2024-08872. Requirements for Designated Contract Markets and Swap Execution Facilities Regarding Governance and the Mitigation of Conflicts of Interest Impacting Market Regulation Functions

AGENCY:

Commodity Futures Trading Commission.

ACTION:

Proposed rule; extension of comment period.

SUMMARY:

On March 19, 2024, the Commodity Futures Trading Commission (“Commission” or “CFTC”) published in the Federal Register a notice of proposed rulemaking (“Proposed Rule” or “NPRM”) titled Requirements for Designated Contract Markets and Swap Execution Facilities Regarding Governance and the Mitigation of Conflicts of Interest Impacting Market Regulation Functions. The comment period for the Proposed Rule was set to close on April 22, 2024. The Commission is extending the comment period for this NPRM by an additional twenty-one days.

DATES:

The comment period for the NPRM titled Requirements for Designated Contract Markets and Swap Execution Facilities Regarding Governance and the Mitigation of Conflicts of Interest Impacting Market Regulation Functions notice of proposed rulemaking is extended through May 13, 2024.

ADDRESSES:

You may submit comments, identified by “Requirements for Designated Contract Markets and Swap Execution Facilities Regarding Governance and the Mitigation of Conflicts of Interest Impacting Market Regulation Functions, RIN 3038-AF29,” by any of the following methods:

• CFTC Comments Portal: https://comments.cftc.gov/​. Select the “Submit Comments” link for this rulemaking and follow the instructions on the Public Comment Form.

• Mail: Send to Christopher Kirkpatrick, Secretary of the Commission, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581.

• Hand Delivery/Courier: Follow the same instructions as for Mail above.

Please submit your comments using only one of these methods. To avoid possible delays with mail or in-person deliveries, submissions through the CFTC Comments Portal are encouraged.

All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to https://comments.cftc.gov. You should submit only information that you wish to make available publicly. If you wish the Commission to consider information that you believe is exempt from disclosure under the Freedom of Information Act (“FOIA”), a petition for confidential treatment of the exempt information may be submitted according to the procedures established in § 145.9 of the Commission's regulations.^[1]

The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse, or remove any or all of your submission from https://comments.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 the rulemaking 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 FOIA.

FOR FURTHER INFORMATION CONTACT:

Rachel Berdansky, Deputy Director, [e-mail], 202-418-5429; Swati Shah, Associate Director, [e-mail], 202-418-5042; Caitlin Holzem, Special Counsel, [e-mail], 202-418-5557; Division of Market Oversight, Commodity Futures Trading Commission, 1155 21st Street NW, Washington, DC 20581.

SUPPLEMENTARY INFORMATION:

On March 19, 2024, the Commission published proposed amendments ^[2] to Parts 37 and 38 that would: adopt the existing standards under the Guidance and Acceptable Practices for DCMs implementing Core Principle 15 and Core Principle 16; adopt rules implementing SEF Core Principle 12 rules that are consistent with existing standards under the Guidance and Acceptable Practices for DCM Core Principles 15 and 16; move certain existing conflicts of interest and governance requirements from Part 1 to Part 37 for SEFs and Part 38 for DCMs; adopt Part 38 rules more detailed standards concerning the DCM Chief Regulatory Officer; adopt as Parts 37 and 38 more detailed standards concerning the Regulatory Oversight Committee (“ROC”); amend Part 37 and 38 regulations regarding the notification of a transfer of equity interest in a SEF and DCM. The comment period for the NPRM closes on April 22, 2024.

In a March 24, 2024, Request Letter,^[3] commenters express concerns that the originally-allotted 60-day comment period is insufficient. The Commission is extending the comment period by an additional twenty-one days in order to allow interested persons additional time to analyze the proposal and prepare their comments.

Issued in Washington, DC, on April 22, 2024 by the Commission.

Robert Sidman,

Deputy Secretary of the Commission.

Note:

the following appendix will not appear in the Code of Federal Regulations.

Appendix to Requirements for Designated Contract Markets and Swap Execution Facilities Regarding Governance and the Mitigation of Conflicts of Interest Impacting Market Regulation Functions—Commission Voting Summary

On this matter, Chairman Behnam and Commissioners Johnson, Goldsmith Romero, and Pham voted in the affirmative. Commissioner Mersinger voted to concur. No Commissioner voted in the negative.

Footnotes

1.  17 CFR 145.9.

2.  Requirements for Designated Contract Markets and Swap Execution Facilities Regarding Governance and the Mitigation of Conflicts of Interest Impacting Market Regulation Functions, 89 FR 19646 (Mar. 19, 2024).

3.   See Letter from the Joint Compliance Committee (“JCC”), dated March 24, 2024. Available at https://comments.cftc.gov/​Handlers/​PdfHandler.ashx?​id=​35300 (the “Extension Request Letter”). The requested extension comment period was through June 26, 2024.