/index.htm.
25 As noted supra in note 12, 17 CFR 20.5(a) and
(b) contain the 102S and 40S filing requirements,
discussed in greater detail below. Final part 20 was
published in the Federal Register on July 22, 2011.
See supra note 12.
26 17 CFR 17.00.
27 17 CFR 15.03(b).
28 17 CFR 17.00(g).

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43971

publishes to enhance market
transparency (e.g., in the Commitments
of Traders reports).
i. Identification of Special Accounts—
Existing Form 102
For each special account identified by
an FCM, clearing member, or foreign
broker and reported to the Commission
in a § 17.00 position report, existing
§ 17.01 29 requires the FCM, clearing
member, or foreign broker to separately
identify such special accounts to the
Commission on Form 102 and provide
certain information with respect to each
special account.30 Pursuant to existing
§ 17.02(b),31 Form 102 must be
submitted by such parties within three
days of an account becoming a special
account; a Form 102 submission may
also be required by the Commission or
its designee via a special call. The text
of existing § 17.01 32 includes both the
requirement to submit the form as well
as the specific data fields that are
required to be completed on Form 102.
Currently, Form 102 requires the filing
of a separate ‘‘paper’’ form for each
special account. Forms are generally
transmitted to the Commission via
email, facsimile, or regular mail.
As noted above, Form 102 identifies
and provides information with respect
to special accounts carried by FCMs,
clearing members, and foreign brokers.
The form provides the Commission with
contact information for the trader(s)
who owns and/or controls trading in
each special account included in the
daily § 17.00 position reports. The Form
102 questions, as currently detailed in
§ 17.01(a) through (f),33 require the
reporting firm to provide the following:
a special account number; the name,
address, and other identification
information for the owner (if also the
controller), controller, or originator (if
an omnibus account) of the account; an
indication whether trades and positions
in the special account are usually
associated with commercial activity of
the account owner in a related cash
commodity or activity; information
regarding an FCM’s relationship to the
account; and name and address
information for the firm submitting the
Form 102.
Based on the Commission’s
experience in receiving, processing, and
reviewing Form 102 submissions, and as
discussed below in the context of the
rules proposed herein, the Commission
29 17

CFR 17.01.
Form 102 is titled Identification of
Special Accounts. 17 CFR 15.02.
31 17 CFR 17.02(b).
32 17 CFR 17.01.
33 17 CFR 17.01(a) through (f).
30 Current

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has determined that the existing Form
102 questions would benefit from
revisions designed to: (1) Provide more
meaningful information to the
Commission and (2) clarify for reporting
firms the traders, accounts, and
information required to be provided on
Form 102. In addition, the Commission
is also proposing (as discussed below)
that the New Form 102 submission
process be modernized to facilitate
electronic submission so that both the
Commission and market participants
may benefit from the efficiencies of
automation.
ii. Statement of Reporting Trader—
Existing Form 40
For each trader holding or controlling
a reportable position (generally, persons
identified on Form 102), § 18.04
requires that, after a special call of the
Commission, such trader file with the
Commission a ‘‘Statement of Reporting
Trader’’ on existing Form 40 at such
time and place as directed in the call.34
The Form 40 is most commonly
submitted to the Commission via paper
submission, email submission, or
facsimile. When submitted in a timely
and accurate manner, Form 40
submissions provide the Commission
with basic information about each
reportable trader in its markets.
As with existing § 17.01 and Form
102, existing § 18.04 also specifically
identifies the data fields required in a
Form 40 filing. Generally, § 18.04 and
Form 40 require every reporting trader
to provide or indicate the following:
Name and address; principal business
and occupation; type of trader;
registration status with the Commission;
name and address of other persons
whose trading the trader controls; name,
address, and phone number for each
controller of the reporting trader’s
trading; name and location of other
reporting firms through which the
reporting trader has accounts; name and
locations of persons guaranteeing the
trading accounts of the reporting trader
or persons having a 10 percent or greater
financial interest in the reporting trader
or its accounts; other identification
information regarding accounts which
the reporting trader guarantees or in
which the reporting trader has a
financial interest of 10 percent or more;
and whether the reporting trader has
certain relationships with or owners
that are foreign governments.
Individuals completing existing Form
40 must also provide or indicate the
following, as applicable: A business
telephone number; employer and job
title; description of trading activity
34 17

CFR 18.04.

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related to physical activity in or
commercial use of a commodity; name
and address of any organization of
which the reporting trader participates
in the management, if such organization
holds a trading account; the name and
address of a partner and/or joint tenant
on the account; and the name and
address of the partner and/or joint
tenant that places orders.
Corporations and other nonindividuals/non-partnerships/non-joint
tenants completing existing Form 40
must also provide or indicate the
following, as applicable: A U.S. entity
indication, and if not a U.S. entity, an
indication of where organized; names
and locations of parent firms and their
respective U.S. entity indication; names
and locations of all subsidiary firms that
trade in commodity futures and options
and their respective U.S. entity
indication; name and address of
person(s) controlling trading, by
commodity and transaction type;
contact information for a contact person
regarding trading; and description of
trading activity related to physical
activity in, or the commercial use of, a
commodity.
As with Form 102, and based on the
Commission’s experience in calling for,
receiving, processing, and reviewing
Form 40 submissions, the Commission
has determined that the existing Form
40 questions could benefit from
revisions designed to: (1) Provide more
meaningful information to the
Commission and (2) clarify for reporting
traders the specific information required
to be provided on Form 40. In addition,
the Commission is also proposing, as
discussed below, that the New Form 40
submission process be modernized to
facilitate Web-based electronic form
submission and achieve the efficiencies
(for both the Commission and market
participants) associated with using a
single Web-based submission format.
B. Large Trader Reporting for Physical
Commodity Swaps—102S and 40S
Filings
As noted above, the Commission
recently adopted rules pertaining to
swaps large trader reporting as new part
20 of the Commission’s regulations.35 In
addition to establishing a position-based
reporting scheme for swaps,36 the rules
also require two trader identification
filings—102S and 40S. For swap
supra note 12.
generally: Large Trader Reporting for
Physical Commodity Swaps: Division of Market
Oversight Guidebook for part 20 Reports, available
at: http://www.cftc.gov/ucm/groups/public/
@newsroom/documents/file/
ltrguidebook120711.pdf (hereafter, ‘‘Swaps Large
Trader Guidebook’’).

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36 See

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counterparties with reportable positions
(as set forth in part 20), the 102S and
40S filings generally serve an analogous
function to that served by the existing
Form 102 and Form 40 for futures and
option traders.
Specifically, pursuant to § 20.5(a),
102S filings must be filed by a part 20
reporting entity (a clearing firm or a
swap dealer) for each reportable
counterparty consolidated account and
‘‘shall consist of the name, address, and
contact information of the counterparty
and a brief description of the nature of
such person’s paired swaps and
swaptions market activity.’’ 37 In
addition, pursuant to § 20.5(b), and in
conjunction with § 20.6, all clearing
organizations, swap dealers, clearing
members, and counterparties with
reportable positions must, after a special
call of the Commission, complete a
Form 40 ‘‘as if any references to futures
or options contracts were references to
paired swaps or swaptions as defined in
§ 20.1’’ and submit the same to the
Commission as a 40S filing.38
Building on the approach of this
Notice to modernizing Form 102 and
Form 40 submissions, the rules
proposed herein would also provide for
the electronic submission of both 102S
and 40S filings. In order to provide
clarity for market participants
submitting these filings, the proposed
rules also include provisions indicating
the specific information required to be
provided in each of these filings. In
addition, the information requested in
proposed Form 102S reflects
considerations developed in the Swaps
Large Trader Guidebook for compliance
with part 20.39 For example, in addition
to requiring information on
counterparty consolidated accounts, as
described above, proposed 102S would
also collect information on ‘‘customer’’
consolidated accounts.40 Form 102S
would also ask reporting firms to
distinguish between ‘‘house’’ and
‘‘customer’’ consolidated accounts.
C. Proposed OCR
In addition to existing trader and
account identification filings
summarized above, the Commission
recently proposed to collect ownership
37 17

CFR 20.5(a).
CFR 20.5(b) and 20.6.
39 See supra note 36.
40 As explained in the Swaps Large Trader
Guidebook, acceptable part 20 data records include
‘‘customer,’’ ‘‘agent,’’ ‘‘principal,’’ and
‘‘counterparty’’ records. Clearing firms and swap
dealers submitting 102S filings would be expected
to classify principal and counterparty consolidated
accounts as counterparty accounts on Form 102S,
and to classify customer consolidated accounts as
customer accounts. Agent data records would not
require a 102S filing.
38 17

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Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Proposed Rules
and control information for all trading
accounts active on U.S. futures
exchanges and other trading venues.
The Commission proposed to collect
such information via an account
ownership and control report (‘‘OCR’’)
submitted periodically by reporting
entities that would primarily be DCMs.
The Commission published an
Advanced Notice of Proposed
Rulemaking (‘‘OCR Advanced Notice’’
or ‘‘Advanced Notice’’) 41 soliciting
public comment on the OCR in 2009,
and a Notice of Proposed Rulemaking
(‘‘OCR NPRM’’) in 2010.42 Both notices
are described in greater detail below.
i. OCR Advanced Notice
In the OCR Advanced Notice, the
Commission sought public comment on
the concept of an OCR submitted
periodically to the Commission by
DCMs and other trading-venue reporting
entities.43 As the Commission explained
in the Advanced Notice, the OCR was
designed to enhance market
transparency, leverage the
Commission’s existing surveillance
systems, and foster synergies between
its market surveillance, trade practice,
enforcement, and economic research
programs. The OCR Advanced Notice
provided a detailed explanation of the
Commission’s need and intended uses
for ownership and control information.
The Commission invited all interested
parties to submit general comments
regarding the Advanced Notice within a
45-day comment window. The
Commission received a total of twelve
comment letters from sixteen interested
parties.

srobinson on DSK4SPTVN1PROD with PROPOSALS3

ii. OCR NPRM
After carefully considering comments
received in response to the OCR
Advanced Notice, the Commission
published its OCR NPRM, which was
substantively similar to the Advanced
Notice. Like the Advanced Notice, the
OCR NPRM also provided for the
collection of information through an
OCR submitted to the Commission by
trading-venue reporting entities.44 For
41 See Commission, Advanced Notice of Proposed
Rulemaking: Ownership and Control Report, 74 FR
31642 (July 2, 2009).
42 See OCR NPRM supra note 6.
43 The OCR Advanced Notice noted that ‘‘most
reporting entities will be designated contract
markets, but they could be any registered entity that
provides trade data to the Commission on a regular
basis.’’ See OCR Advanced Notice supra note 41 at
31642.
44 The OCR NPRM provided that reporting
entities would include DCMs, derivatives
transaction execution facilities, and exempt
commercial markets with significant price
discovery contracts. In addition, the OCR NPRM
provided that should the Commission adopt the
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each trading account, reporting entities
were to collect and transmit specific
OCR data points, including: the trading
account number; the names and
addresses of the account’s owners and
controllers; the owners’ and controllers’
date of birth; the special account
number, if one had been assigned; an
indication of whether the account was
a reportable account pursuant to large
trader thresholds; and other relevant
information. The Commission
understood that, to compile their OCRs,
reporting entities would need to collect
information from FCMs and introducing
brokers (‘‘IBs’’) in possession of the
underlying data required by the OCR.
Consequently, much of the OCR’s
burden would have fallen on FCMs, IBs,
and any other market participants
providing data to the reporting entities.
The OCR NPRM also proposed the form,
manner, and frequency of OCR
transmission by reporting entities.45
The OCR NPRM sought public
comment and provided for a 60-day
comment period. Commission staff also
led a public roundtable to facilitate inperson discussion between Commission
staff and interested parties.46 The staffled public roundtable was held on
September 16, 2010, and consisted of
fifteen panelists.47 By the close of the
OCR NPRM comment period, the
Commission received eight comment
letters from fourteen interested
parties.48 Many of the comments
control information from foreign boards of trade
operating in the U.S. pursuant to staff direct access
no-action letters, if such letters are conditioned on
the regular reporting of trade data to the
Commission. In the OCR NPRM, the Commission
also noted that if given appropriate authority it
would consider collecting OCR data for over-thecounter and exchange-traded swap transactions. See
OCR NPRM supra note 6 at 41782.
45 The OCR NPRM provided that the OCR be
submitted weekly, in Financial Information
eXchange Markup Language (‘‘FIXML’’) via secure
file transfer protocol (‘‘SFTP’’). See OCR NPRM
supra note 6 at 41784.
46 The comment period deadline was extended
from September 17, 2010 to October 7, 2010 in
order to give interested parties time to prepare
comments on matters discussed at the public
roundtable. See 75 FR 54801 (September 9, 2010).
47 Panelists included representatives from: CME
Group Inc.; ICE Futures U.S.; Kansas City Board of
Trade; Katten Muchin Rosenman LLP; Millburn
Ridgefield Corporation; National Introducing
Brokers Association; NYSE Liffe U.S.; State Street
Global Markets; Woodfield Fund Administration
LLC; and an industry consultant.
48 All OCR NPRM comment letters (‘‘CL’’),
supplemental comment letters (‘‘supplemental
CL’’), ex parte communications summaries, and a
transcript of the public roundtable are available
through the Commission’s Web site at: http://
comments.cftc.gov/PublicComments/
CommentList.aspx?id=755. OCR NPRM comment
letters were received from: (1) Air Transport
Association of America, Inc. on September 17, 2010
(‘‘CL–ATA’’); (2) CME Group Inc. on behalf of the
Chicago Mercantile Exchange, Inc.; the Board of
Trade of the City of Chicago, Inc.; the New York

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43973

presented by roundtable panelists raised
the same issues as those raised by the
comment letters responding to the
Advanced Notice and the OCR NPRM.
iii. OCR NPRM Comment Summary
A number of commenters found merit
in the proposed OCR. For example,
IntercontinentalExchange, ICE Futures
Europe, and ICE Futures U.S.
collectively stated that they
‘‘recognize[d] the value in collecting
information regarding the identity of the
owners and controllers of accounts that
actively trade on reporting entities, and
therefore suppor[t] the Commission’s
initiative to collect certain OCR
information.’’ 49 Similarly, the Futures
Industry Association (‘‘FIA’’)
commented that it ‘‘supports the
underlying purposes of the proposed
OCR.’’ 50 The Air Transport Association
of America (‘‘ATA’’) ‘‘agree[d] that the
proposed [OCR] will provide
information the Commission needs to
ensure that the U.S. futures markets
accurately reflect supply and demand
forces for products traded, and to ensure
that the futures markets are not tainted
by fraud, abuse or excessive
speculation.’’ 51 The ATA further stated
that, ‘‘the OCR is critical to the
Commission’s ability to fulfill these
responsibilities in a dynamic and
evolving marketplace that has embraced
new technologies.’’ 52 Finally, the
Kansas City Board of Trade commented
that ‘‘Exchange Compliance staffs will
benefit greatly from the wealth of
information at their disposal regarding
the identity of market participants and
the relationships that exist among
them.’’ 53
Commenters also suggested possible
modifications to the OCR as described
in the OCR NPRM. Commenters
recommended that the Commission
utilize an updated and automated Form
Mercantile Exchange, Inc.; and the Commodity
Exchange, Inc. (collectively ‘‘CME’’) on October 7,
2010 (‘‘CL–CME’’); (3) Darrell Cutshaw on
September 13, 2010 (‘‘CL–DCT’’); (4) Futures
Industry Association on October 7, 2010 (‘‘CL–
FIA’’); (5) IntercontinentalExchange, Inc., ICE
Futures Europe, and ICE Futures U.S., Inc.
(collectively, ‘‘ICE’’) on October 7, 2010 (‘‘CL–ICE’’);
(6) International Assets Holding Corporation and
FCStone, LLC on October 7, 2010 (‘‘CL–FCS’’); (7)
Kansas City Board of Trade on October 7, 2010
(‘‘CL–KCBT’’); and (8) OneChicago, LLC on
September 27, 2010 (‘‘CL–OCX’’). OCR NPRM
supplemental comment letters were received from:
(1) FIA on December 23, 2010 (‘‘Supplemental CL–
FIA I’’); and (2) FIA on March 22, 2011
(‘‘Supplemental CL–FIA II’’).
49 CL–ICE supra note 48 at 1.
50 CL–FIA supra note 48 at 2.
51 CL–ATA supra note 48 at 1.
52 Id.
53 CL–KCBT supra note 48 at 1.

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102 to collect OCR data 54; collaborate
with industry representatives to design
the OCR 55; require the reporting of only
those accounts that exceed certain
volume thresholds 56; and require that
the Commission receive OCRs directly
from clearing FCMs rather than from
DCMs and other trading venues.57 In a
series of supplemental comment letters,
the FIA (working with a group of FCMs,
U.S. exchanges and other experts
(‘‘Working Group’’)) provided a
‘‘Proposed OCR Alternative’’ that
expanded upon comments made by FIA
and its members in response to the
Advanced Notice, the OCR NPRM, and
the public roundtable.58 The Working
Group’s Proposed OCR Alternative
addressed, among other things, the OCR
data points to be collected, the sources
and flow of OCR data, and industry
costs arising from the Commission’s
proposed OCR versus the costs
associated with the Working Group’s
Proposed OCR Alternative.59
Specifically, the Working Group
estimated that the Proposed OCR
Alternative ‘‘would result in an average
first-year cost saving of approximately
$18.8 million’’ when compared with the
Commission’s proposed OCR.60 The
Commission found merit in many of the
commenters’ recommendations and has
incorporated several of these
recommendations in the proposed rules.
For example, as further described
below, the proposed rules would require
OCR data submissions directly from
clearing FCMs, and OCR data would
only be required for those trading
accounts that exceed a specified volume
threshold. Also, in concurrence with the
suggestions of commenters and as more
fully described below, the Commission
anticipates collaborating with reporting
entities and other interested participants
to develop the data format and
submission process.
Concurrent with the publication of
this Notice, the Commission is issuing
a separate notice that serves to formally
withdraw the OCR NPRM and to alert
the public to the rulemaking proposed
herein.
54 See CL–CME supra note 48 at 6, CL–OCX supra
note 49 at 2, and Supplemental CL–FIA I supra note
49 at 2 of Appendix A.
55 See CL–CME supra note 48 at 5, CL–FIA supra
note 49 at 8, CL–ICE supra note 49 at 2, and CL–
KCBT supra note 49 at 4.
56 See CL–ICE supra note 48 at 4, CL–FIA supra
note 49 at 7, and Supplemental CL–FIA I supra note
49 at 2 of Appendix A.
57 See CL–KCBT supra note 48 at 2.
58 See generally Supplemental CL–FIA I supra
note 48 and Supplemental CL–FIA II supra note 48.
59 Id.
60 Supplemental CL–FIA I supra note 48 at 5 of
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IV. Forms
As noted above, this proposed
rulemaking addresses three forms—New
Form 102, New Form 71, and New Form
40. New Form 102 is proposed as a
multi-function form, since the
requirement to submit New Form 102
can arise from one of three separate
triggers. The data required to be
submitted on a New Form 102 is
determined by the underlying triggering
mechanism. A discussion of the three
New Form 102 triggering mechanisms,
the related sections of the form, and the
information required to be provided in
each section, follows. New Form 71 is
proposed as a tool to be used, at the
Commission’s discretion, to learn more
about certain volume threshold
accounts identified as omnibus accounts
on New Form 102B. New Form 40
would continue to serve its traditional
purpose as a tool to be used, at the
Commission’s discretion, to learn more
about traders and market participants
identified on New Form 102, as well as
on New Form 71. New Form 71 and
New Form 40 are also described in
detail below.
A. Position Triggered 102
i. Special Accounts and Reportable
Positions
New Form 102A is the section of New
Form 102 that would serve a function
most analogous to existing Form 102.
New Form 102A requires an FCM,
clearing member, or foreign broker to
identify and report its special accounts.
As discussed above, a special account is
defined in existing § 15.00(r), and means
any commodity futures or option
account in which there is a reportable
position.61 For the purposes of part 17,
reportable position is defined in existing
§ 15.00(p)(1), and generally includes any
open contract position that at the close
of the market on any given business day
equals or exceeds the levels in existing
§ 15.03.62 These proposed rules would
not amend the definition of either
special account or reportable position.
The Commission notes that under
existing regulations (e.g., § 17.00(b),
citing § 150.4),63 reporting firms are
CFR 15.00(r).
CFR 15.00(p)(1) and 15.03.
63 17 CFR 17.00(b) and 150.4. In this regard, the
Commission notes that upon the compliance date
for part 151 of the Commission’s regulations, the
aggregation rules in § 150.4 will be superseded by
those in § 151.7. The compliance date for part 151
is 60 days after the term ‘‘swap’’ is further defined
pursuant to § 721 of the Dodd-Frank Act (i.e., 60
days after the further definition of ‘‘swap’’ as
adopted by the Commission and the Securities
Exchange Commission is published in the Federal
Register). See Commission, Position Limits for
Futures and Swaps, 76 FR 71626, 71632 (November
18, 2011).

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62 17

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required to separately aggregate the
positions of common owners and those
of common controllers for the purpose
of identifying special accounts on a
Form 102. By way of this proposed
rulemaking, the Commission reiterates
that its regulations require reporting
firms to separately aggregate positions
by common ownership and by common
control for the purpose of identifying
and reporting special accounts.
ii. 102A Form Requirements
As compared to existing Form 102,
the data fields in 102A would include
new ownership and control information
fields (or, in the case of special accounts
that are omnibus accounts, omnibus
account originator information fields)
for position-based special accounts.
Form 102A, as proposed, would also
require reporting firms that are clearing
members to identify the trading
accounts that comprise a position-based
special account and to provide
ownership and control information, as
well as TCR trading account numbers,
for those trading accounts.64 To clarify,
‘‘trading accounts that comprise a
position-based special account’’ would
include all of those trading accounts
that: (1) Are used to execute trades
cleared by the clearing member
submitting the 102A; (2) are owned or
controlled by the entity identified as
owning or controlling the special
account reported on a 102A; and (3)
execute transactions in the same
commodity or commodities in which
the special account has a reportable
position. The Commission’s objective in
requiring reporting firms that are
clearing members to identify the trading
accounts that comprise a special
account is to facilitate trade-level
monitoring of the means by which
special account owners or controllers
establish and unwind their reportable
positions. The Commission specifically
requests comment on this definition of
‘‘trading accounts that comprise the
special account.’’ The Commission
welcomes proposals for alternative
definitions that would still permit it to
achieve the objective identified above.
The Commission also requests public
comment regarding whether Form 102S
filings, discussed below, should require
the identification of trading accounts
that comprise a consolidated account in
the same manner that Form 102A would
require the identification of trading
accounts that comprise a special
account.
The Commission notes that the
requirement in 102A to identify a
trading account number for trading
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Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Proposed Rules
accounts that comprise a special
account would only be a relevant/
applicable data field for clearing
members identifying trading accounts
that comprise a special account. Based
on comments received in response to
the OCR NPRM, it is the Commission’s
understanding that non-clearing FCMs,
foreign brokers, and omnibus account
originators (collectively, ‘‘non-clearing
entities’’) would generally not have the
ability to match/identify a trading
account number for their customers or
sub-accounts (hereafter, ‘‘sub-accounts’’)
on the TCR.65
Notwithstanding these limitations,
under this proposed rulemaking nonclearing entities would continue to be
required to submit a 102A for their
customers/sub-accounts that, if carried
directly with a clearing member, would
otherwise be required to be reported as
a position-based special account.
Existing Form 102 requires the reporting
of such special accounts, and New Form
102A would not change that
requirement.
Form 102A would also require
reporting firms to indicate whether a
special account reported based on
ownership or control of a reportable
position is a house or customer account
of the reporting firm. This indicator
would allow the Commission to perform
certain financial risk surveillance
functions in a more automated and
efficient manner by quickly identifying
house positions that potentially create
risk for the reporting firm. Form 102A
also requires that reporting firms
indicate whether any trading account
identified on 102A has been granted
direct market access (‘‘DMA’’) to the
trade matching system of the relevant
reporting market. The proposed
definition of ‘‘DMA’’ appears in section
IX below. Finally, 102A requires any
reporting firm that indicates on 102A
that it is a foreign broker to identify its
U.S. FCM.

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iii. Timing of 102A Reporting
Pursuant to the proposed regulatory
revisions discussed below, this
rulemaking would require 102A
submissions no later than the
submission of the corresponding
§ 17.00(a) position report for a special
account. That is, the 102A for any
particular special account would be due
at the same time as the special account’s
reportable position is first sent to the
Commission. The proposed rule text
also includes an ‘‘on-call’’ provision,
which would require a 102A to be
65 See supra section I(B) for a discussion of the
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submitted on such other date as directed
by special call of the Commission.
iv. 102A Change Updates and Refresh
Updates
The proposed rules provide that if any
change causes the information filed on
a 102A for a special account to no
longer be accurate, that an updated
102A shall be filed with the
Commission no later than 9:00 a.m.
eastern time on the business day after
such change occurs, or on such other
date as directed by special call of the
Commission (‘‘change updates’’).
In addition to change updates,
proposed § 17.02(b) requires that,
starting on a date specified by the
Commission or its designee and at the
end of each six month increment
thereafter (or such later date specified
by the Commission or its designee),
each FCM, clearing member, or foreign
broker resubmit every 102A that it has
submitted to the Commission for each of
its special accounts (‘‘refresh updates’’).
As with the 102B, discussed below, the
goal of the refresh update provision is
to establish discreet points in time
where all 102A data is considered
accurate and reliable. The Commission
is proposing the refresh update
provision in an effort to maintain
accurate 102A data, and to avoid the
data drift which is often associated with
long-term data collection efforts.
Both the change update and refresh
update provisions of § 17.02(b) include
the following sunset provision: an FCM,
clearing member, or foreign broker may
stop providing change updates or
refresh updates for a Form 102A that it
has submitted to the Commission for
any special account upon notifying the
Commission that the account in
question is no longer reportable as a
special account.
B. Volume Triggered 102
New Form 102B of New Form 102
provides a new volume-based reporting
structure not found in existing 102. As
background, the Commission received
several comments in response to the
OCR NPRM that suggested the
Commission should only require the
reporting of those trading accounts
whose trading activity exceeded a
volume threshold, thereby limiting the
total number of reportable accounts,
reducing reporting costs, and preventing
the reporting of non-significant
accounts. The Commission considered
the comments it received regarding the
establishment of volume thresholds for
the OCR, and has modified its approach
accordingly in this Notice. While
existing Form 102 reporting
requirements arise when an account (or

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collection of related accounts) has a
reportable position, 102B reporting is
triggered when an individual trading
account meets a specified trading
volume level in an individual product
and, as a result, becomes a ‘‘volume
threshold account.’’ Volume threshold
accounts, as defined below in proposed
§ 15.00(y), are trading accounts that
execute, or receive via allocation or
give-up, reportable trading volume on or
subject to the rules of a reporting
market, that is a DCM or an SEF.66 The
reportable trading volume level
(‘‘RTVL’’) is defined in proposed § 15.04
as 50 or more contracts in all
instruments that a DCM or SEF
designates with the same product
identifier (including purchases and
sales, and inclusive of all expiration
months).67 As noted above, volume
threshold accounts could reflect,
without limitation, trading in futures,
options on futures, swaps, and any other
product traded on or subject to the rules
of a DCM or SEF. The Commission
requests public comment as to whether
any final rule adopted by the
Commission should raise, lower or
maintain the proposed RTVL. The
Commission also requests public
comment regarding the suitability of the
proposed RTVL, as defined in proposed
§ 15.04, to volume threshold accounts
associated with SEFs, and whether any
changes are required to make the
proposed RTVL suitable for volume
threshold accounts associated with
SEFs. Additional requests for public
66 See supra section I(A) for an explanation of the
reporting markets relevant to 102B filings, and infra
sections VI(A) and IX and note 82 for proposed
amendments to the definition of ‘‘reporting
market.’’
67 The proposed RTVL is based on the
Commission’s analysis of DCM trade data received
through the TCR from a sample of DCMs during a
recent six month period. It is calibrated to yield
information with respect to those trading accounts
that are responsible for a substantial majority of
trading volume, while minimizing the proposed
regulations’ impact on low-volume accounts whose
trading activity does not warrant inclusion in the
proposed reporting and identification regime. Based
on the sample data set used in the Commission’s
analysis, the proposed RTVL would result in the
reporting and identification of approximately onethird of the trading accounts reported in the sample
data set. However, due to the concentration of
trading activity among a minority of accounts and
some accounts’ tendency to be active in more than
one product, the proposed RTVL would nonetheless
result in the identification of at least 85% of the
trading volume in approximately 90% of the
products in the sample data set, as measured at the
conclusion of the six-month period sampled by the
Commission. The Commission notes that any
amendments it may make to the RTVL as it pertains
to SEFs may be designed to ensure that the RTVL
for SEFs achieves a similar level of identification
as the RTVL for DCMs, i.e., identifying a substantial
majority of the volume in a substantial majority of
products while minimizing the impact on SEF
accounts whose trading activity is too low to merit
inclusion in the reporting and identification regime.

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comment with respect to the RTVL as
currently proposed are in section VII,
below.

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i. 102B Form Requirements
As a threshold question, 102B
requires that clearing members provide,
in response to question 2, the trading
account number of any trading account
that meets the criteria for a volume
threshold account; any related short
code(s) for such account; and the name
of the reporting market (i.e., the DCM or
SEF) at which the volume threshold
account had reportable trading volume.
These data points are necessary to
report and identify volume threshold
accounts in TCRs received from DCMs
or similar transaction-based reports that
may be received by the Commission
from SEFs, and to link the volume
threshold account to transaction records
in the Commission’s surveillance
databases.68 The data points will also
assist the Commission in fulfilling its
surveillance responsibilities.
Second, and as with 102A, 102B
requires that clearing members indicate,
in response to question 3, whether the
volume threshold account has been
granted DMA to the trade matching
system of the relevant reporting market.
Third, 102B requires that clearing
members provide, in response to
question 4, the volume threshold
account’s associated special account
number, if applicable. In the case of
DCMs, this information will permit the
Commission to more effectively and
efficiently connect position data
received via the large trader reporting
system and trade data received via the
TCR.
Fourth, 102B requires that clearing
members indicate, in response to
question 5, whether the volume
threshold account is an omnibus
account, or used to execute trades for an
omnibus account. If the account is an
omnibus account or used to execute
trades for an omnibus account, question
5 requires clearing members to indicate
whether the account is a house or
customer omnibus account, and to
provide information sufficient to
uniquely identify and contact the
originator of the account (e.g., the
originator’s name, address and phone
number, among other information).
More detailed information regarding
ownership and control with respect to a
volume threshold account that is a
customer omnibus account will be
collected separately at the Commission’s
request, from the omnibus account’s
originating firm, via a New Form 71,
68 See

supra section I(B).

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also proposed in this Notice and
described below.
Fifth, 102B requires clearing members
to provide information, in response to
question 6, sufficient to uniquely
identify and contact each owner of a
volume threshold account that is not an
omnibus account (e.g., the owner’s
name, address and phone number,
among other information). For each
account owner that is not a natural
person, question 6 also requests, among
other identifying information, a contact
name, contact job title, and the
relationship of the contact to the
account owner.
Finally, the Commission requests that
clearing members provide information,
in response to question 7, sufficient to
uniquely identify and contact each
volume threshold account controller of
an account that is not an omnibus
account. Pursuant to proposed
§ 15.00(dd), a volume threshold account
controller must be a natural person. The
requested information includes the
account controller’s name, address,
phone number and job title, together
with the name of the controller’s
employer and other identifying
information.
The Commission requests public
comment regarding the suitability of
Form 102B to volume threshold
accounts associated with SEFs. The
Commission also requests comment
regarding how Form 102B should be
amended, if at all, to heighten its
suitability with respect to SEFs.
ii. Timing of 102B Reporting
In order to identify its volume
threshold accounts and make a timely
submission of 102B, a clearing firm
must tabulate the gross trading activity
of each account on its books. Once a
volume threshold account is identified,
proposed § 17.02(c) requires that the
clearing firm submit 102B to the
Commission no later than 9:00 a.m.
eastern time on the business day
following the day on which the account
in question became a volume threshold
account.69
iii. 102B Change Updates and Refresh
Updates
Once a clearing firm has identified a
volume threshold account on 102B, that
clearing firm has an ongoing
responsibility (under § 17.02(c)) to
ensure the information reported on
102B remains accurate. If the clearing
69 Business days are Monday through Friday
calendar days that are not Federal holidays. For
example, if an account becomes a volume threshold
account on a Friday, it must be reported to the
Commission by 9:00 on Monday (the next business
day).

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firm becomes aware of any changes that
cause the information reported on 102B
to no longer be accurate, then an
updated 102B must be filed no later
than 9:00 a.m. on the business day after
the clearing firm becomes aware of such
change (‘‘change updates’’).
In addition to change updates,
proposed § 17.02(c) requires that,
starting on a date specified by the
Commission or its designee and at the
end of each six month increment
thereafter (or such later date specified
by the Commission or its designee),
each clearing member shall resubmit
every Form 102B that it has submitted
to the Commission for each of its
volume threshold accounts (‘‘refresh
updates’’). As with Form 102A, the
Commission is proposing the refresh
update provision in § 17.02(c) in an
effort to maintain accurate 102B data
and avoid the data drift which is often
associated with long-term data
collection efforts. The goal of the refresh
update provision is to establish discrete
points in time where all 102B data is
considered accurate and reliable.
Both the change update and refresh
update provisions of § 17.02(c) include
the following sunset provision: If,
during the course of a six-month period,
the subject volume threshold account
executes no trades in any product on the
reporting market at which the volume
threshold account reached the
reportable trading volume level, then
the relevant clearing firm is no longer
required to provide either change
updates or refresh updates following the
end of this six-month period.
C. 102S
i. 102S Form Requirements
Section 102S of New Form 102 is
proposed to formalize and facilitate the
electronic submission of 102S filings as
required in 17 CFR 20.5(a). As noted
above, pursuant to § 20.5(a), 102S filings
must be filed by a part 20 reporting
entity (a clearing firm or a swap dealer)
for each reportable counterparty
consolidated account when such
account first becomes reportable, and
‘‘shall consist of the name, address, and
contact information of the counterparty
and a brief description of the nature of
such person’s paired swaps and
swaptions market activity.’’70 By
including 102S in New Form 102, the
proposed rules would enable the
submission of futures and swaps large
trade reporting via a single electronic
submission, enable the Commission to
integrate its analysis of the information
provided on 102S filings with that
70 17

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provided on New Form 102A and New
Form 102B submissions, and clarify for
market participants the specific
information and data fields that should
be submitted in a 102S filing. As
explained above, 102S would also
incorporate considerations developed in
the Swaps Large Trader Guidebook for
compliance with part 20. The
Commission is proposing that these
rules replace the 102S submission
procedure and guidance in the Swaps
Large Trader Guidebook.71
The timing for submitting 102S filings
would continue to be subject to existing
§ 20.5(a)(3).72 The Commission
specifically requests comment on its
proposal to retain § 20.5(a)(3) as the
timing requirement for submitting 102S
filings on New Form 102.
ii. 102S Change Updates and Refresh
Updates
Section 20.5(a)(4) of the proposed
rules provide that, if any change causes
the information filed on a 102S for a
consolidated account to no longer be
accurate, an updated 102S shall be filed
with the Commission no later than 9:00
a.m. eastern time on the business day
after such change occurs, or on such
other date as directed by special call of
the Commission (‘‘change updates’’).
In addition to change updates,
proposed § 20.5(a)(5) requires that,
starting on a date specified by the
Commission or its designee and at the
end of each six month increment
thereafter (or such later date specified
by the Commission or its designee),
each clearing member or swap dealer
resubmit every 102S that it has
submitted to the Commission for each of
its consolidated accounts (‘‘refresh
updates’’). As with the 102A and 102B,
discussed above, the goal of the refresh
update provision is to establish discrete
points in time where all 102S data is
considered accurate and reliable. The
Commission is proposing the refresh
update provision in an effort to
maintain accurate 102S data, and to
avoid the data drift which is often
associated with long-term data
collection efforts.
Both the change update and refresh
update provisions of § 20.5(a) include
the following sunset provision: A
clearing member or swap dealer may
stop providing change updates or
refresh updates for a Form 102S that it
has submitted to the Commission for
71 See Swaps Large Trader Guidebook at p. 21–
23 and p. 88, Appendix D. See also supra note 25.
72 17 CFR 20.5(a)(3) provides: ‘‘Reporting entities
shall submit a 102S filing within three days
following the first day a consolidated account first
becomes reportable or at such time as instructed by
the Commission upon special call.’’

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any consolidated account upon
notifying the Commission that the
account in question is no longer
reportable as a consolidated account.
D. Form 71
Proposed, New Form 71
(‘‘Identification of Omnibus Accounts
and Sub-Accounts’’) would be sent to
omnibus account originating firms, at
the discretion of Commission staff, in
the event that a volume threshold
account is identified as a customer
omnibus account on Form 102B. The
relevant account number and reporting
market listed on the 102B will be
provided on Form 71. Recipients of a
Form 71 would be required to provide
information regarding any account to
which the customer omnibus account
allocated trades that resulted in
reportable trading volume for the
account receiving such allocations (a
‘‘reportable sub-account’’) on a specified
trading date.73 Form 71 is designed to
permit originating firms to report the
required information directly to the
Commission without requiring such
firms to disclose information regarding
customers to potential competitors. If a
reportable sub-account is itself an
omnibus account (an ‘‘omnibus
reportable sub-account’’), then the
originating firm would be required to (a)
indicate whether the omnibus
reportable sub-account is a house or
customer omnibus account and (b)
identify the originator of the omnibus
reportable sub-account. Another Form
71 (and a New Form 40) would be sent,
at the discretion of Commission staff, to
the originator of a customer omnibus
reportable sub-account identified on
Form 71. At its discretion, the
Commission will continue to reach
through layered customer omnibus
reportable sub-accounts via successive
Form 71s until reaching all reportable
sub-accounts, if any, that are not
omnibus sub-accounts.
If a reportable sub-account identified
on Form 71 is not an omnibus subaccount, then the originating firm will
be required to identify the owner(s) and
controller(s) of the non-omnibus
reportable sub-account. A New Form 40
will be sent at the discretion of
Commission staff to such owner(s) and
controller(s). Form 71 will therefore
enable the Commission to collect the
same level of information regarding
owners and controllers (via a
subsequent New Form 40) that the
Commission would collect with respect
to a non-omnibus volume threshold
73 The relevant trading date would be specified by
Commission staff on Form 71 at the time the special
call is made.

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account identified on 102B. The key
data points proposed to be collected in
Form 71 are summarized below.
As a threshold question, section A of
Form 71 requires the originator of an
omnibus volume threshold account or a
reportable sub-account to confirm
certain identifying information
regarding the originator. Such
information would have been reported
to the Commission by an omnibus
account carrying firm on Form 102B or
on a preceding Form 71 (e.g., the
originator’s name, address and phone
number), and used to auto-populate the
present Form 71. The originator is
prompted to update any incorrect
information provided in Section A.
Second, section B of Form 71 requires
the originator to provide certain
information regarding the allocation of
trades from a specified account number,
and on a specified date and reporting
market, to another account (called a
‘‘recipient account’’). Specifically, the
originator is required to indicate
whether: (1) It allocated trades from the
specified account number on the
specified date and reporting market that
resulted in reportable trading volume
for a recipient account; (2) it allocated
trades from the specified account
number on the specified date and
reporting market, but the allocations did
not sum to reportable trading volume for
a recipient account on such date; or (3)
it did not allocate any trades from the
specified account number on the
specified date and reporting market.
If condition (1) is met, the originator
is required to indicate in section B
whether the reportable sub-account is
an omnibus reportable sub-account. If
so, the originator is required to indicate
whether the omnibus reportable subaccount is a house or customer omnibus
account, and to provide information
sufficient to identify and contact the
originator of the sub-account (e.g., the
originator’s name, address and phone
number, and a contact name, contact job
title, and the relationship of the contact
to the originator). As noted above,
another Form 71 will be sent at the
discretion of Commission staff to the
originator of a customer omnibus
reportable sub-account identified in
response to section B of Form 71.
Therefore, Form 71 may be sent to a
chain of such originators if each
originator allocated trades to another
customer omnibus reportable subaccount.
If the reportable sub-account is not an
omnibus sub-account, the originator is
required to provide information
sufficient to identify and contact the
owner(s) and controller(s) of such nonomnibus reportable sub-account (e.g.,

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the name, address and phone number of
the owner(s) and controller(s)). This
information will enable the
Commission, in its discretion, to send a
New Form 40 to such owner(s) and
controller(s).
The Commission requests public
comment regarding the suitability of
Form 71 to omnibus volume threshold
accounts and omnibus reportable subaccounts associated with SEFs. The
Commission also requests comment
regarding how Form 71 should be
amended, if at all, to heighten its utility
with respect to SEFs.
E. New Form 40
This Notice proposes a revised Form
40 that would be required to be
completed, on special call of the
Commission, by individuals, persons,
and other entities identified on any of
102A, 102B, 102S, and Form 71. As
proposed herein, New Form 40, still
referred to as the ‘‘Statement of
Reporting Trader,’’ would continue to
serve the function traditionally met by
existing Form 40 by providing the
Commission with basic contact and
trading activity information about those
persons and entities identified in the
Commission’s New Form 102 program.
New Form 40 would also be the vehicle
through which market participants
subject to 17 CFR 20.5(b) submit their
40S filings. As part of its
implementation plan related to this
proposal, and described in more detail
below, the Commission is proposing to
develop a Web-based portal through
which market participates would
complete, submit, and (when necessary)
update their New Form 40—thereby
curing much of the inefficiency,
inaccuracy, and uncertainty associated
with the current paper or facsimile
based submission process.
Specifically, as proposed herein, New
Form 40 (whether completed as a New
Form 40 or as a 40S filing) would be
required to be completed on call, as
directed by Commission staff. Because
the proposal anticipates a Web-based
portal and user profile system, those
entities required to complete a New
Form 40 would also be under a
continuing obligation, per direction in
the special call, to update and maintain
the accuracy of their profile information
by periodically visiting the online New
Form 40 portal to review, verify, and/or
update their information.
Generally, New Form 40 would
request basic information regarding the
reporting trader; contact information for
the individual(s) responsible for the
reporting trader’s trading activities, risk
management operations, and the
information on the New Form 40; if

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applicable, omnibus account
information, foreign government
affiliation information, and an
indication regarding the reporting
trader’s status as a domestic or nondomestic entity; information regarding
the reporting entity’s ownership
structure in connection with its parents
and subsidiaries; information regarding
the reporting trader’s control
relationships with other entities;
information regarding other
relationships with persons that
influence or exercise authority over the
trading of the reporting trader; an
indication regarding swap dealer status
and major swap participant status; and
various indications regarding the nature
of the reporting trader’s derivatives
trading activity. The form includes
definitions of certain terms, including
parent, subsidiary, and control, to be
used for the purpose of completing New
Form 40. The Commission specifically
requests comment on the
appropriateness of these definitions and
whether the definitions should be
changed in any way.
New Form 40 would also require
reporting traders who engage in
commodity index trading (‘‘CIT’’), as
defined in the new form, to identify
themselves to the Commission. New
Form 40 defines CIT as: (a) an
investment strategy that consists of
investing in an instrument (e.g., a
commodity index fund, exchange-traded
fund for commodities, or exchangetraded note for commodities) that enters
into one or more derivative contracts to
track the performance of a published
index that is based on the price of one
or more commodities, or commodities
in combination with other securities; or
(b) an investment strategy that consists
of entering into one or more derivative
contracts to track the performance of a
published index that is based on the
price of one or more commodities, or
commodities in combination with other
securities.
An example of CIT described in
clause (a) is the strategy of purchasing
shares in an exchange-traded fund (ETF)
that purchases futures contracts based
on the amount of funds contributed by
investors. It is typical for an ETF for
commodities to track the performance of
a widely cited commodity benchmark.
An example of CIT described in clause
(b) is the strategy of an investor entering
into a total-return swap with a
counterparty. The counterparty would
agree to pay the investor the total return
on (e.g.) a commodity index, and would
hedge the swap by buying futures
contracts. Reporting traders engaged in
CIT as defined in (b) are required to
indicate whether they are, in the

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aggregate, pursuing long exposure or
short exposure with respect to the
relevant commodities or commodity
groups listed on the Form (see question
14ii(a) in New Form 40).
The Commission requests public
comment regarding the definition of CIT
in New Form 40. The Commission also
requests comment on whether the
definition captures all forms of CIT
present in the market, or if not, how the
definition should be modified. Finally,
the Commission requests comment
regarding question 14ii(a) in New Form
40, and whether it will adequately
capture reporting traders’ exposure in
the commodities in which they engage
in CIT.
V. Data Submission Standards and
Procedures
During the comment period, the
Commission anticipates that its data and
technology staff will work with market
participants and potential reporting
entities to address potential information
technology standards to be associated
with the proposed rules. The
Commission encourages interested
parties to share information directly or
through any industry working groups
wishing to provide technical input
pertaining to relevant data fields,
formats, and submission requirements.
The Commission may receive
information through comment letters
submitted according to the instructions
above or through on-the-record meetings
with industry participants, including
staff-led public roundtables.74 The
Commission anticipates that this
process may also include staff visits to
market participant facilities in order to
observe onsite demonstrations of
existing and potential technology
capabilities, operation processes, and,
more generally, to gain more direct
knowledge and understanding of what
an implementation effort will require.
Based on information gathered during
the comment period, the Commission
will direct its data and technology staff
to develop data requirements so that the
Commission can identify and define a
data submission standard for each
submission type (e.g., an XML data feed)
in preparation for the implementation of
any final rules that follow from this
Notice.
Specifically, the Commission
anticipates creating a secure internet
portal with the proposed electronic New
Form 102, New Form 40, and New Form
74 Staff-led public roundtables are included here
only as a possible means by which the Commission
may choose to receive public comments. The
Commission has not yet determined whether any
such roundtable(s) will be held in connection with
this Notice.

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Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Proposed Rules
71 for beta testing in the event that this
Notice ultimately results in final rules.
Industry participants would be
encouraged to review, test, and
comment on the portal and online form
capabilities. Where appropriate, the
Commission may direct its staff to work
with international data standards
authorities to officiate the defined
standards. As part of the completion of
the data standards and online forms, the
Commission plans on publishing a data
compliance guidebook with detailed
submission instructions.75
It is envisioned that once the rule is
effective and all technology at the CFTC
is in place, the following capabilities
will be available:
FCMs (including clearing members),
foreign brokers, or swap dealers that
trigger a position or volume based
reporting obligation will generate the
appropriate 102A, 102B, or 102S
standard file and send it to the
Commission via secure file transfer
protocol (‘‘FTP’’). The Commission will
provide the necessary FTP IP address,
login, and password and will coordinate
with the reporting entity to set up the
secure FTP protocol handlers.
Additionally, the Commission may
provide file converters (such as CSV-toXML) to simplify the data standard
compliance requirements for the
industry. Alternatively, the 102A, 102B
and 102S data may be submitted
through an electronic version of the
form which would be available on the
Commission’s secure Web site portal.
New accounts identified on the New
Form 102 by the reporting entity will be
evaluated by Commission staff to
determine next step actions (i.e.,
requesting a New Form 40 or New Form
71). If it is determined that a New Form
40 or New Form 71 should be sent to an
account identified on a New Form 102
submission, the Commission would
contact the named account (generally
via email, using the email address
provided on the New Form 102) to
request and provide instructions for the
appropriate CFTC form. The
instructions would include a Web site
address, login, and password to access
the specific form needed. The named
account may be required to submit a
completed online form upon receiving
the request.
Depending on the information
provided in the Form 71, additional
reportable sub-accounts named in the
form may be asked to complete a New
Form 40 or Form 71 using the same
process described above.
75 For a recent example of a similar undertaking,
see the Swaps Large Trader Guidebook, linked
supra at note 36.

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Finally, the Commission proposes
that any final rules resulting from this
Notice include separate ‘‘effective’’ and
‘‘compliance’’ dates. The effective date
of any final rule would begin 60 days
after such rule’s publication in the
Federal Register. The Commission
proposes that any compliance date,
however, would be delayed by an
additional 90 days (for a total of 150
days after a final rule’s publication in
the Federal Register). Upon reaching
the effective date of any final rule,
market participants and reporting
entities should be prepared to begin
working with the Commission’s data
and technology staff to test and
implement any information technology
standards or systems associated with the
final rules. Such cooperation would
include providing all test data or form
filings requested by the Commission’s
data and technology staff, in the form
and manner requested by staff. In the
absence of any further relief by the
Commission, all market participants and
reporting entities subject to final rules
would be expected to be in full
compliance by the compliance date,
including having submitted complete
and accurate filings using one of the two
submission methods specified above.
The Commission seeks public comment
on the proposed schedule and
procedures for the effective date and
compliance date of any final rule
resulting from this Notice.
VI. Review and Summary of Regulatory
Changes To Implement New and
Amended Forms
To implement the new and amended
forms described above, the Commission
proposes to revise parts 15, 17, 18, and
20 of its regulations as follows.
A. Part 15
Existing part 15 enumerates certain
defined terms and other provisions
applicable to parts 15 through 19 and 21
of the Commission’s regulations. The
Commission proposes to amend part 15
to effectuate the enhanced market
participant and account identification
regime proposed in this Notice,
including new Forms 102B and 71.
Specifically, the Commission proposes
to do the following: Codify twelve new
defined terms in § 15.00; update the list
of ‘‘persons required to report’’ in
§ 15.01 to include persons identified on
New Forms 102B and 71; revise § 15.04
to provide the ‘‘reportable trading
volume level’’ for volume threshold
accounts and other new account types;
and make conforming changes in
§§ 15.00(q) and 15.02.76 The proposed

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CFR 15.00, 15.01, 15.04, 15.00(q) and 15.02.

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amendments to part 15 are summarized
below.
New Forms 102 and 71 would require
the identification of a number of
account types not currently addressed
in the Commission’s regulations.
Accordingly, the Commission proposes
to introduce the following new defined
terms in § 15.00:
• § 15.00(w). Omnibus account,
meaning any trading account that one
FCM, clearing member or foreign broker
carries for another and in which the
transactions of multiple individual
accounts are combined. The identities of
the holders of the individual accounts
are not generally known or disclosed to
the carrying firm;
• § 15.00(x). Omnibus account
originator, meaning any FCM, clearing
member or foreign broker that executes
trades for one or more customers via one
or more accounts that are part of an
omnibus account carried by another
FCM, clearing member or foreign broker;
• § 15.00(y). Volume threshold
account, meaning any trading account
that executes, or receives via allocation
or give-up, reportable trading volume on
or subject to the rules of a reporting
market that is a board of trade
designated as a contract market under
§ 5 of the Act or a swap execution
facility registered under § 5h of the Act;
• § 15.00(z). Omnibus volume
threshold account, meaning any trading
account that, on an omnibus basis,
executes or receives via allocation or
give-up, reportable trading volume on or
subject to the rules of a reporting market
that is a board of trade designated as a
contract market under § 5 of the Act or
a swap execution facility registered
under § 5h of the Act;
• § 15.00(aa). Omnibus reportable
sub-account, meaning any trading subaccount of an omnibus volume
threshold account, which sub-account
executes reportable trading volume on
an omnibus basis. Omnibus reportable
sub-account also means any trading
account that is itself an omnibus
account, executes reportable trading
volume, and is a sub-account of another
omnibus reportable sub-account; and
• § 15.00(bb). Reportable subaccount, meaning any trading subaccount of an omnibus volume
threshold account or omnibus
reportable sub-account, which subaccount executes reportable trading
volume.
Volume threshold accounts, omnibus
volume threshold accounts, omnibus
reportable sub-accounts, and reportable
sub-accounts all reflect accounts that
execute (or receives via allocation or
give-up) ‘‘reportable trading volume.’’
Accordingly, the Commission proposes

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to codify a new § 15.00(u) that defines
reportable trading volume as contract
trading volume that meets or exceeds
the level specified in proposed § 15.04.
Section 15.04, in turn, would provide
that reportable trading volume for a
trading account is trading volume of 50
or more contracts, during a single
trading day, on a single reporting market
that is a board of trade designated as a
contract market under § 5 of the Act or
a swap execution facility registered
under § 5h of the Act, in all instruments
that such reporting market designates
with the same product identifier
(including purchases and sales, and
inclusive of all expiration months).77
Notably, § 15.04 addresses trading
volume, not open positions, and would
require that purchases and sales by a
trading account be summed to
determine whether such account has
reached the reportable trading volume.
Section 15.04 also stipulates that
reportable trading volume should
encompass all instruments that the
reporting market designates with the
same product identifier. In this regard,
the Commission observes that if a
reporting market utilizes the same
identifier to designate both the openoutcry and electronically-traded
variants of a product, then a clearing
firm reporting on Form 102B should
sum a trading account’s activity in both
the open-outcry and electronic venues
to determine whether such trading
account has reached the reportable
trading volume. Similarly, if a reporting
market uses the same identifier to
designate the futures, options and swaps
variants of a product, then a trading
account’s activity in futures, options
and swaps in such product should be
summed to determine whether the
trading account has reached the
reportable trading volume. Conversely,
if a reporting market utilizes different
product identifiers in these
circumstances, then a clearing firm
reporting on Form 102B should not sum
a trading account’s activity across
venues or across futures, options and
swaps. The Commission anticipates that
its proposed approach, which relies on
reporting markets’ existing product
identification practices, would be less
burdensome than an approach which
requires aggregation of the same product
when traded under different identifiers.
The Commission specifically requests
public comment on its proposed
account-type definitions in § 15.00, and
on its definition of reportable trading
volume in § 15.04.
The Commission also proposes to add
‘‘control’’ to the list of defined terms in
77 Section

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§ 15.00.78 The Commission’s proposed
definition, which would apply only to
special accounts (New Form 102A) and
consolidated accounts (Form 102S),
would be codified in § 15.00(t), and
would define control as ‘‘to actually
direct, by power of attorney or
otherwise, the trading of a special
account or a consolidated account.’’ The
proposed definition specifies that
special accounts and consolidated
accounts may have more than one
controller. The Commission notes that
the proposed definition of ‘‘control’’
would apply solely for the purpose of
satisfying the reporting obligations
under parts 15 through 19 and 21 of this
chapter. The proposed definition would
not limit or alter existing law with
respect to the meaning of the term
control for the purpose of enforcing
other requirements under the Act and
the Commission’s regulations, including
those relating to position limits or
manipulation. Similarly, existing
requirements regarding the aggregation
of positions in separate accounts for
reporting or other purposes under the
Act and Commission regulations (e.g.,
§§ 17.00(b) and 150.4) would not be
altered by the definition of ‘‘control’’
proposed in § 15.00(t).
The Commission also proposes to
separately define the concept of control
in the context of trading accounts,
volume threshold accounts, and
reportable sub-accounts. For these
accounts, ‘‘control’’ may only be
exercised by natural persons.
Accordingly, the proposed definitions
in § 15.00(cc), 15.00(dd), and 15.00(ee)
define trading account controllers,
volume threshold account controllers,
and reportable sub-account controllers,
respectively, as ‘‘a natural person who
by power of attorney or otherwise
actually directs the trading of a [trading
account, volume threshold account, or
reportable sub-account].’’ Each account
type may have more than one controller.
The proposed definitions in § 15.00(cc),
15.00(dd), and 15.00(ee) would be
relevant to the submission of New
Forms 102A (trading accounts), 102B
(volume threshold accounts), and 71
(reportable sub-accounts),
respectively.79 The Commission
specifically requests public comment on
its proposed definition of control in
§ 15.00(t), and on its proposed
definitions of ‘‘trading account
controller,’’ ‘‘volume threshold account
78 The proposed definition of ‘‘control’’ in § 15.00
is based upon the definition of ‘‘controlled
account’’ in § 1.3(j) of part 1.
79 The proposed definitions also specify that
volume threshold accounts and reportable subaccounts may have more than one controller.

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controller’’ and ‘‘reportable sub-account
controller’’ in § 15.00(cc), (dd) and (ee).
Finally, the Commission proposes to
define direct market access (‘‘DMA’’) in
a new § 15.00(v). The Commission
proposes to define DMA as ‘‘a
connection method that enables a
market participant to transmit orders to
a DCM’s electronic trade matching
system without re-entry by another
person or entity, or similar access to the
trade execution platform of a SEF.’’
Pursuant to the proposed definition,
such access could be provided directly
by a DCM or SEF, or by a 3rd-party
platform.
The introduction of new account and
controller types in New Forms 102A,
102B, and 71 would result in a
corresponding expansion in the
categories of persons required to
provide New Form 40 reports.
Accordingly, the Commission proposes
to amend § 15.01(c), which currently
requires Form 40 reports only from
persons who hold or control reportable
positions.80 The proposed rules would
expand § 15.01(c) to require New Form
40 reports from traders who own, hold,
or control reportable positions
(identified via New Form 102A); volume
threshold account controllers (identified
via New Form 102B); persons who own
volume threshold accounts (identified
via New Form 102B); reportable subaccount controllers (identified via New
Form 71); and persons who own
reportable sub-accounts (identified via
New Form 71).
Other proposed amendments to part
15 include: A revision to the definition
of ‘‘reporting market’’ in existing
§ 15.00(q) to replace the provision’s
cross-reference to § 1a(29) of the Act
with a cross-reference to § 1a(40); a
further revision to existing § 15.00(q) to
remove the provision’s reference to
derivatives transaction execution
facilities (‘‘DTEFs’’); and the
amendment of existing § 15.02, which
contains a list of the forms contained in
parts 15 through 19, and 21.81 Section
15.02 would be revised to reflect the
proposed introduction of new Form 71,
the renaming of Form 102, and the new
OMB control number that would be
created by this rulemaking.
80 17

CFR 15.01(c).
CFR 15.00(q) and 15.02. The Dodd-Frank
Act modified § 1a of the CEA. As a result, the
definition of ‘‘registered entity’’ previously found in
§ 1a(29) of the CEA is now in § 1a(40). The
Commission proposes to revise existing § 15.00(q)
so that it cites to § 1a(40) for the definition of
registered entity. The Commission proposes to also
revise existing § 15.00(q) by removing the
provision’s reference to DTEFs, a category of
regulated markets that was eliminated by § 734 of
the Dodd-Frank Act.
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srobinson on DSK4SPTVN1PROD with PROPOSALS3

B. Part 17
The Commission is proposing a
number of substantive, conforming and
administrative amendments to §§ 17.01,
17.02, and 17.03 of part 17,82 and is also
proposing new §§ 17.02(c), 17.03(e),
17.03(f), and 17.03(g). The proposed
amendments and new provisions
address: the identification of special
accounts, volume threshold accounts,
and omnibus volume threshold
accounts (§ 17.01); the form, manner,
and time of New Form 102A and 102B
filings (§ 17.02(b) and 17.02(c),
respectively); and the delegation of
related authorities from the Commission
to the Director of the Division of Market
Oversight (‘‘DMO’’) or the Director of
the Office of Data and Technology
(‘‘ODT’’) (§ 17.03).
i. Substantive Proposed Amendments to
§ 17.01
Existing § 17.01 83 requires reporting
entities (i.e., FCMs, clearing members,
foreign brokers, and contract markets
that list exclusively self-cleared
contracts) to identify special accounts
on existing Form 102, to provide for
each special account the information
required by paragraphs (a)–(f), and to
comply with other requirements in
paragraphs (g)–(h). The Commission
proposes to amend § 17.01 by replacing
all of its existing provisions with the
provisions described below.
First, the Commission proposes to
codify a new § 17.01(a) that would
require reporting entities to identify
special accounts on New Form 102A
(‘‘§ 17.01(a) reports’’), and would also
refer reporting entities directly to the
new form for the required data points.
Second, the Commission proposes to
introduce a new § 17.01(b) that would
subject volume threshold accounts to an
account identification regime
comparable to the position-based regime
already existing for special accounts.84
Proposed Section 17.01(b) would
specifically require clearing firms to
identify volume threshold accounts on
New Form 102B (‘‘§ 17.01(b) reports’’).
Similarly, the Commission proposes to
introduce a new § 17.01(c) that would
subject omnibus accounts to their own
volume-based account identification
regime.85 Proposed § 17.01(c) would
require the originator of an omnibus
volume threshold account (or the
originator of an omnibus reportable subaccount within such account) to file
New Form 71 ‘‘Identification of
Omnibus Accounts and Sub-Accounts’’
82 17

CFR 17.01, 17.02 and 17.03.
83 17 CFR 17.01.
84 See supra section IV(B) and infra section IX.
85 See supra section IV(D) and infra section IX.

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upon special call by the Commission or
its designee.
The fourth substantive amendment
proposed for § 17.01 would codify a
new § 17.01(d). Proposed § 17.01(d)
would require reporting markets that list
exclusively self-cleared contracts to file
§ 17.01(a) and § 17.01(b) reports as if
they were clearing members. Proposed
§ 17.01(d) reflects the requirements of
existing § 17.01(g) 86 with respect to
special accounts, but also incorporates
the new volume threshold accounts
proposed herein. Finally, the
Commission proposes to introduce a
new § 17.01(e) that would extend the
Commission’s special call authority—
currently applicable to special
accounts—to also include volume
threshold accounts, omnibus volume
threshold accounts and reportable subaccounts.87 Responses to special calls
would be due within 24 hours.
ii. Substantive Proposed Amendments
to § 17.02(b); New §§ 17.02(c), 17.03(e),
17.03(f) and 17.03(g)
Section 17.02(b) 88 currently
addresses the form, manner, and
completion date requirements of
existing 102 filings. Specifically,
§ 17.02(b)(1) requires reporting entities
to submit existing Form 102 upon
special call by the Commission; in the
absence of a special call, § 17.02(b)(2)
requires reporting entities to submit
existing Form 102 within three business
days of the first day that a special
account is reported to the Commission.
The Commission proposes to replace
both provisions as described below.
First, as explained above, the
Commission proposes to strike existing
§ 17.02(b)(1) and to shift its special call
requirements to proposed § 17.01(e).
Second, the Commission proposes to
strike existing § 17.02(b)(2) and to
replace its Form 102 submission
requirements with a new § 17.02(b)(1)–
(4) to address the form and manner of
New Form 102A filings for special
accounts. Proposed § 17.02(b)(1) would
direct reporting entities to the
Commission’s Web site (www.cftc.gov)
for detailed instructions on the Form
102A filing process. Proposed
§ 17.02(b)(2)–(4) would address the
completion date requirements of initial
Form 102A submissions, 102A change
updates, and 102A refresh updates,
respectively. The proposed timing
requirements appurtenant to initial
102A filings and the change and refresh
CFR 17.01(g).
Commission’s special call authority with
respect to special accounts is currently found in
§ 17.02(b)(1), which the Commission proposes to
strike, as explained below.
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updates are discussed in detail in
section IV(A), above.
To address New Form 102B filings for
volume threshold accounts, the
Commission proposes to codify a new
§ 17.02(c). Proposed § 17.02(c) would
follow a structure similar to that of
proposed § 17.02(b), with § 17.02(c)(1)
directing reporting entities to
www.cftc.gov for detailed instructions
on the Form 102B filing process, and
proposed § 17.02(c)(2) through (4)
addressing the timing of initial Form
102B filings, 102B change updates, and
102B refresh updates, respectively. The
proposed timing requirements
appurtenant to initial 102B filings and
change and refresh updates are
discussed in detail in section IV(B),
above.
Finally, the Commission also
proposes to codify a new § 17.03(e) that
would provide the Director of ODT with
delegated authority to make special calls
to solicit information from omnibus
volume threshold account originators
and omnibus reportable sub-account
originators on New Form 71. The
Commission also proposes to codify (a)
a new § 17.03(f) that would provide the
Director of DMO with delegated
authority to determine the date on
which each FCM, clearing member, or
foreign broker shall update or otherwise
resubmit every Form 102 that it has
submitted to the Commission for each of
its special accounts and (b) a new
§ 17.03(g) that would provide the
Director of DMO with delegated
authority to determine the date on
which each clearing member shall
update or otherwise resubmit every
Form 102 that it has submitted to the
Commission for each of its volume
threshold accounts.
iii. Conforming and Administrative
Amendments to Part 17
The Commission is proposing a
number of conforming and
administrative amendments to part 17.
First, the Commission proposes to revise
§ 17.00(g)(2)(iii), which defines the
‘‘account number’’ field for position
reports.89 The proposed revisions would
eliminate the provision’s crossreferences to § 17.00(c), which is
reserved, and to existing § 17.01(a),
which the Commission proposes to
strike.90 Section 17.00(g)(2)(iii) would
incorporate a new cross-reference to
New Form 102.
Second, the Commission proposes to
revise existing § 17.03(a), which grants
the Director of DMO the authority to
determine whether FCMs, clearing
89 17
90 17

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members and foreign brokers can report
certain information on series ‘01 forms,
or can use some other format upon a
determination that such person is
unable to report the information using
the standard transmission format.91
More specifically, § 17.03(a) would be
revised to grant such authority to the
Director of ODT, rather than the Director
of DMO.
Third, the Commission proposes to
revise existing § 17.03(b), which grants
the Director of DMO the authority to
approve the late submission of position
reports and Form 102.92 Section
§ 17.03(b) would be revised to grant
such authority to the Director of ODT,
rather than the Director of DMO. Section
17.03(b) would be further revised to: (i)
Replace the provision’s cross-reference
to § 17.01,93 which the Commission
proposes to strike, with cross-references
to proposed § 17.01(a) and 17.01(b); and
(ii) eliminate the provision’s crossreference to existing § 17.01(g),94 which
the Commission also proposes to strike.
Fourth, the Commission proposes to
revise existing § 17.03(c), which grants
the Director of DMO the authority to
permit reporting entities filing Form 102
to authenticate it through a means other
than signing the form.95 Section 17.03(c)
would be revised to grant such authority
to the Director of ODT, rather than the
Director of DMO. Section 17.03(c)
would be further revised to replace the
provision’s existing cross-reference to
§ 17.01(f),96 which the Commission
proposes to strike, with a crossreference to proposed § 17.01, and to
address New Form 71.
Finally, the Commission proposes to
revise existing § 17.03(d), which grants
the Director of DMO the authority to
approve a format and coding structure
other than that set forth in § 17.00(g).97
Section 17.03(d) would be revised to
grant such authority to the Director of
ODT, rather than the Director of DMO.

srobinson on DSK4SPTVN1PROD with PROPOSALS3

C. Part 18
Existing § 18.04 (the ‘‘Statement of
Reporting Trader’’) requires every trader
who holds or controls a reportable
position to file a Form 40 upon special
call by the Commission or its designee
and to provide on Form 40 information
required by existing § 18.04(a) thorugh
(c).98 The Commission proposes to
amend § 18.04 by striking all of its
91 17

CFR 17.03(a).
CFR 17.03(b).
93 17 CFR 17.01.
94 17 CFR 17.01(g).
95 17 CFR 17.03(c).
96 17 CFR 17.01(f).
97 17 CFR 17.03(d) and 17.00(g).
98 17 CFR 18.04(a) through (c).
92 17

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existing provisions and replacing them
as described below.
First, and consistent with its approach
to New Form 102, the Commission
proposes to transition existing § 18.04(a)
through (c)’s detailed form content
requirements from the regulatory text to
New Form 40. Second, the Commission
proposes to codify a new § 18.04(a) that,
as with existing § 18.04, would require
every trader who holds or controls a
reportable position to file a New Form
40 upon special call by the Commission
or its designee. Finally, to accommodate
volume threshold accounts and
reportable sub-accounts identified on
New Forms 102 and 71, the Commission
proposes to codify a new § 18.04(b) that
would require volume threshold
account controllers, persons who own a
volume threshold account, reportable
sub-account controllers, and persons
who own a reportable sub-account to
file New Form 40 upon special call by
the Commission or its designee.
Existing § 18.05 requires traders who
hold or control reportable positions to
maintain books and records regarding
all positions and transactions in the
commodity in which they have
reportable positions.99 In addition,
existing § 18.05 requires that the trader
furnish the Commission with
information concerning such positions
upon request. The Commission
proposes to expand § 18.05 to also
impose books and records requirements
upon (a) volume threshold account
controllers and owners of volume
threshold accounts reported on New
Form 102B and (b) reportable subaccount controllers and persons who
own a reportable sub-account reported
on New Form 71.
D. Part 20
As with Forms 102 and 40, the
Commission proposes to transfer the list
of data points required in Form 102S
data point from the relevant regulatory
text (i.e., § 20.5) 100 to the form itself.
More specifically, the Commission
proposes to eliminate the data points
specified in § 20.5(a)(1), and to revise
§ 20.5(a)(1) to provide that when a
counterparty consolidated account first
becomes reportable, the reporting entity
shall submit a 102S filing (‘‘initial 102S
filing’’). The timing for submitting
initial 102S filings would continue to be
subject to existing § 20.5(a)(3).101
Finally, the Commission proposes to
codify new § 20.5(a)(4) and 20.5(a)(5) to
require change and refresh updates for
Form 102S in the same manner as they
99 17

CFR 18.05.
CFR 20.5.
101 17 CFR 20.5(a)(3). See supra section III(B).
100 17

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are required for Form 102A. The
Commission is also proposing a
conforming amendment to § 20.5(a)(2) to
eliminate the existing instructions with
respect to updating 102S filings.
VII. Questions and Request for
Comment
The Commission requests public
comment on the proposed forms and
regulations described in this Notice, and
welcomes specific alternatives to the
regulatory text proposed to be
implemented and the data points
proposed to be collected herein. In
addition to this general request for
comments, the Commission specifically
requests public comment on the
questions below.
1. With respect to DCMs, the
Commission requests public comment
regarding the RTVL proposed in § 15.04,
which is: 50 or more contracts, during
a single trading day, on a single
reporting market that is a board of trade
designated as a contract market under
§ 5 of the Act or a swap execution
facility registered under § 5h of the Act,
in all instruments that such reporting
market designates with the same
product identifier (including purchases
and sales, and inclusive of all expiration
months). If the RTVL or parameters
proposed in § 15.04 (e.g., a RTVL
measured in ‘‘contracts’’ and set at 50
contracts; a reliance on ‘‘product
identifiers;’’ or the reference to
‘‘expiration months’’) are inadequate
with respect to DCMs, then the
Commission requests public comment
regarding how the RTVL or such
parameters should be revised in any
final rule arising from this Notice. See
section IV(B), above, and section IX,
below.
2. The Commission requests public
comment as to whether it should retain
§ 20.5(a)(3) as the timing requirement
for submitting initial 102S filings on
New Form 102. See section IV(C), above.
3. The Commission requests public
comment on the proposed change and
refresh updates for 102A, 102B, and
102S filings, including comments with
respect to the timing, frequency, and
contents of such updates. See section
IX, below.
4. The Commission requests public
comment as to the appropriateness of
the definitions of ‘‘parent’’ and
‘‘subsidiary’’ in New Form 40, and
whether these definitions should be
changed in any way. See section IV(E),
above.
5. The Commission requests public
comment regarding the definition of
‘‘commodity index trading’’ (CIT) in
New Form 40. The Commission also
requests comment on whether the

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Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Proposed Rules
definition captures all forms of CIT
present in the market, or if not, how the
definition should be modified. Finally,
the Commission requests comment
regarding question 14ii(a) in New Form
40, and whether it will adequately
capture reporting traders’ exposure in
the commodities in which they engage
in CIT. See section IV(E), above.
6. The Commission requests public
comment on the schedule and
procedures proposed in section V above
for the effective date and compliance
date of any final rule resulting from this
Notice.
a. With respect to trading accounts
associated with a DCM or a SEF that is
not yet registered on the effective date
or the compliance date proposed in
section V, should the effective date or
the compliance date for the reporting of
such trading accounts be delayed for a
certain period? If so, how long should
the effective date or compliance date be
delayed?
7. The Commission requests public
comment on whether it should codify a
definition of ‘‘trading account’’ in
§ 15.00 of the Commission’s regulations.
‘‘Trading accounts’’ refers to accounts
identified by a reporting market in daily
transaction-level TCRs submitted to the
Commission pursuant to § 16.02 or any
similar reports received from a SEF.102
If commenters recommend that the
Commission codify a definition of
‘‘trading account’’ in § 15.00, then the
Commission requests that commenters
offer a proposed definition, provided
that such definition does not reference
tags, Party Roles, or other specific data
fields in the TCR. The Commission also
requests public comment regarding the
applicability of the proposed trading
account concept to SEFs, including any
alternatives to trading account that
should be used with respect to SEFs.
8. The Commission requests public
comment on its proposal to require that
reporting firms that are clearing
members identify, on Form 102A, the
trading accounts that comprise a special
account, and provide ownership and
control information and TCR trading
account numbers for such trading
accounts. The Commission also requests
public comment on the three factors
offered in this Notice to determine
whether a trading account comprises
part of a special account. See section
IV(A)(ii), above.
9. The Commission requests public
comment on whether ‘‘trading
account(s) that comprise a special
account’’ should be a defined term in
§ 15.00 of the Commission’s regulations,
and how such definition should differ
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from the three factors discussed in this
preamble, if at all. See section IV(A)(ii),
above.
10. The Commission intends that the
definition of ‘‘volume threshold
account’’ captures all possible categories
of accounts with reportable trading
volume, including give-ups and other
instances in which trades do not
‘execute’ on a DCM or SEF (e.g., block
trades). The Commission requests
public comment regarding whether the
proposed definition of ‘‘volume
threshold account’’ achieves this
purpose, and if not, how the definition
should be revised. See section IX,
below.
11. The definition of ‘‘omnibus
reportable sub-account’’ captures ‘‘any
trading sub-account, which sub-account
executes reportable trading volume on
an omnibus basis,’’ while the definition
of ‘‘reportable sub-account’’ captures
‘‘any trading sub-account, which subaccount executes reportable trading
volume’’ (emphasis added). See section
IX, below. Is the reference to ‘executing’
reportable trading volume the
appropriate terminology in this context?
Would it be preferable to refer instead
to a sub-account that ‘‘receives via
allocation or give-up’’ reportable trading
volume? Is another terminology more
appropriate?
12. With respect to SEFs, the
Commission requests public comment
regarding whether proposed § 15.04
contains the appropriate parameters for
defining a RTVL for volume threshold
accounts associated with a SEF (e.g., a
RTVL measured in ‘‘contracts’’ and set
at 50 contracts; a reliance on ‘‘product
identifiers;’’ or the reference to
‘‘expiration months’’). If the RTVL or
parameters proposed in § 15.04 are
inadequate for SEFs, then the
Commission requests public comment
regarding how the RTVL or such
parameters should be revised in any
final rule arising from this Notice. If
commenters propose alternative
parameters for defining a RTVL for
volume threshold accounts associated
with SEFs (e.g., a parameter based on a
notional value), please describe the
proposed parameters in detail and
indicate which products the parameters
should apply to, in addition to other
relevant criteria. The Commission also
requests comment on the benchmarks
that should be used to determine the
RTVL for SEFs, including the
percentage of trading accounts that
should be identified and the percentage
of products in which a given percentage
of volume should be identified. In this
regard, the Commission refers
commenters to the proposed RTVL in
the context of DCM trading accounts,

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products, and volume: an RTVL of 50
would identify approximately 33
percent of trading accounts, and at least
85 percent of volume in approximately
90 percent of products. The Commission
may determine that any alternative
RTVL for SEFs should achieve similar
coverage. If commenters propose
alternative parameters for defining a
RTVL for volume threshold accounts
associated with a SEF, please also
describe any alternative benchmarks
that are relevant to such parameters
(e.g., what the reportable notional value
for a particular product should be). See
section IV(B) and note 68, above, and
section IX, below.
13. The Commission requests public
comment regarding proposed
§§ 17.01(b), 17.01(d), and 17.02(c)(2)–
(4), which place certain 102B reporting
obligations on clearing members. Do the
proposed regulations require any
revision to adequately address 102B
filings with respect to volume threshold
accounts associated with SEFs? If so,
how should proposed §§ 17.01(b),
17.01(d), and 17.02(c)(2)–(4) be
amended? Should other reporting
entities be considered, and if so, which
ones?
14. The Commission requests public
comment regarding whether the
proposed constructs of ‘‘trading
account,’’ ‘‘volume threshold account,’’
‘‘omnibus volume threshold account,’’
and ‘‘omnibus reportable sub-account’’
are as applicable to SEFs as they are to
trading on DCMs. See section IX, below.
b. If these constructs are not
applicable, then the Commission
requests specific comments on the
differences between trading practices
and/or account structures at DCMs
versus SEFs that would preclude their
use with respect to SEFs. The
Commission also requests specific
comments on how these constructs
should be amended or substituted so
that they are usable with SEFs. For
example, in the context of SEFs, should
the construct of volume threshold
accounts be modified to refer to
reportable trading volume associated
with a particular legal entity identifier,
rather than reportable trading volume
associated with a particular trading
account?
15. The Commission requests public
comments on any defined terms or other
provisions of the proposed rules that
would require revision to accommodate
the identification and reporting of
volume threshold accounts, omnibus
volume threshold accounts, and
omnibus reportable sub-accounts
associated with SEFs.
a. For example, the Commission
requests public comment regarding

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whether the omnibus account structure,
as proposed, is relevant and appropriate
to SEFs. More specifically, the
Commission requests public comment
with respect to proposed § 15.00(w) and
15.00(x), which define omnibus account
and omnibus account originator,
respectively. The proposed definitions
are based on market participants known
to carry or originate omnibus accounts
on DCMs. The Commission requests
comment regarding whether other
market participants should be included
in proposed § 15.00(w) and 15.00(x) to
account for market participants that may
carry or originate omnibus accounts on
SEFs.
16. The Commission requests public
comment as to whether Form 102S
should require the reporting of trading
accounts that comprise a consolidated
account in the same manner that
proposed 102A requires the reporting of
trading accounts that comprise a special
account. If not, why not? The
Commission also requests public
comment regarding: (1) Whether the
three factors used to determine whether
a trading account comprises a special
account are equally applicable to
consolidated accounts; (2) whether
‘‘trading account(s) that comprise a
consolidated account’’ should be a
defined term in the Commission’s
regulations; and (3) the appropriate
definition of ‘‘trading account(s) that
comprise a consolidated account.’’ See
section IV(A)(ii), above.
17. The Commission requests public
comment as to whether New Forms 102
(including, in particular, Form 102S),
71, or 40 should be provided to swap
data repositories (‘‘SDR’’) registered
pursuant to part 49 of the Commission’s
regulations to assist such SDRs in
fulfilling any swaps data aggregation
responsibilities assigned by the
Commission. If not, then the
Commission requests specific public
comment regarding any reasons why the
forms should not be provided to SDRs.
a. If new Forms 102, 71, or 40 are
provided to SDRs, should they be
provided directly by reporting entities
or by the Commission? The Commission
specifically requests public comment
regarding any reasons why the forms
should not be provided to SDRs directly
by reporting entities.
b. The Commission requests public
comment regarding any additional
considerations relevant to the provision
of New Forms 102, 71, or 40 to SDRs
directly by reporting entities, including:
i. the time, manner and format of
submission to SDRs, including any
necessary divergence from the time,
manner, and format proposed herein for

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submission of the forms to the
Commission;
ii. additional data points that should
be contained in the forms to heighten
their utility in any data aggregation
performed by SDRs; and
iii. appropriate limitations on SDRs’
use of any information received in
Forms 102, 71, or 40, other than for data
aggregation purposes specified by the
Commission.
VIII. Related Matters
A. Cost Benefit Considerations
Section 15(a) 103 of the CEA requires
the Commission to consider the costs
and benefits of its actions before
promulgating a regulation under the
CEA or issuing an order. Section 15(a)
further specifies that the costs and
benefits shall be evaluated in light of the
following 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. To the
extent that these proposed regulations
reflect the statutory requirements of the
Dodd-Frank Act, they will not create
costs and benefits beyond those
resulting from Congress’s statutory
mandates in the Dodd-Frank Act.
However, to the extent that the
proposed regulations reflect the
Commission’s own determinations
regarding implementation of the DoddFrank Act’s provisions, such
Commission determinations may result
in other costs and benefits. It is these
other costs and benefits resulting from
the Commission’s own determinations
pursuant to and in accordance with the
Dodd-Frank Act that the Commission
considers with respect to the Section
15(a) factors.
The Commission requests comment
on the costs and benefits associated
with the Notice. As discussed below,
the Commission has identified certain
costs and benefits associated with the
Notice and requests comment on all
aspects of its proposed consideration of
costs and benefits, including
identification and assessment of any
costs and benefits not discussed herein.
In addition, the Commission requests
that commenters provide data and any
other information or statistics that the
commenters relied on to reach any
conclusions on the Commission’s
proposed consideration of costs and
benefits.

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The Commission notes that the cost
estimates provided herein for New
Forms 102A, 102B, 102S, 71, and 40
reflect estimates of: (i) The costs
associated with the reporting and
identification of special and
consolidated accounts for positions
reported under parts 17 and 20,
respectively, of the Commission’s
regulations; and (ii) the costs associated
with the reporting and identification of
volume threshold accounts associated
with DCMs and SEFs. Cost estimates for
these forms are based on extrapolations
from current forms and reports received
from FCMs, IBs, and foreign brokers;
reporting entities pursuant to part 20;
and DCMs pursuant to § 16.02.
The Commission understands that the
costs and benefits of the proposed
reporting regime for trading accounts,
volume threshold accounts, omnibus
volume threshold accounts, and
omnibus reportable sub-accounts
associated with SEFs may differ,
possibly substantially, from the
reporting regime for such accounts
associated with DCMs. The Commission
therefore requests specific quantitative
estimates on the costs and benefits of
Form 102B and 71 filings for volume
threshold accounts, omnibus volume
threshold accounts, omnibus reportable
sub-accounts, and market participants
associated with SEFs.
More generally, the Commission has
requested public comment, in section
VII above, regarding the applicability of
volume threshold accounts, omnibus
volume threshold accounts, and
omnibus reportable sub-accounts to
SEFs. The Commission has also
requested comment on the appropriate
design of a reportable trading volume
level for volume threshold accounts
associated with SEFs, and on the
appropriate reporting entities for
volume threshold accounts associated
with SEFs.
Finally, the Commission requests
comment, including specific
quantitative estimates, on the costs and
benefits of associated with the
identification of trading accounts
associated with consolidated accounts.
i. Background
a. Description of the Statutory Authority
Pursuant to the authority of sections
4a, 4c(b), 4g, 4i, and 4t of the CEA, the
Commission is proposing these
revisions and updates to its large trader
reporting rules and forms.104 These CEA
104 7 U.S.C. 1 et seq. In addition, CEA § 8a(5)
authorizes the Commission to promulgate such
regulations that in its judgment are reasonably
necessary to effectuate any provision of the Act or
to accomplish any of the purposes of the Act. 7

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c. The Proposed Rules
As described in the preamble above,
the Commission is proposing
amendments to the existing reporting
rules and forms as they pertain to
reportable positions in Commission

ii. Costs and Benefits of the Proposed
Rules
The Commission’s consideration of
costs and benefits begins with certain
general considerations applicable to all
forms, followed by specific discussions
of the costs and benefits of: (1) New
Form 102A, (2) New Form 102B, (3)
102S filings, (4) New Form 71, (5) New
Form 40, and (6) 40S filings.
As a general matter, the Commission
considers the incremental costs and
benefits of the proposed regulations and
forms, those costs that are above the
baseline that is the Commission’s
existing regulations. As described in
detail above, the proposed rule and form
amendments would broaden the utility
of existing forms.107 The proposed
amendments would also enhance the
Commission’s surveillance and large
trader reporting programs for futures,
options on futures, and swaps by
clarifying which accounts are required
to be reported on Form 102A; requiring
the reporting on Form 102A of the
trading accounts that comprise each
special account; requiring the reporting
of certain omnibus account information
on Form 71 in connection with omnibus
volume threshold accounts reported on
Form 102B, together with the reporting

of certain reportable sub-accounts
within such omnibus volume threshold
accounts; updating Form 40; and
integrating the submission of 102S and
40S filings into the general Form 102
and Form 40 reporting program.
The Commission proposes that the
costs the Notice would impose on
market participants will vary depending
on various factors, including the size
and/or experience of the market
participant; the scope (whether
measured by position or volume) of the
market participant’s trading activity;
and the number of distinct customer or
proprietary special accounts, volume
threshold accounts, and other account
types required to be reported by each
market participant. Given the range of
factors relative to the potential costs of
the proposed rules, reporting parties
may face costs associated with one,
more than one, or, in some instances, all
of the revised rules and forms. For
purposes of the Paperwork Reduction
Act, the Commission has estimated the
number of hours the average market
participant would spend in connection
with the information collection required
by the Notice.108 Based on those burden
hour estimates, and as further explained
in the Paperwork Reduction Act
discussion below, the Commission
estimates that affected participants
would incur the following approximate
costs in (i) completing Forms 102A and
102S and any resulting Form 40s, (ii)
completing Forms 102B and 71 for
volume threshold accounts associated
with DCMs and SEFs and any resulting
Form 40s, and (iii) complying with the
books and records obligations arising
from proposed § 18.05:

U.S.C. 12a(5). Also, pursuant to CEA § 3(b), the Act
seeks to ensure the financial integrity of regulated
transactions and to prevent price manipulation and
other disruptions to market integrity. 7 U.S.C. 5(b).
105 See supra section II.
106 See supra section IV.

107 New Form 102 is partitioned into: section
102A for the identification of position-based special
accounts; section 102B for the collection of
ownership and control information on individual
trading accounts exceeding a volume-based
reporting threshold; and section 102S for the

submission of 102S filings for swap counterparty
consolidated accounts with reportable positions.
108 See infra the detailed discussion of costs and
burdens in section VIII(C), which has been prepared
for the purpose of the Commission’s responsibilities
under the Paperwork Reduction Act.

provisions, described more fully
above,105 authorize the Commission to
require reporting and recordkeeping
from a wide range of market
participants, including registered
entities, FCMs, brokers, clearing
members, swap dealers, and traders,
engaging in transactions subject to the
Commission’s jurisdiction. Collectively,
these CEA provisions warrant the
maintenance of an effective and
vigorous system of market and financial
surveillance.
b. Prior Rules; Existing Forms 102 and
40
The existing rules and forms,
described more fully above,106 require
FCMs, clearing members, and foreign
brokers to identify special account
traders to the Commission on a Form
102. On special call of the Commission,
a Form 40 is then sent to each trader
identified on a Form 102 submission,
requiring the trader to provide the
Commission with detailed contact
information and to answer other
questions designed to inquire into the
nature of the trader’s market activity. In
both instances, the Form 102 and Form
40 are generally submitted on paper, via
email, or via facsimile (i.e., via some
manual submission process). The
questions and data points on both
existing forms only relate to the
Commission’s existing position-based
reporting rules.

srobinson on DSK4SPTVN1PROD with PROPOSALS3

regulated contracts. In addition, the
Commission is proposing to expand the
reporting rules and forms so that they
may also be used to identify traders and
trading accounts exceeding a volumebased reporting threshold, regardless of
the resulting positions (i.e., ‘‘volume
threshold accounts’’). Finally, the
proposed amendments would provide
for the electronic submission of New
Forms 102, 40, and 71.

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The Commission’s CEA § 15(a)
assessment of costs and benefits
includes consideration of these
estimated Paperwork Reduction Act
information collection costs, as well as
the range of factors that may increase or
decrease these estimates.
In anticipation of a wide range of
technological capabilities among
reporting entities (again, varying based
on the relative size and experience of a
given reporting entity), the Commission
is proposing an implementation
program that would permit multiple
submission methods for each form. By
allowing reporting entities to select the
submission method most suited to their
existing capabilities and business
model, reporting entities will be able to
mitigate their own reporting costs.
While the Commission expects that an
entity with a relatively larger number of
reporting obligations (whether for the
reportable accounts of its customers, or
its own reportable accounts), would
incur larger total costs in complying
with the proposed reporting rules and
submitting the related forms than a
smaller firm, the Commission
anticipates that these larger absolute
costs will be mitigated by lower unit
costs, and the marginal expense of
reporting each additional reportable
account would likely diminish once the
entity established its data collection and
reporting infrastructure. For highvolume reporting entities, the
Commission is proposing an
implementation program, to be
conducted in conjunction with input
from commenters, which will permit
electronic submission of the forms to
the Commission via a defined data
submission standard. This transition
from manual to automated form
submission should reduce costs for
high-volume reporters on a per-account
basis.
In addition to evaluating these
proposed rules based on the
Commission’s experience and expertise
in the derivatives markets, this Notice
took into account comment letters by
industry participants received in
response to the OCR NPRM.110 In one
such letter, the FIA offered a modified
approach to the OCR reporting scheme
109 The estimated total cost includes annual
reporting and recordkeeping costs, as well as
annualized start-up costs and ongoing operating
and maintenance costs. The estimated total costs for
each form included in this chart are subject to the
limitations described earlier in this section. The
estimated total cost for each of New Form 102B,
New Form 71 and New Form 40 in this chart
represents the estimated total cost of completing
Forms 102B and 71 for volume threshold accounts
associated with DCMs and SEFs and any resulting
Form 40s.
110 See supra section III(C)(ii)–(iii).

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proposed in the OCR NPRM, and offered
cost estimates and projections for both
the proposal contained in the OCR
NPRM and the FIA alternative. FIA
specifically expressed concerns about
the implementation costs of the
Commission’s proposal in the OCR
NPRM, stating that it would require
firms to, among other things, renegotiate all active customer agreements
to require customers to provide and
routinely update the necessary data
points, build systems to enter the data,
manually enter the data for each active
account, put in place resources and
processes to maintain the data, provide
it to the reporting entity on a weekly
basis, and monitor changes daily in
order to update the database. In FIA’s
quantification of costs, gathered from
interviews with member institutions,
FIA provided the following estimates in
relation to the proposal in the OCR
NPRM:
Our sample of 12 firms represents
approximately 16 percent of the
approximately 70 FCMs that execute and
clear customer accounts. These firms handle
in excess of $83.8 billion of customer funds,
or approximately 62 percent of customers’
segregated funds (as of July 31, 2010,
according to monthly financial reports filed
with the Commission). We found that the
median firm would face total costs of roughly
$18.8 million per firm, including
implementation costs of roughly $13.4
million, and ongoing costs of $2.6 million
annually. On a per account basis, the median
cost would be $623 per account.

In comparison, FIA estimated that its
alternative would result in significant
first year cost savings, with additional,
incremental savings following initial
implementation. Accordingly, and in
order to realize potential cost savings
identified by FIA, the Commission has
incorporated elements of the FIA’s
alternative approach into this proposal.
For example, this proposal incorporates
FIA suggestions regarding setting a
threshold for determining when a
volume threshold account is reportable
and integrating OCR reporting into the
existing Form 102 process. As noted in
the FIA letter, and as substantiated by
a sample of their members, by
incorporating these elements into this
proposal, the Commission anticipates
that the relative cost impact of these
proposed rules should be significantly
mitigated as compared to the relative
cost impact of the proposal in the OCR
NPRM.
As stated above, the Commission
anticipates potential additional cost
savings (as compared to both the
existing reporting program, as well as
the OCR NRPM) will come through the
proposed automated submission of

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Forms 102, 40, and 71; 111 and, to the
extent practicable, the auto-population
of previously gathered information. As
noted in the FIA comment letter, ‘‘The
end result of developing the alternative
system could ultimately save the firms
(and the Commission) significant time
and money by automating the current
manual process for filing out and
submitting Form 102 information. * * *
Once implemented, the average cost
savings associated with automating the
Form 102 was estimated to be $33,300
per firm on an annual basis.’’ That is,
electronic submission will allow for
increased efficiency for both reporting
firms and for the Commission. In
addition, the proposed requirement that
New Form 102 submissions be updated/
refreshed on a regular basis (as
proposed, on a semi-annual schedule)
would use the previous submission as a
template, meaning that for the majority
of accounts there should be little or no
change to prior reported information,
reducing both the update burden on
firms and the risk of potential errors in
the reporting process.
The Commission proposes that
infrastructure requirements for the
revised Forms 40 and 102 and the
additional Form 71 could be
significant,112 but may be reduced in
relationship to the ability of many firms
to leverage existing systems to meet the
requirements proposed herein. For
example, reporting parties for New
Form 102, which includes new sections
102A, 102B, and 102S, can be FCMs,
foreign brokers, clearing members, and
swap dealers. Many of these entities
will already have standard data
maintenance systems (based on either
their own internal recordkeeping
process or current reporting obligations
other than those proposed herein), and
these current systems could be
leveraged for reporting purposes.
However, because some entities may not
have current systems, or only a portion
of the necessary infrastructure, the
Commission is proposing a phase-in
period for compliance with these
proposed rules. This period is designed
to give entities a window of time for
111 The Commission acknowledges that Form 71
is a completely new form, and so it is not
meaningful to contrast the costs of this new Form
71 with the ‘‘existing reporting program.’’ However,
Form 71 would, in effect, replace a portion of the
Commission’s manual special call process. In that
manner, providing for the automated submission of
Form 71 does provide a much more efficient
information gathering process for both the
Commission and market participants, as compared
the current efforts required to request and receive
analogous information.
112 See infra section VIII(C) for a detailed review
of burden and cost estimates been prepared for the
purpose of the Commission’s responsibilities under
the Paperwork Reduction Act.

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systems development and to mitigate
the cost burdens otherwise associated
with a short-run implementation and
compliance schedule.

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a. New Form 102A
(1) Costs
New Form 102A is directly analogous
to the existing Form 102 currently in
use, identifying owners and controllers
of special accounts with reportable
positions (the other sections of the New
Form 102 extend the Form to new
categories of reportable traders). The
requirement to submit a 102A remains
the same as that for the current Form
102: a special account can be a position
at a reporting entity that is under
common control, common ownership,
or some combination of common control
and common ownership. Because
reportable special accounts would not
be materially different under the
proposed forms and regulations from
special accounts as they now exist, the
Commission believes the incremental
cost of reporting due to account status
should be minimal. However, by reemphasizing that entities must
separately identify special accounts
under common ownership and those
under common control, the Commission
may observe an increase in the number
of special accounts to be identified at
any given reporting entity.
Although the definition of a special
account will not change, the level of
requested information per account will
increase. Proposed Form 102A requests
(as applicable) information not currently
collected, such as owner and controller
NFA ID, LEI, trading account numbers
for trading accounts comprising the
special account, and DMA status. The
commission expects that (as noted by
comment letters on the OCR NPRM) the
majority of these data points already
reside with reporting entities.
Depending on the availability of this
information, costs may be higher or
lower than the estimated average burden
of 102A submission.113
As noted above, the Commission
anticipates that reporting for New Form
102, including Form 102A, will be made
primarily through XML data
submissions. Form 102A reporting will
be triggered once an account becomes a
special account (an account ‘‘event’’)
and updates will be required on at least
a semi-annual basis. Standards for the
data submission will be flexible,
developed in conjunction with market
participants’ and potential reporting
entities’ input, and will take into
113 See infra section VIII(C), which provides
burden and costs estimates in the context of a range
of underlying factors.

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consideration the diversity of reporting
entities’ systems. Should this Notice
lead to a final rule, the Commission will
endeavor to provide flexibility in the
required information technology
systems and to avoid undue burdens for
reporting entities, including those with
relatively large or relatively small
numbers of special accounts.114 The
Commission specifically requests
comment on the expected costs related
to upgrading or obtaining systems to
implement and comply with the
reporting requirement under the 102A
aspect of the proposal in this Notice.
(2) Benefits
As with costs associated with Form
102A, the reporting benefit is mainly
coincident with the benefits of the
current reporting regime. However,
additions to the form have been made to
strengthen the robustness of the
Commission’s regulatory surveillance
capabilities. By collecting information
like the trading account numbers
comprising a special account, the
Commission will be able to compare
intra-day account activity with position
data held over longer periods of time.
This will enable further market
transparency and enhanced market
review over both macro and micro
scales. Micro-structure analysis, the
economic analysis of account activity on
a highly disaggregated level (such as via
individual transactions), was shown to
be uniquely helpful in event studies
such as the Flash Crash of 2010.115
System robustness is also
strengthened with the regular update
schedule required for all special
accounts. Updates provide additional
data verification, improving the
accuracy of account information on a
standard, and sufficiently frequent,
schedule. As discussed, automated
submission should mean that regular
updates come at relatively minimal cost
to those reporting.
b. New Form 102B
(1) Costs
As noted above, the Commission has
attempted to mitigate the cost to the
ultimate reporting entities that provide
OCR data for trading accounts (as
compared to the proposal in the OCR
NPRM), while retaining similar
reporting benefits. One significant
revision relevant to Form 102B is the
introduction of a minimum reporting
114 See infra section VIII(C), which provides
burden and costs estimates related to two distinct
submission methods.
115 See ‘‘Findings Regarding the Market Events of
May 6, 2010,’’ available at: http://www.sec.gov/
news/studies/2010/marketevents-report.pdf.

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threshold of 50 contracts in a given
product, for any given trading day on
any given reporting market that is a
DCM or a SEF, as the trigger for required
reporting (as compared to no minimum
threshold in the OCR NPRM). The
Commission believes that this approach
would provide sufficient data coverage
and benefits, but at a noticeably reduced
cost (again, as compared the proposal in
the OCR NPRM). In this regard, the FIA
comment letter in response to the OCR
NPRM noted that:
Most FCMs found that adopting a volume
threshold of 250 contracts per week would
decrease significantly the costs of
implementing the alternative, by reducing
the amount of data required to be processed
and the associated cost of transmitting large
amounts of data to the exchanges and the
Commission. The average estimated cost of
populating the OCR database using a volume
threshold of 250 contracts per week is
$1,783,750. In contrast, the estimated total
cost for initially populating the OCR file
based on a volume threshold that includes all
accounts (referred to in our survey as option
1) is $2,134,375.

Even with this revision, proposed
Form 102B does cover a market category
not covered under the existing reporting
program and so should be considered as
an additional cost on any baseline. As
with Form 102A, since reporting entities
will likely have existing data feed
capabilities, a subset of reporting firms
will likely not require significant
infrastructure development. In
particular, the Commission notes that
Form 102B reporting firms are limited to
clearing member firms, typically among
the more technologically-sophisticated
participants in the derivatives industry.
As with Form 102A, low-volume
reporters may choose to submit forms
semi-manually through a web-based
portal, which will reduce start-up costs
but increase costs of individual
submissions. Also, as discussed below,
the incremental number of additional
accounts due to volume reporting may
be large. This may translate to
significant costs for those who choose a
manual submission method. The
Commission specifically requests
comment on the expected costs related
to upgrading or obtaining systems to
implement and comply with the
reporting requirement under the 102B
aspect of the proposal in this Notice.
(2) Benefits
The addition of volume threshold
accounts to the reporting structure will
provide much needed information about
a rapidly growing market segment, that
of high volume but low end-of-day
position traders. Many of these
participants enter and exit a given

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market position intraday, and so are not
identified under the current positionreporting regime. The current reporting
regime, though it captures over 90
percent of open interest in many
markets, is not specifically designed to
capture high-volume traders. The
Commission anticipates that, with the
introduction of volume threshold
account reporting, New Form 102B
would help provide trader identification
for over 90 percent of market activity in
many significant products, mirroring the
current levels of position identification
in the futures market.
In addition to increasing the set of
reporting entities on an absolute level,
102B reporting is likely to increase the
types of market participants identified
to the Commission. For example, it is
expected that volume threshold
accounts would identify trade
ownership and control for market
participants such as high-frequency
traders (HFTs) and other algorithmic
systems; in highly-liquid markets,
participants of this type can make up a
meaningful percentage of market
activity. However, due to the current
structure of the reporting system, many
participants in these categories do not
qualify as reportable special accounts.
The 102B would expand the
Commission’s reporting program to
include participant groups of this
nature, and would also expand the
reporting program to include trading
accounts associated with SEFs.
c. New Form 71

srobinson on DSK4SPTVN1PROD with PROPOSALS3

(1) Costs
Because the concept behind Form 71
is being introduced for the first time in
this Notice, all costs associated with
Form 71 reporting are incremental. The
form identifies the ownership and
control structure of omnibus accounts,
from the level of originator to that of
sub-account owners and controllers, for
volume threshold accounts that are
omnibus accounts. The Commission
plans to provide a web-based portal for
submission and, potentially, an XML
submission standard like New Form
102.
Because the structure of omnibus
accounts is currently not known by the
Commission, it cannot accurately
quantify how many additional reports
will be necessary due to the
introduction of Form 71. However, the
Commission has attempted to mitigate
the cost of reporting, especially for
larger institutions that may have a
greater number of relevant accounts.
Many of the data fields in Form 71 will
be auto-populated with data provided to
the Commission on an associated Form

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102B or Form 71. This auto-population
will be included in the web-based
system for the benefit of the reporting
party, and is intended to help mitigate,
as much as possible, the submission
burden. The Commission specifically
requests comment on the expected costs
related to upgrading or obtaining
systems to implement and comply with
the reporting requirement under the
Form 71 aspect of the proposal in this
Notice.
(2) Benefits
Form 71 provides further granularity
regarding the ownership hierarchy of
omnibus accounts that are volume
threshold accounts. Broad collection of
omnibus account information can be
used to aggregate and analyze all trading
by an individual or trading entity,
whether through a single account or
through a number of accounts held with
one or more intermediaries. In the
absence of Form 71 information in
connection with omnibus volume
threshold accounts, the Commission
would lose meaningful ownership and
control information (and, therefore,
usefulness of the 102B reports),
including the structure of and
dependence on intermediaries within a
given market.
d. 102S filings
(1) Costs
The increased relative cost of the
102S filings required in this proposal, as
compared to existing 102S filing
requirements, should be minimal. This
proposal does not amend or change the
subset of traders for which swap dealers
and clearing members will be required
to submit 102S filings. However, by
updating existing Form 102 to include
102S filings and by creating a new
submission framework for New Form
102, entities submitting 102S filings
may encounter costs similar to those
encountered by entities filing New Form
102 for other purposes (whether under
102A or 102B). The Commission
anticipates that many 102S filing
entities will also be submitting New
Form 102 in connection with their
futures trading business. In addition, the
Commission is proposing to work with
potential filing entities during the
comment period in order to achieve a
102S filing submission process that
leverages as much as possible off of the
existing infrastructure and practice at
reporting entities, including the
resources that will be used for
analogous futures filings. The
Commission specifically requests
comment on the expected costs related
to upgrading or obtaining systems to

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implement and comply with the
reporting requirement under the 102S
aspect of the proposal in this Notice.
(2) Benefits
Form 102S, like 102B, is designed to
expand the set of reporting entities
beyond those of the current Form 102.
The identification of accounts via 102S
will provide trader information for
participants in swaps. For the purposes
of tracking aggregated position exposure
in a product or commodity, or market
activity of a specific trader, swap
reporting significantly extends the
Commission’s market surveillance
capabilities. The inclusion of swap
activity aligns with the recently
finalized rules on real-time public and
regulatory reporting of swap trades, and
provides further transparency in what
are currently often opaque and/or overthe-counter markets. As further changes
arise in the commodity swap market,
such as the introduction of SEFs, special
account identification will allow
universal market monitoring of activity
across traditional futures exchanges and
SEFs. This can provide quantifications
of the balance of activity in a given
product across different execution
platforms and changes in this balance
over time. In addition, disruptive
market activity transferred across
multiple trading facilities could now be
more easily, and more quickly,
identified with the information
requested in 102S filings.
e. New Form 40
(1) Costs
The proposed changes to Form 40
extend the level of information collected
about account ownership and the
business practices of reporting traders.
Given the new subsections of New Form
102 (i.e., 102A, 102B, and 102S, as well
as Form 71), the number of traders
required to submit a Form 40 is likely
to increase. As with existing Form 40,
New Form 40 will be required from a
wide range of market participants (from
individual traders up to large financial
institutions). Because of this wide range
of form respondents, New Form 40, like
Form 71, will be offered in a web-based
format, and will be auto-populated with
the related account information
provided on the associated New Form
102 or Form 71, as applicable. Because
of the more detailed questions in New
Form 40, as compared to existing Form
40, the initial reporting burden per form
is likely to increase beyond the estimate
for the current form.116 However,
necessary updates may occasion a
116 See

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reduced incremental burden, given the
introduction of an electronic submission
format through a portal that stores prior
form submissions. The Commission
specifically requests comment on the
expected costs related to implementing
and complying with the reporting
requirement under the New Form 40
aspect of the proposal in this Notice.
(2) Benefits
Through the expansion of Form 40,
the Commission will have more detailed
data on reporting traders, including
information regarding reporting trader’s
control relationships with other entities
and other relationships with persons
that influence or exercise authority over
the trading of a reporting trader. This
data set will include an expansion of the
list of business purposes for futures and
swaps activity and requests for detailed
information about the business sector
and physical commodity market
participation of a given trader.
Responses to these questions can
provide a broader view concerning
relationships and relative interest in
related markets by business sector, and
overlaps in activity across different
product groups. It can also provide the
Commission a check, or confirmation, to
assess whether market activity matches
the self-reported trading goals of a
reporting trader.
f. 40S filings

srobinson on DSK4SPTVN1PROD with PROPOSALS3

(1) Costs
The increased relative cost of the 40S
filings in this proposal, as compared to
existing 40S filing requirements, should
be minimal. This proposal does not
amend or change the subset of traders
who will be required to submit 40S
filings, and the existing 40S filings must
be completed using existing Form 40.
By updating existing Form 40 questions
and providing for web-based form
submission, the Commission does not
anticipate any significant increase or
change in costs related to the 40S filing
provisions of this Notice. The
Commission specifically requests
comment on the expected costs related
to implementing and complying with
the reporting requirement under the 40S
filing aspect of the proposal in this
Notice.
(2) Benefits
Similar to the New Form 40 benefits
discussion above, 40S filings under this
proposal would provide the
Commission with a broader view (as
compared to existing Form 40 and 40S
filings) concerning relative interest in
related markets by business sector, and
overlaps in activity across different
product groups. It can also provide the

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agency a means to check that observed
market activity matches the selfreported trading goals of the entity.
iii. Section 15(a) Factors
a. Protection of Market Participants and
the Public
Although potentially costly, the
Commission proposes that the data
collection under these rules and forms
are necessary to assist the Commission
in protecting market participants and
the public by, inter alia: identifying as
many accounts as feasible that are under
common ownership or control;
identifying trading accounts whose
owners or controllers are also included
in the Commission’s large trader
reporting program or that demonstrate
independently significant trading
activity; and identifying the entities or
persons which the Commission should
contact if additional information is
required, including the owner and
controller, and related contact persons,
for reported accounts and traders.
The Commission proposes that
revised Form 102 will protect market
participants and the public by
expanding data collection in three major
areas: (1) By providing additional
information regarding special accounts
reported on 102A, including the trading
accounts that comprise a special
account; (2) by increasing the number of
identified futures, options, and swaps
accounts through the new volume
threshold trigger in 102B; and (3) by
identifying ownership and control
information for a new market sector,
that of swaps.
The proposed rule will protect market
participants and the public by
permitting the Commission to integrate
transactions (and associated trading
accounts) identified on daily trade
capture reports with special accounts
holding reportable positions; identifying
traders of all sizes whose open interest
does not reach reportable levels, but
whose intra-day trading reaches
significant levels and may adversely
affect markets during concentrated
periods of intra-day trading; reducing
the time-consuming process of
requesting and awaiting information
from outside the Commission to identify
the entity associated with a given
trading account number on a trade
capture report and aggregating all
identified entities that relate to a
common owner; linking traders’ intraday transactions with their end-of-day
special account positions; calculating
how different categories of traders
contribute to market-wide open interest;
and categorizing market participants
based on their actual trading behavior

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43989

on a contract-by-contract basis,
supplementing the self-reported
classifications on Form 40.
The proposed forms will be submitted
in either an XML-based data feed or via
a web-based submission. This modifies
the process of form submission from the
current manual systems at both the
Commission and reporting entities. As
compared to manual entry, automated
systems should decrease the possibility
of transcription error or errors in cross
identification and reduce labor costs,
aiding the accuracy and efficiency of
agency market monitoring and
enforcement.
Additional identifiers, such as those
requested in New Form 102, will also
allow for data integrity checks within
and between the Commission’s
databases. For example, requests for
NFA and LEI numbers provide
independently assigned identifiers for
ownership hierarchy verification. Also,
New Form 40 information will be a
direct check on much of the ownership
and control information provided on
New Form 102. In sum, the proposed
rules would greatly increase the ability
of the Commission to carry out its
regulatory function and its protection of
the public in an efficient manner. By
leveraging available technology, these
revisions should ultimately mitigate the
long term cost to market participants of
providing the requested information.
b. Efficiency, Competitiveness, and
Financial Integrity of the Markets
Collecting ownership and control
information for the identified market
participants allows the Commission to
aggregate positions for a specific
underlying trader across multiple
products and markets and to identify
aggregate activity levels. This
identification provides additional
market transparency for regulators and a
clearer quantification of risk within and
across firms, aiding the surveillance and
monitoring functions of the
Commission. Thus, while done at a cost,
as described above, it aids in
monitoring, over longer periods of time,
risk exposure by institution, market
class, or asset class. The proposed forms
also allow for easy identification of the
individual, or individuals, to be
contacted if additional transaction
information is needed for further
review. As noted in a comment letter
from the Petroleum Marketers
Association of America (PMAA) on the
OCR NRPM, ‘‘Efficient integration of
large trader and trade register data from
DCMs, ECMS, and [other markets] will
improve market transparency and
ensure that no one trader, investment
fund or other entity controls a large

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percentage of the interest on commodity
futures exchanges. Increased reporting
requirements will help to identify those
who possibly attempt to corner the
market by taking huge positions in the
futures markets which can move futures
prices beyond what supply and demand
fundamentals dictate.’’ Similarly, the
Air Transport Association (ATA)
included a list of market and regulatory
benefits of the ownership and control
report, including allowing staff to
aggregate trading accounts under
common ownership or control, allowing
large trader reports and exchange trade
registers to be linked, allowing
expanded oversight of trading by widely
dispersed individuals and accounts,
helping staff link traders’ intra-day
transactions with end-of-day positions,
assisting investigations into intra-day
manipulation and other trade practice
abuses, and, bridging gaps in current
data reporting systems.
Under the proposed rules,
strengthened ties between end-of-day
position and trade execution account
registers received by the Commission
can allow for a more accurate and
timely accounting of market position by
account. In addition, the increased
depth of trader information allows for
more robust research and analytics,
encompassing a much greater segment
of market volume traded on exchange
platforms. The additional information
could also aid in anticipating and/or
monitoring market disruptions that can
come at high costs to the investing and
general public.

srobinson on DSK4SPTVN1PROD with PROPOSALS3

c. Price Discovery
The Commission does not anticipate
that the proposed rules will have an
impact on price discovery in markets
regulated by the Commission.
d. Sound Risk Management Procedures
The expansion of both requested
information and reportable accounts in
the proposed forms requires firms to
collect more information on each
threshold account for appropriate risk
monitoring. While the technology and
personnel required for this collection
will come at some cost to both market
participants and the Commission, as
described above, this collection of
information is of benefit not just for
regulatory oversight but for effective
internal risk management at the level of
the firm. Identification of account
control and related contact information
can provide timely responses to market
disruptive events from multiple parties.
It can also allow for prophylactic
classification of market categories which
could provide unique risks to market
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One specific area for which enhanced
monitoring may be of benefit is that of
direct market access (DMA). Briefly,
DMA allows a trading entity to submit
orders directly to an exchange matching
engine. It is anticipated that this
decreased distance between trade entry
and ultimate execution on the exchange
may carry additional transaction risk. A
recent IOSCO report 117 notes that direct
market access could implicitly contain
any of the following market risks: (1) A
user may access markets outside of the
infrastructure and/or control of market
intermediaries, (2) there may be an
incentive for intermediaries/customers
to gain execution advantages based on
the type and geographic location of their
connectivity arrangements, and (3)
algorithmic trading through automated
systems may imply issues of capacity
and the potential need for rationing
bandwidth. Similarly, a CSA Report
outlined the risks associated with
dealers/exchanges providing DMA to
clients/customers, including risks to
market integrity and to related
technological systems.118 The
Commission feels it is useful, from both
a market monitoring and analysis
standpoint, to identify those accounts
which have been provided with this
enhanced trading capability.
Highlighting potential concerns with
market integrity, both at the firm and at
the exchange level, will be aided by
knowledge of non-intermediated access.
e. Other Public Interest Considerations
Form 40 now contains the relevant
North American Industry Classification
System (NAICS) categories to aid in
business sector identification. The form
includes two other selection lists: (1)
Commodity groups and individual
commodities (a classification defined by
the CFTC) and (2) trading purposes that
further detail the business practices of a
reporting firm. These identifications can
aid in analytical studies (developing
categories of trading activity beyond
those currently used by the agency), in
cross-validation of trading intent, and in
analysis of risk exposure across business
sectors.
In addition, and as discussed
throughout this document, the move to
electronic submission of the forms
addressed by these proposed rules will
increase efficiencies for both market
participants and the Commission.
Specifically, data will be more reliable,
will be received and reviewed faster,
and will be capable of being updated
117 See http://www.iosco.org/library/pubdocs/pdf/
IOSCOPD332.pdf.
118 See http://www.osc.gov.on.ca/documents/en/
Securities-Category2/ni_20110408_23–103_proelectronic-trading.pdf.

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faster than in the current paper based
submission process. By embracing
available technology to carry out its
surveillance and market monitoring
functions in this manner, market
participants and the public will benefit
from a more efficient and effective
Commission.
The Commission specifically requests
comment on its cost and benefit
considerations of the proposed rules, as
discussed above, and the proposed
rule’s impact (or the relative impact of
any alternative rules) on: (1) The
protection of market participants and
the public; (2) the efficiency,
competitiveness, and financial integrity
of the futures markets; (3) the market’s
price discovery functions; (4) sound risk
management practices; and (5) other
public interest considerations.
B. Regulatory Flexibility Analysis
The Regulatory Flexibility Act
(‘‘RFA’’) requires that agencies consider
whether the rules they propose will
have a significant economic impact on
a substantial number of small entities
and, if so, provide a regulatory
flexibility analysis regarding the
impact.119 A regulatory flexibility
analysis or certification is typically
required for ‘‘any rule for which the
agency publishes a general notice of
proposed rulemaking’’ pursuant to the
notice-and-comment provisions of the
Administrative Procedure Act, 5 U.S.C.
553(b).120
The rules proposed in this Notice
would require FCMs, clearing members,
foreign brokers, swap dealers and other
reporting traders (including natural
persons) to complete New Forms 102 or
71, and to submit them to the
Commission as specified in the
proposes rules or upon special call by
the Commission. The Commission has
previously determined that FCMs,
clearing members, foreign brokers, swap
dealers, and natural persons are not
small entities for purposes of the
RFA.121 Accordingly, the rules proposed
in this Notice with respect to Forms 102
and 71 would not have a significant
economic impact on a substantial
number of small entities.
The proposed rules would also
require certain reporting traders to
complete and submit New Form 40
119 5

U.S.C. 601 et seq.
U.S.C. 601(2), 603, 604 and 605.
121 See respectively and as indicated: 47 FR 18618
(April 30, 1982) (FCMs and large traders); 72 FR
34417 at 34418 (June 22, 2007) (foreign brokers); 76
FR 71626 at 71680 (November 18, 2011) (swap
dealers); and 76 FR 71626 at 71680 (November 18,
2011) and 76 FR 43851 at 43860 (July 22, 2011)
(clearing members). See also 5 U.S.C. 601(6)
(natural persons are not entities for purposes of the
RFA).
120 5

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Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Proposed Rules
upon special call by the Commission.
Some of these reporting traders may be
‘‘small entities’’ under the RFA. In 2010,
the Commission required approximately
3,320 reporting traders to complete a
Form 40, from a total population of
approximately 10,000 reporting traders.
Of these 3,320 Form 40s, approximately
2,500 were completed by institutions, a
portion of which could potentially be
small entities under the RFA. For
example, the Commission has received
comments on its Dodd-Frank Act
rulemakings indicating that certain
entities that may be required to comply
with the reporting and recordkeeping
requirements in this Notice have been
determined by the Small Business
Administration to be small entities. In
particular, the Commission understands
that some not-for-profit electric
generators, transmitters, and distributors
that may be required to comply with the
proposed rules have been determined to
be small entities by the SBA, because
they are ‘‘primarily engaged in the
generation, transmission, and/or
distribution of electric energy for sale
and [their] total electric output for the
preceding fiscal year did not exceed 4
million megawatt hours.’’ 122
The Commission believes that, due to
the limited number of institutions likely
to receive a New Form 40 request in any
given year, as well as the limited nature
of the New Form 40 reporting burden,
the rules proposed in this Notice with
respect to New Form 40 would not have
a significant economic impact on a
substantial number of small entities.
New Form 40 would not be required on
a routine and ongoing basis, but rather
would be sent by the Commission on a
discretionary basis in response to the
reporting of an account that reaches a
minimum position or volume threshold.
As summarized above, in 2010 the
Commission made Form 40 requests to
only 25% of all reporting traders that
could potentially be small entities;
furthermore, some of these reporting
traders were not in fact small entities.
As a result, New Form 40 would be
expected to affect only a small subset of
the entities that may be small entities
under the RFA. In addition, New Form
40 is not lengthy or complex, and would
require reporting traders to provide only
limited information to the Commission.
The Commission estimates that a
reporting trader would require only 3
hours to complete a New Form 40.
122 Small Business Administration, Table of
Small Business Size Standards (Nov. 5, 2010). See
also the regulatory flexibility analysis regarding
such entities in 77 FR 1182 at 1240 (January 9,
2012), 77 FR 2136 at 2170 (January 13, 2012), and
77 FR 2613 at 2620 (January 19, 2012).

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The rules proposed in this Notice
regarding revised § 18.05 would also
impose books and records obligations
upon a new category of market
participants—specifically, certain
owners (but not controllers) of a volume
threshold account or a reportable subaccount. Such owners may be small
entities under the RFA. The
Commission does not believe that the
obligation to maintain books and
records under revised § 18.05 would
impose significant costs on the
additional small entities subject to the
recordkeeping requirements of such
section. The Commission expects that
such account owners may largely rely
on the books and records that they
maintain in the ordinary course of
business to fulfill the requirements of
revised § 18.05. The Commission also
expects that a portion of the account
owners subject to revised § 18.05 are
subject to the position-based
recordkeeping requirements of current
§ 18.05,123 and would not incur
significant costs expanding their
recordkeeping practices to comply with
revised § 18.05. To the extent that
certain small entities are required to
modify their practices to comply with
the volume-based recordkeeping
requirements of revised § 18.05, the
Commission believes that this will not
impose a significant economic burden,
because this requirement would: (a)
Ensure that (i) owners of volume
threshold accounts and reportable subaccounts and (ii) owners of reportable
positions are subject to equivalent
recordkeeping obligations under § 18.05,
and therefore maintain books and
records in a consistent format; and (b)
promote the Commission’s market
surveillance and investigatory functions
to better deter price manipulation and
other disruptions of market integrity.
Accordingly, for the reasons set forth
above, the Chairman, on behalf of the
Commission, hereby certifies pursuant
to 5 U.S.C. 605(b) that the rules
proposed in this Notice would not have
a significant economic impact on a
substantial number of small entities.
The Commission invites public
comment on this determination.
C. Paperwork Reduction Act
i. Overview
The Paperwork Reduction Act
(‘‘PRA’’) 124 imposes certain
requirements on Federal agencies in
connection with their conducting or
sponsoring any collection of
information as defined by the PRA. An

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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. This proposed rulemaking
would result in new collection of
information requirements within the
meaning of the PRA. The Commission is
therefore 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.
The title for this collection of
information is ‘‘Trader and Account
Identification Reports’’ (OMB control
number 3038–NEW). If adopted,
responses to this collection of
information would be mandatory. The
Commission would protect proprietary
information in accordance with the
Freedom of Information Act and 17 CFR
part 145, ‘‘Commission Records and
Information.’’ In addition, § 8(a)(1) of
the Act strictly prohibits the
Commission, unless specifically
authorized by the Act, from making
public ‘‘data and information that
would separately disclose the business
transactions or market positions of any
person and trade secrets or names of
customers.’’ 125 The Commission is also
required to protect certain information
contained in a government system of
records according to the Privacy Act of
1974, 5 U.S.C. 552a.
The proposed rulemaking would
create new information collection
requirements via proposed §§ 17.01,
18.04, 18.05, and 20.5. Currently, OMB
control number 3038–0009 covers,
among other things, the collection
requirements arising from existing
§§ 17.01, 18.04, and 18.05.126 Also,
OMB control number 3038–0095 covers,
among other things, the collection
requirements arising from existing
§ 20.5.127 Accordingly, the Commission
is requesting a new OMB control
number for the purpose of consolidating
the collections into a common control
number. Collection requirements arising
from proposed §§ 17.01, 18.04, 18.05,
and 20.5 would be covered by 3038–
NEW. Once the collections covered by
control number 3038–NEW become
operational, OMB control number 3038–
0009 would no longer cover collection
requirements arising from §§ 17.01,
18.04, and 18.05. In addition, OMB
control number 3038–0095 would no
longer cover collection requirements
arising from § 20.5. The remaining
collection requirements covered by
125 7

123 17

CFR 18.05.
124 44 U.S.C. 3501 et seq.

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U.S.C. 12(a)(1).
CFR 17.01, 18.04 and 18.05.
127 17 CFR 20.5.
126 17

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3038–0009 and 3038–0095 would not be
affected.

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ii. Information To Be Provided
Proposed § 17.01 would result in the
collection of information regarding the
following types of accounts: (a) Special
accounts (as defined in existing
§ 15.00(r)); 128 and (b) volume threshold
accounts, omnibus volume threshold
accounts, and omnibus reportable subaccounts (each as defined in proposed
§ 15.00). Specifically, proposed § 17.01
would provide for the filing of New
Form 102A, New Form 102B and New
Form 71, as follows:
1. Pursuant to proposed § 17.01(a),
FCMs, clearing members, and foreign
brokers would identify new special
accounts to the Commission on New
Form 102A; 129
2. Pursuant to proposed § 17.01(b),
clearing members would identify
volume threshold accounts to the
Commission on New Form 102B; 130 and
3. Pursuant to proposed § 17.01(c),
omnibus volume threshold account
originators and omnibus reportable subaccount originators would identify
reportable sub-accounts to the
Commission on New Form 71 when
requested via a special call by the
Commission or its designee.131
Additional reporting requirements
would arise from proposed § 18.04,
which would result in the collection of
information from and regarding traders
who own, hold, or control reportable

128 17

CFR 15.00(r).
supra sections III(A) and IV(A) for a
description of existing Form 102 and a comparison
to New Form 102A.
130 See supra section IV(B) for a description of
New Form 102B.
131 See supra section IV(D) for a description of
New Form 71.
132 See supra sections III(A) and IV(E) for a
description of existing Form 40 and a comparison
to New Form 40.
129 See

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positions; volume threshold account
controllers; persons who own volume
threshold accounts; reportable subaccount controllers; and persons who
own reportable sub-accounts.
Specifically, proposed § 18.04 would
provide for the filing of New Form 40,
as follows:
1. Pursuant to proposed § 18.04(a), a
trader who owns, holds, or controls a
reportable position would file New
Form 40, when requested via a special
call by the Commission or its designee;
and
2. Pursuant to proposed § 18.04(b), a
volume threshold account controller,
person who owns a volume threshold
account, reportable sub-account
controller, and person who owns a
reportable sub-account would file New
Form 40 when requested via a special
call by the Commission or its
designee.132
Reporting requirements would also
arise from proposed § 20.5(a), which
would require all reporting entities to
submit 102S filings for swap
counterparty or customer consolidated
accounts with reportable positions.133 In
addition, existing § 20.5(b) requires
every person subject to books or records
under existing § 20.6 to complete a 40S
filing after a special call upon such
person by the Commission.134 However,
existing § 20.5(b) also provides that a
40S filing shall consist of the
submission of Form 40. As discussed

133 ‘‘Reporting entity,’’ ‘‘counterparty,’’ and
‘‘consolidated account’’ are each defined in § 20.1
of the Commission’s regulations. See supra sections
III(B) and IV(C) for a description of 102S.
134 17 CFR 20.5(b) and 20.6. See supra sections
III(B) and IV(E) for a description of 40S.
135 17 CFR 18.05.
136 The estimated total cost includes annual
reporting and recordkeeping costs, as well as
annualized start-up costs and ongoing operating
and maintenance costs. The estimated total costs for

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above, the proposed rules provide for
the creation of New Form 40, which
would expand and replace existing
Form 40. Accordingly, the proposed
rules would require additional
information from 40S filers.
In addition to the reporting
requirements summarized above,
proposed § 18.05 would impose
recordkeeping requirements for: (1)
Traders who own, hold, or control a
reportable futures or option position; (2)
volume threshold account controllers;
(3) persons who own volume threshold
accounts; (4) reportable sub-account
controllers; and (5) persons who own
reportable sub-accounts. These
provisions extend the recordkeeping
requirements of current § 18.05, which
are applicable to traders who hold or
control reportable positions in futures
contracts, to owners and controllers of
accounts with reportable trading
volume.135
iii. Reporting and Recordkeeping
Burdens
Set forth below is the estimated total
annual industry cost for affected
participants to (i) complete Forms 102A
and 102S and any resulting Form 40s,
(ii) complete Forms 102B and 71 for
volume threshold accounts associated
with DCMs and SEFs and any resulting
Form 40s, and (iii) comply with the
books and records obligations arising
from proposed § 18.05:

each form included in this chart are subject to the
limitations described in section VIII(A), above. The
estimated total cost for each of New Form 102B,
New Form 71 and New Form 40 in this chart
represents the estimated total cost of completing
Forms 102B and 71 for volume threshold accounts
associated with DCMs and SEFs and any resulting
Form 40s.

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Total reporting and recordkeeping
costs for the proposed rules reflect the
sum of estimated burdens, multiplied by
the wage rate provided below, for: (1)
New Form 102A; (2) New Form 102B;
(3) New Form 71; (4) New Form 40
(pursuant to 18.04(a)); 137 (5) New Form
40 (pursuant to 18.04(b)); 138 (6) the
reporting and recordkeeping
requirements of proposed § 18.05; (7)
102S filings; and (8) 40S filings.
However, the Commission notes that
reporting and recordkeeping burdens
arising from each regulation and
associated form were estimated
independently of the requirements of
the other regulations and associated
forms, and that substantial synergies are
likely to exist across the systems and
data necessary to meet the reporting
requirements. As a result, the total
reporting and recordkeeping costs for
the proposed rules are likely to be
substantially lower than estimated. For
example, many reporting firms filing
New Form 102A would also file New
Form 102B, and would be able to
leverage systems and information
necessary for filing one form to meet the
requirements of the other. Accordingly,
total reporting and recordkeeping costs
are likely to be lower than the sum of
the costs associated with each form
individually, as the Commission has
calculated herein.
All burden estimates assume that
information required by each form is
generally available within the reporting
entity; however, in preparing its
estimates, the Commission did make an
effort to account for the added burden
associated with assembling data
distributed among multiple systems
and/or databases within a reporting
entity.
a. Reporting Burdens
Proposed § 17.01(a)—New Form
102A: The Commission estimated the
reporting burden associated with this
proposed regulation by considering the
two distinct filing methods that it will
accommodate should a final rule be
adopted. With two methods of
submission, reporting entities (i.e.,
FCMs, clearing members, and foreign
brokers) would have the flexibility to
select the submission method that
works best with their existing data and
technology infrastructure and the
number of filings they expect to make.
In general, the Commission believes that
Method 1 would be more cost effective
for reporting entities with a large
number of filings, while Method 2
would be more cost effective for
137 17
138 17

CFR 18.04(a).
CFR 18.04(b).

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reporting entities with a small number
of filings.
Method 1: This method assumes that
each reporting entity would use an
automated program to submit its New
Form 102As via secure FTP. Each
Method 1 submission would likely
contain numerous 102A records. The
Commission estimates that the total
initial development burden would
average 264 hours per reporting entity.
The Commission also estimates that the
highly automated nature of this option
would virtually eliminate the marginal
costs associated with each additional
submission or each additional record
contained in a submission. Accordingly,
the Commission estimates that 102A
change and refresh updates would not
increase a reporting entity’s burden
when using Method 1. The Commission
further estimates that ongoing operation
and maintenance costs would average
53 hours per year no matter how many
records are contained in a submission.
The total Method 1 annualized
development burden and the ongoing
operation and maintenance cost burden
(total yearly costs) would equal
approximately 106 hours per reporting
entity.139
A recent assessment of Commission
data collection efforts demonstrated that
the Commission receives Form 102
submissions from approximately 250
reporting entities annually. The
Commission anticipates that it would
receive New Form 102A submissions
from a similar number of reporting
entities. Assuming all New Form 102A
reporting entities utilize Method 1, the
Commission estimates that the total
annual industry burden for New Form
102A would equal 26,500 hours. Using
an estimated wage rate of $78.61 per
hour,140 annual costs for 102A filings
139 All annualized development burden estimates
are based on 5 year, straight line depreciation. The
106 hour figure is arrived at by dividing 264 hours
(initial development burden per reporting entity) by
5 years, which results in an estimated annualized
initial development burden of 52.8 hours per
reporting entity. 52.8 hours plus 53 hours
(annualized ongoing operation and maintenance
costs per reporting entity) equals 106 hours per
reporting entity.
140 The Commission staff’s estimates concerning
the wage rates are based on salary information for
the securities industry compiled by the Securities
Industry and Financial Markets Association
(‘‘SIFMA’’). The $78.61 per hour is derived from
figures from a weighted average of salaries and
bonuses across different professions from the
SIFMA Report on Management & Professional
Earnings in the Securities Industry 2010, modified
to account for an 1800-hour work-year and
multiplied by 1.3 to account for overhead and other
benefits. The wage rate is a weighted national
average of salary and bonuses for professionals with
the following titles (and their relative weight):
‘‘programmer (senior)’’ (30% weight);
‘‘programmer’’ (30% weight); ‘‘compliance advisor

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43993

made pursuant to Method 1 are
estimated at $2,083,165.141
Method 2: This method assumes that
each reporting entity would complete
and submit each New Form 102A online
via a secure portal provided by the
Commission. The Commission estimates
that the total initial development
burden would average 20 hours per New
Form 102A record. The Commission
also estimates that annual ongoing costs,
which include change and refresh
filings, would average 7 hours per year
for each New Form 102A record. The
estimated Method 2 total annualized
development burden and the ongoing
operation and maintenance cost burden
(total yearly cost) equals approximately
11 hours per New Form 102A record.142
A recent assessment of Commission
data collection efforts demonstrated that
the Commission receives approximately
4,700 Form 102 records annually.
However, by reiterating that
Commission regulations require
reporting firms to separately aggregate
positions by common ownership and by
common control for the purpose of
identifying and reporting special
accounts, the Commission may observe
an increase in the number of 102A
filings. The Commission anticipates that
the number of annual New Form 102A
records may increase by 75% to
8,225.143 Assuming each of the 8,225
New Form 102A records are provided
via Method 2, the Commission estimates
that the total annual industry burden for
New Form 102A would equal 90,475
hours. Using an estimated wage rate of
$78.61 per hour, annual costs for 102A
filings made pursuant to Method 2 are
estimated at $7,112,240.144
The Commission understands that
providing filing options to the industry
should lower costs relative to failing to
provide such options. Because of this,
estimated total costs to the industry for
102A filings should be lower than any
cost associated with mandating either
Method 1 or Method 2. Given the cost
estimates for the two individual
(intermediate)’’ (20%), ‘‘systems analyst’’ (10%),
and ‘‘assistant/associate general counsel’’ (10%).
141 The $2,083,165 figure is arrived at by
multiplying 106 hours by 250 reporting entities
(equals 26,500 hours) by $78.61 (equals $2,083,165).
142 All annualized development burden estimates
are based on 5 year, straight line depreciation.
143 The Commission believes that about 25% of
special accounts reported on Form 102 have the
same owner and controller. In such case, the
reporting entity need only submit one New Form
102. Accordingly, the annual number of New Form
102A records would increase, as compared to
current annual Form 102 submissions, only to the
extent that the owner and the controller of a special
account are different.
144 The $7,112,240 figure is arrived at by
multiplying 11 hours by 8,225 records (equals
90,475 hours) by $78.61 (equals $7,112,240).

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Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Proposed Rules

methods discussed above, the
Commission anticipates 102A filing
costs to be no more than approximately
$2,083,165 (Method 1), the lower of the
two estimated filing methods. In
developing this estimate, the
Commission does not make any
assumptions about the behavior of an
individual reporting entity. Reporting
entities, given their own individualized
needs, are assumed to make the most
cost-effective choice for them, which
may be any one of the two methods.
Proposed § 17.01(b)—New Form
102B: The Commission estimated the
reporting burden associated with this
proposed regulation by considering the
two distinct filing methods that it will
accommodate should a final rule be
adopted. With two methods of
submission, reporting entities (i.e.,
clearing members) will have the
flexibility to select the submission
method that works best with their
existing data and technology
infrastructure and the number of filings
they expect to make. In general, the
Commission believes that Method 1
would be more cost effective for
reporting entities with a large number of
filings, while Method 2 would be more
cost effective for reporting entities with
a small number of filings.
Method 1: This method assumes that
each reporting entity would use an
automated program to submit its 102B
filings via secure FTP. Each Method 1
submission would likely contain
numerous 102B records. The
Commission estimates that the total
initial development burden should
average 264 hours per reporting entity.
The Commission also estimates that the
highly automated nature of this option
would virtually eliminate the marginal
costs associated with each additional
submission or each additional record
contained in a submission. Accordingly,
the Commission estimates that 102B
change and refresh updates will not
increase a reporting entity’s burden
when using Method 1. The Commission
further estimates that ongoing operation
and maintenance costs would average
53 hours per year no matter how many
records are contained in a submission.
The total Method 1 annualized
development burden and the ongoing
operation and maintenance cost burden
(total yearly costs) equals approximately
106 hours per reporting entity.145
Because New Form 102B provides a
new volume-based reporting structure
not found in existing Form 102, the
Commission is unable to refer to
historical reporting statistics. Instead,
145 All annualized development burden estimates
are based on 5 year, straight line depreciation.

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the Commission estimated the number
of New Form 102B reporting entities by
estimating the number of clearing
members associated with trading
accounts that the Commission projects
will qualify as volume threshold
accounts. For volume threshold
accounts associated with DCMs, the
Commission anticipates that it would
receive New Form 102B submissions
from approximately 100 reporting
entities annually. For volume threshold
accounts associated with SEFs, the
Commission anticipates that it would
receive New Form 102B submissions
from approximately 75 reporting entities
annually. Assuming that all Form 102B
reporting entities for volume threshold
accounts associated with DCMs utilize
Method 1, the Commission estimates
that the total annual industry burden for
the reporting of such accounts on New
Form 102B would equal 10,600
hours.146 Assuming that all Form 102B
reporting entities for volume threshold
accounts associated with SEFs utilize
Method 1, the Commission estimates
that the total annual industry burden for
the reporting of such accounts on New
Form 102B would equal 7,950 hours.147
Using an estimated wage rate of $78.61
per hour, annual costs for DCM-related
102B filings made pursuant to Method
1 are estimated at $833,266, while
annual costs for SEF-related 102B filings
made pursuant to Method 1 are
estimated at $624,950.148 Collectively,
annual costs for 102B filings made
pursuant to Method 1 are estimated at
$1,458,216.
Method 2: This method assumes that
each reporting entity would complete
and submit each New Form 102B online
via a secure portal provided by the
Commission. The Commission estimates
that the total initial development
burden would average 20 hours per New
Form 102B record. The Commission
also estimates that annual ongoing costs,
which include both change and refresh
updates, would average 7 hours per year
for each New Form 102B record. The
estimated Method 2 total annualized
development burden and the ongoing
operation and maintenance cost burden
146 The 10,600 hour figure is arrived at by
multiplying 106 hours (annualized development
burden and ongoing operation and maintenance
cost burden per reporting entity) by 100 reporting
entities.
147 The 7,950 hour figure is arrived at by
multiplying 106 hours (annualized development
burden and ongoing operation and maintenance
cost burden per reporting entity) by 75 reporting
entities.
148 The $833,266 figure is arrived at by
multiplying 10,600 by $78.61, while the $624,950
figure is arrived at by multiplying 7,950 by $78.61.

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(total yearly cost) equals approximately
11 hours per New Form 102B record.149
Because New Form 102B provides a
new volume-based reporting structure
not found in existing Form 102, the
Commission is unable to refer to
historical reporting statistics to directly
estimate the number of New Form 102B
records it might receive. Instead, the
Commission estimated the number of
distinct volume threshold accounts
across a sample of several contract
markets, and then extrapolated the total
number of volume threshold accounts
across all markets. For volume threshold
accounts associated with DCMs, the
Commission anticipates that it would
receive approximately 126,000 New
Form 102B records annually. For
volume threshold accounts associated
with SEFs, the Commission anticipates
that it would receive approximately
62,015 New Form 102B records
annually. Assuming each New Form
102B record for a volume threshold
account associated with a DCM is
provided via Method 2, the Commission
estimates that the total annual industry
burden for the reporting of such
accounts on New Form 102B would
equal 1,386,000 hours. Assuming each
New Form 102B record for a volume
threshold account associated with a SEF
is provided via Method 2, the
Commission estimates that the total
annual industry burden for the reporting
of such accounts on New Form 102B
would equal 682,165 hours. Using an
estimated wage rate of $78.61 per hour,
annual costs for DCM-related 102B
filings made pursuant to Method 2 are
estimated at $ 108,953,460,150 while
annual costs for SEF-related 102B filings
made pursuant to Method 2 are
estimated at $53,624,991.151
Collectively, annual costs for 102B
filings made pursuant to Method 2 are
estimated at $162,578,451.
The Commission understands that
providing filing options to the industry
should lower costs relative to failing to
provide such options. Because of this,
estimated total costs to the industry for
102B filings should be lower than any
cost associated with mandating either
Method 1 or Method 2. Given the cost
estimates for the two individual
methods discussed above, the
Commission anticipates DCM and SEFrelated 102B filing costs to be no more
than approximately $1,458,216 (Method
1), the lower of the two estimated filing
149 Id.
150 The $108,953,460 figure is arrived at by
multiplying 11 hours by 126,000 records (equals
1,386,000 records) by $78.61 (equals $108,953,460).
151 The $53,624,991figure is arrived at by
multiplying 11 hours by 62,015 records (equals
682,165 records) by $78.61 (equals $53,624,991).

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Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Proposed Rules
methods. In developing this estimate,
the Commission does not make any
assumptions about the behavior of an
individual reporting entity. Reporting
entities, given their own individualized
needs, are assumed to make the most
cost-effective choice for them, which
may be any one of the two methods.
Proposed § 17.01(c)—New Form 71:
New Form 71 reporting entities (i.e.,
originators of omnibus volume
threshold accounts or omnibus
reportable sub-accounts) would, upon
special call by the Commission or its
designee, complete and submit New
Form 71 online via a secure portal
provided by the Commission. The
Commission estimates that, on average,
New Form 71 would create an annual
reporting burden of 8 hours per filing.
The Commission notes that New Form
71 filings do not require change or
refresh updates. Accordingly, the
burdens and costs associated with such
updates in the case of other forms
proposed herein are not relevant to the
calculation of burdens and costs for
New Form 71 filings. The Commission
also notes that it is likely to request the
resubmission of New Form 71 filings
annually.
The number of New Form 71 filings
per year would vary according to the
number of special calls for the form
made by the Commission. In order to
estimate the annual number of New
Form 71 filings (i.e., the number of
special calls made), the Commission
considered the number of existing Form
102 omnibus special accounts and
estimated that New Form 102B would
capture a similar number of DCMrelated omnibus volume threshold
accounts.152 Further, the Commission
estimated that it would require a New
Form 71 for every such omnibus volume
threshold account. Commission records
indicate 526 omnibus special accounts
in 2010, and the Commission
anticipates an equal number of DCMrelated omnibus volume threshold
accounts. Because the Commission does
not presently receive filings pertaining
to SEF-related omnibus volume
threshold accounts, the Commission is
unable to refer to historical reporting
statistics to directly estimate the number
New Form 71 filings it might require. To
estimate the number of SEF-related
omnibus volume threshold accounts,
the Commission assumed that SEF
transactions will likely be intermediated
to a lesser extent than DCM
transactions. The Commission estimates
152 The Commission is estimating the number of
New Form 71 filings in this manner because New
Form 71 provides for an omnibus account reporting
structure that does not currently exist, making
direct estimates unfeasible.

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that there may be 35 percent as many
SEF-related omnibus volume threshold
accounts as DCM-related omnibus
volume threshold accounts.
Accordingly, the Commission estimates
that there will be 184 SEF-related
omnibus volume threshold accounts.
Based on an estimated 526 DCM-related
New Form 71 filings per year, the
Commission estimates an aggregate
reporting burden of 4,208 hours
annually for such filings. Based on an
estimated 184 SEF-related New Form 71
filings per year, the Commission
estimates an aggregate reporting burden
of 1,472 hours annually for such filings.
Using an estimated wage rate of $78.61
per hour, annual costs for DCM-related
New Form 71 filings are estimated at
$330,791, while annual costs for SEFrelated New Form 71 filings are
estimated at $115,714. Collectively,
annual costs for New Form 71 filings are
estimated at $446,505.
Proposed § 18.04(a)—New Form 40:
New Form 40 reporting entities arising
from New Form 102A filings (i.e.,
special account owners and controllers)
would, upon special call by the
Commission, complete and submit New
Form 40 online via a secure portal
provided by the Commission. The
Commission’s special call would
typically be in the form of an email
request that would contain a URL for
the portal, and a unique login and
password for access to the portal.
The number of New Form 40 filings
arising from New Form 102A filings
would vary according to the number of
special calls made by the Commission.
An analysis of the Commission’s
existing Form 40 practices demonstrates
that the Commission makes
approximately 3,000 special calls
annually. However, as explained above,
the Commission is reiterating that its
regulations require reporting firms to
separately aggregate positions by
common ownership and by common
control for the purpose of identifying
and reporting special accounts. The
Commission anticipates that the number
of special calls made annually as a
result of New Form 102A filings may
increase by 75 percent. The Commission
estimates that New Form 40 would
result in annual filings from 5,250
reporting entities.
The Commission estimates that each
filing estimated above would require 3
hours to complete,153 resulting in an
estimated total annual reporting burden
of 15,750 hours. Using an estimated
153 The Commission’s estimate of 3 hours per
response reflects an initial, one-time burden of 10
hours, annualized over a five-year period, plus an
additional hour per year for change updates.

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43995

wage rate of $78.61 per hour, annual
costs for New Form 40 filings arising
from New Form 102A filings are
estimated at $1,238,108.154 Because the
proposed rules anticipate a web-based
portal and user profile system, those
entities required to complete a New
Form 40 would also be under a
continuing obligation, per direction in
the special call, to update and maintain
the accuracy of their profile information
by periodically visiting the online New
Form 40 portal to review, verify, and/or
update their information. However, the
Commission believes that the time
required to update information
contained in New Form 40 using the
online portal would be de minimis.
Proposed § 18.04(b)—New Form 40:
New Form 40 reporting entities arising
from New Form 102B and New Form 71
filings (i.e., volume threshold account
controllers, persons who own volume
threshold accounts, reportable subaccount controllers, and persons who
own reportable sub-accounts) would,
upon special call by the Commission,
file New Form 40 online via a secure
portal provided by the Commission. The
Commission’s special call would
typically be in the form of an email
request that would contain a URL for
the portal, and a unique login and
password for access to the portal.
The number of New Form 40 filings
arising from volume threshold accounts
and reportable sub-accounts would vary
according to the number of special calls
made by the Commission. An analysis
of the Commission’s existing Form 40
practices demonstrates that the
Commission makes approximately 3,000
special calls annually; however, such
calls were made to special account
owners and controllers identified via
existing DCM-related Form 102. The
Commission estimates there could be a
much greater number of New Form
102B and New Form 71 filings. As a
result, the Commission estimates that
the number of potential New Form 40
reporting entities (arising from New
Form 102B and New Form 71 filings)
would increase as well. The
Commission anticipates that it would
154 As discussed in the introduction to this
section, the Commission is evaluating the burden
associated with each regulation and associated form
separately. It should be noted that the burdens
estimated for New Form 40 filings, arising from
proposed § 18.04(a) and § 18.04(b), are especially
duplicative. For example, many of the traders that
complete New Form 40 pursuant to 18.04(a) may
also be volume threshold account controllers that
could receive New Form 40 pursuant to 18.04(b).
In practice, if the Commission possesses a recent
Form 40 filing from a reporting entity, it may elect
not to request a second Form 40 filing from that
same entity if the entity becomes reportable under
an additional provision of the proposed regulations
and there is no additional information to be gained.

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receive approximately 12,000 DCMrelated New Form 40 filings annually
arising from New Form 102B and
approximately 1,550 SEF-related New
Form 40 filings annually arising from
New Form 102B, including filings
arising from control of volume threshold
accounts and filings arising from
ownership of such accounts.155 Each
filing is estimated to require 3 hours,156
resulting in an estimated total annual
reporting burden of 36,000 hours for
DCM-related New Form 40 filings and
4,650 hours for SEF-related New Form
40 filings. The Commission estimates
that the time required to update
information contained in New Form 40
would be de minimis. Using an
estimated wage rate of $78.61 per hour,
annual costs for DCM-related New Form
40 filings arising from volume threshold
accounts and reportable sub-accounts
are estimated at $2,829,960, while
annual costs for SEF-related New Form
40 filings arising from volume threshold
accounts and reportable sub-accounts
are estimated at $365,537. Collectively,
annual costs for New Form 40 filings are
estimated at $3,195,497.
Proposed § 18.05: Existing § 18.05
requires traders who hold or control
reportable positions to maintain books
and records regarding all positions and
transactions in the commodity in which
they have reportable positions.157 In
addition, existing § 18.05 requires that
the trader furnish the Commission with
information concerning such positions
upon request. The Commission
proposes to expand § 18.05 to also
impose books and records requirements
upon volume threshold account
controllers and owners of volume
threshold accounts, and upon reportable
sub-account controllers and persons
who own reportable sub-accounts.
Proposed § 18.05 would likely result in
an increased reporting burden, as
compared to existing § 18.05. An
analysis of the Commission’s special
call practices demonstrates that, in
connection with existing § 18.05, the
Commission typically makes 12 special
calls a month to approximately 45
traders, resulting in a total of 540
155 As with 102A records, the Commission
estimates that in approximately 25 percent of
filings, the owner and the controller of a volume
threshold account reported on New Form 102B will
be the same, and that accordingly, only one New
Form 40 would be required. Similarly, a number of
potential New Form 40 reporting entities are likely
to own or control both DCM-related and SEF-related
volume threshold accounts, but only one New Form
40 would be required.
156 The Commission’s estimate of 3 hours per
response reflects an initial, one-time burden of 10
hours, annualized over a five-year period, plus an
additional hour per year for change updates.
157 17 CFR 18.05.

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special calls.158 The Commission
estimates that proposed § 18.05 would
result in an additional six special calls
to six different traders.159 In total, the
Commission anticipates that it would
make 546 special calls a year to 51
respondents under § 18.05 and that each
response would take approximately 5
hours for a total aggregate annual
reporting burden of 2,730 hours. Using
an estimated wage rate of $78.61 per
hour, annual reporting costs are
estimated at $214,605.
Proposed § 20.5(a)—102S Filing: The
Commission estimated the reporting
burden associated with proposed
§ 20.5(a) by considering the two distinct
filing methods that it will accommodate
should a final rule be adopted. With two
methods of submission, reporting
entities (i.e., clearing members and
swap dealers) will have the flexibility to
select the submission method that
works best with their existing data and
technology infrastructure and the
number of filings they expect to make.
Method 1: This method assumes that
each reporting entity would use an
automated program to submit its 102Ss
via secure FTP. Each Method 1
submission would likely contain
numerous 102S records. The
Commission estimates that the total
initial development burden would
average 264 hours per reporting entity.
The Commission also estimates that the
highly automated nature of this option
would virtually eliminate the marginal
costs associated with each additional
submission or each additional record
contained in a submission. The
Commission believes that the timing
requirements for 102S filings in existing
§ 20.5(a)(3),160 or any new submission
procedures arising from the Swaps
Large Trader Guidebook (i.e., frequency
of 102S filing submission), would not
increase a reporting entity’s burden
when using Method 1. The Commission
further estimates that ongoing operation
and maintenance costs would average
53 hours per year no matter how many
records are contained in a submission.
The total Method 1 annualized
development burden and the ongoing
operation and maintenance cost burden
(total yearly costs) would equal
158 The Commission estimates that each response
takes approximately 5 hours. Existing § 18.05
therefore results in an annual reporting burden of
approximately 2,700 hours. Using an estimated
wage rate of $78.61 per hour, annual reporting costs
in connection with existing § 18.05 are
approximately $212,247.
159 Proposed § 18.05 would result in an additional
annual reporting burden of approximately 30 hours.
Using an estimated wage rate of $78.61 per hour,
proposed § 18.05 would result in additional annual
reporting costs of approximately $2,358.
160 17 CFR 20.5(a)(3).

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approximately 106 hours per reporting
entity.161
The 102S filing requirements in
existing § 20.5 162 are nearly identical to
the filing requirements proposed herein
for 102S; accordingly, the Commission
used its experience to date with 102S
filings to estimate the number of 102S
reporting entities. The Commission
anticipates that it would receive 102S
filings from approximately 75 163
reporting entities annually. Assuming
102S reporting entities utilize Method 1,
the Commission estimates that the total
annual industry burden for 102S filing
would equal 7,950 hours. Using an
estimated wage rate of $78.61 per hour,
annual costs for 102S filings are
estimated at $624,950.
Method 2: This method assumes that
each reporting entity would complete
and submit each New Form 102S online
via a secure portal provided by the
Commission. The Commission estimates
that the total initial development
burden would average 17 hours per
102S record. The Commission also
estimates that annual ongoing costs,
including change and refresh updates,
would average 7 hours per year for each
102S record. The sum of the Method 2
annualized development burden and the
ongoing operation and maintenance cost
burden (total yearly cost) equals
approximately 10 hours per 102S
record.164
Based on a recent assessment of
expected 102S filings, the Commission
anticipates that it would receive
approximately 500 102S records
annually. Assuming each of the
estimated 500 102S records are
provided via Method 2, the Commission
estimates that the total annual industry
burden for 102S filings would equal
5,000 hours. Using an estimated wage
rate of $78.61 per hour, annual costs for
102S filings made pursuant to Method
2 are estimated at $393,050.
The Commission understands that
providing options to the industry
should lower costs relative to failing to
provide these options. Because of this,
estimated total costs to the industry for
102S filing should be lower than any
cost associated with mandating either
Method 1 or Method 2. Given the cost
estimates for the two individual
161 All annualized development burden estimates
are based on 5 year, straight line depreciation.
162 17 CFR 20.5.
163 The Commission notes that this estimate for
the number of 102S reporting entities is lower than
the estimate provided in the Commission’s final
rules for part 20. The lower estimate is based on the
Commission’s experience with position reports
pursuant to part 20 since the rules were made final.
164 All annualized development burden estimates
are based on 5 year, straight line depreciation.

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methods discussed above, the
Commission anticipates 102S filing
costs to be no more than $393,050
(Method 2), the lower of the two
estimated submission costs. In
developing this estimate, the
Commission does not make any
assumptions about the behavior of an
individual reporting entity. Reporting
entities, given their own individualized
needs, are assumed to make the most
cost-effective choice for them, which
may be either of the two methods.
40S Filings: 165 Persons that are
subject to books and records
requirements under existing § 20.6 166
and receive a special call from the
Commission, would file New Form 40
via an online portal. The Commission’s
special call would likely be in the form
of an email request that would contain
a URL for the portal, and a unique login
and password for access to the portal.
Existing § 20.5(b),167 which requires the
40S filing, would not be altered by this
proposed rulemaking; as a result, the
Commission estimates that a similar
number of persons would be required to
submit a 40S filing. Accordingly, the
Commission anticipates that it would
receive 40S submissions from
approximately 500 filers annually. Each
response is estimated to require 3
hours,168 resulting in an estimated total
annual reporting burden of 1,500 hours.
Time required to update information
contained in 40S filings would be de
minimis on average. Using an estimated
wage rate of $78.61 per hour, annual
costs are estimated at $117,915.
b. Recordkeeping burdens:
As discussed above, the Commission
proposes to expand § 18.05 169 to also
impose books and records requirements
upon volume threshold account
controllers and owners of volume
threshold accounts reported on New
Form 102B, and on reportable subaccount controllers and persons who
own a reportable sub-account reported
on New Form 71 (in addition to traders
who hold or control reportable
positions). As a result, proposed § 18.05
would likely impose a recordkeeping
165 The proposed rulemaking does not include
provisions to revise § 20.5(b); however, current
§ 20.5(b) requires a person, after special call by the
Commission, to submit a 40S filing which shall
consist of the submission of Form 40. The proposed
rulemaking does include changes to Form 40.
Accordingly, the reporting burden associated with
§ 20.5(b) and the 40S filing is being recalculated to
account for variations between current and New
Form 40.
166 17 CFR 20.6.
167 17 CFR 20.5(b).
168 The Commission’s estimate of 3 hours per
response reflects an initial, one-time burden of 10
hours, annualized over a five-year period, plus an
additional hour per year for change updates.
169 17 CFR 18.05.

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burden on a larger number of persons
than existing § 18.05. However, any
additional persons subject to proposed
§ 18.05 may be able to rely on books and
records already kept in the ordinary
course of business to meet the
requirements of the proposed
regulation. Accordingly, the
Commission believes that proposed
§ 18.05 would not meaningfully increase
recordkeeping burdens on persons
brought under its scope.

Proposed Rules

iv. Comments on Information Collection

17 CFR Part 18
Commodity futures, Reporting and
recordkeeping requirements.

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 would 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) mitigate the
burden of the collection of information
on those who are required 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 email at
[email protected]. Please
provide the Commission with a copy of
submitted comments so that all
comments can be summarized and
addressed in the final regulation
preamble. Refer to the ADDRESSES
section of this Notice 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 Notice.
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.

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List of Subjects
17 CFR Part 15
Brokers, Commodity futures,
Reporting and recordkeeping
requirements.
17 CFR Part 17
Brokers, Commodity futures,
Reporting and recordkeeping
requirements.

17 CFR Part 20
Physical commodity swaps, Swap
dealers, Reporting and recordkeeping
requirements.
In consideration of the foregoing and
pursuant to the authority contained in
the Act, as indicated herein, the
Commission hereby proposes to amend
chapter I of title 17 of the Code of
Federal Regulations as follows:
PART 15—REPORTS—GENERAL
PROVISIONS
1. The authority citation for part 15
continues to read as follows:
Authority: 7 U.S.C. 2, 5, 6a, 6c, 6f, 6g, 6i,
6k, 6m, 6n, 7, 7a, 9, 12a, 19, and 21, as
amended by Title VII of the Dodd-Frank Wall
Street Reform and Consumer Protection Act,
Pub. L. 111–203, 124 Stat. 1376 (2010).

2. In § 15.00, revise paragraph (q) and
add paragraphs (t) through (ee) to read
as follows:
§ 15.00 Definitions of terms used in parts
15 to 19, and 21 of this chapter.

*

*
*
*
*
(q) Reporting market means a
designated contract market or a
registered entity under § 1a(40) of the
Act.
*
*
*
*
*
(t) Control means to actually direct, by
power of attorney or otherwise, the
trading of a special account or a
consolidated account. A special account
or a consolidated account may have
more than one controller.
(u) Reportable trading volume means
contract trading volume that meets or
exceeds the level specified in § 15.04 of
this part.
(v) Direct Market Access (‘‘DMA’’)
means a connection method that enables
a market participant to transmit orders
to a DCM’s electronic trade matching
system without re-entry by another
person or entity, or similar access to the
trade execution platform of a SEF. DMA
can be provided directly by a DCM or
SEF, or by a 3rd-party platform.

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execution facility registered under § 5h
of the Act.
(aa) Omnibus reportable sub-account
means any trading sub-account of an
omnibus volume threshold account,
which sub-account executes reportable
trading volume on an omnibus basis.
Omnibus reportable sub-account also
means any trading account that is itself
an omnibus account, executes
reportable trading volume, and is a subaccount of another omnibus reportable
sub-account.
(bb) Reportable sub-account means
any trading sub-account of an omnibus
volume threshold account or omnibus
reportable sub-account, which subaccount executes reportable trading
volume.
(cc) Trading account controller
means, for reports specified in § 17.01(a)
of this chapter, a natural person who by
power of attorney or otherwise actually
directs the trading of a trading account.
A trading account may have more than
one controller.
(dd) Volume threshold account
controller means a natural person who
by power of attorney or otherwise
actually directs the trading of a volume
threshold account. A volume threshold
account may have more than one
controller.
(ee) Reportable sub-account controller
means a natural person who by power

(Approved by the Office of Management and
Budget under control numbers 3038–0007,
3038–0009, and 3038–[NEW])

section 5h of the Act, in all instruments
that such reporting market designates
with the same product identifier
(including purchases and sales, and
inclusive of all expiration months).

of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, Pub. L. 111–203,
124 Stat. 1376 (2010).

PART 17—REPORTS BY REPORTING
MARKETS, FUTURES COMMISSION
MERCHANTS, CLEARING MEMBERS,
AND FOREIGN BROKERS

§ 17.00 Information to be furnished by
futures commission merchants, clearing
members and foreign brokers.

§ 15.04

Reportable trading volume level.

The volume quantity for the purpose
of reports filed under parts 17 and 18 of
this chapter is trading volume of 50 or
more contracts, during a single trading
day, on a single reporting market that is
a board of trade designated as a contract
market under section 5 of the Act or a
swap execution facility registered under

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6. The authority citation for part 17 is
revised to read as follows:
Authority: 7 U.S.C. 2, 6a, 6c, 6d, 6f, 6g,
6i, 6t, 7, 7a, and 12a, as amended by Title VII

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§ 15.01

Persons required to report.

*

*
*
*
*
(c) As specified in part 18 of this
chapter:
(1) Traders who own, hold, or control
reportable positions;
(2) Volume threshold account
controllers;
(3) Persons who own volume
threshold accounts;
(4) Reportable sub-account
controllers; and
(5) Persons who own reportable subaccounts.
*
*
*
*
*
4. Revise § 15.02 to read as follows:
§ 15.02

Reporting forms.

Forms on which to report may be
obtained from any office of the
Commission or via the Internet (http://
www.cftc.gov). Forms to be used for the
filing of reports follow, and persons
required to file these forms may be
determined by referring to the rule
listed in the column opposite the form
number.

7. Revise § 17.00(g)(2)(iii) to read as
follows:

*

*
*
*
*
(g) * * *
(2) * * *
(iii) Account Number. A unique
identifier assigned by the reporting firm
to each special account. The field is zero

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5. Add § 15.04 to read as follows:
srobinson on DSK4SPTVN1PROD with PROPOSALS3

of attorney or otherwise actually directs
the trading of a reportable sub-account.
A reportable sub-account may have
more than one controller.
3. Revise § 15.01 (c) to read as follows:

(w) Omnibus account means any
trading account that one futures
commission merchant, clearing member
or foreign broker carries for another and
in which the transactions of multiple
individual accounts are combined. The
identities of the holders of the
individual accounts are not generally
known or disclosed to the carrying firm.
(x) Omnibus account originator means
any futures commission merchant,
clearing member or foreign broker that
executes trades for one or more
customers via one or more accounts that
are part of an omnibus account carried
by another futures commission
merchant, clearing member or foreign
broker.
(y) Volume threshold account means
any trading account that executes, or
receives via allocation or give-up,
reportable trading volume on or subject
to the rules of a reporting market that is
a board of trade designated as a contract
market under § 5 of the Act or a swap
execution facility registered under § 5h
of the Act.
(z) Omnibus volume threshold
account means any trading account that,
on an omnibus basis, executes or
receives via allocation or give-up,
reportable trading volume on or subject
to the rules of a reporting market that is
a board of trade designated as a contract
market under § 5 of the Act or a swap

Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Proposed Rules
filled with the account number rightjustified. Assignment of the account
number is subject to the provisions of
§ 17.00(b) and Form 102.
*
*
*
*
*
8. Revise § 17.01 to read as follows:

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§ 17.01 Identification of special accounts,
volume threshold accounts, and omnibus
accounts.

(a) Identification of special accounts.
When a special account is reported for
the first time, the futures commission
merchant, clearing member, or foreign
broker shall identify the special account
to the Commission on Form 102, in
accordance with the form instructions
and as specified in § 17.02(b).
(b) Identification of volume threshold
accounts. Each clearing member shall
identify and report its volume threshold
accounts to the Commission on Form
102, in accordance with the form
instructions and as specified in
§ 17.02(c).
(c) Identification of omnibus accounts
and sub-accounts. Each originator of an
omnibus volume threshold account
identified in Form 102 or an omnibus
reportable sub-account identified in
Form 71 shall, after a special call upon
such originator by the Commission or its
designee, file with the Commission an
‘‘Identification of Omnibus Accounts
and Sub-Accounts’’ on Form 71, to be
completed in accordance with the
instructions thereto, at such time and
place as directed in the call.
(d) Exclusively self-cleared contracts.
Unless determined otherwise by the
Commission, reporting markets that list
exclusively self-cleared contracts shall
meet the requirements of paragraphs (a)
and (b) of this section, as they apply to
trading in such contracts by all clearing
members, on behalf of all clearing
members.
(e) Special call provision. Upon a call
by the Commission or its designee, the
reports required to be filed by futures
commission merchants, clearing
members, foreign brokers, and reporting
markets under paragraphs (a), (b), (c),
and (d) of this section shall be
submitted within 24 hours of the
Commission or its designee’s request in
accordance with the instructions
accompanying the request.
9. In § 17.02, revise the introductory
text and paragraph (b) and add
paragraph (c) to read as follows:
§ 17.02 Form, manner and time of filing
reports.

Unless otherwise instructed by the
Commission or its designee, the reports
required to be filed by reporting
markets, futures commission merchants,
clearing members, and foreign brokers

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under §§ 17.00 and 17.01 shall be filed
as specified in paragraphs (a), (b), and
(c) of this section.
*
*
*
*
*
(b) Section 17.01(a) reports. For data
submitted pursuant to § 17.01(a) on
Form 102:
(1) Form of submission. Form 102
must be submitted to the Commission in
the form and manner provided on
www.cftc.gov.
(2) Time of submission. For each
account that is a special account, the
futures commission merchant, clearing
member, or foreign broker, as
appropriate, shall submit a completed
Form 102 to the Commission, in
accordance with the instructions
thereto, and in the manner specified by
the Commission or its designee. Such
form shall be submitted no later than
the corresponding § 17.00(a) report filed
pursuant to instructions in § 17.02(a), or
on such other date as directed by special
call of the Commission or its designee,
and as periodically required thereafter
by § 17.02(b)(3) and (4).
(3) Change updates. If any change
causes the information filed by a futures
commission merchant, clearing member,
or foreign broker on a Form 102 for a
special account to no longer be accurate,
then such futures commission
merchant, clearing member, or foreign
broker shall file an updated Form 102
with the Commission no later than 9
a.m. eastern time on the business day
after such change occurs, or on such
other date as directed by special call of
the Commission, provided that, a
futures commission merchant, clearing
member, or foreign broker may stop
providing change updates for a Form
102 that it has submitted to the
Commission for any special account
upon notifying the Commission that the
account in question is no longer
reportable as a special account.
(4) Refresh updates. For Special
Accounts—Starting on a date specified
by the Commission or its designee and
at the end of each six month increment
thereafter (or such later date specified
by the Commission or its designee),
each futures commission merchant,
clearing member, or foreign broker shall
resubmit every Form 102 that it has
submitted to the Commission for each of
its special accounts, provided that, a
futures commission merchant, clearing
member, or foreign broker may stop
providing refresh updates for a Form
102 that it has submitted to the
Commission for any special account
upon notifying the Commission that the
account in question is no longer
reportable as a special account.

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(c) Section 17.01(b) reports. For data
submitted pursuant to § 17.01(b) on
Form 102:
(1) Form of submission. Form 102
must be submitted to the Commission in
the form and manner provided on
www.cftc.gov.
(2) Time of submission. For each
account that is a volume threshold
account, the clearing member shall
submit a completed Form 102 to the
Commission, in accordance with the
instructions thereto, and in the manner
specified by the Commission or its
designee, no later than 9 a.m. eastern
time on the business day following the
day in which the account in question
becomes a volume threshold account, or
on such other date as directed by special
call of the Commission or its designee,
and as periodically required thereafter
by § 17.02(c)(3) and (4).
(3) Change updates. If any change
causes the information filed by a
clearing member on a Form 102 for a
volume threshold account to no longer
be accurate, then such clearing member
shall file an updated Form 102 with the
Commission no later than 9 a.m. eastern
time on the business day after such
clearing member is aware of such
change, or on such other date as
directed by special call of the
Commission, provided that, a clearing
member may stop providing Form 102
change updates for a volume threshold
account upon notifying the Commission
that the volume threshold account
executed no trades in any product in the
past six months on the reporting market
at which the volume threshold account
reached the reportable trading volume
level.
(4) Refresh updates. For Volume
Threshold Accounts—Starting on a date
specified by the Commission or its
designee and at the end of each six
month increment thereafter (or such
later date specified by the Commission
or its designee), each clearing member
shall resubmit every Form 102 that it
has submitted to the Commission for
each of its volume threshold accounts,
provided that, a clearing member may
stop providing refresh updates for a
Form 102 that it has submitted to the
Commission for any volume threshold
account upon notifying the Commission
that the volume threshold account
executed no trades in any product in the
past six months on the reporting market
at which the volume threshold account
reached the reportable trading volume
level.
10. Revise section 17.03 to read as
follows:

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§ 17.03 Delegation of authority to the
Director of the Office of Data and
Technology or the Director of the Division
of Market Oversight.

The Commission hereby delegates,
until the Commission orders otherwise,
the authority set forth in the paragraphs
below to either the Director of the Office
of Data and Technology or the Director
of the Division of Market Oversight, as
indicated below, to be exercised by such
Director or by such other employee or
employees of such Director as
designated from time to time by such
Director. The Director of the Office of
Data and Technology or the Director of
the Division of Market Oversight may
submit to the Commission for its
consideration any matter which has
been delegated to such Director in this
paragraph. Nothing in this paragraph
prohibits the Commission, at its
election, from exercising the authority
delegated in this paragraph.
(a) Pursuant to § 17.00(a) and (h), the
authority shall be designated to the
Director of the Office of Data and
Technology to determine whether
futures commission merchants, clearing
members and foreign brokers can report
the information required under
§ 17.00(a) and (h) on series ‘01 forms or
using some other format upon a
determination that such person is
unable to report the information using
the format, coding structure or
electronic data transmission procedures
otherwise required.
(b) Pursuant to § 17.02, the authority
shall be designated to the Director of the
Office of Data and Technology to
instruct or approve the time at which
the information required under §§ 17.00
and 17.01(a) and (b) must be submitted
by futures commission merchants,
clearing members and foreign brokers
provided that such persons are unable
to meet the requirements set forth in
§ 17.02.
(c) Pursuant to § 17.01, the authority
shall be designated to the Director of the
Office of Data and Technology to
determine whether to permit an
authorized representative of a firm filing
the Form 102 or person filing the Form
71 to use a means of authenticating the
report other than by signing the Form
102 or Form 71 and, if so, to determine
the alternative means of authentication
that shall be used.
(d) Pursuant to § 17.00(a), the
authority shall be designated to the
Director of the Office of Data and
Technology to approve a format and
coding structure other than that set forth
in § 17.00(g).
(e) Pursuant to § 17.01(c), the
authority shall be designated to the
Director of the Office of Data and

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Technology to make special calls on
omnibus volume threshold account
originators and omnibus reportable subaccount originators for information as
set forth in § 17.01(c).
(f) Pursuant to § 17.02(b)(4), the
authority shall be designated to the
Director of the Division of Market
Oversight to determine the date on
which each futures commission
merchant, clearing member, or foreign
broker shall update or otherwise
resubmit every Form 102 that it has
submitted to the Commission for each of
its special accounts.
(g) Pursuant to § 17.02(c)(4), the
authority shall be designated to the
Director of the Division of Market
Oversight to determine the date on
which each clearing member shall
update or otherwise resubmit every
Form 102 that it has submitted to the
Commission for each of its volume
threshold accounts.
PART 18—REPORTS BY TRADERS
11. The authority citation for part 18
is revised to read as follows:
Authority: 7 U.S.C. 2, 4, 5, 6a, 6c, 6f, 6g,
6i, 6k, 6m, 6n, 6t, 12a, and 19, as amended
by Title VII of the Dodd-Frank Wall Street
Reform and Consumer Protection Act, Pub. L.
111–203, 124 Stat. 1376 (2010).

12. Revise § 18.04 to read as follows:
§ 18.04

Statement of reporting trader.

(a) Every trader who owns, holds, or
controls a reportable futures and option
position shall after a special call upon
such trader by the Commission or its
designee file with the Commission a
‘‘Statement of Reporting Trader’’ on the
Form 40, to be completed in accordance
with the instructions thereto, at such
time and place as directed in the call.
(b) Every volume threshold account
controller, person who owns a volume
threshold account, reportable subaccount controller, and person who
owns a reportable sub-account shall
after a special call upon such person by
the Commission or its designee file with
the Commission a ‘‘Statement of
Reporting Trader’’ on the Form 40, to be
completed in accordance with the
instructions thereto, at such time and
place as directed in the call.
13. In § 18.05 revise paragraph (a)
introductory text and paragraphs (b) and
(c), to read as follows:
§ 18.05

Maintenance of books and records.

(a) Every volume threshold account
controller, person who owns a volume
threshold account, reportable subaccount controller, person who owns a
reportable sub-account, and trader who
owns, holds, or controls a reportable

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futures or option position, shall keep
books and records showing all details
concerning all positions and transaction
in the commodity:
*
*
*
*
*
(b) Every such volume threshold
account controller, person who owns a
volume threshold account, reportable
sub-account controller, person who
owns a reportable sub-account, and
trader who owns, holds, or controls a
reportable futures or option position
shall also keep books and records
showing all details concerning all
positions and transactions in the cash
commodity, its products and
byproducts, and all commercial
activities that it hedges in the futures or
option contract in which it is reportable.
(c) Every volume threshold account
controller, person who owns a volume
threshold account, reportable subaccount controller, person who owns a
reportable sub-account, and trader who
owns, holds, or controls a reportable
futures or option position shall upon
request furnish to the Commission any
pertinent information concerning such
positions, transactions, or activities in a
form acceptable to the Commission.
PART 20—LARGE TRADER
REPORTING FOR PHYSICAL
COMMODITY SWAPS
14. The authority citation for part 20
continues to read as follows:
Authority: 7 U.S.C. 1a, 2, 5, 6, 6a, 6c, 6f,
6g, 6t, 12a, 19, as amended by Title VII of the
Dodd-Frank Wall Street Reform and
Consumer Protection Act, Pub. L. 111–203,
124 Stat. 1376 (2010).

15. In § 20.5, revise paragraphs (a)(1)
and (2) and add paragraphs (a)(4) and
(5) to read as follows:
§ 20.5

Series S filings.

(a) * * *
(1) When a counterparty consolidated
account first becomes reportable, the
reporting entity shall submit a 102S
filing, as set forth in Appendix A to part
17, in accordance with the form
instructions and as specified in this
section, including § 20.5.
(2) A reporting entity may submit a
102S filing only once for each
counterparty, even if such persons at
various times have multiple reportable
positions in the same or different paired
swaps or swaptions.
*
*
*
*
*
(4) Change updates. If any change
causes the information filed by a
clearing member or swap dealer on a
Form 102 for a consolidated account to
no longer be accurate, then such
clearing member or swap dealer shall
file an updated Form 102 with the

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Commission no later than 9 a.m. eastern
time on the business day after such
change occurs, or on such other date as
directed by special call of the
Commission, provided that, a clearing
member or swap dealer may stop
providing change updates for a Form
102 that it has submitted to the
Commission for any consolidated
account upon notifying the Commission
that the account in question is no longer
reportable as a consolidated account.
(5) Refresh updates. For Consolidated
Accounts—Starting on a date specified

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by the Commission or its designee and
at the end of each six month increment
thereafter (or such later date specified
by the Commission or its designee),
each clearing member or swap dealer
shall resubmit every Form 102 that it
has submitted to the Commission for
each of its consolidated accounts,
provided that, a clearing member or
swap dealer may stop providing refresh
updates for a Form 102 that it has
submitted to the Commission for any
consolidated account upon notifying the

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Commission that the account in
question is no longer reportable as a
consolidated account.
*
*
*
*
*
Issued in Washington, DC, on June 27,
2012 by the Commission.
David A. Stawick,
Secretary of the Commission.
Note: The following Annex will not appear
in the Code of Federal Regulations.
BILLING CODE P

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[FR Doc. 2012–16180 Filed 7–25–12; 8:45 am]
BILLING CODE C

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