The CFTC adopted rule changes allowing exceptions from the requirement that "covered persons" (i.e., futures commission merchants, retail foreign exchange dealers, CTAs, CPOs, introducing brokers, major swap participants and swap dealers) must send customers annual privacy notices. The new amendments were adopted as originally proposed.
Under the adopted amendments, annual privacy notices will no longer be required if a "covered person": (i) does not share nonpublic personal information except as described in certain specified exceptions and (ii) has not changed its policies and practices with regard to disclosing nonpublic personal information from those policies and practices that the institution had most recently disclosed to consumers.
The adopted amendments, which add paragraph (d) to CFTC Rule 160.5, also address the situation when a covered person no longer meets the requirements of the exception.
The revisions implement the Fixing America's Surface Transportation Act's (FAST Act) December 2015 statutory amendment to the Gramm-Leach-Bliley Act, and are designed to "reduce confusion among customers by providing them with disclosures when they would be most relevant."
The adopted amendments will become effective 30 days following publication in the Federal Register.
Commentary / Bob Zwirb
The CFTC rule changes implement a statutory amendment to the Gramm-Leach-Bliley Act titled, somewhat ironically, "Eliminate Privacy Notice Confusion." The obligation to initiate or resume providing privacy notices is triggered when the financial institution's policies or practices disclosing nonpublic personal information change such that the exception under which it has been operating no longer applies.
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