Overview
Title
Agency Information Collection Activities Under OMB Review
Agencies
ELI5 AI
The Commodity Futures Trading Commission wants to check how futures companies are collecting money safely. They are asking people to share their thoughts until March 1, 2021, but the way to send comments might be a bit tricky.
Summary AI
The Commodity Futures Trading Commission has issued a notice as required by the Paperwork Reduction Act. This notice refers to an information collection related to the requirement for futures commission merchants to collect margin for omnibus accounts on a gross basis, which is important for compliance with regulations. Public comments are welcome until March 1, 2021, and can be submitted electronically or by mail. The collection is estimated to involve 53 entities, with a total expected annual burden of 17 hours and no associated capital or operating costs.
Abstract
In compliance with the Paperwork Reduction Act of 1995 (PRA), this notice announces that the Information Collection Request (ICR) abstracted below has been forwarded to the Office of Information and Regulatory Affairs (OIRA), of the Office of Management and Budget (OMB), for review and comment. The ICR describes the nature of the information collection and its expected costs and burden.
Keywords AI
Sources
AnalysisAI
The document in question is a formal notice from the Commodity Futures Trading Commission (CFTC), as required by the Paperwork Reduction Act of 1995. It concerns an Information Collection Request (ICR) that has been sent to the Office of Management and Budget (OMB) for review. The specific focus of this collection is related to futures commission merchants and the requirement to collect margins for omnibus accounts on a gross basis. The public is invited to comment on this notice by March 1, 2021, either electronically or via mail. The document provides detailed instructions on how to submit these comments.
General Summary
In simple terms, the CFTC is asking for feedback on their proposal that affects how futures commission merchants handle financial requirements related to omnibus accounts. An omnibus account is a type of brokerage account where all trades are mixed together rather than separated by individual client. The request aims to ensure transactions adhere to established regulations. There is an expectation that 53 entities will respond to this collection effort, which will reportedly require 17 hours of work annually, with no extra costs expected.
Significant Issues and Concerns
There are some notable concerns associated with this document:
Complex Regulatory Language: The use of technical jargon and citations of specific regulations might be challenging for those unfamiliar with regulatory processes, potentially limiting broader understanding.
Lack of Public Input: Although a prior notice (the 60-Day Notice) was released, no relevant comments were received, raising questions about the outreach effectiveness or public interest in the matter.
Cost Explanation Gap: The document states that there are no capital or operating costs associated with this collection, yet it offers no details on how these conclusions were reached.
Unclear Burden Revision: The reasoning behind the revised burden estimate due to fewer futures commission merchants is not elaborated upon, making it hard to verify its accuracy.
Cumbersome Comment Process: The instructions for submitting feedback are lengthy and involve navigating multiple online platforms, which may deter public participation.
Public Impact
Broadly, this document is relevant to the public as it reflects a regulatory process intended to ensure financial stability and adherence to trading regulations. However, due to its technical nature, its direct implications may not be apparent to the average individual. For those in the trading or financial sectors, especially futures commission merchants, this notice serves as an important reminder of compliance obligations and offers a channel to voice any concerns they may have.
Stakeholder Impact
For futures commission merchants, the implications are direct and potentially significant. They must align with the gross margin collection requirement for omnibus accounts, and the opportunity to comment on this process offers them a chance to influence regulatory practices that impact their operation. Conversely, the complexity of the submission process might discourage some from participating in this discussion, despite being key stakeholders.
In conclusion, while the notice is an essential part of regulatory function, the complexity and specificity might limit engagement from those potentially affected. Simplifying procedures and providing clearer explanations may enhance understanding and participation from a broader cross-section of stakeholders.
Issues
• The document contains technical language and references to specific regulations (e.g., 17 CFR 145.9, Sections 4c, 4d, 4f, 4g and 8a of the Commodity Exchange Act) that may not be readily understandable to individuals without a background in regulatory compliance.
• The notice mentions that no relevant comments were received on the 60-Day Notice period but does not indicate what potential publicity efforts were undertaken to gather input, potentially limiting stakeholder participation.
• There is no detailed explanation of why there are no capital costs or operating and maintenance costs associated with this collection, which may be useful information.
• The methodology or rationale behind the revised estimate of respondent burden is not explained in detail, making it difficult to assess the accuracy or reasonableness of the estimated burden.
• The comment submission instructions are lengthy and complex, involving multiple platforms and steps, which might discourage public participation.
• The document doesn't specify if there are any consequences to respondents not adhering to the collection or why a reduction in the number of futures commission merchants led to a revision in the burden estimate.