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Federal Register / Vol. 86, No. 4 / Thursday, January 7, 2021 / Rules and Regulations
format and manner specified by the Commission.
4 Amendments to pending application. An applicant for exemption from registration as a derivatives clearing organization shall promptly amend its application if it discovers a material omission or error, or if there is a material change in the information provided to the Commission in the application or other information provided in connection with the application.
5 Public information. The following sections of an application for exemption from registration as a derivatives clearing organization will be public: The cover letter set forth in paragraph e2i of this section; the documentation required in paragraphs e2iii and e2v of this section;
rules that meet the requirements of paragraphs b2 and d of this section, as applicable; and any other part of the application not covered by a request for confidential treatment, subject to 145.9
of this chapter.
f Modification or termination of exemption upon Commission initiative.
1 The Commission may, in its discretion and upon its own initiative, terminate or modify the terms and conditions of an order of exemption from derivatives clearing organization registration if the Commission determines that there are changes to or omissions in material facts or circumstances pursuant to which the order of exemption was issued, or that any of the terms and conditions of its order of exemption have not been met, including, but not limited to, the requirement that:
i The exempt derivatives clearing organization observes the Principles for Financial Market Infrastructures in all material respects; or ii The exempt derivatives clearing organization is subject to comparable, comprehensive supervision and regulation by its home country regulator.
2 The Commission shall provide written notification to an exempt derivatives clearing organization that it is considering whether to terminate or modify an exemption pursuant to this paragraph and the basis for that consideration.
3 The exempt derivatives clearing organization may respond to the notification in writing no later than 30
business days following receipt of the notification, or at such later time as the Commission permits in writing.
4 Following receipt of a response from the exempt derivatives clearing organization, or after expiration of the
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time permitted for a response, the Commission may:
i Issue an order of termination, effective as of a date to be specified therein. Such specified date shall be intended to provide the exempt derivatives clearing organization with a reasonable amount of time to wind down its swap clearing services for U.S.
persons;
ii Issue an amended order of exemption that modifies the terms and conditions of the exemption; or iii Provide written notification to the exempt derivatives clearing organization that the exemption will remain in effect without modification to the terms and conditions of the exemption.
g Termination of exemption upon request by an exempt derivatives clearing organization. 1 An exempt derivatives clearing organization may petition the Commission to terminate its exemption if:
i Changed circumstances result in the exempt derivatives clearing organization no longer qualifying for an exemption;
ii The exempt derivatives clearing organization intends to cease clearing swaps for U.S. persons; or iii In conjunction with the petition, the exempt derivatives clearing organization submits an application for registration in accordance with 39.3a2 or 39.3a3, as applicable, to become a registered derivatives clearing organization pursuant to section 5ba of the Act.
2 The petition for termination of exemption shall include a detailed explanation of the facts and circumstances supporting the request and the exempt derivatives clearing organizations plans for, as may be applicable, the liquidation or transfer of the swaps positions and related collateral of U.S. persons.
3 The Commission shall issue an order of termination within a reasonable time appropriate to the circumstances or, as applicable, in conjunction with the issuance of an order of registration.
h Notice to clearing members of termination of exemption. Following the Commissions issuance of an order of termination unless issued in conjunction with the issuance of an order of registration, the exempt derivatives clearing organization shall provide immediate notice of such termination to its clearing members.
Such notice shall include:
1 A copy of the Commissions order of termination;
2 A description of the procedures for orderly disposition of any open swaps positions that were cleared for U.S.
persons; and
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3 An instruction to clearing members, requiring that they provide the exempt derivatives clearing organizations notice of such termination to all U.S. persons clearing swaps through such clearing members.

5. Revise 39.9 to read as follows:

39.9

Scope.

Except as otherwise provided by Commission order, the provisions of this subpart B apply to any derivatives clearing organization, as defined under section 1a15 of the Act and 1.3 of this chapter, that is registered with the Commission as a derivatives clearing organization pursuant to section 5b of the Act. The provisions of this subpart B do not apply to any exempt derivatives clearing organization, as defined under 39.2.
PART 140ORGANIZATION, FUNCTIONS, AND PROCEDURES OF
THE COMMISSION
6. The authority citation for part 140
continues to read as follows:

Authority: 7 U.S.C. 2a12, 12a, 13c, 13d, 13e, and 16b.

7. Amend 140.94 by:
a. Redesignating paragraphs c4
through 13 as paragraphs c5
through 14; and b. Adding new paragraph c4.
The addition reads as follows:

140.94 Delegation of authority to the Director of the Division of Swap Dealer and Intermediary Oversight and the Director of the Division of Clearing and Risk.

c
4 All functions reserved to the Commission in 39.6 of this chapter, except for the authority to:
i Grant an exemption under 39.6a of this chapter;
ii Prescribe conditions to an exemption under 39.6b of this chapter;
iii Modify or terminate an exemption under 39.6f4 of this chapter; and iv Terminate an exemption under 39.6g3 of this chapter.

Issued in Washington, DC, on November 25, 2020, by the Commission.
Christopher Kirkpatrick, Secretary of the Commission.
Note: The following appendices will not appear in the Code of Federal Regulations.

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