FR 2025-03820

The document under discussion is a notice from the Commodity Futures Trading Commission (CFTC), detailing an Information Collection Request (ICR) related to Swap Execution Facilities (SEFs). It complies with the Paperwork Reduction Act of 1995 and has been forwarded to the Office of Maintenance and Budget (OMB) for review. This document is principally concerned with ensuring compliance of SEFs with certain regulatory requirements.

General Summary

The main objective of this notice is to inform the public about the information collection requirements that SEFs must adhere to, as well as the corresponding burden these requirements entail. Specifically, it focuses on ensuring that these facilities fulfill registration requirements and other obligations, such as providing transaction confirmations and complying with 15 core principles.

The notice details a procedural process for public input, allowing for comments to be submitted up until April 10, 2025. Additionally, it provides an estimation of the burdens involved for each respondent, noting that there are 20 respondents with an average burden of 775 hours each, which totals 15,499 hours annually.

Significant Issues and Concerns

Several issues and concerns with the document warrant discussion:

• Submission Process Ambiguity: The document mentions submitting comments to two key entities, OIRA and the CFTC, but it is unclear whether submissions to both are mandatory or if they are parallel options. This ambiguity could lead to confusion among those wishing to participate in the review process.

• Lack of Burden Justification: While the burden hours are specified, the document lacks a comprehensive breakdown of how these hours were calculated. More transparency in explaining the methodology could improve understanding and acceptance of these figures.

• Complex Language: The procedural language used throughout is dense, possibly resulting in difficulty for the general public to comprehend fully, particularly for individuals not versed in regulatory language.

• Uncertainty in Moderation of Submissions: The document indicates that the CFTC reserves the right to moderate submissions. However, the lack of explicit criteria for moderation introduces uncertainty regarding how submissions will be handled.

• Dependence on Online Platforms: The reliance on specific websites for submissions offers no guidance if users face technical difficulties. This dependence on online functionality without support mechanisms could impede user participation.

• Indirect Cost Analysis: While direct capital or maintenance costs are noted as nonexistent, the document does not account for potential indirect expenses that respondents might incur, which might influence the overall perceived or real burden.

Impact on the Public and Stakeholders

Broad Public Impact

For the general public, the opportunity to engage in this regulatory process through comment submission represents a chance to influence the administration of SEFs, which are significant for financial markets. However, the procedural complexities and potential barriers to participation might limit effective public involvement.

Impact on Stakeholders

Specific stakeholders, notably the 20 identified respondents (likely SEFs or related entities), are directly affected by the document's requirements. They would bear the burden of nearly 775 hours annually each in compliance requirements. This burden could translate to significant time and resource commitments, highlighting the importance of clarity and transparency in regulatory communications.

On a positive note, compliance with these regulations assures a level of operational integrity and transparency in SEFs, which benefits the market and its participants. Conversely, should the estimated burden prove burdensome, there might be calls from stakeholders for reassessment or clarification, as too high a regulatory burden could stifle innovation and efficiency.

In summary, the document serves as a vital communication in regulating important financial infrastructure, though it leaves room for improvement in clarity and public accessibility. It stands as both a procedural necessity and a potential point of engagement for entities subject to these regulations.