Confirmation, Portfolio Reconciliation, Portfolio Compression, and Swap Trading Relationship Documentation Requirements for Swap Dealers and Major Swap Participants; Correction

COMMODITY FUTURES TRADING COMMISSION 17 CFR Part 23 RIN 3038–AC96 Confirmation, Portfolio Reconciliation, Portfolio Compression, and Swap Trading Relationship Documentation Requirements for Swap Dealers and Major Swap Participants; Correction AGENCY: Commodity Futures Trading Commission. ACTION: Correcting amendments. SUMMARY: The Commodity Futures Trading Commission (CFTC) is correcting a final rule published in the Federal Register of September 11, 2012 (77 FR 55904). That rule, 17 CFR 23.505, took effect on November 13, 2012. Subsequently, the CFTC published final rules in the Federal Register of December 13, 2012 (77 FR 74284), that re-codified the Commission regulation at 17 CFR 39.6 as a new Commission regulation at 17 CFR 50.50. This correction amends cross-references in 17 CFR 23.505 to conform them with the final rules published on December 13, 2012. DATES: Effective on April 9, 2013. FOR FURTHER INFORMATION CONTACT:
Frank Fisanich, Chief Counsel, 202– 418–5949, ffisanich@cftc.gov, or Jason A. Shafer, Attorney-Advisor, 202–418– 5097, jshafer@cftc.gov, Division of Swap Dealer and Intermediary Oversight, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581. SUPPLEMENTARY INFORMATION: In the Federal Register of September 11, 2012 (77 FR 55904), the CFTC published final rules setting forth requirements for swap confirmation, portfolio reconciliation, portfolio compression, and swap trading relationship documentation for Swap Dealers and Major Swap Participants. Those rules, in 17 CFR part 23, include cross-references to the Commission regulation at 17 CFR 39.6. After the effective date of the Part 23 rules (November 13, 2012), the CFTC published final rules in the Federal Register of December 13, 2012 (77 FR
74284) that re-codified the Commission
regulation at 17 CFR 39.6 as a new Commission regulation at 17 CFR 50.50. Those rules took effect on February 11,
2013. Thus, the Commission is making
correcting amendments to the affected
section of 17 CFR part 23 to replace the
cross-references to 17 CFR 39.6 with cross-references to 17 CFR 50.50.

1 15 U.S.C. 78s(b)(1).
2See Section 3(a)(26) of the Exchange Act, 15 U.S.C. 78c(a)(26) (defining the term ‘‘self-regulatory organization’’ to mean any national securities exchange, registered securities association, registered clearing agency, and, for purposes of
Section 19(b) and other limited purposes, the
Municipal Securities Rulemaking Board) (emphasis added). 3 15 U.S.C. 78s(b)(1). Section 3(a)(27) of the Exchange Act defines ‘‘rules’’ to include ‘‘the constitution, articles of incorporation, bylaws, and rules, or instruments corresponding to the foregoing

• • • and such of the stated policies, practices, and
      interpretations of such exchange, association, or clearing agency as the Commission, by rule, may determine to be necessary or appropriate in the public interest or for the protection of investors to be deemed to be rules of such exchange, association, or clearing agency.’’ 15 U.S.C. 78c(a)(27). Rule 19b–4(b) under the Exchange Act defines ‘‘stated policy, practice, or interpretation’’ to mean, in part, ‘‘[a]ny material aspect of the operation of the facilities of the self-regulatory organization’’ or ‘‘[a]ny statement made generally available’’ that ‘‘establishes or changes any standard, limit, or guideline’’ with respect to the ‘‘rights, obligations, or privileges’’ of persons or the ‘‘meaning, administration, or enforcement of an existing rule.’’ 17 CFR 240.19b–4(b). 4See 17 CFR 249.819. 5See 15 U.S.C. 78s(b)(1). The SRO is required to prepare the notice of its proposed rule change on Exhibit 1 of Form 19b–4 that the Commission then publishes in the Federal Register. 6See 15 U.S.C. 78s(b)(2). However, as provided in
      Section 19(b)(2)(D) of the Exchange Act, 15 U.S.C.
      78s(b)(2)(D), a proposed rule change shall be ‘‘deemed to have been approved by the Commission’’ if the Commission does not take action on a proposal that is subject to Commission approval within the statutory time frames specified in Section 19(b)(2). 7See, e.g., 15 U.S.C. 78s(b)(3)(A). 8See 15 U.S.C. 78s(b)(2). List of Subjects in 17 CFR part 23 Antitrust, Commodity futures, Conduct standards, Conflict of interests, Major swap participants, Reporting and recordkeeping, Swap dealers, Swaps. Accordingly, 17 CFR part 23 is corrected by making the following correcting amendments:
      PART 23—SWAP DEALERS AND
      MAJOR SWAP PARTICIPANTS

• 1. The authority citation for Part 23
     continues to read as follows:
     Authority: 7 U.S.C. 1a, 2, 6, 6a, 6b, 6b– 1, 6c, 6p, 6r, 6s, 6t, 9, 9a, 12, 12a, 13b, 13c, 16a, 18, 19, 21.
• 2. In § 23.505, revise paragraphs (a)
     introductory text, (a)(2), and (a)(5) to read as follows:
     § 23.505 End user exception documentation. (a) For swaps excepted from a mandatory clearing requirement. Each swap dealer and major swap participant shall obtain documentation sufficient to provide a reasonable basis on which to believe that its counterparty meets the statutory conditions required for an exception from a mandatory clearing requirement, as defined in section 2h(7) of the Act and § 50.50 of this chapter. Such documentation shall include:

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(2) That the counterparty has elected not to clear a particular swap under
section 2h(7) of the Act and § 50.50 of
this chapter;

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(5) That the counterparty generally meets its financial obligations associated with non-cleared swaps. Provided, that a swap dealer or major swap participant need not obtain documentation of paragraphs (a)(3), (4), or (5) of this section if it obtains documentation that its counterparty has reported the information listed in § 50.50(b)(1)(iii) in accordance with § 50.50(b)(2) of this chapter.

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Issued in Washington, DC, on April 4, 2013, by the Commission. Christopher J. Kirkpatrick, Deputy Secretary of the Commission. [FR Doc. 2013–08197 Filed 4–8–13; 8:45 am] BILLING CODE 6351–01–P