Page Range | 50059-50304 | |
FR Document |
Page and Subject | |
---|---|
82 FR 50301 - Unmanned Aircraft Systems Integration Pilot Program | |
82 FR 50169 - Sunshine Act Meetings | |
82 FR 50122 - Expanded Collaborative Search Pilot Program | |
82 FR 50129 - Sunshine Act Meetings | |
82 FR 50162 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; DOL-Only Performance Accountability, Information, and Reporting System | |
82 FR 50131 - Proposed Data Collection Submitted for Public Comment and Recommendations | |
82 FR 50070 - Removing the Prohibition on the Importation of Jadeite or Rubies Mined or Extracted From Burma, and Articles of Jewelry Containing Jadeite or Rubies Mined or Extracted From Burma | |
82 FR 50082 - Drawbridge Operation Regulation; Nanticoke River, Seaford, DE | |
82 FR 50148 - National Vaccine Injury Compensation Program; List of Petitions Received | |
82 FR 50150 - National Vaccine Injury Compensation Program: Revised Amount of the Average Cost of a Health Insurance Policy | |
82 FR 50159 - Bulk Manufacturer of Controlled Substances Application: Euticals Inc. | |
82 FR 50126 - 54KR 8ME LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
82 FR 50126 - AL Solar A, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
82 FR 50125 - Combined Notice of Filings #1 | |
82 FR 50161 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Examinations and Testing of Electrical Equipment, Including Examination, Testing, and Maintenance of High Voltage Longwalls | |
82 FR 50166 - Proposed Collection of Information; Comment Request | |
82 FR 50161 - President's Committee on the International Labor Organization Charter Renewal | |
82 FR 50220 - Notice of Determinations; Culturally Significant Objects Imported for Exhibition Determinations: “The Silver Caesars: A Renaissance Mystery” Exhibition | |
82 FR 50164 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Sealing of Abandoned Areas Standard | |
82 FR 50165 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Request for Assistance From the Department of Labor, Employee Benefits Security Administration | |
82 FR 50163 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Rehabilitation Plan and Award | |
82 FR 50152 - The President's National Security Telecommunications Advisory Committee | |
82 FR 50157 - Notice of Receipt of Complaint; Solicitation of Comments Relating to the Public Interest | |
82 FR 50158 - Certain Shaving Cartridges, Components Thereof and Products Containing Same Institution of Investigation | |
82 FR 50156 - Certain Amorphous Metal and Products Containing Same; Institution of Investigation | |
82 FR 50117 - Notice of Request for Revision to and Extension of Approval of an Information Collection; Importation of Plants for Planting; Establishing a Category for Plants for Planting Not Authorized for Importation Pending Pest Risk Analysis | |
82 FR 50116 - Notice of Request for Revision to and Extension of Approval of an Information Collection; Importation of Tomatoes From France, Morocco, Western Sahara, Chile, and Spain | |
82 FR 50225 - Agency Information Collection Activity Under OMB Review: Claim, Authorization & Invoice for Prosthetic Items & Services | |
82 FR 50120 - Certain Paper Clips From the People's Republic of China: Continuation of Antidumping Duty Order | |
82 FR 50093 - Fisheries of the Exclusive Economic Zone Off Alaska; Pacific Ocean Perch in the Western Regulatory Area of the Gulf of Alaska | |
82 FR 50169 - Submission for Review: OPM Form 1654-B, Combined Federal Campaign Federal Retiree Pledge Form | |
82 FR 50128 - Appraisal Subcommittee Notice of Meeting | |
82 FR 50155 - Notice of Public Meeting, BLM Alaska Resource Advisory Council | |
82 FR 50089 - Motor Vehicle Safety Standards; Electronic Stability Control Systems for Heavy Vehicles | |
82 FR 50121 - North Pacific Fishery Management Council; Public Meeting | |
82 FR 50222 - Notice of OFAC Sanctions Actions | |
82 FR 50151 - Advisory Committee on Infant Mortality; Notice of Charter Renewal | |
82 FR 50221 - Release of Waybill Data | |
82 FR 50142 - Assessing User Fees Under the Generic Drug User Fee Amendments of 2017; Draft Guidance for Industry; Availability | |
82 FR 50160 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Extension of a Previously Approved Collection: Red Ribbon Week Patch | |
82 FR 50209 - Cost-of-Living Increase and Other Determinations for 2018 | |
82 FR 50214 - Social Security Disability Program Demonstration Project: Promoting Opportunity Demonstration (POD) | |
82 FR 50138 - Product Labeling for Certain Ultrasonic Surgical Aspirator Devices; Guidance for Industry and Food and Drug Administration Staff; Availability | |
82 FR 50139 - Standard Development Organizations Whose Susceptibility Test Interpretive Criteria Standards May Be Recognized by the Food and Drug Administration; Request for Information | |
82 FR 50141 - Agency Information Collection Activities; Proposed Collection; Comment Request; Postmarketing Safety Reports for Human Drug and Biological Products: Electronic Submission Requirements | |
82 FR 50134 - Manufacturers Sharing Patient-Specific Information From Medical Devices With Patients Upon Request; Guidance for Industry and Food and Drug Administration Staff; Availability | |
82 FR 50080 - Medical Devices; Neurological Devices; Classification of the Non-Electroencephalogram Physiological Signal Based Seizure Monitoring System | |
82 FR 50145 - Agency Information Collection Activities; Proposed Collection; Comment Request; Survey of Alumni Commissioner's Fellowship Program Fellows | |
82 FR 50129 - Victory Media, Inc.; Analysis To Aid Public Comment | |
82 FR 50073 - Medical Devices; Immunology and Microbiology Devices; Classification of the Streptococcus SPP. Nucleic Acid-Based Assay | |
82 FR 50121 - Marine Mammals; File No. 21431 | |
82 FR 50159 - Agency Information Collection Activities; Proposed eCollection; eComments Requested InfraGard Membership Application and Profile | |
82 FR 50127 - Update to Notice of Financial Institutions for Which the Federal Deposit Insurance Corporation Has Been Appointed Either Receiver, Liquidator, or Manager | |
82 FR 50126 - Agency Information Collection Activities: Submission for OMB Review; Comment Request | |
82 FR 50208 - Presidential Declaration Amendment of a Major Disaster for the State of Florida | |
82 FR 50059 - Covered Securities Pursuant to Section 18 of the Securities Act of 1933 | |
82 FR 50208 - Presidential Declaration Amendment of a Major Disaster for Public Assistance Only for the State of Florida | |
82 FR 50119 - Submission for OMB Review; Comment Request | |
82 FR 50152 - Endangered Species Recovery Permit Applications | |
82 FR 50128 - Formations of, Acquisitions by, and Mergers of Bank Holding Companies | |
82 FR 50135 - Acceptance Review for De Novo Classification Requests; Draft Guidance for Industry and Food and Drug Administration Staff; Availability | |
82 FR 50208 - Notice Seeking Exemption Under Section 312 of the Small Business Investment Act, Conflicts of Interest: Propel Venture Partners US Fund I, L.P. | |
82 FR 50147 - Voluntary Medical Device Manufacturing and Product Quality Program; Public Workshop; Request for Comments; Reopening of Comment Period | |
82 FR 50077 - Medical Devices; Immunology and Microbiology Devices; Classification of the Newborn Screening Test for Severe Combined Immunodeficiency Disorder | |
82 FR 50224 - Advisory Council to the Internal Revenue Service; Meeting | |
82 FR 50224 - Proposed Information Collection; Comment Request | |
82 FR 50223 - Proposed Collection; Comment Request for Form 1041-N | |
82 FR 50144 - De Novo Classification Process (Evaluation of Automatic Class III Designation); Guidance for Industry and Food and Drug Administration Staff; Availability | |
82 FR 50071 - Medical Devices; Clinical Chemistry and Clinical Toxicology Devices; Classification of the Acute Kidney Injury Test System | |
82 FR 50080 - Medical Devices; Gastroenterology-Urology Devices; Classification of the Oral Removable Palatal Space Occupying Device for Weight Management and/or Weight Loss | |
82 FR 50075 - Medical Devices; Immunology and Microbiology Devices; Classification of the Aquaporin-4 Autoantibody Immunological Test System | |
82 FR 50185 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Exchange's Name Change | |
82 FR 50203 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make Technical Corrections to Its Second Amended and Restated Certificate of Incorporation | |
82 FR 50221 - Petition for Exemption; Summary of Petition Received; Airlines for America | |
82 FR 50175 - Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make Technical Corrections to Its Second Amended and Restated Certificate of Incorporation | |
82 FR 50196 - Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 723 To Remove Obsolete Rule Text | |
82 FR 50201 - Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 723 To Remove Obsolete Rule Text | |
82 FR 50171 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule | |
82 FR 50186 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Provide Users With Access to Five Additional Third Party Systems and Connectivity to Two Additional Third Party Data Feeds | |
82 FR 50181 - Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX PEARL Fee Schedule | |
82 FR 50194 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make Permanent an Exception to TRACE Reporting for Certain Bond Transactions Effected on the New York Stock Exchange | |
82 FR 50198 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Nasdaq Closing Cross Rules | |
82 FR 50129 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company | |
82 FR 50177 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Provide Users With Access to Five Additional Third Party Systems and Connectivity to Two Additional Third Party Data Feeds | |
82 FR 50205 - Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Rule 964.2NY Regarding the Participation Entitlement Formula for Specialists and e-Specialists | |
82 FR 50190 - Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Provide Users With Access to Five Additional Third Party Systems and Connectivity to Two Additional Third Party Data Feeds | |
82 FR 50170 - New Postal Products | |
82 FR 50170 - Submission for OMB Review; Comment Request | |
82 FR 50133 - Submission for OMB Review; Comment Request | |
82 FR 50167 - Agency Information Collection Activities; Proposals, Submissions, and Approvals | |
82 FR 50118 - Notice of Public Meeting of the West Virginia Advisory Committee | |
82 FR 50117 - Notice of Public Meeting of the Virginia Advisory Committee | |
82 FR 50119 - Notice of Public Meeting of the Alabama Advisory Committee for Orientation and To Discuss Voting in the State of Alabama as a Topic of SAC Study | |
82 FR 50104 - Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Reef Fish Fishery of the Gulf of Mexico; Modifications to the Number of Unrigged Hooks Carried On Board Bottom Longline Vessels | |
82 FR 50151 - National Center for Complementary & Integrative Health; Notice of Meeting | |
82 FR 50151 - National Center for Complementary and Integrative Health; Notice of Meeting | |
82 FR 50112 - Pacific Island Fisheries; 2017 Annual Catch Limits and Accountability Measures | |
82 FR 50106 - Magnuson-Stevens Act Provisions; Fisheries Off West Coast States; Pacific Coast Groundfish Fishery; Pacific Whiting; Pacific Coast Groundfish Fishery Management Plan; Amendment 21-3; Trawl Rationalization Program | |
82 FR 50167 - NASA Advisory Council; Ad Hoc Task Force on STEM Education; Meeting | |
82 FR 50220 - Release of Waybill Data | |
82 FR 50101 - Snapper-Grouper Fishery of the South Atlantic Region; Temporary Measures To Reduce Overfishing of Golden Tilefish | |
82 FR 50084 - Hexythiazox; Pesticide Tolerances | |
82 FR 50166 - NASA Advisory Council; Aeronautics Committee; Meeting | |
82 FR 50167 - NASA Advisory Council; Charter Renewal | |
82 FR 50220 - BNSF Railway Company-Abandonment Exemption-in Larimer County, CO. | |
82 FR 50208 - National Small Business Development Centers Advisory Board | |
82 FR 50221 - Fee Schedule for the Transfer of U.S. Treasury Book-Entry Securities Held on the National Book-Entry System | |
82 FR 50270 - Supervisory Review Committee; Procedures for Appealing Material Supervisory Determinations | |
82 FR 50094 - Capital Planning and Supervisory Stress Testing | |
82 FR 50288 - Appeals Procedures | |
82 FR 50228 - Restrictions on Qualified Financial Contracts of Certain FDIC-Supervised Institutions; Revisions to the Definition of Qualifying Master Netting Agreement and Related Definitions |
Animal and Plant Health Inspection Service
International Trade Administration
National Oceanic and Atmospheric Administration
Patent and Trademark Office
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Children and Families Administration
Food and Drug Administration
Health Resources and Services Administration
National Institutes of Health
Coast Guard
U.S. Customs and Border Protection
Fish and Wildlife Service
Land Management Bureau
Drug Enforcement Administration
Workers Compensation Programs Office
Federal Aviation Administration
National Highway Traffic Safety Administration
Bureau of the Fiscal Service
Foreign Assets Control Office
Internal Revenue Service
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Securities and Exchange Commission.
Final rule.
The Securities and Exchange Commission (“SEC” or “Commission”) is adopting an amendment to Rule 146 under Section 18 of the Securities Act of 1933, as amended (“Securities Act”), to designate certain securities listed, or authorized for listing, on Investors Exchange LLC (“IEX” or “Exchange”) as covered securities for purposes of Section 18(b) of the Securities Act. Covered securities under Section 18(b) of the Securities Act are exempt from state law registration requirements. The Commission also is amending Rule 146 to reflect name changes of certain exchanges referenced in the Rule.
Richard Holley III, Assistant Director; Edward Cho, Special Counsel; or Michael Ogershok, Attorney-Adviser, Office of Market Supervision, at (202) 551-5777, Division of Trading and Markets, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-7010.
In 1996, Congress amended Section 18 of the Securities Act to exempt from state registration requirements securities listed, or authorized for listing, on the New York Stock Exchange LLC (“NYSE”), the American Stock Exchange LLC (“Amex”) (now known as NYSE American LLC),
Pursuant to Section 18(b)(1)(B) of the Securities Act, the Commission adopted Rule 146.
In July 2017, the Commission proposed to amend Rule 146(b) to designate certain securities listed, or authorized for listing, on IEX as Covered Securities for purposes of Section 18(b) of the Securities Act.
The Commission has determined that IEX's listing standards are substantially similar to the listing standards of the Named Markets. Accordingly, the Commission today is amending Rule 146(b) to designate securities listed, or authorized for listing, on IEX as Covered Securities under Section 18(b)(1) of the Securities Act.
Under Section 18(b)(1)(B) of the Securities Act,
The Commission included in the Proposing Release its preliminary view that IEX's quantitative and qualitative listing standards were substantially similar to the listing standards for a Named Market. The Commission received no comments on its views.
The Commission continues to believe that IEX's initial and continued quantitative listing standards for its securities are substantively identical to, and thus substantially similar to, the initial and continued quantitative listing standards for securities listed on Nasdaq/NGM.
The Commission continues to believe that IEX's initial and continued qualitative listing standards for its securities are substantively identical to, and thus substantially similar to, the qualitative listing standards for securities listed on Nasdaq/NGM,
Accordingly, because IEX's initial and continued qualitative listing standards are substantively identical to those of Nasdaq/NGM, the Commission has determined that IEX's initial and continued qualitative listing standards are substantially similar to the qualitative listing standards for securities listed on Nasdaq/NGM, which is a Named Market,
With respect to the standards relating to the listing and delisting of companies, including prerequisites for initial and continued listing on IEX, obligations of security issuers listed on IEX, as well as rules describing the application and qualification process, IEX's listing rules for securities are virtually identical to, and thus substantially similar to, those of Nasdaq/NGM.
The Commission also notes that IEX's corporate governance standards in connection with securities to be listed and traded on IEX are virtually identical to, and thus substantially similar to, the current rules of Nasdaq/NGM and NYSE.
The Commission compared IEX's listing standards for other types of securities, including, for example, portfolio depository receipts; index fund shares; securities linked to the performance of indexes, commodities, and currencies; index-linked exchangeable notes; partnership units; trust units; and managed fund shares,
Finally, the Commission is amending Rule 146(b) as proposed to reflect the following name changes, on which the Commission did not receive any comments:
• Paragraphs (b)(1) and (b)(2) of Rule 146 use the term “NYSE Amex” to refer to the national securities exchange formerly known as the American Stock Exchange LLC. As noted above, in 2012, NYSE Amex changed its name from NYSE Amex LLC to NYSE MKT LLC, and, in July 2017, NYSE MKT LLC changed its name to NYSE American LLC.
• Paragraph (b)(1) of Rule 146 refers to “Tier I of the NASDAQ OMX PHLX LLC.” As noted above, in December 2015, NASDAQ OMX PHLX LLC changed its name to NASDAQ PHLX LLC.
• Paragraph (b)(1) of Rule 146 refers to “Tier I and Tier II of BATS Exchange, Inc.” As noted above, in March 2016, BATS Exchange, Inc. changed its name to Bats BZX Exchange, Inc.
• Paragraph (b)(1) of Rule 146 refers to “Options listed on the International Securities Exchange, LLC.” As noted above, in March 2017, the International Securities Exchange, LLC changed its name to Nasdaq ISE, LLC.
The Paperwork Reduction Act of 1995 does not apply because the amendment to Rule 146(b) does not impose recordkeeping or information collection requirements or other collection of information, which require the approval of the Office of Management and Budget under 44 U.S.C. 3501
The Commission is sensitive to the economic consequences of its rules, including the benefits, costs, and effects on efficiency, competition, and capital formation. As noted above, the Commission has determined that the overall listing standards for securities to be listed and traded on IEX are substantially similar to those of a Named Market. As such, the Commission is adopting amendments to Rule 146 under Section 18 of the Securities Act, to designate securities listed, or authorized for listing, on IEX as Covered Securities. The following analysis considers the economic effects that may result from the amendment.
Where possible, the Commission has quantified the economic effects of the amendment; however, as explained further below, the Commission is unable to quantify all of the economic effects because it lacks the information necessary to provide reasonable estimates. In some cases, quantification depends heavily on factors outside of the control of the Commission, particularly due to the flexibility that an
The Commission compared the economic effects of the amendment, including benefits, costs, and effects on efficiency, competition, and capital formation, to a baseline that consists of the existing regulatory framework and market structure.
The listing standards of Named and Designated Markets are quantitative and qualitative requirements that issuers must satisfy before they may list on these markets. Securities listed on a Named or Designated Market are Covered Securities, which are exempt from complying with state securities law registration and qualification requirements. As mentioned above,
Pursuant to unlisted trading privileges, a national securities exchange such as IEX currently can trade securities that are listed on other exchanges.
The Commission lacks comprehensive, independent data to precisely estimate the total time, registration, and compliance costs associated with state registration and qualification. Moreover, those total costs may vary widely for issuers depending upon the number of states in which an issuer elects to register. To provide some information about potential costs for state registration, Table 1 below lists examples of Blue Sky registration filing fees for several states.
The issuer of a
In addition, the Commission believes that the state registration and qualification requirements applicable to non-Covered Securities also impose costs on broker-dealers. Specifically, broker-dealers may incur costs to ensure that they are complying with applicable state laws governing non-Covered Securities in each state in which they are transacting in those securities on behalf of their customers or providing advice or other information to customers related to those securities. For example, broker-dealers can incur costs associated with maintaining a compliance program to verify an issuer's state registration status and comply with any state requirements applicable to broker-dealers that transact in non-Covered Securities, which could vary depending on where the customer resides and where the transaction occurs. In addition, the types and content of communications broker-dealers may have with their customers regarding non-Covered securities may be subject to regulation under Blue Sky laws, thus broker-dealers may incur costs to ensure they are compliant with such requirements in each state in which they advise customers.
The amendment to Rule 146 that the Commission is adopting to make IEX a Designated Market will impact several parties, including (i) issuers that currently list their securities on a Named or Designated Market; (ii) issuers with securities not currently listed on any incumbent Named or Designated Market but who might list on IEX, or on an incumbent Named or Designated Market, as a result of the competition from IEX if IEX enters the listing market; and (iii) issuers with securities not currently listed on any incumbent Named or Designated Market and that would eventually list on a Named or Designated Market, regardless of IEX's entry into the market. Given that issuers that meet the listing standards of IEX are likely to meet the listing standards of other Named or Designated Markets, the number of issuers that will list on a Named or Designated Market solely as a result of the amendment (
Issuers of public securities make several considerations when deciding on which exchange to list their securities. These considerations include, among other things, the visibility and publicity provided by the exchange, the exchange's listing services and fees, and the exchange's listing standards. The Named and Designated Markets may provide issuers of Covered Securities with additional visibility over that of securities traded over the counter, which may, in turn, increase the pool of potential investors for an issuer and thereby improve an issuer's access to capital. In addition, the Named and Designated Markets provide listing services for their listed issuers, which can include monitoring, communication, and regulatory compliance services. These services may help issuers by reducing the cost of raising capital and the costs associated with going or remaining public. However, many issuers that list for the first time do so as part of an initial public offering, which can include considerations not related to listing on an exchange, such as SEC reporting obligations, as well as legal, accounting, and other expenses (both for the initial offering and the ongoing requirements of remaining public). In addition, issuers also consider the benefits of going public, such as increased access to capital and providing investors with a signal of an issuer's ability to meet obligations that apply to public companies (
Issuers must pay listing fees and meet listing standards to list on a Named or Designated Market. Listing fees may include an initial application fee, as well as an ongoing annual fee, and may vary by the number of shares in the initial offering or be fixed. However, listing fees typically represent a small portion of the overall cost of an initial public offering or the ongoing costs of remaining public,
The amendment to Rule 146 will affect the market for listing services, in which the Named and Designated Markets compete to provide listing services to issuers, or potential issuers, of Covered Securities because, as explained in detail below, the amendment will permit IEX to compete in this market. In addition, the Commission believes that the amendment can also affect the market for trading services because the listing status and listing designation of securities (
Listing exchanges compete with each other for listings in many ways, including, but not limited to, listing fees, listing standards, and listing services. When issuers select a listing exchange, they consider the listing fees and the costs of compliance with listing standards on any given exchange, as well as the quality of listing services and any relevant reputational benefits, among other things, each exchange may offer. Although issuers may incur costs to meet an exchange's listing standards, high listing standards may also yield benefits as they may serve as a positive signal to investors of an issuer's ability to satisfy high qualitative and quantitative listing requirements. Investors may interpret the reputation of a listing exchange and high listing standards as a credible signal of the quality of the listed securities on that exchange.
Currently, there are three Named Markets under Section 18(b)(1)(A) of the Securities Act: NYSE, NYSE American, and Nasdaq/NGM. In addition, there are currently six Designated Markets: (i) Tier I of the NYSE Arca, Inc.; (ii) Tier I of the NASDAQ OMX PHLX LLC; (iii) CBOE; (iv) options listed on ISE; (v) The Nasdaq Capital Market; and (vi) Tier I and Tier II of BATS. As of June 2, 2017, the Commission estimates that NYSE listed 3,172 equity securities, Nasdaq listed 3,183 equity securities, NYSE Arca listed 1,529 equity securities, NYSE American listed 359 equity securities, and BATS listed 176 equity securities.
While the number of equities listed on each exchange relative to the total number of equities listed on all exchanges is informative about overall competition for listings among the exchanges, the market shares for recent equity issue listings may provide a better picture of the nature of competition between exchanges and the size of the new listings market. Table 2 identifies the number of new equity issue listings from 2008 to 2016.
As shown in Table 2, two listing exchanges—NYSE and Nasdaq—captured 71% of all new equity listings on Named and Designated Markets in 2016, which is evidence of a highly concentrated listing market.
A highly concentrated market may be the result of barriers to entry, which limit competition, and can include economies of scale, reputation, legal barriers to entry, and network externalities. These barriers to entry may adversely affect a new listing exchange's ability to compete with incumbent exchanges for listings. New listing exchanges do not enjoy the economies of scale of large listing exchanges. Listing exchanges may exhibit economies of scale because an exchange with a large number of listings can spread the fixed costs of listing equities over a greater number of issuers. The larger these fixed costs are, the greater will be the scale economies of larger listing exchanges. New listing exchanges face reputational barriers to entry because they may not be able to quickly establish a strong reputation for high quality listings. This lack of reputation may discourage issuers from listing on an entrant exchange, as well as discourage investors from investing in an issuer that lists on an entrant exchange, which may further reinforce the reputational barriers to entry.
Legal barriers to entry also can apply because exchanges are self-regulatory organizations overseen by the Commission. The governing statute and regulations establish legal barriers to entry for an entity that seeks to register as an exchange, as well as additional legal barriers for an exchange to become a Designated Market. Specifically, the process by which the Commission designates an exchange as a Designated Market imposes a legal barrier to entry on the ability of an exchange to effectively compete for the listing business of Covered Securities.
In addition, the market for listings exhibits positive network externalities: Issuers may prefer to be listed on exchanges where other similar issuers are listed because of increased visibility. This indicates that, all else being equal, issuers may tend to favor listing their securities on large exchanges (in terms of listings) over smaller ones.
Issuers also may face costs associated with moving their listing from one exchange to another. These switching costs will not only include the fixed costs associated with listing on a new exchange (such as the exchange's application fee, and the legal and accounting expenses associated with ensuring that the issuer satisfies the listing standards of the new exchange) but also will include the costs associated with communicating with investors about the move to the new exchange. Thus, an issuer that is considering moving from one exchange to another would compare the relatively lower annual listing fee of its current exchange with the relatively high costs of moving its listing to a new exchange, which places the new exchange at a disadvantage and creates a barrier to entry for a potential entrant. Even if an entrant exchange prices its listing fees and services for new issuers competitively compared to the incumbent exchanges, the costs for an issuer to switch its listing to a new exchange may dissuade an issuer from switching and thereby prevent the entrant from gaining market share.
Table 3 shows estimates of the probability that an issuer would change its listing exchange in a given year, based on issuer switching behavior for equities over the period 2008 to 2016. As an example, if an equity security was listed on NYSE in a given year, there was a 99.33% chance that it would still be listed on NYSE the following year, but a 0.04% chance it would be listed on Amex the following year, a 0.34% chance it would be listed on Nasdaq the following year, and a 0.08% chance it would be listed on NYSE Arca the following year. More generally, equities listed on NYSE and Nasdaq in a given year had a greater than 99% chance of remaining listed on that exchange the following year. This result suggests that issuers are unlikely to switch their listings away from the two exchanges with the highest market shares.
Trading in Covered Securities is segmented from trading in those securities that are not listed on a Named or Designated Market (
Exchanges, ATSs, and broker-dealers compete to attract order flow in Covered Securities by offering better trading services or innovative trading
The ability of listing exchanges, however, to successfully use innovative trading services to attract listings has declined over the past decade.
Securities Act Section 2(b)
By listing on IEX, security issuers that otherwise would have not listed their securities on a Named or Designated Market will be able to avoid the duplicative costs of securities registration in multiple jurisdictions. In this way, the amendment will reduce the impediments to listing on exchanges, which in turn can improve market efficiency. To the extent that the amendment results in increased listing activity, then it may improve the allocative efficiency of securities markets by allowing investors to better diversify financial risks by investing in newly-listed securities.
However, these two impacts may be mitigated by the extent to which issuers are unable to list on a Named or Designated Market because, for example, they do not satisfy listing standards or cannot afford the attendant costs of doing so. An issuer must be an SEC reporting company to list on a national securities exchange.
Whether IEX entering the listing market promotes capital formation depends on the extent to which issuers previously unable or unwilling to list on a Named or Designated Market subsequently do so. Some issuers may, as a result of improved services and/or decreased fees stemming from the increased competition between listing exchanges, be induced to list on an exchange where, in the absence of the amendment, they would not have done so. If so, then the entrance of IEX can provide issuers with lower cost access to capital.
As noted in Section IV.A, one reason issuers list on a Named or Designated Market is improved access to capital. Listing on a Named or Designated Market may improve access to capital in several ways, which can promote capital formation. First, listing on a Named or Designated Market may credibly signal to investors that a firm is of higher quality because firms that list on these exchanges must meet the exchange's minimum standards for governance and disclosure. Like listed issuers on the Named and Designated Markets, IEX's listed issuers might benefit from the signal of quality that comes from listing on a Named or Designated Market. The reputational benefits that come from listing on a Named or Designated Market may make investors more willing to invest in such issuers, which may improve the issuers' access to capital, and promote capital formation.
Second, an issuer listing on a Named or Designated Market may experience enhanced liquidity that facilitates capital formation. Investors may demand a liquidity premium (greater returns) when investing in illiquid securities to compensate for the risks associated with the lack of liquidity. Any liquidity risk premium raises the costs issuers incur when issuing new securities. Listing on a Named or Designated Market may result in more liquid trading relative to OTC trading because of potential frictions to liquidity imposed by OTC search costs.
The amendment to Rule 146(b) will likely increase competition among the Named and Designated Markets that compete to list securities. By determining that IEX has “substantially similar” listing standards to the Named and other Designated Markets, the amendment permits IEX to compete with other Named and Designated Markets to list securities that are exempt from state registration requirements. As discussed above, the Named and Designated Markets compete with each other in many ways, including listing standards, listing fees, and listing services. In addition to permitting IEX to compete to list securities as a Designated Market, the additional competition from IEX's entry into the listing market will also provide incumbent listing markets with incentives to change how they compete with each other.
Generally, there are two ways that increased competition can affect how listing markets compete with each other. First, it can affect how Named or Designated Markets compete to provide better services and value for listing issuers. If an additional entrant competes by providing better listing and monitoring services or lower costs for issuers, incumbent listing exchanges may decide to follow suit. For example, listing markets could reduce fees, improve services, or reduce compliance burdens associated with their listing standards.
The Named and Designated Markets also may compete to provide better services by increasing their level of specialization with respect to securities listings. As noted below, as in the case of BATS, some Named and Designated Markets may develop reputations for specializing in specific types of issues by catering to specific types of issuers. An increase in competitive pressures may cause the Named and Designated Markets to increase the degree to which they cater to specific types of issuers. Specialization may reduce the cost of providing listing services or may promote innovation in the provision of listing services. To the extent that specialization improves the services provided to issuers or reduces the costs of these services, this competitive response may improve the efficiency of the market for listing services.
Second, the reputation of a Named or Designated Market for strict listing standards may be informative to an investor and serve as a signal of the quality of an issuer.
The impact of increased competition on listing standards is uncertain. The Named and Designated Markets may respond to increased competition by strengthening listing standards to provide additional signaling and attract investors to the issuers the exchanges list. Alternatively, the Named and Designated Markets can instead respond to increased competition by proposing to weaken their listing standards to attract additional listings. The exchanges' opposing incentives to cater to these two groups of market participants make predicting the impact of increased competition on listing standards difficult.
The Named and Designated Markets' ability to lower listing standards is constrained by two factors (1) any proposed listing standards or proposed changes to existing listing standards must be filed with the Commission pursuant to Section 19(b) of the Exchange Act and must meet statutory and rule requirements to become effective;
Some of the features of the market for listings that currently inhibit competition may mitigate the effects of the amendment on competition. Specifically, some of the barriers to entry discussed in the baseline—economies of scale and network externalities—may make it difficult for IEX to effectively compete with incumbent exchanges for listings.
The most recent example of an entrant into the market for listings is BATS, which became a Designated Market in
Table 3 in Section IV.A.3.a shows that almost none of the new listings on BATS arrived as transfers from another exchange; rather most of those listings were the initial listing for each issuer. This evidence could indicate that switching costs may also have had an impact on BATS' ability to gain market share, and may be a factor for IEX, as well. Moreover, the vast majority of BATS-listed securities are exchange-traded products, which is consistent with the idea that, despite barriers to entry, BATS was able to enter the market by competing for one segment of the market and specializing in listing exchange-traded products.
The amendment to Rule 146(b) making IEX a Designated Market allows securities listed, or authorized for listing, on IEX to be designated as Covered Securities under Rule 146(b)(1) under the Securities Act. As described above, Covered Securities are exempt from state law registration requirements.
As noted above, the Commission is unable to quantify all of the economic effects of the amendment because it lacks the information necessary to provide reasonable estimates.
The amendment will provide benefits, flowing from the exemption from Blue Sky laws, to issuers that do not currently list on an existing Named or Designated Market but choose to list on IEX.
More generally, by making IEX a Designated Market, the amendment will benefit IEX by allowing it to compete in the listing market for Covered Securities on a more level playing field with similarly situated national securities exchanges.
Last, if issuers list on a Named or Designated Market as a result of the amendment, this listing may impact the trading of those issuers' securities on markets that are not Named or Designated Markets. As noted in the baseline, securities that list on a Named or Designated Market may also trade on exchanges that are not Named or Designated Markets, which may bring those exchanges additional revenue from trades.
For unlisted issuers that choose to list on IEX as a result of the amendment, listing on IEX may entail compliance costs arising from new reporting obligations from IEX's listing standards. In addition, if unlisted issuers choose to list on IEX as a result of the amendment, investors may also face costs from the loss of state oversight for the securities listed by these issuers. The Commission notes that the overall magnitude of costs associated with the loss of state oversight depends on the number of unlisted issuers that choose to list as a result of the amendment. The Commission believes this number is likely to be small, or non-existent, for the reasons noted above.
The Commission believes that any costs to investors from a loss of state
Issuers that currently list on an existing Named or Designated Market that would switch to IEX would not experience potential costs from a loss of state oversight or compliance costs arising from new reporting obligations, because they currently are not subject to state oversight and are subject to the reporting requirements by virtue of being an SEC reporting company (a condition to their listing on a current Named or Designated Market). However, any previously listed issuers that decide to change their listing from another Named or Designated Market to IEX will incur costs to switch their listing.
Some of the effects of the amendment to Rule 146 on IEX, incumbent Named and Designated Markets, and issuers involve transfers from one party to another. For example, the listing fees collected by IEX from previously-listed issuers may come from a reduction in the listing fees collected by other Named or Designated Markets. Issuers that list on Named and Designated Markets may also enjoy savings from listing fee reductions as a result of increased listing exchange competition, which would also come from a reduction in listing fees collected by Named or Designated Markets.
Additionally, as a result of changes to competition in the market for listings, the volume of trading across trading venues may shift, to the advantage of some venues and to the detriment of others. Changes to the Named or Designated Markets' shares of the market for listings may affect the distribution of trading volumes across Named and Designated Markets, as well as other trading venues. Commission staff estimates that an exchange captures an average share of volume in the securities listed by that exchange that is about 20% higher than the market share of other exchanges trading the same securities.
The Commission certified, pursuant to Section 605(b) of the Regulatory Flexibility Act,
The Commission is adopting an amendment to Rule 146 pursuant to the Securities Act of 1933,
Securities.
For the reasons set forth in the preamble, Title 17, Chapter II of the Code of Federal Regulations is amended as follows:
15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 77s, 77z-3, 77sss, 78c, 78d, 78j, 78
(b) * * *
(1) For purposes of Section 18(b) of the Act (15 U.S.C. 77r), the Commission finds that the following national securities exchanges, or segments or tiers thereof, have listing standards that are substantially similar to those of the New York Stock Exchange (“NYSE”), the NYSE American LLC (“NYSE American”), or the National Market System of the Nasdaq Stock Market (“Nasdaq/NGM”), and that securities listed, or authorized for listing, on such exchanges shall be deemed covered securities:
(i) Tier I of the NYSE Arca, Inc.;
(ii) Tier I of the NASDAQ PHLX LLC;
(iii) The Chicago Board Options Exchange, Incorporated;
(iv) Options listed on Nasdaq ISE, LLC;
(v) The Nasdaq Capital Market;
(vi) Tier I and Tier II of Bats BZX Exchange, Inc.; and
(vii) Investors Exchange LLC.
(2) The designation of securities in paragraphs (b)(1)(i) through (vii) of this section as covered securities is conditioned on such exchanges' listing standards (or segments or tiers thereof) continuing to be substantially similar to those of the NYSE, NYSE American, or Nasdaq/NGM.
By the Commission.
U.S. Customs and Border Protection, Department of Homeland Security; Department of Treasury.
Final rule.
This document amends the U.S. Customs and Border Protection (CBP) regulations to remove the provision relating to the prohibition on the importation of jadeite or rubies mined or extracted from Burma, and articles of jewelry containing jadeite or rubies mined or extracted from Burma. This reflects the termination of all Burmese sanctions by Executive Order 13742, of October 7, 2016.
This final rule is effective on October 30, 2017.
Daniel Collier, Partner Government Agency Branch, Trade Policy and Programs, Office of Trade, (202) 863-6225,
On July 28, 2003, the President signed into law the Burmese Freedom and Democracy Act of 2003 (Pub. L. 108-61) (the “BFDA”) to sanction the military junta then ruling Burma. Among other provisions, the BFDA required the imposition, subject to annual renewal, of a ban on the importation into the United States of any article that is a product of Burma. To implement the BFDA, the President issued Executive Order (“E.O.”) 13310 (68 FR 44853, July 30, 2003), which prohibited, among other things, the importation into the United States of any article that is a product of Burma.
On July 29, 2008, the President signed into law the Tom Lantos Block Burmese JADE (Junta's Anti-Democratic Efforts) Act of 2008 (Pub. L. 110-286) (the “JADE Act”), which, among other things, amended the BFDA to require a prohibition on the importation into the United States of jadeite or rubies mined or extracted from Burma and articles of jewelry containing such jadeite or rubies. Section 12.151 of the CBP regulations (Title 19, Code of Federal Regulations (“CFR”) section 12.151) reflects this prohibition on the importation of jadeite or rubies mined or extracted from Burma and articles of jewelry containing such jadeite or rubies.
The BFDA, as amended by the JADE Act, required annual renewal, which did not occur in 2013. As a result, the prohibition on the importation of jadeite or rubies mined or extracted from Burma and articles of jewelry containing jadeite or rubies mined or extracted from Burma expired on July 28, 2013. On August 6, 2013, the President signed E.O. 13651, titled “Prohibiting Certain Imports of Burmese Jadeite and Rubies” (78 FR 48793), which revoked the sections of E.O. 13310 imposing a prohibition on the importation into the United States of any article that is a product of Burma. As a result, there was no longer a general ban on importing into the United States any article that is a product of Burma; however, the specific ban of jadeite and rubies mined or extracted from Burma as well as articles of jewelry containing jadeite or rubies mined or extracted from Burma was reinstituted by E.O. 13651. Consequently, on August 23, 2016, CBP published a final rule in the
On October 7, 2016, the President signed E.O. 13742, titled “Termination of Emergency With Respect to the Actions and Policies of the Government of Burma” (81 FR 70593), which revoked, among others, E.O. 13310 and 13651. The President found that the situation that gave rise to the declaration of a national emergency with respect to the actions and policies of the Government of Burma has been significantly altered by Burma's substantial advances in promoting democracy, including historic elections that resulted in the formation of a democratically elected, civilian-led government; the release of many political prisoners; and greater enjoyment of human rights and fundamental freedoms, including freedom of expression and freedom of association and peaceful assembly. As a result, President Obama revoked all the Burmese sanctions. This was accomplished by revoking, among others, E.O. 13651, which prohibited the importation of any jadeite or rubies mined or extracted from Burma as well as any articles of jewelry containing jadeite or rubies mined or extracted from Burma. As of October 7, 2016, CBP is no longer enforcing this import prohibition. To reflect this, CBP is removing the relevant provision, 19 CFR 12.151, from the CBP regulations.
Under section 553 of the Administrative Procedure Act (APA) (5 U.S.C. 553), rulemaking generally requires prior notice and comment, and a 30-day delayed effective date, subject to specified exceptions. This document amends the regulations to remove 19 CFR 12.151 to reflect Executive Order 13742 of October 7, 2016, which terminated the import prohibitions on Burmese articles. Since this document removes a regulation that is no longer applicable or enforced by CBP in light of the Executive Order, CBP has determined it is a nondiscretionary action and that, pursuant to the provisions of 5 U.S.C. 553(b)(B), prior public notice and comment procedures on this regulation are impracticable, unnecessary, and contrary to the public interest and that there is good cause for this rule to become effective immediately upon publication. For these reasons, pursuant to the provision of 5 U.S.C. 553(d)(3), CBP finds that there is good cause for dispensing with a delayed effective date.
Executive Orders 13563 and 12866 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule is not a “significant regulatory action,” under section 3(f) of Executive Order 12866. Accordingly, the Office of Management and Budget has not reviewed this regulation.
The Regulatory Flexibility Act (5 U.S.C. 601
This regulation is being issued in accordance with 19 CFR 0.1(a)(1) pertaining to the Secretary of the Treasury's authority (or that of his delegate) to approve regulations related to certain customs revenue functions.
Customs duties and inspection, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, part 12 of title 19 of the Code of Federal Regulations (19 CFR part 12) is amended as set forth below.
5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized Tariff Schedule of the United States (HTSUS)), 1624.
Food and Drug Administration, HHS.
Final order.
The Food and Drug Administration (FDA or we) is classifying the acute kidney injury test system into class II (special controls). The special controls that apply to the device type are identified in this order and will be part of the codified language for the acute kidney injury test system's classification. We are taking this action because we have determined that classifying the device into class II (special controls) will provide a reasonable assurance of safety and effectiveness of the device. We believe this action will also enhance patients' access to beneficial innovative devices, in part by reducing regulatory burdens.
This order is effective October 30, 2017. The classification was applicable on September 5, 2014.
Seth Olson, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 4561, Silver Spring, MD 20993-0002, 301-796-4364,
Upon request, FDA has classified the acute kidney injury test system as class II (special controls), which we have determined will provide a reasonable assurance of safety and effectiveness. In addition, we believe this action will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens by placing the device into a lower device class than the automatic class III assignment.
The automatic assignment of class III occurs by operation of law and without any action by FDA, regardless of the level of risk posed by the new device. Any device that was not in commercial distribution before May 28, 1976, is automatically classified as, and remains within, class III and requires premarket approval unless and until FDA takes an action to classify or reclassify the device (see 21 U.S.C. 360c(f)(1)). We refer to these devices as “postamendments devices” because they were not in commercial distribution prior to the date of enactment of the Medical Device Amendments of 1976, which amended the Federal Food, Drug, and Cosmetic Act (the FD&C Act).
FDA may take a variety of actions in appropriate circumstances to classify or reclassify a device into class I or II. We may issue an order finding a new device to be substantially equivalent under section 513(i) of the FD&C Act to a predicate device that does not require premarket approval (see 21 U.S.C. 360c(i)). We determine whether a new device is substantially equivalent to a predicate by means of the procedures for premarket notification under section 510(k) of the FD&C Act and part 807 (21 U.S.C. 360(k) and 21 CFR part 807, respectively).
FDA may also classify a device through “De Novo” classification, a common name for the process authorized under section 513(f)(2) of the FD&C Act. Section 207 of the Food and Drug Administration Modernization Act of 1997 established the first procedure for De Novo classification (Pub. L. 105-115). Section 607 of the Food and Drug Administration Safety and Innovation Act modified the De Novo application process by adding a second procedure (Pub. L. 112-144). A device sponsor may utilize either procedure for De Novo classification.
Under the first procedure, the person submits a 510(k) for a device that has not previously been classified. After receiving an order from FDA classifying the device into class III under section 513(f)(1) of the FD&C Act, the person then requests a classification under section 513(f)(2).
Under the second procedure, rather than first submitting a 510(k) and then a request for classification, if the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence, that person requests a classification under section 513(f)(2) of the FD&C Act.
Under either procedure for De Novo classification, FDA is required to classify the device by written order within 120 days. The classification will be according to the criteria under section 513(a)(1) of the FD&C Act. Although the device was automatically placed within class III, the De Novo classification is considered to be the initial classification of the device.
We believe this De Novo classification will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens. When FDA
On June 5, 2013, Astute Medical, Incorporated submitted a request for De Novo classification of the NEPHROCHECK® Test System. FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act. We classify devices into class II if general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls that, in combination with the general controls, provide reasonable assurance of the safety and effectiveness of the device for its intended use (see 21 U.S.C. 360c(a)(1)(B)). After review of the information submitted in the request, we determined that the device can be classified into class II with the establishment of special controls. FDA has determined that these special controls, in addition to general controls, will provide reasonable assurance of the safety and effectiveness of the device.
Therefore, on September 5, 2014, FDA issued an order to the requestor classifying the device into class II. FDA is codifying the classification of the device by adding 21 CFR 862.1220. We have named the generic type of device acute kidney injury test system, and it is identified as a device intended to measure one or more analytes in human samples as an aid in the assessment of a patient's risk for developing acute kidney injury. Test results are intended to be used in conjunction with other clinical and diagnostic findings, consistent with professional standards of practice, including confirmation by alternative methods.
FDA has identified the following risks to health associated specifically with this type of device and the measures required to mitigate these risks in table 1.
FDA has determined that special controls, in combination with the general controls, address these risks to health and provide reasonable assurance of safety and effectiveness. In order for a device to fall within this classification, and thus avoid automatic classification in class III, it would have to comply with the special controls named in this final order. The necessary special controls appear in the regulation codified by this order. This device is subject to premarket notification requirements under section 510(k) of the FD&C Act.
The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
This final order establishes special controls that refer to previously approved collections of information found in other FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in part 807, subpart E, regarding premarket notification submissions have been approved under OMB control number 0910-0120; the collections of information 21 CFR part 801, regarding labeling have been approved under OMB control number 0910-0485; and the collections of information in 21 CFR part 820, regarding the Quality System Regulation have been approved under OMB control number 0910-0073.
Medical devices.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 862 is amended as follows:
21 U.S.C. 351, 360, 360c, 360e, 360j, 360
(a)
(b)
(1) Premarket notification submissions must detail an appropriate end user device training program that will be offered while marketing the device as part of your efforts to mitigate the risk of incorrect interpretation of test results.
(2) As part of the risk management activities performed as part of your 21 CFR 820.30 design controls, you must document the appropriate end user device training program provided in your premarket notification submission to satisfy special control 21 CFR 862.1220(b)(1) that will be offered while marketing the device as part of your efforts to mitigate the risk of incorrect interpretation of test results.
(3) Robust clinical data demonstrating the positive predictive value, negative predictive value, sensitivity and specificity of the test in the intended use population must be submitted as part of the premarket notification submission.
Food and Drug Administration, HHS.
Final order.
The Food and Drug Administration (FDA or we) is classifying the
This order is effective October 30, 2017. The classification was applicable on April 16, 2014.
Steven Tjoe, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 4550, Silver Spring, MD 20993-0002, 301-796-5866,
Upon request, FDA has classified the
The automatic assignment of class III occurs by operation of law and without any action by FDA, regardless of the level of risk posed by the new device. Any device that was not in commercial distribution before May 28, 1976, is automatically classified as, and remains within, class III and requires premarket approval unless and until FDA takes an action to classify or reclassify the device (see 21 U.S.C. 360c(f)(1)). We refer to these devices as “postamendments devices” because they were not in commercial distribution prior to the date of enactment of the Medical Device Amendments of 1976, which amended the Federal Food, Drug, and Cosmetic Act (FD&C Act).
FDA may take a variety of actions in appropriate circumstances to classify or reclassify a device into class I or II. We may issue an order finding a new device to be substantially equivalent under section 513(i) of the FD&C Act to a predicate device that does not require premarket approval (see 21 U.S.C. 360c(i)). We determine whether a new device is substantially equivalent to a predicate by means of the procedures for premarket notification under section 510(k) of the FD&C Act and part 807 (21 U.S.C. 360(k) and 21 CFR part 807, respectively).
FDA may also classify a device through “De Novo” classification, a common name for the process authorized under section 513(f)(2) of the FD&C Act (21 U.S.C. 360c(f)(2)). Section 207 of the Food and Drug Administration Modernization Act of 1997 established the first procedure for De Novo classification (Pub. L. 105-115). Section 607 of the Food and Drug Administration Safety and Innovation Act modified the De Novo application process by adding a second procedure (Pub. L. 112-144). A device sponsor may utilize either procedure for De Novo classification.
Under the first procedure, the person submits a 510(k) for a device that has not previously been classified. After receiving an order from FDA classifying the device into class III under section 513(f)(1) of the FD&C Act, the person then requests a classification under section 513(f)(2).
Under the second procedure, rather than first submitting a 510(k) and then a request for classification, if the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence, that person requests a classification under section 513(f)(2) of the FD&C Act.
Under either procedure for De Novo classification, FDA is required to classify the device by written order within 120 days. The classification will be according to the criteria under section 513(a)(1) of the FD&C Act (21 U.S.C. 360c(a)(1)). Although the device was automatically within class III, the De Novo classification is considered to be the initial classification of the device.
We believe this De Novo classification will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens. When FDA classifies a device into class I or II via the De Novo process, the device can serve as a predicate for future devices of that type, including for 510(k)s (see 21 U.S.C. 360c(f)(2)(B)(i)). As a result, other device sponsors do not have to submit a De Novo request or PMA in order to market a substantially equivalent device (see 21 U.S.C. 360c(i), defining “substantial equivalence”). Instead, sponsors can use the less-burdensome 510(k) process, when necessary, to market their device.
For this device, FDA issued an order on March 20, 2014, finding the Lyra Direct Strep Assay not substantially equivalent to a predicate not subject to a premarket application approval (PMA). Thus, the device remained in class III in accordance with section 513(f)(1) of the FD&C Act when we issued the order.
On March 28, 2014, Quidel Corp. submitted a request for De Novo classification of the Lyra Direct Strep Assay. FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act. We classify devices into class II if general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls that, in combination with the general controls, provide reasonable assurance of the safety and effectiveness of the device for its intended use (see 21 U.S.C. 360c(a)(1)(B)). After review of the information submitted in the request, we determined that the device can be classified into class II with the establishment of special controls. FDA has determined that these special controls, in addition to general controls, will provide reasonable assurance of the safety and effectiveness of the device.
Therefore, on April 16, 2014, FDA issued an order to the requestor classifying the device into class II. FDA is codifying the classification of the device by adding 21 CFR 866.2680. We have named the generic type of device
FDA has identified the following risks to health associated specifically with this type of device and the measures required to mitigate these risks in table 1.
FDA has determined that special controls, in combination with the general controls, address these risks to health and provide reasonable assurance of safety and effectiveness. In order for a device to fall within this classification, and thus avoid automatic classification in class III, it would have to comply with the special controls named in this final order. The necessary special controls appear in the regulation codified by this order. This device is subject to premarket notification requirements under section 510(k).
The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
This final order establishes special controls that refer to previously approved collections of information found in other FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in part 807, subpart E, regarding premarket notification submissions have been approved under OMB control number 0910-0120, and the collections of information in 21 CFR parts 801 and 809, regarding labeling have been approved under OMB control number 0910-0485.
Biologics, Laboratories, Medical devices.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 866 is amended as follows:
21 U.S.C. 351, 360, 360c, 360e, 360j, 360
(a)
(b)
(1) Premarket notification submissions must include detailed device description documentation, including the device components, ancillary reagents required but not provided, and a detailed explanation of the methodology including primer/probe sequence, design, and rationale for sequence selection.
(2) Premarket notification submissions must include detailed documentation from the following analytical and clinical performance studies: Analytical sensitivity (Limit of Detection), reactivity, inclusivity, precision, reproducibility, interference, cross reactivity, carry-over, and cross contamination.
(3) Premarket notification submissions must include detailed documentation from a clinical study. The study, performed on a study population consistent with the intended use population, must compare the device performance to results obtained from well-accepted reference methods.
(4) Premarket notification submissions must include detailed documentation for device software, including, but not limited to, software applications and hardware-based devices that incorporate software.
(5) Premarket notification submissions must include database implementation methodology, construction parameters, and quality assurance protocols, as appropriate.
(6) The device labeling must include limitations regarding the need for culture confirmation of negative specimens, as appropriate.
(7) A detailed explanation of the interpretation of results and acceptance criteria must be included in the device's 21 CFR 809.10(b)(9) compliant labeling.
(8) Premarket notification submissions must include details on an end user device training program that will be offered while marketing the device, as appropriate.
Food and Drug Administration, HHS.
Final order.
The Food and Drug Administration (FDA or we) is classifying the Aquaporin-4 autoantibody immunological test system into class II (special controls). The special controls that apply to the device type are identified in this order and will be part of the codified language for the Aquaporin-4 autoantibody immunological test system's classification. We are taking this action because we have determined that classifying the device into class II (special controls) will provide a reasonable assurance of safety and effectiveness of the device. We believe this action will also enhance patients' access to beneficial innovative devices, in part by reducing regulatory burdens.
This order is effective October 30, 2017. The classification was applicable on April 25, 2016.
Steven Tjoe, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 4550, Silver Spring, MD 20993-0002, 301-796-5866,
Upon request, FDA has classified the Aquaporin-4 autoantibody immunological test system as class II (special controls), which we have determined will provide a reasonable assurance of safety and effectiveness. In addition, we believe this action will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens by placing the device into a lower device class than the automatic class III assignment.
The automatic assignment of class III occurs by operation of law and without any action by FDA, regardless of the level of risk posed by the new device. Any device that was not in commercial distribution before May 28, 1976, is automatically classified as, and remains within, class III and requires premarket approval unless and until FDA takes an action to classify or reclassify the device (see 21 U.S.C. 360c(f)(1)). We refer to these devices as “postamendments devices” because they were not in commercial distribution prior to the date of enactment of the Medical Device Amendments of 1976, which amended the Federal Food, Drug, and Cosmetic Act (the FD&C Act).
FDA may take a variety of actions in appropriate circumstances to classify or reclassify a device into class I or II. We may issue an order finding a new device to be substantially equivalent under section 513(i) of the FD&C Act (21 U.S.C. 360c(i)) to a predicate device that does not require premarket approval. We determine whether a new device is substantially equivalent to a predicate by means of the procedures for premarket notification under section 510(k) of the FD&C Act and part 807 (21 U.S.C. 360(k) and 21 CFR part 807, respectively).
FDA may also classify a device through “De Novo” classification, a common name for the process authorized under section 513(f)(2) of the FD&C Act. Section 207 of the Food and Drug Administration Modernization Act of 1997 established the first procedure for De Novo classification (Pub. L. 105-115). Section 607 of the Food and Drug Administration Safety and Innovation Act modified the De Novo application process by adding a second procedure (Pub. L. 112-144). A device sponsor may utilize either procedure for De Novo classification.
Under the first procedure, the person submits a 510(k) for a device that has not previously been classified. After receiving an order from FDA classifying the device into class III under section 513(f)(1) of the FD&C Act, the person then requests a classification under section 513(f)(2).
Under the second procedure, rather than first submitting a 510(k) and then a request for classification, if the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence, that person requests a classification under section 513(f)(2) of the FD&C Act.
Under either procedure for De Novo classification, FDA is required to classify the device by written order within 120 days. The classification will be according to the criteria under section 513(a)(1) of the FD&C Act. Although the device was automatically placed within class III, the De Novo classification is considered to be the initial classification of the device.
We believe this De Novo classification will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens. When FDA classifies a device into class I or II via the De Novo process, the device can serve as a predicate for future devices of that type, including for 510(k)s (see 21 U.S.C. 360c(f)(2)(B)(i)). As a result, other device sponsors do not have to submit a De Novo request or premarket approval application in order to market a substantially equivalent device (see 21 U.S.C. 360c(i), defining “substantial equivalence”). Instead, sponsors can use the less-burdensome 510(k) process, when necessary, to market their device.
On July 2, 2015, KRONUS, Inc. submitted a request for De Novo classification of the KRONUS Aquaporin-4 Autoantibody (AQP4Ab) ELISA Assay. FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act. We classify devices into class II if general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls that, in combination with the general controls, provide reasonable assurance of the safety and effectiveness of the device for its intended use (see 21 U.S.C. 360c(a)(1)(B)). After review of the information submitted in the request, we determined that the device can be classified into class II with the establishment of special controls. FDA has determined that these special controls, in addition to general controls, will provide reasonable assurance of the safety and effectiveness of the device.
Therefore, on April 25, 2016, FDA issued an order to the requestor classifying the device into class II. FDA is codifying the classification of the device by adding 21 CFR 866.5665. We have named the generic type of device Aquaporin-4 autoantibody immunological test system, and it is identified as a device that consists of reagents used to measure by immunochemical techniques autoantibodies in human serum samples that react with Aquaporin-4 (AQP4Ab). The measurements aid in the diagnosis of neuromyelitis optica and neuromyelitis optica spectrum disorders, in conjunction with other clinical, laboratory, and radiological (
FDA has identified the following risks to health associated specifically with this type of device and the measures
FDA has determined that special controls, in combination with the general controls, address these risks to health and provide reasonable assurance of safety and effectiveness. In order for a device to fall within this classification, and thus avoid automatic classification in class III, it would have to comply with the special controls named in this final order. The necessary special controls appear in the regulation codified by this order. This device is subject to premarket notification requirements under section 510(k) of the FD&C Act.
The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
This final order establishes special controls that refer to previously approved collections of information found in other FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in part 807, subpart E, regarding premarket notification submissions have been approved under OMB control number 0910-0120, the collections of information in part 820 have been approved under OMB control number 0910-0073, and the collections of information in 21 CFR parts 801 and 809, regarding labeling have been approved under OMB control number 0910-0485.
Biologics, Laboratories, Medical devices.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 866 is amended as follows:
21 U.S.C. 351, 360, 360c, 360e, 360j, 360
(a)
(b)
(1) Premarket notification submissions must include the following information:
(i) A detailed device description including:
(A) A detailed description of all components including all required ancillary reagents in the test;
(B) If applicable, a detailed description of instrumentation and equipment, including illustrations or photographs of non-standard equipment or manuals;
(C) If applicable, detailed documentation of the device software, including, but not limited to, standalone software applications and hardware-based devices that incorporate software;
(D) A detailed description of appropriate internal and external quality controls that are recommended or provided. The description must identify those control elements that are incorporated into the specified testing procedures;
(E) Detailed specifications for sample collection, processing, and storage;
(F) A detailed description of methodology and assay procedure;
(G) A description of how the assay cutoff (the medical decision point between positive and negative) was established and validated as well as supporting data; and
(H) Detailed specification of the criteria for test results interpretation and reporting.
(ii) Detailed information demonstrating the performance characteristics of the device, including:
(A) Device precision/reproducibility data generated from within-run, between-run, between-day, between-lot, between-site, and total precision for multiple nonconsecutive days, as applicable. A well characterized panel of patient samples or pools from the indicated population that covers the device measuring range must be used.
(B) Device linearity data generated from samples covering the device measuring range, if applicable.
(C) Information on traceability to a reference material and description of value assignment of calibrators and controls, if applicable.
(D) Device analytical sensitivity data, including limit of blank, limit of detection, and limit of quantitation, if applicable.
(E) Device analytical specificity data, including interference by endogenous and exogenous substances, as well as cross-reactivity with samples derived from patients with other autoimmune diseases or conditions.
(F) Device instrument carryover data, when applicable.
(G) Device stability data, including real-time stability under various storage times and temperatures.
(H) Specimen stability data, including stability under various storage times, temperatures, freeze-thaw, and transport conditions, where appropriate.
(I) Method comparison data generated by comparison of the results obtained with the device to those obtained with a legally marketed predicate device with similar indications of use. A well-characterized panel of patient samples from the indicated population covering the device measuring range must be used.
(J) Specimen matrix comparison data, if more than one specimen type or anticoagulant can be tested with the device. Samples used for comparison must be from well-characterized patient samples covering the device measuring range.
(K) Clinical performance must be established by comparing data generated by testing samples from the indicated population and the differential diagnosis or non-target disease groups with the device to the clinical diagnostic standard.
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(L) Expected/reference values generated by testing an adequate number of samples from apparently healthy normal individuals.
(iii) Identification of risk mitigation elements used by the device, including description of all additional procedures, methods, and practices incorporated into the directions for use that mitigate risks associated with testing.
(2) The device's 21 CFR 809.10(b) compliant labeling must include warnings relevant to the device including:
(i) A warning statement that reads “The device is for use by laboratory professionals in a clinical laboratory setting”; and
(ii) A warning statement that reads “The device is not to be used as a stand-alone device but as an adjunct to other clinical information. A diagnosis of Neuromyelitis Optica (NMO) and Neuromyelitis Optica Spectrum Disorders (NMOSD) should not be made on a single test result. The clinical symptoms, results from physical examination, laboratory tests (
(3) The device's 21 CFR 809.10(b) compliant labeling must include a detailed description of the protocol and performance studies performed in accordance with paragraph (b)(1)(ii) of this section and a summary of the results.
Food and Drug Administration, HHS.
Final order.
The Food and Drug Administration (FDA or we) is classifying the newborn screening test for severe combined immunodeficiency disorder (SCID) into class II (special controls). The special controls that apply to the device type are identified in this order and will be part of the codified language for the newborn screening test for SCID's classification. We are taking this action because we have determined that classifying the device into class II (special controls) will provide a reasonable assurance of safety and effectiveness of the device. We believe this action will also enhance patients' access to beneficial innovative devices, in part by reducing regulatory burdens.
This order is effective October 30, 2017. The classification was applicable on December 15, 2014.
Caryl Giuliano, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5664, Silver Spring, MD 20993-0002, 301-796-2478,
Upon request, FDA has classified the newborn screening test for SCID as class II (special controls), which we have determined will provide a reasonable assurance of safety and effectiveness. In addition, we believe this action will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens by placing the device into a lower device class than the automatic class III assignment.
The automatic assignment of class III occurs by operation of law and without any action by FDA, regardless of the level of risk posed by the new device. Any device that was not in commercial distribution before May 28, 1976, is automatically classified as, and remains within, class III and requires premarket approval unless and until FDA takes an action to classify or reclassify the device (see 21 U.S.C. 360c(f)(1)). We refer to these devices as “postamendments devices” because they were not in commercial distribution prior to the date of enactment of the Medical Device Amendments of 1976, which amended the Federal Food, Drug, and Cosmetic Act (the FD&C Act).
FDA may take a variety of actions in appropriate circumstances to classify or reclassify a device into class I or II. We may issue an order finding a new device to be substantially equivalent under section 513(i) of the FD&C Act (21 U.S.C. 360c(i)) to a predicate device that does not require premarket approval. We determine whether a new device is substantially equivalent to a predicate by means of the procedures for premarket notification under section 510(k) of the FD&C Act and part 807 (21 U.S.C. 360(k) and 21 CFR part 807, respectively).
FDA may also classify a device through “De Novo” classification, a common name for the process authorized under section 513(f)(2) of the FD&C Act. Section 207 of the Food and Drug Administration Modernization Act of 1997 established the first procedure for De Novo classification (Pub. L. 105-115). Section 607 of the Food and Drug Administration Safety and Innovation Act modified the De Novo application process by adding a second procedure (Pub. L. 112-144). A device sponsor may utilize either procedure for De Novo classification.
Under the first procedure, the person submits a 510(k) for a device that has not previously been classified. After receiving an order from FDA classifying the device into class III under section 513(f)(1) of the FD&C Act, the person then requests a classification under section 513(f)(2).
Under the second procedure, rather than first submitting a 510(k) and then a request for classification, if the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence, that person requests a classification under section 513(f)(2) of the FD&C Act.
Under either procedure for De Novo classification, FDA is required to classify the device by written order within 120 days. The classification will be according to the criteria under section 513(a)(1) of the FD&C Act. Although the device was automatically placed within class III, the De Novo classification is considered to be the initial classification of the device.
We believe this De Novo classification will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens. When FDA classifies a device into class I or II via the De Novo process, the device can serve as a predicate for future devices of that type, including for 510(k)s (see 21 U.S.C. 360c(f)(2)(B)(i)). As a result, other device sponsors do not have to submit a De Novo request or premarket approval application (PMA) in order to market a substantially equivalent device (see 21 U.S.C. 360c(i), defining “substantial equivalence”). Instead, sponsors can use the less-burdensome 510(k) process, when necessary, to market their device.
On October 14, 2014, Wallac Oy, a subsidiary of PerkinElmer, Inc., submitted a request for De Novo classification of the EnLite Neonatal TREC Kit. FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act. We classify devices into class II if general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls that, in combination with the general controls, provide reasonable assurance of the safety and effectiveness of the device for its intended use (see 21 U.S.C. 360c(a)(1)(B)). After review of the information submitted in the request, we determined that the device can be classified into class II with the establishment of special controls. FDA has determined that these special controls, in addition to general controls, will provide reasonable assurance of the safety and effectiveness of the device.
Therefore, on December 15, 2014, FDA issued an order to the requestor classifying the device into class II. FDA is codifying the classification of the device by adding 21 CFR 866.5930. We have named the generic type of device newborn screening test for SCID, and it is identified as a prescription device intended to measure T-cell receptor excision circle (TREC) DNA obtained from dried blood spot specimens on filter paper using a polymerase chain reaction based test as an aid in screening newborns for SCID. Presumptive positive results must be followed up by diagnostic confirmatory testing. This test is not intended for use as a diagnostic test, or for screening of SCID-like syndromes, such as DiGeorge syndrome or Omenn syndrome. It is also not intended to screen for less acute SCID syndromes, such as leaky SCID or variant SCID.
FDA has identified the following risks to health associated specifically with this type of device and the measures required to mitigate these risks in table 1.
FDA has determined that special controls, in combination with the general controls, address these risks to health and provide reasonable assurance of safety and effectiveness. In order for a device to fall within this classification, and thus avoid automatic classification in class III, it would have to comply with the special controls named in this final order. The necessary special controls appear in the regulation codified by this order. This device is subject to premarket notification requirements under section 510(k) of the FD&C Act.
The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
This final order establishes special controls that refer to previously approved collections of information found in other FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in the guidance document “De Novo Classification Process (Evaluation of Automatic Class III Designation)” have been approved under OMB control number 0910-0844; the collections of information in part 814, subparts A through E, regarding premarket approval, have been approved under OMB control number 0910-0231; the collections of information in part 807, subpart E, regarding premarket notification submissions, have been approved under OMB control number 0910-0120; and the collections of information in 21 CFR parts 801 and 809, regarding labeling, have been approved under OMB control number 0910-0485.
Biologics, Laboratories, Medical devices.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 866 is amended as follows:
21 U.S.C. 351, 360, 360c, 360e, 360j, 360
(a)
(b)
(1) Premarket notification submissions must include the following information:
(i) The intended use must indicate:
(A) The test is not intended for diagnostic use, or for screening of SCID-like syndromes, such as DiGeorge syndrome or Omenn syndrome; and
(B) The test is not intended to screen for less acute SCID syndromes, such as leaky SCID or variant SCID.
(ii) A detailed description of all components in the test that includes:
(A) A detailed description of the test components, all required reagents, instrumentation and equipment, including illustrations or photographs of nonstandard equipment or methods;
(B) Detailed documentation of the device software including, but not limited to, standalone software applications and hardware-based devices that incorporate software;
(C) Specifications for the filter paper, which must be appropriately labeled for in vitro diagnostic use, to be used in specimen collection and how it will be used in specimen collection validation. These specifications must include: descriptive characteristics of the filter paper, instructions on how a lab should choose the appropriate filter paper, chemical properties of the filter paper, interference concerns associated with the chemicals in the filter paper, absorption properties of the filter paper, punch size, absorption capacity, testing for homogeneity of punches, diameter of the circle for the dried blood spot aliquot, absorption time, physical composition, and number and size of punches to be tested;
(D) Methodology and protocols for detection of T-cell receptor excision circles and methods for determination of results. The cutoff must be selected before conducting clinical and analytical studies;
(E) A description of the result outputs along with sample reports. Sample reports must include the scale used in reporting of results (
(F) A description of appropriate internal and external controls that are recommended or provided. The description must identify those control elements that are incorporated into the testing procedure.
(iii) Information that demonstrates the performance characteristics of the test, including:
(A) Data that demonstrates the clinical validity of the device, using well characterized prospectively or retrospectively obtained clinical specimens representative of the intended use population. A minimum of 10 to 15 confirmed positive specimens must be obtained from more than 1 site, including relevant annotation, and, at 1 year or beyond, a SCID diagnosis by flow cytometry or clinically meaningful information regarding the status of the subject must be obtained. Additional specimens should have been obtained that are characterized by other disorders that can be found by screening specimens that have low or absent TREC (
(B) Device reproducibility data generated, using a minimum of three sites of which at least two must be external sites, with two operators at each site. Each site must conduct a minimum of five runs per operator over five nonconsecutive days evaluating a minimum of six different relevant TREC concentrations that span and are well distributed over the measuring range and include the clinical cutoff. Specimens must include cord blood and cord blood diluted with ABO matched adult blood specimens. Identical specimens from the same sample panel must be tested at each site. Each specimen must be run in triplicate and include controls run in triplicate. Results must be reported as the standard deviation and percentage coefficient of variation for each level tested. Results must also be displayed as a dichotomous variable around the cutoff. Total variation must be partitioned into the sum of within-lab and between-lab variations with pre-specified acceptance criteria and 95 percent confidence intervals for all data. Pre-specified acceptance criteria must be provided and followed;
(C) Device precision data using clinical samples to evaluate the within-lot, between-lot, within-run, between run, and total variation. A range of TREC levels of the specimen must include samples within the measuring range, samples above and below the measuring range, as well as with samples very near above and below the cutoff value. At least three replicates of each specimen must be tested with controls and calibrator(s) according to the device instructions for use. The precision study must use well characterized samples using different lots, instruments, and operators. Results must be summarized in tabular format. Pre-specified acceptance criteria must be provided and followed;
(D) Linearity of the test must be demonstrated using a dilution panel from clinical samples. The range of dilution samples must include samples within the measuring range, samples above and below the measuring range, as well as with samples very near above and below the cutoff value. Results of the regression analysis must be summarized in tabular format and fitted into a linear regression model with the individual measurement results against the dilution factors. Pre-specified acceptance criteria must be provided and followed;
(E) Device analytic sensitivity data, including limit of blank, limit of detection, and limit of quantification;
(F) Device specificity data, including interference, carryover, cross-contamination, and in silico analysis of potential off-target genomic sequences;
(G) Device stability data, including real-time stability of samples under various storage times, temperatures, and freeze-thaw conditions. A separate shipping stability study must be performed;
(H) Lot-to-lot reproducibility study of each filter paper that will be validated with the test. The lot-to-lot study must include a minimum of three lots of each blood spot card that will be validated with the test and be conducted over five nonconsecutive days. The sample panel must consist of specimens with a range
(I) If applicable, a thermocycler reproducibility study must be performed using thermocyclers from three independent thermocyler manufacturers. The sample panel must consist of specimens with a range of TREC levels and must include samples within the measuring range, samples above and below the measuring range, and samples very near above and below the cutoff value. The study must be done using three filter paper lots and conducted over five nonconsecutive days. Results of the thermocycler reproducibility study must be summarized providing the mean, standard deviation, and percentage coefficient of variance in a tabular format. Data must be calculated for the within-run, between-run, within-lot, between-lot, and between thermocycler manufacturer study results. Study acceptance criteria must be provided and followed.
(iv) Identification of risk mitigation elements used by your device, including a description of all additional procedures, methods, and practices incorporated into the directions for use that mitigate risks associated with testing.
(2) Your § 809.10 compliant labeling must include:
(i) A warning statement that reads “This test is not intended for diagnostic use, preimplantation or prenatal testing, or for screening of SCID-like syndromes, such as DiGeorge syndrome or Omenn syndrome. It is also not intended to screen for less acute SCID syndromes, such as leaky SCID or variant SCID.”;
(ii) A warning statement that reads “Test results are intended to be used in conjunction with other clinical and diagnostic findings, consistent with professional standards of practice, including confirmation by alternative methods and clinical evaluation, as appropriate.”;
(iii) A description of the performance studies listed in paragraph (b)(1)(iii) and a summary of the results; and
(iv) A description of the filter paper specifications required for the test.
Food and Drug Administration, HHS.
Final order; correction.
The Food and Drug Administration (FDA) is correcting a final order entitled “Medical Devices; Gastroenterology-Urology Devices; Classification of the Oral Removable Palatal Space Occupying Device for Weight Management and/or Weight Loss” that appeared in the
Effective October 30, 2017
Mark Antonino, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. G208, Silver Spring, MD 20993-0002, 240-402-9980,
In the
In the
“Section 510(m) of the FD&C Act provides that FDA may exempt a class II device from the premarket notification requirements under section 510(k), if FDA determines that premarket notification is not necessary to provide reasonable assurance of the safety and effectiveness of the device. For this type of device, FDA has determined that premarket notification is necessary to provide reasonable assurance of the safety and effectiveness of the device. Therefore, this device type is not exempt from premarket notification requirements. Persons who intend to market this type of device must submit to FDA a premarket notification, prior to marketing the device, which contains information about the oral removable palatal space occupying device for weight management and/or weight loss they intend to market.”
Food and Drug Administration, HHS.
Final order.
The Food and Drug Administration (FDA or we) is classifying the non-electroencephalogram (non-EEG) physiological signal based seizure monitoring system into class II (special controls). The special controls that apply to the device type are identified in this order and will be part of the codified language for the non-EEG physiological signal based seizure monitoring system's classification. We
This order is effective October 30, 2017. The classification was applicable on February 16, 2017.
Xiaorui Tang, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 2609, Silver Spring, MD 20993-0002, 301-796-6500,
Upon request, FDA has classified the non-EEG physiological signal based seizure monitoring system as class II (special controls), which we have determined will provide a reasonable assurance of safety and effectiveness. In addition, we believe this action will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens by placing the device into a lower device class than the automatic class III assignment.
The automatic assignment of class III occurs by operation of law and without any action by FDA, regardless of the level of risk posed by the new device. Any device that was not in commercial distribution before May 28, 1976, is automatically classified as, and remains within, class III and requires premarket approval unless and until FDA takes an action to classify or reclassify the device (see 21 U.S.C. 360c(f)(1)). We refer to these devices as “postamendments devices” because they were not in commercial distribution prior to the date of enactment of the Medical Device Amendments of 1976, which amended the Federal Food, Drug, and Cosmetic Act (the FD&C Act).
FDA may take a variety of actions in appropriate circumstances to classify or reclassify a device into class I or II. We may issue an order finding a new device to be substantially equivalent under section 513(i) of the FD&C Act (21 U.S.C. 360c(i)) to a predicate device that does not require premarket approval. We determine whether a new device is substantially equivalent to a predicate by means of the procedures for premarket notification under section 510(k) of the FD&C Act and part 807 (21 U.S.C. 360(k) and 21 CFR part 807, respectively).
FDA may also classify a device through “De Novo” classification, a common name for the process authorized under section 513(f)(2) of the FD&C Act. Section 207 of the Food and Drug Administration Modernization Act of 1997 established the first procedure for De Novo classification (Pub. L. 105-115). Section 607 of the Food and Drug Administration Safety and Innovation Act modified the De Novo application process by adding a second procedure (Pub. L. 112-144). A device sponsor may utilize either procedure for De Novo classification.
Under the first procedure, the person submits a 510(k) for a device that has not previously been classified. After receiving an order from FDA classifying the device into class III under section 513(f)(1) of the FD&C Act, the person then requests a classification under section 513(f)(2).
Under the second procedure, rather than first submitting a 510(k) and then a request for classification, if the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence, that person requests a classification under section 513(f)(2) of the FD&C Act.
Under either procedure for De Novo classification, FDA shall classify the device by written order within 120 days. The classification will be according to the criteria under section 513(a)(1) of the FD&C Act. Although the device was automatically placed within class III, the De Novo classification is considered to be the initial classification of the device.
We believe this De Novo classification will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens. When FDA classifies a device into class I or II via the De Novo process, the device can serve as a predicate for future devices of that type, including for 510(k)s (see 21 U.S.C. 360c(f)(2)(B)(i)). As a result, other device sponsors do not have to submit a De Novo request or premarket approval application in order to market a substantially equivalent device (see 21 U.S.C. 360c(i), defining “substantial equivalence”). Instead, sponsors can use the less-burdensome 510(k) process, when necessary, to market their device.
On November 10, 2014, Brain Sentinel, Inc., submitted a request for De Novo classification of the Brain Sentinel Monitoring and Alerting System. FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act. We classify devices into class II if general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls that, in combination with the general controls, provide reasonable assurance of the safety and effectiveness of the device for its intended use (see 21 U.S.C. 360c(a)(1)(B)). After review of the information submitted in the request, we determined that the device can be classified into class II with the establishment of special controls. FDA has determined that these special controls, in addition to general controls, will provide reasonable assurance of the safety and effectiveness of the device.
Therefore, on February 16, 2017, FDA issued an order to the requestor classifying the device into class II. FDA is codifying the classification of the device by adding 21 CFR 882.1580. We have named the generic type of device non-EEG physiological signal based seizure monitoring system, and it is identified as a noninvasive prescription device that collects physiological signals other than EEG to identify physiological signals that may be associated with a seizure.
FDA has identified the following risks to health associated specifically with this type of device and the measures required to mitigate these risks in table 1.
FDA has determined that special controls, in combination with the general controls, address these risks to health and provide reasonable assurance of the safety and effectiveness. In order for a device to fall within this classification, and thus avoid automatic classification in class III, it would have to comply with the special controls named in this final order. The necessary special controls appear in the regulation codified by this order. This device is subject to premarket notification requirements under section 510(k) of the FD&C Act.
At the time of classification, non-EEG physiological signal based seizure monitoring systems are for prescription use only. Prescription devices are exempt from the requirement for adequate directions for use for the layperson under section 502(f)(1) of the FD&C Act (21 U.S.C. 352(f)(1)) and 21 CFR 801.5, as long as the conditions of 21 CFR 801.109 are met.
The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
This final order establishes special controls that refer to previously approved collections of information found in other FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in part 807, subpart E, regarding premarket notification submissions have been approved under OMB control number 0910-0120, and the collections of information in 21 CFR part 801, regarding labeling have been approved under OMB control number 0910-0485.
Medical devices.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 882 is amended as follows:
21 U.S.C. 351, 360, 360c, 360e, 360j, 360
(a)
(b)
(1) The technical parameters of the device, hardware and software, must be fully characterized and include the following information:
(i) Hardware specifications must be provided. Appropriate verification, validation, and hazard analysis must be performed.
(ii) Software, including any proprietary algorithm(s) used by the device to achieve its intended use, must be described in detail in the Software Requirements Specification (SRS) and Software Design Specification (SDS). Appropriate software verification, validation, and hazard analysis must be performed.
(2) The patient-contacting components of the device must be demonstrated to be biocompatible.
(3) The device must be designed and tested for electrical, thermal, and mechanical safety and electromagnetic compatibility (EMC).
(4) Clinical performance testing must demonstrate the ability of the device to function as an assessment aid for monitoring for seizure-related activity in the intended population and for the intended use setting. Performance measurements must include positive percent agreement and false alarm rate.
(5) Training must be provided for intended users that includes information regarding the proper use of the device and factors that may affect the collection of the physiologic data.
(6) The labeling must include health care professional labeling and patient-caregiver labeling. The health care professional and the patient-caregiver labeling must include the following information:
(i) A detailed summary of the clinical performance testing, including any adverse events and complications.
(ii) Any instructions technicians and clinicians should convey to patients and caregivers regarding the proper use of the device and factors that may affect the collection of the physiologic data.
(iii) Instructions to technicians and clinicians regarding how to set the device threshold to achieve the intended performance of the device.
Coast Guard, DHS.
Final rule.
The Coast Guard is modifying the operating schedule that governs the SR 13 Bridge across the Nanticoke River, mile 39.6, in Seaford, Delaware (DE). This modification will require the
This rule is effective November 29, 2017.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Mr. Martin A. Bridges, Fifth Coast Guard District (dpb), at (757) 398-6422, email
On July 5, 2017, we published a notice of proposed rulemaking entitled, “Drawbridge Regulation; Nanticoke River, Seaford, DE” in the
The Coast Guard is issuing this rule under authority 33 U.S.C. 499. The US 13 Bridge across the Nanticoke River, Mile 39.6, in Seaford, DE, owned and operated by the Delaware Department of Transportation, has a vertical clearance of 3 feet above mean high water in the closed-to-navigation position. There is a monthly average of three bridge openings on Saturdays and Sundays, from 7:30 a.m. to 3:30 p.m., from November 1 through March 31, which allow one or more vessels to transit through the bridge during each opening. The bridge is normally maintained in the closed position, due to the volume of vehicular traffic crossing the bridge. The current operating schedule is published in 33 CFR 117.243(b). The Coast Guard's authority to make a permanent change to a drawbridge operating schedule is contained in 33 CFR 117.8.
The Nanticoke River is used predominately by recreational vessels and pleasure craft. The three-year average number of bridge openings, maximum number of bridge openings, and weekend bridge openings between 7:30 a.m. and 3:30 p.m., by month and overall for 2014 through 2016, as drawn from the data contained in the bridge tender logs provided by the Delaware Department of Transportation, is presented below.
The Delaware Department of Transportation has requested to modify the operating regulation for the bridge, due to the limited number of requested openings of the bridge on Saturday and Sunday, from 7:30 a.m. to 3:30 p.m., from November 1 through March 31, over a period of approximately the past three years. The data presented in the table above demonstrate that the requested modification may be implemented with minimal impact to navigation. The modification requested will require the bridge to open on signal on Saturday and Sunday; from 7:31 a.m. to 3:29 p.m., from November 1 through March 31, if at least 24 hours notice is given. All other provisions of 33 CFR 117.243 (b) will remain the same.
The Coast Guard provided a comment period of 60 days and received zero comments on the proposed rule.
We developed this rule after considering numerous statutes and Executive Orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive Orders, and we discuss First Amendment rights of protesters.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget (OMB) and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.
This is not considered a significant regulatory action. This determination is based on the findings that: (1) The potential impact is small, given the limited number of vessels requiring a bridge opening during the time frame of the proposed modification, and (2) vessels will be able to transit through the bridge during the time frame of the proposed modification, given the bridge will open on signal, if at least 24 hours notice is given.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received zero comments from the Small Business Administration on this rule. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. While some owners or operators of vessels intending to transit the bridge may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. We received zero comments on this rule.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule will not result in such an expenditure, we do discuss the effects of this proposed rule elsewhere in this preamble. We received zero comments on this rule.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a determination that this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule simply promulgates the operating regulations or procedures for drawbridges. This action is categorically excluded from further review, under figure 2-1, paragraph (32)(e), of the Instruction. A preliminary Record of Environmental Consideration and a Memorandum for the Record are not required for this rule.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Bridges.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows:
33 U.S.C. 499; 33 CFR 1.05-1; Department of Homeland Security Delegation No. 0170.1.
(b) The draw of the SR 13 Bridge, mile 39.6, in Seaford shall:
(1) Open on signal, except from 6 p.m. to 8 a.m., from April 1 through October 31; from November 1 through March 31, Monday to Friday and on Saturday and Sunday from 3:30 p.m. to 7:30 a.m., if at least four hours notice is given.
(2) Open on signal, on Saturday and Sunday, from 7:31 a.m. through 3:29 p.m., from November 1 through March 31, if at least 24 hours notice is given.
Environmental Protection Agency (EPA).
Final rule.
This regulation amends an existing tolerance for residues of the ovicide/miticide hexythiazox in/on hop, dried cones, by increasing the current tolerance from 2.0 parts per million (ppm) to 20 ppm. Gowan Company requested modification of this tolerance under the Federal Food, Drug, and Cosmetic Act (FFDCA).
This regulation is effective October 30, 2017. Objections and requests for hearings must be received
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2017-0155, is available at
Michael L. Goodis, P.E., Director, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2017-0155 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before December 29, 2017. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2017-0155, by one of the following methods:
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Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
In the
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”
Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for hexythiazox including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with hexythiazox follows.
EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.
Hexythiazox has low acute toxicity by the oral, dermal, and inhalation routes of exposure. It produces mild eye irritation and is not a skin irritant or skin sensitizer. Hexythiazox is associated with toxicity of the liver and
Hexythiazox is classified as “Likely to be Carcinogenic to Humans” based on a treatment-related increase in benign and malignant liver tumors in female mice and the presence of mammary gland tumors (fibroadenomas) in male rats; however, the evidence as a whole was not strong enough to warrant the use of a linear low dose extrapolation model applied to the animal data (Q
Specific information on the studies received and the nature of the adverse effects caused by hexythiazox as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at
Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see
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iii.
iv.
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Surface water and groundwater estimated drinking water concentrations (EDWCs) do not result in any change to the existing EDWCs determined from a recent drinking water assessment derived on hops. Specifically, since hops is already a registered use that was recently assessed during registration review, no new drinking water scenarios were identified with this proposed increase in application rates that would require a new drinking water assessment to be conducted. In fact, the highest EDWCs associated with all uses of hexythiazox continue to be from use on sorghum in the Western U.S., using the Pesticide Root Zone Model (PRZM) surface water modeling scenario. Furthermore, based on the Agency's previous assessment, the EDWCs of hexythiazox for chronic exposures are estimated to be 4.3 parts per billion (ppb) for surface water and 2.4 ppb for ground water (DP 433290, 5/9/2016; DP 404023, 1/17/2012), and the higher of these values was used in the dietary exposure model to assess chronic dietary risk.
3.
EPA assessed residential exposure using the following assumptions: Residential handler exposures are expected to be short-term (1 to 30 days) via either the dermal or inhalation routes of exposures. Since a quantitative dermal risk assessment is not needed for hexythiazox, handler MOEs were calculated for the inhalation route of exposure only. EPA uses the term “post-application” to describe exposure to individuals that occur as a result of being in an environment that has been previously treated with a pesticide. There is potential for post-application for individuals exposed as a result of being in an environment that has been previously treated with hexythiazox. Adult residential post-application dermal exposures were not assessed since no dermal hazard was identified for hexythiazox. The residential post-application exposure assessment for children included incidental oral exposure resulting from transfer of residues from the hand-to-mouth, object to- mouth, and from incidental ingestion of soil.
Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at
4.
EPA has not found hexythiazox to share a common mechanism of toxicity with any other substances, and hexythiazox does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action; therefore, EPA has assumed that hexythiazox does not have a common mechanism of toxicity with other substances. For information
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i. The toxicity database for hexythiazox is complete.
ii. There is no indication that hexythiazox is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.
iii. There is no evidence that hexythiazox results in increased susceptibility in
iv. There are no residual uncertainties identified in the exposure databases. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to hexythiazox in drinking water. EPA used similarly conservative assumptions to assess post-application exposure of children as well as incidental oral exposure of toddlers. These assessments will not underestimate the exposure and risks posed by hexythiazox.
EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.
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Hexythiazox is currently registered for uses that could result in short-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term residential exposures to hexythiazox. Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, drinking water, and residential inhalation exposures result in an aggregate MOE for adults (7,500) that greatly exceeds the LOC of 100, and is not of concern.
4.
Hexythiazox is currently registered for uses that could result in intermediate-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with intermediate-term residential exposures to hexythiazox. Using the exposure assumptions described in this unit for intermediate-term exposures, EPA has concluded the combined intermediate-term food, drinking water, and residential oral exposures result in an aggregate MOE for children (1,150) that greatly exceeds the LOC of 100, and is not of concern.
5.
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An adequate High performance liquid chromatography using ultra-violet detection (HPLC/UV) analytical method is available for the enforcement of tolerances for residues of hexythiazox and its metabolites containing the PT-1-3 moiety in crop and livestock commodities. This method is listed in the U.S. EPA Index of Residue Analytical Methods under hexythiazox as method AMR-985-87. The limit of quantification (LOQ) for hexythiazox residues is 0.02 ppm.
In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by Federal Food, Drug and Cosmetic Act (FFDCA) section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however,
Codex has established an MRL for residues of hexythiazox on hops at 3 ppm. The U.S. tolerance for residues of hexythiazox on hops cannot be harmonized based on approved label instructions. Based on available residue data, compliance with label instructions would result in exceedances of a tolerance harmonized with the Codex MRL.
Therefore, the existing tolerance for residues of the ovicide/miticide hexythiazox and its metabolites containing the (4-chlorophenyl)-4-methyl-2-oxo-3-thiazolidine moiety in/on hop, dried cones is increased from 2.0 ppm to 20 ppm.
This action amends an existing tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
(a) * * *
National Highway Traffic Safety Administration (NHTSA), Department of Transportation.
Final rule; response to petition for reconsideration.
This final rule addresses a petition for reconsideration of the final rule for FMVSS No. 136,
The effective date of this final rule is November 29, 2017.
Petitions for reconsideration of this final rule must refer to the docket and notice number set forth above and be submitted to the Administrator, National Highway Traffic Safety Administration, 1200 New Jersey Avenue SE., Washington, DC 20590.
For technical issues, you may contact
On June 23, 2015, NHTSA published a final rule establishing Federal Motor Vehicle Safety Standard (FMVSS) No. 136,
To test the performance of ESC systems, NHTSA included a 150-foot radius J-turn test maneuver. The test course for the test maneuver is shown in Figure 1. This maneuver involves accelerating to a constant speed on a straight stretch of high-friction track before entering into a 150-foot radius curve. After entering the curve, the driver attempts to maintain the lane. At a speed that is up to 1.3 times the lowest entrance speed at which the ESC system activates, but no less than 48.3 km/h (30 mph), an ESC system must activate the vehicle's service brakes to slow the vehicle to 46.7 km/h (29 mph) within 3 seconds after entering the curve and 45.1 km/h (28 mph) within 4 seconds after entering the curve. The test vehicle must also remain within the lane.
For truck tractors, the lane width is 3.7 meters (12 feet) for both the straight section and the curved section of the course. However, after testing large buses, the agency determined that large buses require additional lane width on the curved section of the course because buses have longer wheelbases, which make it substantially more difficult to maintain a narrower lane within the curve. During testing of buses on a 3.7 meter (12 foot) width lane, the bus could not maintain the lane because of the geometry of the vehicle, not because of lack of stability. NHTSA determined that 4.3 meters (14 feet) was an appropriate lane width for testing large buses.
As described in the final rule, the nature of the J-turn test provides two criteria for ensuring vehicle responsiveness: Maintaining the lane within the fixed radius curve and a minimum test speed. These criteria for vehicle responsiveness are needed because there is a possibility of a manufacturer designing a vehicle that
The first responsiveness criterion is the requirement that the vehicle maintain the lane during at least six of eight runs in the roll stability performance test series or at least two of four runs in the engine torque reduction test. This requirement ensures that, during J-turn test runs at increasing speeds, the ESC system activates before the vehicle becomes unstable. We allowed multiple test runs, instead of a single test run, to account for driver variability and possible driver error in conducting the maneuver. Absent driver error, we do not expect any vehicle equipped with a properly functioning ESC system to exceed the lane width during any of the tests using the J-turn maneuver.
The other responsiveness criterion in the final rule is the minimum vehicle entry speed, which is 48 km/h (30 mph) for the roll performance test. The reason for this requirement is to discourage a manufacturer from designing a system that unnecessarily intervenes at very low speeds, thus artificially decreasing the speed at which the vehicle will enter the curve during the roll performance test.
On August 7, 2015, the Truck and Engine Manufacturers Association (EMA) submitted a petition to NHTSA, pursuant to 49 CFR 553.35, requesting that the agency reconsider its June 2015 final rule establishing FMVSS No. 136. EMA is a trade association representing manufacturers of commercial motor vehicles, including medium- and heavy-duty truck tractors. EMA's petition indicated that the 3.7 meter (12 foot) lane width used in the FMVSS No. 136 test procedure presents difficulty in successfully completing the J-turn test for a small subset of truck tractors to achieve certification. According to EMA, long wheelbase truck tractors, such as specialty tractors and severe service tractors, cannot navigate the curve of the test course for the J-turn test maneuver because the radius paths of the trucks are dimensionally too large. This physical limitation does not allow the rear wheels to stay inside the 12-foot-wide lane. The petitioner states that this issue only affects certain long wheelbase truck tractors, which make up about one percent of the annual sales of the new truck tractor market.
EMA asserted that the curved section of the 12-foot-wide lane is too narrow, and therefore, it is impracticable for the testing of a long wheelbase truck tractor with a wheelbase equal to or greater than 7112 millimeters (280 inches). EMA stated that it was challenging for the drivers of tractors with wheelbases larger than 280 inches to complete the maneuver in the 12-foot-wide lane, because there was not an adequate margin of physical space to account for test variability. EMA listed factors that contribute to the variability of its test results which included: (i) The length of the tractor's wheelbase, (ii) the experience level of the test driver, (iii) whether the maneuver is conducted in the clockwise or counter-clockwise direction, and (iv) other vehicle attributes such as steering system, suspensions, axles, and tires. EMA has shown that there are dimensional limitations for certain long wheelbase truck tractors to conduct the J-turn test maneuver within 12-foot-wide lane and a larger lane width is needed to adequately test the ESC systems.
In support of the petition for reconsideration, on June 30, 2016, EMA submitted data from testing and computer simulations indicating that a lane width of 4.3 meters (14 feet) was necessary for these long wheelbase truck tractors. EMA tested three truck tractors with three test drivers of varying degrees of experience in conducting the J-turn maneuver in both directions (clockwise and counterclockwise). EMA also performed computer simulations on three example tractors to do a static analysis showing the clearance of the truck tractor within the lane. Based on engineering recommendations from all of the major heavy-duty tractor manufacturers using the results of the computer simulations and the vehicle testing, EMA requests that truck tractors with a wheelbase equal to or greater than 7112 mm (280 inches) be conducted on a J-turn test course with a lane width of 4.3 meters (14 feet).
Pursuant to the process established under 49 CFR 553.37, after carefully considering all aspects of the petition and its subsequent data submission, the agency has decided to grant the petition without further proceedings. EMA's vehicle testing and computer simulation data support its position that truck tractors with a wheelbase equal to or greater than 7112 millimeters (280 inches) should be conducted on a test course with a wider lane, and we believe the suggested width of 4.3 meters (14 feet) is appropriate. The agency had made similar provisions for large buses by allowing a 14-foot-wide lane after first considering a 12-foot-wide lane.
In order to ensure that the J-turn test maneuver tests the ESC system and not a test driver's ability to maintain a narrow lane, NHTSA will adopt EMA's suggested 4.3 meter (14 foot) lane width for testing longer wheelbase truck tractors. Despite the increased lane width requirement for these long wheelbase truck tractors, NHTSA is confident that the ESC systems in these long wheelbase truck tractors will be adequately tested for minimum performance using the J-turn test maneuver because the driver must maintain the lane within the same fixed radius curve and travel at the same minimum test speed as all other truck tractors.
This change requires two clarifications. First, as with buses, the wider lane is used only in the curved section of the test course. The lane width of the straight section will remain 3.7 meters (12 feet). The dimensional considerations that require a wider lane width for long wheelbase vehicles do not apply to straight sections of the test course.
Second, NHTSA is clarifying the definition of wheelbase by including the definition in the regulatory text. For two-axle vehicles, the wheelbase is generally clear—the distance between the center of the front axle and the center of the rear axle. Moreover, for typical 6x4 truck tractors, which have tandem rear axles, we believe the definition of wheelbase is also clear—the distance between the center of the front axle and the center of the rear tandem axles. However, to clarify wheelbase for all vehicles, including those with liftable axles or tag axles, NHTSA is specifying that the wheelbase is the longitudinal distance between the center of the front axle and the center of the rear axle. For vehicles with tandem axles, the center of the axle is considered to be the midpoint between the centers of the most forward and most rearward of the tandem axles, measured with any liftable axles down.
The agency has considered the impact of this rulemaking action under Executive Orders 12866 and 13563 and the DOT's regulatory policies and procedures. This action was not reviewed by the Office of Management and Budget under Executive Order 12866. The agency has considered the impact of this action under the Department of Transportation's regulatory policies and procedures (44 FR 11034; February 26, 1979), and has determined that it is not “significant” under them.
This action addresses a petition for reconsideration of the June 2015 final rule requiring ESC on truck tractors and certain large buses. However, the petition only addresses one test condition applicable to approximately one percent of truck tractors. This final rule amends the standard to allow long wheelbase truck tractors to be tested in a wider lane to account for the geometry of a turning vehicle and to ensure that the J-turn remains a test of the vehicle's stability and not the test driver. This final rule imposes no costs and adjusts FMVSS No. 136 to give more flexibility to manufacturers testing long wheelbase trucks. This action will not have any safety impacts.
Executive Order 13771 titled “Reducing Regulation and Controlling Regulatory Costs,” directs that, unless prohibited by law, whenever an executive department or agency publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed. In addition, any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs. Only those rules deemed significant under section 3(f) of Executive Order 12866, “Regulatory Planning and Review,” are subject to these requirements. As discussed above, this rule is not a significant rule under Executive Order 12866 and, accordingly, is not subject to the offset requirements of Executive Order 13771.
NHTSA has determined that this rulemaking is a deregulatory action under Executive Order 13771, as it imposes no costs and, instead, amends FMVSS No. 136 to give more flexibility to manufacturers of long wheelbase truck tractors by allowing a wider lane in the test course. Although NHTSA was not able to quantify any cost savings for this rule, in adopting an optional wider lane width for the testing of long wheelbase truck tractors, this final rule adjusts the standard to accommodate the larger physical size of certain truck tractors and improves the efficiency of testing. This issue only affects long wheelbase truck tractors, which make up about one percent of the annual sales of truck tractors. The optional wider lane width will remove the difficulties cited by the petitioner associated with navigating the test course for long wheelbase truck tractors under the current test conditions in the standard.
Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601
NHTSA has considered the effects of this final rule under the Regulatory Flexibility Act. I certify that this final rule will not have a significant economic impact on a substantial number of small entities. NHTSA does not believe that any truck tractor manufacturers affected by this rule qualify as small entities. To the extent any business entities affected by this final rule do qualify as small entities, this final rule will not have a significant economic impact. This final rule addresses one test condition applicable to only one percent of truck tractors. This action will not result in added expenses for those manufacturers.
Anyone is able to search the electronic form of all documents received into any of our dockets by the name of the individual submitting the document (or signing the document, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
In the June 2015 final rule, the agency discussed relevant requirements related to Executive Order 13132 (Federalism), Executive Order 12988 (Civil Justice Reform); Executive Order 13045 (Protection of Children from Environmental Health and Safety Risks); the Paperwork Reduction Act, the National Technology Transfer and Advancement Act, the Unfunded Mandates Reform Act, and the National Environmental Policy Act. As today's final rule merely adjusts one test condition in FMVSS No. 136 for approximately one percent of truck tractors subject to the standard, it will not have any effect on the agency's analyses in those areas.
Imports, Incorporation by reference, Motor vehicle safety, Reporting and recordkeeping requirements, Tires.
In consideration of the foregoing, NHTSA amends 49 CFR part 571 as follows:
49 U.S.C. 322, 30111, 30115, 30117, and 30166; delegation of authority at 49 CFR 1.95.
S4
S6.2.4.2 For truck tractors, the lane width of the test course is 3.7 meters (12 feet). At the manufacturer's option, for truck tractors with a wheelbase equal to or greater than 7112 mm (280 inches) the lane width of the test course is 3.7 meters (12 feet) for the straight section and is 4.3 meters (14 feet) for the curved section. For buses, the lane width of the test course is 3.7 meters (12 feet) for the straight section and is 4.3 meters (14 feet) for the curved section.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure.
NMFS is prohibiting directed fishing for Pacific ocean perch in the Western Regulatory Area of the Gulf of Alaska (GOA). This action is necessary to prevent exceeding the 2017 total allowable catch of Pacific ocean perch in the Western Regulatory Area of the GOA.
Effective 1200 hours, Alaska local time (A.l.t.), October 25, 2017, through 2400 hours, A.l.t., December 31, 2017.
Steve Whitney, 907-586-7228.
NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.
The 2017 total allowable catch (TAC) of Pacific ocean perch in the Western Regulatory Area of the GOA is 2,679 metric tons (mt) as established by the final 2017 and 2018 harvest specifications for groundfish of the Gulf of Alaska (82 FR 12032, February 27, 2017).
In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the 2017 TAC of Pacific ocean perch in the Western Regulatory Area of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 2,579 mt, and is setting aside 100 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific ocean perch in the Western Regulatory Area of the GOA.
After the effective date of this closure the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.
This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of directed fishing for Pacific ocean perch in the Western Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of October 23, 2017.
The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.
This action is required by § 679.20 and is exempt from review under Executive Order 12866.
16 U.S.C. 1801
National Credit Union Administration (NCUA).
Proposed rule.
The NCUA Board (“Board”) proposes to amend its regulations regarding capital planning and stress testing for federally insured credit unions with $10 billion or more in assets (covered credit unions). The proposal would reduce regulatory burden by removing some of the capital planning and stress testing requirements currently applicable to certain covered credit unions. The proposal would also make the NCUA's capital planning and stress testing requirements more efficient for covered credit unions and the NCUA by, among other things, authorizing credit unions to conduct their own stress tests in accordance with the NCUA's requirements and allowing those credit unions to incorporate the stress test results into their capital plan submissions.
Comments must be received on or before December 29, 2017.
You may submit comments by any of the following methods, but please send comments by one method only:
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In April 2014, the Board issued a final rule requiring capital planning and stress testing for FICUs with assets of $10 billion or more (covered credit unions).
In July 2015, the Board amended the NCUA's capital planning and stress testing regulation to align its annual planning and testing schedule with the timelines being adopted by the other banking agencies. Among the reasons for this schedule change was that the NCUA's stress test scenarios are based on the supervisory stress test scenarios developed by the other banking agencies for their regulated institutions. The other banking agencies changed their schedule for publishing scenarios, which precipitated the modification of the NCUA's supervisory stress testing schedule.
Based on the other banking agencies' experiences implementing the annual Dodd-Frank Act stress tests (DFAST), the NCUA tiered its own capital planning expectations for covered credit unions during the first three years of its program. By “tiered,” we mean that the NCUA aligned its capital planning and analysis expectations based on the size, complexity, and financial condition of each covered credit union. As the Board expected, credit union capital planning practices have evolved over the three-year period since 2014. Covered credit unions, consistent with their size, complexity, financial condition, have operated under the NCUA's tiered supervisory expectations. The Board believes that taking a graduated supervisory approach to capital planning has been beneficial for credit unions, and is consistent with the NCUA's overall supervisory objectives.
When the NCUA's current capital planning and stress testing rule was adopted in April 2014, the Board believed it was important for the agency to initially conduct all stress tests to ensure the NCUA had an independent assessment of risk for covered credit unions.
The Board is proposing to amend the NCUA's capital planning and stress testing regulations. The proposed changes reflect the NCUA's experiences in implementing the current rule's requirements, while also taking into consideration the systemic risk that covered credit unions pose to the NCUSIF. As explained in more detail below, these proposed changes are intended to reduce regulatory burdens by removing some of the more onerous capital planning and stress testing requirements currently applicable to covered credit unions.
The proposed changes to the NCUA's capital planning requirements would more closely align the agency's regulatory requirements with its current supervisory expectations for covered credit unions. Under the proposal, covered credit unions would be subject to new tiered regulatory requirements that would further ensure their capital plans are tailored to reflect their size, complexity, and financial condition. For a tier I credit union, which is a covered credit union that has completed fewer than three capital planning cycles and has less than $20 billion in total assets, review of its capital plan would be incorporated into the NCUA's supervisory oversight of that covered credit union. For a tier II credit union, which is a covered credit union that has completed three or more capital planning cycles and has less than $20 billion in total assets, or is otherwise designated as a tier II credit union by the NCUA, review of its capital plan also would be incorporated into its supervisory oversight from the NCUA. For a tier III credit union, which is a covered credit union that has $20 billion or more in total assets, or is otherwise designated as a tier III credit union by the NCUA, review of its capital plan would continue to be subject to the current requirement that the NCUA formally approve or reject it.
Stress testing requirements under the proposal also would be tiered. Tier I credit unions would not be subject to any stress testing requirements. Once a tier I credit union satisfies the criteria for becoming a tier II credit union, which generally would be three years after it reaches total assets of $10 billion or more, that covered credit union would be required to conduct stress testing. Unlike their larger counterparts in tier III, however, tier II credit unions would not be subject to a 5% minimum stress test capital threshold. Further, under the proposal, the NCUA would no longer conduct the annual supervisory stress tests on applicable covered credit unions. Rather, the covered credit unions themselves would conduct the stress tests. Since stress testing standards were first adopted in 2014, the NCUA has conducted annual supervisory stress tests on all covered credit unions.
While the Board recognizes that all covered credit unions are of systemic importance to the NCUSIF, the Board it is appropriate to differentiate the capital planning requirements applicable to such institutions based on their individual characteristics. Specifically, size, complexity, and financial condition are significant determinants regarding each covered credit union's risk to the NCUSIF, as well as to each covered credit union's ability to support sound capital planning and supervisory stress testing expectations. The application of the NCUA's capital planning and stress testing requirements defined by size, complexity, and financial condition would provide certain covered credit unions with a more reasonable period of time over which they can develop the policies and processes necessary to develop sound capital plans and analyses. However, the Board seeks comments on whether these characteristics are the appropriate factors, or whether other considerations should also be taken into account in assessing risk for purposes of differentiating capital planning and stress testing requirements.
As noted above, all covered credit unions pose a degree of systemic risk to the NCUSIF and the credit union industry. This proposal, however, seeks to balance the higher risk that the larger, more complex covered credit unions may pose to the NCUSIF, with the time and resources these institutions need to prepare themselves to meet the NCUA's capital planning and supervisory stress testing expectations. The Board also seeks to tailor the NCUA's capital planning and stress testing requirements in such a manner as to reduce the regulatory burden imposed on those smaller covered credit unions which pose less risk to the NCUSIF.
The proposal identifies three tiers of covered credit unions and would impose varying levels of regulatory requirements based on those tiers. In brief, the tier comprised of the smallest covered credit unions would have the least regulatory requirements, with a concomitant increase in requirements for each tier as the size and complexity of those covered credit unions increases. The three tiers are as follows:
• A
• A
• A
Under the proposal, the level of the NCUA's capital planning requirements for tier I and tier II credit unions would generally decrease from the current regulatory requirements, but would generally remain the same for tier III credit unions. This proposed approach would reduce regulatory burdens on tier I and tier II credit unions while allowing them to focus on establishing sound capital planning and capital adequacy assessment processes. The tier III credit unions, on the other hand, which may pose the greatest systemic risk to the NCUSIF and which are most capable of complying with the current requirements, would remain subject to most of the current requirements. The Board seeks specific comments on whether this approach is appropriate and whether it sufficiently balances regulatory relief for covered credit unions with the NCUA's objective of managing risk to the NCUSIF.
Under the proposal, the NCUA's capital planning and stress testing rule would distinguish between a tier II and a tier III credit union at the threshold level of $20 billion in total assets. Setting the threshold level at $20 billion would mean that a covered credit union would generally not be subject to the regulation's most rigorous requirements until it had doubled in size from the time it was first classified as a covered credit union. Setting the threshold at this level should help ensure that covered credit unions have adequate time to plan and prepare for compliance. The Board specifically requests comment, however, on whether the threshold level should be set higher, at $25 billion in total assets, to provide covered credit unions with even more time to plan and prepare for compliance. In addition, the Board requests comment on whether setting the threshold at this higher level would be reasonable and why.
This proposal would retain the current requirement that all covered credit unions submit capital plans to the NCUA no later than May 31st of each year. Tier 1 and tier II credit unions, however, would no longer be required to have their capital plans formally approved by the NCUA. Capital plan reviews for tier I and tier II credit unions would be conducted as part of the NCUA's supervision of the credit union, with any deficiencies addressed as part of the supervisory process. This approach would provide the NCUA greater latitude when reviewing capital plan submissions. This proposed change is also intended to provide the NCUA with additional flexibility to use the supervisory process to address plan deficiencies, especially for credit unions newly covered by the NCUA's capital planning requirements. The Board believes that any increased risk to the NCUSIF that may occur as a result of providing regulatory relief can be addressed through the supervisory process.
This proposal would retain the current requirement for the NCUA to formally approve or reject a tier III credit union's capital plan. Because the failure of a tier III credit union poses the most significant risk to the NCUSIF, the Board believes it is prudent to retain the current, more formal requirements for tier III credit unions.
The NCUA's formal rejection of a capital plan would be subject to the Supervisory Review Committee process. The Board specifically requests comment on this aspect of the proposal.
The Board believes that credit unions are better informed of risk when they perform their own capital analyses. Having covered credit unions conduct their own supervisory stress tests also eliminates any unintentional, negative consequences that could result from the NCUA conducting those tests, namely concerns that a covered credit union might abdicate its responsibility to perform rigorous capital analyses to the NCUA. As a safeguard, however, the proposal would retain the provision in the current rule that reserves the NCUA's right to conduct the stress tests on any covered credit union at any time, and to request qualitative and quantitative information from the covered credit unions that pertains to supervisory stress testing.
The proposal would apply the tier III threshold of $20 billion as of the March 31 measurement date of each year, and the threshold would be effective at the beginning of the next capital planning cycle. The capital planning cycle would begin on June 1 of that year and run through the capital plan submission date of May 31 of the following year.
The proposed changes outlined above are discussed in more detail in the Section-by-Section Analysis below.
The NCUA is issuing this proposal pursuant to its authority under the Federal Credit Union Act (FCUA).
This proposed rule would retain most of the current language in subpart E of part 702. In particular, current §§ 702.501, and 702.503 would remain unchanged under this proposal. The proposed changes to §§ 702. 502, 702.504, 702.505, and 702.506 are described and explained in more detail below.
The proposal would retain most of the definitions from current § 702.502, without change, with the following exceptions.
The proposal would remove the definition of “adverse scenario” from § 702.502 and replace this term throughout subpart E with terms more commonly used within the financial services industry. This change is intended to reduce confusion for covered credit unions. No substantive changes to the requirements of subpart E are intended by this change.
The proposal would add a definition for the new term “capital planning cycle” to § 702.502. The proposal would provide that “capital planning cycle” means a complete round of capital planning over a one year period. The definition would provide further that the capital planning cycle begins on June 1st of a given year and ends on May 31st of the following year when the capital plan submission is due. This change is intended to reduce confusion for covered credit unions regarding when they would be subject to certain stress testing and other requirements, which are discussed in more detail below.
The proposal would make conforming amendments to the current definition of “covered credit union” in § 702.502. In particular, the proposed definition would remove the words “capital planning and stress testing” from the second sentence in the definition and add in their place the word “applicable.” The proposed definition would provide that “covered credit union” means a federally insured credit union whose assets are $10 billion or more. The definition would provide further that a credit union that crosses that asset threshold as of March 31st of a given calendar year is subject to the applicable requirements of subpart E in the capital planning cycle that begins on June 1st of that calendar year. As explained in more detail below, this change would help clarify that a covered credit union is only subject to the applicable requirements of subpart E.
The proposal would make conforming amendments to the current definition of “scenarios” in § 702.502. In particular, the proposal would remove the words “adverse, and severely adverse” from the current definition and add in their place the words “scenarios, and stress.” The revised definition would provide that “scenarios” are those sets of conditions that affect the U.S. economy or the financial condition of a covered credit union that serve as the basis for stress testing, including, but not limited to, NCUA-established baseline scenarios, and stress scenarios.
The proposal would delete the definition of “severely adverse scenario” from § 702.502 and replace this term throughout subpart E with terms more commonly used within the financial services industry. This change is intended to reduce confusion for covered credit unions. No substantive changes to the requirements of subpart E are intended by this change.
The proposal would add the definition “stress scenario” to § 702.502. The definition would provide that “stress scenario” means a scenario that is more adverse than that associated with the baseline scenario.
The proposal would add the definition of “tier I credit union” to § 702.502. The definition would provide that “tier I credit union” means a covered credit union that has completed fewer than three capital planning cycles and has less than $20 billion in total assets. Generally, a covered credit union would be categorized as a tier I credit union for the first three years after its total assets reached $10 billion or more. After three years, a tier I credit union
The definition of a tier I credit union would provide regulatory relief for qualifying covered credit unions. The Board believes it is appropriate to adjust the expectations for credit unions that newly meet the criteria for covered credit unions. As noted earlier, the NCUA has conducted the review and assessment of covered credit union capital planning activities in a phased manner since inception of the final rule in 2014. The proposed creation of the tier I distinction would allow the NCUA to better align regulatory expectations based on the size, complexity, and financial condition of each covered credit union.
The proposal would add the definition of “tier II credit union” to § 702.502. The definition would provide that “tier II credit union” means a covered credit union that has completed three or more capital planning cycles and has less than $20 billion in total assets, or is otherwise designated as a tier II credit union by NCUA. The tier II credit union definition would recognize the iterative nature of the NCUA's capital planning and stress testing processes, and acknowledge that covered credit unions get better at developing and implementing their capital plans over time and through repetition. The Board believes these proposed changes would provide regulatory relief for tier II credit unions.
The proposal would add the definition of “tier III credit union” to § 702.502. The definition would provide that “tier III credit union” means a covered credit union that has $20 billion or more in total assets, or is otherwise designated as a tier III credit union by NCUA. The proposal identifies credit unions with total assets of $20 billion or more as posing the highest degree of risk to the NCUSIF. While the Board considers qualitative and quantitative capital plan supervision and credit union-run stress test review to be appropriate for covered credit unions with less than $20 billion in total assets, it does not for larger covered credit unions. For covered credit unions with total assets of $20 billion or more, the Board believes it is prudent, given the size of the NCUSIF and the potential loss associated with the failure of a credit union that large, to establish formal triggers requiring the NCUA and credit union actions to further mitigate NCUSIF risk exposure.
Unless otherwise delegated to the NCUA's staff, the Board would retain the authority to designate a covered credit union as a tier II credit union or tier III credit union, respectively. The Board invites comment on what criteria would be appropriate to apply when considering such a designation.
The proposal would retain most of current § 702.504 without change, with the following exceptions. Proposed § 702.504(a)(1) would no longer include the last sentence in current § 702.504(a)(1), which provides that the NCUA will assess whether the capital planning and analysis process is sufficiently robust in determining whether to accept a credit union's capital plan. Given the other changes in this proposal, this sentence would no longer be necessary. Proposed § 702.504(a)(1) would provide that a covered credit union must develop and maintain a capital plan. It also would provide that a covered credit union must submit this plan and its capital policy to the NCUA by May 31 each year, or such later date as directed by the NCUA. It also would provide that the plan must be based on the covered credit union's financial data as of December 31 of the preceding calendar year, or such other date as directed by the NCUA.
The proposal would delete current § 702.504(b)(4) from the regulation. Current § 702.504(b)(4) provides that if a credit union conducts its own stress test under § 702.506(c), its capital plan must include a discussion of how the credit union will maintain a stress test capital ratio of 5 percent or more under baseline, adverse, and severely adverse conditions in each quarter of the 9-quarter horizon. This sentence would no longer be necessary in this section because it would be fully addressed in proposed § 702.506(f).
The proposal would amend current § 702.505(a) by dividing paragraph (a) into two subparts. Proposed § 702.505(a)(1) would provide that the NCUA will address any deficiencies in the capital plans submitted by tier I and tier II credit unions through the supervisory process. The intent of this change is to provide regulatory relief to tier I and tier II credit unions by removing the regulatory review and regulatory “accept or reject” assessment of their capital plans. It also provides the NCUA with additional flexibility in addressing plan deficiencies.
Proposed § 702.505(a)(2) would continue to require that the NCUA accept or reject tier III credit unions' capital plans. The Board is not proposing to remove this requirement for Tier III credit unions at this time for the reasons discussed above. Accordingly, proposed § 702.505(a)(2) would provide that the NCUA will notify tier III credit unions of the acceptance or rejection of their capital plans by August 31 of the year in which their plan is submitted.
The proposal also would make additional conforming changes throughout § 702.505 to clarify that only tier III credit unions would be required to operate under a capital plan formally accepted by the NCUA. No substantive changes, other than those discussed above, are intended.
Much of the substance of current § 702.506 would remain unchanged under the proposal. Each of the proposed substantive amendments are discussed in detail below. The proposal also would make a number of non-substantive conforming amendments to address certain changes in terminology.
The proposal would amend current § 702.506(a) by adding a new clarifying sentence to the beginning of proposed paragraph (a). The new sentence would provide that only tier II and tier III credit unions are required to conduct supervisory stress tests. The Board believes that exempting tier I credit unions from supervisory stress testing provides prudent regulatory relief and enables tier I credit union time to develop their own capital adequacy assessments. The Board considers the supervisory stress testing exemption for tier I credit unions, which generally would be three years, after which the tier I credit union becomes a tier II credit union, to be sufficient time to develop internal capabilities to perform credit union-run supervisory stress tests.
The proposal would delete current § 702.506(b), which, because of the other changes being proposed to part 702, would be overridden. The NCUA already reserves, in proposed
The proposal would make significant revisions to current § 702.506(c) to require tier II and tier III credit unions to conduct their own stress tests instead of first having to get approval from the NCUA. Proposal § 702.506(b) would be split into three new subparagraphs, each of which is described in more detail below.
Proposed § 702.506(b)(1) would provide that all supervisory stress tests must be conducted according to the NCUA's instructions. The Board is proposing to add this requirement to ensure that supervisory stress tests performed by tier II and tier III credit unions are conducted in a manner that promotes consistency and comparability. Credit union-run stress tests must adhere to these principles in order for the NCUA to assess inherent risk in the portfolios of covered credit unions and establish supervisory benchmarks. The NCUA will publish credit union-run supervisory stress test instructions each year on its Web site. The instructions will contain general directives, and where appropriate, differentiate between tier II and tier III requirements.
Proposed § 702.506(b)(2) would provide that when conducting its stress test, a tier III credit union must apply the minimum stress test capital ratio to all time periods in the planning horizon. The Board believes this requirement of the current remains pertinent, but only for tier III credit unions.
Proposed § 702.506(b)(3) would retain the last two sentences in current § 702.506(c), without change. Proposed § 702.506(b)(3) would provide that the NCUA reserves the right to conduct the tests described in this section on any covered credit union at any time. Proposed paragraph (b)(3) would provide further that where both the NCUA and a covered credit union have conducted the tests, the results of the NCUA's tests will determine whether the covered credit union has met the requirements of part 702. No substantive changes are being proposed with regard to these two sentences.
The proposal would retain much of the language in current § 702.506(g), but would insert some additional language. The section would also be broken into three subsections, each of which is discussed in more detail below.
Proposed § 702.506(f)(1) would provide that if a
This section of the proposal would retain the language from the first sentence in current § 702.506(g) and limit the application of paragraph (f)(2) to tier III credit unions. Proposed paragraph (f)(2) would provide that if an
This section of the proposal would retain the language in the last sentence in current § 702.506(g) and move it to proposed § 702.506(f)(3). The proposal also would limit the application of this section to only tier III credit unions. Proposed § 702.506(f)(3) would provide that a tier III credit union operating without an NCUA-approved stress test capital enhancement plan required under this section may be subject to supervisory action. A tier III credit union operating without an accepted capital plan or an approved stress test capital enhancement plan will be considered poorly managed and/or operating with insufficient capital to support the credit union's risk profile. The Board believes it is prudent to subject a tier III credit union to heightened regulatory scrutiny under such circumstances.
The Regulatory Flexibility Act requires the NCUA to prepare an analysis of any significant economic impact any proposed regulation may have on a substantial number of small entities (primarily those under $100 million in assets).
The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in which an agency by rule creates a new paperwork burden on regulated entities or modifies an existing burden (44 U.S.C. 3507(d)). For purposes of the PRA, a paperwork burden may take the form of a reporting, recordkeeping, or a third-party disclosure requirement, referred to as information collections.
The NCUA is seeking comments on proposed revisions to the information collection requirements contained in Subpart E of part 702, which has been submitted to the Office of Management and Budget (OMB) for review and approval OMB control number 3133-0199. The information collection requirements are found in § 702.504, that requires FICUs with assets of at least $10 billion (covered credit unions) to develop, maintain, and submit capital plans annually to NCUA. Proposed change amend § 702.506 to require tier 2 and 3 credit unions to conduct stress tests in a manner prescribed by NCUA. This reporting requirement will have an effect on five credit unions by increasing the information collection burden by an estimated 100 hours for each.
Comments on the proposed information collection requirements may be sent to the 1. Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for NCUA, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. The NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order to adhere to fundamental federalism principles. The proposed rule does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. The Board has, therefore, determined that this proposal does not constitute a policy that has federalism implications for purposes of the executive order.
The Board has determined that this proposed rule will not affect family well-being within the meaning of § 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105-277, 112 Stat. 2681 (1998).
Credit unions, Reporting and record keeping requirements.
For the reasons discussed above, the National Credit Union Administration proposes to amend 12 CFR part 702 as follows:
12 U.S.C. 1766(a), 1784(a), 1786(e), 1790d.
The additions and revisions read as follows:
The revision reads as follows:
(a)
(2)
(a)
(b)
(2)
(3)
(c)
(1) Losses, pre-provision net revenues, loan and lease loss provisions, and net income; and
(2) The potential impact on the stress test capital ratio, incorporating the effects of any capital action over the planning horizon and maintenance of an allowance for loan losses appropriate for credit exposures throughout the horizon. NCUA or the credit union will conduct the stress tests without assuming any risk mitigation actions on the part of the credit union, except those existing and identified as part of the credit union's balance sheet, or off-balance sheet positions, such as derivative positions, on the date of the stress test.
(d)
(e)
(f)
(2) If an NCUA-run stress test shows that a tier III credit union does not have the ability to maintain a stress test capital ratio of 5 percent or more under expected and stressed conditions in each quarter of the planning horizon, the credit union must provide NCUA, by November 30 of the calendar year in which NCUA conducted the tests, a stress test capital enhancement plan showing how it will meet that target.
(3) A tier III credit union operating without an NCUA approved stress test capital enhancement plan required under this section may be subject to supervisory actions.
(g)
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed temporary rule; request for comments.
This proposed temporary rule would implement interim measures to reduce overfishing of golden tilefish in Federal waters of the South Atlantic. Beginning in 2018, this temporary rule would reduce the total annual catch limit (ACL), the commercial and recreational sector ACLs, and the quotas for the hook-and-line and longline components of the commercial sector. This proposed temporary rule would be effective for 180 days, although NMFS may extend the temporary rule's effectiveness for a maximum of an additional 186 days. The intended effect of this proposed temporary rule is to reduce overfishing of golden tilefish while the South Atlantic Fishery Management Council develops long-term management measures.
Written comments must be received by November 14, 2017.
You may submit comments on the proposed temporary rule, identified by “NOAA-NMFS-2017-0111,” by either of the following methods:
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Electronic copies of an environmental assessment (EA) supporting these interim measures may be obtained from the Southeast Regional Office Web site at
Karla Gore, NMFS Southeast Regional Office, telephone: 727-551-5753, or email:
The snapper-grouper fishery in the South Atlantic region is managed under the Fishery Management Plan for Snapper-Grouper Fishery of the South Atlantic Region (FMP) and includes golden tilefish, along with other snapper-grouper species. The FMP was prepared by the South Atlantic Fishery Management Council (Council) and is implemented by NMFS through regulations at 50 CFR part 622 under authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).
The Magnuson-Stevens Act requires that NMFS and regional fishery management councils prevent overfishing and achieve, on a continuing basis, the optimum yield from federally managed fish stocks. These mandates are intended to ensure that fishery resources are managed for the greatest overall benefit to the nation, particularly with respect to providing food production and recreational opportunities, and protecting marine ecosystems.
Golden tilefish are harvested by both commercial and recreational fishermen throughout the South Atlantic, although total landings are dominated by the commercial sector using bottom longline gear. Golden tilefish are also harvested commercially using hook-and-line gear, while the recreational
In April 2016, an update to SEDAR 25 was completed for golden tilefish using data through 2014 (SEDAR 25 Update 2016). The SEDAR 25 Update 2016 indicated that golden tilefish is undergoing overfishing but is not overfished. NMFS notified the Council of the updated stock status determination in a letter dated January 4, 2017. As mandated by the Magnuson-Stevens Act, NMFS and the Council must prepare and implement a plan amendment and regulations to end overfishing of golden tilefish.
In May 2016, the Council's Scientific and Statistical Committee (SSC) reviewed the SEDAR 25 Update 2016 and provided fishing level recommendations for the stock. The SSC determined that the SEDAR 25 Update 2016 was based on the best scientific information available. The Council received the results of the SEDAR 25 Update 2016 and the SSC recommendations in June 2016, and Council members stated their concern over the large differences in biological benchmarks between SEDAR 25 and the SEDAR 25 Update 2016 and the much lower fishing level recommendations in the SEDAR 25 Update 2016. The Council subsequently requested that the SSC review the SEDAR 25 Update 2016, primarily as a result of their concerns about the socio-economic consequences of the large catch level reductions suggested by the SEDAR 25 Update 2016, and the large buffer recommended between the acceptable biological catch (ABC) and the overfishing limit.
In May 2017, the SEDAR Steering Committee considered a Council request for another golden tilefish update assessment, which was intended to address the SEDAR 25 Update 2016 concerns raised by the Council and their SSC during their earlier reviews. While an update assessment could not be included in the SEDAR schedule for 2017, the Southeast Fisheries Science Center agreed to revise the SEDAR 25 Update 2016 to address these Council concerns.
The revised stock assessment for golden tilefish will be reviewed by the SSC at its October 2017 meeting, and the Council is scheduled to discuss the revised assessment results at their December 2017 meeting. The results of the revised assessment will be used to develop Amendment 45 to the FMP, which is intended to end overfishing of golden tilefish with long-term management measures.
The revised ABC recommendations from the Council's SSC will not be available until late October 2017, which provides insufficient time for the Council and NMFS to develop and implement management measures, respectively, to end overfishing of golden tilefish in time for the start of the 2018 fishing year on January 1, 2018. Therefore, in a letter to NMFS dated June 27, 2017, the Council requested that NMFS implement interim measures to immediately reduce overfishing of golden tilefish while long-term measures can be developed through Amendment 45. For 2018, the Council recommended setting the total ACL at the projected yield at 75 percent of the yield produced by the fishing mortality rate at maximum sustainable yield, which would be 323,000 lb (146,510 kg), gutted weight, 361,760 lb (164,092 kg), round weight. The interim measures in a final temporary rule would be effective for 180 days after the publication date in the
During the effectiveness of this proposed temporary rule in 2018, the total ACL for golden tilefish would be 323,000 lb (146,510 kg), gutted weight, 361,760 lb (164,092 kg), round weight. This proposed temporary rule would also specify the commercial and recreational sector ACLs and component commercial quotas using the existing sector allocations of 97 percent commercial and 3 percent recreational, as well as 25 percent of the commercial ACL available for the hook-and-line component and 75 percent available for the longline component. Therefore, during the effectiveness of this proposed temporary rule in 2018, the commercial ACL would be 313,310 lb (142,115 kg), gutted weight. The commercial quota for the hook-and-line component would be 78,328 lb (35,529 kg), gutted weight, and the commercial quota for the longline component would be 234,982 lb (106,586 kg), gutted weight. The recreational ACL during the effectiveness of this proposed temporary rule in 2018 would be 2,187 fish, which is equivalent to 9,690 lb (4,395 kg), gutted weight.
The temporary reductions in the ACLs could result in earlier in-season closures particularly for the commercial sector. The earlier closures would likely result in short-term adverse socio-economic effects. However, the temporary ACLs and quotas are expected to minimize future adverse socio-economic effects by potentially reducing future reductions in the ACLs and quotas required to end overfishing through Amendment 45. The temporary ACLs and quotas would also provide biological benefits to the golden tilefish stock by reducing the current levels of fishing mortality.
NMFS has determined that this proposed temporary rule is necessary to reduce overfishing of golden tilefish in the South Atlantic. NMFS will consider all public comments received on this proposed temporary rule in determining whether to proceed with a final temporary rule and, if so, whether any revisions to the final temporary rule would be appropriate. If NMFS issues a final temporary rule, it would be effective for not more than 180 days after the date of publication in the
Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed temporary rule is consistent with the Magnuson-Stevens Act, and other applicable laws, subject to further consideration after public comment.
This proposed temporary rule has been determined to be not significant for purposes of Executive Order 12866.
NMFS prepared an initial regulatory flexibility analysis (IRFA) for this proposed temporary rule, as required by section 603 of the RFA, 5 U.S.C. 603. The IRFA describes the economic impact that this proposed temporary rule, if implemented, would have on small entities. A description of this proposed temporary rule, why it is being considered, and the objectives of, and legal basis for this proposed temporary rule are contained at the beginning of this section in the preamble and in the
The Magnuson-Stevens Act provides the statutory basis for this rule. No duplicative, overlapping, or conflicting Federal rules have been identified. In addition, no new reporting, record-keeping, or other compliance requirements are introduced by this proposed temporary rule. Accordingly, this rule does not implicate the Paperwork Reduction Act.
This proposed temporary rule, if implemented, would be expected to directly affect all commercial vessels that harvest South Atlantic golden tilefish under the FMP. The change in recreational ACL in this proposed temporary rule would not directly apply to or regulate charter vessel and headboat (for-hire) businesses. Any impact to the profitability or competitiveness of for-hire fishing businesses would be the result of changes in for-hire angler demand and would therefore be indirect in nature. The RFA does not consider recreational anglers, who would be directly affected by this proposed temporary rule, to be small entities, so they are outside the scope of this analysis and only the effects on commercial vessels were analyzed. For RFA purposes only, NMFS has established a small business size standard for businesses, including their affiliates, whose primary industry is commercial fishing (see 50 CFR 200.2). A business primarily engaged in commercial fishing (NAICS code 11411) is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including affiliates), and has combined annual receipts not in excess of $11 million for all its affiliated operations worldwide.
As of August 10, 2017, there were 544 vessels with valid or renewable Federal South Atlantic snapper-grouper unlimited permits, 114 valid or renewable 225-lb trip limited permits, and 22 golden tilefish longline endorsements. The golden tilefish longline endorsement system started in 2013. From 2012 through 2016, an average of 23 longline vessels per year landed golden tilefish in the South Atlantic. These vessels, combined, averaged 255 trips per year in the South Atlantic on which golden tilefish were landed, and 182 trips taken in the South Atlantic on which no golden tilefish were harvested or in areas outside the South Atlantic. The average annual total dockside revenue (2016 dollars) for these vessels combined was approximately $1.56 million from golden tilefish, $0.10 million from other species co-harvested with golden tilefish (on the same trips), and $0.43 million from trips in the South Atlantic on which no golden tilefish were harvested or in areas outside the South Atlantic. Total average annual revenue from all species harvested by longline vessels harvesting golden tilefish in the South Atlantic was approximately $2.10 million, or approximately $92,000 per vessel. Longline vessels generated approximately 74 percent of their total revenues from golden tilefish. For the same period, an average of 82 vessels per year landed golden tilefish using other gear types (mostly hook-and-line) in the South Atlantic. These vessels, combined, averaged 483 trips per year in the South Atlantic on which golden tilefish were landed, and 2,862 trips taken in the South Atlantic on which no golden tilefish were harvested or in areas outside the South Atlantic. The average annual total dockside revenue (2016 dollars) for these 82 vessels was approximately $0.36 million from golden tilefish, $0.66 million from other species co-harvested with golden tilefish (on the same trips in the South Atlantic), and $4.13 million from trips in the South Atlantic on which no golden tilefish were harvested or in areas outside the South Atlantic. The total average annual revenue from all species harvested by these 82 vessels was approximately $5.16 million, or approximately $62,000 per vessel. Approximately seven percent of these vessels' total revenues came from golden tilefish. Based on the foregoing revenue information, all commercial vessels using longlines or other gear types (mostly hook-and-line) affected by the proposed temporary rule may be assumed to be small entities.
Because all entities expected to be directly affected by this proposed temporary rule are assumed to be small entities, NMFS has determined that this proposed temporary rule would affect a substantial number of small entities. For the same reason, the issue of disproportionate effects on small versus large entities does not arise in the present case.
Reducing the South Atlantic stock ACL for golden tilefish would reduce the specific ACLs for the commercial and recreational sectors. These ACL reductions would result in ex-vessel revenue losses of approximately $229,000 for hook-and-line vessels and $600,000 for longline vessels over the entire 2018 fishing year. Ex-vessel revenue reductions for the commercial sector would result in profit reductions, although this is more likely for longline vessels as they are more dependent on golden tilefish than hook-and-line vessels.
The following discusses the alternatives that were not selected as preferred by the Council.
Four alternatives, including the preferred alternative as described above, were considered for reducing the stock and sector ACLs for South Atlantic golden tilefish. The first alternative, the no action alternative, would maintain the current economic benefits to all participants in the South Atlantic golden tilefish component of the snapper-grouper fishery. This alternative, however, would not address the need to curtail continued overfishing of the stock, very likely leading into the adoption of more stringent measures in the near future. The second alternative would reduce the ACLs more than the preferred alternative, and thus would be expected to result in larger revenue (and profit) losses to the commercial sector. The third alternative would establish higher ACLs than the preferred alternative. Although this alternative would result in lower revenue losses to the commercial sector, the ACLs it would establish may not be low enough to address the overfishing status of the stock. To an extent, this alternative would leave open a greater likelihood of implementing more stringent measures when more long-term management actions are implemented in Amendment 45.
Annual catch limit, Fisheries, Fishing, Golden tilefish, South Atlantic.
For the reasons set out in the preamble, 50 CFR part 622 is proposed to be amended as follows:
16 U.S.C. 1801
(a) * * *
(2) * * *
(iv)
(v)
(vi)
(a) * * *
(1) * * *
(iv)
(v)
(vi) If commercial landings of golden tilefish, as estimated by the SRD, exceed the commercial ACL (including both the hook-and-line and longline component quotas) specified in § 622.190(a)(2)(iv), and the combined commercial and recreational ACL of 323,000 lb (146,510 kg), gutted weight, 361,760 lb (164,092 kg), round weight, is exceeded during the same fishing year, and golden tilefish are overfished based on the most recent Status of U.S. Fisheries Report to Congress, the AA will file a notification with the Office of the Federal Register to reduce the commercial ACL for that following fishing year by the amount of the commercial ACL overage in the prior fishing year.
(3)
(ii) If recreational landings of golden tilefish, as estimated by the SRD, exceed the recreational ACL, then during the following fishing year recreational landings will be monitored for a persistence in increased landings, and if necessary, the AA will file a notification with the Office of the Federal Register to reduce the length of the recreational fishing season and the recreational ACL by the amount of the recreational ACL overage, if the species is overfished based on the most recent Status of U.S. Fisheries Report to Congress, and if the combined commercial and recreational ACL of 323,000 lb (146,510 kg), gutted weight, 361,760 lb (164,092 kg), round weight, is exceeded during the same fishing year. The AA will use the best scientific information available to determine if reducing the length of the recreational fishing season and recreational ACL is necessary. When the recreational sector is closed as a result of NMFS reducing the length of the recreational fishing season and ACL, the bag and possession limits for golden tilefish in or from the South Atlantic EEZ are zero.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
NMFS proposes to implement management measures described in an abbreviated framework action to the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico (FMP), as prepared by the Gulf of Mexico (Gulf) Fishery Management Council (Council). This proposed rule would remove the limit on the number of unrigged hooks that a commercial reef fish vessel with a bottom longline endorsement is allowed on board when using or carrying bottom longline gear in the Federal waters of the eastern Gulf. The proposed rule would not change the limit of 750 hooks that these vessels can have rigged for fishing at any given time. The purpose of the proposed rule is to reduce the regulatory and potential economic burden to bottom longline fishers.
Written comments must be received by November 14, 2017.
You may submit comments on the proposed rule, identified by “NOAA-NMFS-2017-0081” by either of the following methods:
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Electronic copies of the abbreviated framework action, which includes an environmental assessment, Regulatory Flexibility Act (RFA) analysis, and a regulatory impact review, may be obtained from
Kelli O'Donnell, NMFS SERO, telephone: 727-824-5305, email:
The Gulf reef fish fishery includes the commercial bottom longline component and is managed under the FMP. The Council prepared the FMP and NMFS implements the FMP under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Steven Act) through regulations at 50 CFR part 622.
The Magnuson-Stevens Act requires NMFS and regional fishery management councils to prevent overfishing and achieve, on a continuing basis, the optimum yield from federally managed fish stocks to ensure that fishery resources are managed for the greatest overall benefit to the nation.
In 2008, using data from Federal fishery observers, the NMFS Southeast Fisheries Science Center estimated sea turtle takes by the commercial bottom longline component of the Gulf reef fish fishery exceeded the 3-year anticipated take levels that were described in the 2005 Endangered Species Act biological opinion on the reef fish fishery. Therefore, the Council and NMFS developed management measures in Amendment 31 to the FMP to reduce sea turtle takes by the bottom longline component of the Gulf reef fish fishery (75 FR 21512; April 26, 2010). These management measures require an endorsement to the Federal commercial reef fish permit to fish for reef fish using bottom longline gear in the Gulf east of 85°30′ west longitude (near Cape San Blas, FL), and a seasonal closure for bottom longline gear use in that area. In addition, vessels in that area that have the endorsement and are fishing with bottom longline gear or have bottom longline gear on board cannot possess more than 1,000 hooks total per vessel of which no more than 750 hooks can be rigged for fishing.
This proposed rule would remove the current limitation on the number of unrigged hooks allowed per bottom longline vessel in the eastern Gulf EEZ, while retaining the limit of 750 hooks that can be rigged for fishing.
Since the implementation of Amendment 31, bottom longline endorsement holders using bottom longline gear in the eastern Gulf EEZ have reported increases in bottom longline hook losses due to shark bite-offs and through normal fishing effort. Therefore, vessel operators that use bottom longline gear in the eastern Gulf EEZ requested that the Council increase the number of total unrigged hooks per vessel, while still keeping in place the restriction of 750 hooks rigged to fish at any one time.
Observer data from 2010-2016 has shown the average amount of hooks lost per commercial bottom longline trip in the eastern Gulf EEZ is 300 hooks. Under the current total possession limit, if more than 250 hooks are lost, a vessel either has to fish with fewer than 750 hooks, get additional hooks from other vessels to maintain the maximum number of hooks in the water, or return to port. Based on public testimony, removing the restriction on the total number of hooks kept on board is expected to make trips more economical by allowing fishing with the maximum number of hooks to continue without having to return to port or request additional hooks from other vessels. In addition, maintaining the current limit of 750 hooks rigged for fishing would preserve the reductions in sea turtle interactions since the implementation of Amendment 31.
Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with the FMP, the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.
This proposed rule has been determined to be not significant for purposes of Executive Order 12866.
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration (SBA) that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. The factual basis for this certification is as follows.
A description of this proposed rule, why it is being considered, and the objectives of, and legal basis for this proposed rule are contained in the preamble.
This proposed rule would directly affect commercial fishing vessels that use bottom longline gear to harvest reef fish from the Gulf EEZ east of 85°30′ west longitude, east of Cape San Blas, FL. These vessels are required to have an eastern Gulf reef fish bottom longline endorsement, and as of July 6, 2017, 62 vessels have that endorsement.
NMFS estimates up to 62 commercial longline vessels could be directly affected annually, and that 36 to 37 businesses own these 62 vessels. These businesses represent approximately 6 percent of the 631 businesses that own at least one commercial fishing vessel with a Gulf reef fish permit. NMFS expects that most to all of the directly affected vessels make their landings in Florida, and from 2011 through 2015, an annual average of 59 longline vessels landed Gulf reef fish in the state and individually landed an average of 71,130 lb (32,264 kg), gutted weight, of reef fish annually. With an average 2015 dockside price of $4.01 per lb, gutted weight, the average longline vessel had annual dockside revenue of $285,231 from reef fish landings. That annual revenue is estimated to represent approximately 98 to 99 percent of the average longline vessel's annual revenues from all landings.
For RFA purposes, NMFS has established a small business size standard for businesses, including their affiliates, whose primary industry is commercial fishing (see 50 CFR 200.2). A business primarily involved in commercial fishing (NAICS 11411) is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and its combined annual receipts are not in excess of $11 million for all of its affiliated operations worldwide. Based on the average annual dockside revenue of a longline vessel, it is expected that most to all of the businesses that would be directly affected by the proposed rule are small.
Since May 2010, within the Gulf EEZ east of 85°30′ west longitude, a vessel for which a valid eastern Gulf reef fish bottom longline endorsement has been issued and that is fishing bottom longline gear or has bottom longline
Industry representatives have indicated that a total of 1,000 hooks is not enough on long trips to compensate for hook losses due to sharks' biting hooks off and other general reasons. Under the current total possession limit, if more than 250 hooks are lost, a vessel either has to fish with fewer than 750 hooks or acquire additional hooks from other vessels to maintain the maximum number of hooks in the water. A third option is for the vessel to end the trip and return to port; however, that reduces the vessel landings. Observer data indicates an average of over 250 hooks were lost per trip from 2011 through 2016; however, despite the total hook limit and the average hook loss, average landings of reef fish per longline trip increased over that time.
The proposed rule would allow a vessel with a longline endorsement to possess an unlimited number of hooks, but it would not change the maximum number that can be rigged for fishing. Any bottom longline vessel that would increase the total number of hooks it possesses beyond 1,000 would do so only if there were an economic benefit of doing so. Removing the limit on the number of unrigged hooks that can be onboard is expected to improve fishers' ability to maintain the maximum number of rigged hooks over the duration of a trip. There is insufficient information to estimate the number of vessels that may benefit from possessing more than 1,000 hooks and the magnitude of such a benefit.
NMFS expects this proposed rule would not have a significant economic impact on a substantial number of small entities, and an initial regulatory flexibility analysis is not required and none has been prepared.
No duplicative, overlapping, or conflicting Federal rules have been identified. In addition, no new reporting, record-keeping, or other compliance requirements are introduced by this proposed rule. Accordingly, this proposed rule does not implicate the Paperwork Reduction Act.
Bottom longline gear, Fisheries, Fishing, Gulf of Mexico, Reef fish.
For the reasons set out in the preamble, 50 CFR part 622 is proposed to be amended as follows:
16 U.S.C. 1801
(b) * * *
(3) Within the Gulf EEZ east of 85°30′ W. long., a vessel for which a valid eastern Gulf reef fish bottom longline endorsement has been issued that is fishing bottom longline gear or has bottom longline gear on board cannot possess more than 750 hooks rigged for fishing at any given time. * * *
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
NMFS proposes this interim measure to change the management of the Pacific whiting at-sea sectors' (
Comments on this proposed rule must be received no later than November 27, 2017.
You may submit comments on this document, identified by NOAA-NMFS-2017-0102 by any of the following methods:
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Miako Ushio, phone: 206-526-4644, or email:
This proposed rule is accessible via the Internet at the Office of the Federal Register Web site at
Bycatch of rockfish species in the Pacific whiting fishery occurs at very low rates, but sporadically and unpredictably. Regulations at 50 CFR 660.55 address the allocation of these groundfish. Darkblotched rockfish and POP are caught almost exclusively by vessels in the shorebased Individual Fishing Quota (IFQ) and at-sea Pacific whiting sectors of the groundfish fishery. NMFS declared both species overfished in 2000 and 1999, respectively, and both stocks are currently managed under rebuilding plans as a result. Populations of both species have shown dramatic improvement in recent years. Darkblotched rockfish was declared rebuilt in June 2017, and a draft 2017 stock assessment indicates that POP may be rebuilt. They are currently managed as allocations, and NMFS automatically closes a fishery sector when it has reached its allocation of either species.
In recent years, both at-sea sectors of the Pacific whiting fishery have exceeded their initial annual allocation of darkblotched rockfish (C/P sector in 2011, and the MS sector in 2014). The latter resulted in an emergency Pacific Fishery Management Council (Council) meeting in order to re-open the fishery. The risk of an inseason closure of these sectors remains high, although the rebuilding ACLs of these rockfish are far from being reached. For example: The most recent fishing mortality estimates by NMFS' Northwest Fisheries Science Center indicate that 44 and 38 percent of the darkblotched rockfish and POP ACLs, respectively, were caught in 2015. While harvest of these species at a level below the ACL may rebuild stocks more quickly, there is a negative socioeconomic impact from preventing harvest of Pacific whiting, as intended in the PCGFMP.
The Council established allocations of darkblotched rockfish and POP for the at-sea sectors in Amendment 21 to the PCGFMP. When the Council considered allocation of these species, the analysis only incorporated data on catch through 2005, and took the overfished status of the species into account when they set up the allocation structure. Ten years of additional data on bycatch in the at-sea sectors are now available. Additionally, six full years of the Shorebased IFQ Program (which was implemented in 2011, 75 FR 60868) fishery information is available. This new information indicates that the stocks of both species are currently much healthier than they were at the time Amendment 21 was implemented.
The Council's Amendment 21 allocation recommendation was based, in part, on the idea that the C/P and MS sectors could avoid early closures by moving to areas of lower rockfish encounter rates if they were approaching a bycatch allocation. However, experience has shown that this assumption was likely too simplistic. Despite the mitigating measures enacted by the C/P and MS coops, darkblotched rockfish bycatch remains particularly variable with the potential for rapid accumulation. The 2014 closure of the MS sector provides an illustration; closure occurred after six hauls caught 4.5 mt of darkblotched rockfish, nearly 75 percent of their 2014 allocation, with the bulk coming from three of the hauls. Some of the largest hauls were delivered to motherships so closely in time that feedback on the size of the catches from observers came too late for the MS coop to effectively respond. Prior to this “lightning strike” event, the sector had made 969 hauls and caught only 2.5 mt of darkblotched rockfish. After the sector was re-opened by an emergency meeting of the Council, the sector made 330 additional hauls that brought in over 14,500 mt of Pacific whiting and only 0.1 mt of additional darkblotched rockfish. The C/P sector has experienced even more rapid accumulations of darkblotched rockfish bycatch, and would have been closed late in the 2011 season if unused allocation had not been available from the MS sector, which had already completed fishing. These events indicate that the current management structure may be adversely impacting the at-sea sectors to a greater degree than was anticipated when the Council adopted the current allocation structure under Amendment 21, due to unpredictability and high volume of bycatch events.
The Council has discussed a variety of solutions to reducing the risk of closure of the Pacific whiting at-sea sectors prior to attainment of their Pacific whiting allocations, such as allowing transfer of rockfish quota between sectors, but it determined that those solutions are too complex to be analyzed and implemented in a timely manner. At its September 2016 meeting, the Council recommended the interim measure of amending the PCGFMP and implementing revised regulations, so that the amounts of darkblotched rockfish and POP allocated to the C/P and MS sectors are managed as set-asides rather than as total catch limits. The Council also recommended giving NMFS inseason authority to automatically close one or both of the C/P and MS sectors in the event the species-specific set-aside amounts plus the available reserve for unforeseen catch events, known colloquially as the “buffer,” are anticipated to be exceeded.
This action would not revise allocations between sectors, which were set by Amendment 21 to the PCGFMP, and is intended to be an interim solution to address the immediate needs of the C/P and MS sectors. Long-term solutions are being reviewed by a Council-appointed Community Advisory Board as part of the 5-year review of the trawl rationalization program. A long-term solution to address the needs of the C/P and MS sectors will focus specifically on fairly and equitably revising the allocation between the trawl sectors, and among all the groundfish fishery sectors, while leaving any applicable stock rebuilding plans unaffected.
This proposed action is intended to substantially reduce the risk of the Pacific whiting at-sea sectors not attaining their respective Pacific whiting
The proposed rule would also allow NMFS to close one or both of the C/P and MS sectors of the Pacific whiting fishery via automatic action when the set-aside for that sector, plus the available reserve for unforeseen catch events, is reached or is expected to be reached for either darkblotched rockfish or POP. Because of near real-time monitoring by the C/P and MS Coop Programs, and the ability of those programs to respond quickly to changing fishery conditions, closures would occur before allocations to other fisheries or the ACLs are reached, thus limiting the potential effects and precluding potential negative biological and socioeconomic impacts of the proposed action.
Pursuant to section 304 (b)(1)(A) of the Magnuson-Stevens Act, NMFS has preliminarily determined that this proposed rule is consistent with the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment. In making its final determination, NMFS will take into account the complete record, including the data, views, and comments received during the comment period.
NMFS has determined that the proposed action would not have a significant effect, individually or cumulatively, on the human environment and does not involve any extraordinary circumstances listed in The National Oceanic and Atmospheric Administration (NOAA) Policy and Procedures for Compliance with the National Environmental Policy Act and Related Authorities (NOAA Administrative Order (NAO) 216-6A and the Companion Manual for NAO 216-6A). For purposes of review under the National Environmental Protection Act, the proposed action is not part of any larger action, and can be reviewed independently. Furthermore, NMFS determined that the proposed action may appropriately be categorically excluded from the requirement to prepare either an environmental assessment or environmental impact statement, in accordance with the Companion Manual for NAO 216-6A.
Under the Regulatory Flexibility Act (RFA), an agency does not need to conduct an Initial Regulatory Flexibility Act Analysis or Final Regulatory Flexibility Act Analysis if a certification can be made that the proposed rule, if adopted, will not have a significant adverse economic impact on a substantial number of small entities, as defined below (5 U.S.C. 601). The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities as described in this document.
The Small Business Administration has established the following size criteria for entities classified under North American Industry Classification System (NAICS). Standards are expressed either in number of employees or annual receipts in millions of dollars. The number of employees or annual receipts indicates the maximum allowed for a concern and its affiliates to be considered small (13 CFR 121.201). A fish and seafood merchant wholesaler primarily engaged in servicing the fishing industry is a small business if it employs 100 or fewer persons, on a full-time, part-time, temporary, or other basis, at all its affiliated operations worldwide (NAICS 424460). A business primarily engaged in seafood product preparation and packaging is a small business if it is independently owned and operated, not dominant in its field of operation, and employs 750 or fewer persons on a full time, part time, temporary, or other basis, at all its affiliated operations worldwide (NAICS 311710). For purposes of this action, NMFS West Coast Region is applying the seafood processor standard to C/Ps and MS processor ships, which earn the majority of their revenue from selling processed seafood product. Under SBA size standards, a nonprofit organization is determined to be a small entity if (1) it is not dominant in its field of operation; and (2) for environmental, conservation, or professional organizations if combined annual receipts are $15 million or less (NAICS 813312, 813920), and for other organizations if combined annual receipts are $7.5 million or less (NAICS 813319, 813410, 813910, 813930, 813940, 813990). For RFA purposes only, NMFS has established a small business size standard for businesses, including their affiliates, whose primary industry is commercial fishing; a business primarily engaged in commercial fishing (NAICS 11411) is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including affiliates), and has combined annual receipts not in excess of $11 million for all its affiliated operations worldwide (50 CFR 200.2).
For the purposes of the RFA, small governmental jurisdictions such as governments of cities, counties, towns, townships, villages, school districts, or special districts are considered small jurisdictions if their populations are less than 50,000 (5 U.S.C. 601).
Four companies own seven permitted mothership vessels. Each year, three to six MS vessels participate in the Pacific whiting fishery. The average number of crew on each MS vessel is 104 individuals. When considering operations in Alaska, none of the MSs would be considered small businesses.
The 17 catcher vessels that participated in the mothership coop spend about 30 percent of their total annual fishing days processing in the Pacific whiting fishery. The majority of their time is spent in the Alaska Pollock fishery. Almost 90 percent of the overall round weight taken by these vessels is taken in Alaska, and approximately 11 percent is taken in the Pacific whiting fishery.
Three companies own nine permitted C/P fleet vessels. C/Ps are large vessels with an average crew of 131 individuals.
Vessels in the C/P fleet spend about 20 percent of their total days fishing in the Pacific whiting fishery and 80 percent in the Alaska Pollock fishery. About 90 percent of the total round weigh taken by the C/Ps is taken in Alaska, and approximately 10 percent is taken in the Pacific whiting fishery. When considering operations from Alaska, none of the C/Ps would be considered small businesses.
The proposed action is primarily administrative in nature, as it does not change the ACLs for either the Pacific whiting at-sea sectors or the allocations levels of darkblotched rockfish and POP. This action is not expected to significantly reduce profit for a substantial number of small entities, because there are no associated compliance requirements or costs.
Two MS permit/processor owning companies self-identified on the most recent (2016) permit renewal as small businesses, and the other two identified as not being small businesses. All three companies owning C/P permits and vessels responded as not being small entities on the most recent (2016) permit renewal form. Of the 35 MS catcher vessel permits, 34 were registered to vessels with the MS catcher vessel endorsement. 27 MS catcher vessel endorsed permits were owned by 22 companies that self-identified as small entities, and the other 8 were owned by 5 companies that self-identified as not being small entities.
Data collected from the trawl rationalization program Economic Data Collection was used for this analysis.
No Federal rules have been identified that duplicate, overlap, or conflict with this action. There are no reporting, recordkeeping or other compliance requirements in the proposed rule.
Pursuant to Executive Order 13175, this proposed rule was developed after meaningful consultation and collaboration with tribal officials from the area covered by the PCGFMP. Consistent with the Magnuson-Stevens Act (16 U.S.C. 1852(b)(5)), one of the voting members of the Pacific Council is a representative of an Indian tribe with Federally recognized fishing rights from the area of the Council's jurisdiction.
This proposed rule would not alter the effects on species listed under the Endangered Species Act, or on marine mammals, over what has already been considered for the regulations governing the fishery.
This proposed rule has been determined to be not significant for purposes of Executive Order 12866.
Fisheries, Fishing, Indian Fisheries.
For the reasons set out in the preamble, 50 CFR part 660 is proposed to be amended as follows:
16 U.S.C. 1801
(c) * * *
(1) * * *
(i)
(A)
(B)
(d) * * *
(1) * * *
(vii) Close one or both the MS or C/P sector when the set-aside for that sector, described in Table 2d, subpart C, plus the available reserve for unforeseen catch events, described in Table 2a, subpart C, combined, is reached or is expected to be reached for either darkblotched rockfish or Pacific ocean perch.
(c) * * *
(1) * * *
(i) Species with formal allocations to the MS Coop Program are Pacific whiting, canary rockfish and widow rockfish;
(ii) Species with set-asides for the MS and C/P Coop Programs, as described in Table 2d, subpart C.
(c) * * *
(1) * * *
(i) Species with formal allocations to the C/P Coop Program are Pacific whiting, canary rockfish, and widow rockfish;
(ii) Species with set-asides for the MS and C/P Programs, as described in Table 2d, subpart C.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce.
Proposed specifications; request for comments.
NMFS proposes annual catch limits (ACLs) for Pacific Island crustacean, precious coral, and territorial bottomfish fisheries, and accountability measures (AMs) to correct or mitigate any overages of catch limits. The proposed ACLs and AMs would be effective for fishing year 2017. The proposed ACLs and AMs support the long-term sustainability of fishery resources of the U.S. Pacific Islands.
NMFS must receive comments by November 14, 2017.
You may submit comments on this document, identified by NOAA-NMFS-2017-0012, by either of the following methods:
•
•
NMFS prepared environmental analyses that describe the potential impacts on the human environment that would result from the proposed ACLs and AMs. Copies of the environmental analyses and other supporting documents are available at
Sarah Ellgen, NMFS PIR Sustainable Fisheries, 808-725-5173.
Fisheries in the U.S. Exclusive Economic Zone (EEZ, or Federal waters) around the U.S. Pacific Islands are managed under archipelagic fishery ecosystem plans (FEPs) for American Samoa, Hawaii, the Pacific Remote Islands, and the Mariana Archipelago (Guam and the Commonwealth of the Northern Mariana Islands (CNMI)). A fifth FEP covers pelagic fisheries. The Western Pacific Fishery Management Council (Council) developed the FEPs, and NMFS implemented them under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).
Each FEP contains a process for the Council and NMFS to specify ACLs and AMs; that process is codified at Title 50, Code of Federal Regulations, Section 665.4 (50 CFR 665.4). The regulations require NMFS to specify, every fishing year, an ACL for each stock and stock complex of management unit species (MUS) in an FEP, as recommended by the Council and considering the best available scientific, commercial, and other information about the fishery. If a fishery exceeds an ACL, the regulations require the Council to take action, which may include reducing the ACL for the subsequent fishing year by the amount of the overage, or other appropriate action.
NMFS proposes to specify ACLs for the crustacean and precious corals MUS in American Samoa, Guam, the CNMI, and Hawaii, and the bottomfish MUS in American Samoa, Guam, and the CNMI for fishing year 2017. The fishing year for each fishery began on January 1 and ends on December 31, except for precious coral fisheries, which began July 1 and ends on June 30 next year.
In this action, NMFS is not proposing to specify 2017 ACLs for Hawaii Kona crab and non-Deep 7 bottomfish, or coral reef ecosystem MUS in all island areas. This is because NMFS has new information for those MUS that may require additional environmental analyses to support the Council's recommendations. NMFS would propose those ACL specifications in a separate action(s). In addition, NMFS specified the 2017-2018 ACL and AM for Hawaii Deep 7 bottomfish in June 2017 (82 FR 29778, June 30, 2017).
NMFS based the proposed specifications for crustacean, precious coral, and territorial bottomfish MUS on recommendations from the Council at its 164th meeting held October 21-22, 2015, its 166th meeting held June 6-10, 2016, and its 170th meeting held June 19-22, 2017. For this action, the Council recommended 36 ACLs: Seven each in American Samoa, Guam, and the CNMI, and 15 in Hawaii. The Council also recommended that NMFS specify multi-year ACLs and AMs in fishing years 2015-2018. NMFS proposes to implement the specifications for each year separately, prior to each fishing year. NMFS previously implemented the 2016 specifications for bottomfish, crustacean, precious coral, and coral reef ecosystem MUS (82 FR 18716, April 21, 2017). All of the proposed 2017 ACLs in this action would be the same as those specified in 2016 (82 FR 18716, April 21, 2017). NMFS also proposes to specify the same AMs as it did in 2016.
Data from these fisheries for fishing year 2016 indicate that catches from each fishery in 2016 did not exceed the fishery's ACL, with the exception of the CNMI slipper lobsters. NMFS proposes to specify an ACL of 60 lb for CNMI slipper lobsters, which is the same ACL that NMFS implemented in 2016, even though the average three-year catch for this fishery exceeded the ACL. For CNMI slipper lobsters, there is no OFL or maximum sustainable yield (MSY) estimate. Prior to 2016, there were only three years (2007-2009) of available catch information for slipper lobsters in the CNMI. Therefore, in 2014, at its 116th meeting, the SSC recommended a proxy for calculating the ACL for the CNMI slipper lobster stock complex. Using a catch-to-habitat-based proxy comparing data from the Hawaii slipper lobster fishery (the only area that has specifically documented harvesting of slipper lobster), the Council recommended setting an ACL for the CNMI slipper lobsters for 2016-2018 at a level equal to ABC, that is, 60 lb.
In 2015, NOAA started a pilot program to improve commercial vendor reporting in the CNMI. The Territory Science Initiative was designed to improve the data vendors submit to commercial receipt books, which track, among other stocks, the slipper lobster fishery. NMFS staff trained vendors to complete receipt books and incorporate the process into their day-to-day business routines. The program proved to be effective, and in 2016, the CNMI commercial receipt book program documented 304 lb of slipper lobsters sold by local fishermen. In comparison,
The Council reviewed the 2016 CNMI slipper lobster fishery performance at its 170th meeting held June 19-22, 2017. The Council noted that the 304 lb reported catch in 2016, combined with zero reported catch in the past two years, resulted in a three-year average catch of 101 lb, which exceeded the ACL by 41 lb. The Council determined that the increase in reported catch was due to the Territory Science Initiative and the associated improvements in catch reporting, and not due to actual increase in harvest. The Council also concluded that the overage was not likely to have had an impact on stock sustainability or result in overfishing based on existing stock data. Based on the status of the stock, the 2016 AM was not applied, and the Council instead recommended maintaining the 2017 CNMI slipper lobster ACL at 60 lb.
The Final Environmental Assessment (EA) for this action supports this determination. In the EA, NMFS concluded that the current level of catch of slipper lobster in the CNMI was not likely to result in overfishing as there are no clear trends indicating that lobster stocks in the CNMI have been declining. (EA Section 3.2.3). NMFS concluded that even if no ACL were specified for this fishery, the level of slipper lobster catch would be expected to remain small. NMFS also determined that an ACL of 60 lb, even if exceeded, would not result in any changes in fishing and would not be expected to have effects on the fishery different from if no ACL were specified.
In this proposed rule, NMFS is not proposing ACLs for MUS that are currently subject to Federal fishing moratoria or prohibitions. These MUS include all species of gold coral (78 FR 32181, May 29, 2013), the three Hawaii seamount groundfish (pelagic armorhead, alfonsin, and raftfish (75 FR 69015, November 10, 2010), and deepwater precious corals at the Westpac Bed Refugia (75 FR 2198, January 14, 2010). The current prohibitions on fishing for these MUS serve as the functional equivalent of an ACL of zero.
Additionally, NMFS is not proposing ACLs for bottomfish, crustacean, precious coral, or coral reef ecosystem MUS identified in the Pacific Remote Islands Area (PRIA) FEP. This is because fishing is prohibited in the EEZ within 12 nm of emergent land, unless authorized by the U.S. Fish and Wildlife Service (USFWS) (78 FR 32996, June 3, 2013). To date, NMFS has not received fishery data that would support any such approvals. In addition, there is no suitable habitat for these stocks beyond the 12-nm no-fishing zone, except at Kingman Reef, where fishing for these resources does not occur. Therefore, the current prohibitions on fishing serve as the functional equivalent of an ACL of zero. However, NMFS will continue to monitor authorized fishing within the Pacific Remote Islands Monument in consultation with USFWS, and may develop additional fishing requirements, including monument-specific catch limits for species that may require them.
NMFS is also not proposing ACLs for pelagic MUS at this time, because NMFS previously determined that pelagic species are subject to international fishery agreements or have a life cycle of approximately one year and, therefore, are statutorily excepted from the ACL requirements.
The following four tables list the proposed ACL specifications for 2017.
Each year, NMFS and local resource management agencies in American Samoa, Guam, the CNMI, and Hawaii collect information about MUS catches and apply them toward the appropriate ACLs. Pursuant to 50 CFR 665.4, when the available information indicates that a fishery is projected to reach an ACL for a stock or stock complex, NMFS must notify permit holders that fishing for that stock or stock complex will be restricted in Federal waters on a specified date. The restriction serves as the AM to prevent an ACL from being exceeded, and may include closing the fishery, closing specific areas, changing bag limits, or restricting effort.
However, local resource management agencies do not have the resources to process catch data in near-real time, so fisheries statistics are generally not available to NMFS until at least six months after agencies collect and analyze the data. Additionally, Federal logbook information and other reporting from fisheries in Federal waters is not sufficient to monitor and track catches for the evaluation of fishery performance against the proposed ACL specifications. This is because most fishing for bottomfish, crustacean, and precious coral MUS occurs in State or territorial waters, generally 0-3 nm from shore. For these reasons, NMFS proposes to continue to specify the Council's recommended AM, which is to apply a three-year average catch to evaluate fishery performance against the proposed ACLs. Specifically, NMFS and the Council would use the average catch of fishing years 2015, 2016, and 2017 to evaluate fishery performance against the 2017 ACL for a particular fishery. At the end of each fishing year, the Council would review catches relative to each ACL. If NMFS and the Council determine that the three-year average catch for any fishery exceeds the specified ACL, NMFS would reduce the ACL in the subsequent year for that fishery by the amount of the overage.
On March 20, 2017, in
NMFS will consider public comments on the proposed ACLs and AMs and will announce the final specifications in the
Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator for Fisheries has determined that these proposed specifications are consistent with the applicable FEPs, other provisions of the Magnuson-Stevens Act, and other applicable laws, subject to further consideration after public comment.
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that these proposed specifications, if adopted, would not have a significant economic impact on a substantial number of small entities. A description of the proposed action, why it is being considered, and the legal basis for it are contained in the preamble to these proposed specifications.
The proposed action would specify annual catch limits (ACLs) and accountability measures (AMs) for Pacific Island crustaceans, precious coral, and territorial bottomfish fisheries in American Samoa, Guam, Hawaii, and the CNMI for 2017. The proposed 2017 ACLs for MUS covered in this proposed action are identical to those specified in 2016 (82 18716, April 21, 2017). NMFS is not proposing to specify 2017 ACLs for Kona crab or non-Deep 7 bottomfish in Hawaii or coral reef ecosystem MUS in any island area because NMFS has obtained new information for those MUS that may require the agency to conduct additional environmental analyses to support the Council's recommendations. NMFS will propose those ACL specifications in a separate action(s).
The vessels affected by this action are federally permitted to fish under the Fishery Ecosystem Plans for American Samoa, the Marianas Archipelago (Guam and the CNMI), and Hawaii. The numbers of vessels permitted under these Fishery Ecosystem Plans permitted by this action are as follows: American Samoa (0), Marianas Archipelago (16), and Hawaii (9). For Regulatory Flexibility Act (RFA) purposes only, NMFS has established a small business size standard for businesses, including their affiliates, whose primary industry is commercial fishing (see 50 CFR 200.2). A business primarily engaged in commercial fishing (NAICS code 11411) is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and has combined annual receipts not in excess of $11 million for all its affiliated operations worldwide. Based on available information, NMFS has determined that all affected entities are small entities under the SBA definition of a small entity,
Even though this proposed action would apply to a substantial number of vessels, this action should not result in significant adverse economic impact to individual vessels. NMFS and the Council are not considering in-season closures in any of the fisheries to which these ACLs apply because fishery management agencies are not able to track catch relative to the ACLs during the fishing year. As a result, fishermen would be able to fish throughout the entire year. In addition, the ACLs, as proposed, would not change the gear types, areas fished, effort, or participation of the fishery during the 2017 fishing year. A post-season review of the catch data would be required to determine whether any fishery exceeded its ACL by comparing the ACL to the most recent three-year average catch for which data is available. If an ACL is exceeded, the Council and NMFS would take action in future fishing years to correct the operational issue that caused the ACL overage. NMFS and the Council would evaluate the environmental, social, and economic impacts of future actions, such as changes to future ACLs or AMs, after the required data are available. Specifically, if NMFS and the Council determine that the three-year average catch for a fishery exceeds the specified ACL, NMFS would reduce the ACL for that fishery by the amount of the overage in the subsequent year.
The proposed action does not duplicate, overlap, or conflict with other Federal rules and is not expected to have significant impact on small entities (as discussed above), organizations, or government jurisdictions. The proposed action also will not place a substantial number of small entities, or any segment of small entities, at a significant competitive disadvantage to large entities. For the reasons above, NMFS does not expect the proposed action to have a significant economic impact on a substantial number of small entities. As such, an initial regulatory flexibility analysis is not required and none has been prepared.
This proposed action is exempt from review under E.O. 12866.
16 U.S.C. 1801
Revision to and extension of approval of an information collection; comment request.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Animal and Plant Health Inspection Service's intention to request a revision to and extension of approval of an information collection associated with the regulations for the importation of fresh tomatoes from France, Morocco, Western Sahara, Chile, and Spain.
We will consider all comments that we receive on or before December 29, 2017.
You may submit comments by either of the following methods:
•
•
Supporting documents and any comments we receive on this docket may be viewed at
For information on the regulations related to the importation of fresh tomatoes from France, Morocco, Western Sahara, Chile, and Spain, contact Dr. Robert Baca, Assistant Director for Compliance and Environmental Coordination, Plant Health Programs, Plant Protection and Quarantine, APHIS, 4700 River Road, Unit 150, Riverdale, MD 20737-1236; (301) 851-2292. For copies of more detailed information on the information collection, contact Ms. Kimberly Hardy, APHIS' Information Collection Coordinator, at (301) 851-2483.
In accordance with § 319.56-28, fresh tomatoes from France, Morocco, Western Sahara, Chile, and Spain may be imported into the United States under certain conditions to prevent the introduction of plant pests into the United States. These conditions require the use of certain information collection activities including greenhouse, production site, and treatment facility registration; a trust fund agreement; documented quality control program; box labeling; application for import permit; appeal of denial or revocation of a permit; notice of arrival; emergency action notification; and recordkeeping. Also, each consignment of tomatoes must be accompanied by a phytosanitary certificate issued by the national plant protection organization (NPPO) or similar agency of the country of origin with an additional declaration stating that the provisions of § 319.56-28 for that country have been met.
We are asking the Office of Management and Budget (OMB) to approve our use of these information collection activities, as described, for an additional 3 years.
The purpose of this notice is to solicit comments from the public (as well as affected agencies) concerning our information collection. These comments will help us:
(1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of our estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, through use, as appropriate, of automated, electronic, mechanical, and other collection technologies;
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
Animal and Plant Health Inspection Service, USDA.
Revision to and extension of approval of an information collection; comment request.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Animal and Plant Health Inspection Service's intention to request revision to and extension of approval of an information collection associated with the category of plants for planting that are not authorized for importation pending pest risk analysis.
We will consider all comments that we receive on or before December 29, 2017.
You may submit comments by either of the following methods:
•
•
Supporting documents and any comments we receive on this docket may be viewed at
For information on the importation of plants for planting not authorized for importation pending pest risk analysis, contact Dr. Indira Singh, Botanist, Plants for Planting Policy, IRM, PPQ, APHIS, 4700 River Road, Unit 133, Riverdale, MD 20737-1236; (301) 851-2020. For copies of more detailed information on the information collection, contact Ms. Kimberly Hardy, APHIS' Information Collection Coordinator, at (301) 851-2483.
The regulations contained in “Subpart-Plants for Planting” (7 CFR 319.37 through 319.37-14) prohibit or restrict, among other things, the importation of living plants, plant parts, and seeds for propagation. These regulations are intended to ensure that imported plants for planting do not serve as a host for plant pests, such as insects or pathogens, which can cause damage to U.S. agricultural and environmental resources.
In accordance with § 319.37-2a, the importation of certain taxa of plants for planting poses a risk of introducing quarantine pests into the United States. Therefore, the importation of these taxa is not authorized pending the completion of a pest risk analysis, except as provided in the regulations. Requests to remove a taxa from the category of plants for planting whose importation is not authorized pending the completion of a pest risk analysis must be made in accordance with § 319.5. These requests contains information collection activities that include information about the requesting party, the commodity proposed for importation into the United States, shipping information, a description of the pests and diseases associated with the commodity, current practices for risk mitigation or management, and any additional information listed in § 319.5 that may be necessary for APHIS to complete a pest risk analysis.
We are asking the Office of Management and Budget (OMB) to approve our use of these information collection activities, as described, for an additional 3 years.
The purpose of this notice is to solicit comments from the public (as well as affected agencies) concerning our information collection. These comments will help us:
(1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of our estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, through use, as appropriate, of automated, electronic, mechanical, and other collection technologies;
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
Commission on Civil Rights.
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that a meeting of the Virginia Advisory Committee to the Commission will convene by conference call at 12:00 p.m. (EST) on: Thursday, November 9, 2017. The purpose of the meeting is to receive updates from committee workgroups and continue project planning on the topic of hate crimes.
Thursday, November 9, 2017, at 12:00 p.m. EST.
Public call-in information: Conference call-in number: 1-800-474-8920 and conference call 8310490.
Ivy Davis at
Interested members of the public may listen to the discussion by calling the following toll-free conference call-in number: 1-800-474-8920 and conference call 8310490. Please be advised that before placing them into the conference call, the conference call operator will ask callers to provide their names, their organizational affiliations (if any), and email addresses (so that callers may be notified of future meetings). Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free conference call-in number.
Persons with hearing impairments may also follow the discussion by first calling the Federal Relay Service at 1-800-977-8339 and providing the operator with the toll-free conference call-in number: 1-800-474-8920 and conference call 8310490.
Members of the public are invited to make statements during the open comment period of the meeting or submit written comments. The comments must be received in the regional office approximately 30 days after each scheduled meeting. Written comments may be mailed to the Eastern Regional Office, U.S. Commission on Civil Rights, 1331 Pennsylvania Avenue, Suite 1150, Washington, DC 20425, faxed to (202) 376-7548, or emailed to Evelyn Bohor at
Records and documents discussed during the meeting will be available for public viewing as they become available at
Commission on Civil Rights.
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that a meeting of the West Virginia Advisory Committee to the Commission will convene by conference call at 12:00 p.m. (EST) on: Friday, November 10, 2017. The purpose of the meeting is to receive updates from committee workgroups and continue project planning on the topic of collateral consequences.
Friday, November 10, 2017, at 12:00 p.m. EST.
Public call-in information: Conference call-in number: 1-877-604-9665 and conference call 5788080.
Ivy Davis at
Interested members of the public may listen to the discussion by calling the following toll-free conference call-in number: 1-877-604-9665 and conference call 5788080. Please be advised that before placing them into the conference call, the conference call operator will ask callers to provide their names, their organizational affiliations (if any), and email addresses (so that callers may be notified of future meetings). Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free conference call-in number.
Persons with hearing impairments may also follow the discussion by first calling the Federal Relay Service at 1-800-977-8339 and providing the operator with the toll-free conference call-in number: 1-877-604-9665 and conference call 5788080.
Members of the public are invited to make statements during the open comment period of the meeting or submit written comments. The comments must be received in the regional office approximately 30 days after each scheduled meeting. Written comments may be mailed to the Eastern Regional Office, U.S. Commission on Civil Rights, 1331 Pennsylvania Avenue, Suite 1150, Washington, DC 20425, faxed to (202) 376-7548, or emailed to Evelyn Bohor at
Records and documents discussed during the meeting will be available for public viewing as they become available at
U.S. Commission on Civil Rights.
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act that the Alabama Advisory Committee (Committee) will hold a meeting on Tuesday, November 7, 2017, at 11:00 a.m. (Central) for the purpose of a discussion of Voting in Alabama as a topic of study for the Committee.
The meeting will be held on Tuesday, November 7, 2017, at 11:00 a.m. (Central).
David Barreras, DFO, at
Members of the public can listen to the discussion. This meeting is available to the public through the following toll-free call-in number: 888-220-8670, conference ID: 5681163. Any interested member of the public may call this number and listen to the meeting. An open comment period will be provided to allow members of the public to make a statement as time allows. The conference call operator will ask callers to identify themselves, the organization they are affiliated with (if any), and an email address prior to placing callers into the conference room. Callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. The Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1-800-977-8339 and providing the Service with the conference call number and conference ID number.
Members of the public are also entitled to submit written comments; the comments must be received in the regional office within 30 days following the meeting. Written comments may be mailed to the Midwestern Regional Office, U.S. Commission on Civil Rights, 55 W. Monroe St., Suite 410, Chicago, IL 60615. They may also be faxed to the Commission at (312) 353-8324, or emailed to David Barreras at
Records generated from this meeting may be inspected and reproduced at the Midwestern Regional Office, as they become available, both before and after the meeting. Records of the meeting will be available via
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
The Department of Commerce has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Enforcement and Compliance, International Trade Administration, Department of Commerce.
As a result of the determinations by the Department of Commerce (Department) and the International Trade Commission (ITC) that revocation of the antidumping duty (AD) order on certain paper clips (paper clips) from the People's Republic of China (PRC) would likely lead to a continuation or recurrence of dumping and material injury to an industry in the United States, the Department is publishing a notice of continuation of the AD order.
Applicable October 30, 2017.
Maliha Khan or Thomas Martin, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: 202-482-0895 or 202-482-3936, respectively.
On November 25, 1994, the Department published in the
The products covered by the
Specifically excluded from the scope of the
The products subject to the order are currently classifiable under subheading 8305.90.3010 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the order is dispositive.
As a result of the determinations by the Department and the ITC that revocation of the
The effective date of the continuation of the
This five-year sunset review and this notice are in accordance with section 751(c) of the Act and published pursuant to section 777(i)(1) of the Act and 19 CFR 351.218(f)(4).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of telephonic meeting.
The North Pacific Fishery Management Council (Council) Social Science Plan Team will meet telephonically on November 14, 2017.
The meeting will be held on Tuesday, November 14, 2017, from 10 a.m. to 3 p.m. Alaska Time.
Teleconference only: (888) 456-5038; Participant passcode: 8480290.
Sam Cunningham, Council staff; telephone: (907) 271-2809.
The Social Science Planning Team (SSPT) will hold an organizational teleconference in advance of its inaugural annual meeting that will occur in Spring 2018. SSPT will elect an executive officer, establish contributing member roles and responsibilities, and discuss processes for public participation and reporting to the North Pacific Fishery Management Council and its advisory bodies. The meeting agenda also includes time to scope discussion topics for the Spring 2018 annual meeting; those topics should further the SSPT's objective of identifying information gaps or underutilized social science data collections, and strategizing to improve information resources over the medium- to long-term.
The Agenda is subject to change, and the latest version will be posted at
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Shannon Gleason at (907) 271-2809 at least 7 working days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; receipt of application.
Notice is hereby given that Gregory Bossart, V.M.D., Ph.D., Georgia Aquarium, 225 Baker Street Northwest, Atlanta, GA 30313, has applied in due form for a permit to conduct research on bottlenose dolphins (
Written, telefaxed, or email comments must be received on or before November 29, 2017.
The application and related documents are available for review by selecting “Records Open for Public Comment” from the “Features” box on the Applications and Permits for Protected Species (APPS) home page,
These documents are also available upon written request or by appointment in the Permits and Conservation Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Room 13705, Silver Spring, MD 20910; phone (301) 427-8401; fax (301) 713-0376.
Written comments on this application should be submitted to the Chief, Permits and Conservation Division, at the address listed above. Comments may also be submitted by facsimile to (301) 713-0376, or by email to
Those individuals requesting a public hearing should submit a written request to the Chief, Permits and Conservation Division at the address listed above. The request should set forth the specific reasons why a hearing on this application would be appropriate.
Shasta McClenahan or Amy Hapeman, (301) 427-8401.
The subject permit is requested under the authority of the Marine Mammal Protection Act of 1972, as amended (MMPA; 16 U.S.C. 1361
The applicant requests a five-year permit to assess individual, population, and comparative perspectives of bottlenose dolphin health in the Indian River lagoon and Mantanzas River, Florida. Up to 40 adult or juvenile bottlenose dolphins per year would be captured, sampled, and released for health assessments. Procedures for captured dolphins would include morphometrics, biological sampling (skin and blubber biopsy, blood, mucus membrane swabs, fecal, and urine), ultrasound, tooth extraction, and marking (freeze-brand or roto tag). Dolphins would only be sampled once per year. An additional 400 bottlenose dolphins may be harassed each year during vessel surveys for photography, videography, counts, and behavioral observations. Two unintentional mortalities may occur due to capture over the life of the permit.
In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Concurrent with the publication of this notice in the
United States Patent and Trademark Office, Commerce.
Notice.
The United States Patent and Trademark Office (USPTO) conducted two separate Collaborative Search Pilot Programs (CSPs) during the period of 2015 through 2017. One of these programs was conducted with the Japan Patent Office (JPO) and the other with the Korean Intellectual Patent Office (KIPO). Improvements in patent quality and examination pendency were identified as positive outcomes from these two original CSPs. Building on the success of these two programs, the USPTO is participating in a new, expanded CSP (Expanded CSP) in which applicants may request that multiple partnering Intellectual Property (IP) offices exchange search results for their counterpart applications prior to formulating and issuing their office actions. In Expanded CSP, each designated partner IP office will independently conduct a prior art search for its corresponding counterpart application. The search results will then be exchanged between the designated partner IP office(s) and the USPTO before any IP office issues an office action. By this exchange of search results, the examiners in all designated partner IP offices will have a more comprehensive set of prior art references to consider when making initial patentability determinations. In addition to changing the number of IP offices that may be providing search results to the USPTO, Expanded CSP provides applicants with more flexibility by not requiring that applicants follow the procedures of the First Action Interview Pilot Program (FAI). Expanded CSP will allow the USPTO to study the impact on examination processes resulting from exchanges of search results between the USPTO and multiple partner IP offices prior to formulating and issuing office actions.
Under Expanded CSP, the USPTO and partner IP offices will each accept requests to participate from November 1, 2017, through November 1, 2020, and each IP office will not grant more than 400 requests per year per partner office. The offices may extend the pilot program (with or without modification), if necessary. Each office reserves the right to withdraw from the program at any time.
Inquiries regarding the handling of any specific application participating in the pilot may be directed to Daniel Hunter, Director of International Work Sharing, Planning, and Implementation, Office of International Patent Cooperation, by telephone at (571) 272-8050. Any inquiries regarding this pilot program can be emailed to
The USPTO will cooperate in an Expanded CSP to determine whether exchanging the results from searches independently performed by multiple IP offices, which occur substantially simultaneously, also increases the efficiency and quality of patent examination. This Expanded CSP is designed so that this exchange of search results would occur prior to the IP offices making initial patentability determinations. The current partner IP offices for the Expanded CSP are JPO and KIPO. The USPTO will announce future partner IP offices when they are designated.
Currently, applicants in the USPTO having U.S. applications with claims of foreign priority may have search results and prior art cited to them by the foreign IP office during pendency of their U.S. applications. Often, applicants submit the prior art after examination on the merits is already underway in their U.S. application. Upon evaluation of the search results and cited prior art, the U.S. examiner may determine that the prior art cited by the foreign office is relevant to patentability and merits being used in further examination before making a final determination on patentability of the pending claims. This delay caused by further examination results in additional cost to applicants and the USPTO that could have been avoided if the U.S. examiner was in possession of the foreign office's search results before commencing examination of the U.S. application. Furthermore, in light of the USPTO's various expedited examination programs, the possibility exists that a U.S. application may reach final disposition before the applicant is in receipt of a foreign office's search results. The exchange of search results between IP offices before an initial determination on patentability should increase efficiency and promote patent examination quality.
In order to study the benefits of the exchange of search results between multiple IP offices, current USPTO examination practice will be modified for applications in Expanded CSP so that a search will be conducted and search results generated, without issuance of an Office action. The U.S. applications in Expanded CSP will also be “made special” pursuant to USPTO procedures to ensure that they are contemporaneously searched with their corresponding counterpart applications.
In the original version of the CSP, the USPTO required the use of the First Action Interview Pilot Program (FAI), which bifurcated the prior art search from issuance of an Office action. The USPTO has determined that it is unnecessary to require applicants participating in Expanded CSP to use FAI procedures. Instead, applications in Expanded CSP will be accorded special status prior to first action on the merits (FAOM) and prior art references provided through the exchange of search results will be included in the FAOM.
Expanded CSP in the U.S. requires a petition to make special for the participating application and authorization to exchange information with the designated partner IP office(s) prior to an initial determination of patentability. As this work sharing program is operating under a common framework across all agreements between the USPTO and all partner offices, it is permissible to participate in Expanded CSP with multiple partner offices simultaneously, and the program is open to adding additional partner IP offices once appropriate agreements are in place.
In addition to a petition being filed with the USPTO, a request must also be filed in the corresponding counterpart applications in each applicant-designated partner IP office, in accordance with the requirements of that office. (Partner IP offices may require a petition or a request; therefore, for purposes of this notice, usage of the term `request' refers to the initial submission that a partner IP office requires to initiate participation in Expanded CSP.) As each partner IP office's conditions for entry may differ, applicants should review the requirements of the relevant partner IP offices to ensure compliance.
No fee for a petition to make special under 37 CFR 1.102 is required for participation in Expanded CSP.
New patent applications are normally taken up for examination in the order of their U.S. filing date. Applications accepted into Expanded CSP will receive expedited processing by being granted special status and taken out of turn until issuance of an FAOM, but will not maintain special status thereafter. Designated partner IP offices and the USPTO will be sharing search results before issuance of an initial determination on patentability. Participants in Expanded CSP should review the references cited in each respective office's initial determination on patentability. If the references cited by any partner IP office are not already of record in the USPTO application and the applicant wants to ensure that the examiner considers the references, then the applicant should file an Information Disclosure Statement (IDS) that includes a copy of the communication along with copies of any missing or newly cited references in accordance with 37 CFR 1.97, 37 CFR 1.98, and Manual of Patent Examining Procedure (MPEP) sec. 609.04(a)-(b).
Each office may reevaluate the workload and resources needed to administer Expanded CSP at any time. The USPTO will provide notice of any substantive changes to the program (including early termination of the program) at least 30 days prior to implementation of any changes.
(1) The application must be a non-reissue, non-provisional utility application filed under 35 U.S.C. 111(a); or an international application that has entered the national stage in compliance with 35 U.S.C. 371, with an effective filing date of no earlier than March 16, 2013. For corresponding counterpart applications filed in accordance with the agreement between the USPTO and KIPO only, plant applications filed under 35 U.S.C. 161 are also eligible. The U.S. application and all corresponding counterpart applications must have a common earliest priority date that is no earlier than March 16, 2013. The disclosures of the U.S. application and all counterpart applications must support the claimed subject matter as of a common date. The U.S. application must be complete and eligible to receive a filing receipt at the time the petition is filed.
(2) A completed petition form PTO/SB/437 must be filed in the application via EFS-Web. Form PTO/SB/437 is available at:
The petition (Form PTO/SB/437) includes:
(A) An express written consent under 35 U.S.C. 122(c) for the USPTO to accept and consider prior art references and comments from each designated partner IP office during the examination of the U.S. application;
(B) Written authorization for the USPTO to provide to the designated partner IP office access to the participating U.S. application's bibliographic data and search results in accordance with 35 U.S.C. 122(a) and 37 CFR 1.14(c); and
(C) A statement that the applicant agrees not to file a request for a refund of the search fee and any excess claim fees paid in the application after the mailing of the decision on the petition to join Expanded CSP. Note: Any petition for express abandonment under 37 CFR 1.138(d) to obtain a refund of the search fee and excess claim fee filed after the mailing of a decision on the petition will be granted, but the fees will not be refunded.
(3) Petitions must be filed before examination has commenced. Examination may commence at any time after an application has been assigned to an examiner. Petitions should preferably be filed before the application has been assigned to an examiner to ensure that the USPTO does not examine the application before recognizing the petition. Therefore, applicants should check the status of the application using the Patent Application Information and Retrieval (PAIR) system to see if the application has been assigned to an examiner. If the application has been assigned to an examiner, the applicant should contact the examiner to confirm that the application has not been taken up for examination and inform the examiner that a petition to participate in Expanded CSP is being filed. Following this guidance will minimize delays caused by remedial corrective action when a petition is not recognized before examination commences. Further, examination must not have commenced in the identified corresponding counterpart application(s) before each designated partner IP office when filing petitions requesting participation in the U.S. application.
(4) The petition filed in the USPTO and any request filed in a designated partner IP office must be filed within 15 days of each other. If the petition and request(s) are not filed within 15 days of each other, the applicant runs the risk of one of the pending applications being acted upon by an examiner before entry into the pilot program, which will result in the applications being denied entry into Expanded CSP. The request for
(5) The petition submission must include a claims correspondence table, which at a minimum must establish “substantial corresponding scope” between all independent claims present in the U.S. application and the corresponding counterpart application(s) filed in the designated partner IP office(s). The claims correspondence table must individually list the claims of the instant U.S. application and correlate them to the claims of the corresponding counterpart application having a substantially corresponding scope. Claims are considered to have a “substantially corresponding scope” where, after accounting for differences due to claim format requirements, the scope of the corresponding claims in the corresponding counterpart application(s) would either anticipate or render obvious the subject matter recited under U.S. law. Additionally, claims in the U.S. application that introduce a new/different category of claims than those presented in the corresponding counterpart application(s) are not considered to substantially correspond. For example, where the corresponding counterpart application(s) contain only claims relating to a process of manufacturing a product, any product claims in the U.S. application are not considered to substantially correspond, even if the product claims are dependent on process claims that do substantially correspond to claims in the corresponding counterpart application(s). Applicants may file a preliminary amendment in compliance with 37 CFR 1.121 to amend the claims of the U.S. application to satisfy this requirement when attempting to make the U.S. application eligible for the program. A translated copy of the claims in English for each counterpart application is required if the application in the designated partner IP office(s) is not publicly available in English. A machine translation is sufficient. Non-corresponding claims need not be listed.
(6) The U.S. application must contain 3 or fewer independent claims and 20 or fewer total claims. The U.S. application must not contain any multiple dependent claims; the corresponding counterpart application may contain multiple dependent claims in accordance with national practice of the partner IP office where it is filed. For a U.S. application that contains more than 3 independent claims or 20 total claims, or any multiple dependent claims, applicants may file a preliminary amendment in compliance with 37 CFR 1.121 to cancel the excess claims and/or the multiple dependent claims to make the application eligible for the program.
If examination commences in either the U.S. or a given designated corresponding counterpart application before either the petition or request is filed, then that combination of U.S. application and designated corresponding counterpart application cannot participate in Expanded CSP. Applicants are advised that, even if they timely file a request with a designated partner office, if the USPTO is not informed by the designated partner office of the filing of the request in the corresponding counterpart application within 20 days of a petition filing with the USPTO, then the USPTO may initially dismiss the petition. In such situation, the applicant may request reconsideration, as discussed in Item B, below.
If the applicant fails to correct the noted deficiencies within the time period set forth, the USPTO may dismiss the petition and notify the designated partner IP office(s). The U.S. application will then be taken up for examination in accordance with standard examination procedures, unless designated special in accordance with another established procedure (
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
This is a supplemental notice in the above-referenced proceeding of 54KR 8ME LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is November 13, 2017.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
This is a supplemental notice in the above-referenced proceeding of AL Solar A, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is November 13, 2017.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Federal Deposit Insurance Corporation (FDIC).
Notice and request for comment.
The FDIC, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on the renewal of the existing information collection, as required by the Paperwork Reduction Act of 1995. On August 18, 2017, the FDIC requested comment for 60 days on a proposal to renew the information collection described below. No comments were received. The FDIC hereby gives notice of its plan to submit to OMB a request to approve the renewal of this collection, and again invites comment on this renewal.
Comments must be submitted on or before November 29, 2017.
Interested parties are invited to submit written comments to the FDIC by any of the following methods:
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Jennifer Jones, at the FDIC address above.
On August 18, 2017, (82 FR 39430), the FDIC requested comment for 60 days on a proposal to renew the information collection described below. No comments were received. The FDIC hereby gives notice of its plan to submit to OMB a request to approve the renewal of this collection, and again invites comment on this renewal.
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Participation in this information collection will be voluntary and conducted in-person, by phone, or using other methods, such as virtual technology. The FDIC plans to retain an experienced contractor(s) to recommend the most appropriate collection method based on the objectives of each qualitative research effort. The FDIC will consult with OMB regarding each specific information collection during the approval period.
Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the FDIC's functions, including whether the information has practical utility; (b) the accuracy of the estimates of the burden of the information collection, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. All comments will become a matter of public record.
Federal Deposit Insurance Corporation.
Update Listing of Financial Institutions in Liquidation.
Notice is hereby given that the Federal Deposit Insurance Corporation (Corporation) has been appointed the sole receiver for the following financial institutions effective as of the Date Closed as indicated in the listing. This list (as updated from time to time in the
Appraisal Subcommittee of the Federal Financial Institutions Examination Council.
Notice of Meeting.
If you plan to attend the ASC Meeting in person, we ask that you send an email to
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than November 22, 2017.
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The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than November 17, 2017.
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The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than November 7, 2017.
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In addition, Patricia Schardt, Deshler, Nebraska, has applied individually and as trustee of the Ronald P. Schardt Marital Trust and Ronald P. Schardt GS Exempt Marital Trust, to retain voting shares of Exchange Company, and for approval to join as a member of the Schardt Family Group acting in concert, which controls Exchange Company.
Employee Thrift Advisory Council, November 8, 2017, 10:00 a.m. (In-Person), 77 K Street NE., Washington, DC 20002.
Kimberly Weaver, Director, Office of External Affairs, (202) 942-1640.
Federal Trade Commission.
Proposed Consent Agreement.
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before November 20, 2017.
Interested parties may file a comment online or on paper, by following the instructions in the Request for Comment part of the
Nikhil Singhvi (202-326-3480) and Stephanie Cox (202-326-2908), Bureau of Consumer Protection, 600 Pennsylvania Avenue NW., Washington, DC 20580.
Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for October 19, 2017), on the World Wide Web, at
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before November 20, 2017. Write “In the Matter of Victory Media, Inc., File No. 1623210” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at
Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at
If you prefer to file your comment on paper, write “In the Matter of Victory Media, Inc., LLC, File No. 1623210” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street, SW., 5th Floor, Suite 5610 (Annex D), Washington, DC. 20024. If possible, submit your paper comment to the Commission by courier or overnight service.
Because your comment will be placed on the publicly accessible FTC Web site at
Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record.
Visit the FTC Web site at
The Federal Trade Commission (“FTC” or “Commission”) has accepted, subject to final approval, an agreement containing a consent order from Victory Media, Inc. The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the FTC will again review the agreement and the comments received, and will decide whether it should withdraw from the agreement and take appropriate action or make final agreement's proposed order.
The respondent publishes print and online magazines and guides for servicemembers transitioning from military service to the civilian workforce. The respondent does business under the names G.I. Jobs and Military Friendly. Its Web sites include
The respondent operates a search tool, School Matchmaker, at
Additionally, the FTC complaint alleges that the respondent, in certain of its articles, emails, and social media posts, misrepresented that its endorsements were independent and not paid advertising, and failed to adequately disclose that the content recommended schools that paid the respondent specifically to be promoted therein. The proposed complaint alleges that those misrepresentations and undisclosed paid recommendations constitute deceptive acts or practices under Section 5 of the FTC Act.
The proposed order is designed to prevent the respondent from engaging in similar deceptive practices in the future.
Part I prohibits the respondent from making any misrepresentations regarding the scope of any search tool, including whether the tool only searches “military friendly” schools. Part I further prohibits the respondent from making any misrepresentations about material connections between it and any schools, and from making any misrepresentations that paid commercial advertising is independent content.
Part II requires the respondent, when endorsing schools (or preparing third-party endorsements of schools), to clearly and conspicuously disclose, in close proximity to the endorsement, any payments or other material connections between the respondent or the other endorser and the school. This disclosure requirement applies where consumers are likely to believe that such endorsements reflect the beliefs of the respondent or other endorser (and not the schools themselves).
Parts III through VII of the proposed order are reporting and compliance provisions.
Part III is an order distribution provision. Part IV requires the respondent to submit a compliance report one year after the issuance of the order, and to notify the Commission of corporate changes that may affect compliance obligations. Part V requires the respondent to create, for 10 years, accounting, personnel, complaint, and advertising records, and to maintain each of those records for 5 years. Part VI requires the respondent to submit additional compliance reports within 10 business days of a written request by the Commission, and to permit voluntary interviews with persons affiliated with the respondent. Part VII “sunsets” the order after twenty years, with certain exceptions.
The purpose of this analysis is to aid public comment on the proposed order. It is not intended to constitute an official interpretation of the complaint or proposed order, or to modify in any way the proposed order's terms.
By direction of the Commission.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice with comment period.
The Centers for Disease Control and Prevention (CDC), as part of its continuing effort to reduce public burden and maximize the utility of government information, invites the general public and other Federal agencies the opportunity to comment on a proposed and/or continuing information collection, as required by the Paperwork Reduction Act of 1995. This notice invites comment on a proposed information collection project titled
CDC must receive written comments on or before December 29, 2017.
You may submit comments, identified by Docket No. CDC-2018-0094 by any of the following methods:
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To request more information on the proposed project or to obtain a copy of the information collection plan and instruments, contact Leroy A. Richardson, Information Collection Review Office, Centers for Disease Control and Prevention, 1600 Clifton Road NE., MS-D74, Atlanta, Georgia 30329; phone: 404-639-7570; Email:
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. In addition, the PRA also requires Federal agencies to provide a 60-day notice in the
The OMB is particularly interested in comments that will help:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
5. Assess information collection costs.
Information Collection for Evaluation of Education, Communication, and Training Activities for Mobile Populations (OMB Control Number 0920-0932, Expires 7/31/2018)—Extension—National Center for Emerging and Zoonotic Infectious
The CDC's Division of Global Migration and Quarantine (DGMQ) seeks to request a three-year extension of a currently approved generic information collection plan to conduct evaluation research. Information gathered from this plan's associated data collections will help CDC plan and implement health communication, education, and training activities to improve health and prevent the spread of disease. These activities include communicating, educating, and training with international travelers and other mobile populations, training healthcare providers, and educating public health departments, federal partners, and other stakeholders.
CDC proposes to change the current title of this generic plan from “Information Collection for Evaluation of Education, Communication, and Training Activities for the Division of Global Migration and Quarantine” to “Information Collection for Evaluation of Education, Communication, and Training Activities for Mobile Populations.”
In the past three years, OMB approved two individual information collections under this generic plan, where both resulted in collaborations between multiple divisions within the NCEZID. DGMQ proposes a less exclusive project title because multiple divisions across NCEZID frequently collaborate on various activities. DGMQ does not propose any other changes for this extension request.
DGMQ has aligned the proposed information collections with DGMQ's mission to reduce morbidity and mortality among immigrants, refugees, travelers, expatriates, and other globally mobile populations, and to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the United States. This mission is supported by delegated legal authorities outlined in the Public Health Service (PHS) Act (42 U.S.C. 264) and in regulations that are codified in 42 Code of Federal Regulations (CFR) parts 70 and 71, and 34.
Approval of this extension request will enable DGMQ to continue collecting information in an expedited manner. To help improve and inform activities during both routine and emergency public health events, DGMQ seeks to collect the following information types: Knowledge, attitudes, and behaviors of key audiences (such as refugees, immigrants, migrants, international travelers, travel industry partners, healthcare providers, non-profit agencies, customs brokers and forwarders, schools, state and local health departments). This generic information collection plan will help DGMQ continue to refine efforts prove valuable for communication activities that must occur quickly in response to public health emergencies.
DGMQ staff will use a variety of data collection methods for this proposed project: Interviews, focus groups, surveys, and pre/post-tests. Depending on the research questions and audiences involved, data may be gathered in-person, by telephone, online, or using some combination of these formats. CDC may collect data in quantitative and/or qualitative forms. CDC will assess numerous audience variables under the auspices of this generic information collection plan. These include, but are not limited to, knowledge, attitudes, beliefs, behavioral intentions, practices, behaviors, skills, self-efficacy, and information needs and sources. Insights gained from evaluation research will assist in the development, refinement, implementation, and demonstration of outcomes and impact of communication, education, and training activities.
DGMQ estimates that 17,500 respondents and 7,982 hours of burden will be involved in evaluation research activities each year. The collected information will not impose a cost burden on the respondents beyond that associated with their time to provide the required data.
To further assist states collect child support, the federal Office of Child Support Enforcement (OCSE) worked with child support agencies and financial institutions to develop the Federally Assisted State Transmitted (
The MSFIDM/
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of the guidance entitled “Manufacturers Sharing Patient-Specific Information from Medical Devices with Patients Upon Request.” FDA developed this guidance to clarify our position regarding manufacturers appropriately and responsibly sharing “patient-specific information”—information unique to an individual patient or unique to that patient's treatment or diagnosis that has been recorded, stored, processed, retrieved, and/or derived from a legally marketed medical device—with that patient at that patient's request. This guidance provides information and recommendations to industry, health care providers, and FDA staff about the mechanisms and considerations for device manufacturers sharing such information with individual patients when they request it.
The announcement of the guidance is published in the
You may submit either electronic or written comments on Agency guidances at any time as follows:
Submit electronic comments in the following way:
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• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
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• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
An electronic copy of the guidance document is available for download from the internet. See the
Esther Bleicher, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5424, Silver Spring, MD 20993-0002, 301-796-8547.
Increasingly, patients seek to play an active role in their own health care. FDA believes that sharing “patient-specific information” with patients upon their request may assist them in being more engaged with their health care providers in making sound medical decisions. For purposes of this guidance, “patient-specific information” is information unique to an individual
FDA developed this guidance to convey FDA's position regarding manufacturers appropriately and responsibly sharing patient-specific information with that patient at that patient's request. In general, manufacturers may do so without undergoing additional premarket review in advance. FDA generally would not consider patient-specific information to be “labeling,” as defined in section 201(m) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 321(m)). FDA is aware that when manufacturers share patient-specific information with patients, manufacturers also may provide them with supplemental information or other materials (
In the
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the current thinking of FDA on “Manufacturers Sharing Patient-Specific Information from Medical Devices with Patients Upon Request.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. This guidance is not subject to Executive Order 12866.
Persons interested in obtaining a copy of the guidance may do so by downloading an electronic copy from the internet. A search capability for all Center for Devices and Radiological Health guidance documents is available at
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of the draft guidance entitled “Acceptance Review for De Novo Classification Requests.” The purpose of this draft guidance is to explain the procedures and criteria FDA intends to use in assessing whether a request for an evaluation of automatic class III designation (De Novo classification request or De Novo request) meets a minimum threshold of acceptability and should be accepted for substantive review. This draft guidance discusses De Novo acceptance review policies and procedures, “Refuse to Accept” principles, and the elements of the De Novo Acceptance Checklist and the Recommended Content Checklist and is being issued to be responsive to an explicit deliverable identified in the Medical Device User Fee Amendments of 2017 (MDUFA IV). This draft guidance is not final nor is it in effect at this time.
Submit either electronic or written comments on the draft guidance by December 29, 2017 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
•
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
An electronic copy of the guidance document is available for download from the internet. See the
Sergio de del Castillo, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 1538, Silver Spring, MD 20993-0002, 301-796-6419; or Stephen Ripley, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993-0002, 240-402-7911.
The automatic class III designation for devices of a new type occurs by operation of law and without any action by FDA, regardless of the level of risk posed by the device. Any device that is of a new type that was not in commercial distribution before May 28, 1976, is automatically classified as, and remains within, class III and requires premarket approval unless and until FDA takes an action to classify or reclassify the device section 513(f)(1) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 360c(f)(1)). We refer to these devices as “postamendments devices” because they were not in commercial distribution prior to the date of enactment of the Medical Device Amendments of 1976.
FDA may classify a device through the De Novo classification process, which is the pathway authorized under section 513(f)(2) of the FD&C Act. A person may submit a De Novo request after submitting a premarket notification under section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and receiving a not substantially equivalent (NSE) determination (section 513(f)(2)(A)(i) of the FD&C Act). A person may also submit a De Novo request without first submitting a premarket notification under section 510(k), if the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence (section 513(f)(2)(A)(ii) of the FD&C Act).
Upon receipt of a De Novo request, FDA is required to classify the device by written order (section 513(f)(2)(A)(iii) of the FD&C Act). The classification will be according to the criteria under section 513(a)(1) of the FD&C Act. Per section 513(f)(2)(B)(i) of the FD&C Act, the classification is the initial classification of the device for the purposes of section 513(f)(1) of the FD&C Act.
We believe De Novo classification enhances patients' access to beneficial innovation, in part by reducing regulatory burdens. When FDA classifies a device into class I or II via the De Novo classification process, the device can serve as a predicate for future devices of that type, including for 510(k)s (section 513(f)(2)(B)(i)). As a result, after a De Novo request is granted, other device sponsors do not have to submit a De Novo request or premarket application under section 515 of the FD&C Act (21 U.S.C. 360e)) in order to market a substantially equivalent device (see 21 U.S.C. 360c(i), defining “substantial equivalence”). Instead, other device sponsors can use the less-burdensome 510(k) process, when applicable, as a pathway to market their device.
FDA is issuing this draft guidance to provide clarity regarding the Agency's expectations for information to be submitted in a De Novo request and ensure predictability and consistency for sponsors. Focusing the Agency's review resources on complete De Novo requests will provide a more efficient approach to ensuring that safe and effective medical devices reach patients as quickly as possible. Moreover, with the enactment of MDUFA IV, FDA agreed to issuance of draft (and final) guidance which includes a submission checklist to facilitate a more efficient and timely review process to assist with new performance goals. Acceptance review therefore takes on additional importance in both encouraging quality applications from De Novo requesters and allowing the Agency to appropriately concentrate resources on complete applications.
FDA anticipates that the Agency and industry may need a period of time to operationalize the policies within this guidance, when finalized. Therefore, if all criteria necessary to meet a minimum threshold of acceptability for De Novo requests as outlined in this guidance, when finalized, are not included in a De Novo request received by FDA before or up to 60 days after the publication of this guidance, when finalized, CDRH staff does not generally intend to refuse to accept.
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on “Acceptance Review for De Novo Classification Requests.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if
Persons interested in obtaining a copy of the draft guidance may do so by downloading an electronic copy from the internet. A search capability for all Center for Devices and Radiological Health guidance documents is available at
Under the Paperwork Reduction Act (44 U.S.C. 3501-3502), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c) (2)(A) of the PRA (44 U.S.C. 3506 (c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
To aid in the acceptance review, the guidance recommends that requesters complete and submit with their De Novo request an Acceptance Checklist that identifies the location of supporting information for each acceptance element and a Recommended Content Checklist that identifies the location of supporting information for each recommended content element. Therefore, we request revision of OMB control number 0910-0844, “De Novo Classification Process (Evaluation of Automatic Class III Designation)” to include the Acceptance Checklist and the Recommended Content Checklist in the hourly burden estimate for De Novo requests.
We previously estimated the average burden per response for a De Novo request under 21 U.S.C. 513(f)(2)(i) to be 100 hours and under 21 U.S.C. 513(f)(2)(ii) to be 180 hours. We estimate that it will take approximately 1 hour to prepare an Acceptance Checklist and 1 hour to prepare a Recommended Content Checklist. Our estimate assumes that each De Novo request will include both checklists. Therefore, we estimate the revised average burden per response for a De Novo request under 21 U.S.C. 513(f)(2)(i) to be 102 hours and under 21 U.S.C. 513(f)(2)(ii) to be 182 hours. The revision results in a 104-hour increase in the total burden estimate. The average burden per response is based on estimates by FDA administrative and technical staff that are familiar with the requirements for submission of a De Novo request (and related materials), have consulted and advised manufacturers on submissions, and have reviewed the documentation submitted.
Approved operating and maintenance costs for a De Novo request include printing, shipping, and eCopy costs. We believe any increase of the operating and maintenance cost resulting from the addition of the Acceptance Checklist and Recommended Content Checklist to be de minimis. Therefore, we are not requesting revision of the operating and maintenance cost estimate for OMB control number 0910-0844.
Respondents to the information collection are medical device manufacturers seeking to market medical device products through submission of a De Novo classification request under section 513(f)(2) of the FD&C Act.
FDA estimates the burden of this collection of information as follows:
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of the guidance entitled “Product Labeling for Certain Ultrasonic Surgical Aspirator Devices.” FDA is providing a specific labeling recommendation in this guidance to promote the safe and effective use of ultrasonic surgical aspirator devices. The labeling recommendation is being made in light of the risk of tissue dissemination and relates to use of these devices in the removal of uterine fibroids.
The announcement of the guidance is published in the
You may submit either electronic or written comments on Agency guidances at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
An electronic copy of the guidance document is available for download from the internet. See the
Trisha Eustaquio, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 1529, Silver Spring, MD 20993-0002, 301-796-5214.
FDA is issuing this guidance to recommend the addition of a specific safety statement to the product labeling of certain ultrasonic surgical aspirator devices. This guidance applies to ultrasonic surgical aspirator devices with indications for use in laparoscopic surgery, open surgery, or gynecologic surgery, as such surgeries can include gynecologic procedures. Ultrasonic surgical aspirator devices are surgical tools intended to fragment, emulsify, and aspirate hard and soft tissue. However, the mechanism of action of ultrasonic surgical aspirator devices creates the potential for tissue dissemination. In light of this risk, FDA is providing a specific labeling recommendation in this guidance regarding use of these devices in the removal of uterine fibroids.
FDA is aware that ultrasonic surgical aspirator devices are sometimes used to treat advanced malignancy through cytoreduction (also known as debulking). When used in advanced cancers, the risk of adverse clinical effects from tissue dissemination may be small compared to the device's potential benefits. In certain clinical circumstances, however, the unintended dissemination of cancerous cells may have a significant adverse effect that outweighs any demonstrated benefits. Specifically, use of an ultrasonic surgical aspirator device during treatment for symptomatic uterine fibroids on a woman with an occult uterine sarcoma could result in dissemination of this cancer. Therefore, FDA recommends that manufacturers of ultrasonic surgical aspirator devices with indications for use in laparoscopic surgery, open surgery, or gynecologic surgery prominently include a specific contraindication in their product labeling that the device is not indicated for and should not be used for the fragmentation, emulsification, and aspiration of uterine fibroids.
In the
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the current thinking of FDA on “Product Labeling for Certain Ultrasonic Surgical Aspirator Devices.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. This guidance is not subject to Executive Order 12866.
Persons interested in obtaining a copy of the guidance may do so by downloading an electronic copy from the internet. A search capability for all Center for Devices and Radiological Health guidance documents is available at
This guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR part 807, subpart E have been approved under OMB control number 0910-0120 and the collections of information in 21 CFR part 801 have been approved under OMB control number 0910-0485.
Food and Drug Administration, HHS.
Request for information.
The Food and Drug Administration (FDA, the Agency, or we) is requesting information to assist in identifying standard development organizations (SDOs) that meet the requirements in the Federal Food, Drug, and Cosmetic Act (FD&C Act), of the 21st Century Cures Act (Cures Act), which was signed into law on December 13, 2016.
Submit either electronic or written comments on the notice by November 29, 2017.
You may submit comments and information as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before November 29, 2017. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Katherine Schumann, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, Rm. 6242, Silver Spring, MD 20993-0002, 301-796-1182 or
Antimicrobial susceptibility testing is used to determine if certain microorganisms that are isolated from a patient with an infection are likely to be killed or inhibited by a particular antimicrobial drug at the concentrations of the drug that are attainable at the site of infection. Historically, susceptibility test interpretive criteria has been contained in the Microbiology subsection of antimicrobial drug labeling, and there have been significant challenges associated with ensuring that this information is up-to-date for individual antimicrobial drug labels. For some time, FDA and other stakeholders have recognized that susceptibility test interpretive criteria standards established by nationally or internationally recognized SDOs can be useful sources of information to identify and update susceptibility test interpretive criteria.
Section 511A of the FD&C Act (21 U.S.C. 360a) was added by section 3044 of the Cures Act (Pub. L. 114-255), which was signed into law on December 13, 2016. This provision clarifies FDA's authority to identify and efficiently update susceptibility test interpretive criteria, including through the recognition by FDA of standards established by SDOs. It also clarifies that sponsors of antimicrobial susceptibility testing devices may rely upon listed susceptibility test interpretive criteria to support premarket authorization of their devices, provided they meet certain conditions, which provides for a more streamlined process for incorporating up-to-date information into such devices.
Section 511A of the FD&C Act requires FDA to establish within 1 year after the date of enactment of the Cures Act an interpretive criteria Web site containing a list of FDA-recognized susceptibility test interpretive criteria standards, as well as other susceptibility test interpretive criteria identified by FDA. The list of standards consists of new or updated susceptibility test interpretive criteria standards with respect to legally marketed antimicrobial drugs that have been: (1) Established by nationally or internationally recognized SDOs that meet the requirements under section 511A(b)(2)(A)(i) of the FD&C Act and (2) recognized, in whole or in part, by FDA, pursuant to section 511A(c) of the FD&C Act.
Section 511A(b)(2)(A)(i) of the FD&C Act requires that in order for FDA to recognize, in whole or in part, new or updated susceptibility test interpretive criteria standards established by an SDO, the SDO must: (1) Be a nationally or internationally recognized SDO that establishes and maintains procedures to address potential conflicts of interest and ensure transparent decision making; (2) hold meetings to ensure that there is an opportunity for public input by interested parties, and establishes and maintains processes to ensure that such input is considered in decision making; and (3) permit its standards to be made publicly available, through the National Library of Medicine or a similar source acceptable to the Secretary of Health and Human Services.
FDA is currently identifying SDOs that meet the requirements under section 511A(b)(2)(A)(i) of the FD&C Act and invites submission of information relevant to this task. FDA is particularly interested in publicly available information illustrating how an SDO has national or international recognition, information illustrating an SDO's established and maintained procedures on how the SDO addresses potential conflicts of interest and ensures transparent decision-making, information illustrating that an SDO holds open meetings and has established and maintained processes to ensure that public input by interested parties is considered in decision-making, and information illustrating that an SDO's standards are made publicly available through the National
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Submit either electronic or written comments on the collection of information by December 29, 2017.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before December 29, 2017. The
Submit electronic comments in the following way:
• Federal eRulemaking Portal:
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Domini Bean, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-5733,
Under the PRA (44 U.S.C. 3501-3520), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
This information collection supports FDA regulations. In the
• manufacturers; packers; distributors; applicants with approved new drug applications, abbreviated new drug applications, and biologics licensing applications (BLAs); and those that market prescription drugs for human use without an approved application must submit postmarketing safety reports to the Agency (§§ 310.305, 314.80, 314.98, and 600.80);
• manufacturers, packers, or distributors whose name appears on the label of nonprescription human drug products marketed without an approved application must report serious adverse events associated with their products (section 760 of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 379aa)); and
• applicants with approved BLAs must submit biological lot distribution reports to the Agency (§ 600.81).
Under §§ 310.305(e)(2), 314.80(g)(2), 329.100(c)(2), 600.80(h)(2), and 600.81(b)(2), those who are subject to these postmarketing safety reporting requirements may request a waiver from the electronic format requirement. While FDA currently has OMB approval for the collection of postmarketing safety reports,
FDA estimates the burden of this collection of information as follows:
In table 1 of this document, we estimate the burden associated with the submission of waiver requests for postmarketing safety reports in electronic format under §§ 310.305(e)(2), 314.80(g)(2), 329.100(c)(2), 600.80(h)(2), and 600.81(b)(2). We expect few waiver requests. We estimate that approximately one manufacturer will request a waiver annually under §§ 310.305(e)(2), 329.100(c)(2), and 600.81(b)(2), and approximately five manufacturers will request a waiver annually under §§ 314.80(g)(2) and 600.80(h)(2). We estimate that each waiver request will take approximately 1 hour to prepare and submit.
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft
Submit either electronic or written comments on the guidance December 29, 2017 to ensure that the Agency considers your comment on this draft guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Mehrban Iranshad, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Rm. 4145, Silver Spring, MD 20993, 301-796-7900,
FDA is announcing the availability of a draft guidance for industry entitled “Assessing User Fees Under the Generic Drug User Fee Amendments of 2017.” GDUFA II (Pub. L. 115-52, Title III) was signed into law by the President on August 18, 2017. GDUFA II continues FDA's and industry's goal to improve the public's access to safe and effective generic drugs and to improve upon the predictability of the review process. GDUFA II extends FDA's authority to collect user fees from fiscal year (FY) 2018 to FY 2022 and introduces a number of technical revisions that affect what fees are collected and how some fees are collected. GDUFA II authorizes fees for abbreviated new drug applications (ANDAs), drug master files (DMFs), annual facility fees, a one-time fee for original ANDAs pending with FDA on October 1, 2012 (backlog fees), and the Generic Drug Applicant Program Fee (GDUFA Program Fee).
The draft guidance announced in this notice addresses changes in user fee assessments from GDUFA I, user fees incurred by industry under GDUFA II, payment procedures, reconsideration and appeals, and other additional information to assist industry in complying with GDUFA II. FDA will issue separate guidance documents regarding GDUFA II non-user fee requirements and processes.
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance, when finalized, will represent the Agency's current thinking on “Assessing User Fees Under the Generic Drug User Fee Amendments of 2017.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. This guidance is not subject to Executive Order 12866.
This guidance contains information collection provisions that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
Persons with access to the internet may obtain the guidance at either
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of the guidance entitled “De Novo Classification Process (Evaluation of Automatic Class III Designation).” The purpose of this document is to provide guidance on the process for the submission and review of a De Novo classification request (hereafter a “De Novo request”) under the Federal Food, Drug, and Cosmetic Act (the FD&C Act), also known as the De Novo classification process. FDA is issuing this guidance to also provide updated recommendations for interactions with FDA related to the De Novo classification process, including what information to submit when seeking a path to market via the De Novo classification process. This guidance replaces “New Section 513(f)(2)—Evaluation of Automatic Class III Designation, Guidance for Industry and CDRH Staff,” dated February 19, 1998.
The announcement of the guidance is published in the
You may submit either electronic or written comments on Agency guidances at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
An electronic copy of the guidance document is available for download from the internet. See the
Sergio de del Castillo, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 1538, Silver Spring, MD 20993-0002, 301-796-6419; and Stephen Ripley, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993-0002, 301-240-402-7911.
The automatic class III designation for devices of a new type occurs by operation of law and without any action by FDA, regardless of the level of risk posed. Any device that is of a new type that was not in commercial distribution before May 28, 1976, is automatically classified as, and remains within, class III and requires premarket approval unless and until FDA takes an action to classify or reclassify the device section 513(f)(1) of the FD&C Act (21 U.S.C. 360c(f)(1)). We refer to these devices as “postamendments devices” because they were not in commercial distribution prior to the date of enactment of the Medical Device Amendments of 1976.
FDA may classify a device through the De Novo classification process, which is the pathway authorized under section 513(f)(2) of the FD&C Act (21 U.S.C. 360c(f)(2)). A person may submit a De Novo request after submitting a premarket notification under section 510(k) of the FD&C Act and receiving a not substantially equivalent (NSE) determination (section 513(f)(2)(A)(i) of the FD&C Act). A person may also submit a De Novo request without first submitting a premarket notification under section 510(k), if the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence (section 513(f)(2)(A)(ii) of the FD&C Act).
Upon receipt of a De Novo request, FDA is required to classify the device by written order (section 513(f)(2)(A)(iii) of the FD&C Act). The classification will be according to the criteria under section 513(a)(1) of the FD&C Act (21 U.S.C. 360c(a)(1)). Per section 513(f)(2)(B)(i) of the FD&C Act, the classification is the initial classification of the device for the purposes of section 513(f)(1) of the FD&C Act.
We believe De Novo classification will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens. When FDA classifies a device into class I or II via the De Novo classification process, the device can serve as a predicate for future devices of that type, including for 510(k)s (section 513(f)(2)(B)(i)). As a result, other device sponsors do not have to submit a De Novo request or PMA in order to market a substantially equivalent device (see 21 U.S.C. 360c(i), defining “substantial equivalence”). Instead, sponsors can use the less-burdensome 510(k) process, when applicable, as a pathway to market their device.
FDA is issuing this document to provide guidance on the process for the submission and review of a De Novo request under section 513(f)(2) of the FD&C Act, also known as the De Novo classification process. This guidance also provides updated recommendations for interactions with FDA related to the De Novo classification process, including what information to submit when seeking a path to market via the De Novo classification process. This guidance will provide clarity regarding the Agency's review process and expectations for information to be submitted in a De Novo request and ensures predictability and consistency for sponsors.
FDA considered comments received on the draft guidance that appeared in the
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the current thinking of FDA on the De Novo Classification Process (Evaluation of Automatic Class III Designation). It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. This guidance is not subject to Executive Order 12866.
Persons interested in obtaining a copy of the guidance may do so by downloading an electronic copy from the Internet. A search capability for all Center for Devices and Radiological Health guidance documents is available at
This guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in the guidance “De Novo Classification Process (Evaluation of Automatic Class III Designation)” have been approved under OMB control number 0910-0844. The collections of information in the guidance document “Requests for Feedback on Medical Device Submissions: The Pre-Submission Program and Meetings with Food and Drug Administration Staff” have been approved under OMB control number 0910-0756. The collections of information in 21 CFR part 807, subpart E have been approved under OMB control number 0910-0120; the collections of information in 21 CFR part 814 have been approved under OMB control number 0910-0231; and the collections of information in 21 CFR part 801 have been approved under OMB control number 0910-0485.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Submit either electronic or written comments on the collection of information by December 29, 2017.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before December 29, 2017. The
Submit electronic comments in the following way:
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• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867,
Under the PRA (44 U.S.C. 3501-3520), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
FDA is requesting approval from OMB to gather information from Alumni Commissioner's Fellowship Program (CFP) Fellows. The information from Alumni CFP Fellows will allow FDA's Office of the Commissioner (OC) to
FDA estimates the burden of this collection of information as follows:
FDA based these estimates on the number of fellows who have graduated and left the Agency over the past 5 years.
Food and Drug Administration, HHS.
Notice; reopening of the comment period.
The Food and Drug Administration (FDA or the Agency) is reopening the comment period provided in the notice entitled “Voluntary Medical Device Manufacturing and Product Quality Program; Public Workshop; Request for Comments,” published in the
FDA is reopening the comment period for the public workshop “Voluntary Medical Device Manufacturing and Product Quality Program; Public Workshop; Request for Comments” published on July 25, 2017 (82 FR 34531). Submit either electronic or written comments on this public workshop by December 14, 2017.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before December 14, 2017. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
•
Francisco Vicenty, Food and Drug Administration, Center for Devices and Radiological Health, 10903 New Hampshire Ave., Bldg. 66, Rm. 3426, Silver Spring, MD 20993, 301-796-5577, email:
In the
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Notice.
HRSA is publishing this notice of petitions received under the National Vaccine Injury Compensation Program (the program), as required by the Public Health Service (PHS) Act, as amended. While the Secretary of HHS is named as the respondent in all proceedings brought by the filing of petitions for compensation under the Program, the United States Court of Federal Claims is charged by statute with responsibility for considering and acting upon the petitions.
For information about requirements for filing petitions, and the Program in general, contact Lisa L. Reyes, Acting Clerk, United States Court of Federal Claims, 717 Madison Place NW., Washington, DC 20005, (202) 357-6400. For information on HRSA's role in the Program, contact the Director, National Vaccine Injury Compensation Program, 5600 Fishers Lane, Room 08N146B, Rockville, MD 20857; (301) 443-6593, or visit our Web site at:
The program provides a system of no-fault compensation for certain individuals who have been injured by specified childhood vaccines. Subtitle 2 of Title XXI of the PHS Act, 42 U.S.C. 300aa-10
A petition may be filed with respect to injuries, disabilities, illnesses, conditions, and deaths resulting from vaccines described in the Vaccine Injury Table (the table) set forth at 42 CFR 100.3. This table lists for each covered childhood vaccine the conditions that may lead to compensation and, for each condition, the time period for occurrence of the first symptom or manifestation of onset or of significant aggravation after vaccine administration. Compensation may also be awarded for conditions not listed in the table and for conditions that are manifested outside the time periods specified in the Table, but only if the petitioner shows that the condition was caused by one of the listed vaccines.
Section 2112(b)(2) of the PHS Act, 42 U.S.C. 300aa-12(b)(2), requires that “[w]ithin 30 days after the Secretary receives service of any petition filed under section 2111 the Secretary shall publish notice of such petition in the
Section 2112(b)(2) also provides that the special master “shall afford all interested persons an opportunity to submit relevant, written information” relating to the following:
1. The existence of evidence “that there is not a preponderance of the evidence that the illness, disability, injury, condition, or death described in the petition is due to factors unrelated to the administration of the vaccine described in the petition,” and
2. Any allegation in a petition that the petitioner either:
a. “[S]ustained, or had significantly aggravated, any illness, disability, injury, or condition not set forth in the Vaccine Injury Table but which was caused by” one of the vaccines referred to in the Table, or
b. “[S]ustained, or had significantly aggravated, any illness, disability, injury, or condition set forth in the Vaccine Injury Table the first symptom or manifestation of the onset or significant aggravation of which did not occur within the time period set forth in the Table but which was caused by a vaccine” referred to in the Table.
In accordance with Section 2112(b)(2), all interested persons may
Health Resources and Services Administration, Department of Health and Human Services (HHS).
Notice.
The Health Resources and Services Administration (HRSA) is publishing an updated monetary amount of the average cost of a health insurance policy as it relates to the National Vaccine Injury Compensation Program (VICP).
Section 100.2 of the VICP's implementing regulation (42 CFR part 100) states that the revised amount of an average cost of a health insurance policy, as determined by the Secretary, is effective upon its delivery by the Secretary to the United States Court of Federal Claims (the Court), and will be published periodically in a notice in the
In 2017, MEPS-IC, available at
Therefore, the Secretary announces that the revised average cost of a health insurance policy under the VICP is $528.76 per month. In accordance with § 100.2, the revised amount was effective upon its delivery by the Secretary to the Court. Such notice was delivered to the Court on October 24, 2017.
The Department of Health and Human Services (HHS) is hereby giving notice that the Advisory Committee on Infant Mortality (ACIM) has been rechartered. The effective date of the renewed ACIM charter is September 30, 2017.
David S. de la Cruz, Ph.D., M.P.H., CAPTAIN, United States Public Health Service, Designated Federal Officer, ACIM, Health Resources and Services Administration (HRSA), HHS, Room 18N25, 5600 Fishers Lane, Rockville, MD 20857. Phone: (301) 443-0543;
ACIM was established under provisions of 42 U.S.C. 217a, section 222 of the Public Health Service Act, as amended. The Committee is governed by provisions of Public Law 92-463, as amended (5 U.S.C. App.), which sets forth standards for the formation and use of Advisory Committees. ACIM advises the Secretary on Department activities and programs that are directed at reducing infant mortality and improving the health status of pregnant women and infants. The Committee represents a public and private partnership at the highest level to provide guidance and focus attention on the policies and resources required to address the reduction of infant mortality. The Committee also provides advice on how best to coordinate the myriad of federal, state, local, and private programs and efforts that are designed to deal with the health and social problems impacting infant mortality, including the Healthy Start program.
On September 30, 2017, the ACIM charter was renewed. Renewal of the ACIM charter authorizes the Committee to operate until September 30, 2019. A copy of the ACIM charter is available on the Committee's Web site:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the ZAT1 VS (07).
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the ZAT1 AJT (05) Exploratory Clinical Trials of Mind and Body Interventions.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
National Protection and Programs Directorate, Department of Homeland Security (DHS).
Committee Management; Notice of Federal Advisory Committee Meeting.
The President's National Security Telecommunications Advisory Committee (NSTAC) will meet via teleconference on Thursday, November 16, 2017. The meeting will be open to the public.
The NSTAC will meet on November 16, 2017 from 3:30 p.m. to 4:00 p.m. Eastern Standard Time (EST). Please note that the meeting may close early if the committee has completed its business.
The meeting will be held via conference call. For access to the conference call bridge, information on services for individuals with disabilities, or to request special assistance to participate, please email
Members of the public are invited to provide comment on the issues that will be considered by the committee as listed in the
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A public comment period will be held during the teleconference on Thursday, November 16, 2017, from 3:35 p.m. EST to 3:45 p.m. Speakers who wish to participate in the public comment period must register in advance by no later than Monday, November 13, 2017, at 5:00 p.m. EST by emailing
Helen Jackson, NSTAC Designated Federal Officer, Department of Homeland Security, (703) 705-6276 (telephone) or
Notice of this meeting is given under
Fish and Wildlife Service, Interior.
Notice of receipt of permit applications; request for comment.
We, the U.S. Fish and Wildlife Service, invite the public to comment on the following applications to conduct certain activities with endangered species. With some exceptions, the Endangered Species Act (Act) prohibits activities with endangered and threatened species unless a Federal permit allows such activity. The Act also requires that we invite public comment before issuing recovery permits to conduct certain activities with endangered species.
Comments on these permit applications must be received on or before November 29, 2017.
Written data or comments should be submitted to the Endangered Species Program Manager, U.S. Fish and Wildlife Service, Region 8, 2800 Cottage Way, Room W-2606, Sacramento, CA 95825 (telephone: 916-414-6464; fax: 916-414-6486). Please refer to the respective permit number for each application when submitting comments.
Daniel Marquez, Fish and Wildlife Biologist; see
The following applicants have applied for scientific research permits to conduct certain activities with endangered species under section 10(a)(1)(A) of the Act (16 U.S.C. 1531
The applicant requests a permit renewal and amendment to take (capture, handle, release, collect vouchers, and collect branchiopod cysts) the Conservancy fairy shrimp (
The applicant requests a permit renewal to take the Quino checkerspot butterfly (
The applicant requests a new permit to take (capture, handle, and release) the California tiger salamander (central California DPS (
The applicant requests a permit amendment to take the Quino checkerspot butterfly (
The applicant requests a permit amendment to take the Quino checkerspot butterfly (
The applicant requests a permit renewal to take (capture, handle, release, collect vouchers, and collect branchiopod cysts) the Conservancy fairy shrimp (
The applicant requests a new permit to take (capture, handle, measure, take skin swabs, clip toes, insert PIT (Passive Integrated Transponder) tags, mark with VIE (Visual Implant Elastomer), transport, translocate, emergency salvage, and release) the Sierra Nevada yellow-legged frog (
The applicant requests a permit renewal to take the Yuma Clapper rail (Yuma Ridgway's r.) (
The applicant requests a permit renewal to take (locate and monitor nests; and remove brown-headed cowbird (
The applicant requests a permit amendment to take the California Clapper rail (California Ridgway's r.) (
The applicant requests a permit amendment to take the California Clapper rail (California Ridgway's r.) (
The applicant requests a permit renewal to take (capture, handle, release, collect vouchers, and collect branchiopod cysts) the Conservancy fairy shrimp (
The applicant requests a permit amendment and renewal to take (survey
The applicant requests a permit renewal to take (capture, band, collect blood samples, and release) the southwestern willow flycatcher (
The applicant requests a permit renewal to take (capture, handle, and release) the tidewater goby (
The applicant requests a new permit to take (capture, handle, and release) the California tiger salamander (Santa Barbara County and Sonoma County Distinct Population Segment DPSs (
The applicant requests a permit renewal and amendment to take (capture, handle, and release) the Sierra Nevada yellow-legged frog (
The applicant requests a permit amendment to take (capture, handle, release, and emergency salvage) the unarmored threespine stickleback (
The applicant requests a permit renewal to take (capture, handle, mark, and release) the Fresno kangaroo rat (
The applicant requests a permit renewal to take (capture, handle, and release) the California tiger salamander (Santa Barbara County and Sonoma County DPSs (
The applicant requests a permit renewal to take the Quino checkerspot butterfly (
The applicant requests a permit renewal to take (capture, handle, and release) the Stephens' kangaroo rat (
The applicant requests a permit renewal to take (survey for, locate and monitor nests, and remove brown-headed cowbird (
The applicant requests a permit renewal to take (capture, handle, release, collect vouchers, and collect branchiopod cysts) the San Diego fairy shrimp (
The applicant requests a permit renewal and amendment to take (survey for and locate and monitor nests) the Light-Footed Clapper rail (light-footed Ridgway's r.) (
The applicant requests a new permit to take the Quino checkerspot butterfly (
The applicant requests a new permit to take (capture, handle, and release) the California tiger salamander (Santa Barbara County and Sonoma County DPSs (
The applicant requests a permit renewal to take (capture, handle, release, collect vouchers, and collect branchiopod cysts) the Conservancy fairy shrimp (
The applicant requests a permit renewal to take (capture, handle, measure, mark, relocate, release, attach radio tags, collect tail tissue, swab for chytrid fungus testing, collect specimens, conduct restoration activities, and remove and euthanize hybrids) the California tiger salamander (Santa Barbara County DPS (
The applicant requests a permit amendment and renewal to take (capture, handle, collect, photograph, tag, attach radio transmitters and radio track, mark, collect morphological data, collect parasites and tissue, conduct veterinary testing (assess reproductive condition, conduct health assessments, quarantine, test for disease and parasites), administer veterinary care, obtain genetic samples, euthanize, remove from the wild, transport, hold in captivity, captive-rear, captive-breed, release to the wild, translocate, use remote cameras, and monitor populations) the Amargosa vole (
The applicant requests a permit renewal to take (capture, handle, and release) the tidewater goby (
The applicant requests a permit renewal to take (capture, handle, release, collect adult vouchers, collect resting eggs, conduct genetic analysis, process vernal pool soil samples for egg identification, and culturing and hatching out of branchiopod eggs) the Conservancy fairy shrimp (
We invite public review and comment on each of these recovery permit applications. Comments and materials we receive will be available for public inspection, by appointment, during normal business hours at the address listed in the
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Bureau of Land Management, Interior.
Notice of public meeting.
In accordance with the Federal Land Policy and Management Act of 1976 as amended and the Federal Advisory Committee Act of 1972, the Bureau of Land Management (BLM) Alaska Resource Advisory Council (RAC) will meet as indicated below.
The RAC will hold a public meeting on Thursday, November 16, 2017, from 8 a.m. until 5 p.m. and Friday, November 17, 2017, from 8 a.m. until noon. A public comment period will be held during Thursday's meeting from 4 to 5 p.m.
The meeting will take place in the Executive Dining Room at the Federal Building, 222 W. 7th Ave., Anchorage, Alaska. The agenda will be posted online by Oct. 17, 2017, at
Dave Doucet, RAC Coordinator, BLM Alaska State Office, 222 W. 7th Avenue #13, Anchorage, AK 99513;
The 15-member BLM Alaska RAC was chartered to provide advice to the BLM and the Secretary of the Interior on a variety of planning and management issues associated with public land management in Alaska. All RAC meetings are open to the public. If you have written comments to distribute to the RAC, please do so prior to the start of the meeting.
Agenda items for the meeting include updates on BLM Alaska planning efforts such as the Bering Sea-Western Interior and Central Yukon Resource Management Plans, the Road to Ambler Mining District Environmental Impact Statement, the Donlin Gold Mine Right of Way, and the Alaska Stand Alone Pipeline/Alaska LNG project. In addition, the BLM will present updates on the status of Public Land Orders withdrawing land from selection or development, activities in the National Petroleum Reserve in Alaska, including the Greater Mooses Tooth Unit 2 project, and the upcoming Oil and Gas Lease Sale. The Placer Mining Subcommittee will present reports on the 2017 placer mining field season and preparations for the 2018 field season, and the Alaska Native Claims Settlement Act Subcommittee will discuss access and subsistence issues. The BLM will also encourage the RAC to provide the BLM with input on recreation, access and transportation issues including the proposed Trans-Alaska Trail along the Trans-Alaska Pipeline System corridor; the Transportation Management Plans for the Steese National Conservation Area and the White Mountains National Recreation Area; the possibilities of partnerships with the State and other agencies for access, recreation, and transportation issues; and the possibility of adjusting recreation site fees. The State of Alaska will also make a presentation on the Arctic Strategic Transportation and Resources Project. The BLM Alaska will post the meeting agenda by Oct. 17, 2017, to the BLM Alaska Web site at
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
42 U.S.C. 15906; 43 CFR 1784.4-2.
U.S. International Trade Commission.
Notice.
Notice is hereby given that a complaint was filed with the U.S. International Trade Commission on September 19, 2017, under section 337 of the Tariff Act of 1930, as amended, on behalf of Metglas, Inc. of Conway, South Carolina and Hitachi Metals, Ltd. of Japan. Supplements were filed on September 20, 2017, and October 6, 2017. The complaint, as supplemented, alleges violations of section 337 based upon the importation into the United States, or in the sale of certain amorphous metal and products containing same by reason of misappropriation of trade secrets, the threat or effect of which is to destroy or substantially injure a domestic industry in the United States.
The complainants request that the Commission institute an investigation and, after the investigation, issue a general exclusion order, or in the alternative a limited exclusion order, and cease and desist orders.
The complaint, except for any confidential information contained therein, is available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW., Room 112, Washington, DC 20436, telephone (202) 205-2000. Hearing impaired individuals are advised that information on this matter can be obtained by contacting the Commission's TDD terminal on (202) 205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at (202) 205-2000. General information concerning the Commission may also be obtained by accessing its internet server at
Pathenia M. Proctor, The Office of Unfair Import Investigations, U.S. International Trade Commission, telephone (202) 205-2560.
The authority for institution of this investigation is contained in section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337 and in section 210.10 of the Commission's Rules of Practice and Procedure, 19 CFR 210.10 (2017).
(1) Pursuant to subsection (b) of section 337 of the Tariff Act of 1930, as amended, an investigation be instituted to determine whether there is a violation of subsection (a)(1)(A) of section 337 in the importation into the United States, or in the sale of certain amorphous metal and products containing same by reason of misappropriation of trade secrets, the threat or effect of which is to destroy or substantially injure a domestic injury in the United States;
(2) For the purpose of the investigation so instituted, the following are hereby named as parties upon which this notice of investigation shall be served:
(a) The complainant are:
(b) The respondents are the following entities alleged to be in violation of section 337, and are the parties upon which the complaint is to be served:
(c) The Office of Unfair Import Investigations, U.S. International Trade Commission, 500 E Street SW., Suite 401, Washington, DC 20436; and
(3) For the investigation so instituted, the Chief Administrative Law Judge, U.S. International Trade Commission, shall designate the presiding Administrative Law Judge.
Responses to the complaint and the notice of investigation must be submitted by the named respondents in accordance with section 210.13 of the Commission's Rules of Practice and Procedure, 19 CFR 210.13. Pursuant to 19 CFR 201.16(e) and 210.13(a), such responses will be considered by the Commission if received not later than 20 days after the date of service by the Commission of the complaint and the notice of investigation. Extensions of time for submitting responses to the complaint and the notice of investigation will not be granted unless good cause therefor is shown.
Failure of a respondent to file a timely response to each allegation in the complaint and in this notice may be deemed to constitute a waiver of the right to appear and contest the allegations of the complaint and this notice, and to authorize the administrative law judge and the Commission, without further notice to the respondent, to find the facts to be as alleged in the complaint and this notice and to enter an initial determination and a final determination containing such findings, and may result in the issuance of an exclusion order or a cease and desist order or both directed against the respondent.
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has received a complaint entitled
Lisa R. Barton, Secretary to the Commission, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205-2000. The public version of the complaint can be accessed on the Commission's Electronic Document Information System (EDIS) at
General information concerning the Commission may also be obtained by accessing its Internet server at United States International Trade Commission (USITC) at
The Commission has received a complaint and a submission pursuant to § 210.8(b) of the Commission's Rules of Practice and Procedure filed on behalf of National Products, Inc. (“NPI”) on October 24, 2017. The complaint alleges violations of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain mounting apparatuses for holding portable electronic devices and components thereof. The complaint names as respondents Shenzhen Chengshuo Technology Co., Ltd. d/b/a WUPP of China; Foshan City Qishi Sporting Goods Technology Co., Ltd. d/b/a N-Star of China; Chengdu MWUPP Technology Co., Ltd. of China; Shenzhen Yingxue Technology Co., Ltd. d/b/a Yingxue Tech of China; Shenzhen Shunsihang Technology Co., Ltd. d/b/a BlueFire of China; Guangzhou Kean Products Co., Ltd. of China; Prolech Electronics Limited of China; Gangzhou Kaicheng Metal Produce Co., Ltd. d/b/a ZJMOTO of China; Shenzhen Smilin Electronic Technology Co., Ltd. of China; and Shenzhen New Dream Intelligent Plastic Co., Ltd. of China. The complainant requests that the Commission issue a general exclusion order, or in the alternative, a limited exclusion order, cease and desist orders, and impose a bond upon respondents' alleged infringing articles during the 60-day Presidential review period pursuant to 19 U.S.C. 1337(j).
Proposed respondents, other interested parties, and members of the public are invited to file comments, not to exceed five (5) pages in length, inclusive of attachments, on any public interest issues raised by the complaint or § 210.8(b) filing. Comments should address whether issuance of the relief specifically requested by the complainant in this investigation would affect the public health and welfare in the United States, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, or United States consumers.
In particular, the Commission is interested in comments that:
(i) Explain how the articles potentially subject to the requested remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the requested remedial orders;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the requested exclusion order and/or a cease and desist order within a commercially reasonable time; and
(v) explain how the requested remedial orders would impact United States consumers.
Written submissions must be filed no later than by close of business, eight
Persons filing written submissions must file the original document electronically on or before the deadlines stated above and submit 8 true paper copies to the Office of the Secretary by noon the next day pursuant to § 210.4(f) of the Commission's Rules of Practice and Procedure (19 CFR 210.4(f)). Submissions should refer to the docket number (“Docket No. 3268”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and of §§ 201.10 and 210.8(c) of the Commission's Rules of Practice and Procedure (19 CFR 201.10, 210.8(c)).
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that a complaint was filed with the U.S. International Trade Commission on September 25, 2017, under section 337 of the Tariff Act of 1930, as amended, on behalf of The Gillette Company LLC of Boston, Massachusetts. A supplement to the complaint was filed on September 28, 2017. The complaint, as supplemented, alleges violations of section 337 based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain shaving cartridges, components thereof and products containing same by reason of infringement of U.S. Patent No. 9,193,077 (“the ’077 patent”). The complaint further alleges that an industry in the United States exists as required by the applicable Federal Statute.
The complainant requests that the Commission institute an investigation and, after the investigation, issue a limited exclusion order and cease and desist orders.
The complaint, except for any confidential information contained therein, is available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW., Room 112, Washington, DC 20436, telephone (202) 205-2000. Hearing impaired individuals are advised that information on this matter can be obtained by contacting the Commission's TDD terminal on (202) 205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at (202) 205-2000. General information concerning the Commission may also be obtained by accessing its internet server at
The Office of Docket Services, U.S. International Trade Commission, telephone (202) 205-1802.
(1) Pursuant to subsection (b) of section 337 of the Tariff Act of 1930, as amended, an investigation be instituted to determine whether there is a violation of subsection (a)(1)(B) of section 337 in the importation into the United States, the sale for importation, or the sale within the United States after importation of certain shaving cartridges, components thereof and products containing same by reason of infringement of one or more of claims 1-4, 11-14, and 18-20 of the ’077 patent, and whether an industry in the United States exists as required by subsection (a)(2) of section 337;
(2) For the purpose of the investigation so instituted, the following are hereby named as parties upon which this notice of investigation shall be served:
(a) The complainant is: The Gillette Company LLC, 1 Gillette Park, Boston, MA 02127.
(b) The respondents are the following entities alleged to be in violation of section 337, and are the parties upon which the complaint is to be served: Edgewell Personal Care Company, 1350 Timberlake Manor Parkway, Chesterfield, MO 63017; Edgewell Personal Care Brands, LLC, 6 Research Drive, Shelton, CT 06484; Edgewell Personal Care, LLC, 6 Research Drive, Shelton, CT 06484; Schick Manufacturing, Inc., 6 Research Drive, Shelton, CT 06484; Schick (Guangzhou)
(3) For the investigation so instituted, the Chief Administrative Law Judge, U.S. International Trade Commission, shall designate the presiding Administrative Law Judge.
The Office of Unfair Import Investigations will not participate as a party in the investigation.
The Commission notes that issues regarding whether the importation requirement of section 337 is met may be present here. In instituting this investigation, the Commission has not made any determination as to whether Complainant has satisfied this requirement. Accordingly, the presiding Administrative Law Judge may wish to consider this issue at an early date. Notwithstanding any Commission Rules to the contrary, which are hereby waived, any such decision should be issued in the form of an initial determination (ID) under Rule 210.42(c), 19 CFR 210.42(c). The ID will become the Commission's final determination 45 days after the date of service of the ID unless the Commission determines to review the ID. Any such review will be conducted in accordance with Commission Rules 210.43, 210.44, and 210.45, 19 CFR 210.43, 210.44, and 210.45.
Responses to the complaint and the notice of investigation must be submitted by the named respondents in accordance with section 210.13 of the Commission's Rules of Practice and Procedure, 19 CFR 210.13. Pursuant to 19 CFR 201.16(e) and 210.13(a), such responses will be considered by the Commission if received not later than 20 days after the date of service by the Commission of the complaint and the notice of investigation. Extensions of time for submitting responses to the complaint and the notice of investigation will not be granted unless good cause therefor is shown.
Failure of a respondent to file a timely response to each allegation in the complaint and in this notice may be deemed to constitute a waiver of the right to appear and contest the allegations of the complaint and this notice, and to authorize the administrative law judge and the Commission, without further notice to the respondent, to find the facts to be as alleged in the complaint and this notice and to enter an initial determination and a final determination containing such findings, and may result in the issuance of an exclusion order or a cease and desist order or both directed against the respondent.
By order of the Commission.
Notice of application.
Registered bulk manufacturers of the affected basic classes, and applicants therefore, may file written comments on or objections to the issuance of the proposed registration on or before December 29, 2017.
Written comments should be sent to: Drug Enforcement Administration, Attention: DEA Federal Register Representative/DRW, 8701 Morrissette Drive, Springfield, Virginia 22152. Comments and requests for hearings on applications to import raw material are not appropriate. 72 FR 3417 (January 25, 2007).
The Attorney General has delegated his authority under the Controlled Substances Act to the Administrator of the Drug Enforcement Administration (DEA), 28 CFR 0.100(b). Authority to exercise all necessary functions with respect to the promulgation and implementation of 21 CFR part 1301, incident to the registration of manufacturers, distributors, dispensers, importers, and exporters of controlled substances (other than final orders in connection with suspension, denial, or revocation of registration) has been redelegated to the Assistant Administrator of the DEA Diversion Control Division (“Assistant Administrator”) pursuant to section 7 of 28 CFR part 0, appendix to subpart R.
In accordance with 21 CFR 1301.33(a), this is notice that on June 20, 2017, Euticals, Inc., 2460 W. Bennett Street, Springfield, Missouri 65807-1229 applied to be registered as a bulk manufacturer the following basic classes of controlled substances:
The company plans to manufacture the listed controlled substances in bulk for distribution and sale to its customers.
Federal Bureau of Investigation, Department of Justice.
30-day notice.
Department of Justice (DOJ), Federal Bureau of Investigation (FBI), Training Division's Curriculum Management Section (CMS) will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. This proposed information collection was previously published in the
Comments are encouraged and will be accepted for an additional 30 days until November 29, 2017.
Written comments and/or suggestions regarding the items contained in this notice, especially the estimated public burden and associated response time, should be directed to Lisa Avery, Management and Program Analyst, Strategic Initiatives Unit, Federal Bureau of Investigation, Intelligence Branch, Office of Private Sector, FBIHQ, 1075 F Street SW., Washington DC 20024 or via email at
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
(1)
(2)
(3)
(4)
(5) An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond/reply: It is estimated that InfraGard has approximately 50,000 members and receives approximately 7,200 new applications for membership per year. The average response time for reading and responding to membership application and profile is estimated to be 30 minutes.
(6) An estimate of the total public burden (in hours) associated with the collection: The total hour burden for completing the application and profile is 3,600 hours.
If additional information is required contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE., Suite 3E.405B, Washington, DC 20530.
Drug Enforcement Administration, Department of Justice.
60-Day notice.
The Department of Justice (DOJ), Drug Enforcement Administration, will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.
Comments are encouraged and will be accepted for 60 days until December 29, 2017.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Gary R. Owen, Chief, Office of Congressional & Public Affairs, Drug Enforcement Administration, 8701 Morrissette Drive, Springfield, VA 22152.
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
1.
2.
3.
4.
5.
6.
If additional information is required contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE., 3E.405B, Washington, DC 20530.
Bureau of International Labor Affairs, Labor.
Notice of charter renewal.
On September 29, 2017, President Trump continued the President's Committee on the International Labor Organization (ILO) for two years through September 30, 2019. In response, and pursuant to the Federal Advisory Committee Act (FACA), the Secretary of Labor renewed the committee's charter on October 23, 2017.
The committee is composed of seven members: The Secretary of Labor (chair), the Secretary of State, the Secretary of Commerce, the Assistant to the President for National Security Affairs, the Assistant to the President for Economic Policy, and one representative each from organized labor and the business community, designated by the Secretary. The labor and business members are the presidents of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and the United States Council for International Business (USCIB), respectively, as the most representative organizations of U.S. workers and employers engaged in ILO matters.
The authority for this notice is granted by the Federal Advisory Committee Act (5 U.S.C. App. 2) and Executive Order No. 13811 of September 29, 2017.
Robert B. Shepard, Director, Office of International Relations, Bureau of International Labor Affairs, U.S. Department of Labor, telephone (202) 693-4808.
Signed at Washington, DC.
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting the Mine Safety and Health Administration (MSHA) sponsored information collection request (ICR) titled, “Examinations and Testing of Electrical Equipment, Including Examination, Testing, and Maintenance of High Voltage Longwalls,” to the Office of Management and Budget (OMB) for review and approval for continued use, without change, in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that agency receives on or before November 29, 2017.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the
Submit comments about this request by mail to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-MSHA, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202-395-5806 (this is not a toll-free number); or by email:
Michel Smyth by telephone at 202-693-4129, TTY 202-693-8064, (these are not toll-free numbers) or by email at
44 U.S.C. 3507(a)(1)(D).
This ICR seeks to extend PRA authority for the Examinations and Testing of Electrical Equipment, Including Examination, Testing, and Maintenance of High Voltage Longwalls information collection. MSHA regulations require records to be kept on the examination, testing, calibration, and maintenance of covered atmospheric monitoring systems, electric equipment, grounding off-track direct-current machines and enclosures of related detached components, circuit breakers, electrical work, and devices for overcurrent protection. The records are intended to verify that examinations and tests were conducted and give insight into the hazardous conditions that have been encountered and those that may be encountered. These records greatly assist those who use them in making decisions during accident investigations to establish root causes and to prevent
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
OMB authorization for an ICR cannot be for more than three (3) years without renewal, and the current approval for this collection is scheduled to expire on October 31, 2017. The DOL seeks to extend PRA authorization for this information collection for three (3) more years, without any change to existing requirements. The DOL notes that existing information collection requirements submitted to the OMB receive a month-to-month extension while they undergo review. For additional substantive information about this ICR, see the related notice published in the
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting the Employment and Training Administration (ETA) sponsored information collection request (ICR) revision titled, “DOL-Only Performance Accountability, Information, and Reporting System,” to the Office of Management and Budget (OMB) for review and approval for use in accordance with the Paperwork Reduction Act (PRA) of 1995. Public comments on the ICR are invited.
The OMB will consider all written comments that agency receives on or before November 29, 2017.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the
Submit comments about this request by mail to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-ETA, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202-395-5806 (this is not a toll-free number); or by email:
Michel Smyth by telephone at 202-693-4129, TTY 202-693-8064, (these are not toll-free numbers) or sending an email to
This ICR seeks approval under the PRA for revisions to the DOL-Only Performance Accountability, Information, and Reporting System. The following programs will be required to report through this system: Workforce Innovation and Opportunity Act (WIOA) Adult, Dislocated Worker and Youth, Wagner Peyser Employment Service, National Farmworker Jobs, Trade Adjustment Assistance, YouthBuild, Indian and Native American, Job Corps, and Jobs for Veterans' State Grants. Requiring these programs to use a standard set of data elements, definitions, and specifications at all levels of the workforce system helps improve the quality of the performance information that is received by the DOL. While H1-B grants, the Reintegration of Ex-Offenders program, and the Trade Adjustment Assistance program are not authorized under the WIOA, these programs will be utilizing the data element definitions and reporting templates proposed in this ICR. The accuracy, reliability, and comparability of program reports submitted by states and grantees using Federal funds are fundamental elements of good public administration, and are necessary tools for maintaining and demonstrating system integrity. This ICR includes several information collection instruments—Program Performance Report, WIOA Pay-for-Performance Report, Participant Individual Record Layout, WIOA Data Element Specifications, and Job
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
44 U.S.C. 3507(a)(1)(D).
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting the Office of Workers' Compensation Programs (OWCP) sponsored information collection request (ICR) revision titled, “Rehabilitation Plan and Award,” to the Office of Management and Budget (OMB) for review and approval for use in accordance with the Paperwork Reduction Act (PRA) of 1995. Public comments on the ICR are invited.
The OMB will consider all written comments that agency receives on or before November 29, 2017.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov Web site at
Submit comments about this request by mail to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-OWCP, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202-395-5806 (this is not a toll-free number); or by email:
Michel Smyth by telephone at 202-693-4129, TTY 202-693-8064, (these are not toll-free numbers) or sending an email to
This ICR seeks approval under the PRA for revisions to the Rehabilitation Plan and Award (Form OWCP-16) information collection. Vocational rehabilitation counselors use Form OWCP-16 to submit an agreed upon rehabilitation plan for OWCP approval. The form also documents any OWCP payment award for approved services. This information collection has been classified as a revision, because the agency has clarified several questions and disclosures. The agency also made formatting changes intended to make the form more user friendly. The Federal Employees' Compensation Act and Longshore and Harbor Workers' Compensation Act authorizes this information collection.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
44 U.S.C. 3507(a)(1)(D).
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting the Mine Safety and Health Administration (MSHA) sponsored information collection request (ICR) titled, “Sealing of Abandoned Areas Standard,” to the Office of Management and Budget (OMB) for review and approval for continued use, without change, in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that agency receives on or before November 29, 2017.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the
Submit comments about this request by mail to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-MSHA, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202-395-5806 (this is not a toll-free number); or by email:
Michel Smyth by telephone at 202-693-4129, TTY 202-693-8064, (these are not toll-free numbers) or by email at
44 U.S.C. 3507(a)(1)(D).
This ICR seeks to extend PRA authority for the Sealing of Abandoned Areas Standard information collection. The Standard includes reporting and recordkeeping requirements to help ensure the construction and maintenance of seals are done correctly; certified persons conducting sampling in sealed areas are adequately trained, and problems can be found and corrected. Federal Mine Safety and Health Act of 1977 sections 101(a) and 103(h) authorize this information collection.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
OMB authorization for an ICR cannot be for more than three (3) years without renewal, and the current approval for this collection is scheduled to expire on October 31, 2017. The DOL seeks to extend PRA authorization for this information collection for three (3) more years, without any change to existing requirements. The DOL notes that existing information collection requirements submitted to the OMB receive a month-to-month extension while they undergo review. For additional substantive information about this ICR, see the related notice published in the
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting the Employee Benefits Security Administration (EBSA) sponsored information collection request (ICR) titled, “Request for Assistance from the Department of Labor, Employee Benefits Security Administration,” to the Office of Management and Budget (OMB) for review and approval for continued use, without change, in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that agency receives on or before November 29, 2017.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov Web site at
Submit comments about this request by mail to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-EBSA, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202-395-5806 (this is not a toll-free number); or by email:
Michel Smyth by telephone at 202-693-4129, TTY 202-693-8064, (these are not toll-free numbers) or by email at
44 U.S.C. 3507(a)(1)(D).
This ICR seeks to extend PRA authority for the Request for Assistance from Department of Labor, Employee Benefits Security Administration information collection. The EBSA assists employee benefit plan participants in understanding their rights, responsibilities, and benefits under employee benefit law and intervenes informally on behalf of beneficiaries with plan sponsors in order to assist participants in obtaining the health and retirement benefits that may have been inappropriately denied. Such informal intervention can avert the necessity for a formal investigation or a civil action. The EBSA maintains a toll-free telephone number through which inquirers can reach Benefits Advisors in ten Regional Offices. The EBSA has also made a request for assistance form available on its Web site for those wishing to obtain assistance in this manner. Employee Retirement Income Security Act of 1974 (ERISA) sections 504 and 513 authorize this information collection.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
OMB authorization for an ICR cannot be for more than three (3) years without renewal, and the current approval for this collection is scheduled to expire on October 31, 2017. The DOL seeks to extend PRA authorization for this information collection for three (3) more years, without any change to existing requirements. The DOL notes that existing information collection requirements submitted to the OMB receive a month-to-month extension while they undergo review. For additional substantive information about this ICR, see the related notice published in the
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Division of Coal Mine Workers' Compensation, Office of Workers' Compensation Programs, Department of Labor.
Notice.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995. This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. Currently, the Office of Workers' Compensation Programs (OWCP) is soliciting comments concerning the proposed collection: Application For Self-Insurance Under The Black Lung Benefits Act, 1240-0NEW (CM-2017; CM-2017a; CM-2017b). A copy of the proposed information collection request can be obtained by contacting the office listed below in the addresses section of this Notice.
Written comments must be received by the office listed in the addresses section below by December 29, 2017.
You may submit comments by mail, delivery service, or by hand to Ms. Yoon Ferguson, U.S. Department of Labor, 200 Constitution Ave. NW., Room S-3323, Washington, DC 20210; by fax to (202) 354-9647; or by Email to
* Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
* evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
* enhance the quality, utility and clarity of the information to be collected; and
* minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval of the information collection request; they will also become a matter of public record.
National Aeronautics and Space Administration.
Notice of meeting.
In accordance with the Federal Advisory Committee Act, as amended, the National Aeronautics and Space Administration (NASA) announces a meeting of the Aeronautics Committee of the NASA Advisory Council (NAC). The meeting will be held for the purpose of soliciting, from the aeronautics community and other persons, research and technical information relevant to program planning. This Committee reports to the NAC.
Wednesday, November 15, 2017, 12:30-5:15 p.m.; and Thursday, November 16, 2017, 8:00-11:30 a.m., Local Time.
The AERO Institute, 38256 Sierra Highway, Palmdale, CA 93550.
Ms. Irma Rodriguez, Designated Federal Officer, NAC Aeronautics Committee, NASA Headquarters, Washington, DC 20546, (202) 358-0984, or
The meeting will be open to the public up to the capacity of the room. This meeting is also available telephonically and WebEx. You must use a touch-tone telephone to participate in this meeting. Any interested person may dial the USA toll-free conference number 1-844-467-6272, passcode 317924, to participate in this meeting by telephone. The WebEx link is
National Aeronautics and Space Administration (NASA).
Notice of renewal of the charter of the NASA Advisory Council.
Pursuant to sections 14(b)(1) and 9(c) of the Federal Advisory Committee Act, as amended (Pub. L. 92-463, 5 U.S.C. App.), and after consultation with the Committee Management Secretariat, General Services Administration, the NASA Acting Administrator has determined that renewal of the charter of the NASA Advisory Council is necessary and in the public interest. The renewed charter is for a two-year period ending October 20, 2019.
Ms. Marla K. King, NASA Headquarters, 300 E Street SW., Washington, DC 20546, phone: (202) 358-1148; email:
National Aeronautics and Space Administration.
Notice of meeting.
In accordance with the Federal Advisory Committee Act, Public Law 92-463, as amended, the National Aeronautics and Space Administration announces a meeting of the Ad Hoc Task Force on Science, Technology, Engineering and Mathematics (STEM) of the NASA Advisory Council (NAC). This Task Force reports to the NAC.
Monday, November 13, 2017, 11:30 a.m.-3:30 p.m., Eastern Standard Time (EST).
Dr. Beverly Girten, Designated Federal Officer, NAC Ad Hoc Task Force on STEM Education, NASA Headquarters, Washington, DC 20546, (202) 358-0212, or
This meeting will be virtual and will be available telephonically and by WebEx only. You must use a touch tone phone to participate in this meeting. Any interested person may dial the toll free access number 844-467-6272 or toll access number 720-259-6462, and then the numeric participant passcode: 634012 followed by the # sign. To join via WebEx, the link is
It is imperative that the meeting be held on this date to accommodate the scheduling priorities of the key participants.
National Science Foundation, National Center for Science and Engineering Statistics.
Submission to OMB and Request for Comments.
The National Science Foundation (NSF) has submitted the following information collection requirements to OMB for review and clearance under the Paperwork Reduction Act of 1995.
Written comments on this notice must be received by [] to be assured consideration. Comments received after that date will be considered to the extent practicable.
Comments should be addressed to: Office of Information and Regulatory Affairs of OMB, Attention: Desk Officer for National Science Foundation, 725 17th Street NW., Room 10235, Washington, DC 20503, and to Suzanne H. Plimpton, Reports Clearance Officer, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, VA 22314; telephone (703) 292-7556; or send email to
Comments are invited on: (a) The proposed confidentiality pledge's fit for use by the National Center for Science and Engineering Statistics (NCSES), and (b) ways to enhance the quality, utility, and clarity of the pledge.
Under CIPSEA and similar statistical confidentiality protection statutes, many Federal statistical agencies make statutory pledges that the information respondents provide will be seen only by statistical agency personnel or their sworn agents, and will be used only for statistical purposes. CIPSEA and similar statutes protect the confidentiality of information that agencies collect solely for statistical purposes and under a pledge of confidentiality. These Acts protect such statistical information from administrative, law enforcement, taxation, regulatory, or any other non-statistical use and immunize the information submitted to statistical agencies from many legal processes. Moreover, statutes like the CIPSEA carry criminal penalties of a Class E felony (fines up to $250,000, or up to five years in prison, or both) for conviction of a knowing and willful unauthorized disclosure of covered information.
As part of the Consolidated Appropriations Act for Fiscal Year 2016 signed on December 17, 2015, the Congress enacted the Federal Cybersecurity Enhancement Act of 2015 (H.R. 2029, Division N, Title II, Subtitle B, Sec. 223). This Act, among other provisions, requires the Secretary of the Department of Homeland Security (DHS) to provide Federal civilian agencies' information technology systems with cybersecurity protection for their Internet traffic. The DHS cybersecurity program's objective is to protect Federal civilian information systems from malicious malware attacks. The Federal statistical system's objective is to ensure that the DHS Secretary performs those essential duties in a manner that honors the Government's statutory promises to the public to protect their confidential data. Given that the DHS is not a Federal statistical agency, both DHS and the Federal statistical system have been successfully engaged in finding a way to balance both objectives and achieve these mutually reinforcing objectives.
As required by passage of the Federal Cybersecurity Enhancement Act of 2015, the Federal statistical community will implement DHS' cybersecurity protection program, called Einstein.
The technology currently used to provide this protection against cyber malware electronically searches Internet traffic in and out of Federal civilian agencies in real time for malware signatures. When such a signature is found, the Internet packets that contain the malware signature are shunted aside for further inspection by DHS personnel. Because it is possible that such packets entering or leaving a statistical agency's information technology system may contain confidential statistical data, statistical agencies can no longer promise their respondents that their responses will be seen only by statistical agency personnel or their sworn agents. However, they can promise, in accordance with provisions of the Federal Cybersecurity Enhancement Act of 2015, that such monitoring can be used only to protect information and information systems from cybersecurity risks, thereby, in effect, providing stronger protection to the security and integrity of the respondents' submissions.
Accordingly, DHS and Federal statistical agencies have developed a Memorandum of Agreement for the installation of Einstein cybersecurity protection technology to monitor their Internet traffic.
On February 2, 2017, in a pair of
Table 1 contains a listing of the current numbers and information collection titles for those NCSES programs whose confidentiality pledges will change to reflect the statutory implementation of DHS' Einstein monitoring for cybersecurity protection purposes. For the Information Collection Requests (ICRs) listed in the table below, NCSES statistical confidentiality pledges will be modified to include one of two sentences, based on whether the collection agent is another federal agency (
Table 1 indicates which pledge (federal vs. private) the ICR will use.
Weeks of October 30, November 6, 13, 20, 27, December 4, 2017.
Commissioners' Conference Room, 11555 Rockville Pike, Rockville, Maryland.
Public and Closed.
3:50 p.m. Affirmation Session (Public Meeting) (Tentative).
Aerotest Operations, Inc. (Aerotest Radiography and Research Reactor), Joint Motion to Terminate Proceedings (Tentative).
4:00 p.m. Briefing on Export Licensing (Closed—Ex. 1 & 9).
There are no meetings scheduled for the week of November 6, 2017.
There are no meetings scheduled for the week of November 13, 2017.
There are no meetings scheduled for the week of November 20, 2017.
10:00 a.m. Briefing on Security Issues (Closed—Ex. 1).
10:00 a.m. Briefing on Equal Employment Opportunity, Affirmative Employment, and Small Business (Public) (Contact: Larniece McKoy Moore: 301-415-1942).
This meeting will be webcast live at the Web address—
There are no meetings scheduled for the week of December 4, 2017.
By a vote of 3-0 on October 25, 2017, the Commission determined pursuant to U.S.C. 552b(e) and § 9.107(a) of the Commission's rules that the above referenced Affirmation Session be held with less than one week notice to the public. The meeting is scheduled on October 30, 2017
The schedule for Commission meetings is subject to change on short notice. For more information or to verify the status of meetings, contact Denise McGovern at 301-415-0681 or via email at
The NRC Commission Meeting Schedule can be found on the Internet at:
The NRC provides reasonable accommodation to individuals with disabilities where appropriate. If you need a reasonable accommodation to participate in these public meetings, or need this meeting notice or the transcript or other information from the public meetings in another format (
Members of the public may request to receive this information electronically. If you would like to be added to the distribution, please contact the Nuclear Regulatory Commission, Office of the Secretary, Washington, DC 20555 (301-415-1969), or email
Office of Personnel Management.
30-Day notice and request for comments.
The Office of Combined Federal Campaign, Office of Personnel Management (OPM) offers the general public and other federal agencies the opportunity to comment on an information collection request (ICR) 3206-NEW, OPM Form 1654-B, the Combined Federal Campaign Retiree Pledge Form. As required by the Paperwork Reduction Act of 1995, as amended by the Clinger-Cohen Act, OPM is soliciting comments for this collection. The information collection was previously published in the
Comments are encouraged and will be accepted until November 29, 2017. This process is conducted in accordance with 5 CFR 1320.1.
Interested persons are invited to submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management Budget, 725 17th Street NW., Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent via electronic mail to
A copy of this ICR, with applicable supporting documentation, may be obtained by contacting the Office of Information and Regulatory Affairs, Office of Management Budget, 725 17th Street NW., Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent via electronic mail to
The Office of Management and Budget is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
The Combined Federal Campaign (CFC) is the world's largest and most successful annual workplace philanthropic giving campaign, with 36 CFC Zones throughout the country and overseas raising millions of dollars each year. The mission of the CFC is to promote and support philanthropy through a program that is employee focused, cost-efficient, and effective in providing all federal employees and retirees the opportunity to improve the quality of life for others.
OPM Form 1654-B is a new information collection that collects CFC pledge information from federal annuitants and military retirees pursuant to Executive Order 13743 signed October 13, 2016. It will be available in both paper format and as an electronic form administered by the CFC's Central Campaign Administrator pursuant to 5 CFR 950.106(a).
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning a negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the market dominant or the competitive product list, or the modification of an existing product currently appearing on the market dominant or the competitive product list.
Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request.
The public portions of the Postal Service's request(s) can be accessed via the Commission's Web site (
The Commission invites comments on whether the Postal Service's request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern market dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR 3010, and 39 CFR 3020, subpart B. For request(s) that the Postal Service states concern competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR 3015, and 39 CFR 3020, subpart B. Comment deadline(s) for each request appear in section II.
1.
This notice will be published in the
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange Commission (the “Commission”) has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information discussed below.
Rule 24f-2 (17 CFR 270.24f-2) under the Investment Company Act of 1940 (15 U.S.C. 80a) requires any open-end management companies (“mutual funds”), unit investment trusts (“UITs”) or face-amount certificate companies (collectively, “funds”) deemed to have registered an indefinite amount of securities to file, not later than 90 days after the end of any fiscal year in which it has publicly offered such securities, Form 24F-2 (17 CFR 274.24) with the Commission. Form 24F-2 is the annual notice of securities sold by funds that accompanies the payment of registration fees with respect to the securities sold during the fiscal year.
The Commission estimates that 7,284 funds file Form 24F-2 on the required annual basis. The average annual burden per respondent for Form 24F-2 is estimated to be two hours. The total annual burden for all respondents to Form 24F-2 is estimated to be 14,568 hours. The estimate of average burden
Compliance with the collection of information required by Form 24F-2 is mandatory. The Form 24F-2 filing that must be made to the Commission is available to the public. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number.
The public may view the background documentation for this information collection at the following Web site,
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The Exchange is filing a proposal to amend the MIAX Options Fee Schedule (the “Fee Schedule”) to adopt a fee for the sale of certain historical market data.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend its Fee Schedule to adopt a fee for the sale of certain historical market data.
The historical market data that the Exchange proposes to sell provides information about the past activity of all option products traded on the Exchange for each trading session conducted during a particular calendar month. The data is intended to enhance the user's ability to analyze option trade and volume data, evaluate historical trends in the trading activity of a particular option product, and enable the testing of trading models and analytical strategies. Specifically, the historical market data that the Exchange proposes to sell includes all data that is captured and disseminated on the following proprietary MIAX Options data feeds, on a T+1 basis: MIAX Top of Market data feed (“ToM”); MIAX Order Feed (“MOR”); MIAX Administrative Information Subscriber Feed (“AIS”); and MIAX Complex Top of Market data feed (“cToM”) (“Historical Market Data”). All such proprietary MIAX Options data feeds that, on a T+1 basis, comprise the Historical Market Data are described on the Exchange's Fee Schedule.
ToM provides real-time updates of the MIAX Best Bid or Offer, or MBBO,
MIAX Options will only assess the fee for Historical Market Data on a user (whether Member or Non-Member) that specifically requests such Historical Market Data. Historical Market Data will be uploaded onto an Exchange-provided device. The amount of the fee is $500, and it will be assessed on a per device basis. Each device shall have a maximum storage capacity of 8 Terabytes and will be configured to include data for both MIAX Options and MIAX PEARL. Users may request up to six months of Historical Market Data per device, subject to the device's storage capacity. Historical Market Data is available from August 1, 2017 to the present (always on a T+1 basis),
The Exchange notes that this filing is substantially similar to a companion MIAX PEARL filing establishing a fee for historical market data on its exchange.
The Exchange believes that its proposal to amend its fee schedule is consistent with Section 6(b) of the Act
The Exchange believes the proposed fees are a reasonable allocation of its costs and expenses among its Members and other persons using its facilities since it is recovering the costs associated with distributing such data. Access to the Exchange is provided on fair and non-discriminatory terms. The Exchange believes the proposed fees are equitable and not unfairly discriminatory because the fee level results in a reasonable and equitable allocation of fees amongst users for similar services. Moreover, the decision as to whether or not to purchase Historical Market Data is entirely optional to all users. Potential purchasers are not required to purchase the Historical Market Data, and the Exchange is not required to make the Historical Market Data available. Purchasers may request the data at any time or may decline to purchase such data. The allocation of fees among users is fair and reasonable because, if the market deems the proposed fees to be unfair or inequitable, firms can diminish or discontinue their use of this data.
In adopting Regulation NMS, the Commission granted self-regulatory organizations and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data:
“[E]fficiency is promoted when broker-dealers who do not need the data beyond the prices, sizes, market center identifications of the NBBO and consolidated last sale information are not required to receive (and pay for) such data when broker-dealers may choose to receive (and pay for) additional market data based on their own internal analysis of the need for such data.”
By removing “unnecessary regulatory restrictions” on the ability of exchanges to sell their own data, Regulation NMS advanced the goals of the Act and the principles reflected in its legislative history. If the free market should determine whether proprietary data is sold to broker-dealers at all, it follows that the price at which such data is sold should be set by the market as well.
In July, 2010, Congress adopted H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), which amended Section 19 of the Act. Among other things, Section 916 of the Dodd-Frank Act amended paragraph (A) of Section 19(b)(3) of the Act by inserting the phrase “on any person, whether or not the person is a member of the self-regulatory organization” after “due, fee or other charge imposed by the self-regulatory organization.” As a result, all SRO rule proposals establishing or changing dues, fees or other charges are immediately effective upon filing regardless of whether such dues, fees or other charges are imposed on members of the SRO, non-members, or both. Section 916 further amended paragraph (C) of Section 19(b)(3) of the Act to read, in pertinent part, “At any time within the 60-day period beginning on the date of filing of such a proposed rule change in accordance with the provisions of paragraph (1) [of Section 19(b)], the Commission summarily may temporarily suspend the change in the rules of the self-regulatory organization made thereby, if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this title. If the Commission takes such action, the Commission shall institute proceedings under paragraph (2)(B) [of Section 19(b)] to determine whether the proposed rule should be approved or disapproved.”
The Exchange believes that these amendments to Section 19 of the Act reflect Congress's intent to allow the Commission to rely upon the forces of competition to ensure that fees for market data are reasonable and equitably allocated. Although Section 19(b) had formerly authorized immediate effectiveness for a “due, fee or other charge imposed by the self-regulatory organization,” the Commission adopted a policy and subsequently a rule stating that fees for data and other products available to persons that are not members of the self-regulatory organization must be approved by the Commission after first being published for comment. At the time, the Commission supported the adoption of the policy and the rule by pointing out that unlike members, whose representation in self-regulatory organization governance was mandated by the Act, non-members should be given the opportunity to comment on fees before being required to pay them, and that the Commission should specifically approve all such fees. The Exchange believes that the amendment to Section 19 reflects Congress's conclusion that the evolution of self-regulatory organization governance and competitive market structure have rendered the Commission's prior policy on non-member fees obsolete. Specifically, many exchanges have evolved from member-owned, not-for-profit corporations into for-profit, investor-owned corporations (or subsidiaries of investor-owned corporations). Accordingly, exchanges no longer have narrow incentives to manage their affairs for the exclusive benefit of their members, but rather have incentives to maximize the appeal of their products to all customers, whether members or non-members, so as to broaden distribution and grow revenues. Moreover, the Exchange believes that the change also reflects an endorsement of the Commission's determinations that reliance on competitive markets is an appropriate means to ensure equitable and reasonable prices. Simply put, the change reflects a presumption that all fee changes should be permitted to take effect immediately, since the level of all fees are constrained by competitive forces.
Selling proprietary market data, such as Historical Market Data, is a means by which exchanges compete to attract business. To the extent that exchanges are successful in such competition, they earn trading revenues and also enhance the value of their data products by increasing the amount of data they provide. The need to compete for business places substantial pressure
The decision of the United States Court of Appeals for the District of Columbia Circuit in
“In fact, the legislative history indicates that the Congress intended that the market system `evolve through the interplay of competitive forces as unnecessary regulatory restrictions are removed' and that the SEC wield its regulatory power `in those situations where competition may not be sufficient,' such as in the creation of a `consolidated transactional reporting system.' ”
The court's conclusions about Congressional intent are therefore reinforced by the Dodd-Frank Act amendments, which create a presumption that exchange fees, including market data fees, may take effect immediately, without prior Commission approval, and that the Commission should take action to suspend a fee change and institute a proceeding to determine whether the fee change should be approved or disapproved only where the Commission has concerns that the change may not be consistent with the Act.
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Indeed, the Exchange believes that offering certain Historical Market Data will enhance competition by encouraging sales, which will make analytical data more readily available to investors. Notwithstanding its determination that the Commission may rely upon competition to establish fair and equitably allocated fees for market data, the
The market for data products is extremely competitive and users may freely choose alternative venues and data vendors based on the aggregate fees assessed, the data offered, and the value provided. Numerous exchanges compete with each other for listings, trades, and market data itself, providing virtually limitless opportunities for entrepreneurs who wish to produce and distribute their own market data. Transaction execution and proprietary data products are complementary in that market data is both an input and a byproduct of the execution service. In fact, market data and trade execution are a paradigmatic example of joint products with joint costs. The decision whether and on which platform to post an order will depend on the attributes of the platform where the order can be posted, including the execution fees, data quality and price, and distribution of its data products. Without trade executions, exchange data products cannot exist. Moreover, data products are valuable to many end users only insofar as they provide information that end users expect will assist them or their customers in making trading decisions.
The costs of producing market data include not only the costs of the data distribution infrastructure, but also the costs of designing, maintaining, and operating the exchange's transaction execution platform and the cost of regulating the exchange to ensure its fair operation and maintain investor confidence. The total return that a trading platform earns reflects the revenues it receives from both products and the joint costs it incurs. Moreover, the operation of the Exchange is characterized by high fixed costs and low marginal costs. This cost structure is common in content distribution industries such as software, where developing new software typically requires a large initial investment (and continuing large investments to upgrade software), but once the software is developed, the incremental cost of providing that software to an additional user is typically small, or even zero (
Competition among trading platforms can be expected to constrain the aggregate return each platform earns from the sale of its joint products. The level of competition and contestability in the market is evidence in the numerous alternative venues that compete for order flow, including SRO markets, as well as internalizing BDs and various forms of alternative trading systems (“ATSs”), including dark pools and electronic communication networks (“ECNs”). Each SRO market competes to produce transaction reports via trade executions. It is common for BDs to further and exploit this competition by sending their order flow and transaction reports to multiple markets, rather than providing them all to a single market. Competitive markets for order flow, executions, and transaction reports provide pricing discipline for the inputs of proprietary data products. The large number of SROs, TRFs, BDs, and ATSs that currently produce proprietary data or are currently capable of producing it provides further pricing discipline for proprietary data products. Each SRO, TRF, ATS, and BD is currently permitted to produce proprietary data products, and many currently do or have announced plans to do so, including the Nasdaq exchanges, NYSE exchanges, and CBOE/Bats exchanges.
In this competitive environment, an “excessive” price for one product will have to be reflected in lower prices for other products sold by the Exchange, or otherwise the Exchange may experience a loss in sales that may adversely affect its profitability. In this case, the proposed rule change enhances competition by providing Historical Market Data at a fixed price. As such, the Exchange believes that the proposed changes will enhance, not impair, competition in the financial markets.
The market for market data products is competitive and inherently contestable because there is fierce competition for the inputs necessary to the creation of proprietary data and strict pricing discipline for the
Broker-dealers currently have numerous alternative venues for their order flow, including fifteen existing options markets. Each SRO market competes to produce transaction reports via trade executions. Competitive markets for order flow, executions, and transaction reports provide pricing discipline for the inputs of proprietary data products. The large number of SROs that currently produce proprietary data or are currently capable of producing it provides further pricing discipline for proprietary data products. Each SRO is currently permitted to produce proprietary data products, and many in addition to MIAX Options currently do, including NASDAQ, CBOE, Nasdaq ISE, NYSE American, and NYSE Arca. Additionally, order routers and market data vendors can facilitate single or multiple broker-dealers' production of proprietary data products. The potential sources of proprietary products are virtually limitless.
Market data vendors provide another form of price discipline for proprietary data products because they control the primary means of access to end subscribers. Vendors impose price restraints based upon their business models. For example, vendors such as Bloomberg and Thomson Reuters that assess a surcharge on data they sell may refuse to offer proprietary products that end subscribers will not purchase in sufficient numbers. Internet portals, such as Google, impose a discipline by providing only data that will enable them to attract “eyeballs” that contribute to their advertising revenue. Retail broker-dealers, such as Schwab and Fidelity, offer their customers proprietary data only if it promotes trading and generates sufficient commission revenue. Although the business models may differ, these vendors' pricing discipline is the same: they can simply refuse to purchase any proprietary data product that fails to provide sufficient value. The Exchange and other producers of proprietary data products must understand and respond to these varying business models and pricing disciplines in order to market proprietary data products successfully.
In addition to the competition and price discipline described above, the market for proprietary data products is also highly contestable because market entry is rapid, inexpensive, and profitable. The history of electronic trading is replete with examples of entrants that swiftly grew into some of the largest electronic trading platforms and proprietary data producers: Archipelago, BATS Trading and Direct Edge. Regulation NMS, by deregulating the market for proprietary data, has increased the contestability of that market. While broker-dealers have previously published their proprietary data individually, Regulation NMS encourages market data vendors and broker-dealers to produce proprietary products cooperatively in a manner never before possible. Multiple market data vendors already have the capability to aggregate data and disseminate it on a profitable scale, including Bloomberg, and Thomson Reuters.
The Court in
The intensity of competition for proprietary information is significant and the Exchange believes that this proposal itself clearly evidences such competition. The Exchange is offering Historical Market Data in order to keep pace with changes in the industry and evolving customer needs. It is entirely optional and is geared towards attracting new order flow. MIAX Options competitors continue to create new market data products and innovative pricing in this space. In all cases, the Exchange expects firms and other parties to make decisions on how much and what types of data to consume on the basis of the total cost of interacting with MIAX Options or other exchanges. Of course, the explicit data fees are only one factor in a total platform analysis. Some competitors have lower transactions fees and higher data fees, and others are vice versa. The market for this proprietary information is highly competitive and continually evolves as products develop and change.
Written comments were neither solicited nor received.
The foregoing rule change is effective pursuant to Section 19(b)(3)(A)(ii) of the Act,
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.
Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange seeks to amend its Second Amended and Restated Certificate of Incorporation. The text of the proposed rule change is provided below.
The name of the corporation is Bats EDGA Exchange, Inc. The corporation filed its original Certificate of Incorporation with the Secretary of State of the State of Delaware on March 9, 2009
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
EDGA recently amended its Restated Certificate of Incorporation in connection with a corporate transaction (the “Transaction”) involving, among other things, the recent acquisition of EDGA, along with Bats BYX Exchange, Inc. (“Bats BYX”), Bats BZX Exchange, Inc. (“Bats BZX”), and Bats EDGX Exchange, Inc. (“Bats EDGX” and, together with Bats EDGA, Bats BYX, and Bats BZX, the “Bats Exchanges”) by CBOE Holdings, Inc. (“CBOE Holdings”). CBOE Holdings is also the parent of Chicago Board Options Exchange, Incorporated (“CBOE”) and C2 Options Exchange, Incorporated (“C2”). Particularly, the filing proposed, among other things, to amend and restate the certificate of incorporation of the Exchange based on certificates of incorporation of CBOE and C2.
Particularly, Section 245(c) of the Delaware General Corporation Law (DGCL) requires that a restated certificate of incorporation “shall state, either in its heading or in an introductory paragraph, the corporation's present name, and, if it has been changed, the name under which it was originally incorporated, and the date of filing of its original certificate of incorporation with the secretary of state.” The Exchange notes that the conformed Certificate did not reference the name under which the corporation was originally incorporated (
The Exchange also notes that it inadvertently did not reference the correct version of the Certificate in two places in the introductory paragraph. Particularly, the Exchange notes that the third sentence of the introductory paragraph provides that the Second Amended and Restated Certificate of Incorporation of the corporation restated and integrated and also further amended
The Exchange notes that the proposed changes are concerned solely with the administration of the Exchange and do not affect the meaning, administration, or enforcement of any rules of the Exchange or the rights, obligations, or privileges of Exchange members or their associated persons is [sic] any way.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the Exchange believes correcting inadvertent non-substantive, technical errors in its Certificate in order to comply with Delaware law and reflect the correct and accurate version of the Certificate that was amended will avoid potential confusion, thereby removing impediments to, and perfecting the mechanism for a free and open market and a national market system, and, in general, protecting investors and the public interest of market participants. As noted above, the proposed changes do not affect the meaning, administration, or enforcement of any rules of the Exchange or the rights, obligations, or privileges of Exchange members or their associated persons is any way.
The Exchange does not believe the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Rather, the proposed rule change is merely attempting to correct inadvertent technical errors in the Exchange's introductory paragraph of its Certificate. The proposed rule change has no impact on competition.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to provide Users with access to five additional third party systems and connectivity to two additional third party data feeds. In addition, the Exchange proposes to change its NYSE Arca Options Fees and Charges (the “Options Fee Schedule”) and the NYSE Arca Equities Fees and Charges (the “Equities Fee Schedule” and, together with the Options Fee Schedule, the “Fee Schedules”) related to these co-location services. The proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend the co-location
As set forth in the Fee Schedules, the Exchange charges fees for connectivity to the execution systems of third party markets and other content service providers (“Third Party Systems”), and data feeds from third party markets and other content service providers (“Third Party Data Feeds”).
The Exchange now proposes to make the following changes:
• Add five content service providers to the list of Third Party Systems: Chicago Mercantile Exchange (CME Group), Chicago Stock Exchange (CHX), Investors Exchange (IEX), OneChicago and TMX Group (together, the “Additional Third Party Systems” or “ATPS”); and
• add two feeds to the list of Third Party Data Feeds: Investors Exchange and OneChicago (together the “Additional Third Part Data Feeds” or “ATPD”).
The Exchange would provide access to the Additional Third Party Systems (“Access”) and connectivity to the Additional Third Party Data Feeds (“Connectivity”) as conveniences to Users. Use of Access or Connectivity would be completely voluntary. The Exchange is not aware of any impediment to third parties offering Access or Connectivity.
The Exchange does not have visibility into whether third parties currently offer, or intend to offer, Users access to the Additional Third Party Systems and connectivity to the Additional Third Party Data Feeds, as such third parties are not required to make that information public. However, if one or more third parties presently offer, or in the future opt to offer, such Access and Connectivity to Users, a User may utilize the Secure Financial Transaction Infrastructure (“SFTI”) network, a third party telecommunication network, third party wireless network, a cross connect, or a combination thereof to access such services and products through a connection to an access center outside the data center (which could be a SFTI access center, a third-party access center, or both), another User, or a third party vendor.
The Exchange will announce the dates that each Product is available through customer notices disseminated to all Users simultaneously.
The Exchange proposes to revise the Fee Schedules to provide that Users may obtain connectivity to the five Additional Third Party Systems for a fee. As with the current Third Party Systems, Users would connect to the Additional Third Party Systems over the internet protocol (“IP”) network, a local area network available in the data center.
As with the current Third Party Systems, in order to obtain access to an Additional Third Party System, the User would enter into an agreement with the relevant third party content service provider, pursuant to which the third party content service provider would charge the User for access to the Additional Third Party System. The Exchange would then establish a unicast connection between the User and the relevant third party content service provider over the IP network.
The Exchange has no ownership interest in the Additional Third Party Systems. Establishing a User's access to an Additional Third Party System would not give the Exchange any right to use the Additional Third Party Systems. Connectivity to an Additional Third Party System would not provide access or order entry to the Exchange's execution system, and a User's connection to an Additional Third Party System would not be through the Exchange's execution system.
As with the existing connections to Third Party Systems, the Exchange proposes to charge a monthly recurring fee for connectivity to an Additional Third Party System. Specifically, when a User requests access to an Additional Third Party System, it would identify the applicable content service provider and what bandwidth connection it required.
The Exchange proposes to modify its Fee Schedules to add the Additional Third Party Systems to its existing list of Third Party Systems. The additional items would be as follows:
The Exchange does not propose to change the monthly recurring fee the Exchange charges Users for unicast connectivity to each Third Party System, including the Additional Third Party Systems.
The Exchange proposes to revise the Fee Schedules to provide that Users may obtain connectivity to each of the two Additional Third Party Data Feeds for a fee. The Exchange would receive the Additional Third Party Data Feeds from the content service provider, at its data center. It would then provide connectivity to that data to Users for a fee. Users would connect to the Additional Third Party Data Feeds over the IP network.
In order to connect to an Additional Third Party Data Feed, a User would enter into a contract with the content service provider, pursuant to which the content service provider would charge the User for the Third Party Data Feed. The Exchange would receive the Third Party Data Feed over its fiber optic network and, after the content service provider and User entered into the contract and the Exchange received authorization from the content service provider, the Exchange would re-transmit the data to the User over the User's port. The Exchange would charge the User for the connectivity to the Additional Third Party Data Feed. A User would only receive, and would only be charged for, connectivity to the Additional Third Party Data Feeds for which it entered into contracts.
The Exchange has no affiliation with the sellers of the Additional Third Party Data Feeds. It would have no right to use the Additional Third Party Data Feeds other than as a redistributor of the data. The Additional Third Party Data Feeds would not provide access or order entry to the Exchange's execution system. The Additional Third Party Data Feeds would not provide access or order entry to the execution systems of the third parties generating the feed. The Exchange would receive the Additional Third Party Data Feeds via arms-length agreements and it would have no inherent advantage over any other distributor of such data.
As it does with the existing Third Party Data Feeds, the Exchange proposes to charge a monthly recurring fee for connectivity to each Additional Third Party Data Feed. The monthly recurring fee would be per Additional Third Party Data Feed. Depending on its needs and bandwidth, a User may opt to receive all or some of the feeds or services included in an Additional Third Party Data Feed.
The Exchange proposes to add the connectivity fees for the Additional Third Party Data to its existing list in the Fee Schedules. The additional items would be as follows:
As is the case with all Exchange co-location arrangements, (i) neither a User nor any of the User's customers would be permitted to submit orders directly to the Exchange unless such User or customer is a member organization, a Sponsored Participant or an agent thereof (
The proposed change is not otherwise intended to address any other issues relating to co-location services and/or related fees, and the Exchange is not aware of any problems that Users would have in complying with the proposed change.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed changes would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest because, by offering additional services, the Exchange would give each User additional options for addressing its access and connectivity needs, responding to User demand for access and connectivity options. Providing additional services would help each User tailor its data center operations to the requirements of its business operations by allowing it to select the form and latency of access and connectivity that best suits its needs.
The Exchange would provide Access and Connectivity as conveniences to Users. Use of Access or Connectivity would be completely voluntary. The Exchange is not aware of any impediment to third parties offering Access or Connectivity. The Exchange does not have visibility into whether third parties currently offer, or intend to offer, Users access to the Additional Third Party Systems and connectivity to the Additional Third Party Data Feeds. However, if one or more third parties presently offer, or in the future opt to offer, such Access and Connectivity to Users, a User may utilize the SFTI network, a third party telecommunication network, third party wireless network, a cross connect, or a combination thereof to access such services and products through a connection to an access center outside the data center (which could be a SFTI access center, a third-party access center, or both), another User, or a third party vendor.
The Exchange believes that the proposed changes would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest because, by offering access to the Additional Third Party Systems and connectivity to the Additional Third Party Data Feeds to Users upon the effective date of this filing, the Exchange would give Users additional options for connectivity and access to new services as soon as they are available, responding to User demand for access and connectivity options.
The Exchange also believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,
The Exchange believes that the proposed fee changes are consistent with Section 6(b)(4) of the Act for multiple reasons. The Exchange operates in a highly competitive market in which exchanges offer co-location services as a means to facilitate the trading and other market activities of those market participants who believe that co-location enhances the efficiency of their operations. Accordingly, fees charged for co-location services are constrained by the active competition for the order flow of, and other business from, such market participants. If a particular exchange charges excessive fees for co-location services, affected market participants will opt to terminate their co-location arrangements with that exchange, and adopt a possible range of alternative strategies, including placing their servers in a physically proximate location outside the exchange's data center (which could be a competing exchange), or pursuing strategies less dependent upon the lower exchange-to-participant latency associated with co-location. Accordingly, the exchange charging excessive fees would stand to lose not only co-location revenues but also the liquidity of the formerly co-located trading firms, which could have additional follow-on effects on the market share and revenue of the affected exchange.
The Exchange believes that the additional services and fees proposed herein would be equitably allocated and not unfairly discriminatory because, in addition to the services being completely voluntary, they would be available to all Users on an equal basis (
The Exchange believes that the proposed charges would be reasonable, equitably allocated and not unfairly discriminatory because the Exchange would offer the Access and Connectivity as conveniences to Users, but in order to do so must provide, maintain and operate the data center facility hardware and technology infrastructure. The Exchange must handle the installation, administration, monitoring, support and maintenance of such services, including by responding to any production issues. Since the inception of co-location, the Exchange has made numerous improvements to the network hardware and technology infrastructure and has established additional administrative controls. The Exchange has expanded the network infrastructure to keep pace with the increased number of services available to Users, including resilient and redundant feeds. In addition, in order to provide Access and Connectivity, the Exchange would maintain multiple connections to each ATPD and ATPS, allowing the Exchange to provide resilient and redundant connections; adapt to any changes made by the relevant third party; and cover any applicable fees charged by the relevant third party, such as port fees. In addition, Users would not be required to use any of their bandwidth for Access and Connectivity unless they wish to do so.
The Exchange believes the proposed fees for Access and Connectivity would be reasonable because they would allow the Exchange to defray or cover the costs associated with offering Users access to Additional Third Party Systems and connectivity to Additional Third Party Data Feeds while providing Users the convenience of receiving such Access and Connectivity within co-location, helping them tailor their data center operations to the requirements of their business operations.
For the reasons above, the proposed changes would not unfairly discriminate between or among market participants that are otherwise capable of satisfying any applicable co-location fees, requirements, terms and conditions established from time to time by the Exchange.
For these reasons, the Exchange believes that the proposal is consistent with the Act.
In accordance with Section 6(b)(8) of the Act,
The Exchange believes that providing Users with additional options for connectivity and access to new services would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because such proposed Access and Connectivity
The Exchange operates in a highly competitive market in which exchanges offer co-location services as a means to facilitate the trading and other market activities of those market participants who believe that co-location enhances the efficiency of their operations. Accordingly, fees charged for co-location services are constrained by the active competition for the order flow of, and other business from, such market participants. If a particular exchange charges excessive fees for co-location services, affected market participants will opt to terminate their co-location arrangements with that exchange, and adopt a possible range of alternative strategies, including placing their servers in a physically proximate location outside the exchange's data center (which could be a competing exchange), or pursuing strategies less dependent upon the lower exchange-to-participant latency associated with co-location. Accordingly, the exchange charging excessive fees would stand to lose not only co-location revenues but also the liquidity of the formerly co-located trading firms, which could have additional follow-on effects on the market share and revenue of the affected exchange. For the reasons described above, the Exchange believes that the proposed rule change reflects this competitive environment.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The Exchange is filing a proposal to amend the MIAX PEARL Fee Schedule (the “Fee Schedule”) to adopt a fee for the sale of certain historical market data.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend its Fee Schedule to adopt a fee for the sale of certain historical market data.
The historical market data that the Exchange proposes to sell provides information about the past activity of all option products traded on the Exchange for each trading session conducted during a particular calendar month. The data is intended to enhance the user's ability to analyze option trade and volume data, evaluate historical trends in the trading activity of a particular option product, and enable the testing of trading models and analytical strategies. Specifically, the historical market data that the Exchange proposes to sell includes all data that is captured and disseminated on the following proprietary MIAX PEARL data feeds, on a T+1 basis: MIAX PEARL Top of Market (“ToM”); and MIAX PEARL Liquidity Feed (“PLF”) (“Historical Market Data”). All such proprietary MIAX PEARL data feeds that, on a T+1 basis, comprise the Historical Market Data are described on the Exchange's Fee Schedule.
ToM provides real-time, ultra-low latency updates of the MIAX PEARL Best Bid or Offer, or PBBO,
MIAX PEARL will only assess the fee for Historical Market Data on a user (whether Member or Non-Member) that specifically requests such Historical Market Data. Historical Market Data will be uploaded onto an Exchange-provided device. The amount of the fee is $500, and it will be assessed on a per device basis. Each device shall have a maximum storage capacity of 8 Terabytes and will be configured to include data for both MIAX Options and MIAX PEARL. Users may request up to six months of Historical Market Data per device, subject to the device's storage capacity. Historical Market Data is available from August 1, 2017 to the present (always on a T+1 basis), however only the most recent six months of Historical Market Data shall be available for purchase from the request date. Historical Market Data usage is restricted to internal use only, and thus may not be distributed to any third-party.
The Exchange notes that this filing is substantially similar to a companion MIAX Options filing
The Exchange believes that its proposal to amend its Fee Schedule is consistent with Section 6(b) of the Act
The Exchange believes the proposed fees are a reasonable allocation of its costs and expenses among its Members and other persons using its facilities since it is recovering the costs associated with distributing such data. Access to the Exchange is provided on fair and non-discriminatory terms. The Exchange believes the proposed fees are equitable and not unfairly discriminatory because the fee level results in a reasonable and equitable allocation of fees amongst users for similar services. Moreover, the decision as to whether or not to purchase Historical Market Data is entirely optional to all users. Potential purchasers are not required to purchase the Historical Market Data, and the Exchange is not required to make the Historical Market Data available. Purchasers may request the data at any time or may decline to purchase such data. The allocation of fees among users is fair and reasonable because, if the market deems the proposed fees to be unfair or inequitable, firms can diminish or discontinue their use of this data.
In adopting Regulation NMS, the Commission granted self-regulatory organizations and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data:
[E]fficiency is promoted when broker-dealers who do not need the data beyond the prices, sizes, market center identifications of the NBBO and consolidated last sale information are not required to receive (and pay for) such data when broker-dealers may choose to receive (and pay for) additional market data based on their own internal analysis of the need for such data.
By removing “unnecessary regulatory restrictions” on the ability of exchanges to sell their own data, Regulation NMS advanced the goals of the Act and the principles reflected in its legislative history. If the free market should determine whether proprietary data is sold to broker-dealers at all, it follows that the price at which such data is sold should be set by the market as well.
In July, 2010, Congress adopted H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), which amended Section 19 of the Act. Among other things, Section 916 of the Dodd-Frank Act amended paragraph (A) of Section 19(b)(3) of the Act by inserting the phrase “on any person, whether or not the person is a member of the self-regulatory organization” after “due, fee or other charge imposed by the self-regulatory organization.” As a result, all SRO rule proposals establishing or changing dues, fees or other charges are immediately effective upon filing regardless of whether such dues, fees or other charges are imposed on members of the SRO, non-members, or both. Section 916 further amended paragraph (C) of Section 19(b)(3) of the Act to read, in pertinent part, “At any time within the 60-day period beginning on the date of filing of such a proposed rule change in accordance with the provisions of paragraph (1) [of Section 19(b)], the Commission summarily may temporarily suspend the change in the rules of the self-regulatory organization made thereby, if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this title. If the Commission takes such action, the Commission shall institute proceedings under paragraph (2)(B) [of Section 19(b)] to determine whether the proposed rule should be approved or disapproved.”
The Exchange believes that these amendments to Section 19 of the Act reflect Congress's intent to allow the Commission to rely upon the forces of competition to ensure that fees for market data are reasonable and equitably allocated. Although Section 19(b) had formerly authorized immediate effectiveness for a “due, fee or other charge imposed by the self-regulatory organization,” the Commission adopted a policy and subsequently a rule stating that fees for data and other products available to persons that are not members of the self-regulatory organization must be approved by the Commission after first being published for comment. At the time, the Commission supported the adoption of the policy and the rule by pointing out that unlike members, whose representation in self-regulatory organization governance was mandated by the Act, non-members should be given the opportunity to comment on fees before being required to pay them, and that the Commission should specifically approve all such fees. The Exchange believes that the amendment to Section 19 reflects Congress's conclusion that the evolution of self-regulatory organization governance and competitive market structure have rendered the Commission's prior policy on non-member fees obsolete. Specifically, many exchanges have evolved from member-owned, not-for-profit corporations into for-profit, investor-owned corporations (or subsidiaries of investor-owned corporations). Accordingly, exchanges no longer have narrow incentives to manage their affairs for the exclusive benefit of their members, but rather have incentives to maximize the appeal of their products to all customers, whether members or non-members, so as to broaden distribution and grow revenues. Moreover, the Exchange believes that the change also reflects an endorsement of the Commission's determinations that reliance on competitive markets is an appropriate means to ensure equitable and reasonable prices. Simply put, the change reflects a presumption that all fee changes should be permitted to take effect immediately, since the level of all fees are constrained by competitive forces.
Selling proprietary market data, such as Historical Market Data, is a means by which exchanges compete to attract business. To the extent that exchanges are successful in such competition, they earn trading revenues and also enhance the value of their data products by increasing the amount of data they provide. The need to compete for business places substantial pressure upon exchanges to keep their fees for both executions and data reasonable.
The decision of the United States Court of Appeals for the District of Columbia Circuit in
In fact, the legislative history indicates that the Congress intended that the market system `evolve through the interplay of competitive forces as unnecessary regulatory restrictions are removed' and that the SEC wield its regulatory power `in those situations where competition may not be sufficient,' such as
The court's conclusions about Congressional intent are therefore reinforced by the Dodd-Frank Act amendments, which create a presumption that exchange fees, including market data fees, may take effect immediately, without prior Commission approval, and that the Commission should take action to suspend a fee change and institute a proceeding to determine whether the fee change should be approved or disapproved only where the Commission has concerns that the change may not be consistent with the Act.
MIAX PEARL does not believe that the proposed rule changes will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Indeed, the Exchange believes that offering certain Historical Market Data will enhance competition by encouraging sales, which will make analytical data more readily available to investors. Notwithstanding its determination that the Commission may rely upon competition to establish fair and equitably allocated fees for market data, the
The market for data products is extremely competitive and users may freely choose alternative venues and data vendors based on the aggregate fees assessed, the data offered, and the value provided. Numerous exchanges compete with each other for listings, trades, and market data itself, providing virtually limitless opportunities for entrepreneurs who wish to produce and distribute their own market data. Transaction execution and proprietary data products are complementary in that market data is both an input and a byproduct of the execution service. In fact, market data and trade execution are a paradigmatic example of joint products with joint costs. The decision whether and on which platform to post an order will depend on the attributes of the platform where the order can be posted, including the execution fees, data quality and price, and distribution of its data products. Without trade executions, exchange data products cannot exist. Moreover, data products are valuable to many end users only insofar as they provide information that end users expect will assist them or their customers in making trading decisions.
The costs of producing market data include not only the costs of the data distribution infrastructure, but also the costs of designing, maintaining, and operating the exchange's transaction execution platform and the cost of regulating the exchange to ensure its fair operation and maintain investor confidence. The total return that a trading platform earns reflects the revenues it receives from both products and the joint costs it incurs. Moreover, the operation of the Exchange is characterized by high fixed costs and low marginal costs. This cost structure is common in content distribution industries such as software, where developing new software typically requires a large initial investment (and continuing large investments to upgrade software), but once the software is developed, the incremental cost of providing that software to an additional user is typically small, or even zero (
Competition among trading platforms can be expected to constrain the aggregate return each platform earns from the sale of its joint products. The level of competition and contestability in the market is evidence in the numerous alternative venues that compete for order flow, including SRO markets, as well as internalizing BDs and various forms of alternative trading systems (“ATSs”), including dark pools and electronic communication networks (“ECNs”). Each SRO market competes to produce transaction reports via trade executions. It is common for BDs to further and exploit this competition by sending their order flow and transaction reports to multiple markets, rather than providing them all to a single market. Competitive markets for order flow, executions, and transaction reports provide pricing discipline for the inputs of proprietary data products. The large number of SROs, TRFs, BDs, and ATSs that currently produce proprietary data or are currently capable of producing it provides further pricing discipline for proprietary data products. Each SRO, TRF, ATS, and BD is currently permitted to produce proprietary data products, and many currently do or have announced plans to do so, including the Nasdaq exchanges, NYSE exchanges, and CBOE/Bats exchanges.
In this competitive environment, an “excessive” price for one product will have to be reflected in lower prices for other products sold by the Exchange, or otherwise the Exchange may experience a loss in sales that may adversely affect its profitability. In this case, the proposed rule change enhances competition by providing Historical Market Data at a fixed price. As such, the Exchange believes that the proposed changes will enhance, not impair, competition in the financial markets.
The market for market data products is competitive and inherently contestable because there is fierce competition for the inputs necessary to the creation of proprietary data and strict pricing discipline for the proprietary products themselves. Numerous exchanges compete with each other for listings, trades, and market data itself, providing virtually limitless opportunities for entrepreneurs who wish to produce and distribute their own market data. This proprietary data is produced by each individual exchange, as well as other entities, in a vigorously competitive market.
Broker-dealers currently have numerous alternative venues for their order flow, including fifteen existing options markets. Each SRO market competes to produce transaction reports via trade executions. Competitive markets for order flow, executions, and transaction reports provide pricing discipline for the inputs of proprietary data products. The large number of SROs that currently produce proprietary data or are currently capable of producing it provides further pricing discipline for proprietary data products. Each SRO is currently permitted to produce proprietary data products, and many in addition to MIAX PEARL currently do, including NASDAQ, CBOE, Nasdaq ISE, NYSE American, and NYSE Arca. Additionally, order routers and market data vendors can
Market data vendors provide another form of price discipline for proprietary data products because they control the primary means of access to end subscribers. Vendors impose price restraints based upon their business models. For example, vendors such as Bloomberg and Thomson Reuters that assess a surcharge on data they sell may refuse to offer proprietary products that end subscribers will not purchase in sufficient numbers. Internet portals, such as Google, impose a discipline by providing only data that will enable them to attract “eyeballs” that contribute to their advertising revenue. Retail broker-dealers, such as Schwab and Fidelity, offer their customers proprietary data only if it promotes trading and generates sufficient commission revenue. Although the business models may differ, these vendors' pricing discipline is the same: They can simply refuse to purchase any proprietary data product that fails to provide sufficient value. The Exchange and other producers of proprietary data products must understand and respond to these varying business models and pricing disciplines in order to market proprietary data products successfully.
In addition to the competition and price discipline described above, the market for proprietary data products is also highly contestable because market entry is rapid, inexpensive, and profitable. The history of electronic trading is replete with examples of entrants that swiftly grew into some of the largest electronic trading platforms and proprietary data producers: Archipelago, BATS Trading and Direct Edge. Regulation NMS, by deregulating the market for proprietary data, has increased the contestability of that market. While broker-dealers have previously published their proprietary data individually, Regulation NMS encourages market data vendors and broker-dealers to produce proprietary products cooperatively in a manner never before possible. Multiple market data vendors already have the capability to aggregate data and disseminate it on a profitable scale, including Bloomberg, and Thomson Reuters.
The Court in
The intensity of competition for proprietary information is significant and the Exchange believes that this proposal itself clearly evidences such competition. The Exchange is offering Historical Market Data in order to keep pace with changes in the industry and evolving customer needs. It is entirely optional and is geared towards attracting new order flow. MIAX PEARL competitors continue to create new market data products and innovative pricing in this space. In all cases, the Exchange expects firms and other parties to make decisions on how much and what types of data to consume on the basis of the total cost of interacting with MIAX PEARL or other exchanges. Of course, the explicit data fees are only one factor in a total platform analysis. Some competitors have lower transactions fees and higher data fees, and others are vice versa. The market for this proprietary information is highly competitive and continually evolves as products develop and change.
Written comments were neither solicited nor received.
The foregoing rule change is effective pursuant to Section 19(b)(3)(A)(ii) of the Act,
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend its rules as well as certain corporate documents of the Exchange to reflect legal name changes.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The purpose of this filing is to reflect in the Exchange's governing documents (and the governing documents of its parent company)
This name change proposal is a non-substantive change. No changes to the ownership or structure of the Exchange have taken place. No other changes are being proposed in this filing. The Exchange represents that these changes are concerned solely with the administration of the Exchange and do not affect the meaning, administration, or enforcement of any rules of the Exchange or the rights, obligations, or privileges of Exchange members or their associated persons in any way. Accordingly, this filing is being submitted under Rule 19b-4(f)(3). In lieu of providing a copy of the marked changes, the Exchange represents that it will make the necessary non-substantive revisions to the Amended Certificate of Formation, Second Amended Limited Liability Company Agreement, By-Laws, Rulebook, and Pricing Schedule and post updated versions of each on the Exchange's Web site pursuant to Rule 19b-4(m)(2).
The Exchange notes that the following references are not being amended in the Exchange's governing documents and the Exchange's Rulebook:
• Any name with a trademark (TM) or service mark (SM) attached to the name.
• Any references in the Amended Certificate of Formation or Second Amended Limited Liability Company Agreement which references [sic] a prior name of the Exchange and reflects a historical date wherein that name was in effect.
The Exchange believes that its proposal is consistent with section 6(b) of the Act,
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The name change will align with the parent company, Nasdaq, Inc.
No written comments were either solicited or received.
Pursuant to section 19(b)(3)(A) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to provide Users with access to five additional third party systems and connectivity to two additional third party data feeds. In addition, the Exchange proposes to change its Price List related to these co-location services. The proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend the co-location
As set forth in the Price List, the Exchange charges fees for connectivity to the execution systems of third party markets and other content service providers (“Third Party Systems”), and data feeds from third party markets and
The Exchange now proposes to make the following changes:
• Add five content service providers to the list of Third Party Systems: Chicago Mercantile Exchange (CME Group), Chicago Stock Exchange (CHX), Investors Exchange (IEX), OneChicago and TMX Group (together, the “Additional Third Party Systems” or “ATPS”); and
• add two feeds to the list of Third Party Data Feeds: Investors Exchange and OneChicago (together the “Additional Third Part Data Feeds” or “ATPD”).
The Exchange would provide access to the Additional Third Party Systems (“Access”) and connectivity to the Additional Third Party Data Feeds (“Connectivity”) as conveniences to Users. Use of Access or Connectivity would be completely voluntary. The Exchange is not aware of any impediment to third parties offering Access or Connectivity.
The Exchange does not have visibility into whether third parties currently offer, or intend to offer, Users access to the Additional Third Party Systems and connectivity to the Additional Third Party Data Feeds, as such third parties are not required to make that information public. However, if one or more third parties presently offer, or in the future opt to offer, such Access and Connectivity to Users, a User may utilize the Secure Financial Transaction Infrastructure (“SFTI”) network, a third party telecommunication network, third party wireless network, a cross connect, or a combination thereof to access such services and products through a connection to an access center outside the data center (which could be a SFTI access center, a third-party access center, or both), another User, or a third party vendor.
The Exchange will announce the dates that each Product is available through customer notices disseminated to all Users simultaneously.
The Exchange proposes to revise the Price List to provide that Users may obtain connectivity to the five Additional Third Party Systems for a fee. As with the current Third Party Systems, Users would connect to the Additional Third Party Systems over the internet protocol (“IP”) network, a local area network available in the data center.
As with the current Third Party Systems, in order to obtain access to an Additional Third Party System, the User would enter into an agreement with the relevant third party content service provider, pursuant to which the third party content service provider would charge the User for access to the Additional Third Party System. The Exchange would then establish a unicast connection between the User and the relevant third party content service provider over the IP network.
The Exchange has no ownership interest in the Additional Third Party Systems. Establishing a User's access to an Additional Third Party System would not give the Exchange any right to use the Additional Third Party Systems. Connectivity to an Additional Third Party System would not provide access or order entry to the Exchange's execution system, and a User's connection to an Additional Third Party System would not be through the Exchange's execution system.
As with the existing connections to Third Party Systems, the Exchange proposes to charge a monthly recurring fee for connectivity to an Additional Third Party System. Specifically, when a User requests access to an Additional Third Party System, it would identify the applicable content service provider and what bandwidth connection it required.
The Exchange proposes to modify its Price List to add the Additional Third Party Systems to its existing list of Third Party Systems. The additional items would be as follows:
The Exchange does not propose to change the monthly recurring fee the Exchange charges Users for unicast connectivity to each Third Party System, including the Additional Third Party Systems.
The Exchange proposes to revise the Price List to provide that Users may obtain connectivity to each of the two Additional Third Party Data Feeds for a fee. The Exchange would receive the Additional Third Party Data Feeds from the content service provider, at its data center. It would then provide connectivity to that data to Users for a fee. Users would connect to the Additional Third Party Data Feeds over the IP network.
In order to connect to an Additional Third Party Data Feed, a User would enter into a contract with the content service provider, pursuant to which the content service provider would charge the User for the Third Party Data Feed. The Exchange would receive the Third Party Data Feed over its fiber optic network and, after the content service provider and User entered into the contract and the Exchange received authorization from the content service provider, the Exchange would re-transmit the data to the User over the User's port. The Exchange would charge the User for the connectivity to the Additional Third Party Data Feed. A User would only receive, and would only be charged for, connectivity to the Additional Third Party Data Feeds for which it entered into contracts.
The Exchange has no affiliation with the sellers of the Additional Third Party Data Feeds. It would have no right to use the Additional Third Party Data Feeds other than as a redistributor of the data. The Additional Third Party Data Feeds would not provide access or order entry to the Exchange's execution system. The Additional Third Party Data Feeds would not provide access or order entry to the execution systems of the third parties generating the feed. The Exchange would receive the Additional Third Party Data Feeds via arms-length agreements and it would have no inherent advantage over any other distributor of such data.
As it does with the existing Third Party Data Feeds, the Exchange proposes to charge a monthly recurring fee for connectivity to each Additional Third Party Data Feed. The monthly
The Exchange proposes to add the connectivity fees for the Additional Third Party Data to its existing list in the Price List. The additional items would be as follows:
As is the case with all Exchange co-location arrangements, (i) neither a User nor any of the User's customers would be permitted to submit orders directly to the Exchange unless such User or customer is a member organization, a Sponsored Participant or an agent thereof (
The proposed change is not otherwise intended to address any other issues relating to co-location services and/or related fees, and the Exchange is not aware of any problems that Users would have in complying with the proposed change.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed changes would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest because, by offering additional services, the Exchange would give each User additional options for addressing its access and connectivity needs, responding to User demand for access and connectivity options. Providing additional services would help each User tailor its data center operations to the requirements of its business operations by allowing it to select the form and latency of access and connectivity that best suits its needs.
The Exchange would provide Access and Connectivity as conveniences to Users. Use of Access or Connectivity would be completely voluntary. The Exchange is not aware of any impediment to third parties offering Access or Connectivity. The Exchange does not have visibility into whether third parties currently offer, or intend to offer, Users access to the Additional Third Party Systems and connectivity to the Additional Third Party Data Feeds. However, if one or more third parties presently offer, or in the future opt to offer, such Access and Connectivity to Users, a User may utilize the SFTI network, a third party telecommunication network, third party wireless network, a cross connect, or a combination thereof to access such services and products through a connection to an access center outside the data center (which could be a SFTI access center, a third-party access center, or both), another User, or a third party vendor.
The Exchange believes that the proposed changes would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest because, by offering access to the Additional Third Party Systems and connectivity to the Additional Third Party Data Feeds to Users upon the effective date of this filing, the Exchange would give Users additional options for connectivity and access to new services as soon as they are available, responding to User demand for access and connectivity options.
The Exchange also believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,
The Exchange believes that the proposed fee changes are consistent with Section 6(b)(4) of the Act for multiple reasons. The Exchange operates in a highly competitive market in which exchanges offer co-location services as a means to facilitate the trading and other market activities of those market participants who believe that co-location enhances the efficiency of their operations. Accordingly, fees charged for co-location services are constrained by the active competition for the order flow of, and other business from, such market participants. If a particular exchange charges excessive fees for co-location services, affected market participants will opt to terminate their co-location arrangements with that exchange, and adopt a possible range of alternative strategies, including placing their servers in a physically proximate location outside the exchange's data center (which could be a competing exchange), or pursuing strategies less dependent upon the lower exchange-to-participant latency associated with co-location. Accordingly, the exchange charging excessive fees would stand to lose not only co-location revenues but also the liquidity of the formerly co-located trading firms, which could have additional follow-on effects on the market share and revenue of the affected exchange.
The Exchange believes that the additional services and fees proposed herein would be equitably allocated and not unfairly discriminatory because, in addition to the services being completely voluntary, they would be available to all Users on an equal basis (
The Exchange believes that the proposed charges would be reasonable, equitably allocated and not unfairly discriminatory because the Exchange would offer the Access and Connectivity as conveniences to Users, but in order to do so must provide, maintain and operate the data center facility hardware and technology infrastructure. The Exchange must handle the installation, administration, monitoring, support and maintenance of such services, including by responding to any production issues. Since the inception of co-location, the Exchange has made numerous improvements to the network hardware and technology infrastructure and has established additional administrative controls. The Exchange has expanded the network infrastructure to keep pace with the increased number of services available to Users, including resilient and redundant feeds. In addition, in order to provide Access and Connectivity, the Exchange would maintain multiple connections to each ATPD and ATPS, allowing the Exchange to provide resilient and redundant connections; adapt to any changes made by the relevant third party; and cover any applicable fees charged by the relevant third party, such as port fees. In addition, Users would not be required to use any of their bandwidth for Access and Connectivity unless they wish to do so.
The Exchange believes the proposed fees for Access and Connectivity would be reasonable because they would allow the Exchange to defray or cover the costs associated with offering Users access to Additional Third Party Systems and connectivity to Additional Third Party Data Feeds while providing Users the convenience of receiving such Access and Connectivity within co-location, helping them tailor their data center operations to the requirements of their business operations.
For the reasons above, the proposed changes would not unfairly discriminate between or among market participants that are otherwise capable of satisfying any applicable co-location fees, requirements, terms and conditions established from time to time by the Exchange.
For these reasons, the Exchange believes that the proposal is consistent with the Act.
In accordance with Section 6(b)(8) of the Act,
The Exchange believes that providing Users with additional options for connectivity and access to new services would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because such proposed Access and Connectivity would satisfy User demand for access and connectivity options. The Exchange would provide Access and Connectivity as conveniences equally to all Users. The Exchange does not have visibility into whether third parties currently offer, or intend to offer, Users access to the Additional Third Party Systems and connectivity to the Additional Third Party Data Feeds, as such third parties are not required to make that information public. However, if one or more third parties presently offer, or in the future opt to offer, such Access and Connectivity to Users, a User may utilize the SFTI network, a third party telecommunication network, third party wireless network, a cross connect, or a combination thereof to access such services and products through a connection to an access center outside the data center (which could be a SFTI access center, a third-party access center, or both), another User, or a third party vendor. Users that opt to use the proposed Access or Connectivity would not receive access or connectivity that is not available to all Users, as all market participants that contract with the content provider may receive access or connectivity. In this way, the proposed changes would enhance competition by helping Users tailor their Access and Connectivity to the needs of their business operations by allowing them to select the form and latency of access and connectivity that best suits their needs.
The Exchange operates in a highly competitive market in which exchanges offer co-location services as a means to facilitate the trading and other market activities of those market participants who believe that co-location enhances the efficiency of their operations. Accordingly, fees charged for co-location services are constrained by the active competition for the order flow of, and other business from, such market participants. If a particular exchange charges excessive fees for co-location services, affected market participants will opt to terminate their co-location arrangements with that exchange, and adopt a possible range of alternative strategies, including placing their servers in a physically proximate location outside the exchange's data center (which could be a competing exchange), or pursuing strategies less dependent upon the lower exchange-to-participant latency associated with co-location. Accordingly, the exchange charging excessive fees would stand to lose not only co-location revenues but also the liquidity of the formerly co-located trading firms, which could have additional follow-on effects on the market share and revenue of the affected exchange. For the reasons described above, the Exchange believes that the proposed rule change reflects this competitive environment.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to provide Users with access to five additional third party systems and connectivity to two additional third party data feeds. In addition, the Exchange proposes to change its NYSE American Equities Price List (“Price List”) and the NYSE American Options Fee Schedule (“Fee Schedule”) related to these co-location services. The proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend the co-location
As set forth in the Price List and Fee Schedule, the Exchange charges fees for connectivity to the execution systems of third party markets and other content service providers (“Third Party Systems”), and data feeds from third party markets and other content service providers (“Third Party Data Feeds”).
The Exchange now proposes to make the following changes:
• Add five content service providers to the list of Third Party Systems: Chicago Mercantile Exchange (CME Group), Chicago Stock Exchange (CHX), Investors Exchange (IEX), OneChicago and TMX Group (together, the “Additional Third Party Systems” or “ATPS”); and
• add two feeds to the list of Third Party Data Feeds: Investors Exchange and OneChicago (together the “Additional Third Part Data Feeds” or “ATPD”).
The Exchange would provide access to the Additional Third Party Systems (“Access”) and connectivity to the Additional Third Party Data Feeds (“Connectivity”) as conveniences to Users. Use of Access or Connectivity would be completely voluntary. The Exchange is not aware of any impediment to third parties offering Access or Connectivity.
The Exchange does not have visibility into whether third parties currently offer, or intend to offer, Users access to the Additional Third Party Systems and connectivity to the Additional Third Party Data Feeds, as such third parties are not required to make that information public. However, if one or more third parties presently offer, or in the future opt to offer, such Access and Connectivity to Users, a User may utilize the Secure Financial Transaction Infrastructure (“SFTI”) network, a third party telecommunication network, third party wireless network, a cross connect, or a combination thereof to access such services and products through a connection to an access center outside the data center (which could be a SFTI access center, a third-party access center, or both), another User, or a third party vendor.
The Exchange will announce the dates that each Product is available through customer notices disseminated to all Users simultaneously.
The Exchange proposes to revise the Price List and Fee Schedule to provide that Users may obtain connectivity to the five Additional Third Party Systems for a fee. As with the current Third Party Systems, Users would connect to the Additional Third Party Systems over the internet protocol (“IP”) network, a local area network available in the data center.
As with the current Third Party Systems, in order to obtain access to an Additional Third Party System, the User would enter into an agreement with the relevant third party content service provider, pursuant to which the third party content service provider would charge the User for access to the Additional Third Party System. The Exchange would then establish a unicast connection between the User and the relevant third party content service provider over the IP network.
The Exchange has no ownership interest in the Additional Third Party Systems. Establishing a User's access to an Additional Third Party System would not give the Exchange any right to use the Additional Third Party Systems. Connectivity to an Additional Third Party System would not provide access or order entry to the Exchange's execution system, and a User's connection to an Additional Third Party System would not be through the Exchange's execution system.
As with the existing connections to Third Party Systems, the Exchange proposes to charge a monthly recurring fee for connectivity to an Additional Third Party System. Specifically, when a User requests access to an Additional Third Party System, it would identify the applicable content service provider and what bandwidth connection it required.
The Exchange proposes to modify its Price List and Fee Schedule to add the Additional Third Party Systems to its existing list of Third Party Systems. The additional items would be as follows:
The Exchange does not propose to change the monthly recurring fee the Exchange charges Users for unicast connectivity to each Third Party System, including the Additional Third Party Systems.
The Exchange proposes to revise the Price List and Fee Schedule to provide that Users may obtain connectivity to each of the two Additional Third Party Data Feeds for a fee. The Exchange would receive the Additional Third Party Data Feeds from the content service provider, at its data center. It would then provide connectivity to that data to Users for a fee. Users would
In order to connect to an Additional Third Party Data Feed, a User would enter into a contract with the content service provider, pursuant to which the content service provider would charge the User for the Third Party Data Feed. The Exchange would receive the Third Party Data Feed over its fiber optic network and, after the content service provider and User entered into the contract and the Exchange received authorization from the content service provider, the Exchange would re-transmit the data to the User over the User's port. The Exchange would charge the User for the connectivity to the Additional Third Party Data Feed. A User would only receive, and would only be charged for, connectivity to the Additional Third Party Data Feeds for which it entered into contracts.
The Exchange has no affiliation with the sellers of the Additional Third Party Data Feeds. It would have no right to use the Additional Third Party Data Feeds other than as a redistributor of the data. The Additional Third Party Data Feeds would not provide access or order entry to the Exchange's execution system. The Additional Third Party Data Feeds would not provide access or order entry to the execution systems of the third parties generating the feed. The Exchange would receive the Additional Third Party Data Feeds via arms-length agreements and it would have no inherent advantage over any other distributor of such data.
As it does with the existing Third Party Data Feeds, the Exchange proposes to charge a monthly recurring fee for connectivity to each Additional Third Party Data Feed. The monthly recurring fee would be per Additional Third Party Data Feed. Depending on its needs and bandwidth, a User may opt to receive all or some of the feeds or services included in an Additional Third Party Data Feed.
The Exchange proposes to add the connectivity fees for the Additional Third Party Data to its existing list in the Price List and Fee Schedule. The additional items would be as follows:
As is the case with all Exchange co-location arrangements, (i) neither a User nor any of the User's customers would be permitted to submit orders directly to the Exchange unless such User or customer is a member organization, a Sponsored Participant or an agent thereof (
The proposed change is not otherwise intended to address any other issues relating to co-location services and/or related fees, and the Exchange is not aware of any problems that Users would have in complying with the proposed change.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed changes would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest because, by offering additional services, the Exchange would give each User additional options for addressing its access and connectivity needs, responding to User demand for access and connectivity options. Providing additional services would help each User tailor its data center operations to the requirements of its business operations by allowing it to select the form and latency of access and connectivity that best suits its needs.
The Exchange would provide Access and Connectivity as conveniences to Users. Use of Access or Connectivity would be completely voluntary. The Exchange is not aware of any impediment to third parties offering Access or Connectivity. The Exchange does not have visibility into whether third parties currently offer, or intend to offer, Users access to the Additional Third Party Systems and connectivity to the Additional Third Party Data Feeds. However, if one or more third parties presently offer, or in the future opt to offer, such Access and Connectivity to Users, a User may utilize the SFTI network, a third party telecommunication network, third party wireless network, a cross connect, or a combination thereof to access such services and products through a connection to an access center outside the data center (which could be a SFTI access center, a third-party access center, or both), another User, or a third party vendor.
The Exchange believes that the proposed changes would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest because, by offering access to the Additional Third Party Systems and connectivity to the Additional Third Party Data Feeds to Users upon the effective date of this filing, the Exchange would give Users additional options for connectivity and access to new services as soon as they are available, responding to User demand for access and connectivity options.
The Exchange also believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,
The Exchange believes that the proposed fee changes are consistent with Section 6(b)(4) of the Act for multiple reasons. The Exchange operates in a highly competitive market in which exchanges offer co-location services as a means to facilitate the trading and other market activities of those market participants who believe that co-location enhances the efficiency of their operations. Accordingly, fees charged for co-location services are constrained by the active competition for the order flow of, and other business from, such market participants. If a particular exchange charges excessive fees for co-location services, affected market participants will opt to terminate their co-location arrangements with that exchange, and adopt a possible range of alternative strategies, including placing their servers in a physically proximate location outside the exchange's data center (which could be a competing exchange), or pursuing strategies less dependent upon the lower exchange-to-participant latency associated with co-location. Accordingly, the exchange charging excessive fees would stand to lose not only co-location revenues but also the liquidity of the formerly co-located trading firms, which could have additional follow-on effects on the market share and revenue of the affected exchange.
The Exchange believes that the additional services and fees proposed herein would be equitably allocated and not unfairly discriminatory because, in addition to the services being completely voluntary, they would be available to all Users on an equal basis (
The Exchange believes that the proposed charges would be reasonable, equitably allocated and not unfairly discriminatory because the Exchange would offer the Access and Connectivity as conveniences to Users, but in order to do so must provide, maintain and operate the data center facility hardware and technology infrastructure. The Exchange must handle the installation, administration, monitoring, support and maintenance of such services, including by responding to any production issues. Since the inception of co-location, the Exchange has made numerous improvements to the network hardware and technology infrastructure and has established additional administrative controls. The Exchange has expanded the network infrastructure to keep pace with the increased number of services available to Users, including resilient and redundant feeds. In addition, in order to provide Access and Connectivity, the Exchange would maintain multiple connections to each ATPD and ATPS, allowing the Exchange to provide resilient and redundant connections; adapt to any changes made by the relevant third party; and cover any applicable fees charged by the relevant third party, such as port fees. In addition, Users would not be required to use any of their bandwidth for Access and Connectivity unless they wish to do so.
The Exchange believes the proposed fees for Access and Connectivity would be reasonable because they would allow the Exchange to defray or cover the costs associated with offering Users access to Additional Third Party Systems and connectivity to Additional Third Party Data Feeds while providing Users the convenience of receiving such Access and Connectivity within co-location, helping them tailor their data center operations to the requirements of their business operations.
For the reasons above, the proposed changes would not unfairly discriminate between or among market participants that are otherwise capable of satisfying any applicable co-location fees, requirements, terms and conditions established from time to time by the Exchange.
For these reasons, the Exchange believes that the proposal is consistent with the Act.
In accordance with Section 6(b)(8) of the Act,
The Exchange believes that providing Users with additional options for connectivity and access to new services would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because such proposed Access and Connectivity would satisfy User demand for access and connectivity options. The Exchange would provide Access and Connectivity as conveniences equally to all Users. The Exchange does not have visibility into whether third parties currently offer, or intend to offer, Users access to the Additional Third Party Systems and connectivity to the Additional Third Party Data Feeds, as such third parties are not required to make that information public. However, if one or more third parties presently offer, or in the future opt to offer, such Access and Connectivity to Users, a User may utilize the SFTI network, a third party telecommunication network, third party wireless network, a cross connect, or a combination thereof to access such services and products through a connection to an access center outside the data center (which could be a SFTI access center, a third-party access center, or both), another User, or a third party vendor. Users that opt to use the proposed Access or Connectivity would not receive access or connectivity that is not available to all Users, as all market participants that contract with the content provider may receive access or connectivity. In this way, the proposed changes would enhance competition by helping Users tailor their Access and Connectivity to the needs of their business operations by allowing them to select the form and latency of access and connectivity that best suits their needs.
The Exchange operates in a highly competitive market in which exchanges offer co-location services as a means to facilitate the trading and other market activities of those market participants who believe that co-location enhances the efficiency of their operations. Accordingly, fees charged for co-location services are constrained by the active competition for the order flow of, and other business from, such market participants. If a particular exchange charges excessive fees for co-location services, affected market participants will opt to terminate their co-location arrangements with that exchange, and adopt a possible range of alternative strategies, including placing their servers in a physically proximate location outside the exchange's data center (which could be a competing exchange), or pursuing strategies less dependent upon the lower exchange-to-participant latency associated with co-location. Accordingly, the exchange charging excessive fees would stand to lose not only co-location revenues but also the liquidity of the formerly co-located trading firms, which could have additional follow-on effects on the
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
FINRA is proposing to amend Rule 6730 to make permanent an exemption from TRACE reporting transactions in TRACE-Eligible Securities that are executed on a facility of the New York Stock Exchange (“NYSE”), subject to specified conditions.
The text of the proposed rule change is available on FINRA's Web site at
In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
Rule 6730(e) (Reporting Requirements for Certain Transactions and Transfers of Securities) exempts members from reporting to the Trade Reporting and Compliance Engine (“TRACE”) transactions in TRACE-Eligible Securities
FINRA is proposing to make the exemption in Rule 6730(e)(4) permanent. Thus, pursuant to the proposed rule change, members would not be required to report to TRACE transactions in TRACE-Eligible Securities that are executed on a NYSE facility in accordance with NYSE Rules 1400, 1401 and 86, where such transactions are disseminated publicly by NYSE, so long as a data sharing agreement is in effect between FINRA and NYSE related to transactions covered by Rule 6730.
FINRA is proposing to make the exemption available on a permanent basis as the pilot has been operating without incident since its inception in 2007. Providing this exemption on a permanent basis would solidify in the FINRA rule a measure to avoid trade reporting to FINRA with regard to transactions in these securities that are disseminated publicly by NYSE. FINRA notes that the exemption under Rule 6730(e)(4) continues to be conditional on a data sharing agreement being in effect between FINRA and NYSE related to transactions covered by Rule 6730.
FINRA has filed the proposed rule change for immediate effectiveness and has requested that the SEC waive the requirement that the proposed rule change not become operative for 30 days after the date of the filing, so FINRA can implement the proposed rule change on the date of filing and prior to the expiration of the current pilot.
FINRA believes that the proposed rule change is consistent with the provisions of section 15A(b)(6) of the Act,
FINRA believes that providing the exemption on a permanent basis protects investors and the public because it continues to ensure that transactions are required to be publicly disseminated, and therefore transparency will be maintained for these transactions. The continued condition that a data sharing agreement remain in effect between NYSE and FINRA for transactions covered by the Rule 6730(e)(4) exemption allows FINRA to conduct surveillance in TRACE-Eligible Securities. In addition, providing the exemption on a permanent basis enhances regulatory efficiency and, with regard to covered transactions, permits members to avoid trade reporting to FINRA and the increased costs that may be incurred as a result of such requirement.
FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. FINRA
Written comments were neither solicited nor received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A) of the Act
FINRA has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such action will allow the existing TRACE exemption to remain available without interruption. If the pilot program were to expire on October 27, 2017, FINRA members would immediately become subject to duplicative reporting obligations with respect to transactions in TRACE-eligible debt securities effected on NYSE. In addition, the Commission notes that the pilot has been operating since 2007 without any issues being raised in the various comment periods to extend the pilot. For these reasons, the Commission hereby waives the 30-day operative delay requirement and designates the proposed rule change as operative upon filing.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend Rule 723 (Price Improvement Mechanism for Crossing Transactions) to remove obsolete rule text.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements
The Exchange proposes to amend Rule 723 (Price Improvement Mechanism for Crossing Transactions) to remove obsolete rule text.
Rule 723 sets forth the requirements for the PIM, which was adopted as part of its application to be registered as a national securities exchange under its previous name of Topaz Exchange, LLC (“Topaz”).
On December 12, 2016, the Exchange filed with the Commission a proposed rule change to make the Pilot permanent, and also to change the requirements for providing price improvement for Agency Orders of less than 50 option contracts (other than auctions involving Complex Orders) where the National Best Bid and Offer (“NBBO”) is only $0.01 wide.
In modifying the requirements for price improvement for Agency Orders of less than 50 contracts, the Exchange proposed to amend Rule 723(b) to require Electronic Access Members to provide at least $0.01 price improvement for an Agency Order if that order is for less than 50 contracts and if the difference between the NBBO is $0.01.
The Exchange adopted a member conduct standard to implement this requirement during the time pursuant to which ISE Gemini symbols were migrating from the ISE Gemini platform to the Nasdaq INET platform. At the time it proposed the member conduct standard, the Exchange anticipated that the migration to the Nasdaq platform would be complete on or before April 15, 2017. Accordingly, Rule 723(b) stated that, for the period beginning January 19, 2017 until a date specified by the Exchange in a Regulatory Information Circular, which date shall be no later than April 15, 2017, if the Agency Order is for less than 50 option contracts, and if the difference between the NBBO is $0.01, an Electronic Access Member shall not enter a Crossing Transaction unless such Crossing Transaction is entered at one minimum price improvement increment better than the NBBO on the opposite side of the market from the Agency Order, and better than the limit order or quote on the Nasdaq GEMX order book on the same side of the Agency Order. This requirement applied regardless of whether the Agency Order is for the account of a public customer, or where the Agency Order is for the account of a broker dealer or any other person or entity that is not a Public Customer.
In adopting the price improvement requirement for Agency Orders of less than 50 contracts, the Exchange also proposed to amend Rule 723(b) to adopt a systems-based mechanism to implement this requirement, which shall be effective following the migration of a symbol to the Nasdaq INET platform. Under this provision, if the Agency Order is for less than 50 option contracts, and if the difference between the NBBO is $0.01, the Crossing Transaction must be entered at one minimum price improvement increment better than the NBBO on the opposite side of the market from the Agency Order and better than the limit order or quote on the Nasdaq GEMX order book on the same side of the Agency Order.
By April 15, 2017, the Exchange had completed the migration of symbols to the Nasdaq INET platform, and adopted the corresponding systems-based mechanism for enforcing the price improvement requirement where the Agency Order is for less than 50 option contracts, and if the difference between the NBBO is $0.01. Accordingly, the Exchange is now proposing to delete the rule text in Rule 723 that implements the member conduct standard.
The Exchange believes that its proposal is consistent with section 6(b) of the Act,
The Exchange does not believe that the proposed rule change will impose any burden on competition not
No written comments were either solicited or received.
Because the proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend Rule 4702 (Order Types) and Rule 4754 [sic] (Nasdaq Closing Cross) to enhance the Nasdaq Closing Cross by permitting members to submit LOC Orders until immediately prior to 3:55 p.m. ET subject to certain conditions, and to make other changes related to Closing Cross/Extended Hours Orders [sic].
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
On July 13, 2017, the Exchange filed a proposed rule change to amend Rule 4702 (Order Types) and Rule 4754 (Nasdaq Closing Cross) to enhance the Nasdaq Closing Cross by permitting members to submit Limit On Close (“LOC”) Orders
A “Market Maker Peg Order” is an Order Type designed to allow a Market Maker to maintain a continuous two-sided quotation at a displayed price that is compliant with the quotation requirements for Market Makers set forth in Rule 4613(a)(2).
Furthermore, when the Nasdaq Closing Cross changes are introduced, the Exchange will re-price LOC Orders entered between 3:50 p.m. ET and immediately prior to 3:55 p.m. ET to the less aggressive of the order's limit price or the First Reference Price
The Exchange proposes to introduce the changes described in this proposed rule change on October 10, 2017. The Exchange began the rollout of functionality described in SR-NASDAQ-2017-061, as announced to members via Equity Trader Alert, with three symbols, VSAT, TEAM, and UNIT. The rollout of those changes will continue in the fourth quarter of 2017 after the completion of additional industry testing of the functionality.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
When the Exchange filed to restrict Market Maker Peg Orders from operating as Closing Cross/Extended Hours Orders, the Exchange explained that Market Maker Peg Orders were designed to assist members in meeting their quoting obligations and not as a means of submitting interest flagged with an on-close instruction. Furthermore, the Exchange explained that it did not believe that members want functionality that allows Market Maker Peg Orders to be entered with a flag designating an on-close instruction. The Exchange believes that this is true both for Market Maker Peg Orders entered with a TIF that continues after the time of the Nasdaq Closing Cross, and that therefore operate as Closing Cross/Extended Hours Orders, and Market Maker Peg Orders entered with a TIF that causes it to execute solely in the Nasdaq Closing Cross. The Exchange is therefore proposing to reject all Market Maker Peg Orders flagged to participate in the Nasdaq Closing Cross, regardless of TIF. The Exchange believes that this change will perfect the mechanism of a free and open market by eliminating the possibility that members can inadvertently enter this order type combination, while preserving the design of Market Maker Peg Orders to aid members in meeting their quoting obligations.
In addition, the Exchange believes that the current language in Rule 4702 could be confusing to members and investors when applied to securities that are selected for inclusion in the Tick Size Pilot Program, as these securities are subject to a $0.05 minimum increment instead of the $0.01 or $0.0001 minimum increments cited in the rule today. The Exchange believes that removing the reference to these specific increments will reduce confusion because permissible minimum increments may be $0.01 or $0.0001 for most securities, and $0.05 for a handful of securities selected for inclusion in the Tick Size Pilot Program. The Exchange must round to a permissible minimum increment whenever the First Reference Price is not in such a minimum increment. The proposed rule change makes this clear and will therefore increase transparency to the benefit of members and investors, and help ensure compliance with the Tick Size Pilot Program.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. With respect to Market Maker Peg Orders flagged for the Nasdaq Closing Cross, the proposed change eliminates an order type combination that is not consistent with the purpose of aiding members in meeting their quoting obligations. Furthermore, the proposed change related to minimum increments properly reflects the increments applicable to securities traded on the Exchange, including securities selected for inclusion in the Tick Size Pilot Program. Neither of these proposed changes is designed to have any significant competitive impact.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend Rule 723 (Price Improvement Mechanism for Crossing Transactions) to remove obsolete rule text.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend Rule 723 (Price Improvement Mechanism for Crossing Transactions) to remove obsolete rule text.
Rule 723 sets forth the requirements for the PIM, which was adopted as part of the Exchange's application to be registered as a national securities exchange.
On December 12, 2016, the Exchange filed with the Commission a proposed rule change to make the Pilot permanent, and also to change the requirements for providing price improvement for Agency Orders of less than 50 option contracts (other than auctions involving Complex Orders) where the National Best Bid and Offer (“NBBO”) is only $0.01 wide.
In modifying the requirements for price improvement for Agency Orders of less than 50 contracts, the Exchange proposed to amend Rule 723(b) to require Electronic Access Members to provide at least $0.01 price improvement for an Agency Order if that order is for less than 50 contracts and if the difference between the NBBO is $0.01.
The Exchange adopted a member conduct standard to implement this requirement during the time pursuant to which ISE Mercury symbols were migrating from the ISE Mercury platform to the Nasdaq INET platform. At the time it proposed the member conduct standard, the Exchange anticipated that the migration to the Nasdaq platform would be complete on or before September 15, 2017. Accordingly, Rule 723(b) stated that, for the period beginning January 19, 2017 until a date specified by the Exchange in a Regulatory Information Circular, which date shall be no later than September 15, 2017, if the Agency Order is for less than 50 option contracts, and if the difference between the NBBO is $0.01, an Electronic Access Member shall not enter a Crossing Transaction unless such Crossing Transaction is entered at one minimum price improvement increment better than the NBBO on the opposite side of the market from the Agency Order, and better than the limit order or quote on the Nasdaq MRX order book on the same side of the Agency Order. This requirement applied regardless of whether the Agency Order is for the account of a public customer, or where the Agency Order is for the account of
In adopting the price improvement requirement for Agency Orders of less than 50 contracts, the Exchange also proposed to amend Rule 723(b) to adopt a systems-based mechanism to implement this requirement, which shall be effective following the migration of a symbol to the Nasdaq INET platform. Under this provision, if the Agency Order is for less than 50 option contracts, and if the difference between the NBBO is $0.01, the Crossing Transaction must be entered at one minimum price improvement increment better than the NBBO on the opposite side of the market from the Agency Order and better than the limit order or quote on the Nasdaq MRX order book on the same side of the Agency Order.
By September 15, 2017, the Exchange had completed the migration of symbols to the Nasdaq INET platform, and adopted the corresponding systems-based mechanism for enforcing the price improvement requirement where the Agency Order is for less than 50 option contracts, and if the difference between the NBBO is $0.01. Accordingly, the Exchange is now proposing to delete the rule text in Rule 723 that implements the member conduct standard.
The Exchange believes that its proposal is consistent with section 6(b) of the Act,
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act, as the rule text to be removed has become obsolete with the migration of all symbols to the Nasdaq INET system and the corresponding adoption of the systems-based mechanism for enforcing the price improvement requirement where the Agency Order is for less than 50 option contracts, and if the differences between the NBBO is $0.01.
No written comments were either solicited or received.
Because the proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange seeks to amend its Second Amended and Restated Certificate of Incorporation. The text of the proposed rule change is provided below.
The name of the corporation is Bats EDGX Exchange, Inc. The corporation filed its original Certificate of Incorporation with the Secretary of State of the State of Delaware on March 9, 2009
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
EDGX recently amended its Restated Certificate of Incorporation in connection with a corporate transaction (the “Transaction”) involving, among other things, the recent acquisition of EDGX, along with Bats BYX Exchange, Inc. (“Bats BYX”), Bats BZX Exchange, Inc. (“Bats BZX”), and Bats EDGA Exchange, Inc. (“Bats EDGA” and, together with Bats EDGX, Bats BYX, and Bats BZX, the “Bats Exchanges”) by CBOE Holdings, Inc. (“CBOE Holdings”). CBOE Holdings is also the parent of Chicago Board Options Exchange, Incorporated (“CBOE”) and C2 Options Exchange, Incorporated (“C2”). Particularly, the filing proposed, among other things, to amend and restate the certificate of incorporation of the Exchange based on certificates of incorporation of CBOE and C2.
Particularly, Section 245(c) of the Delaware General Corporation Law (DGCL) requires that a restated certificate of incorporation “shall state, either in its heading or in an introductory paragraph, the corporation's present name, and, if it has been changed, the name under which it was originally incorporated, and the date of filing of its original certificate of incorporation with the secretary of state.” The Exchange notes that the conformed Certificate did not reference the name under which the corporation was originally incorporated (
The Exchange also notes that it inadvertently did not reference the correct version of the Certificate in two places in the introductory paragraph. Particularly, the Exchange notes that the third sentence of the introductory paragraph provides that the Second Amended and Restated Certificate of Incorporation of the corporation restated and integrated and also further amended the provisions of the corporation's “Certificate of Incorporation” instead of the then current (and now previous) version titled, “Restated Certificate of Incorporation”. Additionally, the last sentence of the introductory paragraph which provides that the current certificate is “amended, integrated and restated to read in its entirety as follows:” mistakenly references the new title of the amended Certificate (
The Exchange notes that the proposed changes are concerned solely with the administration of the Exchange and do not affect the meaning, administration, or enforcement of any rules of the Exchange or the rights, obligations, or privileges of Exchange members or their associated persons is [sic] any way.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the Exchange believes correcting inadvertent non-substantive, technical errors in its Certificate in order to comply with Delaware law and reflect the correct and accurate version of the Certificate that was amended will avoid potential confusion, thereby removing impediments to, and perfecting the mechanism for a free and open market and a national market system, and, in general, protecting investors and the public interest of market participants. As noted above, the proposed changes do not affect the meaning, administration, or enforcement of any rules of the Exchange or the rights, obligations, or privileges of Exchange members or their associated persons is any way.
The Exchange does not believe the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Rather, the proposed rule change is merely attempting to correct inadvertent technical errors in the Exchange's introductory paragraph of its Certificate. The proposed rule change has no impact on competition.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to modify Rule 964.2NY regarding the participation entitlement formula for Specialists and e-Specialists. The proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The purpose of the filing is to modify Rule 964.2NY regarding the participation entitlement of Specialists and e-Specialists.
Rule 964NY sets forth the priority for the allocation of incoming orders to resting interest at a particular price in the System,
Generally, the Specialist Pool is entitled to 40% of the remaining balance of an order after any orders on behalf of Customers in the Consolidated Book are satisfied.
Currently, the Exchange applies the Additional Weighting as follows: When an inbound order is allocated against the Specialist Pool, the Primary Specialist's quoted size is treated as if it were double (
Because current Rule 964.2NY(b)(3)(A) does not specify the circumstances under which the Primary Specialist's allocation in the Specialist Pool is subject to the Cap, the Exchange proposes to make clear that the Cap only applies if “all participants in the Specialist Pool are quoting the same size.”
Pursuant to Rule 964.2NY(b)(1)(iv), each participant in the Specialist Pool would “be allocated a number of contracts equal to the
Below are examples of how the Exchange applies the Additional Weighting in circumstances where the Specialist Pool participation guarantee entitles each participant to a more favorable allocation than size pro rata:
The Exchange believes the proposed change, which does not alter current functionality, would provide additional specificity regarding how orders are allocated and the circumstances under which the Cap would apply to the Primary Specialist allocation, which adds clarity and transparency to Exchange rules to the benefit of all market participants.
The Exchange believes that its proposal is consistent with the requirements of the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.
The proposed rule change would promote just and equitable principles of trade as it is intended to provide additional specificity regarding the circumstances under which the Primary Specialist's allocation would be subject to a Cap, which adds clarity and transparency to Exchange rules regarding order allocation. The Exchange believes that the proposed change promotes just and equitable principles of trade, fosters cooperation and coordination among persons engaged in facilitating securities transactions, and removes impediments to and perfects the mechanism of a free and open market by ensuring that members, regulators and the public can more easily navigate and better understand the Exchange's rulebook.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is not designed to address any competitive issues. Rather, the proposed change is designed to provide ATP Holders and the investing public with additional specificity and transparency regarding the circumstances under which the Primary Specialist's allocation would be subject to a Cap, which in turn adds clarity and transparency to Exchange rules.
No written comments were solicited or received with respect to the proposed rule change.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEAMER-2017-23. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Small Business Administration.
Notice of open Federal Advisory Committee meetings.
The SBA is issuing this notice to announce the location, date, time and agenda for November meeting of the Federal Advisory Committee for the Small Business Development Centers Program. The meeting will be open to the public; however, advance notice of attendance is required.
Tuesday, November 14, 2017, at 1:00 p.m. EST.
Meeting will be held via conference call.
Monika Nixon, Office of Small Business Development Center, U.S. Small Business Administration, 409 Third Street SW., Washington, DC 20416;
If anyone wishes to be a listening participant or would like to request accommodations, please contact Monika Nixon at the information above.
Pursuant to section 10(a) of the Federal Advisory Committee Act (5 U.S.C. Appendix 2), SBA announces the meetings of the National SBDC Advisory Board. This Board provides advice and counsel to the SBA Administrator and Associate Administrator for Small Business Development Centers.
The purpose of the meetings is to discuss the following issues pertaining to the SBDC Program:
U.S. Small Business Administration.
Amendment 6.
This is an amendment of the Presidential declaration of a major disaster for the State of Florida (FEMA—4337—DR), dated 09/10/2017.
Issued on 10/20/2017.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW., Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for the State of FLORIDA, dated 09/10/2017, is hereby amended to establish the incident period for this disaster as beginning 09/04/2017 through 10/18/2017. All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 3.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of Florida (FEMA-4337-DR), dated 09/21/2017.
Issued on 10/20/2017.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW., Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of Florida, dated 09/21/2017, is hereby amended to establish the incident period for this disaster as beginning 09/04/2017 through 10/18/2017.
All other information in the original declaration remains unchanged.
Notice is hereby given that Propel Venture Partners US Fund, L.P., 201 Mission Street, 25th Floor, San Francisco, CA 94105, a Federal Licensee under the Small Business Investment Act of 1958, as amended (“the Act”), in connection with the financing of a small concerns, has sought an exemption under Section 312 of the Act and section 107.730, Financings which Constitute Conflicts of Interest of the Small Business Administration (“SBA”) Rules and Regulations (13 CFR 107.730). Propel Venture Partners US Fund, L.P. proposes to purchase common stock of Kasisto, Inc. from BBVA Compass Bancshares, Inc. (“BBVA”). Kasisto has requested the transaction because it prefers the shares to be held by a venture investor who will support the continued growth of the company.
The proposed transaction is brought within the purview of section 107.730 of the Regulations because BBVA is the sole owner of Propel Venture Partners US Fund, L.P. BBVA is considered an Associate of Propel Venture Partners US Fund, L.P. pursuant to section 107.50. Therefore, the proposed transaction is considered self-deal pursuant to 13 CFR 107.730 and requires a regulatory exemption. Notice is hereby given that any interested person may submit written comments on the transaction within fifteen days of the date of this publication to Associate Administrator for Investment, U.S. Small Business
Social Security Administration.
Notice.
Under title II of the Social Security Act (Act), there will be a 2.0 percent cost-of-living increase in Social Security benefits effective December 2017. In addition, the national average wage index for 2016 is $48,664.73. The cost-of-living increase and national average wage index affect other program parameters as described below.
Susan C. Kunkel, Office of the Chief Actuary, Social Security Administration, 6401 Security Boulevard, Baltimore, MD 21235, (410) 965-3000. Information relating to this announcement is available on our Internet site at
Because of the 2.0 percent cost-of-living increase, the following items will increase for 2018:
(1) The maximum Federal Supplemental Security Income (SSI) monthly payment amounts for 2018 under title XVI of the Act will be $750 for an eligible individual, $1,125 for an eligible individual with an eligible spouse, and $376 for an essential person;
(2) The special benefit amount under title VIII of the Act for certain World War II veterans will be $562.50 for 2018;
(3) The student earned income exclusion under title XVI of the Act will be $1,820 per month in 2018, but not more than $7,350 for all of 2018;
(4) The dollar fee limit for services performed as a representative payee will be $42 per month ($80 per month in the case of a beneficiary who is disabled and has an alcoholism or drug addiction condition that leaves him or her incapable of managing benefits) in 2018; and
(5) The dollar limit on the administrative-cost fee assessment charged to an appointed representative such as an attorney, agent, or other person who represents claimants will be $93 beginning in December 2017.
The national average wage index for 2016 is $48,664.73. This index affects the following amounts:
(1) The Old-Age, Survivors, and Disability Insurance (OASDI) contribution and benefit base will be $128,700 for remuneration paid in 2018 and self-employment income earned in taxable years beginning in 2018;
(2) The monthly exempt amounts under the OASDI retirement earnings test for taxable years ending in calendar year 2018 will be $1,420 for beneficiaries who will attain their Normal Retirement Age (NRA) (defined in the
(3) The dollar amounts (“bend points”) used in the primary insurance amount (PIA) formula for workers who become eligible for benefits, or who die before becoming eligible, in 2018 will be $896 and $5,399;
(4) The bend points used in the formula for computing maximum family benefits for workers who become eligible for benefits, or who die before becoming eligible, in 2018 will be $1,145, $1,652, and $2,155;
(5) The taxable earnings a person must have to be credited with a quarter of coverage in 2018 will be $1,320;
(6) The “old-law” contribution and benefit base under title II of the Act will be $95,400 for 2018;
(7) The monthly amount deemed to constitute substantial gainful activity (SGA) for statutorily blind persons in 2018 will be $1,970. The corresponding amount for non-blind disabled persons will be $1,180;
(8) The earnings threshold establishing a month as a part of a trial work period will be $850 for 2018; and
(9) Coverage thresholds for 2018 will be $2,100 for domestic workers and $1,800 for election officials and election workers.
According to section 215(i)(2)(D) of the Act, we must publish the benefit increase percentage and the revised table of “special minimum” benefits within 45 days after the close of the third calendar quarter of 2017. We must also publish the following by November 1: The national average wage index for 2016 (215(a)(1)(D)), the OASDI fund ratio for 2017 (section 215(i)(2)(C)(ii)), the OASDI contribution and benefit base for 2018 (section 230(a)), the earnings required to be credited with a quarter of coverage in 2018 (section 213(d)(2)), the monthly exempt amounts under the Social Security retirement earnings test for 2018 (section 203(f)(8)(A)), the formula for computing a PIA for workers who first become eligible for benefits or die in 2018 (section 215(a)(1)(D)), and the formula for computing the maximum benefits payable to the family of a worker who first becomes eligible for old-age benefits or dies in 2018 (section 203(a)(2)(C)).
The cost-of-living increase is 2.0 percent for monthly benefits under title II and for monthly payments under title XVI of the Act. Under title II, OASDI benefits will increase by 2.0 percent for individuals eligible for December 2017 benefits, payable in January 2018. We base this increase on the authority contained in section 215(i) of the Act.
Pursuant to section 1617 of the Act, Federal SSI payment levels will also increase by 2.0 percent effective for payments made for January 2018 but paid on December 29, 2017.
Computation of the cost-of-living increase is based on an increase in a Consumer Price Index produced by the Bureau of Labor Statistics. At the time the Act was amended to provide cost-of-living increases, only one Consumer Price Index existed, namely the Consumer Price Index for Urban Wage Earners and Clerical Workers. Although the Bureau of Labor Statistics has since developed other consumer price indices, we follow precedent by continuing to use the Consumer Price Index for Urban Wage Earners and Clerical Workers. We refer to this index in the following paragraphs as the CPI.
Section 215(i)(1)(B) of the Act defines a “computation quarter” to be a third calendar quarter in which the average CPI exceeded the average CPI in the previous computation quarter. The last cost-of-living increase, effective for those eligible to receive title II benefits for December 2016, was based on the CPI increase from the third quarter of 2014 to the third quarter of 2016. Therefore, the last computation quarter is the third quarter of 2016. The law states that a cost-of-living increase for benefits is determined based on the percentage increase, if any, in the CPI from the last computation quarter to the third quarter of the current year. Therefore, we compute the increase in the CPI from the third quarter of 2016 to the third quarter of 2017.
Section 215(i)(1) of the Act states that the CPI for a cost-of-living computation quarter is the arithmetic mean of this index for the 3 months in that quarter. In accordance with 20 CFR 404.275, we round the arithmetic mean, if necessary, to the nearest 0.001. The CPI for each month in the quarter ending September 30, 2016, the last computation quarter, is: For July 2016, 234.771; for August 2016, 234.904; and for September 2016, 235.495. The arithmetic mean for the calendar quarter ending September 30, 2016 is 235.057. The CPI for each month in the quarter ending September 30, 2017, is: For July 2017, 238.617; for August 2017, 239.448; and for September 2017, 240.939. The arithmetic mean for the calendar quarter ending September 30, 2017 is 239.668. The CPI for the calendar quarter ending September 30, 2017, exceeds that for the calendar quarter ending September 30, 2016 by 2.0 percent (rounded to the nearest 0.1). Therefore, beginning December 2017 a cost-of-living benefit increase of 2.0 percent is effective for benefits under title II of the Act.
Section 215(i) also specifies that a benefit increase under title II, effective for December of any year, will be limited to the increase in the national average wage index for the prior year if the OASDI fund ratio for that year is below 20.0 percent. The OASDI fund ratio for a year is the ratio of the combined assets of the OASDI Trust Funds at the beginning of that year to the combined expenditures of these funds during that year. For 2017, the OASDI fund ratio is assets of $2,847,687 million divided by estimated expenditures of $954027 million, or 298.5 percent. Because the 298.5 percent OASDI fund ratio exceeds 20.0 percent, the benefit increase for December 2017 is not limited.
The following program amounts change based on the cost-of-living increase: (1) Title II benefits; (2) title XVI payments; (3) title VIII benefits; (4) the student earned income exclusion; (5) the fee for services performed by a representative payee; and (6) the appointed representative fee assessment.
In accordance with section 215(i) of the Act, for workers and family members for whom eligibility for benefits (that is, the worker's attainment of age 62, or disability or death before age 62) occurred before 2018, benefits will increase by 2.0 percent beginning with benefits for December 2017, which are payable in January 2018. For those first eligible after 2017, the 2.0 percent increase will not apply.
For eligibility after 1978, we determine benefits using a formula provided by the Social Security Amendments of 1977 (Pub. L. 95-216), as described later in this notice.
For eligibility before 1979, we determine benefits by using a benefit table. The table is available on the Internet at
Section 215(i)(2)(D) of the Act requires that, when we determine an increase in Social Security benefits, we will publish in the
In accordance with section 1617 of the Act, maximum Federal SSI payments amounts for the aged, blind, and disabled will increase by 2.0 percent effective January 2018. For 2017, we derived the monthly payment amounts for an eligible individual, an eligible individual with an eligible spouse, and for an essential person—$735, $1,103, and $368, respectively—from yearly, unrounded Federal SSI
Title VIII of the Act provides for special benefits to certain World War II veterans who reside outside the United States. Section 805 of the Act provides that “[t]he benefit under this title payable to a qualified individual for any month shall be in an amount equal to 75 percent of the Federal benefit rate [the maximum amount for an eligible individual] under title XVI for the month, reduced by the amount of the qualified individual's benefit income for the month.” Therefore, the monthly benefit for 2018 under this provision is 75 percent of $750, or $562.50.
A blind or disabled child who is a student regularly attending school, college, university, or a course of vocational or technical training can have limited earnings that do not count against his or her SSI payments. The maximum amount of such income that we may exclude in 2017 is $1,790 per month, but not more than $7,200 in all of 2017. These amounts increase based on a formula set forth in regulation 20 CFR 416.1112.
To compute each of the monthly and yearly maximum amounts for 2018, we increase the unrounded amount for 2017 by the latest cost-of-living increase. If the amount so calculated is not a multiple of $10, we round it to the nearest multiple of $10. The unrounded monthly amount for 2017 is $1,786.71. We increase this amount by 2.0 percent to $1,822.44, which we then round to $1,820. Similarly, we increase the unrounded yearly amount for 2017, $7,202.19, by 2.0 percent to $7,346.23 and round this to $7,350. Therefore, the maximum amount of the income exclusion applicable to a student in 2018 is $1,820 per month but not more than $7,350 in all of 2018.
Sections 205(j)(4)(A)(i) and 1631(a)(2)(D)(i) of the Act permit a qualified organization to collect a monthly fee from a beneficiary for expenses incurred in providing services as the beneficiary's representative payee. In 2017, the fee is limited to the lesser of: (1) 10 percent of the monthly benefit involved; or (2) $41 each month ($78 each month when the beneficiary is entitled to disability benefits and has an alcoholism or drug addiction condition that makes the individual incapable of managing such benefits). The dollar fee limits are subject to increase by the cost-of-living increase, with the resulting amounts rounded to the nearest whole dollar amount. Therefore, we increase the current amounts by 2.0 percent to $42 and $80 for 2018.
Under sections 206(d) and 1631(d) of the Act, whenever we pay a fee to a representative such as an attorney, agent, or other person who represents claimants, we must impose on the representative an assessment to cover administrative costs. The assessment is no more than 6.3 percent of the representative's authorized fee or, if lower, a dollar amount that is subject to increase by the cost-of-living increase. We derive the dollar limit for December 2017 by increasing the unrounded limit for December 2016, $91.47, by 2.0 percent, which is $93.30. We then round $93.30 to the next lower multiple of $1. The dollar limit effective for December 2017 is, therefore, $93.
We determined the national average wage index for calendar year 2016 based on the 2015 national average wage index of $48,098.63, published in the
Multiplying the national average wage index for 2015 ($48,098.63) by the ratio of the average wage for 2016 ($46,662.59) to that for 2015 ($46,119.78) produces the 2016 index, $48,664.73. The national average wage index for calendar year 2016 is about 1.18 percent higher than the 2015 index.
Under the Act, the following amounts change with annual changes in the national average wage index: (1) The OASDI contribution and benefit base; (2) the exempt amounts under the retirement earnings test; (3) the dollar amounts, or bend points, in the PIA formula; (4) the bend points in the maximum family benefit formula; (5) the earnings required to credit a worker with a quarter of coverage; (6) the old-law contribution and benefit base (as determined under section 230 of the Act as in effect before the 1977 amendments); (7) the substantial gainful activity (SGA) amount applicable to statutorily blind individuals; and (8) the coverage threshold for election officials and election workers. Additionally, under section 3121(x) of the Internal Revenue Code, the domestic employee coverage threshold is based on changes in the national average wage index.
Two amounts also increase under regulatory requirements—the SGA amount applicable to non-blind disabled persons, and the monthly earnings threshold that establishes a month as part of a trial work period for disabled beneficiaries.
The OASDI contribution and benefit base is $128,700 for remuneration paid in 2018 and self-employment income earned in taxable years beginning in 2018. The OASDI contribution and benefit base serves as the maximum annual earnings on which OASDI taxes are paid. It is also the maximum annual earnings used in determining a person's OASDI benefits.
Section 230(b) of the Act provides the formula used to determine the OASDI contribution and benefit base. Under the formula, the base for 2018 is the larger of: (1) The 1994 base of $60,600 multiplied by the ratio of the national average wage index for 2016 to that for
Multiplying the 1994 OASDI contribution and benefit base ($60,600) by the ratio of the national average wage index for 2016 ($48,664.73 as determined above) to that for 1992 ($22,935.42) produces $128,582.02. We round this amount to $128,700. Because $128,700 exceeds the current base amount of $127,200, the OASDI contribution and benefit base is $128,700 for 2018.
We withhold Social Security benefits when a beneficiary under the NRA has earnings over the applicable retirement earnings test exempt amount. The NRA is the age when retirement benefits (before rounding) are equal to the PIA. The NRA is age 66 for those born in 1943-54, and it gradually increases to age 67 for those born in 1960 or later. A higher exempt amount applies in the year in which a person attains NRA, but only for earnings in months before such attainment. A lower exempt amount applies at all other ages below NRA. Section 203(f)(8)(B) of the Act provides formulas for determining the monthly exempt amounts. The annual exempt amounts are exactly 12 times the monthly amounts.
For beneficiaries who attain NRA in the year, we withhold $1 in benefits for every $3 of earnings over the annual exempt amount for months before NRA. For all other beneficiaries under NRA, we withhold $1 in benefits for every $2 of earnings over the annual exempt amount.
Under the formula that applies to beneficiaries attaining NRA after 2018, the lower monthly exempt amount for 2018 is the larger of: (1) The 1994 monthly exempt amount multiplied by the ratio of the national average wage index for 2016 to that for 1992; or (2) the 2017 monthly exempt amount ($1,410). If the resulting amount is not a multiple of $10, we round it to the nearest multiple of $10.
Under the formula that applies to beneficiaries attaining NRA in 2018, the higher monthly exempt amount for 2018 is the larger of: (1) The 2002 monthly exempt amount multiplied by the ratio of the national average wage index for 2016 to that for 2000; or (2) the 2017 monthly exempt amount ($3,740). If the resulting amount is not a multiple of $10, we round it to the nearest multiple of $10.
Multiplying the 1994 retirement earnings test monthly exempt amount of $670 by the ratio of the national average wage index for 2016 ($48,664.73) to that for 1992 ($22,935.42) produces $1,421.62. We round this to $1,420. Because $1,420 exceeds the current exempt amount of $1,410, the lower retirement earnings test monthly exempt amount is $1,420 for 2018. The lower annual exempt amount is $17,040 under the retirement earnings test.
Multiplying the 2002 retirement earnings test monthly exempt amount of $2,500 by the ratio of the national average wage index for 2016 ($48,664.73) to that for 2000 ($32,154.82) produces $3,783.63. We round this to $3,780. Because $3,780 exceeds the current exempt amount of $3,740, the higher retirement earnings test monthly exempt amount is $3,780 for 2018. The higher annual exempt amount is $45,360 under the retirement earnings test.
The Social Security Amendments of 1977 provided a method for computing benefits that generally applies when a worker first becomes eligible for benefits after 1978. This method uses the worker's average indexed monthly earnings (AIME) to compute the PIA. We adjust the formula each year to reflect changes in general wage levels, as measured by the national average wage index.
We also adjust, or index, a worker's earnings to reflect the change in the general wage levels that occurred during the worker's years of employment. Such indexing ensures that a worker's future benefit level will reflect the general rise in the standard of living that will occur during his or her working lifetime. To compute the AIME, we first determine the required number of years of earnings. We then select the number of years with the highest indexed earnings, add the indexed earnings for those years, and divide the total amount by the total number of months in those years. We then round the resulting average amount down to the next lower dollar amount. The result is the AIME.
The PIA is the sum of three separate percentages of portions of the AIME. In 1979 (the first year the formula was in effect), these portions were the first $180, the amount between $180 and $1,085, and the amount over $1,085. We call the dollar amounts in the formula governing the portions of the AIME the “bend points” of the formula. Therefore, the bend points for 1979 were $180 and $1,085.
To obtain the bend points for 2018, we multiply each of the 1979 bend-point amounts by the ratio of the national average wage index for 2016 to that average for 1977. We then round these results to the nearest dollar. Multiplying the 1979 amounts of $180 and $1,085 by the ratio of the national average wage index for 2016 ($48,664.73) to that for 1977 ($9,779.44) produces the amounts of $895.72 and $5,399.21. We round these to $896 and $5,399. Therefore, the portions of the AIME to be used in 2018 are the first $896, the amount between $896 and $5,399, and the amount over $5,399.
Therefore, for individuals who first become eligible for old-age insurance benefits or disability insurance benefits in 2018, or who die in 2018 before becoming eligible for benefits, their PIA will be the sum of:
(a) 90 percent of the first $896 of their AIME, plus
(b) 32 percent of their AIME over $896 and through $5,399, plus
(c) 15 percent of their AIME over $5,399.
We round this amount to the next lower multiple of $0.10 if it is not already a multiple of $0.10. This formula and the rounding adjustment are stated in section 215(a) of the Act.
The 1977 amendments continued the policy of limiting the total monthly benefits that a worker's family may receive based on the worker's PIA. Those amendments also continued the relationship between maximum family benefits and PIAs but changed the method of computing the maximum benefits that may be paid to a worker's family. The Social Security Disability Amendments of 1980 (Pub. L. 96-265) established a formula for computing the maximum benefits payable to the family of a disabled worker. This formula applies to the family benefits of workers who first become entitled to disability insurance benefits after June 30, 1980, and who first become eligible for these benefits after 1978. For disabled workers initially entitled to disability benefits
The formula used to compute the family maximum is similar to that used to compute the PIA. It involves computing the sum of four separate percentages of portions of the worker's PIA. In 1979, these portions were the first $230, the amount between $230 and $332, the amount between $332 and $433, and the amount over $433. We refer to such dollar amounts in the formula as the “bend points” of the family-maximum formula.
To obtain the bend points for 2018, we multiply each of the 1979 bend-point amounts by the ratio of the national average wage index for 2016 to that average for 1977. Then we round this amount to the nearest dollar. Multiplying the amounts of $230, $332, and $433 by the ratio of the national average wage index for 2016 ($48,664.73) to that for 1977 ($9,779.44) produces the amounts of $1,144.53, $1,652.11, and $2,154.71. We round these amounts to $1,145, $1,652, and $2,155. Therefore, the portions of the PIAs to be used in 2018 are the first $1,145, the amount between $1,145 and $1,652, the amount between $1,652 and $2,155, and the amount over $2,155.
Thus, for the family of a worker who becomes age 62 or dies in 2018 before age 62, we will compute the total benefits payable to them so that it does not exceed:
(a) 150 percent of the first $1,145 of the worker's PIA, plus
(b) 272 percent of the worker's PIA over $1,145 through $1,652, plus
(c) 134 percent of the worker's PIA over $1,652 through $2,155, plus
(d) 175 percent of the worker's PIA over $2,155.
We then round this amount to the next lower multiple of $0.10 if it is not already a multiple of $0.10. This formula and the rounding adjustment are stated in section 203(a) of the Act.
The earnings required for a quarter of coverage in 2018 is $1,320. A quarter of coverage is the basic unit for determining if a worker is insured under the Social Security program. For years before 1978, we generally credited an individual with a quarter of coverage for each quarter in which wages of $50 or more were paid, or with 4 quarters of coverage for every taxable year in which $400 or more of self-employment income was earned. Beginning in 1978, employers generally report wages yearly instead of quarterly. With the change to yearly reporting, section 352(b) of the Social Security Amendments of 1977 amended section 213(d) of the Act to provide that a quarter of coverage would be credited for each $250 of an individual's total wages and self-employment income for calendar year 1978, up to a maximum of 4 quarters of coverage for the year. The amendment also provided a formula for years after 1978.
Under the prescribed formula, the quarter of coverage amount for 2018 is the larger of: (1) The 1978 amount of $250 multiplied by the ratio of the national average wage index for 2016 to that for 1976; or (2) the current amount of $1,300. Section 213(d) provides that if the resulting amount is not a multiple of $10, we round it to the nearest multiple of $10.
Multiplying the 1978 quarter of coverage amount ($250) by the ratio of the national average wage index for 2016 ($48,664.73) to that for 1976 ($9,226.48) produces $1,318.62. We then round this amount to $1,320. Because $1,320 exceeds the current amount of $1,300, the quarter of coverage amount is $1,320 for 2018.
The old-law contribution and benefit base for 2018 is $95,400. This base would have been effective under the Act without the enactment of the 1977 amendments.
The old-law contribution and benefit base is used by:
(a) The Railroad Retirement program to determine certain tax liabilities and tier II benefits payable under that program to supplement the tier I payments that correspond to basic Social Security benefits,
(b) the Pension Benefit Guaranty Corporation to determine the maximum amount of pension guaranteed under the Employee Retirement Income Security Act (section 230(d) of the Act),
(c) Social Security to determine a year of coverage in computing the special minimum benefit, as described earlier, and
(d) Social Security to determine a year of coverage (acquired whenever earnings equal or exceed 25 percent of the old-law base for this purpose only) in computing benefits for persons who are also eligible to receive pensions based on employment not covered under section 210 of the Act.
The old-law contribution and benefit base is the larger of: (1) The 1994 old-law base ($45,000) multiplied by the ratio of the national average wage index for 2016 to that for 1992; or (2) the current old-law base ($94,500). If the resulting amount is not a multiple of $300, we round it to the nearest multiple of $300.
Multiplying the 1994 old-law contribution and benefit base ($45,000) by the ratio of the national average wage index for 2016 ($48,664.73) to that for 1992 ($22,935.42) produces $95,481.70. We round this amount to $95,400. Because $95,400 exceeds the current amount of $94,500, the old-law contribution and benefit base is $95,400 for 2018.
A finding of disability under titles II and XVI of the Act requires that a person, except for a title XVI disabled child, be unable to engage in SGA. A person who is earning more than a certain monthly amount is ordinarily considered to be engaging in SGA. The monthly earnings considered as SGA depends on the nature of a person's disability. Section 223(d)(4)(A) of the Act specifies the SGA amount for statutorily blind individuals under title II while our regulations (20 CFR 404.1574 and 416.974) specify the SGA amount for non-blind individuals.
The monthly SGA amount for statutorily blind individuals under title II for 2018 is the larger of: (1) The amount for 1994 multiplied by the ratio of the national average wage index for 2016 to that for 1992; or (2) the amount for 2017. The monthly SGA amount for non-blind disabled individuals for 2018 is the larger of: (1) The amount for 2000 multiplied by the ratio of the national average wage index for 2016 to that for 1998; or (2) the amount for 2017. In either case, if the resulting amount is not a multiple of $10, we round it to the nearest multiple of $10.
Multiplying the 1994 monthly SGA amount for statutorily blind individuals ($930) by the ratio of the national
Multiplying the 2000 monthly SGA amount for non-blind individuals ($700) by the ratio of the national average wage index for 2016 ($48,664.73) to that for 1998 ($28,861.44) produces $1,180.31. We then round this amount to $1,180. Because $1,180 exceeds the current amount of $1,170, the monthly SGA amount for non-blind disabled individuals is $1,180 for 2018.
During a trial work period of 9 months in a rolling 60-month period, a beneficiary receiving Social Security disability benefits may test his or her ability to work and still receive monthly benefit payments. To be considered a trial work period month, earnings must be over a certain level. In 2018, any month in which earnings exceed $850 is considered a month of services for an individual's trial work period.
The method used to determine the new amount is set forth in our regulations at 20 CFR 404.1592(b). Monthly earnings in 2018, used to determine whether a month is part of a trial work period, is the larger of: (1) The amount for 2001 ($530) multiplied by the ratio of the national average wage index for 2016 to that for 1999; or (2) the amount for 2017. If the amount so calculated is not a multiple of $10, we round it to the nearest multiple of $10.
Multiplying the 2001 monthly earnings threshold ($530) by the ratio of the national average wage index for 2016 ($48,664.73) to that for 1999 ($30,469.84) produces $846.49. We then round this amount to $850. Because $850 exceeds the current amount of $840, the monthly earnings threshold is $850 for 2018.
The minimum amount a domestic worker must earn so that such earnings are covered under Social Security or Medicare is the domestic employee coverage threshold. For 2018, this threshold is $2,100. Section 3121(x) of the Internal Revenue Code provides the formula for increasing the threshold.
Under the formula, the domestic employee coverage threshold for 2018 is equal to the 1995 amount of $1,000 multiplied by the ratio of the national average wage index for 2016 to that for 1993. If the resulting amount is not a multiple of $100, we round it to the next lower multiple of $100.
Multiplying the 1995 domestic employee coverage threshold ($1,000) by the ratio of the national average wage index for 2016 ($48,664.73) to that for 1993 ($23,132.67) produces $2,103.72. We then round this amount to $2,100. Therefore, the domestic employee coverage threshold amount is $2,100 for 2018.
The minimum amount an election official and election worker must earn so the earnings are covered under Social Security or Medicare is the election official and election worker coverage threshold. For 2018, this threshold is $1,800. Section 218(c)(8)(B) of the Act provides the formula for increasing the threshold.
Under the formula, the election official and election worker coverage threshold for 2018 is equal to the 1999 amount of $1,000 multiplied by the ratio of the national average wage index for 2016 to that for 1997. If the amount we determine is not a multiple of $100, it we round it to the nearest multiple of $100.
Multiplying the 1999 coverage threshold amount ($1,000) by the ratio of the national average wage index for 2016 ($48,664.73) to that for 1997 ($27,426.00) produces $1,774.40. We then round this amount to $1,800. Therefore, the election official and election worker coverage threshold amount is $1,800 for 2018.
Social Security Administration.
Notice.
We are announcing a demonstration project for the Social Security disability program under title II of the Social Security Act (Act). Under this project, we will modify program rules applied to beneficiaries who work and receive title II disability benefits. We are required to conduct the Promoting Opportunity Demonstration (POD), in compliance with section 823 of the Bipartisan Budget Act (BBA) of 2015.
In this project, we will test simplified work incentives and use a benefit offset based on earnings as an alternative to rules we currently apply to title II disability beneficiaries who work. Under the benefit offset, we will reduce title II disability benefits by $1 for every $2 that a beneficiary earns above a certain threshold.
We will select beneficiaries and offer them the opportunity to volunteer for the project. When we make the selection, we will include beneficiaries who receive title II disability benefits only as well as beneficiaries who receive both title II disability benefits and Supplemental Security Income (SSI) based on disability or blindness under title XVI of the Act. We are modifying rules that apply to the title II program and the Ticket to Work program under title XI. We will continue to apply the usual SSI program rules for participants who receive SSI payments in addition to title II disability benefits.
We plan to begin this project in November 2017 and end it in June 2021.
Jeffrey Hemmeter, Office of Retirement and Disability Policy, Social Security Administration, 6401 Security Boulevard, Baltimore, MD 21235, (410) 597-1815.
We are required to conduct this demonstration under Social Security Act section 234(f).
In this section, we broadly outline our usual rules for paying disability benefits, how those benefits may terminate, and the work incentives that affect payments. Then, we discuss the modified rules we will apply under the demonstration project.
Under title II of the Act, we pay the following benefits to persons who meet the Act's definition of disability:
• Disability insurance benefits for a worker insured under the Act;
• Widow's and widower's insurance benefits based on disability for a widow, widower, or surviving divorced spouse of an insured worker; and
• Childhood disability benefits for a child of an insured worker who is entitled to retirement or disability benefits or has died.
In the rest of this notice, we refer to these benefits collectively as Social Security Disability Insurance (SSDI) benefits and refer to the beneficiaries who receive them as SSDI beneficiaries.
Under title XVI of the Act, we pay SSI to persons who are aged, blind, or disabled, and who also have limited income and resources. An SSDI beneficiary with limited income and resources may qualify for SSI payments.
A person must meet the definition of disability under title II of the Act in order to be eligible for SSDI benefits. A person is disabled under title II if the person has a physical or mental impairment or combination of impairments that has lasted or is expected to last for at least 12 months or can be expected to result in death and that prevents the person from doing any substantial gainful activity (SGA).
We periodically reevaluate a disability beneficiary's impairment(s) to determine whether the person continues to be under a disability.
We offer certain work incentives to encourage disability beneficiaries to attempt to work. We also administer the Ticket to Work program and other employment support programs to help disability beneficiaries become as self-sufficient as possible through work and to promote their economic independence. Under certain provisions of the Act, such as the title II provision for a trial work period, beneficiaries may test their ability to work while keeping their cash and medical benefits.
We provide a trial work period (TWP) that allows SSDI beneficiaries
If a beneficiary works after the TWP ends, we review the beneficiary's work and earnings to decide if the work is SGA. Work is “substantial” if it involves doing significant physical or mental activities. Work activity may be “substantial” even if it is performed on a part-time basis. Work activity is “gainful” if it is performed for pay or profit or is the kind of work usually performed for pay or profit, whether or not a profit is realized.
In deciding whether work is SGA, we consider the nature of the person's job duties, the skills and experience the person needs to do the job, and how much the person actually earned.
When we decide whether work is SGA and figure earnings, we deduct the reasonable costs of certain “impairment-related work expenses” (IRWEs), that is, items and services that enable a person to work.
Immediately after an SSDI beneficiary completes the TWP, the reentitlement period begins. The reentitlement period is also called the extended period of eligibility. The reentitlement period typically lasts for 36 months, but it may end earlier if we determine that the beneficiary ceases to have a disabling impairment for medical reasons.
Expedited reinstatement is an employment support available under both the SSDI and SSI programs.
In addition to the work incentives policies discussed above, we also administer the Ticket to Work program, which can help disability beneficiaries access employment services, vocational rehabilitation services, and other support services.
Under the POD, we will modify title II disability program rules that we currently apply to SSDI beneficiaries who work. We will test alternate rules to determine their effectiveness in encouraging SSDI beneficiaries to return to work or increase their earnings. We will test simplified work incentives and use a monthly benefit offset based on earnings. Under the benefit offset, we will reduce SSDI benefits by $1 for every $2 of a beneficiary's earnings that are above a certain threshold. The POD threshold is equal to the greater of (1) the applicable monthly TWP amount for the calendar year or (2) itemized IRWEs up to the SGA amount for the calendar year.
We have contracted with Abt Associates to implement the POD and Mathematica Policy Research to conduct evaluation activities. We will evaluate the impact of the benefit offset on work activity, earnings, and continued receipt of cash benefits.
We expect to conduct this project in eight sites across the country:
• Alabama (all counties);
• California (Los Angeles, Orange, and San Diego counties);
• Connecticut (all counties);
• Maryland (Anne Arundel, Baltimore, Harford, Howard, Montgomery, and Prince George's counties; Baltimore City);
• Michigan (Barry, Berrien, Branch, Calhoun, Cass, Kalamazoo, Kent, St. Joseph, and Van Buren counties);
• Nebraska (Adams, Buffalo, Douglas, Hall, Lancaster, and Sarpy counties);
• Texas (Bexar, Dallas, and Tarrant counties); and
• Vermont (all counties).
Abt Associates is subcontracting with the State vocational rehabilitation agencies or Work Incentive Planning and Assistance providers in each site to work directly with the beneficiaries in this project.
To be eligible to participate in the project, a beneficiary must:
• Be at least age 20 and be under age 62 throughout the project;
• Be entitled to title II benefits based on disability as the insured worker
• Receive title II disability cash benefits, unless we are not paying cash benefits because the beneficiary is engaging in SGA after the grace period and during the reentitlement period;
• Reside in one of the eight sites for the project, according to our records; and
• Not be a prior or current treatment or control group participant in any of our other demonstration projects.
We will select potential participants for the POD from a pool of beneficiaries who meet the requirements for participation described above. We expect to recruit about 15,000 beneficiaries to volunteer to participate in the POD. We will randomly assign the beneficiaries who have agreed to participate in the POD to a control group or one of two treatment groups, as described below.
• Control Group—We will assign approximately 5,000 SSDI beneficiaries to this group, which will continue to be subject to our usual program rules. We will not test any alternate rules with this group.
• Treatment Group 1—We will assign approximately 5,000 SSDI beneficiaries to this group, which will be eligible for the benefit offset. For any month the beneficiary's SSDI benefits are reduced to zero under the offset, benefits are suspended for that month. The beneficiary remains eligible for benefits for months that the offset does not reduce benefits to zero.
• Treatment Group 2—We will assign approximately 5,000 SSDI beneficiaries to this group, which will be eligible for the benefit offset. If a beneficiary in this group has the SSDI benefit reduced to zero under the offset for 12 consecutive
The evaluation contractor, Mathematica Policy Research, will conduct outreach through mailings and phone calls to recruit and enroll beneficiaries into the POD, and randomly assign participants into the control and treatment groups. Beneficiaries we recruit and who wish to participate will sign a consent form to indicate their agreement to participate before being randomly assigned to one of the three groups described above. All enrolled beneficiaries can withdraw from the project at any time. Beneficiaries randomly assigned to the control group will receive a notice informing them of their assignment and that the usual program rules apply. Beneficiaries randomly assigned to the treatment groups will receive a notice informing them of their assignment and that alternate program rules will apply for earnings. The notice will provide contact information for Abt Associates, which will be beneficiaries' central point of contact for the POD.
The notice will also inform beneficiaries of the POD-related benefits counseling available to all treatment group members. Each site will have benefits counselors dedicated to the project who can help beneficiaries understand the alternate rules under the POD and how the offset will affect their SSDI benefit.
Participation in the POD is voluntary, and a beneficiary may withdraw the consent to participate in the POD at any time in writing. A beneficiary who wishes to withdraw consent will inform Abt Associates in writing and be offered counseling on withdrawing from the demonstration and returning to usual rules. A beneficiary in a treatment group who withdraws consent will no longer be eligible for the alternate program rules or any project services available under the POD, but will have the option to continue to participate in evaluation activities, such as follow-up surveys. If a beneficiary chooses not to participate in the evaluation activities, we will continue to track the beneficiary for the project evaluation using program data. We will apply our usual program rules to the beneficiary beginning with the month that withdrawal from the project becomes effective. We will apply our usual title II disability program rules for all participants after the end of the project, beginning July 2021.
The following alternate program rules will apply to an SSDI beneficiary assigned to a treatment group during participation in the POD:
• Eligibility for the benefit offset will begin after random assignment to a treatment group and end at the close of the project in June 2021;
• Payment of SSDI benefits will be subject to reduction, potentially to zero, under the benefit offset;
• Payment of benefits to any other person entitled to benefits on the earnings record of the SSDI beneficiary will continue for any month for which the beneficiary's SSDI benefit is partially reduced under the benefit offset and will stop for months for which the SSDI benefit is reduced to zero under the offset;
• For months that SSDI benefits are reduced to zero under the offset, benefits are suspended for participants in both treatment groups. If the participants' earnings decrease in a subsequent month such that the offset does not reduce the SSDI benefit to zero, the beneficiary will again receive a benefit, subject to the offset. If a participant in treatment group 2 has the SSDI benefit reduced to zero for 12 consecutive months, we will terminate entitlement to benefits;
• The TWP will not apply to the participant;
• The reentitlement period will not apply to the participant;
• If a participant has entitlement reinstated under expedited reinstatement, the IRP will not apply to the participant;
• If a participant was eligible for Medicare Part A coverage because of entitlement to SSDI and the SSDI entitlement terminates as a result of the POD's benefit offset, the participant will remain eligible for Medicare Part A coverage for 93 additional months provided that the person continues to have the same disabling impairment(s) that provided the basis for the prior SSDI entitlement and meets the other SSDI entitlement requirements;
• No work CDRs will be initiated or completed during the POD participation;
• We will continue to pay outcome payments to qualified providers under the Ticket to Work program for participants who earn above SGA, whether or not their SSDI benefit is reduced to zero; and
• Our usual program rules will apply beginning with the month after participation in the POD ends.
Applying these alternate rules involves waiving or altering certain provisions included in sections 222(c); 223(a)(1), (d)(4), (e), and (i); and 1148(h) of the Act and 20 CFR 404.316(d), 404.325, 404.401a, 404.1571 through 404.1576, 404.1590, 404.1592, 404.1592a, 404.1592f, 404.1594, 411.500(b)-(e), 411.525(a)(1)(i), and 411.575(b)(1)(i)(A).
A beneficiary who is in a treatment group will be eligible for the benefit offset after random assignment and should begin to report earnings to Abt Associates the month after random assignment. Thus, if random assignment is in November, the beneficiary should report November earnings and IRWEs in December, and the benefit offset, if any, will begin with the December benefit, which is paid in January. Participants should report earnings and IRWEs information to the POD through June 2021.
We will apply the benefit offset on a monthly basis to reduce SSDI benefits based on a beneficiary's report of monthly earnings and IRWEs. Participants who report their earnings and IRWEs information for the prior month on time in the current month will have the benefit offset calculated into the following month's benefit. For example, for a participant who reports April 2018 earnings and IRWEs in May 2018, the offset will be calculated in the May 2018 benefit, which is paid in June 2018.
In the example below, we show how we will calculate the amount by which monthly SSDI benefit payments will be reduced under the offset for a beneficiary whose earnings exceed the POD threshold. In the example, we use the POD threshold that would apply in 2017.
First, we calculate the monthly earnings that exceed the POD threshold.
Second, we calculate the $1 for $2 benefit offset amount by dividing the amount of earnings that exceeds the POD threshold by 2.
$200 ÷ 2 = $100 (monthly $1 for $2 benefit offset amount)
For the purposes of the POD, we will round the monthly benefit offset amount resulting from the calculations down to the nearest dime.
We consider monthly IRWEs in the calculation only when the total is greater than the POD threshold. If the total monthly amount of itemized IRWEs is greater than the POD threshold, we will use the total monthly amount of itemized IRWEs as the monthly POD threshold for the offset. However, if the total monthly amount of itemized IRWEs equals or exceeds the applicable SGA amount, we will use the SGA amount as the monthly POD threshold for the offset.
In the example below, we show how we will calculate the amount by which monthly SSDI benefit payments will be reduced under the offset for a beneficiary whose earnings and itemized IRWEs exceed the POD threshold. In the example, we use the POD threshold that would apply in 2017.
First, we calculate the monthly earnings that exceed the POD threshold.
Second, we calculate the $1 for $2 benefit offset amount by dividing the amount of earnings that exceeds the POD threshold by 2.
$100 ÷ 2 = $50 (monthly $1 for $2 benefit offset amount)
For the purposes of the POD, we will round the monthly benefit offset amount resulting from the calculations down to the nearest dime.
It is very important that beneficiaries in the treatment groups report earnings and IRWEs. If a beneficiary reports earnings for a month, but does not continue to report monthly, the prior reported earnings will carry forward for subsequent months until the beneficiary reports earnings again, or until the end of the project. If the beneficiary is late in reporting earnings for a month, we will make appropriate adjustments to future benefit payments if we determine that we paid the beneficiary too much or too little in benefits under the offset for the months when we carried over prior earnings. We will send the beneficiary a written notice of our determination that will provide appeal rights.
We will perform an end-of-year reconciliation after the close of each calendar year. We will determine the actual amount of the beneficiary's earnings for each month in the calendar year to decide if the person was paid more or less in benefits than was due under the offset. We will make appropriate adjustments to future benefit payments if we determine that we paid the beneficiary too much or too little in benefits under the offset. We will send the beneficiary a written notice of our determination that will provide appeal rights.
When a beneficiary's earnings are high enough that the offset amount equals or exceeds the beneficiary's SSDI monthly benefit payment, the beneficiary will not receive a benefit payment for that month. That is, the SSDI benefit is reduced to zero under the offset, and the benefit is suspended for that month. Beneficiaries in treatment group 2 only will have entitlement terminated after their benefit is reduced to zero (that is, suspended) for 12 consecutive months.
Participants whose entitlement to disability benefits terminates due to work activity during the POD can apply for expedited reinstatement, as under current rules. Participants can request expedited reinstatement of their prior entitlement for a 60-month period. We will apply the same criteria used under current rules to determine whether a beneficiary meets the requirements for reinstatement. As under current rules, an individual may receive up to six consecutive months of provisional cash benefits while we make a determination.
Participants in treatment group 2 who are reinstated will remain in the demonstration. They will continue in the POD treatment group 2 and will be subject to the applicable alternate rules for that treatment group. Under current rules, after we reinstate entitlement through expedited reinstatement, the IRP begins. Under POD rules, the IRP will not apply. See the following section for further details on the IRP.
A participant whose entitlement is terminated under the POD will remain in this terminated status (unless the person is reinstated as discussed above), even if the person withdraws from the project.
The IRP will not apply to beneficiaries in treatment groups during POD participation. When a beneficiary in a treatment group stops participating in the POD, the status of the IRP will be the same as when the beneficiary began participating in the POD. That means that if a beneficiary enters the POD during the beneficiary's IRP, the IRP will pick up at the same point after the beneficiary's participation in the POD ends and the beneficiary returns to our usual rules. If a beneficiary in treatment group 2 has entitlement terminated because of the offset but then has entitlement reinstated under expedited reinstatement, the beneficiary will return to participation in treatment group 2. When the beneficiary's participation ends and the beneficiary returns to usual rules, the beneficiary will begin the IRP.
Participants must maintain all SSDI eligibility requirements to continue receiving SSDI. For example, participants will still be subject to medical CDRs, which could result in a termination of entitlement on medical grounds. If a participant's entitlement terminates for any reason and we subsequently approve reinstatement, the participant will return to the same treatment group the participant was in before termination until the participant withdraws from the project or the project ends.
If any other person is entitled to benefits on the earnings record of a beneficiary whose SSDI benefit is subject to the offset, we will pay the other person the full amount of monthly cash benefits that the person is
The TWP will not apply to beneficiaries in treatment groups during their participation in the POD. A month during which the participant works and earns above the TWP amount will not be considered a trial work month for any purpose. Once the beneficiary's participation in the POD ends, the beneficiary will, from that point forward, be subject to our usual rules, but the work and earnings accumulated during the POD participation will not be counted toward a TWP. Upon return to our usual rules, the beneficiary's TWP status will be equal to the TWP status before participating in the POD. We will, however, count the period of the POD participation as part of the rolling 60-month TWP window. For example, if a beneficiary in a treatment group has completed four trial work months before enrolling in the POD, the first month the beneficiary earns above the TWP amount after the beneficiary's participation in the POD ends will be the beneficiary's fifth trial work month.
The reentitlement period will not apply to beneficiaries in treatment groups during POD participation. There is also no reentitlement-related assessment to determine whether a beneficiary's disability ended during a reentitlement period because the person performed SGA. Once the beneficiary's participation in the POD ends, the beneficiary will, from that point forward, be subject to our usual rules. Upon return to usual rules, the beneficiary's reentitlement status will be equal to the reentitlement status before participating in the POD. No work or earnings during POD participation will be considered in determining the reentitlement period upon return to usual rules.
We will not initiate work CDRs for participants in the POD treatment groups while they are participating in the POD. If a participant in a POD treatment group has a work CDR in progress when POD participation begins, we will not complete the work CDR while the person is participating in the POD.
A beneficiary who is under age 65 and who has been entitled to SSDI benefits for 24 months is entitled to Hospital Insurance (Medicare Part A) under the Medicare program.
Section 234(f)(2)(D) of the Act, created by section 823 of the BBA of 2015, provides special rules on Medicare Part A coverage for some POD participants. If a participant is entitled to Medicare Part A coverage because of entitlement to SSDI benefits and the SSDI entitlement is terminated as a result of the POD's benefit offset, the participant is entitled to extended Medicare coverage for a period of 93 months following the SSDI entitlement termination, as long as the participant continues to have the same disabling impairment(s) that provided the basis for the prior SSDI entitlement and the participant meets the other SSDI entitlement requirements.
We will apply an alternate rule for paying outcome payments to a qualified service provider that has been assigned a ticket by an SSDI-only or concurrent SSDI/SSI beneficiary in a POD treatment group. As noted above, under our usual rules, we may pay outcome payments to service providers for months in which SSDI benefits are not payable to a beneficiary because earnings are at or above the SGA level. Under the POD's offset, however, a beneficiary's earnings may be at or above the SGA level and yet still not be high enough to reduce the SSDI benefit to zero. Thus, applying our normal Ticket to Work program rules could unduly burden these service providers, since they would not receive the outcome payments that they would otherwise be eligible for if the beneficiary was not participating in the POD. Therefore, for the POD, we will pay an outcome payment to the provider for each month the participant earns above SGA, whether or not the SSDI benefit is reduced to zero. This process will occur only during a beneficiary's POD participation period.
We will apply our usual rules for paying outcome payments beginning with the first month after a beneficiary's POD participation period ends. We will continue to limit the number of months for which outcome payments may be made based on the same ticket to a maximum of 36 months. We will count any month for which we pay an outcome payment under the alternate rule or our usual rule toward this 36-month limit.
Section 234 of the Act authorizes experiments and demonstration projects designed to promote attachment to the labor force, including projects that test alternative methods of treating work activity of SSDI beneficiaries and that involve the waiver of certain program rules. Section 234(f) of the Act, added by section 823 of the BBA of 2015, specifically requires that we conduct the POD. We are conducting the POD consistent with the requirements in section 234(e) of the Act that participation in a demonstration project must be voluntary and based on informed written consent, and that the voluntary agreement to participate may be withdrawn by the volunteer at any time.
Section 234 of the Act.
Notice is hereby given of the following determinations: I hereby determine that certain objects to be included in the exhibition “The Silver Caesars: A Renaissance Mystery,” imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to loan agreements with the foreign owners or custodians. I also determine that the exhibition or display of the exhibit objects at The Metropolitan Museum of Art, New York, New York, from on or about December 12, 2017, until on or about March 11, 2018, and at possible additional exhibitions or venues yet to be determined, is in the national interest.
For further information, including a list of the imported objects, contact Elliot Chiu in the Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), E.O. 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
The Surface Transportation Board has received a request from Thompson Hine LLP, on behalf of itself, Economists, and L.E. Peabody & Associates (WB17-44—10/20/17) for permission to use certain unmasked data from the Board's 2006-2016 Carload Waybill Samples. A copy of this request may be obtained from the Office of Economics.
The waybill sample contains confidential railroad and shipper data; therefore, if any parties object to these requests, they should file their objections with the Director of the Board's Office of Economics within 14 calendar days of the date of this notice. The rules for release of waybill data are codified at 49 CFR 1244.9.
BNSF Railway Company (BNSF) has filed a verified notice of exemption under 49 CFR pt. 1152 subpart F-
BNSF has certified that: (1) No local freight traffic has moved over the Line since prior to 2009; (2) no overhead traffic has been handled on the Line since prior to 2009; (3) no formal complaint filed by a user of rail service on the Line (or by a state or local government entity acting on behalf of such user) regarding cessation of service over the Line either is pending with the Surface Transportation Board (Board) or with any U.S. District Court or has been decided in favor of complainant within the two-year period; and (4) the requirements at 49 CFR 1105.7(c) (environmental report), 49 CFR 1105.11 (transmittal letter), 49 CFR 1105.12 (newspaper publication), and 49 CFR 1152.50(d)(1) (notice to governmental agencies) have been met.
As a condition to this exemption, any employee adversely affected by the abandonment shall be protected under
Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on November 29, 2017, unless stayed pending reconsideration. Petitions to stay that do not involve environmental issues,
A copy of any petition filed with the Board should be sent to Karl Morell, Karl Morell & Associates, 440 1st Street NW., Suite 440, Washington, DC 20001.
If the verified notice contains false or misleading information, the exemption is void ab initio.
BNSF has filed a combined environmental and historic report that addresses the effects, if any, of the abandonment on the environment and historic resources. OEA will issue an environmental assessment (EA) by November 3, 2017. Interested persons may obtain a copy of the EA by writing to OEA (Room 1100, Surface Transportation Board, Washington, DC 20423-0001) or by calling OEA at (202) 245-0305. Assistance for the hearing impaired is available through the Federal Information Relay Service at (800) 877-8339. Comments on environmental and historic preservation matters must be filed within 15 days after the EA becomes available to the public.
Environmental, historic preservation, public use, or trail use/rail banking conditions will be imposed, where appropriate, in a subsequent decision.
Pursuant to the provisions of 49 CFR 1152.29(e)(2), BNSF shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the Line. If
Board decisions and notices are available on our Web site at
By the Board, Scott M. Zimmerman, Acting Director, Office of Proceedings.
The Surface Transportation Board has received a request from the Association of American Railroads. (WB17-45—10/10/17) for permission to use certain data from the Board's 2016 Carload Waybill Sample. A copy of this request may be obtained from the Office of Economics.
The waybill sample contains confidential railroad and shipper data; therefore, if any parties object to these requests, they should file their objections with the Director of the Board's Office of Economics within 14 calendar days of the date of this notice. The rules for release of waybill data are codified at 49 CFR 1244.9.
Federal Aviation Administration (FAA), DOT.
Notice.
This notice contains a summary of a petition seeking relief from specified requirements of Federal Aviation Regulations. The purpose of this notice is to improve the public's awareness of, and participation in, the FAA's exemption process. Neither publication of this notice nor the inclusion or omission of information in the summary is intended to affect the legal status of the petition or its final disposition.
Comments on this petition must identify the petition docket number and must be received on or before November 20, 2017.
Send comments identified by docket number FAA-2002-12455 using any of the following methods:
•
•
•
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Nia Daniels, (202) 267-7626, Office of Rulemaking, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591.
This notice is published pursuant to 14 CFR 11.85.
Issued in Washington, DC.
Bureau of the Fiscal Service, Fiscal Service, Treasury.
Notice.
The Department of the Treasury (Treasury) is announcing a new fee schedule applicable to transfers of U.S. Treasury book-entry securities maintained on the National Book-Entry System (NBES) that occur on or after January 2, 2018.
Applicable January 2, 2018.
Brandon Taylor or Janeene Wilson, Bureau of the Fiscal Service, 202-504-3550.
Treasury has established a fee structure for the transfer of Treasury book-entry securities maintained on NBES. Treasury reassesses this fee structure periodically based on our review of the latest book-entry costs and volumes.
For each Treasury securities transfer or reversal sent or received on or after January 2, 2018, the basic fee will increase from $0.93 to $0.97. The Federal Reserve System also charges a funds movement fee for each of these transactions for the funds settlement component of a Treasury securities transfer.
Treasury does not charge a fee for account maintenance, the stripping and reconstitution of Treasury securities, the wires associated with original issues, or interest and redemption payments. Treasury currently absorbs these costs.
The fees described in this notice apply only to the transfer of Treasury book-entry securities held on NBES. Information concerning fees for book-entry transfers of Government Agency securities, which are priced by the Federal Reserve, is set out in a separate
The following is the Treasury fee schedule that will take effect on January 2, 2018, for book-entry transfers on NBES:
31 CFR 357.45.
Office of Foreign Assets Control, Treasury.
Notice.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of nine persons that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
See
OFAC: Associate Director for Global Targeting, tel.: 202-622-2420; Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490; Assistant Director for Licensing, tel.: 202-622-2480; Assistant Director for Regulatory Affairs, tel. 202-622-4855; or the Department of the Treasury's Office of the General Counsel: Office of the Chief Counsel (Foreign Assets Control), tel.: 202-622-2410.
The Specially Designated Nationals and Blocked Persons List and additional information concerning OFAC sanctions programs are available on OFAC's Web site (
On October 25, 2017, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons subject to U.S. jurisdiction are blocked under the relevant sanctions authority listed below.
1. AL-DHUBHANI, Adil Abduh Fari Uthman (a.k.a. AL-MAKANI, Adil Abd Fari; a.k.a. AL-MALKAB, Adil Fari; a.k.a. BIN-UTHMAN, Adil Abdu Bin-Fari; a.k.a. FARI, Adil Muhammad Abdu; a.k.a. FAZI, Adil Mohammad Abdu; a.k.a. “`ADIL `ABDIH FAR'A”; a.k.a. “ABU AL-ABBAS”; a.k.a. “ADEL ABDUH FAREA'A”; a.k.a. “ADIL ABD FARI”; a.k.a. “ADIL ABDAH FARI”; a.k.a. “ADIL ABDU FAAREA”; a.k.a. “ADIL ABDU FAARI'A”; a.k.a. “ADIL ABDU FAREA”; a.k.a. “ADIL ABDU FARIA”; a.k.a. “AMIR MUMINEN”; a.k.a. “AMIR MUMININ”; a.k.a. “FARI, Abu-al-Abbas Adil Abdu”; a.k.a. “FARI, Abu-al-Abbas Adil Abduh”), Ta'izz City, Ta'izz Governorate, Yemen; Almqwat Mahtah Ahmed Sif, Taiz City, Taiz Governorate, Yemen; DOB 15 Jul 1963; alt. DOB 1971; POB Ta'izz, Yemen; nationality Yemen; Gender Male; National ID No. 01010013602 (Yemen) (individual) [SDGT] (Linked To: AL-QA'IDA IN THE ARABIAN PENINSULA; Linked To: ISIL-YEMEN).
Designated pursuant to section 1(c) of Executive Order 13224 of September 23, 2001, “Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism” (E.O. 13224), for being owned or controlled by, or acting for or on behalf of, AL-QA'IDA IN THE ARABIAN PENINSULA, a person whose property and interests in property are blocked pursuant to E.O. 13224.
Also designated pursuant to section 1(d)(ii) of E.O. 13224 for assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, AL-QA'IDA IN THE ARABIAN PENINSULA and ISIL-YEMEN, persons whose property and interests in property are blocked pursuant to E.O. 13224.
2. AL-ADANI, Abu Sulayman (a.k.a. ABU-SULAYMAN, Nashwan al-Adani; a.k.a. AL-ADANI, Nashwan; a.k.a. AL-ADANI, Sulayman; a.k.a. AL-HASHIMI, Abu Ma'ali; a.k.a. AL-SAY'ARI, Muhammad Ahmed; a.k.a. AL-SAY'ARI, Muhammad Qan'an; a.k.a. AL-SAY'ARI, Nashwan; a.k.a. MUTHANA, Mohsen Ahmed Saleh; a.k.a. MUTHANNA, Muhsin Ahmad Salah; a.k.a. QAN'AN, Muhammad Salih Muhammad; a.k.a. “AL-MUHAJIR, Abu Usama”), Yemen; DOB 13 Jan 1988; Gender Male; Passport 05867398 (Yemen); alt. Passport 04988639 (Jordan) (individual) [SDGT] (Linked To: ISIL-YEMEN).
Designated pursuant to section 1(c) of E.O. 13224 of September 23, 2001, for being owned or controlled by, or acting for or on behalf of, ISIL-YEMEN, a person whose property and interests in property are blocked pursuant to E.O. 13224.
3. AL-HAYASHI, Sayf Abdulrab Salem (a.k.a. AL-BAYDANI, Sayf; a.k.a. AL-BAYDANI, Sayf Husayn `Abd-al-Rabb; a.k.a. AL-BHADANI, Saif; a.k.a. AL-BIDHANI, Sayf; a.k.a. AL-HAYASHI, Sayf `Abd-al-Rab Salim; a.k.a. AL-HAYYASHI, Sayf `Abd-al-wali `Abd-al-rub), At Takhtit Ministry Marab Jawlat Ayat Street, Yemen; Azzan, Abyan Governorate, Yemen; DOB 01 Jan 1978; nationality Yemen; Gender Male; National ID No. 01010003969 (Yemen) (individual) [SDGT] (Linked To: AL-QA'IDA IN THE ARABIAN PENINSULA).
Designated pursuant to section 1(c) of E.O. 13224 for assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, AL-QA'IDA IN THE ARABIAN PENINSULA, a person whose property and interests in property are blocked pursuant to E.O. 13224.
4. AL-MARFADI, Khalid (a.k.a. AL-YAFI'I, Abu Anas; a.k.a. AL-YAFI'I, Khalid Abdallah Salah Ahmad Hussayn al-'Umari al-Marfadi), al-Bayda' Governorate, Yemen; al-Sharafa', al-Qurayshiyah District, al-Bayda' Governorate, Yemen; al-Wuhayshi Village, Az Zahir District, al Bayda' Governorate, Yemen; Marfad Village, Marfad District, Yafia, Yemen; DOB 1966; Gender Male (individual) [SDGT] (Linked To: ISIL-YEMEN).
Designated pursuant to section 1(c) of E.O. 13224 for being owned or controlled by, or acting for or on behalf of, ISIL-YEMEN, a person whose property and interests in property are blocked pursuant to E.O. 13224.
Also designated pursuant to section 1(d)(ii) of E.O. 13224 for assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, ISIL-Yemen, a person whose property and interests in property are blocked pursuant to E.O. 13224.
5. AL-YAFI'I, Nashwan al-Wali (a.k.a. AL-YAFI'I, Nishwan al-Wali; a.k.a. AL-YAFI'I, Wali Nashwan), Yafi' District, Lahij Governorate, Yemen; DOB 1984; Gender Male (individual) [SDGT] (Linked To: ISIL-YEMEN).
Designated pursuant to section 1(c) of E.O. 13224 for being owned or controlled by, or acting for or on behalf of, ISIL-YEMEN, a person whose property and interests in property are blocked pursuant to E.O. 13224.
6. AL-UBAYDI, Khalid Sa'id Ghabish (a.k.a. AL-UBAYDI, Khalid Sa'id Ghubaysh; a.k.a. “UBAYDI, Abu-Amr”), Hadramawt Governorate, Yemen; DOB 1984 to 1986; POB United Arab Emirates; Gender Male (individual) [SDGT] (Linked To: ISIL-YEMEN).
Designated pursuant to section 1(c) of E.O. 13224 for being owned or controlled by, or acting for or on behalf of, ISIL-YEMEN, a person whose property and interests in property are blocked pursuant to E.O. 13224.
7. AL-WAFI, Bilal Ali Muhammad (a.k.a. AL-WAFI, Bilal; a.k.a. AL-WAFI, Bilal `Ali; a.k.a. AL-WARAFI, 'Ali 'Abbad Muhammad; a.k.a. “ABU AL-WALEED”; a.k.a. “ABU AL-WALID”), Ta'izz Governorate, Yemen; DOB 1986 to 1989; POB Ta'izz Governorate, Yemen; Gender Male (individual) [SDGT] (Linked To: AL-QA'IDA IN THE ARABIAN PENINSULA).
Designated pursuant to section 1(c) of E.O. 13224 for being owned or controlled by, or acting for or on behalf of, AL-QA'IDA IN THE ARABIAN PENINSULA, a person whose property and interests in property are blocked pursuant to E.O. 13224.
8. QANAN, Radwan Muhammad Husayn Ali (a.k.a. AL-ADANI, Abu `Abd al-Rahman; a.k.a. AL-NAQAZ, Basil Muhsin Ahmad; a.k.a. KANAN, Radwan; a.k.a. KANNA, Radwan), Aden, Yemen; al-Tawilah, Kraytar District, Aden, Yemen; DOB 07 Sep 1975; alt. DOB 1982; POB Abyan Governorate, Khanfar, Al-Rumilah, Yemen; Gender Male (individual) [SDGT] (Linked To: ISIL-YEMEN).
Designated pursuant to section 1(c) of E.O. 13224 for being owned or controlled by, or acting for or on behalf of, ISIL-YEMEN, a person whose property and interests in property are blocked pursuant to E.O. 13224.
1. AL KHAYR SUPERMARKET (a.k.a. AL-KHAIR MARKET), Fuwwah, south of Mukalla, Hadramawt Governorate, Yemen [SDGT] (Linked To: AL-HAYASHI, Sayf Abdulrab Salem).
Designated pursuant to section 1(c) of E.O. 13224 for being owned or controlled by, or acting for or on behalf of, AL-HAYASHI, Sayf Abdulrab Salem, a person whose property and interests in property are blocked pursuant to E.O. 13224.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Internal Revenue Service, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. The IRS is soliciting comments concerning Form 1041-N, U.S. Income Tax Return for Electing Alaska Native Settlement Trusts.
Written comments should be received on or before December 29, 2017 to be assured of consideration.
Direct all written comments to L. Brimmer, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224. Requests for additional information or copies of the form and instructions should be directed to LaNita Van Dyke, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.
Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice.
The Internal Revenue Service Advisory Council (IRSAC) will hold a public meeting on Wednesday, November 15, 2017.
Ms. Anna Millikan, IRSAC Program Manager, Office of National Public Liaison, CL:NPL:P, Room 7571, 1111 Constitution Avenue NW., Washington, DC 20224. Telephone: 202-317-6851 (not a toll-free number). Email address:
Notice is hereby given pursuant to section 10(a) (2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988), a public meeting of the IRSAC will be held on Wednesday, November 15, 2017, from 9:00 a.m. to 12:45 p.m. at the Washington Marriott Wardman Park Hotel, 2660 Woodley Road NW., Wilson Room, Washington, DC 20008. Issues to be discussed include, but are not limited to:
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Internal Revenue Service, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. This notice provides guidance relating to the waiver of 2009 required minimum distributions, described in section 401(a)(9) of the Internal Revenue Code (“Code”), from certain plans under the Worker, Retiree, and Employer Recovery Act of 2008 (“WRERA”).
Written comments should be received on or before December 29, 2017 to be assured of consideration.
Direct all written comments to L. Brimmer, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224.
Please send comments for the information collection listed below. You must reference the information collection's title, form number, reporting or record-keeping requirement number, and OMB number (if any) in your comment. To obtain additional information, or copies of the information collection and instructions, or copies of any comments received, contact LaNita Van Dyke, at Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224, or through the internet, at
Currently, the IRS is seeking comments concerning the following forms, and reporting and record-keeping requirements:
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to
Veterans Health Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Health Administration, Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Comments must be submitted on or before November 29, 2017.
Submit written comments on the collection of information through
Cynthia Harvey-Pryor, Office of Quality, Privacy and Risk (OQPR), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 461-5870 or email
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Federal Deposit Insurance Corporation (FDIC).
Final rule.
The FDIC is adding regulations to improve the resolvability of systemically important U.S. banking organizations and systemically important foreign banking organizations and enhance the resilience and the safety and soundness of certain State savings associations and State-chartered banks that are not members of the Federal Reserve System (“State non-member banks” or “SNMBs”) for which the FDIC is the primary Federal regulator (together, “FSIs” or “FDIC-supervised institutions”). This final rule requires that FSIs and their subsidiaries (“covered FSIs”) ensure that covered qualified financial contracts (QFCs) to which they are a party provide that any default rights and restrictions on the transfer of the QFCs are limited to the same extent as they would be under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and the Federal Deposit Insurance Act (FDI Act). In addition, covered FSIs are generally prohibited from being party to QFCs that would allow a QFC counterparty to exercise default rights against the covered FSI based on the entry into a resolution proceeding under the FDI Act, or any other resolution proceeding of an affiliate of the covered FSI. The final rule also amends the definition of “qualifying master netting agreement” in the FDIC's capital and liquidity rules, and certain related terms in the FDIC's capital rules. These amendments are intended to ensure that the regulatory capital and liquidity treatment of QFCs to which a covered FSI is party would not be affected by the restrictions on such QFCs.
The final rule is effective on January 1, 2018, except for amendatory instruction #6 which is delayed indefinitely. Once OCC adopts its related final rule, FDIC will publish a document announcing the effective date of the amendatory instruction.
Ryan Billingsley, Acting Associate Director,
This final rule addresses one of the ways the failure of a major financial firm could destabilize the financial system. The disorderly failure of a large, interconnected financial company could cause severe damage to the U.S. financial system and, ultimately, to the economy as a whole, as illustrated by the failure of Lehman Brothers in September 2008. Protecting the financial stability of the United States is a core objective of the Dodd-Frank Act,
On May 3, 2016, the FRB issued a Notice of Proposed Rulemaking, (the FRB NPRM), pursuant to section 165 of the Dodd-Frank Act.
The policy objective of this final rule is to improve the orderly resolution of a GSIB by limiting disruptions to a failed GSIB through its FSI subsidiaries' financial contracts with other companies. The FRB FR, the OCC FR, and FDIC FR complement the ongoing work of the FRB and the FDIC on resolution planning requirements for GSIBs.
The FDIC has a strong interest in preventing a disorderly termination of covered FSIs' QFCs upon a GSIB's entry into resolution proceedings. In fulfilling the FDIC's responsibilities as (i) the primary Federal supervisor for SNMBs and State savings associations;
The final rule specifically addresses QFCs, which are typically entered into by various operating entities in a GSIB group, including covered FSIs. These covered FSIs are affiliates of U.S. GSIBs or foreign GSIBs that have OTC derivatives exposure. The exercise of default rights against an otherwise healthy covered FSI resulting from the failure of its affiliate—
These potentially destabilizing effects are best addressed by requiring all GSIB entities to amend their QFCs to include contractual provisions aimed at avoiding such destabilization. It is imperative that all entities within the GSIB group amend their QFCs in a similar way, thereby eliminating an incentive for counterparties to concentrate QFCs in entities subject to fewer restrictions. Therefore, the application of this final rule to the QFCs of covered FSIs is not only necessary for the safety and soundness of covered FSIs individually and collectively, but also to avoid potential destabilization of the overall banking system.
The FDIC received a total of 14 comment letters in response to the FDIC NPRM from trade groups representing GSIBs or GSIB groups, buy-side and end-users of derivatives, individuals and community advocates. There was substantial overlap in the comments received by the FRB, OCC and FDIC regarding the NPRMs. Notably, a copy of comments the commenter had already sent to the FRB or the OCC generally accompanied the comments received by the FDIC and were incorporate therein by reference. Commenters requested that the agencies coordinate in developing final rules and consider comments submitted to the other agencies regarding their NPRMs.
All comments were considered in developing the final rule. Comments are discussed in the relevant sections that follow. The FDIC consulted with the FRB and the OCC in developing the final rule.
QFCs play a role in economically valuable financial intermediation when markets are functioning normally. But they are also a major source of financial interconnectedness, which can pose a threat to financial stability in times of market stress. The final rule focuses on a context in which that threat is especially great: The failure of a GSIB that is an affiliate of a covered FSI that is party to large volumes of QFCs, which are likely to include QFCs with counterparties that are themselves systemically important.
QFC continuity is important for the orderly resolution of a GSIB because it helps to ensure that the GSIB entities remain viable and to avoid instability caused by asset fire sales. Together, the FRB and FDIC have identified the exercise of certain default rights in financial contracts as a potential obstacle to orderly resolution in the context of resolution plans filed pursuant to section 165(d) of the Dodd-Frank Act,
Importantly, the final rule does not affect all types of default rights, and, where it affects a default right, the rule does so only temporarily for the purpose of allowing the relevant resolution authority to take action to continue to provide for continued performance on the QFC or to transfer the QFC. Moreover, the final rule is concerned only with default rights that run
Many complex GSIBs have developed resolution strategies that rely on the single-point-of-entry (SPOE) resolution strategy. In an SPOE resolution of a GSIB, only a single legal entity—the GSIB's top-tier bank holding company—would enter a resolution proceeding. The effect of losses that led to the GSIB's failure would pass up from the operating subsidiaries that incurred the losses to the holding company and would then be imposed on the equity holders and unsecured creditors of the holding company through the resolution process. This strategy is designed to help ensure that the GSIB subsidiaries remain adequately capitalized, and that operating subsidiaries of the GSIB are able to stabilize and continue meeting their financial obligations without immediately defaulting or entering resolution themselves. The expectation that the holding company's equity holders and unsecured creditors would absorb the GSIB's losses in the event of failure would help to maintain the confidence of the operating subsidiaries' creditors and counterparties (including their QFC counterparties), reducing their incentive to engage in potentially destabilizing funding runs or margin calls and thus lowering the risk of asset fire sales. A successful SPOE resolution would also avoid the need for separate resolution proceedings for separate legal entities run by separate authorities across multiple jurisdictions, which would be more complex and could therefore destabilize the resolution of a GSIB. An SPOE resolution can also avoid the need for insured bank subsidiaries, including covered FSIs, to be placed into receivership or similar proceedings as the likelihood of their continuing to operate as going concerns will be significantly enhanced if the parent's entry into resolution proceedings does not trigger the exercise of cross-default rights. Accordingly, this final rule, by limiting such cross-default rights in covered QFCs based on an affiliate's entry into resolution proceedings, assists in stabilizing both the covered FSIs and the larger banking system.
However, the U.S. Bankruptcy Code largely exempts QFC.
The U.S. Bankruptcy Code's automatic stay also does not prevent the exercise of cross-default rights against an affiliate of the party entering resolution. The stay generally applies only to actions taken against the party entering resolution or the bankruptcy estate,
Title II of the Dodd-Frank Act empowers the FDIC to transfer QFCs to a bridge financial company or some other financial company that is not in a resolution proceeding and should therefore be capable of performing under the QFCs.
Title II of the Dodd-Frank Act addresses cross-default rights through a similar procedure. It empowers the FDIC to enforce contracts of subsidiaries or affiliates of the failed covered financial company that are “guaranteed or otherwise supported by or linked to the covered financial company, notwithstanding any contractual right to cause the termination, liquidation, or acceleration of such contracts based solely on the insolvency, financial condition, or receivership of” the failed company, so long as, if such contracts are guaranteed or otherwise supported by the covered financial company, the FDIC takes certain steps to protect the QFC counterparties' interests by the end of the business day following the company's entry into Title II resolution.
These stay-and-transfer provisions of the Dodd-Frank Act are intended to mitigate the threat posed by QFC default rights. At the same time, the provisions allow appropriate protections for QFC counterparties of the failed financial company. The provisions stay the exercise of default rights based on the failed company's entry into resolution, the fact of its insolvency, or its financial condition. Further, the stay period is temporary, unless the FDIC transfers the QFCs to another financial company that is not in resolution (and should therefore be capable of performing under the QFCs) or, in the case of cross-default rights relating to guaranteed or supported QFCs, the FDIC takes the action required in order to continue to enforce those contracts.
The proposal was intended to increase GSIB resolvability and resiliency by addressing two QFC-related issues. First, the proposal sought to address the risk that a court in a foreign jurisdiction may decline to enforce the QFC stay-and-transfer provisions of Title II and the FDI Act discussed above. Second, the proposal sought to address the potential disruptions that may occur if a counterparty to a QFC with an affiliate of a GSIB entity that goes into resolution under the Bankruptcy Code or the FDI Act is provided cross-default rights.
In the proposal, “qualified financial contract” or “QFC” was defined to have the same meaning as in section 210(c)(8)(D) of the Dodd-Frank Act,
The FDIC did not propose to prohibit covered FSIs from entering into QFCs that allow its counterparties to exercise direct default rights against the covered FSI.
As an alternative to bringing their covered QFCs into compliance with the requirements set out in the proposed rule, covered FSIs would have been permitted to comply by adhering to the International Swaps and Derivatives Association (ISDA) 2015 Universal Resolution Stay Protocol, including the Securities Financing Transaction Annex and the Other Agreements Annex (together, the “Universal Protocol”).
The FDIC would have been permitted to approve such a request if, in light of several enumerated considerations,
A number of commenters including GSIBs that would be subject to the proposed requirements included in the proposal expressed strong support for the proposed rule as a well-considered effort to reduce systemic risk with minimal burden and as an important step to ensure a more efficient and orderly resolution process for GSIB entities and thereby to protect the stability of the U.S. financial system. Other commenters, however, expressed concern with the proposed rule. These commenters generally argued that the proposal should not restrict contractual rights of GSIB counterparties and contended that the proposal would have shifted the costs of resolving the covered FSIs, covered entities, and covered banks to non-defaulting counterparties. Some commenters argued that the proposal would not assuredly mitigate systemic risk, as the requirements could result in increased market and credit risk for QFC counterparties of a GSIB. Commenters also argued that it would be more appropriate for Congress to impose the proposal's restrictions on contractual rights through the legislative process rather than through a regulation.
As described above, the proposal applied to “covered FSIs.” A covered FSI included any subsidiary of a covered FSI. The proposal defined “subsidiary of a covered FSI” as an entity owned or controlled directly or indirectly by a covered FSI. “Control” was defined by reference to the Bank Holding Company Act of 1956, as amended (“BHC Act”). The other NPRMs similarly used the definition of control from the BHC Act for purposes of determining the entities that would have been subject to the requirements of the NPRMs. Commenters urged the agencies to move to a financial consolidation standard to define the subsidiaries of covered FSIs, arguing that the concept of control under the BHC Act includes entities (1) that are not under the operational control of the GSIB entity and (2) over whom the GSIB may not have the practical ability to require remediation. Furthermore, commenters urged that non-financial consolidated subsidiaries are unlikely to raise the types of concerns for the orderly resolution of GSIBs targeted by the proposal. For similar reasons, these commenters argued that, for purposes of the requirement that a covered FSI conform existing QFCs if a covered FSI enters into a new QFC with a counterparty or its affiliate, a counterparty's “affiliate” should also be defined by reference to financial consolidation rather than BHC Act control. Commenters also expressed concern that the definition of “covered QFCs” under the proposal was overly broad. The proposal required a covered QFC to explicitly provide that it is subject to the stay-and-transfer provisions of Title II and the FDI Act and generally prohibited a covered FSI from being a party to a QFC that would allow the exercise of cross-default rights. Commenters argued that the final rule should exclude QFCs that do not contain any contractual transfer restrictions, direct default rights, or cross-default rights, as these QFCs do not give rise to the risk that counterparties will exercise their contractual rights in a manner that is inconsistent with the provisions of the U.S. Special Resolution Regimes. Commenters also urged the FDIC to exclude QFCs governed by U.S. law from the requirement that QFCs explicitly “opt in” to the U.S. Special Resolution Regimes since it is already clear that such QFCs are subject to the stay-and-transfer provisions of Title II and the FDI Act. With respect to the proposal's prohibition against provisions that would allow the exercise of cross-default rights in covered QFCs of a GSIB, commenters argued that the final rule should clarify that QFCs that do not contain such cross-default rights or transfer restrictions regarding related credit enhancements are not within the scope of the prohibition.
Commenters also requested that certain types of contracts that may include transfer or default rights subject to the proposal's requirements (
As noted above, the proposal would have deemed compliant covered QFCs amended by the existing Universal Protocol (which allows for creditor protections in addition to those otherwise permitted by the proposed rule). Commenters generally supported this aspect of the proposal, although they requested express clarification that adherence to the existing Universal Protocol would satisfy all of the requirements of the final rule. Commenters urged that the final rule should also provide a safe harbor for a future ISDA protocol that would be substantially similar to the existing Universal Protocol except that it would seek to address the specific needs of buy-side market participants, such as asset managers, insurance companies, and pension funds who are counterparties to QFCs with GSIBs, to allow, for example, entity-by-entity adherence and the exclusion of certain foreign special resolution regimes.
Commenters expressed support for the exemption in the proposal for cleared QFCs but requested that this exemption be broadened to extend to the client leg of a cleared back-to-back transaction and also to exclude any contract cleared, processed, or settled on a financial market utility (FMU) as well as any QFC conducted according to the rules of an FMU. Commenters also requested an exemption for QFCs with sovereign entities and central banks. Commenters further requested a longer period of time for covered FSIs, entities, and banks to conform covered QFCs with certain types of counterparties to the requirements of the final rule. Commenters also requested that the FDIC coordinate with other regulatory agencies, consider comments submitted to the OCC and the FRB regarding their proposals and from entities not regulated by the FDIC, and finalize a rule with conformance periods consistent with the OCC's and FRB's final rules. In addition, commenters requested confirmation that modifications to contracts to comply with this rule would not trigger other regulatory requirements (
The FDIC is adopting this final rule to improve the resolvability of GSIBs and thereby furthering financial stability and enhancing the resilience, and the safety and soundness of covered FSIs. The FDIC has made a number of changes to the proposal in response to concerns raised by commenters, as further described below.
The final rule is intended to protect covered FSIs and to facilitate the orderly resolution of the most systemically important banking firms—GSIBs—by limiting the ability of the counterparties of the firms' FSI subsidiaries to terminate qualified financial contracts upon the entry of the GSIB or one or more of its affiliates into resolution. The rule requires the inclusion of contractual restrictions on the exercise of certain default rights in those QFCs. In particular, the final rule requires the QFCs of covered FSIs to contain contractual provisions that opt into the stay-and-transfer provisions of the FDI Act and the Dodd-Frank Act to reduce the risk that the stay-and-transfer related actions by the receiver would be successfully challenged by a QFC counterparty or a court in a foreign jurisdiction. The final rule also prohibits covered FSIs from entering into QFCs that contain cross-default rights, subject to certain creditor protection exceptions that would not be expected to interfere with an orderly resolution.
The final rule also furthers the implementation of the Universal Protocol, which extends, through contractual agreement, the application of the resolution frameworks of the FDI Act and the Dodd-Frank Act to all QFCs entered into by an adhering GSIB and its adhering subsidiaries, including QFCs entered into outside of the United States, and establishes restrictions on cross-default rights that are similar to those in the final rule. The final rule is necessary to implement the Universal Protocol provisions regarding the resolution of a GSIB under the U.S. Bankruptcy Code, as these provisions do not become effective until implemented by U.S. regulations. To support further adherence to the Universal Protocol, the final rule creates a safe harbor allowing covered FSIs to sign up to the Universal Protocol and thereby amend their QFCs pursuant to the Universal Protocol as an alternative to implementing the restrictions of the final rule on a counterparty-by-counterparty basis. In addition, the final rule provides that covered QFCs amended pursuant to adherence of a covered FSI to a new protocol (the “U.S. Protocol”) would be deemed to conform to the requirements of the final rule. The U.S. Protocol may differ (and is required to differ) from the Universal Protocol in certain respects discussed below, but otherwise must be substantively identical to the Universal Protocol.
The final rule requires covered FSIs to conform certain covered QFCs to the requirements of the final rule beginning one year after the effective date of the final rule (first compliance date) and phases in conformance requirements with respect to all covered QFCs over a two-year period depending on the type of counterparty. As explained below, a covered FSI generally is required to conform pre-existing QFCs only if the covered FSI or an affiliate of the covered FSI enters into a new QFC with the same counterparty or a consolidated affiliate of the counterparty on or after the first compliance date.
The final rule, like the proposal, applies to “covered FSIs,” which generally are State savings associations and State non-member banks and their subsidiaries. “Subsidiary” continues to be defined in the final rule by reference to BHC Act control. As discussed below, certain other types of subsidiaries, including a subsidiary that is owned in satisfaction of debt previously contracted in good faith, a portfolio concern controlled by a small business investment company, or a subsidiary that promotes the public welfare, are excluded from the definition of covered FSI and therefore not required to conform any QFCs.
The final rule like the proposal defines “qualified financial contract” or “QFC” to have the same meaning as in section 210(c)(8)(D) of the Dodd-Frank Act
The final rule also makes clear that a covered FSI must conform existing QFCs with a counterparty if the GSIB group (
Under the final rule, covered FSIs are required to ensure that covered QFCs include contractual terms explicitly providing that any default rights or restrictions on the transfer of the QFC are limited to the same extent as they would be pursuant to the U.S. Special Resolution Regimes.
Under the final rule, a covered FSI is prohibited from entering into covered QFCs that would allow the exercise of cross-default rights—that is, default rights related, directly or indirectly, to the entry into resolution of an affiliate of the direct party—against it.
The final rule does not prohibit covered FSIs from entering into QFCs that provide their counterparties with direct default rights against the covered FSI. Under the final rule, a covered FSI may be a party to a QFC that provides the counterparty with the right to terminate the QFC if the covered FSI fails to perform its obligations under the QFC.
As an alternative to bringing their covered QFCs into compliance with the requirements of the final rule, the final rule allows covered FSIs to comply with the rule by adhering to the Universal Protocol.
The final rule also allows the FDIC, at the request of a covered FSI, to approve as compliant with the final rule covered QFCs with creditor protections other than those that would otherwise be permitted under § 382.4 of the final rule.
The final rule also amends certain definitions in the FDIC's capital and liquidity rules to help ensure that the regulatory capital and liquidity treatment of QFCs to which a covered FSI is party is not affected by the proposed restrictions on such QFCs. Specifically, the final rule amends the definition of “qualifying master netting agreement” in the FDIC's regulatory capital and liquidity rules and similarly amends the definitions of the terms “collateral agreement,” “eligible margin loan,” and “repo-style transaction” in the FDIC's regulatory capital rules.
In developing this final rule, the FDIC consulted with the FRB and the OCC as a means of promoting alignment across regulations and avoiding redundancy. Furthermore, the FDIC has consulted with and expects to continue to consult with foreign financial regulatory authorities regarding the implementation of this final rule and the establishment of other standards that would maximize the prospects for the cooperative and orderly cross-border resolution of a failed GSIB on an international basis.
The FRB has finalized a rulemaking that would subject entities to requirements substantially identical to those finalized here for covered FSIs. Similarly, the OCC is expected to finalize a rulemaking that would subject covered banks, including the national banks of GSIBs, to requirements substantially identical to those proposed here for covered FSIs. The FDIC has consulted with the OCC and the FRB in the development of their respective final rules. The banking agencies have endeavored to harmonize their respective rules to the extent possible and to provide specificity and clarity in the final rule to minimize the possibility of conflicting interpretations or uncertainty in their application. Moreover, the banking agencies intend to consult with each other and coordinate as needed regarding implementation of the final rule.
The FDIC is issuing this final rule under its authorities under the FDI Act (12 U.S.C. 1811
As discussed above, the exercise of default rights by counterparties of a failed GSIB can have significant impacts on financial stability. These financial stability concerns are necessarily intertwined with the safety and soundness of covered FSIs and the banking system—the disorderly exercise of default rights can produce a sudden, contemporaneous threat to the safety and soundness of individual institutions, including insured depository institutions, throughout the system, which in turn threatens the system as a whole. Furthermore, the failure of multiple insured depository institutions in the same time period could stress the DIF, which is managed by the FDIC.
While a covered FSI may not itself be considered systemically important, as part of a GSIB, the disorderly resolution of the covered FSI could result in a significant negative impact on the GSIB. Additionally, the application of the final rule to the QFCs of covered FSIs should avoid creating what may otherwise be
The proposed rule applied to “covered FSIs.” The term “covered FSI” included: Any State savings associations (as defined in 12 U.S.C. 1813(b)(3)) or State non-member bank (as defined in 12 U.S.C. 1813(e)(2)) that is a direct or indirect subsidiary of (i) a global systemically important bank holding company that has been designated pursuant to § 252.82(a)(1) of the FRB's Regulation YY (12 CFR 252.82); or (ii) a global systemically important foreign banking organization that has been designated pursuant to § 252.87 of the FRB's Regulation YY (12 CFR 252.87). Under the proposed rule, the term “covered FSI” included any “subsidiary of covered FSI.”
The definition of “subsidiary” under the proposal included any company that is owned or controlled directly or indirectly by another company where the term “control” was defined by reference to the BHC Act.
Commenters noted that covered FSIs are not excluded from the definition of covered entities in the FRB NPRM. They urged the FDIC to coordinate with the FRB and the OCC to ensure that only a single set of rules applies to a GSIB entity. As discussed above, the banking agencies have coordinated and the FRB final rule excludes covered FSIs from the scope of entities covered by that rule.
A number of commenters urged the agencies to move to a financial consolidation standard to define a “subsidiary” of a covered entity, covered bank or covered FSI instead of by reference to BHC Act control.
Commenters urged that regardless of whether financial consolidation standard is adopted for the purpose of defining “subsidiary,” the final rule should exclude from the definition of “covered FSI, covered bank, or covered entity” entities over which the GSIB does not exercise operational control, such as merchant banking portfolio companies, section 2(h)(2) companies, joint ventures, sponsored funds as distinct from their sponsors or investment advisors, securitization vehicles, entities in which the GSIB holds only a minority interest and does not exert a controlling influence, and subsidiaries held pursuant to provisions for debt previously contracted in good faith (DPC subsidiaries).
Certain commenters requested other exclusions from the definition of “covered entity” that are not applicable to the FDIC's final rule. For example, certain commenters argued that subsidiaries of foreign GSIBs for which the foreign GSIB has been given special relief by an FRB order not to hold the subsidiary under an intermediate holding company (IHC) should not be included in the definition of covered entity, even if such entities would be consolidated under financial consolidation principles. The FDIC is not addressing these comments.
Under the final rule, a “covered FSI” is generally any State savings associations (as defined in 12 U.S.C. 1813(b)(3)) or State non-member bank (as defined in 12 U.S.C. 1813(e)(2)) that is a direct or indirect subsidiary of (i) a global systemically important bank holding company that has been designated pursuant to § 252.82(a)(1) of the FRB's Regulation YY (12 CFR 252.82); or (ii) a global systemically important foreign banking organization that has been designated pursuant to § 252.87 of the FRB's Regulation YY (12 CFR 252.87), and any subsidiary of a covered FSI, other than a portfolio concern, as defined under 13 CFR 107.50 that is controlled by a small business investment company as defined in section 103(3) of the Small Business Investment Act of 1958 (15 U.S.C. 662) or owned pursuant to paragraph (11) of section 5136 of the Revised Statutes of the United States (12 U.S.C. 24).
“Subsidiary” in the final rule continues to be defined by reference to BHC Act control as does the definition of “affiliate.”
The application of the rule's requirements to a “covered QFC” was one of the most commented upon aspects of the proposal. Certain commenters argued that the definition of QFC in Title II of the Dodd-Frank Act was overly broad and imprecise and could include agreements that market participants may not expect to be subject to the stay-and-transfer provisions of the U.S. Special Resolution Regimes. More generally, commenters argued that the proposed definition of QFC was too broad and would capture contracts that do not present any obstacles to an orderly resolution. Commenters advocated for the exclusion of a variety of types of QFCs from the requirements of the final rule. In particular, a number of commenters requested the exclusion of QFCs that do not contain any transfer restrictions or default rights, because these types of QFCs do not give rise to the risk that counterparties will exercise their contractual rights in a manner that is inconsistent with the provisions of the U.S. Special Resolution Regimes. Commenters provided several examples of contracts that they asserted fall into this category, including cash market securities transactions, certain spot FX transactions (including securities conversion transactions), retail brokerage agreements, retirement/IRA account agreements, margin agreements, options agreements, FX forward master agreements, and delivery versus payment client agreements. Commenters contended that these types of QFCs number in the millions at some firms and that remediating these contracts to include the express provisions required by the final rule would require an enormous client outreach effort that would be extremely burdensome and costly while providing no meaningful resolution benefits. For example, commenters indicated that for certain types of transactions, such as cash securities transactions, FX spot transactions, and retail QFCs, such a requirement could require an overhaul of existing market practice and documentation that affects hundreds of thousands, if not millions, of transactions occurring on a daily basis and significant education of the general market.
Commenters also requested the exclusion of QFCs that do not contain any default or cross-default rights but that may contain transfer restrictions. Commenters contended that examples of these types of agreements included investment advisory account agreements with retail customers, which contain transfer restrictions as required by section 205(a)(2) of the Investment Advisers Act of 1940, but no direct default or cross-default rights; underwriting agreements;
Commenters also argued for the exclusion of a number of other types of contracts from the definition of covered QFC in the final rule. In particular, a number of commenters urged that contracts issued in the capital markets or related to a capital market issuance like warrants or a certificate representing a call option, typically on
Commenters also urged the exclusion of contracts for the purchase of commodities in the ordinary course of business (
The final rule applies to any “covered QFC,” which generally is defined as any “in-scope QFC” that a covered FSI enters into, executes, or to which the covered FSI otherwise becomes a party.
In response to concerns raised by commenters, the final rule exempts QFCs that have no transfer restrictions or default rights, as these QFCs have no provisions that the rule is intended to address. The final rule effects this exemption by limiting the scope of QFCs potentially subject to the rule to those QFCs that explicitly restrict the transfer of a QFC from a covered FSI or explicitly provide default rights that may be exercised against a covered FSI (in-scope QFCs).
The final rule provides that a covered FSI is not required to conform certain investment advisory contracts described
Commenters argued that requiring remediation of existing QFCs of a person if the GSIB entered into a new QFC with an affiliate of the person would make compliance with the proposed rule overly burdensome.
The final rule's definition of “covered QFC” has been modified to address the concerns raised by commenters. In particular, the final rule provides that a covered QFC includes a QFC that the covered FSI entered, executed, or otherwise became a party to before January 1, 2019, if the covered FSI or any affiliate that is a covered FSI, covered entity, or covered bank also enters, executes, or otherwise becomes a party to a QFC with the same person or a consolidated affiliate of the same person on or after January 1, 2019.
The definition of “covered QFC” is intended to limit the restrictions of the final rule to those financial transactions whose disorderly unwind has substantial potential to frustrate the orderly resolution of a GSIB, as discussed above. By adopting the Dodd-Frank Act's definition of QFC, with the modifications described above, the final rule generally extends stay-and-transfer protections to the same types of transactions as Title II of the Dodd-Frank Act. In this way, the final rule enhances the prospects for an orderly resolution in bankruptcy and under the U.S. Special Resolution Regimes.
Some commenters requested clarification that transactions between a covered entity, covered bank, or covered FSI client and its clearing member (as opposed to transactions where the covered entity, covered bank, or covered FSI is the clearing member) would be subject to the rule's requirements, since this would be consistent with the Universal Protocol. As explained in this section, the exemption in the final rule regarding CCPs does not depend on whether the covered entity, covered bank, or covered FSI is a clearing member or a client. A covered QFC—generally a QFC to which a covered entity, covered bank, or covered FSI is a party—is exempted from the requirements of the final rule if a CCP is also a party.
A few commenters requested that the FDIC modify the definition of “central counterparty,” which was defined to mean “a counterparty (for example, a clearing house) that facilitates trades between counterparties in one or more financial markets by either guaranteeing trades or novating trades” in the proposal.
Commenters also urged the FDIC to exclude from the requirements of the final rule all QFCs that are cleared, processed, or settled through the facilities of an FMU as defined in section 803(6) of the Dodd-Frank Act
The issues that the final rule is intended to address with respect to non-cleared QFCs may also exist in the context of centrally cleared QFCs. However, clearing through a CCP provides unique benefits to the financial system while presenting unique issues related to the cancellation of cleared contracts. Accordingly, it is appropriate to exclude centrally cleared QFCs, in light of differences between cleared and non-cleared QFCs with respect to contractual arrangements, counterparty credit risk, default management, and supervision. The FDIC has not extended the exclusion for CCPs to the client-facing leg of a cleared transaction because bilateral trades between a GSIB and a non-CCP counterparty are the types of transactions that the final rule intends to address and because nothing in the final rule would prohibit a covered FSI clearing member and a client from agreeing to terminate or novate a trade to balance the clearing member's exposure. The final rule continues to define central counterparty as a counterparty that facilitates trades between counterparties in one or more financial markets by either guaranteeing trades or novating trades, which is a broad definition that should be familiar to market participants as it is used in the regulatory capital rules and does not sweep in entities that market participants would not normally recognize as clearing organizations.
The final rule also makes clear that, if one or more FMUs are the only counterparties to a covered QFC, the covered FSI is not required to conform the covered QFC to the final rule.
The final rule does not explicitly exclude futures and cleared swaps agreements with a futures commission merchant, as requested by a commenter. The nature and scope of the requested exclusion is unclear, and, therefore, it is unclear whether the exclusion would be necessary, on the one hand, or overbroad, on the other hand. However, the final rule makes a number of clarifications and exemptions that may help address the commenter's concern regarding FCM agreements.
The FDIC continues to believe that covering QFCs with sovereigns and central banks under the final rule is an important requirement and has not modified the final rule to address the requests made by commenters. Excluding QFCs with sovereigns and central banks would be inconsistent with Title II of the Dodd-Frank Act and the FDI Act. Moreover, the mass termination of such QFCs has the potential to undermine the resolution of a GSIB and the financial stability of the United States. The final rule provides covered FSIs two years to conform covered QFCs with central banks and sovereigns (as well as certain other counterparties, as discussed below). This additional time should provide covered FSIs sufficient time to develop separate conformance mechanisms for sovereigns and central banks, if necessary.
As discussed above, a party to a QFC generally has a number of rights that it can exercise if its counterparty defaults on the QFC by failing to meet certain contractual obligations. These rights are generally, but not always, contractual in nature. One common default right is a setoff right: The right to reduce the total amount that the non-defaulting party must pay by the amount that its defaulting counterparty owes. A second common default right is the right to liquidate pledged collateral and use the proceeds to pay the defaulting party's net obligation to the non-defaulting party. Other common rights include the ability to suspend or delay the non-defaulting party's performance under the contract or to accelerate the obligations of the defaulting party. Finally, the non-defaulting party typically has the right to terminate the QFC, meaning that the parties would not make payments that would have been required under the QFC in the future.
However, the proposed definition of default right excluded two rights that are typically associated with the business-as-usual functioning of a QFC. First, same-day netting that occurs during the life of the QFC in order to reduce the number and amount of payments each party owes the other was excluded from the definition of “default right.”
However, certain QFCs are also commonly subject to rights that would increase the amount of collateral or margin that the defaulting party (or a guarantor) must provide upon an event of default. The financial impact of such default rights on a covered FSI could be similar to the impact of the liquidation and acceleration rights discussed above. Therefore, the proposed definition of “default right” included such rights (with the exception discussed in the previous paragraph for margin requirements based solely on the value of collateral or the amount of an economic exposure).
Finally, contractual rights to terminate without the need to show cause, including rights to terminate on demand and rights to terminate at contractually specified intervals, were excluded from the definition of “default right” under the proposal for purposes of the proposed rule's restrictions on cross-default rights.
Commenters expressed support for a number of aspects of the definition of default rights. For example, a number of commenters supported the proposed exclusion from the definition of “default right” of contractual rights to terminate without the need to show cause, noting that such rights exist for a variety of reasons and that reliance on these rights is unlikely to result in a fire sale of assets during a GSIB resolution. At least one commenter requested that this exclusion be expanded to include force majeure events. Commenters also expressed support for the exclusion for what commenters referred to as “business-as-usual” payments associated with a QFC. However, these commenters requested clarification that certain “business-as-usual” actions would not be included in the definition of default right, such as payment netting, posting and return of collateral, procedures for the substitution of collateral and modification to the terms of the QFC, and also requested clarification that the definition of “default right” would not include off-setting transactions to third parties by the non-defaulting counterparty. One commenter to the FRB and the OCC's proposal urged that if the FRB's and OCC's goal is to provide that a party cannot enforce a provision that requires more margin because of a credit downgrade but may demand more margin for market price changes, the rule should state so explicitly. Another commenter expressed concern that the definition of default right in the proposal would permit a defaulting covered FSI to demand collateral from its QFC counterparty as margin due to a market price change, but would not allow the non-covered FSI to demand collateral from the covered FSI.
The final rule retains the same definition of “default right” as that of the proposal. The FDIC believes that the definition of default right is sufficiently clear and that additional modifications are not needed to address the concerns raised by commenters. The final rule does not adopt a particular exclusion for force majeure events as requested by certain commenters as it is not clear without reference to particular contractual provisions what this term would encompass. Moreover, it should be clear that events typically considered to be captured by force majeure clauses (
“Business as usual” rights regarding changes in collateral or margin would not be included within the definition of default right to the extent that the right or operation of a contractual provision arises solely from either a change in the value of collateral or margin or a change in the amount of an economic exposure.
Regarding transactions with third parties, the final rule, like the proposal, does not require covered FSIs to address default rights in QFCs solely between parties that are not covered FSIs (
The proposed rule generally would have required a covered QFC to explicitly provide both (a) that the transfer of the QFC (and any interest or obligation in or under it and any property securing it) from the covered FSI to a transferee will be effective to the same extent as it would be under the U.S. Special Resolution Regimes if the covered QFC were governed by the laws of the United States or of a State of the United States and (b) that default rights with respect to the covered QFC that could be exercised against a covered FSI could be exercised to no greater extent than they could be exercised under the U.S. Special Resolution Regimes if the covered QFC were governed by the laws of the United States or of a State of the United States.
A number of commenters noted that the wording of these requirements in proposed § 382.3(b) was confusing and could be read to be inconsistent with the intent of the section. In response to comments, the final rule makes clearer that the substantive restrictions apply only in the event the covered FSI (or, in the case of the requirement regarding default rights, its affiliate) becomes subject to a proceeding under a U.S. Special Resolution Regime.
A number of commenters argued that QFCs should be exempt from the requirements of proposed § 382.3 if the QFC is governed by U.S. law. An example of such a QFC provided by commenters includes the standard form repurchase and securities lending agreement published by the Securities Industry and Financial Markets Association. These commenters argued that counterparties to such agreements are already required to observe the stay-and-transfer provisions of the FDI Act and Title II of the Dodd-Frank Act, as mandatory provisions of U.S. Federal law, and that requiring an amendment of these types of QFCs to include the express provisions required under § 382.3 would be redundant and would not provide any material resolution benefit, but would significantly increase the remediation burden on covered FSIs.
Other commenters proposed a three-prong test of “nexus with the United States” for purposes of recognizing an exclusion from the express acknowledgment of the requirements of proposed § 382.3. In particular, these commenters argued that the presence of two factors, in addition to the contract being governed by U.S. law, would provide greater certainty that courts would apply the stay-and-transfer provisions of the FDI Act and Title II of the Dodd-Frank Act: (1) If a contract is entered into between entities organized in the United States; and (2) to the extent the GSIB's obligations under the QFC are collateralized, if the collateral is held with a U.S. custodian or depository pursuant to an account agreement governed by U.S. law.
The requirements of the final rule (in conjunction with those of the FRB FR and the expected OCC FR) seek to provide certainty that all covered QFCs would be treated the same way in the context of a resolution of a covered entity, covered bank or covered FSI under the Dodd-Frank Act or the FDI Act. The stay-and-transfer provisions of the U.S. Special Resolution Regimes should be enforced with respect to all contracts of any U.S. GSIB entity that enters resolution under a U.S. Special Resolution Regime, as well as all transactions of the subsidiaries of such an entity. Nonetheless, it is possible that a court in a foreign jurisdiction would decline to enforce those provisions. In general, the requirement that the effect of the statutory stay-and-transfer provisions be incorporated directly into the QFC contractually helps to ensure that a court in a foreign jurisdiction would enforce the effect of those provisions, regardless of whether the court would otherwise have decided to enforce the U.S. statutory provisions.
In response to comments, the final rule exempts from the requirements of § 382.3 a covered QFC that meets two requirements.
This section of the final rule is consistent with efforts by regulators in other jurisdictions to address similar risks by requiring that financial firms within their jurisdictions ensure that the effect of the similar provisions under these foreign jurisdictions' respective special resolution regimes would be enforced by courts in other jurisdictions, including the United States. For example, the U.K.'s Prudential Regulation Authority (PRA) recently required certain financial firms to ensure that their counterparties to newly created obligations agree to be subject to stays on early termination that are similar to those that would apply upon a U.K. firm's entry into resolution if the financial arrangements were governed by U.K. law.
Commenters also argued that it would be more appropriate for Congress to act to obtain cross-border recognition of U.S. Special Resolution Regimes, rather than for the FDIC to do so through this final rule. The FDIC believes it is appropriate to adopt this final rule in order to ensure the safety and soundness of covered FSIs and, to that end, to improve the resolvability and resilience of U.S. GSIBs and foreign GSIB parents of covered FSIs. Because of the current risk that the stay-and-transfer provisions of U.S. Special Resolution Regimes may not be recognized by courts of other jurisdictions, § 382.3 of the final rule requires contractual recognition to help ensure that courts in foreign jurisdictions will recognize these provisions.
This requirement would advance the goal of the final rule of removing QFC-related obstacles to the orderly resolution of a GSIB. As discussed above, restrictions on the exercise of QFC default rights are an important prerequisite for an orderly GSIB resolution. Congress recognized the importance of such restrictions when it enacted the stay-and-transfer provisions of the U.S. Special Resolution Regimes. As demonstrated by the 2007-2009 financial crisis, the modern financial system is global in scope, and covered FSIs and their affiliates are party to large volumes of QFCs with connections to foreign jurisdictions. The stay-and-transfer provisions of the U.S. Special Resolution Regimes would not achieve their purpose of facilitating orderly resolution in the context of the failure of a GSIB with large volumes of QFCs if such QFCs could escape the effect of those provisions. To remove doubt about the scope of coverage of these provisions, the requirements of § 382.3 of the final rule would ensure that the stay-and-transfer provisions apply as a matter of contract to all non-exempted covered QFCs, whatever the transaction.
First, the final rule distinguishes between a credit enhancement and a “direct QFC,” defined as any QFC that is not a credit enhancement.
One commenter requested that the exception be broadened to include transfers that would result in the supported party being unable, without further action, to satisfy the requirements of any law applicable to the supported party. As an example of a type of transfer that the commenter intended to be included within the broadened exception, the commenter stated that the supported party would be able to prevent the transfer if it would result in less favorable tax treatment. The exception would seem to also include filing requirements that may arise as a result of transfer or other requirements that could be satisfied with minimal “action” by, or cost to, the supported party. More generally, the scope of the laws that supported parties deem themselves to satisfy and the method of such satisfaction is unclear and potentially very broad.
The final rule retains the exception as proposed. The requested exception would add uncertainty as to how the contractual provisions relate to transfers made during the stay period and potentially unduly limit the restrictions on transfer prohibitions.
One commenter expressed strong support for these provisions.
A number of commenters representing counterparties to covered FSIs objected to § 382.4 of the proposal and requested the elimination of this provision. These commenters expressed concern about limitations on counterparties' exercise of default rights during insolvency proceedings and argued that rights should not be taken away from
Some commenters argued that if these rights must be restricted by law, Congress should impose such restrictions and that the requirements of the proposed rule circumvented the legislative process by creating a de facto amendment to the U.S. Bankruptcy Code that forecloses countless QFC counterparties from exercising their rights of cross-default protection under section 362 of the U.S. Bankruptcy Code. Some of these commenters argued that parties cannot by contract alter the U.S. Bankruptcy Code's provisions, such as the administrative priority of a claim in bankruptcy, and one commenter suggested that non-covered FSI counterparties may challenge the legality of contractual stays on the exercise of default rights if a GSIB becomes distressed. Other commenters, however, argued that the provisions of the proposed rule were necessary to address systemic risks posed by the exemption for QFCs in the U.S. Bankruptcy Code.
As an alternative to eliminating these requirements, these commenters expressed the view that if the FDIC moves forward with these provisions, the final rule should include at least those minimum creditor protections established by the Universal Protocol. Certain commenters also argued that this provision was overly broad in that it covered not only U.S. Federal resolution and insolvency proceedings but also State and foreign resolution and insolvency proceedings.
Some commenters argued that the FDIC should eliminate the stay on default rights that are related “indirectly” to an affiliate of the direct party becoming subject to insolvency proceedings, claiming it is unclear what constitutes a right related “indirectly” to insolvency and noting that any default right exercised by a counterparty after an affiliate of that counterparty enters resolution could arguably be motivated by the affiliate's entry into resolution.
A primary purpose of these restrictions is to facilitate the orderly resolution of a GSIB outside of Title II of the Dodd-Frank Act, including under the U.S. Bankruptcy Code. As discussed above, the potential for mass exercises of QFC default rights is one reason why a GSIB's failure could cause severe damage to financial stability. In the context of an SPOE resolution, if the GSIB parent's entry into resolution led to the mass exercise of cross-default rights by the subsidiaries' QFC counterparties, then the subsidiaries could themselves fail or experience financial distress. Moreover, the mass exercise of QFC default rights could entail asset fire sales, which likely would affect other financial companies and undermine financial stability. Similar disruptive results can occur with an MPOE resolution of a GSIB affiliate if an otherwise performing GSIB entity is subject to having its QFCs terminated or accelerated as a result of the default of its affiliate.
In an SPOE resolution, this damage could be avoided if actions of the following two types are prevented: The exercise of direct default rights against the top-tier holding company that has entered resolution, and the exercise of cross-default rights against the operating subsidiaries based on their parent's entry into resolution. (Direct default rights against the subsidiaries would not be exercisable because the subsidiaries would not enter resolution.) In an MPOE resolution, this damage could occur from exercise of default rights against a performing entity based on the failure of an affiliate.
The stay-and-transfer provisions of Title II of the Dodd-Frank Act would address both direct default rights and cross-default rights. But, as explained above, no similar statutory provisions apply in a resolution under the U.S. Bankruptcy Code. This final rule attempts to address these obstacles to orderly resolution by extending
The final rule also is intended to facilitate other approaches to GSIB resolution. For example, it would facilitate a similar resolution strategy in which a U.S. depository institution subsidiary of a GSIB enters resolution under the FDI Act while its subsidiaries continue to meet their financial obligations outside of resolution.
The final rule is intended to enhance the potential for orderly resolution of a GSIB under the U.S. Bankruptcy Code, the FDI Act, or a similar resolution regime. The risks to an orderly resolution under the U.S. Bankruptcy Code include separate resolution insolvency proceedings, including proceedings in non-U.S. jurisdictions. Therefore, by staying default rights arising from affiliates entering into such proceedings, the final rule will advance the Dodd-Frank Act's goal of making orderly GSIB resolution workable under the Bankruptcy Code.
Likewise, the final rule retains the prohibition against contractual provisions that permit the exercise of default rights that are indirectly related to the resolution of an affiliate. QFCs may include a number of default rights triggered by an event that is not the resolution of an affiliate but is caused by the resolution, such as a credit rating downgrade in response to the resolution. A primary purpose of the final rule is to prevent early terminations caused by the resolution of an affiliate. A regulation that specifies each type of early termination provision that should be stayed would be over-inclusive or under-inclusive, and easy to evade. Similarly, a stay of default rights that are only directly related to the resolution of an affiliate could increase the likelihood of litigation to determine the relationship between the default right and the affiliate resolution was sufficient to be considered “directly” related. The final rule attempts to decrease such uncertainty and litigation risk by including default rights that are related (
Moreover, the final rule does not affect parties' direct default rights under the U.S. Bankruptcy Code. As explained above, the regulation does not prohibit a covered QFC from permitting the exercise of default rights against a non-bank covered FSI that has entered bankruptcy proceedings.
The final rule should also benefit the counterparties of a subsidiary of a failed GSIB by preventing the severe stress or disorderly failure of an otherwise-solvent subsidiary and allowing it to continue to meet its obligations. While it may be in the individual interest of any given counterparty to exercise any available rights against a subsidiary of a failed GSIB, the mass exercise of such rights could harm the counterparties' collective interest by causing an otherwise-solvent subsidiary to fail. Therefore, like the automatic stay in bankruptcy, which serves to maximize creditors' ultimate recoveries by preventing a disorderly liquidation of the debtor, the final rule seeks to mitigate this collective action problem to the benefit of the failed firm's creditors and counterparties by preventing a disorderly resolution. And because many creditors and counterparties of GSIBs are themselves systemically important financial firms, improving outcomes for those creditors and counterparties should further protect the financial stability of the United States.
First, in order to ensure that the prohibitions would apply only to cross-default rights (and not direct default rights), the final rule provides that a covered QFC may permit the exercise of default rights based on the direct party's entry into a resolution proceeding.
The proposal exempted from this creditor protection provision proceedings under a U.S. or foreign special resolution regime. As explained in the proposal, special resolution regimes typically stay direct default rights, but may not stay cross-default rights. For example, as discussed above, the FDI Act stays direct default rights,
One commenter requested the FDIC revise this provision to clarify that default rights based on a covered FSI or an affiliate entering resolution under the FDI Act or Title II of the Dodd-Frank Act are not prohibited but instead are merely subject to the terms of such regimes. The commenter requested the FDIC clarify that such default rights are permitted so long as they are subject to the provisions of the FDI Act or Title II of the Dodd-Frank Act as required under § 385.3. The final rule eliminates this proposed exemption for special resolution regimes because the rule separately addresses cross-defaults arising from the FDI Act and because foreign special resolution regimes, along with efforts in other jurisdictions to contractually recognize stays of default rights under those regimes, should reduce the risk that such a regime should pose to the orderly resolution of a GSIB under the U.S. Bankruptcy Code or other ordinary insolvency proceedings.
The final rule also allows, in the context of an insolvency proceeding, and subject to the statutory requirements and restrictions thereunder, covered QFCs to permit the exercise of default rights based on (i) the failure of the direct party; (ii) the direct party not satisfying a payment or delivery obligation; or (iii) a covered affiliate support provider or transferee not satisfying its payment or delivery obligations under the direct QFC or credit enhancement.
As explained in the proposal, the exceptions in the final rule for the creditor protections described above are intended to help ensure that the final rule permits a covered FSI's QFC counterparties to protect themselves from imminent financial loss and does not create a risk of delivery gridlocks or daisy-chain effects, in which a covered FSI's failure to make a payment or delivery when due leaves its counterparty unable to meet its own payment and delivery obligations (the daisy-chain effect would be prevented because the covered FSI's counterparty would be permitted to exercise its default rights, such as by liquidating collateral). These exceptions are generally consistent with the treatment of payment and delivery obligations, following the applicable stay period, under the U.S. Special Resolution Regimes.
These exceptions also help to ensure that counterparties of a covered FSI's non-IDI subsidiaries or affiliates would not risk the delay and expense associated with becoming involved in a bankruptcy proceeding, since, unlike a typical creditor of an entity that enters bankruptcy, the QFC counterparty would retain its ability under the U.S. Bankruptcy Code's safe harbors to exercise direct default rights. This should further reduce the counterparty's incentive to run. Reducing incentives to run in the period leading up to resolution promotes orderly resolution, since a QFC creditor run (such as a mass withdrawal of repo funding) could lead to a disorderly resolution and pose a threat to financial stability.
Where a covered QFC is supported by a covered affiliate credit enhancement,
Under the final rule, contractual provisions may permit the exercise of default rights at the end of the stay period if the covered affiliate credit enhancement has not been transferred away from the covered affiliate support provider and that support provider becomes subject to a resolution proceeding other than a proceeding under Chapter 11 of the U.S. Bankruptcy Code or the FDI Act.
QFCs may also permit the exercise of default rights at the end of the stay period if the original credit support provider does not remain, and no transferee becomes, obligated to the same (or substantially similar) extent as the original credit support provider was obligated immediately prior to entering a resolution proceeding (including a Chapter 11 proceeding) with respect to (a) the covered affiliate credit enhancement (b) all other covered affiliate credit enhancements provided by the credit support provider on any other covered QFCs between the same parties, and (c) all credit enhancements provided by the credit support provider between the direct party and affiliates of the direct party's QFC counterparty.
Finally, if the covered affiliate credit enhancement is transferred to a transferee, the QFC may permit non-defaulting counterparty to exercise default rights at the end of the stay period unless either (a) all of the covered affiliate support provider's ownership interests in the direct party are also transferred to the transferee or (b) reasonable assurance is provided that substantially all of the covered affiliate support provider's assets (or the net proceeds from the sale of those assets) will be transferred or sold to the
Commenters generally expressed strong support for these exclusions but also requested that these exclusions be broadened in a number of ways. Certain commenters urged the FDIC to broaden the exclusions to permit, after the trigger of the stay-and-transfer provisions, the exercise of default rights by a counterparty against a direct counterparty or covered support provider with respect to any default right under the QFC (other than a default right explicitly based on the failure of an affiliate) and not just with respect to defaults resulting from payment or delivery failure or the direct party becoming subject to certain resolution or insolvency proceedings (
The final rule does not include the additional creditor protections of the Universal Protocol or other creditor protections requested by commenters. As explained in the proposal and below, the additional creditor protections of the Universal Protocol do not appear to materially diminish the prospects for an orderly resolution of a GSIB because the Universal Protocol includes a number of desirable features that the final rule otherwise lacks.
Additionally, in response to commenters, the definition of “transferee” in § 382.4(g)(3) of the final rule has been changed to define a “transferee” as a person to whom a covered affiliate credit enhancement is transferred upon the covered affiliate credit support provider entering a receivership, insolvency, liquidation, resolution, or similar proceeding or thereafter as part of the resolution, restructuring or reorganization involving the covered affiliate support provider. The provisions of the FRB final rule are consistent with this final rule.
One commenter also argued that transfer should be limited to a bridge bank under the FDI Act or a bridge financial company under Title II of the Dodd-Frank Act to ensure that the transferee is more likely to be able to satisfy the obligations of a credit support provider and is subject to regulatory oversight. Section 382.4 of the final rule does not apply in situations where the covered affiliate support provider is in Title II of the Dodd-Frank Act. Furthermore, this section is limited in its application to the FDI Act as well, limiting the exercise of cross-default rights as contemplated by § 382.4(h) of the final rule. Therefore, the FDIC is not adopting the proposed additional creditor protection because it would defeat in large part the purpose of § 382.4 and potentially create confusion regarding the requirements and purposes of §§ 382.3 and 382.4 of the final rule.
A few commenters expressed concern that the additional creditor protections applied only to QFCs supported by a credit enhancement provided by a “covered affiliate support provider” (
One commenter requested clarification that the creditors of a non-U.S. credit support provider are permitted to exercise any and all rights against that non-U.S. credit support provider that they could exercise under the non-U.S. resolution regime applicable to that non-U.S. credit support provider. The final rule, like the proposal, is limited to QFCs to which a covered FSI is a party. Section 382.4 of the final rule generally prohibits QFCs to which a covered FSI is a party from allowing the exercise of cross-default rights of the covered QFC, regardless of whether the affiliate entering resolution and/or the credit support provider is organized or operates in the United States.
Another commenter expressed concern that the proposed § 382.4(g)(3) (§ 382.4(f)(3) of the final rule) would provide a right without a remedy because if the covered affiliate credit
Another commenter suggested revising § 382.4(g) (§ 382.4(f) of the final rule) to clarify that, for a covered direct QFC supported by a covered affiliate credit enhancement, the covered direct QFC and the covered affiliate credit enhancement may permit the exercise of a default right after the stay period that is related, directly or indirectly, to the covered affiliate support provider entering into resolution proceedings. This reading is incorrect and revising the rule as requested would largely defeat the purpose of § 382.4 of the final rule by merely delaying QFC termination en masse.
Some commenters also requested specific provisions related to physical commodity contracts, including a provision that would allow regulators to override a stay if necessary to avoid disruption of the supply or prevent exacerbation of price movements in a commodity or a provision that would allow the exercise of default rights of counterparties delivering or taking delivery of physical commodities if a GSIB entity defaults on any physical delivery obligation to any counterparty. As noted above, QFCs may permit a counterparty to exercise its default rights immediately, even during the stay period, if the direct party fails to pay or perform on the covered QFC with the counterparty (or another contract between the same parties that gives rise to a default under the covered QFC).
The purpose of this requirement is to deter the QFC counterparty of a covered FSI from thwarting the purpose of the final rule by exercising a default right because of an affiliate's entry into resolution under the guise of other default rights that are unrelated to the affiliate's entry into resolution.
A few commenters requested guidance on how to satisfy the burden of proof of clear and convincing evidence so that they may avoid seeking such clarity through litigation. Other commenters urged that this standard was not appropriate and should be eliminated. In particular, a number of commenters expressed concern that the burden of proof requirements, which are more stringent than the burden of proof requirements for typical contractual disputes adjudicated in a court, unduly hamper the creditor protections of counterparties and impose a burden directly on non-covered FSIs, who should be able to exercise default rights if it is commercially reasonable in the context. One commenter contended that this burden, combined with the stay on default rights related “indirectly” to an affiliate entering insolvency proceedings effectively prohibits counterparties from exercising any default rights during the stay period. These commenters argued that it is inappropriate for the rulemaking to alter the burden of proof for contractual disputes. One commenter suggested that, in a scenario involving a master agreement with some transactions out of the money and others in the money, the defaulting GSIB will have a lower burden of proof for demonstrating that it is owed money than for demonstrating that it owes money, should the non-GSIB counterparty exercise its termination rights. Certain commenters suggested instead that the final rule shift the burden and instead adopt a rebuttable presumption that the non-defaulting counterparty's exercise of default rights is permitted under the QFC unless the defaulting covered FSI demonstrates otherwise. One commenter requested that the burden of proof not apply to the exercise of direct default rights. Another commenter suggested that the burden of proof provision imposes a higher burden of proof on counterparties affected by the rule than domestic and foreign GSIBs and that the requirements for satisfying this burden should be clarified and any case law or statutory standard that a Federal judge would apply in this instance be provided.
The final rule retains the proposed burden of proof requirements. The requirement is based on a primary goal of the final rule—to avoid the disorderly termination of QFCs in response to the failure of an affiliate of a GSIB. The requirement accomplishes this goal by making clear that a party that exercises a default right when an affiliate of its direct party enters receivership or insolvency proceedings is unlikely to prevail in court unless there is clear and convincing evidence that the exercise of the default right against a covered FSI is not related to the insolvency or resolution proceeding. The requirement therefore should discourage the impermissible exercise of default rights without prohibiting the exercise of all default rights. Moreover, the burden of
The proposal would have applied to a covered QFC regardless of whether the covered FSI was acting as a principal or as an agent. Sections 382.3 and 382.4 of the proposal did not distinguish between agents and principals with respect to default rights or transfer restrictions applicable to covered QFCs. Under the proposal, § 382.3 would have limited default rights and transfer restrictions that a counterparty may have against a covered FSI consistent with the U.S. Special Resolution Regimes.
Commenters argued that the provisions of §§ 382.3 and 382.4 that relate to transactions entered into by the covered FSI as agent should exclude QFCs where the covered FSI or its affiliate does not have any liability (including contingent liability) under or in connection with the contract, or any payment or delivery obligations with respect thereto. Commenters also argued that the proposed agent provisions should not apply to circumstances where the covered FSI acts as agent for a counterparty whose transactions are excluded from the requirements of the rule.
Commenters contended that the requirement to conform QFCs with all affiliates of a counterparty when an agent is acting on behalf of the counterparty would be particularly burdensome, as the agent may not have information about the counterparty's affiliates or their contracts with covered FSIs, covered banks, or covered entities. Commenters also requested clarification that conformance is not required of contracts between a covered FSI as agent on behalf of a non-U.S. affiliate of a foreign GSIB that would not be a covered FSI under the proposal, since default rights related to the non-U.S. operations of foreign GSIBs are not the focus of the rule and do not bear a sufficient connection to U.S. financial stability to warrant the burden and cost of compliance.
One commenter also urged that securities lending authorization agreements (SLAAs) should also be exempt from the rule. The commenter explained that SLAAs are banking services agreements that establish an agency relationship with the lender of securities and an agent and may be considered credit enhancements for securities lending transactions (and therefore QFCs) because the SLAAs typically require the agent to indemnify the lender for any shortfall between the value of the collateral and the value of the securities in the event of a borrower default. The commenter explained that SLAAs typically do not contain provisions that may impede the resolution of a GSIB, but may contain termination rights or contractual restrictions on assignability. However, the commenter argued that the beneficiaries under SLAAs lack the incentive to contest the transfer of the SLAA to a bridge institution in the event of GSIB insolvency.
To respond to concerns raised by commenters, the agency provisions of the proposed rule have been modified in the final rule. The final rule provides that a covered FSI does not become a party to a QFC solely by acting as agent to a QFC.
The final rule does not specifically exempt SLAAs because the agreements provide the beneficiaries with contractual rights that may hinder the orderly resolution of a GSIB and because it is unclear how such beneficiaries would act in response to the failure of their agent. More generally, the final rule does not exempt a QFC with respect to which an agent also acts in another capacity, such as guarantor. Continuing the example regarding the covered FSI acting as agent with respect to a master securities lending agreement, if the covered FSI also provided a SLAA that included the typical indemnification provision, discussed above, the agency exemption of the final rule would not exclude the SLAA but would still exclude the master securities lending agreement. This is because the covered FSI is acting solely as agent with respect to the master securities lending agreement but is acting as agent and guarantor with respect to the SLAA. However, SLAAs would be exempted under the final rule to the extent that they are not “in-scope QFCs” or otherwise meet the exemptions for covered QFCs of the final rule.
The proposal noted that, while the scope of the stay-and-transfer provisions of the Universal Protocol are narrower than the stay-and-transfer provisions that would have been required under the proposal and the Universal Protocol provides a number of creditor protection provisions that would not otherwise have been available under the proposal, the Universal Protocol includes a number of desirable features that the proposal lacked. When an entity (whether or not it is a covered FSI) adheres to the Universal Protocol, it necessarily adheres to the Universal Protocol with respect to all covered FSIs that have also adhered to the Protocol rather than one or a subset of covered FSIs (as the proposal would otherwise have permitted). This feature appears to allow the Universal Protocol to address impediments to resolution on an industry-wide basis and increase market certainty, transparency, and equitable treatment with respect to default rights of non-defaulting parties.
Commenters generally supported the proposal's provisions to allow covered FSIs to comply with the requirements of the proposed rule through adherence to the Universal Protocol. For the reasons discussed above and in the proposal, the final rule allows covered FSIs to comply with the rule through adherence to the Universal Protocol and makes other modifications to the proposal to address comments.
A few commenters requested that the final rule clarify two technical aspects of adherence to the Universal Protocol. These commenters requested confirmation that adherence to the Universal Protocol would also satisfy the requirements of § 382.3. The commenters also requested confirmation that QFCs that incorporate the terms of the Universal Protocol by reference also would be deemed to comply with the terms of the proposed alternative method of compliance.
One commenter indicated that many non-covered FSI counterparties do not have ISDA master agreements for physically-settled forward and commodity contracts and, therefore, compliance with the rule's requirements through adherence to the Universal Protocol would entail substantial time and educational effort. As in the proposal, the final rule simply permits adherence to the Universal Protocol as one method of compliance with the rule's requirements, and parties may meet the rule's requirements through bilateral negotiation, if they choose. Moreover, the Securities Financing Transaction Annex and Other Agreements Annex of the Universal Protocol, which are specifically identified in the proposed and final rule, are designed to amend QFCs that are not ISDA master agreements.
Many commenters argued that the final rule should also allow compliance with the rule through a yet-to-be-created
With respect to the scope of the special resolution regimes of the Universal Protocol, commenters' concern focused on the special resolution regimes of “Protocol-eligible Regimes.” Some commenters also expressed concern with the scope of “Identified Regimes” of the Universal Protocol.
The Universal Protocol defines “Identified Regimes” as the special resolution regimes of France, Germany, Japan, Switzerland, and the United Kingdom as well as the U.S. Special Resolution Regimes. The Universal Protocol defines “Protocol-eligible Regimes” as resolution regimes of other jurisdictions specified in the protocol that satisfies the requirements of the Universal Protocol. The Universal Protocol provides a “Country Annex,” which is a mechanism by which individual adherents to the Universal Protocol may agree that a specific jurisdiction satisfies the requirements of a “Protocol-eligible Regime.” The Universal Protocol referred to in the proposal did not include any Country Annex for any Protocol-eligible Regime.
Commenters requested the final rule include a safe harbor for an approved U.S. JMP that does not include Protocol-eligible Regimes. Commenters argued that many counterparties may not be able to adhere to the Universal Protocol because they would not be able to adhere to a Protocol-eligible Regime in the absence of law or regulation mandating such adherence, as it would force counterparties to give up default rights in jurisdictions where that is not yet legally required.
With respect to the universal adherence feature of the Universal Protocol, commenters argued that universal adherence imposed significant monitoring burden since new adherents may join the Universal Protocol at any time. To address this concern, some commenters requested that an approved U.S. JMP allow a counterparty to adhere on a firm-by-firm or entity-by-entity basis. Other commenters suggested or supported approval of, an approved U.S. JMP in which a counterparty would adhere to all current covered FSIs under the final rule (to be identified on a “static list”) and would adhere to new covered FSIs on an entity-by-entity basis. This static list, commenters argued, would retain the “universal adherence mechanics” of the Universal Protocol and allow market participants to fulfill due diligence obligations related to compliance. Commenters also argued that universal adherence would be overbroad because the Universal Protocol could amend QFCs to which a covered FSI, covered bank, or covered entity was not a party. Certain commenters argued that adhering with respect to any counterparty would also be inconsistent with their fiduciary duties.
In response to comments and to further facilitate compliance with the rule, the final rule provides that covered QFCs amended through adherence to the Universal Protocol or a new (and separate) protocol (the “U.S. Protocol”) would be deemed to conform the covered QFCs to the requirements of the final rule.
Consistent with the proposal
The final rule also provides that the U.S. Protocol is required to include the U.S. Special Resolution Regimes and the other Identified Regimes but is not required to include Protocol-eligible Regimes.
The U.S. Protocol does not permit parties to adhere on a firm-by-firm or entity-by-entity basis because such adherence mechanisms requested by commenters would obviate one of the primary benefits of the Universal Protocol: Universal adherence. Similarly, the final rule does not permit adherence to a “static list” of all current covered FSIs, which other commenters requested.
The final rule also addresses provisions that allow an adherent to elect that Section 1 and/or Section 2 of the Universal Protocol do not apply to the adherent's contracts.
Consistent with the basic purposes of the proposed and final rules, the U.S. Protocol requires that opt-outs exercised by its adherents will only be effective to the extent that the affected covered QFCs otherwise conform to the requirements of the final rule. Therefore, the U.S. Protocol allows counterparties to exercise available opt-out rights in a manner that also allows covered FSIs to ensure that their covered QFCs continue to conform to the requirements of the rule.
The final rule also provides that, under the U.S. Protocol, the opt-out in Section 4(b)(i)(A) of the attachment to the Universal Protocol (Sunset Opt-out)
The final rule also expressly addresses a provision in the Universal Protocol that concerns the client-facing leg of a cleared transaction. As discussed above, the final rule, like the proposal, does not include the exemption in Section 2 of the Universal Protocol regarding the client-facing leg of a cleared transaction. Therefore, the final rule provides that the U.S. Protocol must not exempt the client-facing leg of the transaction.
As discussed above, the restrictions of the final rule would leave many creditor protections that are commonly included in QFCs unaffected. The final rule would also allow any covered FSI to submit to the FDIC a request to approve as compliant with the rule one or more QFCs that contain additional creditor protections—that is, creditor protections that would be impermissible under the restrictions set forth above.
The first two factors concern the potential impact of the requested creditor protections on GSIB resilience and resolvability. The next four concern
In addition to analyzing the request under the enumerated factors, a covered FSI requesting that the FDIC approve enhanced creditor protections would be required to submit a legal opinion stating that the requested terms would be valid and enforceable under the applicable law of the relevant jurisdictions, along with any additional relevant information requested by the FDIC.
Under the final rule, the FDIC could approve a request for an alternative set of creditor protections if the terms of the QFC, as compared to a covered QFC containing only the limited creditor protections permitted by the final rule, would promote the safety and soundness of covered FSIs by mitigating the potential destabilizing effects of the resolution of a GSIB that is an affiliate of the covered FSI to at least the same extent.
Commenters requested that this approval process be made less burdensome and more flexible and urged for additional clarifications on the process for submitting and approving such requests (
Finally, commenters also urged the FDIC, FRB, and OCC to either harmonize their standards for approving enhanced creditor protections or otherwise be consistent in approving enhanced creditor protection conditions. Imposing different conditions or arriving at different outcomes would subject identical QFCs to different creditor protections, raise fairness issues, increase legal and operational complexity, and hence impede the goal of orderly resolution of a GSIB.
The FDIC has clarified that the FDIC could approve an alternative proposal of additional creditor protections as compliant with §§ 382.3 and 382.4 of the final rule, but has not otherwise modified these provisions of the proposal in response to changes requested by commenters. The provisions contain flexibility and guidance on the process for submitting and approving enhanced creditor protections. The final rule directly places requirements only on covered FSIs and thus only covered FSIs are eligible to submit requests pursuant to these provisions. In response to commenters' concerns, the FDIC notes that the final rule does not prevent multiple covered FSIs from presenting one request and does not prevent covered FSIs from seeking the input of counterparties when developing a request. The final rule does not provide a maximum time to review proposals because proposals could vary greatly in complexity and novelty. The final rule also maintains the provision requiring a written legal opinion which helps ensure that proposed provisions are valid and enforceable under applicable law. The final rule does not expand the approval process beyond additional creditor protections; however, revisions to aspects of the final rule may be made through the rulemaking process. The FDIC intends to consult with the FRB and OCC with respect to any requests for approvals for additional creditor protections. Therefore, the FDIC does not expect that the agencies would arrive at different outcomes with respect to an identical application for approval for enhanced creditor protections based on the differences in standards for approval.
Under the proposal, the rule would have required compliance on the first day of the first calendar quarter beginning at least one year after issuance of the final rule, which the proposal referred to as the effective date.
One commenter suggested that the rule should take effect no sooner than one year from the date that an approved U.S. JMP is published and available for adherence, including any additional time it might take for the agencies to approve it. Certain commenters requested that the compliance deadline for covered QFCs entered into by an agent on behalf of a principal be extended by six months as well. Other commenters, however, cautioned against an approach that would impose different deadlines with respect to different classes of QFCs, as opposed to counterparty types, since the main challenge in connection with the remediation is the need for outreach to and education of counterparties. These commenters contended that once a counterparty has become familiar with the requirements of the rule and the terms of the required amendments, it would be more efficient to remediate all covered QFCs with the counterparty at the same time.
A number of commenters also requested that the FDIC confirm that entities newly acquired by a GSIB, and thereby become new covered FSIs have until the first day of the first calendar quarter immediately following one year after becoming covered FSIs to conform their existing QFCs. Commenters argued that this would allow the GSIB to conform existing QFCs in an orderly fashion without impairing the ability of covered FSIs to engage in corporate activities. These commenters also requested clarification that, during that conformance period, affiliates of covered FSIs would not be prohibited from entering into new transactions or QFCs with counterparties of the newly acquired entity if the existing covered FSIs otherwise comply with the rule's requirements. Some commenters urged the FDIC to exclude existing contracts from the final rule's requirements and only apply the rule on a prospective basis. Additionally, commenters asked for harmonized compliance dates across the different agencies' rules.
The effective date for the final rule is January 1, 2018, more than 60 days following publication in the
The final rule provides additional time for compliance with the requirements for other types of counterparties. In particular, for other types of financial counterparties
The FDIC is giving this additional time for compliance to respond to concerns raised by commenters. The FDIC encourages covered FSIs to start planning and outreach efforts early in order to come into compliance with the rule on the time frames provided. The FDIC believes that this additional time for compliance should also address concerns raised by commenters regarding the burden of conforming existing contracts by allowing firms additional time to conform all covered QFCs to the requirements of the final rule.
Although the phased-in compliance period does not contain special rules related to acting as an agent as requested by certain commenters, the rule has been modified as described above to clarify that a covered FSI does not become a party to a QFC solely by acting as agent with respect to the QFC.
Entities that are covered FSIs when the final rule is effective would be required to comply with the requirements of the final rule beginning on the first compliance date, but would be given more time to conform such covered QFCs with entities that are not covered FSIs, covered entities, or covered banks.
In addition, an entity that becomes a covered FSI after the effective date of the final rule (a “new covered FSI” for purposes of this preamble) generally has the same period of time to comply as an entity that is a covered FSI on the effective date (
Certain commenters opposed application of the requirements of the rule to existing QFCs, requesting instead that the final rule only apply to QFCs entered into after the effective date of any final rule and that all pre-existing QFCs not be subject to the rule's requirements. Commenters suggested that end users of QFCs with GSIB affiliates might not have entered into existing contracts without the default rights prohibited in the proposed rule and that revising existing QFCs would be time-consuming and expensive. Commenters asserted that this treatment would be consistent with the final rules in the United Kingdom and the statutory requirements adopted by Germany.
The FDIC does not believe it is appropriate to exclude all pre-existing QFCs because of the current and future risk that existing covered QFCs pose to the orderly resolution of a covered FSI. Moreover, application of different default rights to existing and future transactions within a netting set could cause the netting set to be broken, which commenters noted could increase burden to both parties to the netting set.
By permitting a covered FSI to remain a party to noncompliant QFCs entered before the effective date unless the covered FSI or any affiliate (that is also a covered entity, covered bank, or covered FSI) enters into new QFCs with the same counterparty or its consolidated affiliates, the final rule strikes a balance between ensuring QFC continuity if the GSIB were to fail and ensuring that covered FSIs and their existing counterparties can manage any compliance costs and disruptions associated with conforming existing QFCs by refraining from entering into new QFCs. The requirement that a covered FSI ensure that all existing QFCs with a particular counterparty and its consolidated affiliates are compliant before it or any affiliate of the covered FSI (that is also a covered entity, covered bank, or covered FSI) enters into a new QFC with the same counterparty or its consolidated affiliates after the effective date will provide covered FSIs with an incentive to seek the modifications necessary to ensure that their QFCs with their most important counterparties are compliant. Moreover, the volume of noncompliant covered QFCs outstanding can be expected to decrease over time and eventually to reach zero. In light of these considerations, and to avoid creating potentially inappropriate compliance costs with respect to existing QFCs with counterparties that, together with their consolidated affiliates, do not enter into new covered QFCs with the GSIB on or after the first day of the calendar quarter that is one year from the effective date of the final rule, it would be appropriate to permit a limited number of noncompliant QFCs to remain outstanding, in keeping with the terms described above. Moreover, the final rule also excludes existing warrants and retail investment advisory agreements to address concerns raised by commenters and mitigate burden.
The final rule is intended to promote the financial stability of the United States by reducing the potential that resolution of a GSIB, particularly through bankruptcy, will be disorderly. The final rule will help meet this policy objective by more effectively and efficiently managing the exercise of cross default rights and transfer restrictions contained in QFCs. It will therefore help mitigate the risk of future financial crises and imposition of substantial costs on the U.S. economy.
The final rule only applies to FDIC-supervised institutions that are subsidiaries or affiliates of a GSIB. Of the 3,717 institutions that the FDIC supervises,
The final rule will likely benefit the counterparties of covered FSIs by preventing the disorderly failure of the GSIB subsidiary and enabling it to continue to meet its obligations. The mass exercise of default rights against an otherwise healthy covered FSI resulting from the failure of an affiliate may cause it to weaken or fail. Therefore, preventing the mass exercise of QFC default rights at the time the parent or other affiliate enters resolution proceedings makes it more likely that the subsidiaries will be able to meet their obligations to QFC counterparties. Moreover, the creditor protections permitted under the rule will allow any counterparty that does not continue to receive payment under the QFC to exercise its default rights, after any applicable stay period.
Because financial crises impose enormous costs on the economy, even small reductions in the probability or severity of future financial crises create substantial economic benefits.
The final rule will also likely benefit the DIF. Mass exercise of QFC default rights by the counterparties at the time the parent or other affiliate of an FDIC-insured institution enters resolution could lead to severe losses for, or possibly the failure of, FDIC-insured subsidiaries of failed GSIBs. Those losses and/or failures could result in considerable losses to the DIF.
The costs of the final rule are likely to be relatively small and only affect eleven covered FSIs. Only eight of the eleven affected institutions had QFC contracts over the past 5 years. The QFC activity of those eight firms represented less than .02 percent of QFC activity among all FDIC-insured GSIB subsidiaries.
In addition, the FDIC anticipates that covered FSIs would likely share resources with their parent GSIB and/or GSIB affiliates—which are subject to parallel requirements—to help cover compliance costs. The stay-and-transfer provisions of the Dodd-Frank Act and the FDI Act are already in force, and the Universal Protocol is already partially effective for the 25 existing GSIB adherents. The partial effectiveness of the Universal Protocol (regarding Section 1, which addresses recognition of stays on the exercise of default rights and remedies in financial contracts under special resolution regimes, including in the United States, the United Kingdom, Germany, France, Switzerland and Japan) suggests that to the extent covered FSIs already adhere to the Universal Protocol, some implementation costs will likely be reduced.
The final rule could potentially impose costs on covered FSIs to the extent that they may need to provide their QFC counterparties with better contractual terms in order to compensate those parties for the loss of their ability to exercise default rights. These costs may be higher than drafting and negotiating costs. However, they are also expected to be relatively small because of the limited reduction in the rights of counterparties and the availability of other forms of credit protection for counterparties.
The final rule could also create economic costs by causing a marginal reduction in QFC-related economic activity. For example, a covered FSI may not enter into a QFC that it would have otherwise entered into in the absence of the rule. Therefore, economic activity that would have been associated with that QFC absent the rule (such as economic activity that would have otherwise been hedged with a derivatives contract or funded through a repo transaction) might not occur. The FDIC does not expect any significant reduction in QFC activity to result from this rule because the restrictions on default rights in covered QFCs that the rule requires are relatively narrow and would not change a counterparty's rights in response to its direct counterparty's entry into a bankruptcy proceeding (that is, the default rights covered by the Bankruptcy Code's “safe harbor” provisions). Counterparties are also able to prudently manage risk through other means, including entering into QFCs with entities that are not GSIB entities and therefore would not be subject to the final rule.
This final rule also amends several definitions in the FDIC's capital and liquidity rules to help ensure that the final rule does not have unintended effects for the treatment of covered FSIs' netting agreements under those rules, consistent with the amendments contained in the FRB FR and the OCC FR.
The FDIC's regulatory capital rules permit a banking organization to measure exposure from certain types of financial contracts on a net basis and recognize the risk-mitigating effect of financial collateral for other types of exposures, provided that the contracts are subject to a “qualifying master netting agreement” or agreement that provides for certain rights upon the default of a counterparty.
The current definition of “qualifying master netting agreement” recognizes that default rights may be stayed if the financial company is in resolution under the Dodd-Frank Act, the FDI Act, a substantially similar law applicable to government-sponsored enterprises, or a substantially similar foreign law, or where the agreement is subject by its terms to any of those laws. Accordingly, transactions conducted under netting agreements where default rights may be stayed in those circumstances may qualify for the favorable capital treatment described above. However, the current definition of “qualifying master netting agreement” does not recognize the restrictions that the final rule would impose on the QFCs of covered FSIs. Thus, a master netting agreement that is compliant with this final rule would not qualify as a qualifying master netting agreement. This would result in considerably higher capital and liquidity requirements for QFC counterparties of covered FSIs, which is not an intended effect of this final rule.
Accordingly, the final rule would amend the definition of “qualifying master netting agreement” so that a master netting agreement could qualify for such treatment where the right to accelerate, terminate, and close-out on a net basis all transactions under the agreement and to liquidate or set-off collateral promptly upon an event of default of the counterparty is limited to the extent necessary to comply with the requirements of this final rule. This revision maintains the existing treatment for these contracts under the FDIC's capital and liquidity rules by accounting for the restrictions that the final rule, or the substantively identical rules of issued by the FRB and expected from the OCC, would place on default rights related to covered FSIs' QFCs. The FDIC does not believe that the disqualification of master netting agreements that would result in the absence of this amendment would accurately reflect the risk posed by the affected QFCs. As discussed above, the implementation of consistent restrictions on default rights in GSIB QFCs would increase the prospects for the orderly resolution of a failed GSIB and thereby protect the financial stability of the United States.
The final rule would similarly revise certain other definitions in the regulatory capital rules to make analogous conforming changes designed to account for this final rule's restrictions and ensure that a banking organization may continue to recognize the risk-mitigating effects of financial collateral received in a secured lending transaction, repo-style transaction, or eligible margin loan for purposes of the FDIC's capital rules. Specifically, the final rule would revise the definitions of “collateral agreement,” “eligible margin loan,” and “repo-style transaction” to provide that a counterparty's default rights may be limited as required by this final rule without unintended adverse impacts under the FDIC's capital rules.
The interagency rule establishing margin and capital requirements for covered swap entities (swap margin rule) defines the term “eligible master netting agreement” in a manner similar to the definition of “qualifying master netting agreement.”
Certain commenters requested technical modifications to the proposed modifications to the definitions to better distinguish the requirements of § 382.4 and the provisions of Section 2 of the Universal Protocol from provisions regarding “opt in” to special resolution regimes. In response to this comment, the final rule establishes an independent exception addressing the requirements of § 382.4 and the provisions of Section 2 of the Universal Protocol and makes other minor clarifying edits.
One commenter requested that the definitions of the terms “collateral agreement,” “eligible margin loan,” “qualifying master netting agreement,” and “repo-style transaction” include references to stays in State resolution regimes (such as insurance receiverships). The commenters did not identify, and the FDIC is not aware of, any State resolution regime that currently includes QFC stays similar to those of the U.S. Special Resolution Regimes. Neither the nature of the potential laws nor the extent of their effect on the regulatory capital requirements of FDIC-regulated institutions is known. Therefore, the final rule does not reference State resolution regimes.
One commenter argued that neither the current nor the proposed definition of qualifying master netting agreement comports with section 302(a) of the Business Risk Mitigation and Price Stabilization Act of 2015, which exempts certain types of counterparties from initial and variation margin requirements, and that the proposed amendments to the definition add unnecessary complexity to the existing rules and therefore make compliance more difficult. Section 302(a) of that act is not relevant to the definition of qualifying master netting agreement because the definition does not require initial or variation margin. Rather, the definition of qualifying master netting agreement requires that margin provided under the agreement, if any, be able to be promptly liquidated or set off under the circumstances specified in the definition. The FDIC continues to believe that the amendments are necessary and do not substantially add to the complexity of the FDIC's rules.
In accordance with the requirements of the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 through 3521 (PRA), the FDIC may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid OMB control number. Section 382.5 of the proposed rule contains “collection of information” requirements within the meaning of the PRA. OMB has assigned the following control numbers to this information collection: 3064-AE46.
This information collection consists of amendments to covered QFCs and, in some cases, approval requests prepared and submitted to the FDIC regarding modifications to enhanced creditor protection provisions (in lieu of adherence to the ISDA Protocol).
Covered FSIs would also have recordkeeping associated with proposed amendments to their covered QFCs. However, much of the recordkeeping associated with amending the covered QFCs is already expected from a covered FSI. Therefore, the FDIC would expect minimal additional burden to accompany the initial efforts to bring all covered QFCs into compliance. The existing burden estimates for the information collection associated with § 382.5 are as follows:
The FDIC received no comments on the PRA section of the proposal or the burden estimates. However, the FDIC has an ongoing interest in public comments on its burden estimates. Any such comments should be sent to the Paperwork Reduction Act Officer, FDIC Legal Division, 550 17th Street NW., Washington, DC 20503. Written comments should address the accuracy of the burden estimates and ways to minimize burden, as well as other relevant aspects of the information collection request.
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601
The final rule would only apply to FSIs that form part of GSIB organizations, which include the largest, most systemically important banking organizations and certain of their subsidiaries. More specifically, the proposed rule would apply to any covered FSI that is a subsidiary of a U.S. GSIB or foreign GSIB—regardless of size—because an exemption for small entities would significantly impair the effectiveness of the proposed stay-and-transfer provisions and thereby undermine a key objective of the proposal: To reduce the execution risk of an orderly GSIB resolution.
The FDIC estimates that the final rule would apply to approximately eleven FSIs. As of June 30, 2017, only eight of the eleven covered FSIs have derivatives portfolios that could be affected. None of these eight banking organizations would qualify as a small entity for the purposes of the RFA.
This regulatory flexibility analysis demonstrates that the proposed rule would not, if promulgated, have a significant economic impact on a substantial number of small entities, and the FDIC so certifies.
The Riegle Community Development and Regulatory Improvement Act of 1994 (RCDRIA), 12 U.S.C. 4701, requires that the FDIC, in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions, consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, subject to certain exceptions, new regulations that impose additional reporting, disclosures, or other new requirements on insured depository institutions must take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form. In accordance with these provisions and as discussed above, the FDIC considered any administrative burdens, as well as benefits, that the final rule would place on depository institutions and their customers in determining the effective date and administrative compliance requirements of the final rule. The final rule will be effective no earlier than the first day of a calendar quarter that begins on or after the date on which the final rule is published.
Section 722 of the Gramm-Leach-Bliley Act, 12 U.S.C. 4809, requires the FDIC to use plain language in all proposed and final rules published after January 1, 2000. The FDIC has presented the final rule in a simple and straightforward manner.
The Office of Management and Budget has determined that this final rule is a “major rule” within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801,
Administrative practice and procedure, Banks, Banking, Capital adequacy, Reporting and recordkeeping requirements, Securities, State savings associations, State non-member banks.
Administrative practice and procedure, Banks, Banking, Federal Deposit Insurance Corporation, FDIC, Liquidity, Reporting and recordkeeping requirements.
Administrative practice and procedure, Banks, Banking, Federal Deposit Insurance Corporation, FDIC, Qualified financial contracts, Reporting and recordkeeping requirements, State savings associations, State non-member banks.
For the reasons stated in the supplementary information, the Federal Deposit Insurance Corporation amends 12 CFR chapter III as follows:
12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b), 1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n), 1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub. L. 102-233, 105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102-242, 105 Stat. 2236, 2355, as amended by Pub. L. 103-325, 108 Stat. 2160, 2233 (12 U.S.C. 1828 note); Pub. L. 102-242, 105 Stat. 2236, 2386, as amended by Pub. L. 102-550, 106 Stat. 3672, 4089 (12 U.S.C. 1828 note); Pub. L. 111-203, 124 Stat. 1376, 1887 (15 U.S.C. 78o-7 note).
(1) Under applicable law in the relevant jurisdictions, other than:
(i) In receivership, conservatorship, or resolution under the Federal Deposit Insurance Act, Title II of the Dodd-Frank Act, or under any similar insolvency law applicable to GSEs, or laws of foreign jurisdictions that are substantially similar
(ii) Where the agreement is subject by its terms to, or incorporates, any of the laws referenced in paragraph (1)(i) of this definition; or
(2) Other than to the extent necessary for the counterparty to comply with the requirements of part 382 of this title, subpart I of part 252 of this title or part 47 of this title, as applicable.
(1) An extension of credit where:
(i) The extension of credit is collateralized exclusively by liquid and readily marketable debt or equity securities, or gold;
(ii) The collateral is marked to fair value daily, and the transaction is subject to daily margin maintenance requirements; and
(iii) The extension of credit is conducted under an agreement that provides the FDIC-supervised institution the right to accelerate and terminate the extension of credit and to liquidate or set-off collateral promptly upon an event of default, including upon an event of receivership, insolvency, liquidation, conservatorship, or similar proceeding, of the counterparty, provided that, in any such case,
(A) Any exercise of rights under the agreement will not be stayed or avoided under applicable law in the relevant jurisdictions, other than
(
(
(B) The agreement may limit the right to accelerate, terminate, and close-out on a net basis all transactions under the agreement and to liquidate or set-off collateral promptly upon an event of default of the counterparty to the extent necessary for the counterparty to comply with the requirements of part 382 of this title, subpart I of part 252 of this title or part 47 of this title, as applicable.
(2) In order to recognize an exposure as an eligible margin loan for purposes of this subpart, an FDIC-supervised institution must comply with the requirements of § 324.3(b) with respect to that exposure.
(1) The agreement creates a single legal obligation for all individual transactions covered by the agreement upon an event of default following any stay permitted by paragraph (2) of this definition, including upon an event of receivership, conservatorship, insolvency, liquidation, or similar proceeding, of the counterparty;
(2) The agreement provides the FDIC-supervised institution the right to accelerate, terminate, and close-out on a net basis all transactions under the agreement and to liquidate or set-off collateral promptly upon an event of default, including upon an event of receivership, conservatorship, insolvency, liquidation, or similar proceeding, of the counterparty, provided that, in any such case,
(i) Any exercise of rights under the agreement will not be stayed or avoided under applicable law in the relevant jurisdictions, other than:
(A) In receivership, conservatorship, or resolution under the Federal Deposit Insurance Act, Title II of the Dodd-Frank Act, or under any similar insolvency law applicable to GSEs, or laws of foreign jurisdictions that are substantially similar
(B) Where the agreement is subject by its terms to, or incorporates, any of the laws referenced in paragraph (2)(i)(A) of this definition; and
(ii) The agreement may limit the right to accelerate, terminate, and close-out on a net basis all transactions under the agreement and to liquidate or set-off collateral promptly upon an event of default of the counterparty to the extent necessary for the counterparty to comply with the requirements of part 382 of this title, subpart I of part 252 of this title or part 47 of this title, as applicable;
(3) The agreement does not contain a walkaway clause (that is, a provision that permits a non-defaulting counterparty to make a lower payment than it otherwise would make under the agreement, or no payment at all, to a defaulter or the estate of a defaulter, even if the defaulter or the estate of the defaulter is a net creditor under the agreement); and
(4) In order to recognize an agreement as a qualifying master netting agreement for purposes of this subpart, an FDIC-supervised institution must comply with the requirements of § 324.3(d) with respect to that agreement.
(1) The transaction is based solely on liquid and readily marketable securities, cash, or gold;
(2) The transaction is marked-to-fair value daily and subject to daily margin maintenance requirements;
(3)(i) The transaction is a “securities contract” or “repurchase agreement” under section 555 or 559, respectively, of the Bankruptcy Code (11 U.S.C. 555 or 559), a qualified financial contract under section 11(e)(8) of the Federal Deposit Insurance Act, or a netting contract between or among financial institutions under sections 401-407 of the Federal Deposit Insurance Corporation Improvement Act or the Federal Reserve's Regulation EE (12 CFR part 231); or
(ii) If the transaction does not meet the criteria set forth in paragraph (3)(i) of this definition, then either:
(A) The transaction is executed under an agreement that provides the FDIC-supervised institution the right to accelerate, terminate, and close-out the transaction on a net basis and to liquidate or set-off collateral promptly upon an event of default, including upon an event of receivership, insolvency, liquidation, or similar proceeding, of the counterparty, provided that, in any such case,
(
(
(
(
(B) The transaction is:
(
(
(4) In order to recognize an exposure as a repo-style transaction for purposes of this subpart, an FDIC-supervised institution must comply with the requirements of § 324.3(e) of this part with respect to that exposure.
12 U.S.C. 12 U.S.C. 1815, 1816, 1818, 1819, 1828, 1831p-1, 5412.
(1) The agreement creates a single legal obligation for all individual transactions covered by the agreement upon an event of default following any stay permitted by paragraph (2) of this definition, including upon an event of receivership, conservatorship, insolvency, liquidation, or similar proceeding, of the counterparty;
(2) The agreement provides the FDIC-supervised institution the right to accelerate, terminate, and close-out on a net basis all transactions under the agreement and to liquidate or set-off collateral promptly upon an event of default, including upon an event of receivership, conservatorship, insolvency, liquidation, or similar proceeding, of the counterparty, provided that, in any such case,
(i) Any exercise of rights under the agreement will not be stayed or avoided under applicable law in the relevant jurisdictions, other than:
(A) In receivership, conservatorship, or resolution under the Federal Deposit Insurance Act, Title II of the Dodd-Frank Act, or under any similar insolvency law applicable to GSEs, or laws of foreign jurisdictions that are substantially similar
(B) Where the agreement is subject by its terms to, or incorporates, any of the laws referenced in paragraph (2)(i)(A) of this definition; and
(ii) The agreement may limit the right to accelerate, terminate, and close-out
(3) The agreement does not contain a walkaway clause (that is, a provision that permits a non-defaulting counterparty to make a lower payment than it otherwise would make under the agreement, or no payment at all, to a defaulter or the estate of a defaulter, even if the defaulter or the estate of the defaulter is a net creditor under the agreement); and
(4) In order to recognize an agreement as a qualifying master netting agreement for purposes of this subpart, an FDIC-supervised institution must comply with the requirements of § 329.4(a) with respect to that agreement.
12 U.S.C. 1816, 1818, 1819, 1820(g) 1828, 1828(m), 1831n, 1831o,1831p-l, 1831(u), 1831w.
(1) Either consolidates the other company, or is consolidated by the other company, on financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles, the International Financial Reporting Standards, or other similar standards;
(2) Is, along with the other company, consolidated with a third company on a financial statement prepared in accordance with principles or standards referenced in paragraph (1) of this definition; or
(3) For a company that is not subject to principles or standards referenced in paragraph (1), if consolidation as described in paragraph (1) or (2) of this definition would have occurred if such principles or standards had applied.
(1) With respect to a QFC, any
(i) Right of a party, whether contractual or otherwise (including, without limitation, rights incorporated by reference to any other contract, agreement, or document, and rights afforded by statute, civil code, regulation, and common law), to liquidate, terminate, cancel, rescind, or accelerate such agreement or transactions thereunder, set off or net amounts owing in respect thereto (except rights related to same-day payment netting), exercise remedies in respect of collateral or other credit support or property related thereto (including the purchase and sale of property), demand payment or delivery thereunder or in respect thereof (other than a right or operation of a contractual provision arising solely from a change in the value of collateral or margin or a change in the amount of an economic exposure), suspend, delay, or defer payment or performance thereunder, or modify the obligations of a party thereunder, or any similar rights; and
(ii) Right or contractual provision that alters the amount of collateral or margin that must be provided with respect to an exposure thereunder, including by altering any initial amount, threshold amount, variation margin, minimum transfer amount, the margin value of collateral, or any similar amount, that entitles a party to demand the return of any collateral or margin transferred by it to the other party or a custodian or that modifies a transferee's right to reuse collateral or margin (if such right previously existed), or any similar rights, in each case, other than a right or operation of a contractual provision arising solely from a change in the value of collateral or margin or a change in the amount of an economic exposure;
(2) With respect to § 382.4, does not include any right under a contract that allows a party to terminate the contract on demand or at its option at a specified time, or from time to time, without the need to show cause.
(1)(i) A bank holding company or an affiliate thereof; a savings and loan holding company as defined in section 10(n) of the Home Owners' Loan Act (12 U.S.C. 1467a(n)); a U.S. intermediate holding company that is established or designated for purposes of compliance with 12 CFR 252.153; or a nonbank financial institution supervised by the Board of Governors of the Federal Reserve System under Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5323);
(ii) A depository institution as defined, in section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)); an organization that is organized under the laws of a foreign country and that engages directly in the business of banking outside the United States; a Federal credit union or State credit union as defined in section 2 of the Federal Credit Union Act (12 U.S.C. 1752(1) and (6)); an institution that functions solely in a trust or fiduciary capacity as described in section 2(c)(2)(D) of the Bank Holding Company Act (12 U.S.C. 1841 (c)(2)(D)); an industrial loan company, an industrial bank, or other similar institution described in section 2(c)(2)(H) of the Bank Holding Company Act (12 U.S.C. 1841(c)(2)(H));
(iii) An entity that is State-licensed or registered as;
(A) A credit or lending entity, including a finance company; money
(B) A money services business, including a check casher; money transmitter; currency dealer or exchange; or money order or traveler's check issuer;
(iv) A regulated entity as defined in section 1303(20) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended (12 U.S.C. 4502(20)) or any entity for which the Federal Housing Finance Agency or its successor is the primary Federal regulator;
(v) Any institution chartered in accordance with the Farm Credit Act of 1971, as amended, 12 U.S.C. 2001
(vi) Any entity registered with the Commodity Futures Trading Commission as a swap dealer or major swap participant pursuant to the Commodity Exchange Act of 1936 (7 U.S.C. 1
(vii) A securities holding company within the meaning specified in section 618 of the Dodd-Frank Wall Street Reform and Consumer Protection act (12 U.S.C. 1850a); a broker or dealer as defined in sections 3(a)(4) and 3(a)(5) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(45); an investment adviser as defined in section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)); an investment company registered with the U.S. Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. 80a-1
(viii) A private fund as defined in section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)); an entity that would be an investment company under section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a-3) but for section 3(c)(5)(C); or an entity that is deemed not to be an investment company under section 3 of the Investment Company Act of 1940 pursuant to Investment Company Act Rule 3a-7 (17 CFR 270.3a-7) of the U.S. Securities and Exchange Commission;
(ix) A commodity pool, a commodity pool operator, or a commodity trading advisor as defined, respectively, in section 1a(10), 1a(11), and 1a(12) of the Commodity Exchange Act of 1936 (7 U.S.C. 1a(10), 1a(11), and 1a(12)); a floor broker, a floor trader, or introducing broker as defined, respectively, in 1a(22), 1a(23) and 1a(31) of the Commodity Exchange Act of 1936 (7 U.S.C. 1a(22), 1a(23), and 1a(31)); or a futures commission merchant as defined in 1a(28) of the Commodity Exchange Act of 1936 (7 U.S.C. 1a(28));
(x) An employee benefit plan as defined in paragraphs (3) and (32) of section 3 of the Employee Retirement Income and Security Act of 1974 (29 U.S.C. 1002);
(xi) An entity that is organized as an insurance company, primarily engaged in writing insurance or reinsuring risks underwritten by insurance companies, or is subject to supervision as such by a State insurance regulator or foreign insurance regulator; or
(xii) An entity that would be a financial counterparty described in paragraphs (1)(i) through (xi) of this definition, if the entity were organized under the laws of the United States or any State thereof.
(2) The term “financial counterparty” does not include any counterparty that is:
(i) A sovereign entity;
(ii) A multilateral development bank; or
(iii) The Bank for International Settlements.
(1) Designated contract markets, registered futures associations, swap data repositories, and swap execution facilities registered under the Commodity Exchange Act (7 U.S.C. 1
(2) Any broker, dealer, transfer agent, or investment company, or any futures commission merchant, introducing broker, commodity trading advisor, or commodity pool operator, solely by reason of functions performed by such institution as part of brokerage, dealing, transfer agency, or investment company activities, or solely by reason of acting on behalf of a FMU or a participant therein in connection with the furnishing by the FMU of services to its participants or the use of services of the FMU by its participants, provided that services performed by such institution do not constitute critical risk management or processing functions of the FMU.
(1) Is organized as a bank, as defined in section 3(a) of the Federal Deposit Insurance Act, the deposits of which are insured by the Federal Deposit Insurance Corporation; a savings association, as defined in section 3(b) of the Federal Deposit Insurance Act, the deposits of which are insured by the Federal Deposit Insurance Corporation; a farm credit system institution chartered under the Farm Credit Act of
(2) Has total assets of $10,000,000,000 or less on the last day of the company's most recent fiscal year.
(a)
(b)
(1) Any State savings association or State non-member bank (as defined in the Federal Deposit Insurance Act, 12 U.S.C. 1813(e)(2)) that is a direct or indirect subsidiary of:
(i) A global systemically important bank holding company that has been designated pursuant to § 252.82(a)(1) of the Federal Reserve Board's Regulation YY (12 CFR 252.82); or
(ii) A global systemically important foreign banking organization that has been designated pursuant to subpart I of 12 CFR part 252 (FRB Regulation YY), and
(2) Any subsidiary of a covered FSI other than:
(i) A subsidiary that is owned in satisfaction of debt previously contracted in good faith;
(ii) A portfolio concern that is a small business investment company, as defined in section 103(3) of the Small Business Investment Act of 1958 (15 U.S.C. 662), or that has received from the Small Business Administration notice to proceed to qualify for a license as a Small Business Investment Company, which notice or license has not been revoked; or
(iii) A subsidiary designed to promote the public welfare, of the type permitted under paragraph (11) of section 5136 of the Revised Statutes of the United States (12 U.S.C. 24), including the welfare of low- to moderate-income communities or families (such as providing housing, services, or jobs).
(c)
(1) With respect to a covered FSI that is a covered FSI on January 1, 2018, an in-scope QFC that the covered FSI:
(i) Enters, executes, or otherwise becomes a party to on or after January 1, 2019; or
(ii) Entered, executed, or otherwise became a party to before January 19, 2019, if the covered FSI or any affiliate that is a covered entity, covered bank, or covered FSI also enters, executes, or otherwise becomes a party to a QFC with the same person or a consolidated affiliate of the same person on or after January 1, 2019.
(2) With respect to a covered FSI that becomes a covered FSI after January 1, 2018, an in-scope QFC that the covered FSI:
(i) Enters, executes, or otherwise becomes a party to on or after the later of the date the covered FSI first becomes a covered FSI and January 1, 2019; or
(ii) Entered, executed, or otherwise became a party to before the date identified in paragraph (c)(2)(i) of this section with respect to the covered FSI, if the covered FSI or any affiliate that is a covered entity, covered bank or covered FSI also enters, executes, or otherwise becomes a party to a QFC with the same person or consolidated affiliate of the same person on or after the date identified in paragraph (c)(2)(i) of this section with respect to the covered FSI.
(d)
(1) Restricts the transfer of a QFC (or any interest or obligation in or under, or any property securing, the QFC) from a covered FSI; or
(2) Provides one or more default rights with respect to a QFC that may be exercised against a covered FSI.
(e)
(1) A covered FSI does not become a party to a QFC solely by acting as agent with respect to the QFC; and
(2) The exercise of a default right with respect to a covered QFC includes the automatic or deemed exercise of the default right pursuant to the terms of the QFC or other arrangement.
(f)
(i) January 1, 2019, if each party to the covered QFC is a covered entity, covered bank, or covered FSI.
(ii) July 1, 2019, if each party to the covered QFC (other than the covered FSI) is a financial counterparty that is not a covered entity, covered bank or covered FSI; or
(iii) January 1, 2020, if a party to the covered QFC (other than the covered FSI) is not described in paragraph (f)(1)(i) or (ii) of this section or if, notwithstanding paragraph (f)(1)(ii), a party to the covered QFC (other than the covered FSI) is a small financial institution.
(2) With respect to each of its covered QFCs, a covered FSI that is not a covered FSI on January 1, 2018 must conform the covered QFC to the requirements of this part by:
(i) The first day of the calendar quarter immediately following 1 year after the date the covered FSI first becomes a covered FSI if each party to the covered QFC is a covered entity, covered bank, or covered FSI;
(ii) The first day of the calendar quarter immediately following 18 months from the date the covered FSI first becomes a covered FSI if each party to the covered QFC (other than the covered FSI) is a financial counterparty that is not a covered entity, covered bank or covered FSI; or
(iii) The first day of the calendar quarter immediately following 2 years from the date the covered FSI first becomes a covered FSI if a party to the covered QFC (other than the covered FSI) is not described in paragraph (f)(2)(i) or (ii) of this section or if, notwithstanding paragraph (f)(2)(ii), a party to the covered QFC (other than the covered FSI) is a small financial institution.
(g)
(a)
(i) The covered QFC designates, in the manner described in paragraph (a)(2) of this section, the U.S. special resolution
(ii) Each party to the covered QFC, other than the covered FSI, is
(A) An individual that is domiciled in the United States, including any State;
(B) A company that is incorporated in or organized under the laws of the United States or any State;
(C) A company the principal place of business of which is located in the United States, including any State; or
(D) A U.S. branch or U.S. agency.
(2) A covered QFC designates the U.S. special resolution regimes as part of the law governing the QFC if the covered QFC:
(i) Explicitly provides that the covered QFC is governed by the laws of the United States or a State of the United States; and
(ii) Does not explicitly provide that one or both of the U.S. special resolution regimes, or a broader set of laws that includes a U.S. special resolution regime, is excluded from the laws governing the covered QFC.
(b)
(1) In the event the covered FSI becomes subject to a proceeding under a U.S. special resolution regime, the transfer of the covered QFC (and any interest and obligation in or under, and any property securing, the covered QFC) from the covered FSI will be effective to the same extent as the transfer would be effective under the U.S. special resolution regime if the covered QFC (and any interest and obligation in or under, and any property securing, the covered QFC) were governed by the laws of the United States or a State of the United States; and
(2) In the event the covered FSI or an affiliate of the covered FSI becomes subject to a proceeding under a U.S. special resolution regime, default rights with respect to the covered QFC that may be exercised against the covered FSI are permitted to be exercised to no greater extent than the default rights could be exercised under the U.S. special resolution regime if the covered QFC were governed by the laws of the United States or a State of the United States.
(c)
This section does not apply to proceedings under Title II of the Dodd-Frank Act.
(a)
(1) Does not explicitly provide any default right with respect to the covered QFC that is related, directly or indirectly, to an affiliate of the direct party becoming subject to a receivership, insolvency, liquidation, resolution, or similar proceeding; and
(2) Does not explicitly prohibit the transfer of a covered affiliate credit enhancement, any interest or obligation in or under the covered affiliate credit enhancement, or any property securing the covered affiliate credit enhancement to a transferee upon or following an affiliate of the direct party becoming subject to a receivership, insolvency, liquidation, resolution, or similar proceeding or would prohibit such a transfer only if the transfer would result in the supported party being the beneficiary of the credit enhancement in violation of any law applicable to the supported party.
(b)
(2) A covered QFC may not prohibit the transfer of a covered affiliate credit enhancement, any interest or obligation in or under the covered affiliate credit enhancement, or any property securing the covered affiliate credit enhancement to a transferee upon or following an affiliate of the direct party becoming subject to a receivership, insolvency, liquidation, resolution, or similar proceeding unless the transfer would result in the supported party being the beneficiary of the credit enhancement in violation of any law applicable to the supported party.
(c)
(2)
(3)
(d)
(1) The direct party becoming subject to a receivership, insolvency, liquidation, resolution, or similar proceeding;
(2) The direct party not satisfying a payment or delivery obligation pursuant to the covered QFC or another contract between the same parties that gives rise to a default right in the covered QFC; or
(3) The covered affiliate support provider or transferee not satisfying a payment or delivery obligation pursuant to a covered affiliate credit enhancement that supports the covered direct QFC.
(e)
(2)
(3)
(4)
(f)
(1) The covered affiliate support provider that remains obligated under the covered affiliate credit enhancement becomes subject to a receivership, insolvency, liquidation, resolution, or
(2) Subject to paragraph (h) of this section, the transferee, if any, becomes subject to a receivership, insolvency, liquidation, resolution, or similar proceeding;
(3) The covered affiliate support provider does not remain, and a transferee does not become, obligated to the same, or substantially similar, extent as the covered affiliate support provider was obligated immediately prior to entering the receivership, insolvency, liquidation, resolution, or similar proceeding with respect to:
(i) The covered affiliate credit enhancement;
(ii) All other covered affiliate credit enhancements provided by the covered affiliate support provider in support of other covered direct QFCs between the direct party and the supported party under the covered affiliate credit enhancement referenced in paragraph (f)(3)(i) of this section; and
(iii) All covered affiliate credit enhancements provided by the covered affiliate support provider in support of covered direct QFCs between the direct party and affiliates of the supported party referenced in paragraph (f)(3)(ii) of this section; or
(4) In the case of a transfer of the covered affiliate credit enhancement to a transferee,
(i) All of the ownership interests of the direct party directly or indirectly held by the covered affiliate support provider are not transferred to the transferee; or
(ii) Reasonable assurance has not been provided that all or substantially all of the assets of the covered affiliate support provider (or net proceeds therefrom), excluding any assets reserved for the payment of costs and expenses of administration in the receivership, insolvency, liquidation, resolution, or similar proceeding, will be transferred or sold to the transferee in a timely manner.
(g)
(2)
(3)
(h)
(1) After the FDI Act stay period, if the covered affiliate credit enhancement is not transferred pursuant to 12 U.S.C. 1821(e)(9)-(10) and any regulations promulgated thereunder; or
(2) During the FDI Act stay period, if the default right may only be exercised so as to permit the supported party under the covered affiliate credit enhancement to suspend performance with respect to the supported party's obligations under the covered direct QFC to the same extent as the supported party would be entitled to do if the covered direct QFC were with the covered affiliate support provider and were treated in the same manner as the covered affiliate credit enhancement.
(i)
(1) The party seeking to exercise a default right to bear the burden of proof that the exercise is permitted under the covered QFC; and
(2) Clear and convincing evidence or a similar or higher burden of proof to exercise a default right.
(a)
(2) A covered QFC will be deemed to be amended by the universal protocol for purposes of paragraph (a)(1) of this section notwithstanding the covered QFC being amended by one or more Country Annexes, as the term is defined in the universal protocol.
(3) For purposes of paragraphs (a)(1) and (2) of this section:
(i) The universal protocol means the ISDA 2015 Universal Resolution Stay Protocol, including the Securities Financing Transaction Annex and Other Agreements Annex, published by the International Swaps and Derivatives Association, Inc., as of May 3, 2016, and minor or technical amendments thereto;
(ii) The U.S. protocol means a protocol that is the same as the universal protocol other than as provided in paragraphs (a)(3)(ii)(A) through (F) of this section.
(A) The provisions of Section 1 of the attachment to the universal protocol may be limited in their application to covered entities, covered banks, and covered FSIs and may be limited with respect to resolutions under the Identified Regimes, as those regimes are identified by the universal protocol;
(B) The provisions of Section 2 of the attachment to the universal protocol may be limited in their application to covered entities, covered banks, and covered FSIs;
(C) The provisions of Section 4(b)(i)(A) of the attachment to the universal protocol must not apply with respect to U.S. special resolution regimes;
(D) The provisions of Section 4(b) of the attachment to the universal protocol may only be effective to the extent that the covered QFCs affected by an adherent's election thereunder would continue to meet the requirements of this part;
(E) The provisions of Section 2(k) of the attachment to the universal protocol must not apply; and
(F) The U.S. protocol may include minor and technical differences from the universal protocol and differences necessary to conform the U.S. protocol to the differences described in paragraphs (a)(3)(ii)(A) through (E) of this section.
(iii) Amended by the universal protocol or the U.S. protocol, with respect to covered QFCs between adherents to the protocol, includes amendments through incorporation of the terms of the protocol (by reference or otherwise) into the covered QFC; and
(iv) The attachment to the universal protocol means the attachment that the universal protocol identifies as “ATTACHMENT to the ISDA 2015
(b)
(2) Enhanced creditor protection conditions means a set of limited exemptions to the requirements of § 382.4(b) of this part that is different than that of § 382.4(d), (f), and (h).
(3) A covered FSI making a request under paragraph (b)(1) of this section must provide
(i) An analysis of the proposal that addresses each consideration in paragraph (d) of this section;
(ii) A written legal opinion verifying that proposed provisions or amendments would be valid and enforceable under applicable law of the relevant jurisdictions, including, in the case of proposed amendments, the validity and enforceability of the proposal to amend the covered QFCs; and
(iii) Any other relevant information that the FDIC requests.
(c)
(d)
(1) Whether, and the extent to which, the proposal would reduce the resiliency of such covered FSIs during distress or increase the impact on U.S. financial stability were one or more of the covered FSIs to fail;
(2) Whether, and the extent to which, the proposal would materially decrease the ability of a covered FSI, or an affiliate of a covered FSI, to be resolved in a rapid and orderly manner in the event of the financial distress or failure of the entity that is required to submit a resolution plan;
(3) Whether, and the extent to which, the set of conditions or the mechanism in which they are applied facilitates, on an industry-wide basis, contractual modifications to remove impediments to resolution and increase market certainty, transparency, and equitable treatment with respect to the default rights of non-defaulting parties to a covered QFC;
(4) Whether, and the extent to which, the proposal applies to existing and future transactions;
(5) Whether, and the extent to which, the proposal would apply to multiple forms of QFCs or multiple covered FSIs;
(6) Whether the proposal would permit a party to a covered QFC that is within the scope of the proposal to adhere to the proposal with respect to only one or a subset of covered FSIs;
(7) With respect to a supported party, the degree of assurance the proposal provides to the supported party that the material payment and delivery obligations of the covered affiliate credit enhancement and the covered direct QFC it supports will continue to be performed after the covered affiliate support provider enters a receivership, insolvency, liquidation, resolution, or similar proceeding;
(8) The presence, nature, and extent of any provisions that require a covered affiliate support provider or transferee to meet conditions other than material payment or delivery obligations to its creditors;
(9) The extent to which the supported party's overall credit risk to the direct party may increase if the enhanced creditor protection conditions are not met and the likelihood that the supported party's credit risk to the direct party would decrease or remain the same if the enhanced creditor protection conditions are met; and
(10) Whether the proposal provides the counterparty with additional default rights or other rights.
(a)
(1) A CCP is party; or
(2) Each party (other than the covered FSI) is an FMU.
(b)
(1) The affiliate credit enhancement provider with respect to the covered QFC, then the covered FSI is required to conform the credit enhancement to the requirements of this part but is not required to conform the direct QFC to the requirements of this part; or
(2) The direct party to which the covered entity or covered bank is the affiliate credit enhancement provider, then the covered FSI is required to conform the direct QFC to the requirements of this part but is not required to conform the credit enhancement to the requirements of this part.
(c)
(1) An investment advisory contract that:
(i) Is with a retail customer or counterparty;
(ii) Does not explicitly restrict the transfer of the contract (or any QFC entered into pursuant thereto or governed thereby, or any interest or obligation in or under, or any property securing, any such QFC or the contract) from the covered FSI except as necessary to comply with section 205(a)(2) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-5(a)(2)); and
(iii) Does not explicitly provide a default right with respect to the contract or any QFC entered pursuant thereto or governed thereby.
(2) A warrant that:
(i) Evidences a right to subscribe to or otherwise acquire a security of the covered FSI or an affiliate of the covered FSI; and
(ii) Was issued prior to January 1, 2018.
(d)
(1) The potential impact of the exemption on the ability of the covered FSI(s), or affiliates of the covered FSI(s), to be resolved in a rapid and orderly manner in the event of the financial distress or failure of the entity that is required to submit a resolution plan;
(2) The burden the exemption would relieve; and
(3) Any other factor the FDIC deems relevant.
By order of the Board of Directors.
National Credit Union Administration (NCUA).
Final rule.
The NCUA Board (Board) is adopting regulatory procedures for appealing material supervisory determinations to the NCUA's Supervisory Review Committee (SRC). These procedures significantly expand the number of material supervisory determinations appealable to the SRC to include most agency decisions that could significantly affect capital, earnings, operating flexibility, or the nature or level of supervisory oversight of a federally insured credit union (FICU). Furthermore, the procedures contain a number of safeguards designed to provide FICUs with enhanced due process and promote greater consistency with the practices of the Federal banking agencies.
This rule is effective January 1, 2018.
Michael J. McKenna, General Counsel, Frank S. Kressman, Associate General Counsel, or Benjamin M. Litchfield, Staff Attorney, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428 or telephone: (703) 518-6540.
Section 309 of the Riegle Community Development and Regulatory Improvement Act of 1994 (Riegle Act) required the NCUA and the Federal banking agencies
When establishing the intra-agency appeals procedures, the Riegle Act required the NCUA and the Federal banking agencies to ensure that (1) any appeal of a material supervisory determination by an insured depository institution or insured credit union is heard and decided expeditiously; and (2) appropriate safeguards exist for protecting the appellant from retaliation by agency examiners.
The Board published a proposed Interpretive Ruling and Policy Statement (IRPS) setting out intra-agency appeals procedures for the review of material supervisory determinations in the
The Board extended the comment period until January 18, 1995 to allow stakeholders additional opportunity to comment on the proposed IRPS.
On April 23, 2002, the Board adopted IRPS 02-1, which amended IRPS 95-1 to expand the scope of appealable determinations to include a decision by a Regional Director to revoke a Federal credit union's (FCU) authority under the NCUA's then-Regulatory Flexibility Program (RegFlex).
The Board adopted IRPS 11-1, which contains the current SRC appeals procedures, on April 29, 2011.
On June 7, 2017, the Board published a proposed rule in the
The Board received 9 comments on the proposed rule from State and national credit union trade associations, an FCU, a management consulting company, a professional association for State credit union supervisors, and a private individual. Commenters generally approved of the proposed rule and appreciated the Board's efforts to provide FICUs with enhanced due process regarding agency decisions. However, commenters raised several concerns with various aspects of the proposed rule and recommended changes to address those concerns. Specific comments and recommendations are discussed in more detail in the Section-by-Section Analysis set out in Part V below.
One commenter requested that the Board establish an examination outreach officer position to conduct a post-examination interview with each FICU to determine whether the goals of a healthy exam are being met, and if not, what parts of the exam can be improved upon to achieve those goals. The commenter also requested that the Board establish an advisory committee of senior credit union officials similar to the Consumer Financial Protection Bureau's credit union advisory council (CUAC) to advise the NCUA on credit union matters. These requests are outside the scope of the proposed rule and, therefore, the Board will not address them in this rulemaking.
The Board is generally adopting the rule as proposed, with certain modifications based on public comments and other considerations as discussed in greater detail in the section-by-section analyses set out in Part V below. The final rule expands the scope of appealable determinations to include most agency decisions that may significantly affect the capital, earnings, operating flexibility, or that may otherwise affect the nature and level of supervisory oversight of a FICU. This includes, but is not limited to, a composite examination rating of 3, 4, or 5; a determination relating to the adequacy of loan loss reserve provisions; the classification of loans and other assets that are significant to the FICU; a determination relating to compliance with Federal consumer financial law; and a determination relating to a waiver request or application for additional authority where independent appeals procedures have not been specified in other NCUA regulations.
The final rule also creates an optional intermediate level of review (at the FICU's option) by the Director of E&I, or his or her designee, before a FICU appeals an agency decision to the SRC. Review by the Director of E&I will be based entirely on written submissions provided by the appropriate program office and the petitioning FICU with no opportunity for an oral hearing. The Director of E&I will have an opportunity, however, to request additional information from the parties and may consult with them jointly or separately before rendering a decision. The Director of E&I may also solicit input from any other pertinent program office, including the Office of General Counsel, as necessary. A FICU that receives an adverse decision from the Director of E&I may appeal that decision to the SRC. Under no circumstances, however, may either party request reconsideration of a decision rendered by the Director of E&I.
Furthermore, the final rule restructures the SRC by creating a rotating pool of at least eight senior staff appointed by the NCUA Chairman from NCUA's central and regional offices who may be selected by the SRC Chairman to serve on a three-member panel to hear a particular appeal. The Secretary of the Board will serve as the permanent SRC Chairman and will also be eligible to serve as one of the three members on any particular panel. The Special Counsel to the General Counsel (Special Counsel), or any senior staff within the Office of General Counsel assigned such duties, will serve as a permanent non-voting advisor to each three-member panel to consult on procedural and legal matters regarding the jurisdiction of the SRC. To avoid any real or apparent conflicts of interest, the SRC Chairman will not be permitted to select individuals for the program office that rendered the material supervisory determination that is the subject of the appeal to serve on the three-member panel hearing that appeal.
The proposed rule, along with a companion rule on agency appeals, created a comprehensive set of appeals procedures to the appeal of most agency decisions to the Board. This comprehensive set of procedures was to be codified in a new part of the NCUA's regulations, part 746, with the SRC appeals process codified in subpart A to part 746 and the appeals procedures codified in subpart B to part 746. The Board received one substantive comment on this aspect of the proposed rule. The commenter requested that the Board codify the SRC appeals process in part 741, NCUA's share insurance requirements rule, to make the procedures more conspicuous for federally insured, State-chartered credit unions (FISCUs). While the commenter's argument is not without merit, the Board believes that codifying these procedures in their own part of the NCUA's regulations gives all credit unions, regardless of charter, greater notice of the procedures for appealing most agency decisions. Accordingly, the Board is codifying the SRC appeals process as subpart A to part 746 as proposed.
Proposed § 746.101 set out the authority for issuing the regulation as well as the regulation's purpose and scope. Paragraph (a) provided that the rule was being issued pursuant to section 309 of the Riegle Act
Proposed § 746.102 set out definitions for certain terms relevant to the proposed rule. The Board received one substantive comment on this aspect of the proposed rule requesting that the Board add a definition of “senior staff” to clarify which individuals are eligible to be appointed by the NCUA Chairman to serve as members of the rotating pool of individuals able to be selected by the SRC Chairman to hear a particular appeal. The commenter expressed concerns that many of the procedural safeguards in the proposed rule designed to prevent conflicts of interest might actually result in NCUA staff with executive level knowledge and experience being ineligible to serve as part of the rotating pool. As a result, NCUA staff with the same level of knowledge and experience as the individuals making the initial material supervisory determination may be called upon to evaluate judgments and impressions of their peers which could create pressure to affirm that initial material supervisory determination.
The Board appreciates the commenter's concerns and agrees that the SRC will function best if the most knowledgeable and experienced NCUA staff are reviewing appeals to the SRC. However, the Board does not believe that adding a definition of “senior staff” is either the most practical or effective solution for ensuring the competency and independence of members of the rotating pool. A definition of “senior staff” would necessarily need to be open-ended and vague, as opposed to being tied to particular titles or pay grades, to account for any operational changes at the NCUA, as well as to ensure that there is a sufficiently broad group of individuals from which the NCUA Chairman can select members of the rotating pool. As a result, the Board believes that any definition of “senior staff” would almost certainly lack the clarity that the commenter seeks. Therefore, the Board will not define “senior staff” in the final rule. The determination of which individuals are considered “senior staff” eligible to be appointed to the rotating pool will rest solely within the discretion of the NCUA Chairman.
The Board did not receive any other substantive comments on proposed § 746.102 and is finalizing this provision as proposed with minor modifications. The Board is removing the definitions of “petitioner” and “respondent” to reflect the fact that a program office will no longer be eligible to appeal an adverse decision by the Director of E&I or the SRC. The Board is adopting this policy change in response to concerns raised by the commenters that are discussed in more detail below. The Board has replaced the words “petitioner” and “respondent” with “insured credit union” and “program office” where appropriate throughout the final rule.
Proposed § 746.103 set out a general definition of “material supervisory determination” and provided a list of examples. The proposed rule defined “material supervisory determination” to mean a written decision by a program office that may significantly affect the capital, earnings, operating flexibility, or that may otherwise affect the nature or level of supervisory oversight of a FICU. The Board intended this general definition to be broad, capturing most agency decisions where independent appeals procedures did not exist, and as consistent with the definitions adopted by the Federal banking agencies as possible taking into consideration any operational differences between those agencies and the NCUA. Commenters generally supported this aspect of the proposed rule, highlighting the importance of significantly expanding the ability of FICUs to appeal agency decisions to the SRC and the Board. Accordingly, the Board is adopting the general definition of “material supervisory determination” set out in § 746.103 substantially as proposed with modifications for clarity.
The Board is modifying § 746.103(a) to clarify that the SRC appeals procedures do not apply to agency decisions that have been committed to the sole discretion of the appropriate program office director. While the Board seeks to provide FICUs with the greatest possible opportunity to seek agency review of material supervisory determinations, some agency decisions require significant expertise that is unique to a particular program office or must be made with such finality that the SRC appeals procedures would be inappropriate. Accordingly, the Board is revising the general definition of “material supervisory determination” in the final rule to read “a written decision by a program office (unless ineligible for appeal) that may significantly affect the capital, earnings, operating flexibility, or that may otherwise affect the nature or level of supervisory oversight of a FICU.” In cases where an agency decision has been committed to the sole discretion of the program office, a FICU that receives an adverse decision could potentially seek judicial review of the agency decision under the Administrative Procedure Act (APA).
The Board is also modifying § 746.103(a) to clarify that a decision by the reviewing authority (
This clarification is particularly necessary to address cases where the reviewing authority dismisses an appeal
Proposed § 746.103(a)(1) listed a composite examination rating of 3, 4, or 5 as an example of a material supervisory determination. Proposed § 746.103(b)(1), however, excluded a composite examination rating of 1 or 2 because the Board did not believe that a composite examination rating of 2 would have a significant impact on the supervisory oversight of a FICU. Similarly, proposed § 746.103(b)(2) excluded component examination ratings unless such ratings had a significant adverse effect on the nature or level of supervisory oversight of a FICU. Several commenters objected to these aspects of the proposed rule, highlighting that the Federal banking agencies permit insured depository institutions to appeal all composite and component examination ratings and urging the Board to adopt a similar approach.
However, the Board does not believe that adopting an approach that is entirely consistent with the Federal banking agencies is appropriate. The NCUA uses a credit union examination as a diagnostic tool to identify potential operational vulnerabilities and address regulatory compliance concerns that could impact the safety and soundness of a FICU. While a FICU's composite examination rating may change if an NCUA examiner identifies an emerging trend that increases a FICU's risk profile, a change in an examination rating does not, in and of itself, typically have a significant impact on a FICU until the FICU reaches a composite examination rating of 3, 4, or 5. Furthermore, a change in a component examination rating hardly impacts a FICU unless that particular component examination rating is connected with some specified regulatory relief initiative by the NCUA, such as the ability to participate in an extended examination cycle.
In contrast, the FDIC uses composite and component examination ratings issued by the respective Federal banking agencies (including the FDIC) as a basis for determining an insured depository institution's Federal deposit insurance premium.
Put differently, a change in a composite or component examination rating is not a “material supervisory determination” for a FICU until the FICU reaches a composite examination rating of 3, 4, or 5, or unless the particular component examination rating changes the nature or level of supervisory oversight of the FICU. Meanwhile, a change in a composite or component examination may be a “material supervisory determination” for an insured depository institution because it can lead to an increase in that institution's Federal deposit insurance premium. In light of this important distinction, the Board does not believe that absolute consistency with the Federal banking agencies is necessary to provide FICUs with enhanced due process. Accordingly, the Board adopts this aspect of § 746.103 as proposed.
Proposed § 746.103(a)(4) listed a restitution order pursuant to the Truth in Lending Act (TILA)
Proposed § 746.103(b)(5) excluded from the definition of material supervisory determination a directive imposing prompt corrective action under section 216 of the FCU Act.
The commenter also argued that allowing a FICU to appeal a directive imposing prompt corrective action to the SRC would be consistent with the approach adopted by the FDIC. However, proposed § 746.103(b)(5) is nearly identical to an exclusion adopted by the FDIC in its “Guidelines for Appeal of Material Supervisory Determinations,” (Guidelines) which establishes the FDIC's Supervisory Appeals Review Committee (SARC) and sets out procedures for insured depository institutions to appeal material supervisory determinations by FDIC staff.”
Because the Board already provides significant procedural safeguards for FICUs prior to issuing a directive imposing prompt corrective action that are more expeditious than the SRC appeals process and consistent with the practices of the Federal banking agencies, the Board does not believe that subjecting these agency decisions to the SRC appeals process would be appropriate. Accordingly, the Board is adopting § 746.103(b)(5) as proposed.
Proposed § 746.103(b)(6) excluded from the definition of “material supervisory determination” all decisions to initiate formal enforcement actions. One commenter objected to this exclusion noting that the FDIC recently revised its Guidelines to allow insured depository institutions to appeal a decision regarding the institution's level of compliance with a formal enforcement action. The commenter argued that the Board should similarly expand the definition of material supervisory determination for consistency with the FDIC. The Board disagrees. Compliance with a formal enforcement action is monitored by high-level NCUA staff within a program office in consultation with staff attorneys within the Office of General Counsel. Accordingly, the Board believes that FICUs already have significant procedural and structural safeguards with respect to formal enforcement matters such that subjecting these decisions to the SRC appeals process would be unnecessarily duplicative.
As the Board noted in the preamble to the proposed rule, once a formal enforcement action is initiated, the SRC appeals process is suspended regardless of how far along the FICU may be in that process. Once the formal enforcement action is resolved, the FICU may continue to seek redress through the SRC appeals process to the extent that any matters remain outstanding and were not addressed as part of the formal enforcement action. To avoid confusion, the Board is adopting a modification in the final rule to clarify when a formal enforcement action commences. A formal enforcement action begins when the NCUA provides written notice to the FICU of a recommended or proposed formal enforcement action under section 206 of the FCU Act.
Proposed § 746.103 included several other examples of and exclusions from the general definition of “material supervisory determination.” The examples and exclusions included matters specifically addressed by the Riegle Act and preliminary matters such as the scope and timing of supervisory contacts. The Board did not receive substantive comments on these examples and exclusions. Accordingly, the Board is adopting the examples set out in proposed § 746.103(a)(2), (3), and (5) and the exclusions set out in proposed § 746.103(b)(3), (4), (7), (8), (9), and (10) as proposed.
Proposed § 746.104 set out general provisions to be applied by each reviewing authority during the SRC appeals process. The proposed rule established an explicit standard of review to ensure that the NCUA's policies and procedures were applied fairly and consistently. The proposed rule also addressed the effect of an appeal on the commencement of enforcement actions, applications for additional authority, and waiver requests. The Board received several comments on various aspects of proposed § 746.104. As discussed in more detail below, the Board is adopting § 746.104 as proposed with minor modifications for clarity.
Proposed § 746.104(a) established a
Commenters also requested that the Board clarify what constitutes the administrative record to be reviewed by the relevant reviewing authority at each stage of the SRC appeals process. While the Board believes that several sections of the proposed rule addressed this issue, such as proposed § 746.106(c), which outlined the basis for review of a material supervisory determination by the Director of E&I, the Board recognizes that a more general statement regarding the administrative record may be necessary to provide FICUs with greater clarity and enhanced due process. Accordingly, the Board is adopting a new paragraph in the final rule, § 746.104(f), to explicitly describe what information is part of the administrative record to be reviewed by the reviewing authority at each stage of the SRC appeals process. For most appeals, the administrative record consists entirely of written submissions by the petitioning FICU and the appropriate program office. In cases involving a federally insured, State-chartered credit union (FISCU), the administrative record may also include written submissions by the appropriate State supervisory authority (SSA). A decision by an intermediate reviewing authority, such as the Director of E&I or the SRC, is also part of the administrative record. Furthermore, the administrative record includes a transcript of any oral hearing before the SRC or the Board.
One commenter specifically requested that the Board require that any consultations between a reviewing authority and another party must take the form of written submissions that would become part of the administrative record. The proposed rule explicitly allowed the Director of E&I to consult with the FICU, the program office, or any other party prior to rendering a decision. The consultation process was meant to allow the Director of E&I to get clarification on a written submission or seek advice from a program office, such as the Office of General Counsel, on a technical or legal matter outside of the Director of E&I's area of expertise. In fact, the Board anticipates that much of the consultation process will involve outreach to staff within the Office of General Counsel to seek legal opinions on various regulatory matters which may be subject to one or more evidentiary privileges. Accordingly, the Board does not believe that it is appropriate to include such communications as part of the administrative record.
Proposed § 746.104(b) set out the conditions under which a reviewing authority could dismiss the appeal of a material supervisory determination. Under the proposed rule, a reviewing authority could dismiss an appeal if it was not timely filed, if the basis for the appeal was not discernable, if the petitioner asked to withdraw the request in writing, or for reasons deemed appropriate by the reviewing authority, including, for example, if the petitioner acted in bad faith by knowingly withholding evidence from the appropriate reviewing authority. The Board cautioned that FICUs are encouraged to make good faith efforts to resolve supervisory issues at the most direct level possible, starting with their examinations or program office staff, and as efficiently as possible. Accordingly, the Board stated that if a FICU engaged in bad faith by knowingly withholding evidence from an examiner, the program office, the Director of E&I, the SRC, or the Board, withholding that evidence would result in dismissal of the appeal. The Board did not receive substantive comments on this aspect of the proposed rule and is adopting § 746.104(b) substantially as proposed with one clarification to address the appeal of a dismissal for failure to state a material supervisory determination discussed in the section analysis of § 746.103 above.
Proposed § 746.104(c) prohibited discovery or any similar process in connection with an appeal. Instead, each appeal was based entirely on written submissions to the reviewing authority and, where permitted, oral presentations to the SRC and the Board. The Board did not receive substantive comments on this aspect of the proposed rule and is, therefore,. Accordingly, the Board is adopting § 746.104(c) as proposed.
Proposed § 746.104(d) clarified that no provision of the proposed rule was intended to affect, delay, or impede any formal or informal supervisory or enforcement action in progress or affect the NCUA's authority to take any supervisory or enforcement action against a FICU. The purpose of this provision was to ensure that appeals to the SRC and enforcement matters remained separate processes governed by different rules. The Board received one comment on this specific aspect of the proposed rule. The commenter requested that the Board modify § 746.104(d) to allow a FICU to request a stay of a supervisory or enforcement action during the pendency of an appeal consistent with recently adopted amendments to the FDIC's Guidelines. The Board has carefully reviewed the recent amendments to the FDIC's Guidelines and believes that proposed § 746.104(d) is consistent with the overall approach adopted by the FDIC. While the FDIC, in response to a public comment, noted that the Guidelines do not prohibit an insured depository institution from requesting a stay from a Division Director, the Guidelines make abundantly clear that the FDIC does not generally stay supervisory actions during the pendency of an appeal.
Proposed § 746.104(e) required a program office to delay action on a waiver request or an application for additional authority that could be affected by the outcome of an appeal unless the FICU specifically requested that the waiver request or application for additional authority be considered notwithstanding the appeal. The proposed rule suspended any deadline for a program office to make a determination on a waiver request or application for additional authority set out in any part of the NCUA's regulations until the FICU exhausted its administrative remedies under the SRC appeals process or was no longer eligible to pursue an appeal. The
Proposed § 746.105 set out procedures for a FICU to request reconsideration from the appropriate program office. Prior to requesting review by the Director of E&I or filing an appeal with the SRC, the proposed rule required a FICU to make a written request for reconsideration from the appropriate program office within 30 calendar days after receiving an examination report or other written communication containing a material supervisory determination. The request for reconsideration needed to include a statement of the facts on which the request for reconsideration was based, a statement of the basis for the material supervisory determination and the alleged error in the determination, and any other evidence relied upon by the FICU that was not previously provided to the appropriate program office making the material supervisory determination.
Under the proposed rule, the appropriate program office was required to reach a decision on a request for reconsideration within 30 calendar days after receiving the request. If a written decision was not issued within 30 calendar days after receiving a request for reconsideration, the request was automatically deemed to have been denied. Any subsequent request for reconsideration was to be treated as a request for review by the Director of E&I or an appeal to the SRC as determined by the Secretary of the Board after consultation with the FICU. As the Board explained in the preamble to the proposed rule, these procedures largely follow NCUA's long standing policy of requiring a FICU to first request reconsideration from the program office prior to filing an appeal with the SRC. This is to encourage a program office and a FICU to resolve disputes informally and as expeditiously as possible.
Several commenters requested that the Board remove the requirement that a FICU seek reconsideration from the appropriate program office prior to a request for review by the Director of E&I or an appeal to the SRC. Alternatively, some commenters requested that the Board permit a FICU to appeal time-sensitive matters directly to the SRC. As the Board first explained in IRPS 94-2,
Proposed § 746.106 set out procedures for requesting review by the Director of E&I, or his or her designee. Prior to filing an appeal with the SRC, but after receiving a written decision by the appropriate program office in response to a request for reconsideration, the proposed rule allowed a FICU to make a written request for review by the Director of E&I of the program office's material supervisory determination. The proposed rule required such a request to be made in writing within 30 calendar days after receiving a final decision on reconsideration by the appropriate program office. The request for review needed to include a statement that the FICU is requesting review by the Director of E&I, a statement of the facts on which the request for review was based, a statement of the basis for the material supervisory determination and the alleged error in the determination, any evidence relied upon by the FICU that was not previously provided to the program office making the material supervisory determination, and a certification from the FICU's board of directors authorizing the request for review to be filed.
Under the proposed rule, review of a material supervisory determination by the Director of E&I was based on written submissions provided with the initial documents requesting review. The Director of E&I could request additional information from any party within 15 calendar days after the Secretary of the Board received the request for review and the relevant party had 15 calendar days to submit the requested information. The Director of E&I also had the authority to consult with the FICU and the program office jointly or separately, and with any other party prior to issuing a written decision. The proposed rule required the Director of E&I to issue a written decision within 30 calendar days after the Secretary of the Board receives the request for review. However, the deadline would be extended by the time period during which the Director of E&I gathered additional information from the FICU or the program office. If a written decision was not issued within 30 calendar days, or as extended by any additional time during which information was being gathered, the request for review was automatically deemed to have been denied. Any subsequent request for review was to be treated as an appeal to the SRC.
The Board received one substantive comment regarding the ability of the Director of E&I to consult with any party, including the FICU or the program office, prior to issuing a written decision. The commenter requested that these consultations take the form of written submissions that would become part of the administrative record. As the Board discussed above in the section analysis of § 746.104, the Board does not believe that consultations should be part of the administrative record. The Board sees little merit in including these kinds of communications as part of the administrative record because they will already be reflected in the initial submissions of the FICU and the program office and the final decision of the Director of E&I. Accordingly, the Board is adopting § 746.106 as proposed.
Proposed § 746.107 set out procedures for appealing a material supervisory determination to the SRC. The proposed rule required a FICU to file an appeal within 30 calendar days after receiving a written decision by the appropriate program office on reconsideration or, if the FICU requested review by the Director of E&I, within 30 calendar days after a final decision made by the Director of E&I, or his or her designee. The appeal documents submitted to the SRC needed to include a statement that the FICU was filing an appeal with the SRC, a statement of the facts on which
The conduct of the appeal was primarily by oral hearing before the SRC at NCUA headquarters in Alexandria, Virginia, except where the FICU requested that an appeal be based entirely on the written record. At the oral hearing, the FICU and the appropriate program office could introduce written evidence or witness testimony during each side's oral presentation. The SRC was also permitted to ask questions of any individual, including witnesses, appearing before it. Prior to the oral hearing, both the FICU and the program office would submit notices of appearance identifying no more than two individuals who would be representing them in the oral hearing, including counsel. However, either party could request permission from the SRC to allow additional individuals to appear before the SRC. The SRC was required to reach a decision within 30 calendar days after an oral presentation or, if the appeal was based entirely on the written record, within 30 calendar days from the date of receipt of the appeal. If a written decision was not issued within 30 calendar days, the appeal was automatically deemed to have been denied.
The proposed rule also required the SRC to publish its decisions on the NCUA's Web site with appropriate redactions to protect confidential or exempt information. In cases where redaction was insufficient to prevent improper disclosure, published decisions could be presented in summary form. If an appeal involved the interpretation of material supervisory policy or generally accepted accounting principles, the SRC was required to notify the Director of E&I and solicit input from E&I prior to rendering a decision. Likewise, if an appeal involved an interpretation of NCUA's regulations, the FCU Act, or any other law applicable to FICUs, the SRC was required to notify the General Counsel and solicit input from the Office of General Counsel. Finally, the proposed rule authorized the SRC Chairman to issue rules governing the operations of the SRC, to order that material be kept confidential, or to consolidate appeals that presented similar issues of law or fact. The Board is adopting § 746.107 substantially as proposed with minor modifications discussed below.
The Board received four substantive comments on this aspect of the proposed rule. One commenter requested that the Board remove the ability of the program office to appeal a decision by the Director of E&I to the SRC. The commenter argued that it would be inappropriate to allow a program office to challenge a determination by the central head of examination policy and that only a FICU should have the ability to appeal a decision by the Director of E&I. The Board agrees with the commenter and has accordingly removed the ability of the program office to appeal a decision by the Director of E&I to the SRC in the final rule. For the same reasons, the Board has also removed the ability of the program office to appeal an adverse decision by the SRC to the Board under § 746.108.
Another commenter requested that the Board include, as part of the publication of a written decision by the SRC, a synopsis of each appeal and a summary of the final result on NCUA's Web site. The Board agrees with the commenter and has accordingly added language in the final rule indicating that a synopsis of each appeal and a summary of the final result will be published on NCUA's Web site along with the written decision by the SRC with appropriate redactions. The Board believes that publishing a synopsis and the final result will make it easier for a FICU to research previous SRC decisions which enhances the precedential value of each SRC decision and encourages consistent results throughout the SRC appeals process. For the same reasons, the Board will also publish a synopsis of each appeal and a summary of the final result for appeals from the SRC to the Board under § 746.110.
A third commenter requested that the Board expand the publication of written decisions by the SRC to include publication of appeals that were rejected without being considered by the SRC. The commenter argued that allowing stakeholders to determine the number of petitions granted or rejected enhances the ability of stakeholders to evaluate the efficacy of the SRC appeals process. However, the Board does not believe that publishing rejected appeals will necessarily achieve either of those goals. The Board anticipates that a large majority of rejected appeals will involve a FICU failing to file a timely appeal. The Board sees little merit in publishing these determinations on NCUA's Web site because those determinations are of little precedential value to FICUs and give little, if any, insight into the SRC appeals process. Accordingly, neither the SRC nor the Board will not publish rejected appeals.
Finally, a commenter objected to the ability of the SRC Chairman to issue supplemental rules governing the operations of the SRC. The commenter argued that while the SRC Chairman may use this authority to ensure the SRC appeals process operates efficiently, the broad authority to adopt supplemental rules invites potential misuse of that authority. The Board disagrees. The substantive appellate rights of each FICU are set out in the final rule. The SRC Chairman may not adopt any supplemental rules that would limit or alter those rights in any way. For example, the SRC Chairman could not adopt a supplemental rule that would conflict with the requirement in § 746.107(b) to submit certain information as part of an appeal to the SRC. Instead, the SRC Chairman may only adopt rules that further define, clarify, or simplify the SRC appeals process. For example, the SRC Chairman could adopt a supplemental rule to allow a FICU to make an oral presentation through video conference rather than in person at NCUA headquarters in Alexandria, Virginia. As a result, the Board sees little opportunity for the SRC Chairman to misuse the authority to adopt supplemental rules and declines to limit the authority of the SRC Chairman to issue such rules. Should a FICU believe that a particular rule adopted by the SRC Chairman is an inappropriate exercise of the SRC Chairman's authority, the FICU may appeal that rule to the Board as part of its appeal of the SRC decision.
Proposed § 746.108 set out rules governing the formation and composition of the SRC. Under the proposed rule, the NCUA Chairman would appoint not less than eight individuals from among the NCUA's central and regional offices to serve along with the SRC Chairman as a rotating pool from which individual members could be selected by the SRC Chairman to serve as the three-member SRC for a particular appeal. Each member of the rotating pool, with the exception of the SRC Chairman, was to serve a one year term with eligibility to be reappointed by the NCUA Chairman for additional terms. Certain individuals, however, such as the General Counsel and Executive Director, were ineligible to serve as members of the rotating pool and, accordingly,
The Secretary of the Board was to serve as permanent SRC Chairman and the Special Counsel was to serve as a permanent non-voting member of each SRC to offer advice to the SRC on procedural and legal matters. When selecting SRC members to hear a particular appeal, the SRC Chairman was required to consider any real or apparent conflicts of interest that could impact the SRC member's objectivity as well as that individual's experience with the subject matter of the appeal. Members of the program office that rendered the material supervisory determination that was the subject of the appeal were ineligible to serve as SRC members for that appeal. Likewise, E&I staff were ineligible to serve as SRC members for appeals where the FICU appealed a decision by the Director of E&I. Commenters generally favored this aspect of the proposed rule but raised some concerns and offered suggested modifications discussed below. With the exception of a minor modification to grant the NCUA additional flexibility and the increase of the term limits for members of the rotating pool, the Board is adopting § 746.108 as proposed.
Proposed § 746.108(a) established a rotating pool of at least eight senior staff appointed by the NCUA Chairman from NCUA's central and regional offices who may be selected by the SRC Chairman to serve on a three-member panel to hear a particular appeal. The Board received several comments on this aspect of the proposed rule. One commenter requested that the Board include a representative from an SSA as part of the rotating pool similar to the representative from the State Liaison Committee who serves on the Federal Financial Institutions Examination Council (FFIEC).
The Board is adopting one modification to proposed § 746.108(a), however, to address the closure and consolidation of various program offices to avoid the need for future technical corrections to the SRC appeals rule. The proposed rule specifically listed several central offices from which the NCUA Chairman could select senior staff to serve on the rotating pool. However, on July 21, 2017, the Board announced a major restructuring initiative including the consolidation of two Regional Offices and the creation of the Office of Credit Union Resources and Expansion which could eliminate at least one central office listed in the proposed rule. Accordingly, the Board is modifying § 746.108(a) in the final rule to eliminate any reference to specific central offices. Instead, the regulatory text will refer, generally, to senior staff in the central and regional offices to allow for additional agency flexibility.
Proposed § 746.108(b) limited each member of the rotating pool to a one year term with the option of being reappointed by the NCUA Chairman for additional terms. This was to ensure greater accountability among members of the rotating pool. However, one commenter expressed concerns that such an approach could lead to a lack of consistency in SRC decisions and requested that the Board modify this provision to establish permanent members of the rotating pool with the ability to appoint alternatives in the event of a conflict of interest. Another commenter requested that the Board adopt a minimum five year term for members of the rotating pool. The Board is mindful of commenters' concerns regarding the need to retain experienced senior staff as part of the rotating pool to ensure greater consistency in SRC decisions. Accordingly, the Board is adjusting the term limit in § 746.108(b) to a two-year term with the option of reappointment by the NCUA Chairman after the expiration of the two-year term.
Proposed § 746.108(d) required the SRC Chairman when selecting members from the rotating pool to serve as the SRC for a particular appeal to consider any real or apparent conflicts of interest that may impact the objectivity of the member as well as the individual's experience with the subject matter of the appeal. One commenter requested that the Board also include language requiring the SRC Chairman to also consider any perceived conflict of interest, in addition to a real or apparent conflict of interest, in selecting members of the rotating pool to hear a particular appeal. Functionally, this would allow a FICU to veto the selection of a member of the SRC panel that the FICU subjectively feels cannot render an impartial decision. While the Board seeks to adopt a process that is transparent and provides FICUs enhanced due process, adopting such a subjective disqualification standard would unnecessarily complicate the SRC appeals process by opening every SRC decision to challenge from a FICU that subjectively felt that a particular member of the SRC panel was biased against the FICU regardless of any objective evidence to indicate a real or potential conflict of interest. Accordingly, the Board is adopting § 746.108(d) as proposed.
Proposed § 746.109 set out procedures for appealing an adverse decision by the SRC to the Board. The proposed rule required a FICU or program office to file an appeal within 30 calendar days after receiving an adverse decision from the SRC. Under the proposed rule, an appeal to the Board was not an automatic right. Instead, the proposed rule required at least one Board Member to agree to hear an appeal within 20 calendar days of receiving a request for an appeal to the Board. If at least one Board Member did not agree to hear an appeal within 20 calendar days, the request for an appeal was automatically deemed to have been denied. If a FICU or program office failed to file an appeal within 30 calendar days after receiving an adverse decision from the SRC, the FICU was deemed to have waived all claims pertaining the subject matter of the appeal. Consistent with IRPS 12-1, an adverse decision by the SRC on the denial of a TAG reimbursement was not reviewable by the Board.
The appeal documents submitted to the Board needed to include a statement of the facts on which the appeal was based, a statement of the basis for the material supervisory determination to which the FICU or program office objected and the alleged error in the determination, and (for FICUs) a certification that the FICU's board of directors authorized the appeal to be filed with the Board. For a FICU or program office requesting an oral hearing, the appeal documents also needed to include a separate written document requesting an oral hearing and demonstrating good cause why an appeal could not be presented adequately in writing. A FICU or program office could amend or
The Board received one substantive comment regarding this aspect of the proposed rule. The commenter argued that a FICU should be allowed to appeal all adverse decisions from the SRC to the Board as a matter of right rather than at the discretion of one Board Member. The commenter reasoned that requiring the Board to hear all appeals would serve an important agency goal of alerting the Board to emerging trends in supervisory policy.
Proposed § 746.110 set out procedures for appealing an adverse decision from the SRC to the Board based solely on the written record. Under the proposed rule, the Board or the Special Counsel could request additional information to be provided in writing from either party within 15 calendar days after: (1) Either the FICU or the program office filed an appeal with the Secretary of the Board; (2) either the FICU or the program office filed an amendment or supplemental information; or (3) either the FICU or the program office filed responsive materials, whichever was later. The Board was required to reach a decision within 90 calendar days from the date of receipt of the appeal. If a written decision was not issued within 90 calendar days, the appeal was automatically deemed to have been denied. The proposed rule also required the Board to publish its decisions on the NCUA's Web site with appropriate redactions to protect confidential or exempt information. In cases where redaction was insufficient to prevent improper disclosure, published decisions could be presented in summary form. The Board did not receive substantive comments on this aspect of the proposed rule and is adopting § 746.110 with a slight modification to the provision regarding publication of decisions as discussed in the section analysis of § 746.107.
Proposed § 746.111 set out procedures for appealing an adverse decision from the SRC to the Board through an oral hearing. Under the proposed rule, a petitioner was required to request an oral hearing before the Board as part of the initial appeal documents submitted in accordance with § 746.109. The proposed rule required the request for an oral hearing to take the form of a separate written document titled “Request for Oral Hearing” and show good cause why the appeal could not be presented adequately in writing. Similar to a decision to hear an appeal, the proposed rule required at least one Board Member to approve an oral hearing within 20 days after receiving the request for an oral hearing and direct the Secretary of the Board to serve notice of the Board's determination in writing to both the FICU and the program office. In the event that a request for an oral hearing was denied, the Board could review an appeal based entirely on the written record provided that at least one Board Member agreed to hear the appeal.
The proposed rule required the Secretary of the Board to notify the parties of the date and time for the oral hearing making sure to provide reasonable lead time and scheduling accommodations. In most cases the oral hearing was to be held at NCUA headquarters in Alexandria, Virginia. However, the proposed rule allowed the NCUA Chairman to permit an oral hearing to be conducted through teleconference or video conference in his or her sole discretion. The parties were required to submit a notice of appearance identifying the individuals who would be representing them in the oral hearing with each party designating no more than two individuals without the prior consent of the NCUA Chairman. The oral hearing was to consistent entirely of oral presentations. The proposed rule expressly prohibited the introduction of written evidence or witness testimony at the oral hearing. The proposed rule also required the oral hearing to be on the record and transcribed by a stenographer, who was to prepare a transcript of the proceedings. Finally, the proposed rule required the Board to maintain the confidentiality of any information or materials submitted in the course of the proceedings subject to applicable Federal disclosure laws.
The Board received one comment on this specific aspect of the proposed rule. The commenter raised concerns regarding the limitation on the introduction of written evidence or witness testimony at the oral hearing. The commenter argued that an oral presentation cannot provide the same level of detail as a written brief on the merits of a particular appeal and, therefore, the Board should permit the introduction of written evidence at the oral hearing. Furthermore, the commenter argued that the Board should permit witness testimony, where appropriate, to accommodate circumstances where an expert may have special knowledge that could assist the Board with a particular appeal. The commenter's arguments are misplaced. The proposed rule did not prohibit the submission of a written brief on the merits or expert testimony. Instead, the proposed rule simply required a written brief or expert testimony to be submitted as part of the initial appeal documents provided to the Secretary of the Board in accordance with § 746.109. The purpose of the prohibition on submitting written evidence or witness testimony at the oral hearing was to avoid conducting a full administrative trial in front of the Board. Rather, the Board was to serve as an appellate body hearing oral arguments and deciding a case on the administrative record and the written submissions of the parties, which could include written briefs and expert testimony presented before the oral hearing.
The Board is not convinced that a full administrative trial, including the submission of written evidence and witness testimony, is necessary to provide FICUs with enhanced due process. At various stages of the SRC appeals process, a FICU will have the opportunity to provide the appropriate reviewing authority with written and oral evidence which may include written briefs or expert testimony. This information should already be part of the administrative record presented to
Proposed § 746.112 allowed a FICU to file a complaint with the NCUA Office of Inspector General regarding retaliation, abuse, or retribution by NCUA staff in connection with an appeal to the SRC. The proposed rule required a complaint to include an explanation of the factual circumstances surrounding the complaint and any evidence of retaliation. Information submitted as part of a complaint would be kept strictly confidential. If the Office of Inspector General concluded that any NCUA staff had retaliated against a FICU for filing an appeal with the SRC, that staff member would be subject to disciplinary or remedial action by his or her appropriate supervisor including reprimand, suspension, or separation from employment depending on the facts and circumstances. The Board did not receive substantive comments on this aspect of the proposed rule and is adopting § 746.112 as proposed.
Proposed § 746.113 set out a framework for the appropriate reviewing authority to cooperate with the SSA regarding an appeal of a material supervisory determination by a FISCU that was the joint product of the NCUA and the SSA. The proposed rule required the reviewing authority to promptly notify the SSA of the appeal, provide the SSA with a copy of the appeal and any other related materials, solicit the SSA's views regarding the merits of the appeal before rendering a decision, and notify the SSA of the reviewing authority's decision. Once the NCUA reviewing authority had issued its decision, any other issues remaining between the FISCU and the SSA were left to those parties to resolve. The Board received one comment regarding this aspect of the proposed rule. The commenter argued that the Board should permit an SSA to comment on an appeal in all cases involving a FISCU and not only when the appeal involves a material supervisory determination that is the joint product of the NCUA and the SSA. The Board disagrees. Congress vested the NCUA with exclusive authority to administer the FCU Act.
The commenter also argued that the Board should permit an SSA to make written submissions similar to amicus briefs that would become part of the administrative record. The proposed rule did not prohibit an SSA from expressing its views regarding the merits of an appeal in the form of written submissions. In fact, the Board anticipated that most comments from an SSA would be submitted in writing and become part of the administrative record reviewed by each successive reviewing authority before rendering a decision on appeal. While the Board believes that clarifications regarding the administrative record discussed above in the section analysis of § 746.104 may be sufficient to address commenter's concerns, the Board is also adopting a modification to § 746.113 to clarify that a reviewing authority is required to solicit an SSA's written views regarding the merits of an appeal before rendering a decision. Under § 746.104(f), the written submissions of the SSA will become part of the administrative record reviewed on appeal by the appropriate reviewing authority.
IRPS 11-1 “Supervisory Review Committee,” as amended by IRPS 12-1, sets out the current guidelines for appealing a material supervisory determination to the SRC. With the issuance of this final rule, the Board is withdrawing IRPS 11-1 effective January 1, 2018. IRPS 11-1 shall remain on the NCUA's Web site and govern the appeal of all material supervisory determinations appealed prior to January 1, 2018. The final rule will not have retroactive effect and will only apply to material supervisory determinations appealed after January 1, 2018.
The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a regulation may have on a substantial number of small entities (primarily those under $100 million in assets).
The Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121) (SBREFA) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where NCUA issues a final rule as defined by Section 551 of the Administrative Procedure Act. NCUA does not believe this final rule is a “major rule” within the meaning of the relevant sections of SBREFA. As required by SBREFA, NCUA has filed the appropriate reports so that this final rule may be reviewed.
The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in which an agency by rule creates a new paperwork burden on regulated entities or increases an existing burden.
The NCUA has determined that this final rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999.
Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on State and local interests.
Administrative practice and procedure, Claims, Credit Unions, Investigations.
For the reasons discussed above, the NCUA Board adds 12 CFR part 746 to read as follows:
12 U.S.C. 1766, 1787, and 1789.
(a)
(b)
(c)
For purposes of this subpart:
(a)
(1) A composite examination rating of 3, 4, or 5;
(2) A determination relating to the adequacy of loan loss reserve provisions;
(3) The classification of loans and other assets that are significant to an insured credit union;
(4) A determination regarding an insured credit union's compliance with Federal consumer financial law;
(5) A determination on a waiver request or an application for additional authority where independent appeal procedures have not been specified in other NCUA regulations; and
(6) A determination by the relevant reviewing authority that an appeal filed under this subchapter does not raise a material supervisory determination.
(b)
(1) A composite examination rating of 1 or 2;
(2) A component examination rating unless the component rating has a significant adverse effect on the nature or level of supervisory oversight of an insured credit union;
(3) The scope and timing of supervisory contacts;
(4) A decision to appoint a conservator or liquidating agent for an insured credit union;
(5) A decision to take prompt corrective action pursuant to section 216 of the Federal Credit Union Act (12 U.S.C. 1790d) and part 702 of this chapter;
(6) Enforcement-related actions and decisions, including determinations and the underlying facts and circumstances that form the basis of a pending enforcement action;
(7) Preliminary examination conclusions communicated to an insured credit union before a final exam
(8) Formal and informal rulemakings pursuant to the Administrative Procedure Act (5 U.S.C. 500
(9) Requests for NCUA records or information under the Freedom of Information Act (5 U.S.C. 552) and part 792 of this chapter and the submission of information to NCUA that is governed by this statute and this regulation; and
(10) Determinations for which other appeals procedures exist.
(a)
(b)
(c)
(d)
(e)
(f)
(a)
(b)
(1) A statement of the facts on which the request for reconsideration is based;
(2) A statement of the basis for the material supervisory determination to which the insured credit union objects and the alleged error in such determination; and
(3) Any other evidence relied upon by the insured credit union that was not previously provided to the appropriate program office making the material supervisory determination.
(c)
(d)
(a)
(b)
(1) A statement that the insured credit union is requesting review by the Director of the Office of Examination and Insurance;
(2) A statement of the facts on which the request for review is based;
(3) A statement of the basis for the material supervisory determination to which the insured credit union objects and the alleged error in such determination;
(4) Any other evidence relied upon by the insured credit union that was not previously provided to the appropriate program office making the material supervisory determination; and
(5) A certification that the board of directors of the insured credit union has authorized the request for review to be filed.
(c)
(d)
(e)
(a)
(b)
(1) A statement that the insured credit union is filing an appeal with the Committee;
(2) A statement of the facts on which the appeal is based;
(3) A statement of the basis for the determination to which the insured credit union objects and the alleged error in such determination;
(4) Any other evidence relied upon by the insured credit union that was not previously provided to the appropriate program office or, if applicable, the Director of the Office of Examination and Insurance; and
(5) A certification that the board of directors of the insured credit union has authorized the appeal to be filed.
(c)
(1)
(2)
(3)
(d)
(e)
(f)
(g)
(a
(b)
(c)
(d)
(e)
(f)
(g)
(a)
(b)
(c)
(d)
(e)
(1) A statement of the facts on which the appeal is based;
(2) A statement of the basis for the determination to which the insured credit union objects and the alleged error in such determination; and
(3) A certification that the board of directors of the insured credit union has authorized the appeal to be filed.
(f)
(g)
(a)
(1)
(2)
(b)
(c)
(a)
(b)
(c)
(d)
(1)
(2)
(3)
(4)
(e)
(f)
(a)
(b)
(c)
(a)
(b)
(c)
National Credit Union Administration (NCUA).
Final rule.
The NCUA Board (Board) is adopting this final rule to establish procedures to govern appeals to the Board. The rule establishes a uniform procedure that will apply to agency regulations that currently have their own embedded appeals provisions. Accordingly, this final rule will replace those current provisions. The procedures will apply in cases in which a decision rendered by a regional director or other program office director is subject to appeal to the Board. The procedures will result in greater efficiency, consistency, and a better understanding of the way in which matters under covered regulations may be appealed to the Board.
This final rule is effective on January 1, 2018.
Michael J. McKenna, General Counsel, Ross P. Kendall, Special Counsel to the General Counsel, or Benjamin M. Litchfield, Staff Attorney, at the above address, or telephone: (703) 518-6540.
As outlined in its May 2017 proposed rule,
As reflected in the proposed rule and as finalized herein, the Board is committed to providing credit unions, and other persons or entities that are affected by agency decisions, with an opportunity to obtain meaningful review of those decisions. The Board believes this final rule strikes an appropriate balance that will afford a petitioner fair consideration of the issues while avoiding procedures that are overly burdensome, time consuming, and expensive.
The Board received a total of seven comments to the proposed rule. All commenters noted broad, general support for the proposal. Beneficial results from the proposal identified by commenters included clearer and improved processes, the introduction of consistency into a process that is currently varied, a more uniform set of procedures to govern those rules in which an appeal is permitted, and the promotion of a more streamlined and efficient appeals process. One commenter applauded NCUA for what the commenter characterized as a visible and forceful commitment to the practice of transparency.
As discussed more fully below, the Board received one comment suggesting that the appeals process be extended to include decisions involving capital planning and stress testing. There were no other suggestions of additional rules that should be covered. Similarly, the Board did not receive any comments on its proposal to exclude certain categories of actions or determinations from coverage under the new procedures. Accordingly, all of the proposed changes to existing regulations are adopted as proposed and without change. In addition, the Board confirms the exclusion of the following categories of actions from the scope of new part 746, subpart B:
• Formal enforcement actions;
• Creditor claims in liquidation, to the extent that the claimant has requested and the Board has agreed to consider the appeal formally on the record;
• Material supervisory determinations within the jurisdiction of the Supervisory Review Committee (SRC);
• Challenges to actions imposed under the prompt corrective action regime; and
• Appeals of matters that are delegated by rule to an officer or position below the Board for final, binding agency action.
The Board believes that the proposal adequately covers this scenario. The Board anticipates that instances of failure by the program office to respond to a reconsideration request within the prescribed time frame will be rare. Furthermore, the Board notes that the provisions in § 746.203(g) are designed to protect the petitioner from circumstances in which delay at the program office level would thwart the petitioner's ability to secure a higher level of review. As drafted, the provision effectively imposes an operational deadline for the program office to act. Accordingly, this section of the proposed rule is adopted in full without change from the proposal.
One commenter recommended that, for the sake of consistency, this appeals period should also be established at 60 days. Alternatively, according to the commenter, the rule should explicitly require the program office to notify credit unions affected by this provision of the notably shorter time frame for taking an appeal. Otherwise, according to the commenter, the movement toward standardization reflected in the rule could lead a credit union to assume that all appeals have the same 60-day deadline.
The Board is not persuaded by this comment. Preserving the shorter time frame in this area recognizes the exigencies associated with management changes and helps assure that decisions affecting personnel are made quickly and subject to review within reasonable time frames. In this respect, the Board notes that the relatively shorter timeframe governing the change of officials is currently reflected in the existing rules that governs this area (§ 701.14 and part 747, subpart J) and is therefore familiar to credit unions generally. Furthermore, the Board notes that program offices include explicit references to this deadline in correspondence dealing with this issue currently, further minimizing the likelihood of confusion in this area. Accordingly, this section of the proposed rule is adopted in full without change from the proposal.
The Board declines to make the changes requested by these commenters. In its proposed form, the rule recognizes that an oral hearing can be a logistical challenge requiring significant planning and effort, particularly in view of the goal of having the Board render its decision within 90 days of the filing of an appeal. This requirement also helps to prevent a petitioner from requesting a hearing as a device to delay or prolong appeal proceedings. Similarly, with regard to the request to allow more personnel to participate in the hearing, the Board believes the limitations as proposed will help to keep the oral hearing procedures manageable. The Board notes, however, that the rule grants the NCUA Chairman discretion to allow a greater number of representatives to participate in the oral hearing. Accordingly, this section of the proposed rule is adopted in full without change from the proposal.
The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a rule may have on a substantial number of small entities (primarily those under $100 million in assets). This rule only provides enhanced voluntary opportunities for credit unions to appeal agency determinations. Accordingly, it will not have a significant economic impact on a substantial number of small credit unions, and therefore, no regulatory flexibility analysis is required.
The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501
In accordance with the PRA, the information collection requirements included in this final rule has been submitted to OMB for approval under control number 3133-0198.
NCUA has determined that this rule will not affect family well-being within the meaning of sec. 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105-277, 112 Stat. 2681 (1998).
Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on State and local interests. In adherence to fundamental federalism principles, NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. This rulemaking will not have a substantial direct effect on the States, on the connection between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. NCUA has determined that this proposal does not constitute a policy that has federalism implications for purposes of the executive order.
The Small Business Regulatory Enforcement Fairness Act of 1996
Credit, Credit unions, Reporting and recordkeeping requirements.
Credit unions, Investments.
Credit unions, Grants, Loans, Revolving fund.
Credit unions, Reporting and recordkeeping requirements.
Claims, Credit unions.
Credit unions, Reporting and recordkeeping requirements, Share insurance.
Administrative practice and procedure, Claims, Credit unions, Share insurance.
Administrative practice and procedure, Claims, Credit unions, Investigations.
Administrative practice and procedure, Claims, Credit unions, Investigations.
Credit unions, Golden parachute payments, Indemnity payments.
For the reasons discussed above, the NCUA Board amends 12 CFR parts 701, 703, 705, 708a, 709, 741, 745, 746, 747, and 750 as follows:
12 U.S.C. 1752(5), 1755, 1756, 1757, 1758, 1759, 1761a, 1761b, 1766, 1767, 1782, 1784, 1786, 1787, 1789. Section 701.6 is also authorized by 15 U.S.C. 3717. Section 701.31 is also authorized by 15 U.S.C. 1601
(e)
(h) * * *
(3) A regional director will provide a written determination on a waiver request within 45 calendar days after receipt of the request; however, the 45-day period will not begin until the requesting credit union has submitted all necessary information to the regional director. If the regional director does not provide a written determination within the 45-day period the request is deemed denied. A credit union may request the regional director to reconsider a denied waiver request and/or file an appeal with the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
(c) To seek a waiver from any of the limitations in paragraph (b) of this section, a federally insured credit union must submit a written request to its regional director with a full and detailed explanation of why it is requesting the waiver. Within 45 calendar days of receipt of a completed waiver request, including all necessary supporting documentation and, if appropriate, any written concurrence, the regional director will provide the federally insured credit union a written response. The regional director's decision will be based on safety and soundness and other considerations; however, the regional director will not grant a waiver to a federally insured, State-chartered credit union without the prior written concurrence of the appropriate State supervisory authority. A federally insured credit union may request the regional director to reconsider a denied waiver request and/or file an appeal with the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
(h) * * *
(3)
(b) * * *
(5) The regional director will provide a written determination on an exemption request within 30 calendar days after receipt of the request. The 30-day period will not begin to run until all necessary information has been submitted to the Regional Director. A credit union may request the Regional Director to reconsider a denied exemption request and/or file an appeal with the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
(a) * * *
(4) If NCUA determines a low-income designated Federal credit union no longer meets the criteria for the designation, NCUA will notify the Federal credit union in writing, and the Federal credit union must, within five years, meet the criteria for the designation or come into compliance with the regulatory requirements applicable to Federal credit unions that do not have a low-income designation. The designation will remain in effect during the five-year period. If a Federal credit union does not requalify and has secondary capital or nonmember deposit accounts with a maturity beyond the five-year period, NCUA may extend the time for a Federal credit union to come into compliance with regulatory requirements to allow the Federal credit union to satisfy the terms of any account agreements. A Federal credit union may request NCUA to reconsider a determination that it no longer meets the criteria for the designation and/or file an appeal with the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
The revisions read as follows:
If the Office of Consumer Financial Protection and Access Director denies a charter application, in whole or in part, that decision may be appealed to the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
Before appealing, the prospective group may, within 30 days of the denial, provide supplemental information to the Office of Consumer Financial Protection and Access Director for reconsideration. A request for reconsideration should contain new and material evidence addressing the reasons for the initial denial. The Office of Consumer Financial Protection and Access Director will have 30 days from the date of the receipt of the request for reconsideration to make a final decision. If the request is again denied, the applicant may proceed with the appeal process within 60 days of the date of the last denial.
If the Office of Consumer Financial Protection and Access Director denies a field of membership expansion request, merger, or spin-off, that decision may be appealed to the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
Before appealing, the credit union may, within 30 days of the denial, provide supplemental information to the Office of Consumer Financial Protection and Access Director for reconsideration. A request for reconsideration should contain new and material evidence addressing the reasons for the initial denial. The Office of Consumer Financial Protection and Access Director will have 30 days from the date of the receipt of the request for reconsideration to make a final decision. If the request is again denied, the applicant may proceed with the appeal process within 60 days of the date of the last denial.
If the Office of Consumer Financial Protection and Access Director denies a field of membership expansion request, merger, or spin-off, that decision may be appealed to the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
Before appealing, the credit union may, within 30 days of the denial, provide supplemental information to the Office of Consumer Financial Protection and Access Director for reconsideration. A request for reconsideration should contain new and material evidence addressing the reasons for the initial denial or explain extenuating circumstances that precluded the inclusion of existing material evidence or information that should have been filed with the request for reconsideration. The Office of Consumer Financial Protection and Access Director will have 30 days from the date of the receipt of the request for reconsideration to make a final decision. If the request is again denied, the applicant may proceed with the appeal process within 60 days of the date of the last denial. A petitioner may seek a second reconsideration based on new material evidence or information or extenuating circumstances that precluded the inclusion of such information in the previous request.
If the Office of Consumer Financial Protection and Access Director denies a field of membership expansion request, merger, or spin-off, that decision may be appealed to the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
Before appealing, the credit union may, within 30 days of the denial, provide supplemental information to the Office of Consumer Financial Protection and Access Director for reconsideration. A request for reconsideration should contain new and material evidence addressing the reasons for the initial denial or explain extenuating circumstances that precluded the inclusion of existing material evidence or information that should have been filed with the request for reconsideration. The Office of Consumer Financial Protection and Access Director will have 30 days from the date of the receipt of the request for reconsideration to make a final decision. If the request is again denied, the applicant may proceed with the appeal process within 60 days of the date of the last denial. A petitioner may seek a second reconsideration based on new material evidence or information or extenuating circumstances that precluded the inclusion of such information in the previous request.
If the Office of Consumer Financial Protection and Access Director denies a field of membership expansion request, merger, or spin-off, that decision may be appealed to the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
Before appealing, the credit union may, within 30 days of the denial, provide supplemental information to the Office of Consumer Financial Protection and Access Director for reconsideration. A request for reconsideration should contain new and material evidence addressing the reasons for the initial denial or explain extenuating circumstances that precluded the inclusion of existing material evidence or information that should have been filed with the request for reconsideration. The Office of Consumer Financial Protection and Access Director will have 30 days from the date of the receipt of the request for reconsideration to make a final decision. If the request is again denied, the applicant may proceed with the appeal process within 60 days of the date of the last denial. A petitioner may seek a second reconsideration based on new material evidence or information or extenuating circumstances that precluded the inclusion of such information in the previous request.
If the Office of Consumer Financial Protection and Access Director denies an “underserved area” request, the Federal credit union may appeal that decision to the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
Before appealing, the credit union may, within 30 days of the denial, provide supplemental information to the Office of Consumer Financial Protection and Access Director for reconsideration. A request for reconsideration should contain new and material evidence addressing the reasons for the initial denial or explain extenuating circumstances that precluded the inclusion of existing material evidence or information that should have been filed with the request for reconsideration. The Office of Consumer Financial Protection and Access Director will have 30 days from the date of the receipt of the request for reconsideration to make a final decision. If the request is again denied, the applicant may proceed with the appeal process within 60 days of the date of the last denial. A petitioner may seek a second reconsideration based on new material evidence or information or extenuating circumstances that precluded the inclusion of such information in the previous request.
If a conversion to a Federal charter is denied by the Office of Consumer Financial Protection and Access Director, the applicant credit union may appeal that decision to the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
Before appealing, the credit union may, within 30 days of the denial, provide supplemental information to the Office of Consumer Financial Protection and Access Director for reconsideration. A request for reconsideration should contain new and material evidence addressing the reasons for
When the Office of Consumer Financial Protection and Access Director has received evidence that the board of directors has satisfactorily completed the actions described above, the Federal charter and new Certificate of Insurance will be issued.
The credit union may then complete the conversion as discussed in the following section. A credit union may request the Office of Consumer Financial Protection and Access Director to reconsider a denial of a conversion application and/or appeal a denial to the NCUA Board. For more information, refer to Section II.C.6 of this chapter.
If the Office of Consumer Financial Protection and Access Director denies a conversion to a State charter, the Federal credit union may appeal that decision to the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
Before appealing, the credit union may, within 30 days of the denial, provide supplemental information to the Office of Consumer Financial Protection and Access Director for reconsideration. The Office of Consumer Financial Protection and Access Director will have 30 business days from the date of the receipt of the request for reconsideration to make a final decision. If the application is again denied, the credit union may proceed with the appeal process to the NCUA Board within 60 days of the date of the last denial by the Office of Consumer Financial Protection and Access Director.
12 U.S.C. 1757(7), 1757(8), 1757(15).
(d)
(d)
(c) A Federal credit union may request the regional director to reconsider a denial of an application for additional products or characteristics and/or file an appeal with the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
(c) A Federal credit union may request the regional director to reconsider a revocation of derivatives authority or an order to terminate existing derivatives positions and/or file an appeal with the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
12 U.S.C. 1756, 1757(5)(D), and (7)(I), 1766, 1782, 1784, 1785 and 1786.
(a)
(1)
(2)
12 U.S.C. 1766, 1785(b), and 1785(c).
(d) A converting credit union may request the regional director to reconsider a determination regarding the methods and procedures of the membership vote and/or file an appeal with the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
(h)
(d) A merging credit union may request the Regional Director to reconsider the disapproval of a merger proposal and/or file an appeal with the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
12 U.S.C. 1757, 1766, 1767, 1786(h), 1787, 1788, 1789, 1789a.
(a)
(b)
(c)
(d)
12 U.S.C. 1757, 1766(a), 1781-1790, and 1790d; 31 U.S.C. 3717.
(d)
12 U.S.C. 1752(5), 1757, 1765, 1766, 1781, 1782, 1787, 1789; title V, Pub. L. 109-351, 120 Stat. 1966.
(c)
12 U.S.C. 1766, 1787, and 1789.
(a)
(b)
(c)
(d)
(1) Actions by the agency to develop regulations, policy statements, or guidance documents;
(2) Formal enforcement actions, the review of material supervisory determinations that come under the jurisdiction of NCUA's Supervisory Review Committee, or the appeal of any agency determination made pursuant to part 792 of this chapter;
(3) Challenges to determinations under the prompt corrective action regime in parts 702 and 704 of this chapter and subparts L and M to part 747 of this chapter; and
(4) Creditor claims arising from the liquidation of an insured credit union to the extent that the creditor has requested, and the NCUA Board has agreed, for the claim to be handled through a hearing on the record pursuant to 12 U.S.C. 1787(b)(7)(A) and subpart A of part 747 of this chapter.
For purposes of this subpart:
(a)
(b)
(c)
(d)
(1) A statement of the facts on which the request for reconsideration is based;
(2) A statement of the basis for the initial agency determination to which the petitioner objects and the alleged error in such determination; and
(3) Any other support or evidence relied upon by the petitioner which was not previously provided to the appropriate program office.
(e)
(f)
(1) In addition to a written statement of reasons for the decision, the appropriate program office shall provide the petitioner with written notice of the right to appeal the decision, in whole or in part, to the Board in accordance with the procedures set forth in § 746.204.
(2) For creditor claims brought pursuant to sec. 207 of the Federal Credit Union Act (12 U.S.C. 1787), the appropriate program office shall provide the petitioner with written notice of the right, in the alternative to filing an appeal with the Board, to file suit or continue an action commenced before the appointment of the liquidating agent in the district or territorial court of the United States for the district within which the credit union's principal place of business was located or the United States District Court for the District of Columbia. For such claims, the 60-day period for filing a lawsuit in United States district court provided in 12 U.S.C. 1787(b)(6) shall be tolled from the date of the petitioner's request for reconsideration to the date of a determination pursuant to paragraph (e) of this section.
(3) Upon a showing of extenuating circumstances, as determined by the program office in its reasonable judgment, a petitioner may be allowed to submit a second reconsideration request before filing an appeal with the Board. In such cases, the deadline for filing an appeal with the Board shall begin to run from the earlier of the date of the decision of the program office regarding the second reconsideration request or thirty calendar days from the date the second reconsideration request was accepted by the program office.
(g)
(h)
(a)
(b)
(c)
(d)
(1) A statement summarizing the underlying facts that form the basis of the appeal, together with copies of all pertinent documents, records, and materials on which the petitioner relies in support of the appeal.
(2) A statement outlining why the petitioner objects to the conclusions in the initial agency determination, including any errors alleged to have been made by the program office in reaching its determination.
(3) Any other materials or evidence relied upon by the petitioner that were not previously provided to the appropriate program office.
(e)
(f)
(g)
(a)
(b)
(a)
(b)
(c)
(a)
(b)
(c)
(d)
(1)
(2)
(3)
(4)
(e)
(f)
12 U.S.C. 1766, 1782, 1784, 1785, 1786, 1787, 1790a, 1790d; 15 U.S.C. 1639e; 42 U.S.C. 4012a; Pub. L. 101-410; Pub. L. 104-134; Pub. L. 109-351; Pub. L. 114-74.
12 U.S.C. 1786(t).
(b) A FICU whose request for approval by NCUA, in accordance with paragraph (a) of this section, has been denied may seek reconsideration of the request and/or file an appeal with the NCUA Board in accordance with the procedures set forth in subpart B to part 746 of this chapter.
(b) The objectives of the Program shall be to:
(b) In selecting proposals for participation in the Program under subsection (a) of this section, the Secretary shall consider:
(A) promoting innovation and economic development;
(B) enhancing transportation safety;
(C) enhancing workplace safety;
(D) improving emergency response and search and rescue functions; and
(E) using radio spectrum efficiently and competitively.
(c) Within 180 days of the establishment of the Program, the Secretary shall enter into agreements with State, local, or tribal governments to participate in the Program, with the goal of entering into at least 5 such agreements by that time.
(d) In carrying out subsection (c) of this section, the Secretary shall select State, local, or tribal governments that plan to begin integration of UAS
(e) The Secretary shall consider new proposals for participation in the Program up to 1 year before the Program is scheduled to terminate.
(f) The Secretary shall apply best practices from existing FAA test sites, waivers granted under 14 CFR part 107, exemptions granted under section 333 of the FMRA, the FAA Focus Area Pathfinder Program, and any other relevant programs in order to expedite the consideration of exceptions, exemptions, authorizations, and waivers from FAA regulations to be granted under the Program, as described in subsection (a)(iv) of this section.
(g) The Secretary shall address any non-compliance with the terms of exceptions, exemptions, authorizations, waivers granted, or agreements made with UAS users or participating jurisdictions in a timely and appropriate manner, including by revoking or modifying the relevant terms.
(b) The Secretary, in coordination with the Secretaries of Defense and Homeland Security and the Attorney General, shall take necessary and appropriate steps to:
(c) The heads of executive departments and agencies with relevant law enforcement responsibilities (Federal law enforcement agencies), including the Attorney General and the Secretary of Homeland Security, shall develop and implement best practices to enforce the laws and regulations governing UAS operations conducted under the Program.
(d) In carrying out the responsibilities set forth in subsection (c) of this section, the heads of Federal law enforcement agencies shall coordinate with the Secretaries of Defense and Transportation, as well as with the relevant State, local, or tribal law enforcement agencies.
(e) In implementing the Program, the Secretary shall coordinate with the Secretaries of Defense and Homeland Security and the Attorney General to test counter-UAS capabilities, as well as platform and system-wide cybersecurity, to the extent appropriate and consistent with law.
(b) Before and after the termination of the Program, the Secretary shall use the information and experience yielded by the Program to inform the development of regulations, initiatives, and plans to enable safer and more complex UAS operations, and shall, as appropriate, share information with the Secretaries of Defense and Homeland Security, the Attorney General, and the heads of other executive departments and agencies.
(c) After the date of this memorandum and until the Program is terminated, the Secretary, in consultation with the Secretaries of Defense and Homeland Security and the Attorney General, shall submit an annual report to the President setting forth the Secretary's interim findings and conclusions concerning the Program. Not later than 90 days after the Program is terminated, the Secretary shall submit a final report to the President setting forth the Secretary's findings and conclusions concerning the Program.
(a) The term “unmanned aircraft system” has the meaning given that term in section 331 of the FMRA.
(b) The term “public unmanned aircraft system” has the meaning given that term in section 331 of the FMRA.
(c) The term “civil unmanned aircraft system” means an unmanned aircraft system that meets the qualifications and conditions required for operation of a civil aircraft, as defined in 49 U.S.C. 40102.
(b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(d) The Secretary is authorized and directed to publish this memorandum in the
Category | Regulatory Information | |
Collection | Federal Register | |
sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
Publisher | Office of the Federal Register, National Archives and Records Administration |